DEVELOPMENT MANAGEMENT AGREEMENT
BETWEEN
PROVENCE HILLS DEVELOPMENT COMPANY, LLC
("OWNER")
AND
HOMEFED CORPORATION
("DEVELOPMENT MANAGER")
TABLE OF CONTENTS
ARTICLE I DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE II ENGAGEMENT; STANDARDS OF PERFORMANCE. . . . . . . . . . . . . 7
2.1 Engagement. . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.2 Standard of Performance . . . . . . . . . . . . . . . . . . . 7
2.3 Development Manager's Personnel . . . . . . . . . . . . . . . 7
2.4 Owner's Representatives . . . . . . . . . . . . . . . . . . . 8
2.5 Access to Work. . . . . . . . . . . . . . . . . . . . . . . . 8
2.6 Other Services. . . . . . . . . . . . . . . . . . . . . . . . 8
2.7 Licensing Requirements. . . . . . . . . . . . . . . . . . . . 8
2.8 Bank Account. . . . . . . . . . . . . . . . . . . . . . . . . 8
2.9 Project Financing . . . . . . . . . . . . . . . . . . . . . . 9
ARTICLE III DEVELOPMENT OF THE PROJECT. . . . . . . . . . . . . . . . . . 9
3.1 Budgets . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.1.1 Approval of Budgets. . . . . . . . . . . . . 9
3.1.2 Conformity with Budget. . . . . . . . . . . . 9
3.1.3 Reserves.. . . . . . . . . . . . . . . . . . . 9
3.2 Project Schedule and Development Plan . . . . . . . . . . . .10
3.2.1 Approved Project Schedule and Development
Plan. . . . . . . . . . . . . . . . . . . . .10
3.2.2 Delay. . . . . . . . . . . . . . . . . . . . .10
3.2.3 Notification by Development Manager. . . . . .10
3.3 Project Phasing . . . . . . . . . . . . . . . . . . . . . . .10
3.4 Entitlements. . . . . . . . . . . . . . . . . . . . . . . . .10
3.5 Formation of Districts. . . . . . . . . . . . . . . . . . . .11
3.6 Risk Management . . . . . . . . . . . . . . . . . . . . . . .11
3.7 Litigation. . . . . . . . . . . . . . . . . . . . . . . . . .11
3.8 Development Manager's Other Duties. . . . . . . . . . . . . .11
3.8.1 Overall Project Management . . . . . . . . . .12
3.8.2 Plans and Specifications . . . . . . . . . . .12
3.8.3 Third Party Contracts. . . . . . . . . . . . .12
3.8.4 Construction Management. . . . . . . . . . . .12
3.8.5 Supervision of Third Parties . . . . . . . . .12
3.8.6 Governmental Inspections and Approval. . . . .13
3.8.7 Applications for Payment . . . . . . . . . . .13
3.8.8 Change Orders. . . . . . . . . . . . . . . . .13
3.8.9 Project Meetings . . . . . . . . . . . . . . .13
3.8.10 Loan Administration. . . . . . . . . . . . . .13
3.8.11 Books and Records . . . . . . . . . . . . . .13
3.8.12 Liens and Stop Notices . . . . . . . . . . . .13
3.8.13 Utilities . . . . . . . . . . . . . . . . . .13
3.8.14 Adjoining Landowners . . . . . . . . . . . . .13
(i)
3.8.15 Bonds and Deposits . . . . . . . . . . . . . .13
3.8.16 Other Services . . . . . . . . . . . . . . . .14
3.9 Inspections . . . . . . . . . . . . . . . . . . . . . . . . .14
3.10 Approvals by Owner. . . . . . . . . . . . . . . . . . . . . .14
3.11 Land Maintenance and Protection . . . . . . . . . . . . . . .14
3.12 Ownership of Plans and Materials. . . . . . . . . . . . . . .14
ARTICLE IV SALE OF PROJECT . . . . . . . . . . . . . . . . . . . . . . .15
4.1 Duties of Development Manager . . . . . . . . . . . . . . . .15
4.1.1 Marketing Materials . . . . . . . . . . . . . . . .15
4.1.2 Co-op Marketing and Advertising Program . . . . . .15
4.1.3 Disclosure Program. . . . . . . . . . . . . . . . .15
4.1.4 Master Association. . . . . . . . . . . . . . . . .15
4.1.5 Selection of Purchasers . . . . . . . . . . . . . .16
4.1.6 Purchase Documents. . . . . . . . . . . . . . . . .16
4.1.7 Closings. . . . . . . . . . . . . . . . . . . . . .16
4.1.8 Purchaser Defaults. . . . . . . . . . . . . . . . .16
4.1.9 Post Closing Matters. . . . . . . . . . . . . . . .16
4.1.10 Other Services. . . . . . . . . . . . . . . . . . .16
4.2 Sale of the Project . . . . . . . . . . . . . . . . . . . . .16
4.3 No Representations. . . . . . . . . . . . . . . . . . . . . .17
4.4 Price List. . . . . . . . . . . . . . . . . . . . . . . . . .17
4.5 Sales Reports . . . . . . . . . . . . . . . . . . . . . . . .17
ARTICLE V PROGRESS MEETINGS; REPORTING REQUIREMENTS. . . . . . . . . . . . .17
5.1 Progress Meetings . . . . . . . . . . . . . . . . . . . . . .17
5.2 Reporting Requirements. . . . . . . . . . . . . . . . . . . .17
5.3 Third Party Information . . . . . . . . . . . . . . . . . . .18
5.4 Books and Records . . . . . . . . . . . . . . . . . . . . . .18
ARTICLE VI INSURANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . .18
6.1 Insurance General . . . . . . . . . . . . . . . . . . . . . .18
6.2 Evidence of Insurance . . . . . . . . . . . . . . . . . . . .19
6.3 Workers' Compensation Insurance . . . . . . . . . . . . . . .19
6.4 Commercial General Liability Insurance. . . . . . . . . . . .19
6.5 Automobile Liability Insurance. . . . . . . . . . . . . . . .19
6.6 Umbrella/Excess Coverage. . . . . . . . . . . . . . . . . . .19
6.7 Additional Insured. . . . . . . . . . . . . . . . . . . . . .19
6.8 Project Property Insurance. . . . . . . . . . . . . . . . . .20
6.9 Additional Named Insured. . . . . . . . . . . . . . . . . . .20
6.10 Lender Requirements. . . . . . . . . . . . . . . . . . . . .20
6.11 OCIP Policy . . . . . . . . . . . . . . . . . . . . . . . . .20
ARTICLE VII PAYMENTS TO DEVELOPMENT MANAGER . . . . . . . . . . . . . . . .20
(ii)
7.1 Fees to Development Manager . . . . . . . . . . . . . . . . .20
7.2 Project Management Fee. . . . . . . . . . . . . . . . . . . .20
7.3 Field Overhead Fee. . . . . . . . . . . . . . . . . . . . . .20
7.4 Marketing and Advertising Fee . . . . . . . . . . . . . . . .21
7.5 Payment of Fees . . . . . . . . . . . . . . . . . . . . . . .21
7.6 Success Fee . . . . . . . . . . . . . . . . . . . . . . . . .21
ARTICLE VIII FUNDING FOR PROJECT . . . . . . . . . . . . . . . . . . . . . .23
8.1 Costs to be Borne by Owner. . . . . . . . . . . . . . . . . .23
8.2 Costs to be Borne by Development Manager. . . . . . . . . . .24
ARTICLE IX TERMINATION; DEFAULT. . . . . . . . . . . . . . . . . . . . . . .24
9.1 Right of Termination for Convenience. . . . . . . . . . . . .24
9.2 Termination Claim . . . . . . . . . . . . . . . . . . . . . .25
9.3 Full Payment. . . . . . . . . . . . . . . . . . . . . . . . .25
9.4 Termination By Reason of Default. . . . . . . . . . . . . . .25
9.5 Remedies. . . . . . . . . . . . . . . . . . . . . . . . . . .27
9.6 Development Manager's Responsibility Upon Termination . . . .27
9.7 Termination By Development Manager. . . . . . . . . . . . . .27
ARTICLE X MISCELLANEOUS PROVISIONS . . . . . . . . . . . . . . . . . . . . .28
10.1 Remedies Cumulative. . . . . . . . . . . . . . . . . . . . .28
10.2 Nonwaiver. . . . . . . . . . . . . . . . . . . . . . . . . .28
10.3 Successors and Assigns . . . . . . . . . . . . . . . . . . .28
10.4 Written Notice . . . . . . . . . . . . . . . . . . . . . . .29
10.5 Severability . . . . . . . . . . . . . . . . . . . . . . . .29
10.6 No Third-Party Beneficiaries . . . . . . . . . . . . . . . .30
10.7 Exhibits and Headings . . . . . . . . . . . . . . . . . . .30
10.8 Oral Agreements. . . . . . . . . . . . . . . . . . . . . . .30
10.9 Counterparts . . . . . . . . . . . . . . . . . . . . . . . .30
10.10 Governing Law. . . . . . . . . . . . . . . . . . . . . . . .30
10.11 Special Exculpation. . . . . . . . . . . . . . . . . . . . .30
10.12 Lenders. . . . . . . . . . . . . . . . . . . . . . . . . . .30
10.13 Time . . . . . . . . . . . . . . . . . . . . . . . . . . . .31
10.14 Independent Contractor . . . . . . . . . . . . . . . . . . .31
10.15 Indemnity. . . . . . . . . . . . . . . . . . . . . . . . . .31
10.15.3 Applicability of Indemnity . . . . . . . . . . . .32
10.16 Merger . . . . . . . . . . . . . . . . . . . . . . . . . . .32
10.17 Alternative Dispute Resolution . . . . . . . . . . . . . . .32
10.18 Attorney's Fees. . . . . . . . . . . . . . . . . . . . . . .32
10.19 Non-Discrimination . . . . . . . . . . . . . . . . . . . . .32
10.20 Confidentiality. . . . . . . . . . . . . . . . . . . . . . .32
10.21 Advice of Counsel. . . . . . . . . . . . . . . . . . . . . .33
(iii)
DEVELOPMENT MANAGEMENT AGREEMENT
THIS DEVELOPMENT MANAGEMENT AGREEMENT (the "Agreement") is made
effective as of the 14th day of August, 1998, by and between Provence
Hills Development Company, LLC, a Delaware limited liability company (the
"Owner"), and HomeFed Corporation, a Delaware corporation (the
"Development Manager").
RECITALS
A. Owner owns that certain real property located in the City of
San Marcos, County of San Diego, State of California, more particularly
described in Exhibit "A" attached hereto and by this reference
incorporated herein (the "Property").
B. The Property is part of a master-planned residential community
commonly known as "San Elijo Ranch" ("San Elijo Ranch Community" or
"Project") which has been and continues to be developed by Owner. Owner
currently anticipates that the Project will be developed in five (5) major
construction phases.
C. Owner obtained approval from the City of San Marcos of
Tentative Subdivision Map No. 400 pursuant to Resolution No. 98-5025
adopted on May 12, 1998, covering a majority of the Property. Owner
intends to process (and, upon execution of this Agreement, will cause
Development Manager to process) final subdivision maps to subdivide the
Property into legal parcels that may be conveyed to Buyers (as defined
below) in accordance with the California Subdivision Map Act ("Final
Map(s)").
D. The San Elijo Ranch Community is subject to the San Elijo
Ranch Specific Plan (the "Specific Plan") and the First Amended and
Restated Development Agreement and Owner Participation Agreement between
the City of San Marcos, the San Marcos Redevelopment Agency and San Elijo
Ranch, Inc., dated August 15, 1997, and recorded in the Official Records
of San Diego County on August 15, 1997, as File No. 97-0395018 (the
"Development Agreement"). Owner is processing (and, upon execution of
this Agreement, will cause the Development Manager to process) certain
other discretionary approvals relating to the development of the San Elijo
Ranch Community. In satisfaction of various conditions(s) of approval or
in order to comply with growth regulation of the City of San Marcos or in
order to receive discretionary or other approvals or as a result of voter
initiatives or other governmental action, Owner may enter into agreements
with the State of California, County of San Diego, City of San Marcos, and
other governmental agencies. Such agreements may relate to the
establishment of bonus densities or density transfers, the provision of
on-site or off-site facilities or services for the benefit of the San
Elijo Ranch Community and to serve the public facility needs of the San
Elijo Ranch Community, the creation of assessment, facilities benefit or
other community facilities assessment districts relating to the San Elijo
Ranch Community or other matters relating to the development of the San
Elijo Ranch Community.
1
E. Development Manager is experienced in the development,
management and sale of real estate development projects similar to the
Project.
F. Owner and Development Manager desire to enter into this
Agreement subject to the terms of which Development Manager, on behalf of
Owner as agent and representative of Owner and independent contractor for
Owner, shall undertake those development, construction management and
sales activities more particularly described herein.
NOW, THEREFORE, in consideration of the foregoing Recitals and the
mutual promises and covenants contained herein, Owner and Development
Manager agree as follows:
ARTICLE I
DEFINITIONS
-----------
For the purposes of this Agreement, the following terms shall have
the respective meanings set forth below:
"Affiliate" shall mean a person or entity controlled by, under
common control with or controlling another person or entity. For purposes
of the definition of the "Initial Owner Payment Amount" and Section 8.1.5,
the term "Affiliate" shall include any person or entity who is an
Affiliate on the date of this Agreement even if they are no longer an
Affiliate at any time thereafter.
"Agreement" shall mean this Development Management Agreement, as the
same may be amended, modified or supplemented from time to time.
"Application for Payment" shall mean the Application for Payment
customarily used by Owner from time to time.
"Budget" shall mean the pro forma cash flow analysis for the Project
(and each Phase thereof) attached hereto as Exhibit B, as it may be
amended and/or updated from time to time, setting forth the anticipated
costs, expenses, and income and other relevant financial projections.
"Building Permits" shall mean such grading and building permits as
may be necessary for the construction of the Improvements.
"Business Day" shall mean any day other than a Saturday, Sunday or
other than a holiday on which businesses in San Diego County, California
are generally closed for business.
"Buyer(s)" shall mean any purchaser(s) of all or any part of the
Property from Owner.
"City" shall mean the City of San Marcos, California.
2
"Claims" shall mean any and all claims, liabilities, losses,
damages, costs or expenses, including, without limitation, actual
attorneys' fees and costs, court costs, demands, debts, causes of action,
fines, judgments and penalties.
"Commercial Property" shall mean the portions of the Project planned
for commercial development under the Specific Plan and the other
Entitlements.
"Construction Management Services" shall mean the construction
management services to be performed by Development Manager under this
Agreement in connection with construction of the Improvements by Third
Parties.
"Consultants" shall mean the architects, engineers, consultants or
designers engaged by Owner and/or Development Manager on behalf of Owner
for the Project.
"Contractor(s)" shall mean one or more licensed general contractors
to be engaged by Owner to construct all or a portion of the Improvements.
"Co-op Marketing and Advertising Program" shall mean the Development
Manager's strategy for marketing the Project and/or any property that
comprises the San Elijo Ranch Community to the general public on behalf of
Buyers.
"Costs" or "costs" means any costs, fees or expenses.
"Day" shall mean a calendar day unless specifically referenced as a
Business Day.
"Development Management Fee" shall refer collectively to the Field
Overhead Fee, the Project Management Fee, and the Marketing and
Advertising Fee.
"Development Plan" shall mean the Owner's general plan for
development of the Project consisting of the product type and size, site
plan and density of development and Project amenities, which Development
Plan shall be consistent with the Specific Plan and the other
Entitlements.
"Development Services" shall mean the obligations of Development
Manager under this Agreement with respect to the development, marketing
and sale of the Project as set forth herein, including, without
limitation, the processing of all applications, plans and maps required to
obtain the Entitlements for the Project.
"District(s)" shall mean any assessment, facilities benefit,
community facilities districts or other financing districts relating to
the San Elijo Ranch Community that Owner may elect to form.
"Entitlements" shall mean the Specific Plan, the Development
Agreement, the Tentative Maps, the Final Maps, the Building Permits and
all other governmental agreements, permits and entitlements required from
time to time for the development and sale of the Project to Buyers,
3
including, without limitation, the governmental agreements and
governmental approvals described in Recital D above.
"Field Overhead Fee" shall mean the fee described in Section 7.3
below.
"Final Map" shall mean a final subdivision map subdividing all or a
portion of the Property in substantial conformance with the Tentative
Maps.
"Gross Revenues" shall mean the total amount of revenues from the
Property.
"Improvements" shall mean the onsite and offsite grading,
subdivision and other improvements to be constructed in connection with
the development of the Project as set forth in the Plans and
Specifications, as the same may be amended, modified or supplemented from
time to time pursuant to the terms hereof.
"Initial Owner Payment Amount" shall mean the sum of (x) all amounts
due from and payable by Owner in connection with the release of Trust
Deeds encumbering portions of the Property that have been sold or
conveyed, and the payment or reimbursement of fees, costs and expenses
incurred in connection with the release of such Trust Deeds and (y) all
amounts payable by Owner to any Affiliate of Owner, including the 12%
preferred return earned on any advances to Owner from such Affiliates.
"Lender" shall mean the construction lender for the Project or any
other lender making a loan to Owner, if any, whether secured or unsecured,
the proceeds of which are used to pay any portion of the costs of
developing or constructing the Project.
"Line Items" shall mean the cost accounting categories set forth in
the Budget for each of the construction trades for the construction of the
Improvements and for any separate material categories or other development
costs, including costs to obtain Entitlements.
"Litigation" shall mean any existing or future litigation against
Owner relating to the Project, including, without limitation, the actions
described in Schedule "1" attached hereto and incorporated herein.
"Marketing and Advertising Fee" shall mean the fee described in
Section 7.4 below.
"Marketing Materials" shall mean brochures, property profiles,
fliers, newspaper advertisements and other marketing materials and
promotional items for the Project.
"Marketing Plan" shall mean Development Manager's strategy for
marketing the Project to Buyers.
4
"Merchant Builder" shall mean a person or entity that will acquire
a portion of the Project for the development and sale of Residences
thereon.
"Net Revenues" shall mean the excess of (x) Gross Revenues received
by Owner after the date of this Agreement over (y) Project Costs incurred
after the date of this Agreement.
"Notice of Termination" shall mean a written notice of termination
of this Agreement delivered by Owner to Development Manager.
"Phase" shall mean the phase or phases of development for the
Project. Owner currently anticipates that the Project will be developed
in five (5) major construction Phases.
"Plans and Specifications" shall mean the grading plans and the
architectural and engineering plans and specifications for the
Improvements including the improvement plans that may be approved by the
City in connection with the Final Maps, the geotechnical report, if any,
for the Project (the "Geotechnical Report"), the plot plans showing the
proposed location of the Improvements and appurtenances, and such other
plans and specifications as may be necessary for the construction of the
Improvements.
"Price List" shall mean the selling prices for parcels within each
Phase to be sold to Buyers.
"Prime Rate" shall mean the reference rate quoted from time to time
by Bank of America NT&SA, or, if Bank of America NT&SA is no longer in
existence, the reference rate quoted by the successor to Bank of America
NT&SA.
"Project Costs" shall mean all costs incurred by Owner and/or by
Development Manager on behalf of Owner in connection with the Property
and/or the Project, in accordance with the Budget or otherwise approved by
Owner. However, Project Costs shall exclude the Success Fee, the Costs
described in Section 8.2 below, the Initial Owner Payment Amount and any
income, franchise or similar taxes applicable to Gross Revenues.
"Project Management Fee" shall mean the fee described in Section 7.2
below.
"Project Schedule" shall mean a schedule to be prepared by
Development Manager and approved by Owner showing the dates of
commencement and completion of the Project and each Phase, and the
anticipated date for the final sale to a Buyer for each Phase in the
Project, which schedule shall be updated by Development Manager as
provided in this Agreement.
"Residence" shall mean each of the residences, including single
family residences, condominiums and apartments, to be developed by
Merchant Builders as contemplated by the Specific Plan and the other
Entitlements.
5
"Sales Entitlements" shall mean all governmental permits and
entitlements required for the sale of portions of the Project to Buyers,
and, to the extent applicable to Owner, the sale of Residences by Merchant
Builders to members of the home buying public including, without
limitation, preliminary and final subdivision public reports from the
California Department of Real Estate, and FHA/VA approvals.
"Sales Report" shall mean a report to be prepared by Development
Manager showing the progress of the sale of each Phase of the Project,
which report shall be updated by Development Manager as provided in this
Agreement.
"Services" shall mean the Development Services, the Construction
Management Services and any other services contemplated to be performed by
Development Manager under this Agreement.
"Sold," "sold" or "sale" shall mean, with respect to any portion of
the Property, the recordation of the grant deed in the Official Records of
San Diego County, California, transferring fee title to a Buyer.
"Subcontractor" shall mean a person or organization who has a direct
contract with a Contractor to perform any work or to provide any
materials, equipment or supplies for the Project and, as used herein,
unless the context otherwise requires, shall include sub-subcontractors.
"Success Fee" shall mean the fee to be paid to Development Manager
as described in Section 7.6 below.
"Tentative Maps" shall mean Tentative Subdivision Map No. 400
approved by the City for a portion of the Project and any other tentative
map(s) for any portion of the Project.
"Third Party or Parties" shall mean individually or collectively, as
applicable, any Consultants, Contractor, Subcontractor, vendor, supplier
or any other person or entity providing services or materials to the
Project, other than the Development Manager.
"Third Party Contract" shall mean a contract between Owner (or
Development Manager on behalf of Owner) and any Third Party.
"Trust Deeds" shall mean the deeds of trust that currently encumber
all or any portion of the Property as described on Schedule "2" attached
hereto and incorporated herein.
"Unavoidable Delay" means any prevention, delay or stoppage in the
Services required of Development Manager pursuant to the Agreement caused
by acts of God, war, inability to obtain labor or materials or reasonable
substitutes therefor, newly enacted governmental regulations or controls
or the application to the Project of existing regulations or controls in
a manner which Development Manager could not have reasonably foreseen or
other matters or causes beyond the reasonable control of Development
Manager, which shall extend the time within which this Agreement requires
6
certain acts to be performed for a period equal to any such prevention,
delay or stoppage.
ARTICLE II
ENGAGEMENT; STANDARDS OF PERFORMANCE
------------------------------------
2.1 Engagement. Subject to the terms and conditions set forth in
this Agreement, Owner hereby engages Development Manager, and Development
Manager hereby agrees to use commercially reasonable efforts to perform
the Services, including using commercially reasonable efforts to
(i) preserve all existing Entitlements and obtain and preserve all other
Entitlements required from time to time for the Project, (ii) negotiate on
behalf of Owner contracts with all Third Parties, (iii) oversee and manage
construction of the Improvements by Third Parties pursuant to approved
Plans and Specifications, (iv) obtain all Sales Entitlements for the
Project, (v) market the Project for sale to prospective Buyers and
negotiate on behalf of Owner agreements for the sale of portions of the
Project, (vi) develop, manage and implement the Co-op Marketing and
Advertising Program and the Marketing Plan, (vii) take actions necessary
to form the Districts and thereafter implement the financing plan
contemplated by the Districts, (viii) manage, prosecute and defend the
Litigation and make recommendations to Owner in connection therewith,
(ix) obtain the acceptance of the applicable Improvements by the relevant
government agencies, (x) manage the Project in a manner that minimizes
Owner's potential liabilities related to the development of the Project,
including making recommendations to Owner regarding, and thereafter
implementing, construction management procedures, insurance programs and
other risk management strategies, (xi) obtain financing for development of
the Project, and (xii) otherwise provide all services necessary for
completion of the development, marketing and sale of the Project, all
within the Budget and Project Schedule as the same may be modified from
time to time. Nothing contained in this Agreement shall be deemed or
construed to be a representation by Development Manager that the
Entitlements or the Sales Entitlements relating to the Project can be
obtained by Development Manager, that the Project will be sold at the
prices set by Owner or within the time frame set forth in the Project
Schedule (subject, however, to the provisions of Section 3.2), or that the
Project can be completed for the amounts set forth in the Budget.
2.2 Standard of Performance. Development Manager accepts the
relationship of trust and confidence established between Development
Manager and Owner by this Agreement. Development Manager covenants with
Owner to furnish its skill and judgment and to cooperate with Owner, and
the Third Parties performing work on the Project or providing services
relating to the Project. Development Manager shall perform its duties and
obligations under this Agreement in a reasonably efficient, expeditious
and economical manner, consistent with the best interests of Owner, and in
accordance with the applicable Project Schedule (subject, however, to the
provisions of Section 3.2) and within the amounts set forth in the Budget.
2.3 Development Manager's Personnel. Development Manager shall
provide adequate and experienced personnel to perform the duties and
obligations of Development Manager described in this Agreement, including
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competent construction management personnel reasonably approved by Owner
and qualified and competent employees who are licensed to sell real estate
in California. All such personnel shall be employees of Development
Manager and not Owner. Development Manager shall directly supervise the
time and manner of the work and services to be performed by its employees
and personnel. Development Manager shall be responsible for hiring,
compensating, supervising and training all of Development Manager's
employees and staff members performing services relating to the Project.
Development Manager shall comply with all applicable laws, rules and
regulations relating to the duties and obligations of Development Manager
under this Agreement and/or relating to Development Manager's employees.
The persons designated by Development Manager as its representatives
("Representatives") shall represent Development Manager as its agents and
all written communications given to or by those Representatives shall be
as if given to or by Development Manager. Development Manager's
Representatives and its other key personnel shall not be changed by
Development Manager without consultation with Owner. Development Manager
and its employees shall at all times perform Development Manager's
obligations hereunder in a good and workmanlike manner. Any employee of
Development Manager working on the Project who, in the opinion of Owner,
does not perform its work in a skillful manner or appears to be
incompetent or to act in a disorderly or intemperate manner shall, at the
written request of Owner, be removed from work on the Project immediately,
provided that Owner shall indemnify and hold Development Manager harmless
from any reasonable costs incurred as a result of such removal, excluding
from such indemnity however any costs or liabilities arising from
Development Manager's failure to effect such removal in accordance with
applicable law or from other acts or omissions of Development Manager not
directly related to such removal.
2.4 Owner's Representatives. Those persons designated by Owner,
in writing, as its representatives shall represent Owner as its agents and
all written communications given to or by those representatives shall be
deemed given to or by Owner. Owner's representatives may be changed from
time to time by Owner by delivery of written notice thereof to Development
Manager.
2.5 Access to Work. Owner, Development Manager and their
respective officers, managers, members, representatives, agents and
employees shall at all times have access to the Project and the work
wherever it is in preparation or progress.
2.6 Other Services. In addition to the specific duties described
in this Agreement, Development Manager shall perform, at Owner's expense,
such other reasonable services as Owner may request from time to time, in
connection with the Project.
2.7 Licensing Requirements. Development Manager shall promptly
apply for and shall use all reasonable efforts to obtain a California real
estate broker's license. In any case, Development Manager shall obtain
such license prior to performing any Services which require a broker's
license under California law.
2.8 Bank Account. Development Manager shall establish one or more
bank accounts in Owner's name with banks designated by Owner in which
revenues and income from the Project shall be deposited and from which
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disbursements of expenses and reimbursements for authorized expenditures
shall be withdrawn. Development Manager shall not commingle the funds of
Owner with the funds of any other person. Development Manager and the
authorized representatives of Owner shall each have separate signature
authority over any such bank accounts and each shall be separately
authorized to issue checks drawn on such bank accounts; provided, however,
that Development Manager shall only have the authority to issue checks or
make withdrawals from such accounts to pay Project Costs to Third Parties
and shall not be authorized to do so to pay any amounts due to Development
Manager under this Agreement. If withdrawals from any bank account are,
with respect to any period, anticipated to exceed the balance therein,
Development Manager shall provide adequate prior notice thereof to Owner
and Development Manager shall arrange for financing to provide funds for
deposit into the account in order that withdrawals reasonably anticipated
may be made.
2.9 Project Financing. Development Manager shall on behalf of
Owner arrange financing for all Project Costs. Development Manager shall
negotiate the terms of such loans on behalf of Owner and make
recommendations to Owner with respect to such loans. In addition, in its
sole discretion, Development Manager may elect, but shall not be
obligated, to provide financing for any Project Costs directly or
indirectly to Owner. The decision as to whether Development Manager shall
provide financing to Owner shall be made by Development Manager in its
sole discretion.
ARTICLE III
DEVELOPMENT OF THE PROJECT
--------------------------
3.1 Budgets.
3.1.1 Approval of Budgets. Owner and Development Manager have
jointly agreed upon each component of the Budget with respect to the
Project. Development Manager shall advise Owner if Development Manager
determines that the amounts set forth in the applicable Budget will be
exceeded. All material changes to the Budget shall be subject to Owner's
approval. Based on the Budget, and in consultation with Owner,
Development Manager shall prepare annual budgets for Owner's approval.
3.1.2 Conformity with Budget. Development Manager shall use
its commercially reasonable efforts to enable the Project to be completed
substantially in conformity with the Budget; provided, however, in no
event shall Development Manager be required to extend credit or expend
funds with respect to the Project except as specifically required by this
Agreement.
3.1.3 Reserves. Development Manager shall make
recommendations to Owner regarding reserves to be held and established to
pay Project Costs and other potential liabilities associated with the
Project, including any reserves to be established upon the completion
and/or sale of the Project.
9
3.2 Project Schedule and Development Plan.
3.2.1 Approved Project Schedule and Development Plan. Owner
and Development Manager have jointly agreed upon the Project Schedule and
Development Plan. Development Manager shall provide Owner such reports
as Owner may reasonably request with respect to the progress of the
Services.
3.2.2 Delay. Development Manager shall proceed with
reasonable diligence to perform the Services in accordance with the
Development Plan, the Project Schedule and the Budget. If any delay in
completion of the Services in accordance with the Project Schedule (or
other applicable time period as specified herein) occurs due to an
Unavoidable Delay, Owner shall grant appropriate extensions of the
applicable Project Schedule. Development Manager shall not be liable for
any costs, expenses, damages, losses, or lost profits arising from any
delays except to the extent caused by Development Manager's gross
negligence, willful misconduct or willful and persistent failure to
perform its material obligations under this Agreement.
3.2.3 Notification by Development Manager. After Development
Manager becomes aware that (i) any action or performance shown in the
Project Schedule will be delayed more than ten (10) days beyond the start
or completion date that is specified for such action or performance or
(ii) any changes to the Development Plan are necessary or advisable, and
at such other times as Owner may request, Development Manager shall
furnish to Owner proposed additional or revised schedules with variance
explanations and/or revisions to the Development Plan. If requested by
Owner, Development Manager shall submit a written remedial plan of action
for recapturing such schedule slippage, together with supporting
documentation therefor. Owner shall review the proposal with Development
Manager and Development Manager shall make any necessary revisions thereto
as mutually agreed upon during the review.
3.3 Project Phasing. Development Manager shall submit to Owner
all Budgets, Development Plans and Project Schedules required pursuant to
this Agreement on both an overall Project basis and a Phase-by-Phase basis.
Budgets and schedules shall set forth Development Manager's
estimates of the proper allocation to particular Phases of those items
which impact more than one Phase of the Project.
3.4 Entitlements. Development Manager shall take all actions
reasonably necessary to comply with the requirements of, and otherwise
preserve the effect of, all existing Entitlements. In addition,
Development Manager shall work with Owner and all appropriate governmental
authorities to obtain the other Entitlements and the Sales Entitlements
necessary for the Project. Development Manager shall make recommendations
to Owner regarding revisions to any Entitlements and/or the Sales
Entitlements that may be necessary or appropriate to respond to changes in
market conditions or to other Project changes. To the extent approved by
Owner, Development Manager shall attempt to obtain such revisions to the
Entitlements and/or the Sales Entitlements. In obtaining such
Entitlements and Sales Entitlements, Development Manager shall prepare (or
cause Third Parties to prepare) in consultation with Owner as necessary
all Tentative Maps, Final Maps, subdivision improvement agreements, bonds,
10
utility agreements, maps, studies, drawings, applications and other
necessary or appropriate items of every description. All applications for
approval of Tentative Maps, Final Maps, subdivision improvement
agreements, licenses, permits, bond, utility agreements and other
Entitlements and Sales Entitlements shall be in the name of Owner.
Development Manager shall coordinate with the City and other governmental
agencies and shall attend meetings and hearings relating to the Project.
Development Manager shall keep Owner informed of material developments
relating to the Entitlements and Sales Entitlements. In connection with
such efforts, Development Manager shall coordinate with legal counsel,
engineering firms and other applicable Third Parties selected by
Development Manager in consultation with Owner.
3.5 Formation of Districts. Development Manager shall make
recommendations to Owner regarding the Districts and work with Owner and
all appropriate governmental authorities to form and implement the
Districts. In consultation with Owner, Development Manager shall prepare
and submit (or cause Third Parties to prepare and submit) all necessary
applications, financing plans, financial analyses, disclosure provisions
and other documents and analysis and take other actions as may be
necessary to form and maintain the Districts. Development Manager shall
take all necessary action to implement the financing plans contemplated by
the Districts, including applying on behalf of Owner for financing and/or
reimbursement from the Districts for any Project Costs and complying with
and satisfying (and causing all Third Parties to comply with and satisfy)
all requirements applicable to any such financing and/or reimbursement.
Development Manager shall keep Owner informed of material developments
relating to the Districts. In connection with such efforts, Development
Manager shall coordinate with legal counsel, financial consultants and
other applicable Third Parties selected by Development Manager in
consultation with Owner.
3.6 Risk Management. Development Manager shall make
recommendations to Owner regarding risk management plans to limit Owner's
potential liability for Claims by owners of Residences, Buyers, homeowners
associations, Third Parties and other persons in connection with the
Project, including construction management procedures, quality assurance
programs, peer review programs (including peer review of construction by
Owner or a licensed Contractor engaged by Owner) appropriate selection of
Third Parties, and insurance programs. Development Manager shall
implement all such plans approved by Owner and shall cause all Third
Parties to comply with such plans. Development Manager shall cause all
Third Party Contracts and contracts with Buyers to include alternate
dispute resolution provisions and other provisions required by Owner.
3.7 Litigation. Development Manager shall manage, defend and
prosecute on behalf of Owner any Litigation pending or threatened now or
in the future, including participating in settlement discussions approved
by Owner. Development Manager shall keep Owner reasonably informed of
material developments in connection with any Litigation, and shall make
recommendations to Owner regarding such Litigation. In connection with
such efforts, Development Manager shall coordinate with legal counsel and
other applicable Third Parties selected by Owner.
3.8 Development Manager's Other Duties. Development Manager shall
be the construction manager for the Project and shall perform all services
normally performed by construction managers performing services for
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similar residential projects in Southern California, including, without
limitation, the following:
3.8.1 Overall Project Management. Performing business,
management, administrative and related services and functions that a
prudent Owner developing a residential project similar to the Project
would normally perform.
3.8.2 Plans and Specifications. Coordinating with Third
Parties to prepare the Plans and Specifications setting forth the
requirements for construction of the Improvements in detail sufficient to
enable trade contractors and suppliers to bid their respective portions of
the work and to enable workers of ordinary skill to construct such work.
Making recommendations to Owner in connection with the proposed Plans and
Specifications and any changes thereto; provided, however, that such
recommendations shall not constitute a guarantee or a representation or
warranty by Development Manager regarding the Plans and Specifications.
3.8.3 Third Party Contracts. In consultation with Owner,
selecting Third Parties, negotiating Third Party Contracts and submitting
to Owner for its review, approval and execution, all applicable bids and
all Third Party Contracts necessary for the development and sale of the
Project, in conformance with the approved Budget.
3.8.4 Construction Management. Providing administrative,
construction management and related services as required to coordinate the
construction of the Improvements by Third Parties engaged by Owner. If
any field changes or modifications are made to the Plans and
Specifications during the course of construction, such changes shall be
noted on the Plans and Specifications or the appropriate change order,
shall be approved by Development Manager (and, if such change would result
in a material increase to the costs and expenses in the Budget, by Owner),
all applicable governmental agencies and the architect or engineer of
record, and a copy delivered to Owner for its records.
3.8.5 Supervision of Third Parties. Coordinating, managing
and supervising the work of the Third Parties. Using reasonable efforts
to manage construction and to confirm that the Third Parties perform their
obligations under the Third Party Contracts in a good and workmanlike
manner and complete the Improvements substantially in accordance with the
Plans and Specifications except for typical field modifications.
Notifying Owner of any known material defect in any work performed by any
Third Party or any known material breach by any Third Party. Using
reasonable efforts to inspect the work of Third Parties and to discover
possible defects or errors therein. Development Manager shall not be
liable for any costs, expenses, damages, losses, or lost profits arising
from any default by a Third Party under a Third Party Contract except to
the extent caused by Development Manager's gross negligence, willful
misconduct or willful and persistent failure to perform its material
obligations under this Agreement.
12
3.8.6 Governmental Inspections and Approval. Arranging for
all necessary inspections and obtaining all necessary approvals of the
Plans and Specifications and the Improvements from the City and any other
governmental agencies, including the Districts. Using reasonable efforts
to enforce the obligations of the Third Parties to correct any work
rejected by the City or any other applicable governmental agency or
otherwise found to be defective or not in compliance with applicable
governmental requirements.
3.8.7 Applications for Payment. Reviewing applications for
payment from Third Parties and making recommendations to Owner as to
whether any Third Party is entitled to payment under the applicable Third
Party Contract. Obtaining and reviewing conditional and unconditional
lien waivers and releases as appropriate in connection with all such
applications for payment.
3.8.8 Change Orders. Reviewing and approving any change
orders under the Third Party Contracts; provided that if such change
orders result in a material increase in the costs and expenses in the
Budget, Development Manager shall make recommendations to Owner regarding
such change orders, which shall be subject to Owner's approval.
3.8.9 Project Meetings Scheduling and attending regular
meetings with the Third Parties and with Owner as Owner deems appropriate.
3.8.10 Loan Administration. Coordinating with any
Lenders and administering draw requests under any loans.
3.8.11 Books and Records. Maintaining books and records
pertaining to the Project.
3.8.12 Liens and Stop Notices. Making recommendations to
Owner to remove the effect of any liens or stop notices affecting the
Project.
3.8.13 Utilities. Submitting, prosecuting and
negotiating (on Owner's behalf) with utility companies, governmental
authorities and all other necessary parties or entities with respect to
utility and sewer easements, relocations and service; and implement and
coordinate Owner's construction obligations under agreements with such
utility companies, governmental authorities and other parties or entities.
3.8.14 Adjoining Landowners. Negotiating with adjoining
landowners with respect to any matters required for the development of the
Project.
3.8.15 Bonds and Deposits. Preparing necessary documents
and instruments required for the posting of any bonds, deposit agreements,
letters of credit, deposits or other forms of security required by any
governmental entities in connection with the Project and necessary
documents and instruments required for the timely exoneration, release or
reimbursement of such security when satisfied.
13
3.8.16 Other Services. Performing all other functions
which may be reasonably necessary to properly coordinate, supervise and
assist Owner in the development and completion of the Project.
3.9 Inspections. Owner shall have the right, but not the
obligation, to inspect the progress and quality of all work performed by
the Third Parties in connection with the Project, to require the
replacement of any defective or improper work and to refuse payment of any
funds related to such particular work until such matters have been
remedied. Inspections by Owner shall not in any manner constitute Owner
approval or acceptance of the progress or quality of the work. The
failure of Owner to inspect shall not relieve Development Manager of its
duties under this Agreement.
3.10 Approvals by Owner. The approval by Owner of any plans,
specifications, designs or other items relating to the Project or other
matters relating to Development Manager's performance pursuant to this
Agreement shall be construed only as an approval of conformity with the
Budget and other general aesthetic plans for the Project. Such documents
and other items will not be approved for engineering, architectural,
design, safety, structural adequacy or compliance with laws or
regulations, and Owner, by its approval of any item, assumes no liability
or responsibility therefor or for any defect in any Improvement made
pursuant thereto. If Owner withholds its approval of any matter, and
Development Manager revises its request for approval to conform to Owner's
objections, such change shall not be considered a direction by the Owner.
Such revised request shall be deemed to be with the Development Manager's
consent unless Development Manager expressly states in writing in its
request that Development Manager is not in agreement with the proposal,
and Owner acknowledges in writing that it is directing Development Manager
to act in the proposed manner.
3.11 Land Maintenance and Protection. During the term of this
Agreement, Development Manager shall maintain (or cause Third Parties to
maintain) the Property in a reasonably safe condition and reasonably free
of debris and toxic or hazardous substances with the exception of what is
legal, reasonable, sufficient and prudent to operate equipment and to
construct the Improvements. In addition, Development Manager shall
reasonably protect the Project and all Improvements, whether or not
completed, from being damaged by the work of Development Manager or any
Third Party or other persons or cause including, but not limited to,
vandals and the elements.
3.12 Ownership of Plans and Materials. As between Owner and
Development Manager, all Plans and Specifications, the Marketing Plan, the
Co-op Marketing and Advertising Program and all other marketing and sales
materials, including advertising and promotional materials prepared in
connection with the Project by or for Development Manager shall, at all
times, be solely the property of Owner. Upon any termination of
Development Manager or this Agreement, Development Manager shall provide
all such materials in its possession to Owner.
14
ARTICLE IV
SALE OF PROJECT
---------------
4.1 Duties of Development Manager. Development Manager shall
develop a Marketing Plan for the Project to be approved by Owner.
Development Manager shall use commercially reasonable efforts to sell the
Project to Buyers and otherwise implement the Marketing Plan for the
Project. Development Manager shall make recommendations to Owner
regarding any proposed changes to the Marketing Plan as circumstances may
require. Without limiting the foregoing, Development Manager's duties
with respect to the marketing and sale of the Project shall include the
following:
4.1.1 Marketing Materials. Prepare, in consultation with
Owner, the Marketing Materials. Publish and distribute the Marketing
Materials in accordance with the Marketing Plan.
4.1.2 Co-op Marketing and Advertising Program. Administer and
implement the Co-op Marketing and Advertising Program, including
collecting fees from Buyers for the Co-op Marketing and Advertising
Program. Development Manager shall be entitled to retain and use any such
fees collected from the Buyers to pay costs relating to the Co-op
Marketing and Advertising Program. Review and oversee the marketing
programs of the Buyers.
4.1.3 Disclosure Program. Administer and implement a
disclosure program for the Project that will require Buyers to disclose to
prospective purchasers various matters regarding the Project, including
the existence of any Districts, environmental issues, amenities serving
the Project, school facilities, matters or disclosures required by the
City or the Entitlements, and matters that the California Department of
Real Estate may require to be disclosed. Development Manager shall submit
to Owner the form of disclosures and any changes to the approved form of
disclosures. Development Manager shall take reasonable measures to ensure
that the Buyers comply with the requirements of the disclosure program for
the Project.
4.1.4 Master Association. Prepare, make recommendations to
Owner regarding, and submit to Owner for its approval, the declaration of
covenants, conditions and restrictions (the "Master Declaration") for the
Project, documents relating to the formation and existence of the master
homeowners association for the Project ("Master Association") and any
amendments or changes thereto. Development Manager shall cause the Master
Association to be formed (if not already formed) and, in consultation with
Owner shall take actions in connection with the Master Association,
including performing and exercising Declarant's rights and obligations
under the Master Declaration and causing Development Manager's employees
approved by Owner to serve on the board of directors of the Master
Association and any architectural or similar committee. Development
Manager shall review and approve or disapprove any subassociations that
any Buyer may propose.
15
4.1.5 Selection of Purchasers. Make recommendations to Owner
regarding offers to purchase from prospective Buyers and negotiate and
submit to Owner for its review, approval and execution any binding letters
of intent for the purchase and sale of portions of the Project.
4.1.6 Purchase Documents. Negotiate and submit to Owner for
its review, approval and execution purchase and sale agreements and
related agreements with Buyers, all using the forms of agreements approved
by Owner (the "Purchase Documents"). Negotiate and submit to Owner for
its review, approval and execution any amendments to the Purchase
Documents.
4.1.7 Closings. Take actions within Development Manager's
control necessary to close the transactions contemplated by the Purchase
Documents, including preparing escrow instructions, preparing and
delivering closing documents and taking actions to satisfy conditions to
closing on behalf of and with the cooperation of Owner.
4.1.8 Purchaser Defaults. Advise Owner with respect to any
default under the Purchase Documents and make recommendations to Owner
regarding any necessary actions in connection with such defaults.
4.1.9 Post Closing Matters. Administer any post closing
obligations of Owner, and enforcing on behalf of Owner any post closing
obligations of the Buyers, under the Purchase Documents, including
collecting any maintenance fees, marketing fees, and price participation
and/or profit participation payments, reviewing matters submitted by any
Buyer under any development declaration of covenants, conditions and
restrictions or similar instrument and enforcing any rights of first
refusal and/or repurchase rights of Owner.
4.1.10 Other Services. Provide such other services as
are reasonably related to the marketing and sale of the Project and are
agreed to by Owner and Development Manager.
4.2 Sale of the Project. Development Manager is being retained by
Owner pursuant to the provisions of this Agreement to negotiate the sale
of portions of the Project. All of the proceeds from any such sale shall
be the property of Owner and Development Manager shall not have any right
or interest with respect thereto except that Owner shall pay Development
Manager the Development Management Fee and the Success Fee as provided
herein and that Development Manager shall have the right to retain and use
fees paid by Buyers for the Co-op Marketing and Advertising Program as
provided in Section 4.1.2 above. In no event shall Development Manager
sell any portion of the Project without the prior written consent of
Owner, which consent may be withheld in Owner's sole and absolute
discretion. Development Manager shall use commercially reasonable efforts
to sell the Project. Development Manager shall provide experienced
marketing, brokerage, administrative and professional personnel to
undertake the services of Development Manager as described in this
Article. All of the Marketing Materials prepared by or for Development
Manager shall be and remain the property of Owner.
16
4.3 No Representations. Other than as approved or required by
Owner, Development Manager shall not make any representations or
warranties regarding the Project, including the condition of the Property,
the compliance of the Project with any applicable building, zoning,
environmental or other laws or regulations of any federal, state or local
entity or any other matter to any Buyer. Notwithstanding the foregoing,
Development Manager shall make such disclosures as are required by the
California Department of Real Estate or the California Business and
Professions Code and other similar laws and regulations.
4.4 Price List. Prior to offering any Phase of the Project for
sale to Buyers, Development Manager shall submit to Owner for prior
approval in Owner's sole and absolute discretion, a proposed Price List
with respect to all parcels in the Phase of the Project. If Development
Manager shall recommend any sales incentives in connection with the sale
of any parcels in addition to any sales incentive set forth in the Budget,
Development Manager shall consult with Owner regarding details concerning
the proposed sales incentives.
4.5 Sales Reports. At Owner's request, Development Manager shall
provide Sales Reports to Owner setting forth the status of the marketing
and sale of the Project, including a list of parcels, Buyers, purchase
prices and other material terms of all sales that are under negotiation,
in escrow or closed.
ARTICLE V
PROGRESS MEETINGS; REPORTING REQUIREMENTS
-----------------------------------------
5.1 Progress Meetings. At Owner's request, Development Manager
shall schedule and attend meetings with Owner to discuss the progress of
the development, construction and sale of the Project. At such meetings
Development Manager shall provide Owner with any updated Project
Schedules, Budget, Development Plan, Marketing Plan and Sales Reports
requested by Owner.
5.2 Reporting Requirements. At Owner's request, Development
Manager shall deliver the following updated reports (as applicable based
upon the performance of the Services) to Owner, all of which shall be in
form and substance satisfactory to Owner:
5.2.1 Project Schedule, Development Plan and Marketing Plan;
5.2.2 Budget (Development Manager shall also prepare and
deliver to Owner a quarterly review of the Budget);
5.2.3 Sales Report; and
5.2.4 such other reports as the parties shall mutually agree.
17
5.3 Third Party Information. Development Manager shall furnish to
Owner, from time to time during the term of this Agreement, promptly after
Owner's request, a current list of all of Third Parties employed in
connection with the Project.
5.4 Books and Records. There shall be kept at the principal
office of Development Manager correct and complete books of account and
business records in which all transactions of the Project shall be
entered. Such accounts and records shall be kept by Development Manager
on an accrual basis and in all respects in a manner consistent with
generally accepted accounting principles and practices consistently
applied. Unless otherwise directed by Owner, the books shall be kept on
the basis of a fiscal year ending December 31. Development Manager shall
preserve all such records and upon the expiration or earlier termination
of this Agreement, shall deliver all such records to Owner. Such books
shall be open at all reasonable times for inspection or copying by Owner
and its agents, employees, members and representatives. The books shall
be audited as directed by Owner. The cost of such audit shall be borne by
Owner; provided, however, that if any audit reveals errors or
discrepancies caused by Development Manager's gross negligence or willful
misconduct in the performance of the Services, Development Manager shall
correct the same at its sole expense.
ARTICLE VI
INSURANCE
---------
6.1 Insurance General.
(a) Development Manager shall not commence any Services
under this Agreement until it obtains all insurance required to be
obtained by Development Manager under this Agreement. Development Manager
will not permit any Third Party to commence work on the Project until
(i) all insurance requirements described in the applicable Third Party
Contract have also been complied with by such Third Party or unless
Development Manager has approved any lesser insurance for such Third Party
consistent with Development Manager's standard business practices and
(ii) Owner has been named as an additional insured as provided below.
(b) Except as otherwise approved by Owner, all insurance
described under this Article to be carried by Development Manager will be
maintained by Development Manager during the term of this Agreement with
insurance carriers having a general policyholders' rating of not less than
an "A-" and financial rating of not less than "VI" in the most current
Best's Key Rating Guide. Development Manager may provide the insurance
described in this Article, in whole or in part, through a policy or
policies covering other liabilities and projects of Development Manager
provided that Development Manager obtains a "per project, per location"
endorsement.
(c) Premiums for all policies of insurance required to be
maintained by Development Manager hereunder (excluding Workers'
Compensation Insurance, the cost of which shall be paid by Development
18
Manager) shall be paid by Owner to the extent properly allocable to the
Project.
6.2 Evidence of Insurance. As evidence of Development Manager's
specified insurance coverage, Owner shall accept certificates issued by
Development Manager's insurance carrier acceptable to Owner showing such
policies in force for the specified period. Such evidence shall be
delivered to Owner promptly upon execution of this Agreement or prior to
commencement of Services, whichever earliest occurs. Each policy and
certificate shall be subject to reasonable approval by Owner and shall
provide that such policy shall not be subject to cancellation without
thirty (30) days notice in writing to be delivered by registered mail to
Owner and Lender. Development Manager shall also allow Owner to inspect
such evidence of insurance as Development Manager obtains from its
Subcontractors, but Owner shall have no obligation to inspect such
evidence of insurance.
6.3 Workers' Compensation Insurance. Development Manager shall
maintain, at its expense, Workers' Compensation Insurance (statutory
limit), including Employer's Liability (limit of Five Hundred Thousand
Dollars ($500,000.00)) for all persons whom it employs in carrying out the
Services under this Agreement. Such insurance shall be in strict
accordance with the requirements of the most current and applicable
Workers' Compensation Insurance Laws in effect from time to time.
6.4 Commercial General Liability Insurance. Development Manager
shall maintain Commercial General Liability Insurance on an "occurrence"
basis, with reasonably acceptable deductibles, with a combined single
limit for bodily injury and property damage of One Million Dollars
($1,000,000.00) covering operations, independent contractors, products and
completed operations, broad form property damage (including completed
operations), severability of interest, personal injury and explosion,
collapse and underground hazards (X,C,U).
6.5 Automobile Liability Insurance. Development Manager shall
maintain owned, hired and nonowned automobile liability insurance covering
all use of all automobiles, trucks and other motor vehicles utilized by
Development Manager in connection with this Agreement, with a combined
single limit for bodily injury and property damage of One Million Dollars
($1,000,000.00).
6.6 Umbrella/Excess Coverage Development Manager shall maintain
umbrella/excess liability coverage on an "occurrence" basis, with a
combined single limit for bodily injury and property damage of Five
Million Dollars ($5,000,000.00) covering general liability and automobile
liability.
6.7 Additional Insured. To the extent available with respect to
insurance required to be obtained by Third Parties pursuant to the
provisions of Third Party Contracts, Development Manager shall use
diligent efforts to have Third Parties include Owner as an additional
insured under such coverage.
19
6.8 Project Property Insurance. Development Manager shall
maintain an "all risk" (excluding earthquake and flood) builder's risk
policy covering loss or damage to Property which becomes a full part of
the Project in the amount of the full replacement cost thereof. Such
policy shall cover the interest of Owner and Development Manager. The per
occurrence deductible and all uninsured loss shall be the responsibility
of the party whose negligence causes the loss, or, if no one is negligent,
shall be a Project Cost.
6.9 Additional Named Insured. With respect to insurance required
to be obtained by Development Manager pursuant to the provisions of
Section 6.7 of this Agreement, Development Manager shall name Owner and
any Lender as an additional named insured with respect to the Project.
6.10 Lender Requirements. Development Manager shall maintain any
additional insurance required by any Lender as a Project Cost to the
extent allocable to the Project.
6.11 OCIP Policy. Owner may elect, in its sole and absolute
discretion, to obtain an owner controlled insurance policy ("OCIP Policy")
for the Project providing such coverages as Owner may deem advisable for
liability, professional errors and omissions and builder's risk on behalf
of Owner, Development Manager, the Contractors and other parties involved
in the Project. If Owner elects to obtain the OCIP Policy, the parties
agree that Sections 6.4, 6.6, 6.8 and 6.9 shall be deleted and replaced
with provisions reflecting the terms of the OCIP Policy, which terms shall
be subject to Development Manager's approval, which shall not be
unreasonably withheld. The parties also agree to make such revisions to
this Article as may be necessary to reflect the terms of the OCIP Policy.
ARTICLE VII
PAYMENTS TO DEVELOPMENT MANAGER
-------------------------------
7.1 Fees to Development Manager. In consideration of its services
hereunder, Development Manager shall be entitled to payment from Owner of
the Project Management Fee, the Field Overhead Fee, the Marketing and
Advertising Fee and the Success Fee as provided in this Article.
7.2 Project Management Fee. The Development Manager shall be paid
a Project Management Fee in an amount equal to (a) three percent (3.0%) of
Gross Revenues minus (b) any management fees paid to date, or payable in
the future, by Owner to Accretive Investments, LLC. The Project
Management Fee shall be paid as provided in Section 7.5.
7.3 Field Overhead Fee. The Development Manager shall be paid a
Field Overhead Fee in an amount equal to (a) two and seventy two one-hundreds
percent (2.72%) of Gross Revenues minus (b) any amounts incurred
by Owner for construction peer review by Owner or its Contractor pursuant
to Section 3.6 above. The Field Overhead Fee shall be paid as provided in
Section 7.5.
20
7.4 Marketing and Advertising Fee. The Development Manager shall
be paid a Marketing and Advertising Fee in an amount equal to one and one-half
percent (1.5%) of Gross Revenues. The Marketing and Advertising Fee
shall be paid as provided in Section 7.5.
7.5 Payment of Fees. Owner will pay the Development Management
Fee applicable to each sale of a portion of the Project to Development
Manager within ten (10) days after the closing of such sale. Prior to the
first sale of a portion of the Property, Owner, in its sole discretion,
may make advances to Development Manager of up to (a) $958,000 against the
Field Overhead Fee, (b) $1,350,000 against the Project Management Fee and
(c) $284,000 against the Marketing and Advertising Fee (in each case, such
amounts shall be reduced for any payments made by Owner to any party other
than Development Manager with respect to the applicable fee category).
Any such advances shall be offset against the next payment(s) of the
Development Management Fee becoming due to Development Manager under this
Agreement. A final reconciliation shall be after the sale of the last
portion of the Project, and, within ten (10) days thereafter, Owner will
pay any underpayment of the Development Management Fee, or Development
Manager shall pay to Owner any overpayment of such fees.
7.6 Success Fee. The parties believe that the ultimate success of
the Project will largely depend on the efforts and abilities of
Development Manager. Owner desires to incentivize Development Manager to
maximize the profitability of the Project. In addition, the parties
recognize that the long-term commitments required to be made by
Development Manager under this Agreement and the risks undertaken by
Development Manager under this Agreement, including risks relating to
construction management and to Development Manager's obligation to arrange
financing for the Project, warrant additional compensation to Development
Manager. Therefore, as a material part of the consideration to
Development Manager, Owner shall pay to Development Manager a Success Fee
in the following manner:
Step 1: all Net Revenues initially shall be used by Owner to pay
the Owner Initial Payment Amount;
Step 2: next, the remaining Net Revenues (if any) will be paid
to Development Manager in an amount equal to such Owner
Initial Payment Amount;
Step 3: thereafter, fifty percent (50%) of the remaining Net
Revenues (if any) will be paid to Development Manager;
and
Step 4: provided, however, that in no event shall the Success
Fee payable to Development Manager exceed sixty-eight
percent (68%) of an amount equal to (a) the Net Revenues
minus (b) the Owner Initial Payment Amount (the "Success
Fee Limit").
21
Owner shall pay portions of the Success Fee to Development Manager from
time to time when, in Owner's reasonable judgment, Owner has sufficient
funds, after providing reserves for potential liabilities associated with
the Project in amounts determined by Owner, to make such payment in light
of the then existing and reasonably anticipated future expenses and
liabilities relating to the Project. In addition, to the extent Owner
determines that sufficient funds are available to make payments of the
Success Fee, Owner may reserve amounts that Owner deems necessary to
ensure that the payments of the Success Fee will not exceed the Success
Fee Limit. A final reconciliation shall be made after the sale of the
last portion of the Project, and Owner shall promptly pay any remaining
Success Fee to Development Manager, or Development Manager shall pay to
Owner any overpayment of the Success Fee (including any amount paid to
Development Manager that exceeds the Success Fee Limit). Notwithstanding
the foregoing, Development Manager acknowledges and agrees that it shall
be entitled to payment of the Success Fee only if the amount of the Net
Revenues exceed the amount of the Owner Initial Payment Amount, and then
only to the extent of such excess amount and subject to the Success Fee
Limit. Owner has made no representations or warranties regarding the
amount of the Success Fee that may be payable. Neither Owner nor any of
its shareholders, members, managers, officers, directors or Affiliates
shall be liable to Development Manager if no Success Fee is payable or if
the amount of the Success Fee is less than the amount anticipated by the
Budget or any other projections.
For purposes of illustration only, the following examples are
provided:
Example 1:
Net Revenues = $400,000,000
Step 1: Owner Initial Payment Amount = $50,000,000
Step 2: Initial payment to Development Manager = $50,000,000
Step 3: 50% of remainder to Development Manager = $150,000,000 (50%
of $300,000,000)
Step 4: Cap = 68% of $350,000,000 = $238,000,000
Success Fee = $200,000,000 ($50,000,000 plus $150,000,000 from
Steps 2 and 3)
Example 2:
Net Revenues = $120,000,000
Step 1: Owner Initial Payment Amount = $50,000,000
Step 2: Initial payment to Development Manager = $50,000,000
Step 3: 50% of remainder to Development Manager = $10,000,000 (50%
of $20,000,000)
Step 4: Cap = 68% of $70,000,000 = $47,600,000
Success Fee = $47,600,000 (based on 68% cap)
22
Example 3:
Net Revenues = $50,000,000
Step 1: Owner Initial Payment Amount = $50,000,000
Step 2: Success Fee = $0
ARTICLE VIII
FUNDING FOR PROJECT
-------------------
8.1 Costs to be Borne by Owner. Owner shall pay all Project
Costs. To the extent feasible, Owner (or Development Manager on behalf of
Owner) shall pay all Project Costs directly to the appropriate Third
Parties. Project Costs shall include the following general categories of
work to the extent incurred by Owner and/or Development Manager in
accordance with the Budget:
8.1.1 All costs for architectural, legal, accounting,
engineering and other consultant services (other than marketing and
advertising consultants and consultants who are engaged by Development
Manager to perform any of Development Manager's obligations hereunder) and
for soils, geological, and toxic and hazardous waste studies;
8.1.2 All construction costs, including labor and material
costs and equipment rental and repair, and the costs to maintain the
Property as provided in this Agreement;
8.1.3 All governmental licenses and fees relating to the
Project, costs to process and maintain the Entitlements, all real and
personal property taxes imposed against the Property and Project and all
bonds or deposits required in connection with the development of the
Project;
8.1.4 All costs of sale including but not limited to
commissions, escrow and title charges, and other closing costs;
8.1.5 Financing costs, including interest payments, for loans
from non-Affiliate Lenders;
8.1.6 The Development Management Fees;
8.1.7 The premiums on any insurance required to be carried by
Development Manager pursuant to Article VI to the extent properly
allocable to the Project (but excluding workers' compensation insurance);
and
8.1.8 All other costs incurred in connection with the Project
that are not expressly excluded under Section 8.2.
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Subject to the indemnification obligations of Development Manager
pursuant to Section 10.15 and Development Manager's obligation to arrange
financing for the Project, Development Manager shall have no
responsibility to fund any Project Costs under this Agreement.
8.2 Costs to be Borne by Development Manager. Notwithstanding any
other provision of this Agreement, in no event shall Owner be responsible
for any of the following costs incurred by Development Manager in
connection with the Services, all of which shall be borne by Development
Manager:
8.2.1 Any and all costs or expenses incurred by Development
Manager prior to the date of this Agreement;
8.2.2 Any marketing and advertising expenses relating to the
administration or implementation of the Marketing Plan and/or the Co-op
Marketing and Advertising Program;
8.2.3 The costs for Development Manager's employees for
salaries, fringe benefits, payroll taxes, F.I.C.A., worker's compensation
premiums, health insurance premiums, retirement benefits, bonuses and
similar personnel costs;
8.2.4 Overhead expenses of Development Manager, which shall be
limited to salaries and other payments or benefits to principals,
shareholders, and officers, and the cost of maintaining off-site offices
and any on-site construction field offices, and costs of operating
Development Manager's business;
8.2.5 Business licenses, real estate broker's license and fees
of Development Manager, except as required specifically for the Project by
governmental entities having jurisdiction thereof;
8.2.6 Costs of any consultants engaged by Development Manager
to perform any of its obligations hereunder; and
8.2.7 Any costs, liabilities, damages or expenses for which
Development Manager is responsible for indemnifying Owner pursuant to
Section 10.15.
ARTICLE IX
TERMINATION; DEFAULT
--------------------
9.1 Right of Termination for Convenience. The performance of all
or any portion of the Services under this Agreement may be terminated by
Owner, in whole or in part, whenever Owner shall determine that such
termination is in its best interest, with or without cause and without
regard to whether Development Manager is in default hereunder. Any such
termination shall be effected by delivery to Development Manager of a
24
Notice of Termination specifying the extent to which performance of
Services under the Agreement is terminated and the date (the "Termination
Date") upon which such termination shall become effective, which shall not
be less than sixty (60) days after the date of the Notice of Termination.
9.2 Termination Claim. Upon termination of this Agreement by
Owner without cause, Owner shall pay to Development Manager the following
amounts:
9.2.1 All Project Costs incurred and payable by Owner to
Development Manager pursuant to the provisions of this Agreement through
the Termination Date. Owner shall pay such amount to Development Manager
within twenty (20) days after the Termination Date; and
9.2.2 The accrued but unpaid portion of the Development
Management Fee and the Success Fee. The accrued Development Management
Fee shall only include the fee for sales to Buyers that have already
closed escrow or that are in escrow for sale on the Termination Date and
actually close pursuant to such escrow within 120 days after the
Termination Date. Owner shall make a reasonable determination of the
amount of the accrued Success Fee payable to Development Manager with
respect to such sales that have closed on or before the date that is 120
days after the Termination Date based upon Owner's reasonable estimates of
the then existing Net Revenues and the Owner Initial Payment Amount.
Within one hundred fifty (150) days after the Termination Date, Owner
shall pay to Development Manager any Development Management Fee and
Success Fee payable to Development Manager or Development Manager shall
pay to Owner any overpayment in the Development Management Fee and the
Success Fee. To the extent that any advances of the Development
Management Fee paid to Development Manager pursuant to Section 7.5 exceed
the amount of the accrued Development Management Fee as of the Termination
Date as provided in this Section, Development Manager will repay to Owner
such excess amount of the advances upon termination of this Agreement.
9.3 Full Payment. Development Manager acknowledges and agrees
that the amounts set forth in this Article represent the entire amount
payable by Owner to Development Manager upon the termination of this
Agreement and in no event shall Development Manager be entitled to any
other or future fees, costs of other expenses arising out of this
Agreement or the termination thereof.
9.4 Termination By Reason of Default. Development Manager shall
be in default and breach of this Agreement, and this Agreement shall
terminate at the election of Owner in its reasonable discretion, without
notice except as expressly provided to the contrary, upon the occurrence
of any of the events set forth in Sections 9.4.1 through 9.4.7, inclusive.
9.4.1 Development Manager shall admit in writing its inability
to pay its debts when due, or shall make an assignment for the benefit of
creditors; or shall apply for or consent to the appointment of any
receiver, trustee or similar officer for Development Manager, or for all
or any substantial part of its property; or Development Manager shall
institute (by petition, application, answer, consent or otherwise) any
bankruptcy, insolvency, reorganization, arrangement, readjustment of
25
debts, dissolution, liquidation, or similar proceedings relating to
Development Manager, or under the laws of any jurisdiction; or
9.4.2 A receiver, trustee or similar officer shall be
appointed for Development Manager or for all or any substantial part of
its property without the application or consent of Development Manager,
and such appointment shall continue undischarged for a period of ninety
(90) Days (whether or not consecutive); or any bankruptcy, insolvency,
reorganization, arrangements, readjustment of debt, dissolution,
liquidation or similar proceedings shall be instituted (by petition,
application or otherwise) against Development Manager and shall remain
undismissed for a period of ninety (90) Days (whether or not consecutive);
or
9.4.3 Subject to Development Manager's right to reasonably
contest, Development Manager fails to make proper payment to any party
performing services or providing materials or labor to Development Manager
in connection with this Agreement after fifteen (15) Business Days notice
thereof and of Owner's intent to terminate this Agreement, unless
Development Manager's nonpayment is due to the other party's default in
its obligations; or
9.4.4 Development Manager violates any laws, ordinances, rules
and regulations or orders of any public authority having jurisdiction and
fails to cure the applicable violation within fifteen (15) Days following
notice of any violation thereof from Owner or the applicable governmental
agency and following notice of Owner's intent to terminate this Agreement,
or, if the default cannot with due diligence be cured within such fifteen
(15) Day period, Development Manager fails to commence a cure within such
fifteen (15) Day period or thereafter fails to diligently prosecute such
cure to completion as soon as possible; or
9.4.5 Development Manager fails to arrange for financing for
the Project as required by this Agreement; or
9.4.6 Development Manager persistently fails to comply with
the applicable Project Schedule or other time period specified herein and
persistently fails to perform the Services for the Project with such
diligence as will cause the Services to be completed in accordance with
the applicable Project Schedule or other time period specified herein and
such failure continues after fifteen (15) Days notice thereof and of
Owner's intent to terminate this Agreement or, if the default cannot with
due diligence be cured within such fifteen (15) Day period, Development
Manager fails to commence a cure within such fifteen (15) Day period or
thereafter fails to diligently prosecute such cure to completion within a
reasonable time; or
9.4.7 Development Manager fails to observe any other material
terms, provisions, conditions, covenants or agreements in this Agreement
to be observed and performed on the part of Development Manager and fails
promptly to cure such default within fifteen (15) Days following notice
thereof to Development Manager by Owner and notice of Owner's intent to
terminate this Agreement, or, if the default is not a monetary default and
cannot with due diligence be cured within said fifteen (15) Day period,
Development Manager fails to commence cure within such fifteen (15) Day
26
period or thereafter fails to diligently prosecute such cure to completion
within a reasonable time.
9.5 Remedies. Upon Development Manager's default hereunder, Owner
shall have such rights and remedies as are provided herein and such
additional remedies as may be available at law or in equity.
Notwithstanding the foregoing, or anything else to the contrary contained
herein, if Development Manager fails to perform its obligations to arrange
financing in accordance with this Agreement, Owner's sole remedy against
Development Manager shall be to terminate this Agreement and Development
Manager shall not be liable for damages or subject to specific performance
or other remedies on account thereof.
9.6 Development Manager's Responsibility Upon Termination.
9.6.1 After receipt of a Notice of Termination and except as
otherwise directed by Owner in the Notice of Termination or otherwise,
Development Manager shall:
9.6.1.1 Stop work under this Agreement;
9.6.1.2 At Owner's request and, if the Notice of
Termination is delivered pursuant to Section 9.1, at Owner's expense,
either terminate all orders and agreements to the extent that they relate
to the performance of Work terminated by the Notice of Termination or
otherwise or assign such orders and agreements to Owner, as Owner directs.
9.6.1.3 Assign to Owner, in the manner, at the
times, and to the extent directed by Owner, all of the right, title and
interest of Development Manager under the orders and agreements so
terminated;
9.6.1.4 Transfer title and deliver to Owner as
directed by Owner: (a) work in process, completed work, supplies, and
other material procured as a part of, or acquired in connection with the
performance of, the work terminated by the Notice of Termination or
otherwise, (b) information and other property which, if this Agreement had
not been terminated, would have been required to be furnished to Owner,
and (c) all books, records and documents relating to the Project; and
9.6.1.5 At Owner's expense take such action as may
be necessary, or as Owner may direct, for the protection and preservation
of the property related to the Agreement which is in the possession of
Development Manager and in which Owner had or may acquire an interest.
9.7 Termination By Development Manager. Owner shall be in default
and breach of this Agreement, and this Agreement shall terminate at the
election of Development Manager, upon the occurrence of any of the events
set forth in Sections 9.7.1 through 9.7.3, inclusive.
27
9.7.1 Owner shall admit in writing its inability to pay its
debts when due, or shall make an assignment for the benefit of creditors;
or shall apply for or consent to the appointment of any receiver, trustee
or similar officer for Owner, or for all or any substantial part of its
property; or Owner shall institute (by petition, application, answer,
consent or otherwise) any bankruptcy, insolvency, reorganization,
arrangement, readjustment of debts, dissolution, liquidation, or similar
proceedings relating to Owner, or under the laws of any jurisdiction; or
9.7.2 A receiver, trustee or similar officer shall be
appointed for Owner or for all or any substantial part of its property
without the application or consent of Owner, and such appointment shall
continue undischarged for a period of ninety (90) Days (whether or not
consecutive); or any bankruptcy, insolvency, reorganization, arrangements,
readjustment of debt, dissolution, liquidation or similar proceedings
shall be instituted (by petition, application or otherwise) against Owner
and shall remain undismissed for a period of ninety (90) Days (whether or
not consecutive); or
9.7.3 Owner fails to observe any of the material terms,
provisions, conditions, covenants or agreements in this Agreement to be
observed and performed on the part of Owner and fails promptly to cure
such default within fifteen (15) Days following notice thereof to Owner by
Development Manager and notice of Development Manager's intent to
terminate this Agreement, or, if the default is not a monetary default and
cannot with due diligence be cured within said fifteen (15) Day period,
Owner fails to commence cure within such fifteen (15) Day period or
thereafter fails to diligently prosecute such cure to completion within a
reasonable time.
ARTICLE X
MISCELLANEOUS PROVISIONS
------------------------
10.1 Remedies Cumulative. No remedy herein reserved to Owner is
intended to be exclusive of any other remedy, but each and every such
remedy shall be cumulative and shall be in addition to any other given in
this Agreement or as now or hereafter existing or at law, equity or by
statute.
10.2 Nonwaiver. The failure of either party to notify the other of
any default under this Agreement shall not be deemed to be a waiver of any
continuing default of any term, covenant or condition set forth in this
Agreement, nor of such party's right to declare a default for any such
continuing breach, and the failure of either party to insist upon strict
performance of any of the terms, covenants or conditions of this
Agreement, or to exercise any option in this Agreement in any one or more
instances, shall not be construed as a waiver or relinquishment of any
such terms, covenants, conditions or options, but the same shall be and
remain in full force and effect.
10.3 Successors and Assigns. Development Manager shall not assign
this Agreement in whole or in part, or any interest herein, without
Owner's prior written consent, which may be withheld in Owner's sole and
absolute discretion. Any assignment by Development Manager without
28
Owner's consent shall be void and of no effect. The rights and
obligations of the parties hereunder shall, subject to the limitations on
assignment contained in this Section, be binding upon, and inure to the
benefit of, the successors and assigns of Owner and Development Manager.
10.4 Written Notice. For purposes of this Agreement, notices will
be deemed to have been given upon personal delivery thereof, three
(3) Business Days after having been deposited in the United States mail,
postage prepaid and properly addressed, one (1) Business Day after having
been sent by Federal Express or other similar overnight delivery service
or upon confirmation if sent by facsimile. Any party hereto may from time
to time, by written notice to the other, designate a different address
which shall be substituted for the one set forth below.
Owner: Provence Hills Development Company, LLC
0000 Xxxxxxx Xxxxxxx Xxxx, Xxxxx 000
Xxxxxxxx, XX 00000
Attn: R. Xxxxx Xxxxxxx, Vice President
Facsimile No.: (000) 000-0000
With a copy to: Provence Hills Development Company, LLC
000 Xxxx Xxxxxx Xxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000-0000
Attn: Xxxx Xxxxxx, President
Facsimile No.: (212) _____________
With an additional copy to:
Xxxx, Forward, Xxxxxxxx & Scripps LLP
000 Xxxx Xxxxxxxx, Xxxxx 0000
Xxx Xxxxx, Xxxxxxxxxx 00000-0000
Attn: Xxxxx X. Xxxxx, Esq.
Facsimile No.: (000) 000-0000
Development Manager:HomeFed Corporation
000 Xxxx Xxxxx Xxxxxx
Xxxx Xxxx Xxxx, Xxxx 00000
Attn: Xx. Xxxxxxx Xxxx
Facsimile No.: (000) 000-0000
With a copy to: Pillsbury, Madison & Sutro LLP
000 Xxxx Xxxxxxxx, Xxxxx 0000
Xxx Xxxxx, XX 00000
Attn: K. Xxxxxxx Xxxxxxx, Esq.
Facsimile No.: (000) 000-0000
10.5 Severability. In case any one or more provisions set forth in
this Agreement shall for any reason be held invalid, illegal or
unenforceable in any respect, any such invalidity, illegality, or
29
unenforceability shall not affect any other provision of this Agreement,
and this Agreement shall be construed as if such invalid, illegal or
unenforceable provision had never been incorporated therein provided that
the deletion of such provision does not materially alter this Agreement.
10.6 No Third-Party Beneficiaries. This Agreement is not intended
and shall not be deemed or construed to confer any rights, powers or
privileges on any person, firm, partnership, corporation or other entity
not a party hereto except as may be expressly provided herein to the
contrary.
10.7 Exhibits and Headings. The Exhibits attached or to be
attached hereto shall be construed with and as integral parts of this
Agreement to the same extent as if the same had been set forth verbatim
herein. The titles and headings of articles and sections of this
Agreement are intended for convenience only and shall not in any way
affect the meaning or construction of any provision of this Agreement.
10.8 Oral Agreements. No oral order, objection, claim or notice by
any party to the other shall affect or modify any of the terms or
obligations contained in this Agreement, and none of the provisions of
this Agreement shall be held to be waived or modified by reason of any act
whatsoever, other than by an express waiver or modification thereof in
writing, and no evidence shall be introduced in any proceeding of any
other waiver or modification.
10.9 Counterparts. This Agreement may be executed in any number of
counterparts, and each of such counterparts for all purposes shall be
deemed to be an original, and all of such counterparts should constitute
one and the same agreement.
10.10 Governing Law. This Agreement shall be governed by the
internal laws of the State of California without regard to choice of law
rules.
10.11 Special Exculpation. Except for payment for Services
performed in accordance with this Agreement, the liability of Owner
hereunder shall be limited to its interest in the Project, and in no event
shall any other assets of Owner or any constituent member of Owner be
subject to any claim arising out of or in connection with this Agreement.
10.12 Lenders. Upon Development Manager's receipt of the applicable
provisions thereof, Development Manager shall cooperate with all Lenders
and shall comply with all terms of the loan agreements pertaining to the
Services or the Project and the delivery of information to such Lenders
with respect thereto, including, without limitation, Lender's right to
approve Third Parties, any Third Party Contracts and all conditions
precedent to the disbursement of loan proceeds thereunder. Development
Manager agrees that, if requested by Owner, it shall advise all of the
Third Parties in writing of the identity of all Lenders. Development
Manager will cooperate with and permit all Lenders or their
representatives to enter upon the Project at reasonable times for the
purpose of inspecting the Project and all materials, fixtures and articles
to be used in the Project, and to examine all Plans and Specifications
which are or may be kept at the Project. Notwithstanding the foregoing,
any references in this Agreement to specific inspection or approval rights
of any Lender shall only apply if and to the extent such Lender elects to
30
exercise such rights by agreement with Owner or by written notice to Owner
or Development Manager.
10.13 Time. Time is of the essence of this Agreement and each
provision hereof of which time is an element.
10.14 Independent Contractor. It is expressly understood and agreed
that Development Manager will act as an independent contractor and as an
agent of Owner in the performance of its duties and responsibilities set
forth in this Agreement. No provisions of this Agreement shall be
intended to create a partnership or joint venture or other similar
relationship between Owner and Development Manager with respect to the
Project, and neither party shall have the power to bind or obligate the
other party, except as expressly set forth in this Agreement. Neither
this Agreement nor any communication or other action between the parties
relating to the Project, is intended or shall be construed to create a
joint venture, partnership or other similar relationship between
Development Manager and Owner.
10.15 Indemnity.
10.15.1 Development Manager shall defend (with legal counsel
reasonably acceptable to Owner), indemnify, protect and hold harmless
Owner and its employees, officers, directors, members, managers,
affiliates, agents and representatives, and its and their respective
successors and assigns (collectively, the "Owner Indemnitees") from any
and all Claims to the extent arising from or relating to (a) the gross
negligence or willful misconduct of Development Manager, or its agents,
employees, consultants, subcontractors, suppliers, anyone employed
directly or indirectly by any of them or for whose acts they may be liable
or any or all of them arising from or relating to Development Manager's
obligations under this Agreement; (b) any and all liens, stop notices and
charges of any type, nature, kind or description which may at any time be
filed or claimed against the Project site or any portion thereof, or the
Owner or Owner's Lender as a consequence of acts or omissions of
Development Manager, or its agents, employees, consultants,
subcontractors, suppliers, anyone employed directly or indirectly by any
of them or for whose acts they may be liable or any or all of them;
(c) Development Manager's breach of its obligations under the Agreement;
or (d) violation of any local, state or federal law, regulation or code by
Development Manager or by any of Development Manager's employees, agents,
consultants, subcontractors or suppliers; provided, however, Development
Manager shall not be obligated to indemnify a party to the extent such
damages are the result of the negligence or willful misconduct of the
party to be indemnified. The indemnity set forth in this Section shall
apply during the term of this Agreement (or Development Manager's
performance thereof) and shall survive the expiration or termination of
this Agreement until such time as action against the Owner Indemnitees on
account of any matter covered by such indemnity is barred by the
applicable statute of limitations.
10.15.2 Owner shall defend (with counsel reasonably
acceptable to Development Manager), indemnify, protect, and hold harmless
Development Manager and its employees, officers, directors, shareholders,
agents and representatives, and its and their respective successors and
assigns (collectively, the "Development Manager Indemnitees"), from and
against any and all Claims, of any nature whatsoever, arising out of, in
connection with or incidental to: (i) the negligence or willful
31
misconduct of Owner or any of its managers, members, officers, directors,
separate contractors, agents or employees; (ii) the failure by Owner to
comply with its obligations under this Agreement; (iii) any failure by
Owner to comply with any laws, statutes, ordinances, or regulations of any
governmental or quasi-governmental agency or authority except and to the
extent such compliance was the obligation of Development Manager under
this Agreement; or (iv) work performed after the Termination Date and
without Development Manager's participation. This Indemnity shall survive
the expiration or termination of this Agreement until an action against
the Development Manager Indemnitees on account of any matter covered by
such indemnity is barred by the applicable statute of limitation.
10.15.3 Applicability of Indemnity. Notwithstanding the
foregoing, if Owner elects to obtain an OCIP Policy, the parties agree
that the indemnity obligations under Sections 10.15.1 and 10.15.2 shall
only apply to the extent the matter is not covered by such OCIP Policy and
each party waives all claims against the other to the extent covered by
such insurance.
10.16 Merger. All prior understandings and agreements between the
parties respecting this relationship, are merged into this Agreement,
which Agreement fully and completely expresses the agreement of the
parties, and there are no representations, warranties or agreements except
as specifically and expressly set forth herein and in the Exhibits annexed
hereto.
10.17 Alternative Dispute Resolution. All claims, disputes and
other matters as to which the parties disagree arising out of this
Agreement or the interpretation or breach or alleged breach thereof, shall
be decided in accordance with the terms of the Alternative Dispute
Resolution Addendum attached hereto as Exhibit C and incorporated herein.
10.18 Attorney's Fees. If any action, arbitration or judicial
reference proceeding is instituted between Owner and Development Manager
in connection with this Agreement, the party prevailing in such action
will be entitled to recover from the other party all of its costs of
action, including reasonable attorneys' fees and costs, experts' fees and
costs and fees and costs incurred in connection with any appeals or to
enforce any judgment. If either party files an action against the other
in connection with this Agreement and subsequently dismisses or withdraws
such action, with or without prejudice, except in connection with a
settlement agreement between Owner and Development Manager, the other
party shall be deemed to be the prevailing party and shall be entitled to
recover its fees and costs in connection therewith.
10.19 Non-Discrimination. There shall be no discrimination against
or segregation of any person, or group of persons on account of sex, race,
color, creed, national origin or ancestry 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 of the land.
10.20 Confidentiality. Unless otherwise agreed to by Owner,
Development Manager will keep confidential all documents, contracts,
prices, plans, specifications, strategies, marketing programs, financial
32
statements, reports or other information provided to, or generated by
Owner relating to the Project and will not disclose any such information
to any person other than (i) those employees and agents of Development
Manager directly participating in providing the Services; (ii) those who
are actively and directly participating in the development of the Project,
and (iii) governmental, administrative, regulatory or judicial authorities
in the investigation of the compliance of the Project with applicable
legal requirements. However, Development Manager agrees that it will not
disclose any code compliance, environmental or other regulatory matters to
governmental or other authorities without the prior approval by Owner
unless required by law, in which case Development Manager shall promptly
notify Owner thereof. Upon any termination of this Agreement for any
reason, Development Manager will promptly return to Owner copies of all
documents or other information pertaining to the Project provided to
Development Manager by Owner. The provisions of this Section will survive
the Closing or earlier termination of this Agreement.
10.21 Advice of Counsel. Each party represents and warrants that it
has received the advice of independent counsel of its own choosing with
respect to the meaning and effect of this Agreement. No provision of this
Agreement shall be construed in favor of or against any party on the
ground that such party or its counsel drafted the provision.
IN WITNESS WHEREOF, the undersigned have executed this instrument
effective as of the date set forth above.
OWNER: DEVELOPMENT MANAGER:
PROVENCE HILLS DEVELOPMENT HOMEFED CORPORATION, a Delaware
COMPANY, LLC, a Delaware limited corporation
liability company
By: /s/ Xxxx Xxxxxx By: /s/ Xxxxxxx X. Xxxxxxxxx
--------------------------- --------------------------------
Xxxx Xxxxxx, President Xxxxxxx X. Xxxxxxxxx, Chairman
33
EXHIBITS
EXHIBIT A . . . . . . . . . . . . . . . . . . . . . . . . . Legal Description
EXHIBIT B. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Budget
EXHIBIT C. . . . . . . . . . . . . . . . Alternate Dispute Resolution Addendum
SCHEDULES
SCHEDULE 1 . . . . . . . . . . . . . . . . . . . . . . . . Existing Litigation
SCHEDULE 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . Trust Deeds
EXHIBIT C
ALTERNATE DISPUTE RESOLUTION ADDENDUM
1. DISPUTE RESOLUTION PROCEDURE FOR DISPUTES. All claims,
disputes and other matters as to which the parties disagree arising out
of this Agreement or the interpretation or breach thereof ("Disputes")
and all Related Disputes (as defined below) shall be resolved pursuant
to the terms of this Addendum. In the event that a Related Dispute is
initiated during the pendency of a Disputes proceeding ("Pending
Proceeding"), such Pending Proceeding shall be stayed until the Related
Dispute has been finally resolved or, at the option of Owner, the
Related Dispute shall be removed from such Pending Proceeding and
resolved pursuant to the terms of the Addendum. If the claims in the
Pending Proceeding include both Related Disputes and other causes of
action that are not Related Disputes then, in the discretion of the
referee, the claims that are not Related Disputes may proceed to final
resolution in the Pending Proceeding.
2. Definitions. The term "Homeowner/Association Dispute" shall
mean any action or claim by, between or among (a) Owner, Development
Manager or any Buyer or any director, officer, partner, member, manager,
affiliate, employee or agent of Owner, Development Manager or any Buyer,
or any contractor, subcontractor, design professional, engineer or
supplier who provided labor, services or materials to the Project and
who is bound or has agreed to be bound to the following dispute
notification and resolution procedure (collectively, the "Owner
Parties") and (b) either the Master Association that has been or will be
formed with respect to the Project (the "Master Association") or any
homeowner ("Homeowner"), relating to or arising out of the Project, this
Agreement, the governing documents for the Master Association, any other
agreements between the Owner Parties and a Homeowner or the Master
Association (unless any such agreement specifies another form of dispute
resolution), the sale of any portion of the Project, the use or
condition of the Project or the design or construction of or any
condition on or affecting the Project, including, but not limited to,
construction defects, surveys, soils conditions, grading,
specifications, installation of improvements or disputes which allege
breach of implied or express warranties as to the condition of the
Project or the Project where the amount in controversy is greater than
$25,000 or in which non-monetary relief is sought that cannot be granted
by a Municipal Court in the State of California as of January 1, 1998.
The term "Related Disputes" shall mean a Homeowner/Association Dispute
which arises out of the same transaction, occurrence, or series of
transactions or occurrences as a Dispute. The term "Homeowner" shall
mean and refer to one or more persons or entities who are alone or
collectively the record owner of a residential lot, condominium or
apartment.
3. ADR Provisions. All Disputes and all Related Disputes shall
be resolved shall be subject to the provisions set forth below.
3.1 Notice. Any person with a Dispute claim shall notify
Owner in writing of the claim, which writing shall describe the nature
of the claim and any proposed remedy (the "Claim Notice").
3.2 Right to Inspect and Right to Corrective Action.
Within a reasonable period after receipt of the Claim Notice, which
period shall not exceed sixty (60) days, Owner and the claimant shall
meet at a mutually-acceptable place within or near the San Elijo Ranch
Community to discuss the Dispute. At such meeting or at such other
mutually-agreeable time, Owner and Owner's representatives shall have
full access to the property that is subject to the Dispute and shall
have the right to conduct inspections, testing and/or destructive or
invasive testing of the same in a manner deemed appropriate by Owner,
which rights shall continue until such time as the Dispute is resolved.
The parties to the Dispute shall negotiate in good faith in an attempt
to resolve the Dispute. If Owner elects to take any corrective action,
Owner and Owner's representatives and agents shall be provided full
access to the Project that is subject to the Dispute to take and
complete corrective action.
3.3 Civil Code Sections 1368.4 and 1375. Nothing
contained herein shall be deemed a waiver or limitation of the
provisions of California Civil Code Sections 1368.4 and 1375.
3.4 Mediation. If the parties to the Dispute cannot
resolve the claim, the matter shall be submitted to mediation pursuant
to the mediation procedures adopted by the American Arbitration
Association (except as such procedures are modified by the provisions of
this Section) or any successor thereto or to any other entity offering
mediation services that is acceptable to such parties. No person shall
serve as a mediator in any Dispute in which the person has any financial
or personal interest in the result of the mediation, except by the
written consent of all parties to the Dispute participating in the
mediation. Prior to accepting any appointment, the prospective mediator
shall disclose any circumstances likely to create a presumption of bias
or to prevent a prompt commencement of the mediation process.
3.5 Position Memoranda; Pre-Mediation Conference. Within
ten (10) days of the selection of the mediator, each party to the
Dispute participating in the mediation shall submit a brief memorandum
setting forth its position with regard to the issues that need to be
resolved. The mediator shall have the right to schedule a pre-mediation
conference and all parties to the Dispute participating in the mediation
shall attend unless otherwise agreed. The mediation shall be commenced
within ten (10) days following the submittal of the memoranda and shall
be concluded within fifteen (15) days from the commencement of the
mediation unless the parties to the Dispute participating in the
mediation mutually agree to extend the mediation period. The mediation
shall be held in the county in which the Project is located or such
other place as is mutually acceptable to the parties to the Dispute
participating in the mediation.
3.5.1 Conduct of Mediation. The mediator has
discretion to conduct the mediation in the manner in which the mediator
believes is most appropriate for reaching a settlement of the Dispute.
The mediator is authorized to conduct joint and separate meetings with
the parties to the Dispute participating in the mediation and to make
oral and written recommendations for settlement. Whenever necessary,
the mediator may also obtain expert advice concerning technical aspects
of the Dispute, provided the parties to the Dispute participating in the
mediation agree and assume the expenses of obtaining such advice. The
2
mediator does not have the authority to impose a settlement on the
parties to the Dispute participating in the mediation.
3.5.2 Exclusion Agreement. Prior to the commencement
of the mediation session, the mediator and all parties to the Dispute
participating in the mediation shall execute an agreement pursuant to
California Evidence Code Section 1152.5(e) or successor statute in order
to exclude the use of any testimony or evidence produced at the
mediation in any subsequent dispute resolution forum, including, but not
limited to, court proceedings, reference proceedings or arbitration
hearings. Pursuant to California Evidence Code Section 1152.5(a), the
agreement shall specifically state that evidence of anything said or of
any admission made in the course of the mediation is not admissible
evidence, and disclosure of any such evidence shall not be compelled in
any civil action in which, pursuant to law, testimony can be compelled
to be given. Unless the document provides otherwise, no document
prepared for the purpose of, or in the course of, or pursuant to, the
mediation, or copy thereof, is admissible in evidence; and disclosure of
any such document shall not be compelled in any civil action in which,
pursuant to law, testimony can be compelled to be given. The provisions
of California Evidence Code Sections 1115 through 1128 shall also be
applicable to such mediation process.
3.5.3 Parties Permitted at Sessions. Persons other
than the parties to the Dispute participating in the mediation, their
representatives and the mediator may attend mediation sessions only with
the permission of such parties to the Dispute participating in the
mediation and the consent of the mediator. Confidential information
disclosed to a mediator by the parties or by witnesses in the course of
the mediation while serving in such capacity shall be confidential.
There shall be no stenographic record of the mediation process.
3.5.4 Expenses. The expenses of witnesses for either
side shall be paid by the party producing such witnesses. All other
expenses of the mediation, including, but not limited to, the fees and
costs charged by the mediator and the expenses of any witnesses or the
cost of any proof or expert advice produced at the direct request of the
mediator, shall be borne equally by the parties to the Dispute
participating in the mediation unless they agree otherwise. Each party
to the Dispute participating in the mediation shall bear its own
attorneys' fees and costs in connection with such mediation.
3.6 Judicial Reference. Should mediation described above not be
successful in resolving any Dispute, such Dispute shall be resolved by
general judicial reference pursuant to Code of Civil Procedure
Sections 638 and 641 through 645.1, and as modified or as otherwise
provided in this Section. The parties to the Dispute shall cooperate in
good faith to ensure that all necessary and appropriate parties are
included in the judicial reference proceeding. Owner shall not be
required to participate in the judicial reference proceeding if all
parties against whom Owner would have necessary or permissive cross-claims or
counterclaims will not or cannot be joined in the judicial
reference proceeding, including, but not limited to, the Owner Parties.
Subject to the limitations set forth in this Section, the general
referee shall have the authority to try all issues, whether of fact or
law, and to report a statement of decision to the court. The referee
shall be the only trier of fact or law in the reference proceeding, and
3
shall have no authority to further refer any issues of fact or law to
any other party, without the mutual consent of all parties to the
judicial reference proceeding.
3.6.1 Place. The proceedings shall be heard in San Diego
County.
3.6.2 Referee. The referee shall be an attorney or retired
judge with experience in relevant real estate matters. The referee
shall not have any relationship to the parties to the Dispute or
interest in the Project. The parties to the Dispute participating in
the judicial reference shall meet to select the referee within ten (10)
days after service of the initial complaint on all defendants named
therein. Any dispute regarding the selection of the referee shall be
promptly resolved by the judge to whom the matter is assigned, or if
there is none, to the presiding judge of the Superior Court of San Diego
County who shall select the referee.
3.6.3 Commencement and Timing of Proceeding. The referee
shall promptly commence the proceeding at the earliest convenient date
in light of all of the facts and circumstances and shall conduct the
proceeding without undue delay.
3.6.4 Pre-hearing Conferences. The referee may require one
or more pre-hearing conferences.
3.6.5 Discovery. The parties to the judicial reference
proceeding shall be entitled only to limited discovery, consisting of
the exchange between such parties of only the following matters:
(i) witness lists; (ii) expert witness designations; (iii) expert
witness reports; (iv) exhibits; (v) reports of testing or inspections of
the property subject to the Dispute, including but to limited to,
destructive or invasive testing; and (vi) trial briefs. Such parties
shall also be entitled to conduct further tests and inspections as
provided in Section above. Any other discovery provided for in the
California Code of Civil Procedure shall be permitted by the referee
upon a showing of good cause or based on the mutual agreement of the
parties to the judicial reference proceeding. The referee shall oversee
discovery and may enforce all discovery orders in the same manner as any
trial court judge.
3.6.6 Limitation on Remedies. The referee shall not have
the power to award punitive damages. In addition, as further provided
below, the right to punitive damages is waived. The referee shall have
the power to grant all other legal and equitable remedies and award
compensatory damages in the judicial reference proceeding.
3.6.7 Motions. The referee shall have the power to hear and
dispose of motions, including motions relating to provisional remedies,
demurrers, motions to dismiss, motions for judgment on the pleadings and
summary adjudication motions, in the same manner as a trial court judge,
except the referee shall also have the power to adjudicate summarily
issues of fact or law including the availability of remedies, whether or
not the issue adjudicated could dispose of an entire cause of action or
defense. Notwithstanding the foregoing, if prior to the selection of
the referee as provided herein, any provisional remedies are sought by
the parties to the Dispute, such relief may be sought in the Superior
Court of San Diego County.
4
3.6.8 Rules of Law. The referee shall apply the laws of the
State of California except as expressly provided herein including the
rules of evidence, unless expressly waived by all parties to the
judicial reference proceeding.
3.6.9 Record. A stenographic record of the hearing shall be
made, provided that the record shall remain confidential except as may
be necessary for post-hearing motions and any appeals.
3.6.10 Statement of Decision. The referee's statement
of decision shall contain findings of fact and conclusions of law to the
extent required by law if the case were tried to a judge. The decision
of the referee shall stand as the decision of the court, and upon filing
of the statement of decision with the clerk of the court, judgment may
be entered thereon in the same manner as if the Dispute had been tried
by the court.
3.6.11 Post-hearing Motions. The referee shall have the
authority to rule on all post-hearing motions in the same manner as a
trial judge.
3.6.12 Appeals. The decision of the referee shall be
subject to appeal in the same manner as if the Dispute had been tried by
the court.
3.6.13 Expenses. The fees and costs of any judicial
reference proceeding hereunder shall be paid as agreed by the parties to
the judicial reference proceeding. If such parties cannot agree on the
payment of such costs and fees, including ongoing costs and fees, then
these costs and fees shall be paid as determined by the referee, with
the overall costs and fees of the proceeding ultimately to be borne as
determined by the referee. Each party to the judicial reference
proceeding shall bear its own attorneys' fees and costs in connection
with such proceeding.
3.7 WAIVERS AND AMENDMENT. OWNER AND DEVELOPMENT MANAGER AGREE
TO HAVE ANY DISPUTE RESOLVED ACCORDING TO THE PROVISIONS OF THIS
ADDENDUM AND WAIVE THEIR RESPECTIVE RIGHTS TO PURSUE ANY DISPUTE IN ANY
MANNER OTHER THAN AS PROVIDED IN THIS ADDENDUM SUCH PARTIES ACKNOWLEDGE
THAT BY AGREEING TO RESOLVE ALL DISPUTES AS PROVIDED IN THIS ADDENDUM,
THEY WILL NOT HAVE ANY RIGHT TO HAVE SUCH DISPUTES TRIED BEFORE A JURY
AND FURTHER WAIVE THEIR RESPECTIVE RIGHTS TO AN AWARD OF PUNITIVE
DAMAGES BY THE REFEREE RELATING TO SUCH DISPUTES, THEREBY GIVING UP ANY
RIGHTS SUCH PARTIES MAY POSSESS TO SUCH REMEDIES.
5
SCHEDULE "1"
Existing Litigation
1. CARE v. City of San Marcos (Supreme Court Case No. N74070).
Final EIR and CUP - briefing complete on appeal;
2. City of San Marcos, et al. v. County of San Diego (Riverside
County Case No. 272265). Landfill litigation - ruling by court of
appeal decided against the County; ongoing enforcement of landscaping
and other issues pertaining to the landfill; and
3. County of San Diego v. City of San Marcos, et al. (Riverside
County Case No. 292531). Regarding the County's claim for an accounting
and refund of mitigation fees imposed by the City against the County in
connection with the Landfill. San Elijo is not a party to this lawsuit.
SCHEDULE "1"
SCHEDULE "2"
Trust Deeds
1. Short Form Deed of Trust and Assignment of Rents made by ABQ
DEVELOPMENT CORPORATION, a New Mexico corporation, as trustor, in favor
of SAN XXXXXX XXXX-OCEAN VIEW PARTNERSHIP, a California general
partnership, dated April 11, 1990, and recorded in the Official Records
of San Diego County, California on May 1, 1990, as Document Number 90-237220,
as modified by a Modification Agreement and Modification of Deed
of Trust dated as of December 1, 1994, and recorded in the Official
Records of San Diego County, California on December 29, 1994, as
Document Number 00-0000000.
2. Short Form Deed of Trust and Assignment of Rents made by ABQ
DEVELOPMENT CORPORATION, a New Mexico corporation, as trustor, in favor
of LAKE SAN MARCOS-153 PARTNERSHIP, a California general partnership,
dated April 11, 1990, and recorded in the Official Records of San Diego
County, California on May 1, 1990, as Document Number 90-237219, as
modified by a Modification Agreement and Modification of Deed of Trust
dated as of December 1, 1994, and recorded in the Official Records of
San Diego County, California on December 29, 1994, as Document Number
00-0000000.
3. Short Form Deed of Trust and Assignment of Rents made by ABQ
DEVELOPMENT CORPORATION, a New Mexico corporation, as trustor, in favor
of XXXXXX RANCH-S.E. 18 ASSOCIATES, a California general partnership,
dated April 11, 1990, and recorded in the Official Records of San Diego
County, California on May 1, 1990, as Document Number 90-237217, as
modified by a Modification Agreement and Modification of Deed of Trust
dated as of December 1, 1994, and recorded in the Official Records of
San Diego County, California on December 29, 1994, as Document Number
00-0000000.
4. Short Form Deed of Trust and Assignment of Rents made by ABQ
DEVELOPMENT CORPORATION, a New Mexico corporation, as trustor, in favor
of XXXXXX RANCH-N.E. 40 ASSOCIATES, a California general partnership,
dated April 11, 1990, and recorded in the Official Records of San Diego
County, California on May 1, 1990, as Document Number 90-237222, as
modified by a Modification Agreement and Modification of Deed of Trust
dated as of December 1, 1994, and recorded in the Official Records of
San Diego County, California on December 29, 1994, as Document Number
00-0000000.
5. Short Form Deed of Trust and Assignment of Rents made by ABQ
DEVELOPMENT CORPORATION, a New Mexico corporation, as trustor, in favor
of LAKE SAN MARCOS-605 PARTNERSHIP, a California general partnership,
dated April 11, 1990, and recorded in the Official Records of San Diego
County, California on May 1, 1990, as Document Number 90-237216, as
modified by a Modification Agreement and Modification of Deed of Trust
dated as of December 1, 1994, and recorded in the Official Records of
San Diego County, California on December 29, 1994, as Document Number
00-0000000.
SCHEDULE "2"
6. Short Form Deed of Trust and Assignment of Rents made by ABQ
DEVELOPMENT CORPORATION, a New Mexico corporation, as trustor, in favor
of XXXX XXXXXXXX, or any applicable successor trustee, as Trustee under
Declaration of Trust dated March 29, 1973, and recorded in the Official
Records of San Diego County, California on May 1, 1990, as Document
Number 90-237221, as modified by a Modification Agreement and
Modification of Deed of Trust dated as of December 1, 1994, and recorded
in the Official Records of San Diego County, California on December 29,
1994, as Document Number 00-0000000.
7. Short Form Deed of Trust and Assignment of Rents made by ABQ
DEVELOPMENT CORPORATION, a New Mexico corporation, as trustor, in favor
of XXXXXX X. XXXX, Trustee of the Xxxxxx X. Xxxx 1986 Trust; XXXXXXX X.
XXXXXXXXX, XX. and XXXXXXXXX XXXXXXXXX; XXXXXX X. XXXXX and XXXXXXXX
XXXXX XXXXX, Trustees of the Declaration of Trust dated October 5, 1989,
Trust No. 2; XXXXX X. XXXXX, XXXXX X. XXXXX, Trustee of the Xxxxx Family
Trust, XXXXXXX XXXXX, Trustee of the Xxxxxx Family Trust, XXXXXX X.
XXXXX; XXXXX X. XXXXX and IRL X. XXXXXXXX, co-trustees of the White and
Xxxxxxxx, A Professional Corporation Combination Retirement Plan as
Document Number 90-237215 and recorded in the Official Records of San
Diego County, California as Document Number 00-0000000.
8. Short Form Deed of Trust and Assignment of Rents made by
ABQ DEVELOPMENT CORPORATION, a New Mexico corporation, as trustor, in
favor of the Beneficiaries named therein dated April 11, 1990, and
recorded in the Official Records of San Diego County, California on
May 1, 1990, as Document Number 90-237223, as modified by a Modification
Agreement and Modification of Deed of Trust dated as of December 1,
1994, and recorded in the Official Records of San Diego County,
California on December 29, 1994, as Document Number 00-0000000.
9. Short Form Deed of Trust and Assignment of Rents made by
ABQ DEVELOPMENT CORPORATION, a New Mexico corporation, as trustor, in
favor of the Xxxxxx Xxxxxxxx and Xxxxx Xxxx dated April 11, 1990, and
recorded in the Official Records of San Diego County, California on
May 31, 1990, as Document Number 90-297451.
SCHEDULE "2"
