Download Property Disposition Agreement: Developer's Obligations and Conditions for Closing and more Study notes Land Law in PDF only on Docsity!
Property Disposition Agreement Solicitation for Offers
PROPERTY DISPOSITION AGREEMENT
THIS PROPERTY DISPOSITION AGREEMENT (this “ Agreement ”), is made effective for all purposes as of the _____ day of_______________, 20___ (the “ Effective Date ”), between (i) DISTRICT OF COLUMBIA , a municipal corporation, acting by and through the Department of Housing and Community Development, (“ District ”), and (ii) _________________, a ___________________________ (the “ Developer ”).
RECITALS:
R-1. District owns certain real property located in Washington, D.C. with the following addresses _________________________________________________________________, which are further identified and described on Exhibit A attached hereto and incorporated herein (collectively, the “ Property ”).
R-2. Pursuant to that certain Fourth Solicitation for Offers, dated ____________________, 2010 (the “ Solicitation ”), the District in accordance with authority pursuant to Mayor’s Order 2007-209 (the “ Disposition Authority ”), solicited offers from interested developers to develop among other parcels, the Property. The Developer submitted a proposal that was selected by the District on the condition that among other things, the Developer enter into this Agreement evidencing its agreement to develop, construct, own, operate and dispose of a mixed-use project, including but not limited to, mixed-income housing, commercial uses and neighborhood amenities, approved by the District, and in accordance with the Solicitation, the District’s Disposition Authority and the terms of this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by the Parties hereto, District and Developer do hereby agree as follows, to wit:
ARTICLE I DEFINITIONS
For the purposes of this Agreement, the following capitalized terms shall have the meanings ascribed to them below and, unless the context clearly indicates otherwise, shall include the plural as well as the singular:
“Affiliate” means with respect to any Person (“ first Person ”) (i) any other Person directly or indirectly controlling, controlled by, or under common control with such first Person, (ii) any officer, director, partner, shareholder, manager, member or trustee of such first Person, or (iii) any officer, director, general partner, manager, member or trustee of any Person described in clauses (i) or (ii) of this sentence. As used in this definition, the terms “controlling”, “controlled by”, or “under common control with” shall mean the possession, directly or indirectly, of the power to direct, or cause the direction of, the management and policies of a Person, whether
Property Disposition Agreement Solicitation for Offers
through individual right, ownership of voting securities, membership interests or partnership interests, by contract or otherwise, or the power to elect at least fifty percent (50%) of the directors, managers, partners or Persons exercising similar authority with respect to the subject Person.
“Affordability Covenant” is that certain Affordable Housing Covenant in the form attached hereto as Exhibit C , to be recorded in the Land Records against the Property in connection with Closing.
“ Affordable Unit ” means each Residential Unit to be developed, sold, and used for residential purposes in accordance with the requirements of the Affordability Covenant.
“ Agreement ” means this Property Disposition Agreement.
“Applicable Laws” means all applicable District of Columbia and federal laws, codes, regulations, and orders, including, without limitation, Environmental Laws, laws relating to historic preservation, and laws relating to accessibility for persons with disabilities.
“Approved Plans and Specifications” as defined in Section 4.2.1.
“Business Days” means Monday through Friday, inclusive, other than holidays recognized by the District of Columbia government.
“ Cash Deposit ” has the meaning given in Section 2.2.1.
“CBEs” is defined in Section 7.5.
“ CBE Agreement ” is that agreement, in customary form, between Developer and DSLBD governing certain obligations of Developer under D.C. Law 16-33, as amended, for the Project.
“Closing” is the consummation of the purchase and sale of the Property as contemplated by this Agreement.
“ Closing Date ” is defined in Section 6.1.
“Commencement of Construction” means the Developer has obtained all of the following: (i) a building permit or an unconditional approval letter from the District of Columbia Department of Consumer Regulatory Affairs; (ii) an executed construction contract approved by the District with its general contractor, if applicable; (iii) given notice to the general contractor to proceed under said construction contract; and (iv) caused the general contractor to mobilize on the Property equipment required to commence construction in accordance with the Approved Plans and Specifications, and shall occur no later than the date identified on the Schedule of Performance. For purposes of this Agreement, the term “ Commencement of Construction ” does not mean site exploration, borings to determine foundation conditions, or other pre- construction monitoring or testing to establish background information related to the suitability
Property Disposition Agreement Solicitation for Offers
“ Disapproval Notice ” is defined in Section 4.2.2.
“ Disposal Plan ” is defined in Section 2.3.1(d).
“ District Default ” is defined in Section 8.1.2.
“ District Parties ” mean District’s employees, officers, consultants and duly authorized representatives and agents.
“ DOES ” is the District of Columbia Department of Employment Services, and any successor agency.
“ DSLBD ” is the District of Columbia Department of Small and Local Business Development, and any successor agency.
“ Effective Date ” is the date first written above.
“Environmental Laws” means any present and future federal, or District of Columbia law and any amendments (whether common law, statute, rule, order, regulation or otherwise), permits and other requirements or guidelines of governmental authorities and relating to (a) the protection of health, safety, and the indoor or outdoor environment; (b) the conservation, management, or use of natural resources and wildlife; (c) the protection or use of surface water and groundwater; (d) the management, manufacture, possession, presence, use, generation, transportation, treatment, storage, disposal, release, threatened release, abatement, removal, remediation, or handling of or exposure to Hazardous Materials; or (e) pollution (including any release to air, land, surface water, and groundwater), and includes, without limitation, the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, 42 U.S.C. § 9601 et seq.; the Solid Waste Disposal Act, as amended by the Resource Conservation and Recovery Act of 1976, and subsequently amended, 42 U.S.C. § 6901 et seq.; the Hazardous Materials Transportation Act, 49 U.S.C. § 5101 et seq.; the Federal Water Pollution Control Act, as amended by the Clean Water Act of 1977, 33 U.S.C. § 1251 et seq.; the Oil Pollution Act of 1990, 33 U.S.C. § 32701 et seq.; the Federal Insecticide, Fungicide, and Rodenticide Act, as amended, 7 U.S.C. § 136-136y, the Clean Air Act, as amended, 42 U.S.C. § 7401 et seq.; the Toxic Substances Control Act of 1976, as amended, 15 U.S.C. § 2601 et seq.; the Safe Drinking Water Act of 1974, as amended, 42 U.S.C. § 300f et seq.; the Emergency Planning and Community Right-To-Know Act of 1986, 42 U.S.C. § 11001 et seq.; the Occupational Safety and Health Act of 1970, 29 U.S.C. § 651 et seq.; the National Environmental Policy Act of 1969, 42 U.S.C. § 4321 et seq.; and any similar, implementing or successor law, and any amendment, rule, regulatory order or directive issued thereunder.
“First Source Agreement” is that agreement, in customary form, between the Developer and DOES, entered into in accordance with Section 7.6 herein, governing certain obligations of Developer under D.C. Law 14-24, D.C. Law 5-93, and Mayor’s Order 83-265 regarding job creation and employment generated as a result of the Project.
Property Disposition Agreement Solicitation for Offers
“ Force Majeure ” is an act or event, including, as applicable, an act of God, act of terrorism, fire, earthquake, flood, explosion, war, invasion, insurrection, riot, mob violence, sabotage, inability to procure or a general shortage of labor, equipment, facilities, materials, or supplies in the open market, failure or unavailability of transportation, strike, lockout, actions of labor unions, a taking by eminent domain, requisition, and laws or orders or acts or failures to act of government or of civil, military, or naval authorities enacted or adopted after the Effective Date, so long as such act or event (i) is not within the reasonable control of Developer, Developer’s Agents, or its Members; (ii) is not due to the fault or negligence of Developer, Developer’s Agents, or its Members; (iii) is not reasonably foreseeable and avoidable by Developer, Developer’s Agents, or its Members, and (iv) directly results in a delay in performance by Developer; but specifically excluding (A) shortage or unavailability of funds or financial condition, (B) changes in market conditions such that construction of the Project as contemplated by this Agreement and the Final Project Plans and Specifications is no longer practicable under the circumstances, or (C) the acts or omissions of a general contractor, its subcontractors, or any of Developer’s Agents or Members.
“ Form Letter of Credit ” is attached as Exhibit F.
“ Green Communities ” means the national green building program designed by Enterprise Community Partners that provides criteria for the design, development, and operation of affordable housing.
“ Guarantor ” is ____________________, pursuant to the Development and Completion Guaranty.
“ Guarantor Submissions ” shall mean the current audited or unaudited financial statements and balance sheets, profit and loss statements, cash flow statements and other financial reports and other financial information of a proposed guarantor as District may reasonably request, together with a summary of such proposed guarantor’s other guaranty obligations and the other contingent obligations of such proposed guarantor (in each case, certified by such proposed guarantor or an officer of such proposed guarantor as being true, correct and complete).
“Hazardous Materials” means (a) asbestos and any asbestos containing material; (b) any substance that is then defined or listed in, or otherwise classified pursuant to, any Environmental Law or any other Applicable Law as a “hazardous substance,” “hazardous material,” “hazardous waste,” “infectious waste,” “toxic substance,” “toxic pollutant” or any other formulation intended to define, list or classify substances by reason of deleterious properties such as ignitability, corrosivity, reactivity, carcinogenicity, toxicity, reproductive toxicity or Toxicity Characteristic Leaching Procedure (TCLP) toxicity; (c) any petroleum and drilling fluids, produced waters and other wastes associated with the exploration, development or production of crude oil, natural gas or geothermal resources; and (d) any petroleum product, polychlorinated biphenyls, urea formaldehyde, radon gas, radioactive material (including any source, special nuclear or by-product material), medical waste, chlorofluorocarbon, lead or lead-based product and any other substance the presence of which could be detrimental to the Property or hazardous to health or the environment.
Property Disposition Agreement Solicitation for Offers
who is an on-going target of a grand jury investigation convened pursuant to Applicable Laws concerning organized crime;
(B) any Person organized in or controlled from a country, the effects of the activities with respect to which are regulated or controlled pursuant to the following United States laws and the regulations or executive orders promulgated thereunder: (x) the Trading with the Enemy Act of 1917, 50 U.S.C. App. §1, et seq., as amended (which countries are, as of the Effective Date hereof, North Korea and Cuba); (y) the International Emergency Economic Powers Act of 1976, 50 U.S.C. §1701, et seq., as amended; and (z) the Anti-Terrorism and Arms Export Amendments Act of 1989, codified at Section 6(j) of the Export Administration Act of 1979, 50 U.S.C. App. § 2405(j), as amended (which countries are, as of the Effective Date hereof, Iran, Sudan and Syria);
(C) any Person who has engaged in any dealings or transactions (i) in contravention of the applicable money laundering laws or regulations or conventions or (ii) in contravention of Executive Order No. 13224 dated September 24, 2001 issued by the President of the United States (Executive Order Blocking Property and Prohibiting Transactions with Persons Who Commit, Threaten to Commit, or Support Terrorism), as may be amended or supplemented from time-to-time or any published terrorist or watch list that may exist from time to time;
(D) any Person who appears on or conducts any business or engages in any transaction with any person appearing on the list maintained by the U.S. Treasury Department’s Office of Foreign Assets Control list located at 31 C.F.R., Chapter V, Appendix A or is a person described in Section 1 of the Anti-Terrorism Order;
(E) any Person suspended or debarred by HUD or by the District of Columbia government; or
(F) any Affiliate of any of the Persons described in paragraphs (A) through (E) above.
“Project” means those Improvements on the Property, and the development and construction thereof in accordance with the Development Plan, this Agreement, and the Declaration.
“ Project Budget ” means the budget for the Project representing the total cost of the Improvements as provided by the Developer to the District.
“ Project Drawings ” is defined in Section 4.1.1.
“Property” is defined in the Recitals.
“Purchase Price” means the price Developer shall pay for the acquisition of the Property pursuant to Section 2.1.2 hereof.
“ Residential Unit ” is any unit constructed as part of the Project to be developed, sold, and used for residential purposes.
Property Disposition Agreement Solicitation for Offers
“ Schedule of Affordable Units ” is defined in Section 7.4.
“Schedule of Performance” means that schedule of performance, attached hereto as Exhibit G and incorporated herein, setting forth the timelines for Milestones in the design, development, construction, and completion of the Project (including a construction timeline in customary form) together with the dates for submission of documentation required under this Agreement, which schedule shall be attached to the Development Plan and to the Declaration.
“Schematic Plans ” are the design plans that present a developed design based on the approved Concept Plans, and illustrate the development of building facades, scale elements, and materials. The Schematic Plans shall include: (i) a site plan (1/32’ = 1’) that illustrates revisions and further development of ideas presented in Concept Plans; (ii) street-level floor plans, a roof plan, and other relevant floor plans (1/16” = 1’); (iii) illustrative elevations and renderings sufficient to review the Project (minimum 1/8” = 1’); (iv) 3-dimensional massing diagrams or models and perspective sketches sufficient to review the Project; (v) one set of 24” x 36” presentation boards with the foregoing items shown thereon; (vi) illustrations and wall sections of façade design elements and other important character elements (½” – 1” = 1’); (vii) exterior material samples; (viii) a summary chart showing floor area, building coverage of the site, building height, floor area ratios, and number of parking spaces and loading docks, and the amount of space dedicated to recreational use; and (ix) such other drawings or documents as District may reasonably request related to the foregoing.
“Settlement Agent” is Answer Title located at 10 G Street, NE, Suite 140, Washington, DC 20002.
“Settlement Statement ” is the HUD-1 statement prepared by the Settlement Agent in connection with Closing.
“ Studies ” is defined in Section 2.3.1.
“ UST Act ” is defined in Section 2.3.3.
“ UST Regulations ” is defined in Section 2.3.3.
ARTICLE 2 CONVEYANCE; PURCHASE PRICE; CONDITION OF PROPERTY
2.1 SALE; PURCHASE PRICE
2.1.1 Subject to and in accordance with the terms of this Agreement, District shall sell to Developer and Developer shall purchase from District for the Purchase Price, all of District’s right, title, and interest in and to the Property.
2.1.2 The Purchase Price shall be ____________________________ Dollars ($00). Purchaser shall pay the Purchase Price at Closing by certified check, wired funds, or other immediately available funds reasonably acceptable to District.
Property Disposition Agreement Solicitation for Offers
without the prior written consent of District. The District shall have the right to accompany Developer or Developer’s Agents during the conduct of any such invasive Studies.
(b) Developer and Developer’s Agents are solely responsible for obtaining any necessary licenses and permits for the Studies and any work associated therewith, including transportation and disposal of materials. In addition, Developer and Developer’s Agents shall be obligated to comply with all Applicable Laws and the provisions of this Agreement during their entry on the Property and while conducting any Studies.
(c) At least 24 hours prior to entry on any Parcel, Developer shall provide District (i) written notice, including a written description of the intended Studies, (ii) evidence of insurance, as required under the terms of this Agreement, and (iii) copies of any required licenses and notices in accordance with Section 2.3.1(b).
(d) In the event Developer or Developer’s Agents disturbs, removes or discovers any materials or waste on any Parcel while conducting the Studies, or otherwise during its entry on the Property, which are determined to be Hazardous Materials as defined herein, Developer shall notify District and DDOE within one (1) Business Day after its discovery of such Hazardous Materials. Thereafter, within ten (10) Business Days after its discovery of such Hazardous Materials, Developer shall submit a written notice of a proposed plan for disposal (the “ Disposal Plan ”) to District and DDOE. The Disposal Plan shall contain all identifying information as to the type and condition of the Hazardous Materials or waste discovered and a detailed account of the proposed removal and disposal of the Hazardous Materials, including the name and location of the hazardous waste disposal site. DDOE may conduct an independent investigation of the Property, including but not limited to, soil sampling and other environmental testing as may be deemed necessary. Upon completion of DDOE’s investigation, District and/or the DDOE shall notify Developer of its findings and shall notify Developer by written notice of its approval or disapproval of the proposed Disposal Plan. In the event DDOE disapproves the proposed Disposal Plan, Developer shall resubmit a revised Disposal Plan to District and DDOE. Developer shall seek the advice and counsel of DDOE prior to any resubmission of a proposed Disposal Plan. Upon review of the revised Disposal Plan, District or DDOE shall notify Developer of its decision. Upon approval of the Disposal Plan, Developer shall remove and dispose of all Hazardous Materials in accordance with the approved Disposal Plan and all Applicable Laws; provided, however, Developer shall not be required to begin its removal and disposal of Hazardous Materials not already disturbed or removed until after Closing. Within thirty (30) Business Days after the disposal of any Hazardous Materials or waste, Developer shall provide District such written evidence and receipts confirming the proper disposal of all Hazardous Materials or waste removed from such Parcel.
(e) Developer hereby indemnifies and holds District and the District Parties harmless and shall defend District (with counsel reasonably satisfactory to District) and the District Parties from and against any and all losses, costs, liabilities, damages, expenses, mechanic's liens, claims and judgments, including, without limitation, reasonable attorneys' fees and court costs, incurred or suffered by District or the District Parties, but excluding losses and liabilities due to the gross negligence and willful misconduct of the District, as a result of any entry on the Property or
Property Disposition Agreement Solicitation for Offers
Studies or other activities at the Property conducted by Developer or Developer’s Agents. This provision shall survive Closing or the earlier termination of this Agreement.
(f) Developer covenants and agrees that Developer shall keep confidential all information obtained by Developer as to the condition of the Property; provided, however, that (i) Developer may disclose such information to its Members, officers, directors, attorneys, consultants, Settlement Agent, and potential lenders so long as Developer directs such parties to maintain such information as confidential and (ii) Developer may disclose such information as it may be legally compelled so to do. The foregoing obligation of confidentiality shall not be applicable to any information which is a matter of public record or, by its nature, necessarily available to the general public. This provision shall survive Closing or the earlier termination of this Agreement.
(g) Any access to the Property by Developer pursuant to this Section shall additionally be subject to all of Developer’s insurance obligations contained in Article 10 and Developer shall restore the Property after such tests are completed.
2.3.2 Soil Characteristics. Pursuant to requirements contained in D.C. Official Code § 42-608(b) the District hereby gives notice to the Developer that:
(a) The characteristic of the soil on the Property is described by the Soil Conservation Service of the United States Department of Agriculture in the Soil Survey of the District of Columbia published in 1976 Soil Maps of the District of Columbia at the back of that publication; and
(b) for further soil information, Developer may contact the District of Columbia Department of Environmental Services or the Soil Conservation Service of the Department of Agriculture.
The foregoing does not constitute a representation or warranty by District.
2.3.3 Underground Storage Tanks. In accordance with the requirements of Section 3(g) of the D.C. Underground Storage Tank Management Act of 1990, as amended by the District of Columbia Underground Storage Tank Management Act of 1990 Amendment Act of 1992 (D.C. Code § 8-113.01, et seq .) (collectively, the “ UST Act ”) and the applicable D.C. Underground Storage Tank Regulations, 20 DCMR Chapter 56 (the “ UST Regulations ”), District hereby informs the Developer that it has no knowledge of the existence or removal during its ownership of the Property of any “underground storage tanks” (as defined in the UST Act). Information pertaining to underground storage tanks and underground storage tank removals of which the D.C. Government has received notification is on file with the District Department of the Environment, Underground Storage Tank Branch, 51 N Street, N.E., Third Floor, Washington, D.C., 20002, telephone (202) 535-2525. District’s knowledge for purposes of this Section shall mean and be limited to the actual knowledge of Adarsh Hathi, Property Acquisition and Disposition Division of the Department of Housing and Community Development, telephone no. (202) 478-1351. The foregoing is set forth pursuant to requirements
Property Disposition Agreement Solicitation for Offers
2.6 CONDEMNATION
2.6.1 Notice. If, prior to Closing, any condemnation or eminent domain proceedings shall be commenced by any competent public authority against any Parcel, District shall promptly give Developer written notice thereof.
2.6.2 Condemnation. In the event of a taking of any Parcel prior to Closing, the Parties agree as follows:
(a) if such taking constitutes 20% or less of the appraised value or lot square footage, the Developer shall be obligated to purchase the Property or any affected Parcel thereof for the full Purchase Price without adjustment, and in accordance with this Agreement, or
(b) if such taking constitutes more than 20% of the appraised value or lot square footage, the Developer may elect to terminate this Agreement or elect to proceed to Closing on the Property, except for the Parcels, or any portion thereof, so taken. If Developer elects to proceed to Closing on the Property, except for the taken Parcel, or any portion thereof, (x) this Agreement relating to such parcel shall terminate and the Parties shall be released from any and all obligations hereunder relating to such parcel except those that expressly survive termination, (y) the Purchase Price for the remaining Property shall be decreased by the amount apportioned to such Parcel, or any portion thereof, and (z) District shall have the right to any and all condemnation proceeds.
2.7 SERVICE CONTRACTS AND LEASES
District has not procured or entered into any (i) service, management, maintenance, or development contracts, or (ii) leases, licenses, easements, or other occupancy agreements affecting the Property that will survive Closing. District will not hereafter enter into any such contracts or agreements that will bind the Property or Developer as successor-in-interest with respect to the Property, without the prior written consent of Developer.
ARTICLE 3 REPRESENTATIONS AND WARRANTIES
3.1 REPRESENTATIONS AND WARRANTIES OF DISTRICT
3.1.1 District hereby represents and warrants to Developer as of the Effective Date as follows:
(a) The District is the owner the Property.
(b) The execution, delivery and performance of this Agreement by District and the transactions contemplated hereby between District and Developer shall have been approved by all necessary parties prior to Closing and District has the authority to dispose of the Property.
(c) No agent, broker, or other Person acting pursuant to express or implied authority of District is entitled to any commission or finder's fee in connection with the
Property Disposition Agreement Solicitation for Offers
transactions contemplated by this Agreement or will be entitled to make any claim against Developer for a commission or finder's fee. District has not dealt with any agent or broker in connection with the sale of the Property.
(d) There is no litigation, arbitration, administrative proceeding, or other similar proceeding pending against District which relates to the Property.
(e) To the knowledge of the District, the execution, delivery, and performance of this Agreement by District and the transactions contemplated hereby between District and Developer do not violate any of the terms, conditions or provisions of any judgment, order, injunction, decree, regulation, or ruling of any court or other governmental authority to which District is subject, or any agreement, contract or Applicable Law to which District is a party or to which it is subject.
3.1.2 Survival. The representations and warranties contained in Section 3.1.1 shall not survive Closing. District shall have no liability or obligation hereunder for any representation or warranty that becomes materially untrue because of reasons beyond District’s control.
3.2 REPRESENTATIONS AND WARRANTIES OF DEVELOPER
3.2.1 Developer hereby covenants, represents, and warrants to District as follows:
(a) Developer is a District of Columbia nonprofit corporation, duly formed and validly existing and in good standing, and has full power and authority under the laws of the District of Columbia to conduct the business in which it is now engaged. _____________________ and __________________ are the only Members of Developer and the only Persons with an ownership interest in Developer. Neither Members nor any Person owning directly or indirectly any interest in Developer or Members is a Prohibited Person.
(b) The execution, delivery, and performance of this Agreement and the consummation of the transactions contemplated hereby have been duly and validly authorized by Developer. Upon the due execution and delivery of the Agreement by Developer, this Agreement constitutes the valid and binding obligation of Developer, enforceable in accordance with its terms.
(c) The execution, delivery, and performance of this Agreement and the consummation of the transactions contemplated hereby do not violate any of the terms, conditions, or provisions of (i) Developer's organizational documents, (ii) any judgment, order, injunction, decree, regulation, or ruling of any court or other governmental authority, or Applicable Law to which Developer is subject, or (iii) any agreement or contract to which Developer is a party or to which it is subject.
(d) No agent, broker, or other Person acting pursuant to express or implied authority of Developer is entitled to any commission or finder's fee in connection with the transactions contemplated by this Agreement or will be entitled to make any claim
Property Disposition Agreement Solicitation for Offers
4.1.2 Approval by District. Notwithstanding anything to the contrary herein, prior to application for any Permit, Developer shall cause the Project Drawings applicable to such Permit to become Approved Plans and Specifications prior to their application.
4.1.3 Delay Caused By District. The dates set forth in Sections 4.1.1 shall be extended on a day-for-day basis for each day of delay caused by District due to its failure to timely respond to any prior submission, as more particularly described in Section 4.2.1 below. For purposes of calculating any period of such delay, the ten (10) day period set forth in Section 4.2.1 shall control, such that the day-for-day extension shall commence as of the 31st calendar day after the applicable submission by Developer.
4.2 DISTRICT REVIEW AND APPROVAL OF PROJECT DRAWINGS
4.2.1 Generally. District shall have the right to review and approve or disapprove all or any part of each of the Project Drawings. District may also grant a conditional approval subject to Developer making certain changes to the Project Drawings. District shall use good faith efforts to complete its review of each submission by Developer and provide a written response thereto, within ten (10) days after its receipt of the same. Any Project Drawings approved (or any approved portions thereof) pursuant to this Section 4.2 shall be “ Approved Plans and Specifications .”
4.2.2 Disapproval Notices. Any notice of disapproval (“ Disapproval Notice ”) shall state in reasonable detail the basis for such disapproval. If District issues a Disapproval Notice, Developer shall revise the Project Drawings to address the objections of District and shall resubmit the revised Project Drawings for approval. Any Approved Plans and Specifications may not be later disapproved by District unless any disapproval and revision is mutually agreed upon by the Parties. District’s review of any submission that is responsive to a Disapproval Notice shall be limited to the matters disapproved by District as set forth in the Disapproval Notice, but shall not be so limited with regard to any new matters shown on such submission that were not included or indicated on any prior submission.
4.2.3 Submission Deadline Extensions. If Developer is proceeding diligently and in good faith and desires to extend a specified deadline for submission of a particular Project Drawing, Developer may request such extension in writing, and, for good cause shown, District may, in its sole discretion, grant such extension by written notice.
4.2.4 No Representation; No Liability. District’s review and approval of the Project Drawings is not and shall not be construed as a representation or other assurance that they comply with any building codes, regulations, or standards, including, without limitation, building engineering and structural design or any other Applicable Laws. District shall incur no liability in connection with its review of any Project Drawings and is reviewing such Project Drawings solely for the purpose of protecting its own interests.
4.3 CHANGES IN APPROVED PLANS AND SPECIFICATIONS
No “Material Changes” (as defined below) to the Approved Plans and Specifications shall be made without District’s prior written approval. If Developer desires to make any
Property Disposition Agreement Solicitation for Offers
Material Changes to the Approved Plans and Specifications, Developer shall submit the proposed changes in writing to District for approval, which approval shall be granted or withheld in District’s sole discretion. District agrees that it shall respond to any such request within a reasonable period of time, not to exceed thirty (30) days. “ Material Changes ” means any change: (i) that substantially alters the general appearance or structural integrity of exterior walls and elevations, building bulk, coverage or floor area ratio or number of floors; (ii) to the colors and uses of exterior finishing materials from those shown and specified in the Approved Plans and Specifications; (iii) in landscape planning and design or to exterior lighting and other exterior site features from the Approved Plans and Specifications; (iv) that affects the number of Residential Units; (v) that affects the unit mix of Residential Units by ten percent (10%) or more from the Approved Plans and Specifications; (vi) that increases or decreases the size of a Residential Unit by ten percent (10%) or more from the Approved Plans and Specifications; (vii) that increases the Project Budget, (viii) that requires additional zoning approvals, or (ix) that will cause an increase in the Initial Sales Prices shown on Exhibit H.
4.4 PROGRESS MEETINGS/CONSULTATION
During the preparation of the Project Drawings, District’s staff and Developer, at the request of District’s staff, shall hold periodic progress meetings as appropriate considering the progress of Developer’s plans and specifications. During such meetings, Developer and District staff shall coordinate the preparation and submission of the Project Drawings as well as their review by District. The time and location of such meetings to be determined by Developer and District.
4.5 APPROVAL OF GUARANTORS
4.5.1 The Development and Completion Guaranty required pursuant to this Agreement shall be from one or more Persons approved by District in District’s sole discretion, which approval shall include District’s determination as to whether such Person has sufficient net worth and liquidity to satisfy its obligations under the Development and Completion Guaranty, taking into account all relevant factors, including, without limitation, such Person’s obligations under other guaranties and the other contingent obligations of such Person. The Development and Completion Guaranty shall be delivered to District no later than Closing.
4.5.2 At any time upon District’s request, but in any event no later than sixty (60) days prior to Closing, each Guarantor shall submit to District updated Guarantor Submissions. In the event District determines, in its sole discretion, that a material adverse change in the financial condition of the Guarantor(s) has occurred that impacts, or could threaten to impact, the Guarantor’s ability to perform under the Development and Completion Guaranty, Developer shall, within five (5) Business Days after notice from District, indentify a proposed substitute guarantor and request District’s approval of the same, which request shall include delivery of the Guarantor Submissions for such proposed guarantor.
Property Disposition Agreement Solicitation for Offers
this Agreement shall immediately terminate and be of no further force and effect, except those provisions that expressly survive termination.
5.2 CONDITIONS PRECEDENT TO DISTRICT'S OBLIGATION TO CLOSE
5.2.1 The obligation of District to convey the Property and perform the other obligations it is required to perform on the Closing Date shall be subject to the following listed conditions precedent.
(a) Developer shall have performed all obligations hereunder required to be performed by Developer prior to the Closing Date.
(b) The representations and warranties made by Developer in Section 3.2 of this Agreement shall be true and correct in all material respects on and as if made on the Closing Date.
(c) The Development Plan and all Project Drawings for the Project shall have been approved as Approved Plans and Specifications in their entirety pursuant to Article 4.
(d) Developer shall be ready, willing, and able in accordance with the terms and conditions of this Agreement to acquire the Property and proceed with the development of the Project in accordance with the Approved Plans and Specifications and the Declaration.
(e) Developer shall have executed a First Source Agreement and a CBE Agreement.
(f) Developer shall have furnished to District certificates of insurance or duplicate originals of insurance policies required of Developer hereunder.
(g) Developer shall have provided satisfactory evidence of its authority to acquire the Property and perform its obligations under this Agreement.
(j) Developer shall have delivered (or caused to be delivered) the original, executed documents required to be delivered pursuant to Section 6.2.2 herein.
(l) Settlement Agent shall have irrevocably committed itself in writing to issue a title insurance policy for the Property at regular rates, free and clear of all encumbrances, subject only to the Permitted Exceptions.
(m) There shall have been no material adverse change in the financial condition of any Guarantor, determined in accordance with the provisions of Section 4.5.2 or, if a material adverse change has occurred, District has approved a substitute guarantor pursuant to Section 4.5.2.
(n) Satisfaction of the condition that a duly-noticed public hearing be held on the disposition herein.
Property Disposition Agreement Solicitation for Offers
5.2.2 Failure of Condition. If all of the conditions to Closing set forth above in Section 5.2.1 have not been satisfied by the Closing Date, provided the same is not the result of District’s failure to perform any obligation of District hereunder, District shall have the option, at its sole discretion, to (i) terminate this Agreement by written notice to Developer and the District shall be entitled to keep the Initial Deposit (including all accrued interest thereon, if the Initial Deposit is a Cash Deposit), and may bring legal claim for any damages incurred by the District in the process and/or an equitable claim to enforce the provisions of this Agreement, (ii) delay Closing for up to three (3) months, to permit Developer to satisfy the conditions to Closing set forth in Section 5.2.1, or (iii) waive the condition and proceed to Closing. In the event District proceeds under clause (ii), Closing shall occur within thirty (30) days after the conditions precedent set forth in Section 5.2.1 have been satisfied, but if such conditions precedent have not been satisfied by the end of the three (3) month period, District may again proceed under clause (i) above, in its sole discretion. The foregoing notwithstanding, Closing shall not occur after the Outside Closing Date. If Closing has not occurred by such date, this Agreement shall immediately terminate and be of no further force and effect.
ARTICLE 6
CLOSING
6.1 CLOSING DATE
Prior to Closing, a duly-noticed public hearing shall be held approximately forty five (45) days after the execution of this Agreement. This effectiveness of the Agreement is solely conditional on the holding of the hearing prior to the disposition. Closing on the Property shall be held fifteen (15) days after the District has held a public hearing on this disposition, which date shall be [______________________, 20___] (the “ Closing Date ”). The Closing shall take place prior to the Developer receiving all zoning approvals and required building permits and clearances. Notwithstanding any provision in this Agreement to the contrary, in no event shall the Closing be held after ________________, 20___ (the “ Outside Closing Date ”). Closing shall be held at 10:00 a.m. EST in the offices of the Real Estate Section of the Commercial Division of the District of Columbia Office of Attorney General located at 1100 15th^ Street, NW, Suite 800, Washington, DC 20005, or such other location as agreed to between the Parties.
6.2 DELIVERIES AT CLOSING
6.2.1 District’s Deliveries. On or before the Closing Date, subject to the terms and conditions of this Agreement, District shall execute, notarize, and deliver, as applicable, to Settlement Agent:
(a) the Deed, in recordable form;
(b) the Declaration in recordable form to be recorded in the Land Records against the Property;
