DEVELOPMENT
AGREEMENT
THIS DEVELOPMENT AGREEMENT is made as of the
day of
, _____, by and between
, a
, hereinafter referred to as "Developer" and
, a(n)
, hereinafter referred to as "Owner").
P
R E L I M I N A R Y :
A.
This Agreement is made with respect to certain real property located in
the City of
, County of
,
State of Arizona, described in Exhibit "A" attached hereto
and incorporated herein by reference, which real property described in Exhibit
"A" is hereinafter referred to as the "Shopping
Center". Developer is the beneficial owner of the portion of the Shopping
Center described in Exhibit "A-1" attached hereto and
incorporated herein by reference (hereinafter referred to as the
"Developer Parcel") and Owner is the owner of the portion of the
Shopping Center described in Exhibit "A-2" attached hereto
and incorporated herein by reference (hereinafter referred to as the
"Owner Parcel").
B.
The parties hereto desire to develop said Parcels for the operation of
a commercial shopping center. A plot plan delineating the manner of said
development is attached hereto as Exhibit "B", which exhibit
is hereby incorporated herein by reference.
NOW, THEREFORE, in consideration of the foregoing and of the mutual
agreement of the parties hereto to the terms and conditions hereinafter
contained, it is agreed as follows:
1.
The parties hereto agree that it is more efficient and economical to
have one (1) architect supervise the development of the "Common Area
Work" (as hereinafter defined) of the Shopping Center and one (1)
contractor perform the construction of the Common Area Work. The parties
hereto may engage any architect of their choosing respecting the design of the
buildings to be located on their respective Parcels and may engage any
contractor of their choosing to perform the construction of the buildings to
be located on their respective Parcels.
2.
(a)
The parties hereto select
, as the "Project Architect" for the supervision of the
development of the Common Area Work of the Shopping Center. Developer already
has a contract with the Project Architect, which pertains in part to his
services in connection with the design and development of the Common Area Work
of the Shopping Center as shown on Exhibit "B" hereto. In the
event the Project Architect was not paid in full, pursuant to Section 3(d) of
that certain Agreement of Purchase and Sale between Developer and Owner
relating to the Owner Parcel (the "Agreement of Purchase and Sale"),
for such services and for the Project Architect's supervisory services
required by this Development Agreement, the balance of the payment for such
design services and such supervisory services which is due and payable to the
Project Architect but was not paid pursuant to the Agreement of Purchase and
Sale shall be paid by Developer and Owner shall reimburse Developer
percent
(
%) of the amount so paid by Developer within fifteen (15) days
after written request therefor by Developer, which written request shall be
accompanied by copies of invoices or other documents establishing the amount
to be reimbursed by Owner. The intent of the foregoing is that either pursuant
to Section 3(d) of the Agreement of Purchase and Sale or this Section 2(a),
Owner shall reimburse to Developer
percent (
%) of all fees paid by Developer to the Project Architect for
services rendered in connection with the Shopping Center whether such services
were rendered, or payment therefore was made before or after execution of the
Agreement of Purchase and Sale or this Development Agreement.
(b)
(i)
All off-site work in connection with the development of the Shopping
Center shall include, but not be limited to, necessary street extensions
and/or widenings, turning movements, median divider strips, left turn stacking
lanes, traffic signalization, curbs, gutters, sidewalks, sewers, storm drains,
provision of utilities to the property line of the Shopping Center, street
grading and paving, relocation of overhead lines and replacement of same
underground as well as such other improvements as may be required by any
governmental authority or necessary to complete development of the Shopping
Center.
(ii)
All on-site work in connection with the development of the Shopping
Center shall include, but not be limited to, demolition, excavation, fill,
compaction, building pads to accommodate the buildings on the building area
located within the Shopping Center as shown on Exhibit "B",
rough graded (including compaction) within six (6) inches of finished grade as
shown on the plans and specifications, drainage, water retention, engineering
and provision of utilities (including sewers and storm drains) from the
exterior boundary of the property line of the Shopping Center to within five
(5) feet of each building pad located in the Shopping Center.
(iii)
All finished common area work in connection with the development of the
Shopping Center shall include, but not be limited to, fine grading and base,
construction of retaining or perimeter walls, common area paving, striping,
lighting, landscaping, irrigation, bumpers, curbs, gutters, sewers, storm
drains and sewers, on-site sidewalks (excepting sidewalks immediately adjacent
to the building areas) and the installation of all other common utilities.
Off-site work, on-site work and finished common area work as defined
above are hereinafter collectively referred to as the "Common Area
Work".
(c)
The buildings to be located within the Shopping Center shall be
developed in an architectural style and manner that shall create compatibility
of appearance and architectural harmony. At the time of the development of the
building area on the Developer Parcel, Owner shall have the right to approve
the elevations and exterior design of the improvements on such building area,
which improvements shall be of an exterior design architecturally harmonious
with the balance of the improvements of the Shopping Center. At the time of
the development of the building area on the Owner Parcel, Developer shall have
the right to approve the elevations and exterior design of the improvements on
such building area, which improvements shall be of an exterior design
architecturally harmonious with the balance of the improvements of the
Shopping Center. The common area of the Shopping Center shall be developed as
shown on the plot plan which is Exhibit "B" hereto.
3.
(a)
Within
(
) days of the date hereof, the Project Architect shall supervise
the letting of the contract for the construction of the Common Area Work. One
(1) contractor shall perform all said work, and said contractor either shall
be selected pursuant to competitive bidding, in which event the Project
Architect shall obtain bids from five (5) contractors approved in writing by
Developer and Owner, or shall be selected pursuant to a negotiated bid with a
contractor approved by Developer and Owner.
(b)
Whether the bid is selected by competitive bidding or negotiated, said
bid shall be approved by Developer and Owner.
(c)
Developer shall let the contract for the construction of the Common
Area Work within
(
) days of the date hereof, and Developer shall use its best efforts
to cause all of said construction to be completed on or prior to
. All of said construction shall be completed substantially in
accordance with the plans and specifications consisting of pages through
dated
, 19__ and prepared by the Project Architect.
(d)
Any change orders respecting the performance of the Common Area Work
(other than change orders respecting changes that are immaterial, the amounts
of which change orders do not exceed $10,000.00 in the aggregate) must have
the prior written approval of Developer and Owner, which approval shall not be
unreasonably withheld or delayed.
(e)
Developer's contract with the contractor performing the Common Area
Work shall provide that said contractor shall prepare and forward to the
Project Architect invoices for work completed, monthly or at such longer
intervals as shall have been approved in writing by Developer and set forth in
said contractor's contract. If the Project Architect is able to determine that
the work invoiced has in fact been performed in substantial compliance with
the plans and specifications therefor, the Project Architect shall provide to
each of Owner and Developer copies of said invoices together with the Project
Architect's written certification that the work which is the subject of said
invoices has been performed as hereinabove provided. Further, Developer's
contract with said contractor shall provide that, commencing with the third
invoice, the contractor shall provide to each of Owner and Developer a lien
waiver or release from each of the subcontractors employed on the project
respecting payment to each such subcontractor for all amounts owed to each
such subcontractor included in the next preceding invoice, together with an
affidavit of the contractor that each such lien waiver or release includes the
waiver or release of all claims for labor and materials for which a lien could
be filed. Developer shall pay all amounts owing to the contractor and Owner
shall, from time to time, within fifteen (15) days after written request
therefor by Developer, reimburse to Developer
percent (
%) of the amounts so paid by Developer to the contractor.
4.
In the event Developer shall fail to let the contract for the
performance of the Common Area Work as hereinabove provided, and such failure
shall continue for thirty (30) days following Developer's receipt of Owner's
written notice thereof, Developer agrees that Owner may so contract on behalf
of Developer. In such event, the provisions of Section 3(e) shall continue to
apply with respect to payment of the contractor.
5.
Owner shall reimburse to Developer from time to time within fifteen
(15) days after receipt of a billing therefor
percent (
%) of any other cost of performing the Common Area Work other than
costs reimbursed by Owner to Developer pursuant to Sections 2(a) and 3 above
and Section 5(d) of the Agreement of Purchase and Sale. Such other amounts
shall include, but not be limited to:
(a)
Costs of preparation and reproduction of all working plans;
(b)
All charges for fees, permits, licenses, development, sales or
transaction privilege taxes, inspections, plan check fees and certificates
required by any governmental authority or agency or otherwise;
(c)
All architectural, surveying and engineering fees (e.g., civil,
traffic, soils, etc.) incurred in connection with the preparation of all
reports and working plans and specifications;
(d)
Builder's risk and workmen's compensation insurance premiums;
(e)
Premiums for contractor's performance bond and payment bond, if any;
(f)
Premiums for mechanics' lien bonds paid for the Developer, together
with all expenses incurred in connection with the discharging of any such
mechanics' liens which may be erroneously placed upon the Shopping Center;
(g)
Recording costs and filing fees; and
(h)
Costs of an As-Built survey upon completion of the construction that is
the subject matter of this Agreement.
6.
In the event Owner shall fail to reimburse Developer sums due pursuant
to Sections 2(e), 3 or 5 above and such failure shall continue for twenty (20)
days following Owner's receipt of Developer's written notice thereof, then,
Developer shall have a lien on Owner's Parcel to the extent of the amount
unpaid by Owner, which amount shall bear interest at an annual rate of
interest equal to three percent (3%) over the then "prime rate" of
interest (or substitute therefor) charged by The Valley National Bank of
Arizona, but in no event more than the maximum rate allowed by law, from the
time such reimbursement should have been made until paid. Said lien may be
established and foreclosed in the same manner as liens are established and
foreclosed under the Declaration of Restrictions and Grant of Easements
recorded against the Shopping Center. The foreclosure of such lien shall be in
addition to any other rights or remedies Developer may have against Owner as a
result of Owner's failure to make reimbursement as provided herein.
7.
(a)
Each party shall pay the cost of construction of its respective
building(s) on its respective Parcel. In this regard, each party agrees that
any construction on its respective Parcel shall not interfere with the
operation of the business of the building(s) to be located on the other
Parcel.
(b)
(i)
Owner shall be responsible for the construction of the building and
improvements to be located on the building area within the Owner Parcel which
shall consist of a
of approximately
square feet (the
"
Building") and facilities incidental thereto. The
Building shall be constructed at least to the same standards
of quality as other
located in
,
Arizona.
(ii)
Subject to compliance with the provisions of Section 2(c) above, Owner
shall use its best efforts to cause construction of the
Building to be
commenced upon the last to occur of the following: (1)
, or (2) the fifteenth (15th) day after the date upon which the
grading and compaction of Owner's Parcel has been performed. For purposes of
the foregoing, Owner shall be deemed to have caused construction of the
Building to have commenced on the date that the pouring of the
footings for such building is commenced.
(iii)
Owner hereby agrees that Owner shall use its best efforts to cause the
Building to be complete and open for business to the public on
or before: (1) the date upon which the Common Area Work is completed or (2)
days after Owner has commenced or caused construction of the
Building to be commenced, whichever is later.
(c)
(i)
Developer shall be responsible for the construction of the buildings
and improvements ("Developer Building") to be located on the
building area on that portion of the Developer Parcel depicted on Exhibit
"B" as Lots 3 and 7. Developer shall have no obligation to
construct any buildings or other improvements on those portions of the
Developer Parcel depicted on Exhibit "B" as Lots 1, 2, 5 and
6,
(ii)
Developer shall use its best efforts to cause construction of the
Developer Buildings to commence no later than ______________ and to be
completed no later than ______________.
(d)
The parties hereto and their contractors shall generally cooperate in
all work performed under this Agreement (and under any separate development
agreements entered into between Developer and other persons owning property
within the Shopping Center, such other persons being hereinafter referred to
as "additional owners") to the end that the Shopping Center shall be
harmoniously developed. Each party hereto shall perform its construction so as
not to cause any unreasonable increase in the cost of construction incurred by
the other party or any additional owner or unreasonably interfere with any
construction performed by the other party or any additional owner. Each party
specifically acknowledges the right of the other party and the additional
owners to use the Shopping Center for performance of the work of such party or
additional owner under this Agreement or under any separate development
agreement. Each party hereto shall cause its contractor(s) to cooperate with
all other contractors in the performance of their work so that the Shopping
Center may be completed as expeditiously as possible.
In the event a party hereto, or its tenant shall open for business from
such party's Parcel while the other party is still engaged in construction
activities on its Parcel, the parties shall cause such business or
construction activities to be conducted in a manner that does not unreasonably
interfere with the activities being conducted on the other party's Parcel.
8.
The parties hereto hereby acknowledge that there has been recorded
against the Shopping Center a document entitled "Declaration of
Easements, Covenants and Restrictions" (the "CCRs") providing
for the Shopping Center to be operated as an integrated, uniform and
harmonious development. In addition to the standards of performance set forth
in this Agreement, the parties hereto shall perform their construction
obligations and other obligations, with respect to the development of the
Shopping Center, in accordance with the applicable provisions of the CCR's. In
the event of any conflict between the provisions of the CCR's and this
Agreement, the provisions of the CCR's shall govern.
9.
In the event that any party hereto brings or commences legal
proceedings other than arbitration as provided in Section 12 hereof, to
enforce any of the terms of this Development Agreement, the successful party
in such action shall be entitled to receive and shall receive from the other
party, in every such action commenced, a reasonable sum as attorneys' fees and
costs, to be fixed by the court in the same action.
10.
With respect to work to be performed hereunder, each of the parties
hereto agrees to indemnify, defend and hold the other and its agents,
servants, employees, partners, officers and directors, harmless from any and
all loss, damage, liability, cost or expense, including, but not limited to,
attorneys' fees, reasonable investigative and discovery costs, court costs and
other sums which such party, its agents, servants, employees, partners,
officers and directors may pay or become obligated to pay on account of any,
all and every demand or claim, or assertion of liability, or any claim or
action founded thereon arising or alleged to have arisen out of any act or
omission of the indemnifying party, its agents, servants and employees,
whether such claim or claims, action or actions be for damages, injury to
person or property, including the property of the indemnified party, or death
of any person, made by any person, group or organization, whether employed by
either of said parties hereto or otherwise. Each of the parties hereto agrees
that it shall, at its own expense, maintain in force a policy or policies of
insurance written by one or more responsible insurance carriers licensed to do
business in the State of Arizona which shall insure against liability for
injury to, and/or of, and/or damage to property of any person or persons, with
policy limits of not less than $1,000,000 combined single limit for injury to
or death of any number of persons or for damage to property of others arising
out of any one occurrence. Said policy or policies shall provide, among other
things, that it or they specifically recognize and insure the liability
assumed herein by the purchaser thereof. Each of the parties hereto agrees to
deliver to the other certificates of insurance evidencing the existence in
force of the policies of insurance hereinabove provided for. Each of such
certificates shall provide that such insurance shall not be cancelled or
materially amended unless ten (10) days prior written notice of such
cancellation or amendment is given to the party designated on such certificate
as holder thereof.
11.
This Development Agreement shall terminate upon satisfaction of all of
the following conditions:
(a)
Lien free completion of, and full payment and reimbursement for, the
Common Area Work; and
(b)
Satisfaction of the respective obligations of Owner and Developer as
provided in Sections 7(b) and 7(c) hereof.
Notwithstanding
the foregoing, the obligations of the parties under Section 6 and the first
sentence of Section 10 above shall survive any termination of this Agreement.
12.
Any dispute or difference (other than a dispute or difference under the
first sentence of Section 10 above) which shall arise between the parties
relating to the construction, meaning or effect of this Agreement, or of the
rights or liabilities of the parties hereunder, shall be submitted to final
and binding arbitration by a board of three (3) disinterested arbitrators.
Within ten (10) days after receipt by either party of written notice
from the other requesting arbitration, which notice shall specify the name and
address of one (1) person designated to act as arbitrator, the other party
shall give notice to the first of the name and address of one (1) other person
also to act as arbitrator. The arbitrators so appointed by the parties shall
designate within ten (10) days after the second thereof has been designated
one (1) additional person as arbitrator. Should the two (2) arbitrators be
unable to agree upon a third arbitrator within said time, the third arbitrator
shall be appointed by the presiding judge of the Superior Court of Arizona,
County Division. If the second party fails to notify the first
party of the name and address of the arbitrator it is required to designate
within the time hereinabove specified, then the arbitrator designated by the
first party acting alone shall determine the matter, and the cost of the
single arbitrator shall be borne equally by the parties hereto. If three (3)
arbitrators are appointed each party shall bear the cost of the arbitrator
appointed by it, and the parties shall share equally in the cost of the third
arbitrator. The persons designated as arbitrators shall be selected from a
list of arbitrators supplied by the American Arbitration Association who are
disinterested Arizona attorneys who have been actively engaged for at least
ten (10) years in real property law and shopping center practice.
The arbitration shall be conducted, to the extent consistent with this
Section 12, in accordance with the then prevailing rules of the American
Arbitration Association governing commercial arbitration. If a party, after
being duly notified, fails to appear at or participate in arbitration
proceedings, or fails to produce evidence demanded by the arbitrators, the
arbitrators are authorized to make their award based on the evidence produced
at the hearings by the party who does participate. In rendering their decision
and award, the arbitrators shall have no power to modify any of the provisions
of this Agreement, which shall be construed in strict conformity with Arizona
law. The decision of the arbitrators shall be in writing, shall be rendered
within thirty (30) days after the failure of a second arbitrator to be
selected, or the selection of the third arbitrator, as applicable, and shall
be final and binding upon the parties hereto. A decision of a majority of the
arbitrators shall be the decision of all arbitrators. Judgment upon the
decision and award may be entered and enforced in accordance with Arizona law
by any court of competent jurisdiction.
13.
No claim of default on the part of a party hereto made by the other
party shall give either party the right to order a halt in or cessation of any
work of construction to be performed by such party pursuant to this Agreement,
nor shall either party be thereby relieved of its obligation of diligence or
cooperation with respect to completion of such construction, unless cessation
of such construction is absolutely necessary in order to resolve a dispute
concerning a proposed change or an allegation that the work of construction is
not proceeding in accordance with this Agreement. Each party hereto
acknowledges that the paramount concern in connection with the development and
construction of the Shopping Center is the obligation of each party to proceed
with all due diligence to bring about completion of the work for which such
party is responsible at the earliest feasible time so that each party can open
for business with all work completed in the most efficient manner.
Furthermore, no party shall threaten to stop construction or threaten to
withhold any approval required in connection with the diligent prosecution of
any work of construction under this Agreement as a condition to obtaining any
concession from any other party.
14.
Any prevention, delay or stoppage due to strikes, lockouts, labor
disputes, acts of God, inability to obtain labor or materials or reasonable
substitutes therefor, governmental restrictions, governmental regulations,
governmental controls, judicial orders, enemy or hostile governmental action,
civil commotion, fire or other casualty and other causes beyond the reasonable
control of a party obligated to perform hereunder (other than financial
inability or mismanagement) shall excuse the performance by such party for a
period equal to any such prevention, delay or stoppage; provided, however,
that, should any such delay exceed seven (7) consecutive days in duration, the
party so delayed shall notify the other party hereto in writing and keep it
informed as to the progress of the resolution of such delay. Any provision
contained in this Agreement to the contrary notwithstanding, any time limits
contained in this Agreement shall be extended for the same period of time lost
by the causes hereinabove set forth.
15.
Except as otherwise provided herein, the parties hereto agree to
cooperate with each other and, at the reasonable request of either party, to
execute and deliver such instruments and documents as may be necessary to
effectuate the provisions hereof and the development of the Shopping Center as
a unified development. Without limiting the generality of the foregoing,
either party hereto shall forthwith, upon the request of the other, execute,
acknowledge (if necessary) and deliver utility easements, sewer service
agreements, water service agreements or approvals or consents to any of the
foregoing and such other documents, agreements, approvals or consents thereto
which may be requested by utility companies and/or governmental authorities in
order for the construction obligations of the parties under this Agreement to
be performed or the development of the Shopping Center to be accomplished in
the manner intended by the parties.
16.
This Agreement shall not be recorded. However, a Memorandum of this
Agreement in the form of Exhibit "C", attached hereto and
incorporated herein by reference, shall be executed and acknowledged by the
parties hereto and shall be recorded in the Official Records of
County. Upon the
termination of this Agreement pursuant to provisions of Section 11 hereof, the
parties hereto shall execute a document for recordation indicating that this
Development Agreement is no longer effective. The parties hereto shall share
equally in all recordation costs incurred pursuant to this Section 16.
17.
Time is of the essence hereof.
18.
The foregoing provisions of this Development Agreement are not intended
to create, nor shall they be in any way interpreted to create a joint venture,
partnership or any other similar relationship between the parties hereto.
19.
Developer represents and warrants that it is a general partnership
organized and existing under the laws of the State of Arizona. The persons
executing this Agreement on behalf of Developer represent and warrant on
behalf of themselves and on behalf of Developer that they are fully authorized
to execute this Agreement and to bind Developer with respect to all matters
contained herein.
20.
The headings used herein are for purposes of convenience only and shall
not be utilized in the construction or interpretation of the provisions
hereof.
21.
This Agreement was made and executed in and it shall be construed
according to the laws of the State of Arizona.
22.
No provision of this Agreement is intended to confer any benefit on any
third party and no third party shall have the right to enforce any of the
provisions of this Agreement.
23.
Unless otherwise expressly provided herein, whenever approval, consent
or satisfaction (herein collectively referred to as an "approval")
is required of either party hereto, such approval shall not be unreasonably
withheld. Unless provision herein is made for a specific time period, approval
or disapproval shall be given within ten (10) days after receipt of a written
request for approval and, if a party hereto shall neither approve nor
disapprove within such ten (10) day period (or other time period as may be
specified in this Agreement for approval), that party shall be deemed to have
given its approval (except that in the case of change order approval pursuant
to Section 3(d) above, approval or disapproval shall be given within five (5)
days). If a party hereto shall disapprove, the reasons therefor shall be
stated in reasonable detail in writing. Approval by a party hereto to or of
any act or request by the other party hereto shall not be deemed to waive or
render unnecessary approval to or of any similar or subsequent acts or
requests.
24.
This Agreement shall be binding upon the heirs, personal
representatives, successors, transferees and assigns of the parties hereto.
25.
Notices made by the parties pursuant hereto may be served personally or
may be served by depositing the same in the United States mail, postage
prepaid, certified or registered mail, return receipt requested, addressed as
follows:
To Developer:
With a copy to:
To Owner:
Any notice mailed pursuant hereto shall be deemed complete upon receipt
hereof. The foregoing addresses may be changed by written notice given
pursuant to provisions of this Section.
IN WITNESS WHEREOF, the parties hereto have executed this Development
Agreement the day and year first hereinabove set forth.
By:
Its:
("Developer")
By:
Its:
("Owner")
