EXCLUSIVE NEGOTIATING AGREEMENT
This EXCLUSIVE NEGOTIATING AGREEMENT ("Agreement"), dated as of this day of , 2023 ( Effective Date"), is made by and between the City of Barstow, a municipal corporation ("City"), and Lewis Acquisition Company, LLC, a Delaware limited liability company, or assigns ("Lewis"). City and Lewis are sometimes referred to in this Agreement, individually, as a "Party" and, collectively, as the "Parties." For and in consideration of the mutual covenants and promises set forth herein, the Parties agree as set forth below, with reference to the following facts:
RECITALS
A. The City intends to acquire from the Bureau of Land Management ("BLM") certain real property (the total amount of acreage and the exact parcels have yet to be determined) which could include some or all of the parcels shown on Exhibit "A" or potentially additional properties (the "Property"); and
B. Lewis would like to assist the City in its effort to acquire the Property and better understand (i) how the BLM will determine the value of the Propelty, and (ii) the process and timing necessary to obtain site control; and
C. City and Lewis acknowledge that the acquisition of the Property from the BLM could be an extensive process and that an extension of the term of this Agreement may be necessary; D. During the term of the ENA the City and Lewis intend to negotiate a Disposition and Development Agreement (DDA) describing the terms and conditions for Lewis's acquisition of the Property and the future development of a mixed-use project including uses as determined by the City and Lewis ("Project"); and E. Lewis understands and agrees that by entering into this Agreement the City is making no commitment that it will approve any future agreements) for the Project with Lewis or lease or sell the Property to Lewis. The City specifically retains the right to approve or deny proposed future agreements), or to approve an alternative Project, or to impose any conditions or mitigation measures upon the Project in its sole discretion.
NOW, THEREFORE, in consideration of performance by the Parties of the promises, covenants, and conditions herein contained and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:
1. Incorporation of Recitals. The recitals of fact set folth above are true and correct and are incorporated into this Agreement in their entirety by this reference. 309749.v1
2. Obligations of City:
a. Exclusive Negotiations. During the Exclusive Negotiating Period as described in Section 4 of this Agreement, the City agrees not to negotiate with any person or entity other than with Lewis and its designees regarding the acquisition of the Property and/or development of a Project on the Property, except as may be required by law.
b. Meetings. During the Exclusive Negotiating Period the City staff shall be available to meet with Lewis to discuss the process and timing of obtaining site control from the BLM as well as how the Property will be valued.
c. Lewis understands and agrees that by entering into this Agreement the City is making no commitment that it will approve any future agreements) for the Project with Lewis or lease or sell the Property to Lewis. The City specifically retains the right to approve or deny proposed future agreements), or to approve an alternative Project, or to impose any conditions or mitigation measures upon the Project in its sole discretion
3. Obligations of Lewis
a. BLM. During the Exclusive Negotiating Period Lewis will assist the City in working with the BLM to (i) identify which parcels are of interest to the City and shall be included in the Property, (ii) determine the best process of working with the BLM to designate the Property for disposal in the shortest possible time, (iii) in consideration of its current unentitled condition, work with the BLM to provide Property information to assist in the valuation process, and (iv) complete agreements that may be necessary to turn over site control of the Property to the City. As it deems necessary for the completion of the above, Lewis, at its sole expense, may engage consultants and other professionals with experience in negotiating and completing similar BLM transactions.
4. Exclusive Negotiation Period. The "Exclusive Negotiating Period" shall commence as of the Effective Date and shall terminate on the earlier of (i) the date on which Lewis's or City's "Termination Notice" (defined at Section 6) becomes effective and this Agreement terminates, (ii) the DDA is approved by the City and signed by both parties, or (il) the date that is One Hundred Eighty (180) days after the Effective Date, which date will automatically extend in 180-day increments so long as this Agreement has not been otherwise terminated by either Party.
5. Disposition and Development Agreement Negotiations of DDA. The Parties shall use their respective good faith efforts during the Exclusive Negotiating Period to negotiate the basic terms and conditions of a DDA. During the Exclusive Negotiating Period, the Parties shall negotiate the proposed terms of a DDA or other future agreements) for submittal to the City's Planning Commission and City Council for their consideration and possible approval or disapproval in public hearings as required by law. The DDA or other future 309749.v1
agreements) will establish the essential business terms and framework for the sale, lease, and/or development of the Property for a Project, including but not limited to the financial, legal, operational, and administrative mechanisms to implement such development. Lewis understands and agrees that by entering into this Agreement the City is making no commitment that it will approve any future agreements) for the Project with Lewis or lease or sell the Property to Lewis. The City specifically retains the right to approve or deny proposed a DDA or other future agreements) or the Project, or to approve an alternative Project, or to impose any conditions or mitigation measures upon the Project in its sole discretion, including any environmental impact mitigation measures.
6. Termination of This Agreement. Termination of this Agreement shall be the sole and exclusive remedy of either Party for a default under this Agreement. In any action or other legal or administrative proceeding to enforce this Agreement, or that otherwise may arise out of this Agreement, neither the City nor Lewis shall be entitled to any damages or monetary relief. It is understood and agreed by the Parties that this Agreement is solely to enable the Parties to negotiate the terms of a DDA or other future agreements), on an exclusive basis for the Negotiating Period. There is no commitment that any DDA or other future agreements) or entitlements necessary for the development of the Project will be approved and no damages, monetary relief, or specific performance shall be available to Lewis if any DDA or other future agreements), including entitlements, are not approved during the Negotiation Period or if this Agreement is terminated prior to expiration of the Negotiation Period. Upon termination of this Agreement for any reason no Party shall have any further duty or obligation to any other party. The Parties knowingly acknowledge that there is risk involved in advancing the Project and circumstances arise that may render the Project infeasible and thus neither shall have the right to seek monetary damages from the other should this Agreement be terminated. The Parties agree that either Party may terminate this Agreement if the other Party is in default under this Agreement and such default is not cured after a ten (10) day notice (the "Termination Notice") and cure period. In addition, Lewis and City shall each have the right at any time during the Exclusive Negotiating Period to terminate this Agreement by delivering a written Termination Notice to City or Lewis, as applicable, stating that this Agreement will terminate thirty (30) days from the date such Termination Notice is sent to the City or Lewis, as applicable.
7. Mutual Acknowledgements. Each Party acknowledges and agrees that: (a) under this Agreement, neither Party is committing itself, nor agreeing to, enter into a DDA or other future agreement, and City has not agreed to approve any land use entitlements or undertake any other acts or activities; (b) no provision of this Agreement shall be deemed to be an offer (i) by either Party, nor an acceptance by either Party, of any offer or proposal from the other, or (ii) for City to provide any financial or other assistance to Lewis for development of the Project; (c) Lewis has not acquired, nor will acquire, by virtue of the terms of this Agreement, any legal or equitable interest in real or personal property from City; (d) further efforts by either Party to perform due diligence, arrange or obtain financing, or carry out other acts in contemplation of the possible development of the Project shall not be deemed evidence of intent by either Party to be bound by any 309749.v1
terms, conditions, covenants, restrictions or agreements relating to development of the Project.
8. Costs and Expenses. All Fees or expenses of engineers, architects, financial consultants, legal, planning or other consultants or contractors, retained by Lewis for any study, analysis, evaluation, report, schedule, estimate, environmental review, planning or design activities, drawings, specifications or other activity or matter relating to the Project or negotiation or documentation of the DDA that may be undertaken by Lewis during the Negotiation Period, pursuant to or in reliance upon this Agreement or in Lewis's discretion, regarding any matter relating to this Agreement, the DDA, or the Project, shall be the sole responsibility of and undertaken at the sole cost and expense of Lewis and no such activity or matter shall be deemed to be undertaken for the benefit of, at the expense of or in reliance upon City. City shall not be obligated to pay, reimburse or refund any expenses, fees, charges or costs incurred by Lewis in pursuit of any study, analysis, evaluation, report, schedule, estimate, environmental review, planning or design activities, drawings, specifications or other activity or matter relating to this Agreement, the Project or negotiation or documentation of the DDA that may be undertaken by Lewis during the Negotiation Period, whether or not this Agreement is, eventually, terminated or extended or the DDA or other future agreement is entered into between City and Lewis.
9. Governing Law. This agreement constitutes the entire agreement of the Parties hereto with respect to the subject matter hereof and supersedes any and all prior agreements and understandings between the parties. There are no agreements or understandings between the patties and no representations by either Party to the other as an inducement to enter into this Agreement, except as expressly set forth herein.
10. No Other Agreement. This Agreement constitutes the entire agreement of the Parties hereto with respect to the subject matter hereof and supersedes any and all prior agreements and understandings between the parties. There are no agreements or understandings between the patties and no representations by either Party to the other as an inducement to enter into this Agreement, except as expressly set forth herein.
11. Assignment. This agreement shall not be assigned by any Party hereto to any person or entity without the express written consent of City. Notwithstanding the foregoing, Lewis may assign the Agreement (or the DDA) to a single purpose limited liability company or limited partnership in which some, or all of Richard Lewis, Robert Lewis, Roger Lewis, Randall Lewis, and/or John Goodman, directly or indirectly, owns a fifty percent (50%) or greater interest in the capital and/or profits of such entity.
12. Notices. Any notice which is required, or which may be given hereunder may be delivered personally, or by email or by overnight mail to the party to be notified, as follows:
If to Lewis: Lewis Acquisition Company, LLC
1156 N. Mountain Ave.
Upland, CA 91785
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Attn: John M. Goodman
Email: [email protected]
If to City: City of Barstow
220 East Mountain View St., Ste. A
Barstow, CA 92311
Attn: Willie A. Hopkins, Jr. City Manager
Email: [email protected]
Notice shall be effective the same business day delivered if delivered personally or by email, or the next business day after mailing if sent via overnight mail.
13. Effect of Agreement. Notwithstanding any other provision of this Agreement to the contrary, the parties expressly acknowledge and agree as follows: (a) no matter described in this Agreement as a purported commitment or obligation of City or Lewis with respect to the development of the Project shall have any effect unless and only to the extent such matters are expressly set forth in a DDA or other subsequent written agreement duly authorized and approved by City, and signed by Lewis; (b) City and Lewis shall promptly commence the feasibility analysis upon execution of this Agreement; and (c) if and upon the creation and execution of a DDA by the Parties, this Agreement shall be null and void and of no effect and shall be superseded by the terms and conditions of the DDA.
This Agreement does not constitute a sale agreement, lease agreement, or other disposition and development agreement. Execution of this Agreement by the City is merely an agreement to enter into a period of exclusive negotiations according to the terms hereof, reserving final discretion and approval by the City as to any DDA or other future agreements), including all land use entitlements and California Environmental Quality Act, Public Resources Code Section 21000, et seq., environmental review, and all proceedings and decisions in connection therewith.
If negotiations under this Agreement result in a DDA or other future agreements), City Council approval thereof may occur only after compliance, as may be required, with all applicable laws and ordinances including, without limitation, the California Environmental Quality Act, Public Resources Code Section 21000, et seq., and any such DDA or other future agreements) shall not be effective until considered and approved by the City Council and executed by duly authorized representatives of the City and Lewis.
Until and unless a DDA or other future agreements) are signed by Lewis, approved by the City Council, and executed by the City, no agreement drafts, actions, deliverables, or communications arising from the performance of this Agreement shall impose any legally binding obligation on either Party to enter into or support entering into a DDA or other future agreements) or be used as evidence of any oral or implied agreement by either Party to enter into any other legally binding document.
14. No Obligations. Notwithstanding any other provision of this Agreement to the contrary, Lewis acknowledges and expressly agrees as follows: (a) that this Agreement does not 309749.v1
obligate City in any way to approve, in whole or in part, any of the matters described in this Agreement, including, (without limitation) matters pertaining to land use entitlements or approvals, permits, waivers or reduction of fees, development or financing of the Project or any other matters to be acted on by City, as applicable; (b) that all such matters shall be considered and processed by City in accordance with all otherwise applicable City requirements and procedures; and (c) that City reserves all rights to approve, disapprove or approve with conditions all such matters in their sole discretion. Lewis acknowledges that any and all expenditures made by it are not recoverable by Lewis in the event that a DDA is not approved.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date of written
CITY OF BARSTOW LEWIS ACQUISITION COMPANY, LLC
A California Municipal Corporation A Delaware Limited Liability Company By:
Willie A. Hopkins, Jr.
City Manager A Delaware Corporation
Its Manager
By:
Authorized Agent
Date: Date: 3/30/23
ATTEST:
By:
Andrea Flores, City Clerk
APPROVED AS TO FORM:
By:
Matthew T. Summers, City Attorney
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