Staff Attachment 1RESOLUTION NO.
RESOLUTION OF THE TOWN COUNCIL OF THE TOWN OF
LOS GATOS APPROVING A LOCATION AGREEMENT
FOR SALES TAX SHARING BETWEEN THE TOWN OF LOS GATOS
AND CALIFORNIA DEVELOPMENT GROUP AND U.S. CONCRETE INC.
WHEREAS, the Town of Los Gatos ( "Town ") desires to support high quality, low impact,
vibrant and economically healthy commercial activity in the Town; and
WHEREAS, a request for a location agreement for sales tax sharing was submitted by
California Development Group and U.S. Concrete Inc. for the sales tax generated from the
relocation of their sales office to Los Gatos; and
WHEREAS, the proposed relocation is anticipated to require no special planning permits, and
minimal office space, with limited permanent staffing and customer traffic; and
WHEREAS, in recognition of the economic benefits and low impacts upon Town residents, the
proposed agreement specifies a the tax sharing formula; and
WHEREAS, supporting and approving such an Agreement will generate additional commerce
and economic development in accordance with the goals, policies and programs of the Los Gatos
General Plan; and
WHEREAS, supporting and approving such an Agreement will forge a public /private
partnerships that ultimately will produce General Fund revenue.
NOW, THEREFORE, BE IT RESOLVED by the Town Council of the Town of Los Gatos as
follows:
SECTION 1. That the above recitals are true and correct and incorporated herein.
SECTION 2. That the Town Council of the Town of Los Gatos hereby finds and determines that
the Agreement is in the best interests of the citizens of the Town of Los Gatos.
SECTION 3. The Agreement, a copy of which is on file with the Town Clerk and attached as
Exhibit A, is hereby approved. The Town Council authorizes and directs the Town Manager and
Town Attorney to make any final modifications to the Agreement that are consistent with the
substantive terms of the Agreement approved hereby, and to thereafter sign the Agreement on
behalf of the Town.
SECTION 4. The Town Council authorizes and directs the Town Manager to take any further
actions, as may be necessary and proper to carry out the terms of the Agreement.
ATTACHMENT
PASSED AND ADOPTED at a regular meeting of the Town Council of the Town of
Los Gatos, California, held on the day of May, 2015 by the following vote:
COUNCIL MEMBERS:
AYES:
NAYS:
ABSENT:
ABSTAIN:
ATTEST:
CLERK OF THE TOWN OF LOS GATOS
LOS GATOS, CALIFORNIA
2
SIGNED:
MAYOR OF THE TOWN OF LOS GATOS
LOS GATOS, CALIFORNIA
LOCATION AGREEMENT
between
TOWN OF LOS GATOS
a California municipal corporation
and
CALIFORNIA DEVELOPMENT GROUP, LLC
a Texas limited liability company
and
U.S. CONCRETE INC.,
a Delaware Corporation
May 19 2015
EXHIBIT A
ARTICLE 1. PARTIES AND EFFECTIVE DATE.
1.1 Parties. This Location Agreement ( "Agreement ") is entered into by and
between the Town of Los Gatos, a California municipal corporation ( "Town "), and
California Development Group, LLC, a Texas limited liability company ( "CDG ") and US
Concrete Inc., a Delaware Corporation ( "Client "). For the purposes of this Agreement,
the address of Town is 110 E. Main Street, Los Gatos, California 95030; Attn: Town
Manager. The address of CDG is 3475 Lenox Road, Suite 650, Atlanta, Georgia, 30326.
The address for Client is 331 N. Main Street, Euless, Texas 76039. Town and CDG and
Client are sometimes referred to individually as "Party" and collectively as "Parties"
herein.
1.1.1 Town Representations and Warranties. Town represents and
warrants to CDG and Client that, to Town's actual current knowledge:
(i) Town is a Municipal Corporation exercising governmental
functions and powers and organized and existing under the
State of California;
(ii) Town has taken all actions required by law to approve the
execution of this Agreement;
(iii) Town's entry into this Agreement and the performance of
Town's obligations under this Agreement do not violate any
contract, agreement or other legal obligation of Town;
(iv) Town's entry into this Agreement and the performance of
Town's obligations under this Agreement do not constitute
a violation of any state or federal statute or judicial decision
to which Town is subject;
(v) There are no pending lawsuits or other actions or
proceedings which would prevent or impair the timely
performance of Town's obligations under this Agreement;
(vi) Town has the legal right, power and authority to enter into
this Agreement and to consummate the transactions
contemplated hereby, and the execution, delivery and
performance of this Agreement has been duly authorized
and no other action by Town is requisite to the valid and
binding execution, delivery and performance of this
Agreement, except as otherwise expressly set forth herein;
and
(vii) The individual executing this Agreement is authorized to
execute this Agreement on behalf of Town.
2
The representations and warranties set forth above are material
consideration to CDG and Client and Town acknowledges that CDG and Client are
relying upon the representations set forth above in undertaking CDG's and Client's
obligations set forth in this Agreement.
The term "Town's actual current knowledge" means, and is limited to, the
actual current knowledge of Town Manager, as of the Effective Date, without having
undertaken any independent inquiry or investigation for the purpose of making such
representation or warranty and without any duty of inquiry or investigation. All of the
terms, covenants and conditions of this Agreement shall be binding on and shall inure to
the benefit of Town and its nominees, successors and assigns.
1.1.2 CDG and Client Representations and Warranties. CDG and
Client represent and warrant to Town that, to CDG's and Client's actual current
knowledge:
(i) CDG is a duly formed Texas limited liability company and
is in good standing and qualified to do business under the
laws of the State of California;
(ii) Client is a duly formed Delaware corporation and is in
good standing and qualified to do business under the laws
of the State of California
(ii) The individuals executing this Agreement are authorized to
execute this Agreement on behalf of CDG and Client;
(iii) CDG and Client have taken all actions required by law to
approve this Agreement;
(iv) CDG's and Client's entry into this Agreement and the
performance of CDG's and Client's obligations under this
Agreement do not violate any contract, agreement or other
legal obligation of CDG or Client;
(v) CDG's and Client's entry into this Agreement and the
performance of CDG's and Client's obligations under this
Agreement do not constitute a violation of any state or
federal statute or judicial decision to which CDG and
Client are subject;
(vi) There are no pending lawsuits or other actions or
proceedings which would prevent or impair the timely
performance of CDG's and Client's obligations under this
Agreement; and
3
(vii) CDG and Client have the legal right, power and authority
to enter into this Agreement and to consummate the
transactions contemplated hereby, and the execution,
delivery and performance of this Agreement have been
duly authorized and no other action by CDG or Client is
requisite to the valid and binding execution, delivery and
performance of this Agreement, except as otherwise
expressly set forth herein.
The representations and warranties set forth herein are material
consideration to Town and CDG and Client acknowledge that Town is relying upon the
representations set forth above in undertaking Town's obligations set forth above.
The term "CDG's and Client's actual current knowledge" means, and is
limited to, the actual current knowledge of CDG and Client staff as of the Effective Date,
without having undertaken any independent inquiry or investigation for the purpose of
making such representation or warranty and without any duty of inquiry or investigation.
All of the terms, covenants and conditions of this Agreement shall be
binding on and shall inure to the benefit of CDG and Client and its permitted nominees,
successors and assigns. Wherever the term "CDG" and Client is used herein or therein,
such term shall include any permitted nominee, assignee or successor of CDG and Client.
The Town has entered into this Agreement with CDG and Client because
of the unique qualifications and identity of CDG and Client. No voluntary or involuntary
successor -in- interest of CDG or Client shall acquire any rights or powers under this
Agreement except as expressly set forth herein. Except as expressly provided by this
Agreement, CDG and Client may not assign or transfer all or any part of this Agreement
without the prior written approval of Town, which may be given or withheld in Town's
sole and absolute discretion.
1.2 Effective Date. This Agreement is dated for reference purposes only.
This Agreement will not become effective until the date ( "Effective Date ") on which both
of the following are true: (i) this Agreement has been approved by the Town Council
following all legally required notices and hearings; and (ii) this Agreement has been
executed by the appropriate authorities of Town and CDG and Client.
ARTICLE 2. DEFINITIONS.
2.1 Definitions. Unless the context otherwise requires, the terms defined in this
Article 2 shall, for all purposes, and of any amendment hereof, and of any opinion or
report or other document mentioned herein or therein, have the meanings defined herein;
the following definitions to be equally applicable to both the singular and plural forms of
any of the terms defined herein.
n
2.1.1 "Agreement" shall have the meaning set forth in Section 1.1.
2.1.2 "Applicable Reporting Period" means, for purposes of determining
the Parties' financial obligations hereunder, the Reporting Period applicable to the Fiscal
Quarter for which the financial obligation is being calculated.
2.1.3 "Business Day" means a day which is not a Saturday, Sunday or
legal holiday on which banking institutions in the State of California or Town are closed.
2.1.4 "BOE" means the California State Board of Equalization and any
successor agency.
2.1.5 "Client" means US Concrete Inc., and any subsidiary, affiliate or
organization under common complete or partial ownership or control of/ of US Concrete,
that contracts with CDG to establish a Sales Office.
2.1.6 "Costs" shall have the meaning set forth in Section 4.19.
2.1.7 "CDG" shall have the meaning set forth in Section 1.1 and shall
include any permitted nominee, assignee or successor to CDG's rights, powers and
responsibilities.
2.1.8 "Data and Documentation" shall have the meaning set forth in
Section 4.2.2.
2.1.9 "Dispute Notice" shall have the meaning set forth in Section 4.20.
2.1.10 "Effective Date" shall have the meaning set forth in Section 1.2.
2.1.11 "Enforced Delays" shall have the meaning set forth in
Section 4.18.
2.1.12 "Event of Default" shall have the meaning set forth in Section 4.4.
2.1.13 "Location Payment Obligation" or "LPO" means, the following
percentage of each dollar of Local Sales Tax Revenues received by Town and attributable
to Client on a four Fiscal Quarter basis, beginning with the first Fiscal Quarter in the
Term:
0% for Local Sales Tax Revenues up to the first $500,000
100% for Local Sales Tax Revenues between $500,000 and $2,000,000
75% for Local Sales Tax Revenues in excess $2,000,000
5
2.1.14 "Fiscal Quarter" means one calendar year quarter within the Term
and commencing on January 1, April 1, July 1, or October 1, and ending on, as
applicable, the immediately following March 31st, June 30th, September 30th, or
December 31st. As an example, the Fiscal Quarter commencing January 1st shall end on
the March 31 st immediately following, the Fiscal Quarter commencing on April 1 st shall
end on the June 30th immediately following, and so on.
2.1.15 "Local Sales Tax Revenues" means that portion of the Sales Tax,
paid by Client, which is allocated and paid to Town pursuant to the Sales Tax Law.
Local Sales Tax Revenues shall not include: (i) Penalty Assessments, (ii) any Sales Tax
levied by, collected for or allocated to the State of California, the County of Los Angeles,
or a district or any entity (including an allocation to a statewide or countywide pool)
other than Town, (iii) any administrative fee charged by the BOE, (iv) any Sales Tax
subject to any sharing, rebate, offset or other charge imposed pursuant to any applicable
provision of federal, state or local (except Town's) law, rule or regulation, or (v) any
Sales Tax attributable to any transaction not consummated within the Term, (vi) any
Sales Tax (or other funds measured by Sales Tax) required by the State of California to
be paid over to another public entity (including the State) or set aside and/or pledged to a
specific use other than for deposit into or payment from the Town's general fund, or (vii)
any Sales Tax attributable to any transaction occurring following CDG's or Client's
Event of Default.
Without limiting the generality of the foregoing, CDG and Client
acknowledges that the California legislature has adopted certain legislation, commonly
known as the "triple- flip ", which diverts to the State of California a portion of the Sales
Tax which would otherwise be payable to the Town pursuant to the Sales Tax Law as it
existed prior to enactment of the above - referenced legislation. CDG and Client
acknowledges that such legislation causes a reduction, and a delay in the time of payment
to the Town, of the Local Sales Tax Revenues which would otherwise be attributable to
Sales and that such reduction will cause a corresponding reduction and a delay in the time
of payment of the Town Payments due to CDG during such time as such legislation is in
effect. Furthermore, CDG and Client acknowledges that it is possible that the legislation
described above, or other legislation related to Sales Tax, may be enacted and effective
during one or more subsequent years during the Term and may materially and negatively
impact the amount and timing of Local Sales Tax Revenues and, accordingly, Town
Payments. The Town does not make any representation, warranty or commitment
concerning the future actions of the California legislature with respect to the allocation of
Sales Taxes to the Town. CDG and Client agree that it is undertaking its obligations
under this Agreement after having considered, and is expressly assuming the risk of, the
possibility of such legislation.
The foregoing paragraph notwithstanding, Town acknowledges that the California
legislature may provide for the payment to Town of other revenues for the purpose of
offsetting any losses in Local Sales Tax Revenues resulting from the enactment of
legislation of the type described in the immediately preceding paragraph. Town agrees
that, should the California legislature provide for such offsetting revenues, then for
on
purposes of this Agreement and the computation of any Town Payments which may
become due to CDG hereunder, Town will consider any such offsetting revenues which
are (i) indexed to Sales Tax and offset the loss of sales tax revenues to the Town dollar
for dollar, (ii) actually received by the Town, and (iii) not subject to any restrictions on
use beyond those which are otherwise generally applicable to sales tax revenues received
by California municipalities, to be Local Sales Tax Revenues within the meaning of this
Agreement.
2.1.16 "Material" means any and all tangible personal property offered for
sale by Client to its customers /clients which is subject to the Sales Tax Law.
2.1.17 'Penalty Assessments" means penalties, assessments, collection
costs and other costs, fees or charges resulting from late or delinquent payment of Sales
Tax and which are levied, assessed or otherwise collected from Client.
2.1.18 "Reporting Period" means, at any one point in time, the
then - current Fiscal Quarter together with the immediately preceding three (3) Fiscal
Quarters.
2.1.19 'Resolution Period" shall have the meaning set forth in Section
4.20.2.
2.1.20 " Sales" means all sales of tangible personal property to any person
or entity, which is subject to the Sales Tax Law and which generates Local Sales Tax
Revenues.
2.1.21 " Sales Office" means any form of business entity of Client, or a
subsidiary or affiliate of Client, which maintains a sales operation within the Town at
which Sales transactions are consummated pursuant to the Sales Tax Law, including but
not limited to: buying companies, Internet sales offices, and field salespersons branch
offices.
2.1.22 Intentionally Not Used
2.1.23 "Sales Tax" means all sales and use taxes levied under the
authority of the Sales Tax Law, excluding Sales Tax which is to be refunded to Client,
because of an overpayment of Sales Tax.
2.1.24 "Sales Tax Law" means (i) California Revenue and Taxation Code
Section 6001 et seq., and any successor law thereto, (ii) any legislation allowing Town or
other public agency with jurisdiction in Town to levy any form of Sales Tax, and (iii)
regulations of the BOE and other binding rulings and interpretations relating to (i) and (ii)
hereof.
7
2.1.25 "Term" shall mean that period commencing as of the first Fiscal
Quarter Client files a California Sales and Use Tax Return after establishing the Sales
Office and commencing Sales within Town under this Agreement, and ending as of the
last date of the eightieth (80th) Fiscal Quarter thereafter, unless earlier terminated or
extended as provided by this Agreement. At any time, upon notification to CDG, Town
may unilaterally extend this agreement for an additional eighty Fiscal Quarters.
2.1.26 "Town" shall have the meaning set forth in Section 1.1 and shall
include any nominee, assignee or successor to Town's rights, powers and responsibilities.
2.1.27 "Town Payment" means, with respect to a particular Fiscal Quarter
within the Term, the sum total amount of Town's "Location Payment Obligation" (LPO),
as defined in Section 2.1.13, for such Fiscal Quarter.
ARTICLE 3. RECITALS
3.1 CDG is engaged in the business of causing Clients to form and locate
Sales Offices in the Town which would consummate sales transactions in the Town for
no less than the Term. Notwithstanding the foregoing, Town acknowledges that CDG
Client retains authority over Client's own business operations, reserving the right to
expand, contract, modify, move, or cease operations in Town, in accordance with prudent
commercial business practice and at its sole discretion, prior to expiration of the Term.
3.2 Town, in consideration of the additional Local Sales Tax Revenues to be
paid by the Client Sales Offices for the benefit of Town, which Town would not
otherwise realize, desires to provide Town Payments to CDG as compensation for CDG's
establishing the Client Sales Offices within Town and otherwise satisfying its obligations
under this Agreement.
3.3 Such Town Payment for each Fiscal Quarter will be an amount paid from
any legally available source of funds and shall be measured by a percentage of the Local
Sales Tax Revenues generated in such Fiscal Quarter, as more particularly set forth in
this Agreement.
3.4 The operations of CDG, and the Client Sales Offices in Town will provide
significant public benefits to Town, in that the additional Local Sales Tax Revenues to be
generated as a result of CDG's efforts represent a substantial and significant source of
additional public revenue for Town, which may be used by Town for the funding of
necessary public services and facilities, including public safety services and facilities.
3.5 Town and CDG and Client desire to enter into this Agreement for the
purposes described above.
0
ARTICLE 4. OPERATIVE TERMS
4.1 Location and Operation Covenant. CDG shall include in all contracts
into which it enters with Client (or any subsidiary or affiliate) a requirement that, for the
full Term, the Client Sales Offices located in Town shall conduct their operations in
accordance with all applicable provisions of local, state and federal law; provided,
however, that nothing herein shall require CDG to guarantee the performance of any
Client Sales Office. CDG and Client shall use commercially reasonable, good faith
efforts to administer its business activities, with the objective of maximizing the amount
of Local Sales Tax Revenues generated from CDG's ongoing business activity with its
Client and Client Sales Office in Town.
4.1.1 The Client Sales Office has obtained, and will maintain, a
sales tax permit from the BOE. Client agrees to conduct its business so that the place
of sale for all Sales made by Client during the term of this Agreement will be the
Town pursuant to the Sales and Use Tax Law. In all sales reports filed by Client
with the BOE, relating to Sales, where such a designation is permitted or required
under the Sales and Use Tax Law, Client shall specify the Town as the place of sale
for all of its Sales.
4.2 Payment of Town Payment. Within two hundred (200) days following
the later of: (i) Town's receipt of final reconciliation reports from the BOE for a Fiscal
Quarter occurring within the Term, and (ii) Town's receipt of any and all Data and
Documentation applicable to such Fiscal Quarter, Town will determine and pay to CDG
the Town Payment due for such Fiscal Quarter.
4.2.1 Conditions Precedent to Town Payments. Town's obligations
under Section 4.2 hereof are contingent on a year -to -year basis and, for each Fiscal
Quarter within the Term, Town's obligations to make any payments to CDG hereunder
are expressly contingent upon the satisfaction of the following conditions precedent in
each Fiscal Quarter after Client has begun Sales in Town:
(i) CDG and Client having, for the entirety of such Fiscal
Quarter, completely fulfilled its material obligations under
this Agreement; and
(ii) Town's receipt and reasonable approval of the Data and
Documentation, certified as complete and accurate by an
authorized CDG officer or Client employee
Should any one or more of the foregoing conditions precedent not be
satisfied for each Fiscal Quarter, then Town shall have no obligation to make any Town
Payment to CDG for such Fiscal Quarter.
4.2.2 Data and Documentation. For the purposes of this Agreement, the
term "Data and Documentation" means document(s) reasonably required by Town to
evidence the net dollar value of all Sales consummated by Client Sales Office in such
E
Fiscal Quarter which would be represented by a signed California Sales and Use Tax
Return that was filed with the BOE.
4.2.3 Adequate Consideration. Each Town Payment due and payable
hereunder shall constitute the total payment to CDG for the Fiscal Quarter to which it
relates. The Parties hereto have determined and agreed that the Town Payment due and
payable during each Fiscal Quarter represents fair consideration to CDG and Client for its
covenants and obligations hereunder.
Both Town and CDG and Client expressly acknowledge and agree that
CDG and Client will receive no compensation under this Agreement other than the Town
Payment. CDG and Client shall not be entitled to any reimbursement or other
compensation from Town for any costs incurred by CDG and Client in performing or
preparing to perform its obligations under this Agreement. The Town Payments shall not
be reduced or offset for any costs or expenses incurred by Town in performing or
preparing to perform its duties under this Agreement.
4.2.4 No Carry Forward or Back. Town and CDG and Client
acknowledge and agree that the calculation and determination of all financial components
of the Parties' rights and obligations under this Agreement shall be computed on a Fiscal
Quarter -to- Fiscal Quarter basis. Revenues generated in one Fiscal Quarter may not be
carried forward or back to any prior or future Fiscal Quarter, it ' being the express
agreement and understanding of the Parties that for each Fiscal Quarter the financial
obligations of the Parties and satisfaction of the conditions precedent to such obligations
shall be determined and made independently of any other Fiscal Quarter.
4.2.5 Source of Town Payment. Town Payments shall be payable from
any source of legally available funds of Town. Town covenants to reasonably consider
such actions as may be necessary to include all Town Payments owed hereunder in each
of its annual budgets during the Term and to reasonably consider the necessary annual
budgetary appropriations for all such Town Payments.
4.2.6 Recapture of Town Payments. If, at any time during or after the
Term of this Agreement, BOE determines that all or any portion of the Local Sales Tax
Revenues received by the Town were improperly allocated and/or paid to the Town, and
if BOE requires repayment of, offsets against future Sales Tax payments, or otherwise
recaptures from the Town those improperly allocated and/or paid Local Sales Tax
Revenues, then CDG and Client shall, within thirty (30) days after written demand from
the Town, repay all Town Payments (or applicable portions thereof) theretofore paid to
CDG which are attributable to such repaid, offset or recaptured Local Sales Tax
Revenues. If CDG and Client fail to make such repayment within thirty (30) days after
the Town's written demand, then such obligation shall accrue interest from the date of the
Town's original written demand at the then - maximum legal rate imposed by the
California Code of Civil Procedure on prejudgment monetary obligations, compounded
monthly, until paid. In addition, Town may withhold such amounts from future Town
Payments.
10
Town and CDG agree that, should the BOE question the correctness of the
allocation or determine that there has been an improper allocation to the Town, CDG will
(at the request of Town) engage legal counsel to use his or her best efforts to defend such
allocation in all BOE administrative proceedings. Costs associated with such efforts will
be borne by CDG. For purposes of this paragraph, administrative proceedings include all
BOE meetings, conferences and appeals before BOE Board members. Town and Client
will cooperate fully with CDG and its attorney in any BOE administrative proceedings.
4.2.7 Underpayment by BOE. In order to further the goals of this
Agreement, Town hereby authorizes CDG and Client, upon reasonable notice and within
the limits of the California Public Records Act, to review records regarding the receipt of
Local Sales Tax Revenues by the Town from the BOE relating to Client. In the event of
an underpayment of Local Sales Tax Revenues by the BOE, Town agrees to promptly use
its reasonable good faith efforts to pursue its available administrative remedies against
the BOE on behalf of CDG and Client.
4.2.8 Town Business License Tax & Fees. CDG and Client
acknowledge that it is solely responsible for any and all Town Business License Fees and
any applicable permits and client shall be classified as a Jobbing business pursuant to Los
Gatos Town Code Section 14.10.010.
4.2.9 No Financial Assistance. CDG and Client covenants and agrees
for the period beginning on the Effective Date and continuing through the termination of
this Agreement, CDG and Client will not directly or indirectly solicit or accept any
Financial Assistance (as defined below) from any other public or private person or entity
in California, to the extent such Financial Assistance is given for the purpose of causing
or would result in either Sales Center's relocation from the Town or termination of this
Agreement. For purposes of this Section 4.2.9, the term "Financial Assistance" means
any direct or indirect payment, subsidy, rebate, or other similar monetary or non-
monetary benefit, including, without limitation, payment of land subsidies, relocation
expenses, public financings, property or sales tax relief or rebates, relief from public
improvement obligations, and payment for public improvements to or for the benefit of
Client.
4.3 Audit of Books and Records. Either Party shall, upon no less than
seventy -two (72) hours prior written request from the other Party, make the entirety of its
books and records relating to the calculation and determination of that Party's rights and
obligations under this Agreement available at no cost to the requesting Party and /or its
designees (including its accountants and/or attorneys) and shall direct its accountants and
other consultants and contractors in possession of its books and records to do likewise;
provided, however, that nothing herein shall be deemed to abridge or constitute a waiver
of any Party's evidentiary rights and privileges arising pursuant to any provision of law,
including, without implied limitation, the California Evidence Code, California
Government Code (including the Public Records Act), the Code of Civil Procedure,
federal statutes and state or federal judicial decisions. Furthermore, all such
11
non - privileged books and records may be made available and introduced as evidence in
any arbitration proceeding brought pursuant to the provisions of Section 4.20.2 hereof or
as otherwise ordered by any court of competent jurisdiction. Each Party shall bear the
costs of its own auditors, experts and other consultants it may engage to complete its
investigation of the other Party's books and records; provided, however, that any audit
and /or investigation undertaken in connection with any arbitration proceeding described
in Section 4.20.2 hereof, or as otherwise ordered by the court, may be recovered as an
item of litigation expense pursuant to Section 4.19.
4.3.1 Annual Review of Client's Operations. Town may conduct an
annual review of Client's operations in Los Gatos to verify that Client is conducting its
sales operation in a way that requires the California local sales tax to be allocated to
Town.
4.4 Event of Default. Each of the following shall constitute an "Event of
Default ":
4.4.1 Failure by a Party to comply with and observe any of the
conditions, terms, or covenants set forth in this Agreement, if such failure remains
uncured within thirty (30) days after written notice of such failure from the
non - defaulting Party to the defaulting Party in the manner provided herein or, with
respect to a default that cannot be cured within thirty (30) days, if the defaulting Party
fails to commence such cure within such thirty (30) day period or thereafter fails to
diligently and continuously proceed with such cure to completion. However, if a
different period, notice requirement, or remedy is specified under any other section of
this Agreement, then the specific provision shall control.
4.4.2 Any representation or warranty contained in this Agreement or in
any application, financial statement invoice, certificate, or report submitted pursuant to
this Agreement proves to have been incorrect in any material respect when made.
4.5 Rights and Remedies; Rights and Remedies Not Exclusive. Unless
prohibited by law or otherwise provided by a specific term of this Agreement, the rights
and remedies of Town and CDG and Client under this Agreement are, nonexclusive and
all remedies hereunder may be exercised individually or cumulatively. Upon the other
Party's Event of Default, in addition to those remedies expressly granted herein, the
Parties shall also have the right to seek all other available legal and equitable remedies,
including, without implied limitation, general and consequential damages.
4.6 Termination. In addition to all other rights and remedies granted to the
Parties under this Agreement or available to them in equity or at law, any Party may
terminate this Agreement and all of its obligations hereunder without cost or liability
upon the other Party's Event of Default as described in Section 4.4 above. Such
termination shall not limit or abridge the rights and remedies available to the
non - defaulting Party.
12
4.6.1 Employee Head Count and Activity Limitations. Under this
agreement, Client may employ up to a maximum of 25 employees at the Los
Gatos salesoffice location, excluding field salespersons who normally work out of
their home offices but are technically employees of Client. Activity at the office is
limited to that which is customary for headquarter office functions (finance,
accounting, personnel, administration) and telephone and Internet sales offices, with
limited on -site customer sales activity, product deliveries, etc. If during the term of
this agreement, or any extensions as provided, Client wishes to add employees such
that the total employee count would exceed the authorized amount, or alter the
activities at the office to be inconsistent with that which is described above, Town
approval shall first be obtained. If Client exceeds the stated maximum number of
employees without first obtaining Town approval, Town may terminate this
Agreement at its sole discretion. Such approval shall be requested at least ninety
(90) days in advance.
In addition, changes in law that prohibit or materially undermine the intent and purposes
of this Agreement may be a basis for termination or negotiated modification hereof.
4.7 Amendment; Modification. At any time Town and CDG and Client may
determine that this Agreement should be amended for the mutual benefit of the Parties, or
for any other reason. Any such amendment to this Agreement shall only be by written
agreement between Town and CDG and Client. Town and CDG and Client agree to
consider reasonable requests for amendments to this Agreement which may be made by
either of the Parties hereto, although neither Party shall be obligated to approve any such
amendment. Any amendments to this Agreement must be in writing and signed by the
appropriate authorities of both the Parties.
4.8 California Law. This Agreement shall be construed and governed in
accordance with the laws of the State of California without regard to its conflict of laws
principles.
4.9 Execution in Counterparts. This Agreement may be executed in two (2)
or more counterparts, each of which shall be deemed an original, and all of which shall
constitute but one (1) and the same instrument.
4.10 Business Days. Any act or thing required to be done or exist on any date
set forth herein which does not constitute a Business Day in any year shall be deemed to
be done or to exist on such date if such act or thing is done or exists on the next date
which constitutes a Business Day.
4.11 Tax Consequences. CDG shall be responsible and assume all liability for
federal, state and/or local income or other taxes resulting from its receipt of Town
Payments.
4.12 Rights Not Granted. This Agreement is not, and shall not be construed
to be, a statutory development agreement under California Government Code Section
65864 et seq. or a disposition and development agreement under California Health and
13
Safety Code Section 33000 et seq. This Agreement is not, and shall not be construed to
be, an approval of or an agreement to issue permits or a granting of any right or
entitlement by Town concerning any project, development, or construction by CDG's
Client in Town. This Agreement does not, and shall not be construed to exempt CDG's
Client in any way from the requirement to obtain permits and /or other discretionary or
non - discretionary approvals as may be necessary for the development, maintenance and
operation of any project, development or construction of CDG's Client within Town.
This Agreement does not, and shall not be construed to exempt CDG's Client from the
application and/or exercise of Town's power of eminent domain or its police power,
including, but not limited to, the regulation of land uses and the taking of any actions
necessary to protect the health, safety and welfare of its citizenry.
4.13 Consent. Whenever consent or approval of either Party is required under
this Agreement, that Party shall not unreasonably withhold, delay or condition such
consent or approval unless a different standard is otherwise provided by a specific
provision of this Agreement.
4.14 Notices and Demands. All notices or other communications required or
permitted between Town and CDG under this Agreement shall be in writing, and may be
(i) personally delivered, (ii) sent by United States registered or certified mail, postage
prepaid, return receipt requested, (iii) sent by facsimile, or (iv) sent by nationally
recognized overnight courier service (e.g., Federal Express), and addressed to the Parties
at the addresses provided in Article 1 subject to the right of either Party to designate a
different address for itself by notice similarly given. Any notice so given by registered or
certified United States mail shall be deemed to have been received on the fourth (4a')
Business Day after the same is deposited in the United States mail. Any notice not so
given by registered or certified mail, such as notices delivered by facsimile or courier
service (e.g., Federal Express), shall be deemed received upon actual receipt of the same
by the Party to whom the notice is given.
4.15 Non - liability of Parties' Officials and Employees. No officer, elected
official, contractor, consultant, attorney or employee of Town shall be personally liable to
CDG, any voluntary or involuntary successors or assignees of CDG, or any lender or
other party holding an interest in CDG's property, in the event of any default or breach by
Town, or for any amount which may become due to CDG or to its successors or
assignees, or on any obligations arising under this Agreement.
No officer, official, contractor, consultant, attorney or employee of CDG shall be
personally liable to Town, any voluntary or involuntary successors or assignees of Town
in the event of any default or breach by CDG, or for any amount which may become due
to Town or to its successors or assignees, or on any obligations arising under this
Agreement.
4.16 Conflict of Interests. No officer, elected official, contractor, consultant,
attorney or employee of Town shall have any personal interest, direct or indirect, in this
Agreement nor shall any such officer, elected official, contractor, consultant, attorney or
14
employee participate in any decision relating to this Agreement which unlawfully affects
his/her personal interests or the interests of any corporation, partnership or association in
which he /she is directly or indirectly interested.
4.17 Entire Agreement; Confidentiality. This Agreement contains all of the
terms and conditions agreed upon by the Parties. No other understanding, oral or
otherwise, in direct conflict with this Agreement shall be deemed to exist or to bind any
of the Parties hereto. All prior written or oral offers, counteroffers, memoranda of
understanding, proposals and the like are superseded by this Agreement. The terms and
existence of this Agreement will not be publicized or made public beyond what is
required by law, legal or administrative process.
4.18 Extensions and Delays. Time is of the essence in the performance of the
obligations of Town and CDG under this Agreement. In addition to specific provisions
of this Agreement, providing for extensions of time, times for performance hereunder
shall be extended where delays in performance are due to war, insurrection; any form of
labor dispute; lockouts; riots; floods; earthquakes; fires; acts of God or of third parties;
third party litigation or orders and judgments of courts of competent jurisdiction; acts of a
public enemy; acts of governmental authorities; epidemics; quarantine restrictions; and
freight embargoes (collectively, "Enforced Delays ") provided, however, that the Party
claiming the extension shall notify the other Party of the nature of the matter causing the
default; and, provided further, that the extension of time shall be only for the period of
the Enforced Delays. In no event shall either Party be deemed in default of this
Agreement because of an Enforced Delay event.
4.19 Attorneys' Fees. In the event of the bringing of an arbitration, action or
suit by a Party hereto against another Party hereunder by reason of any breach of any of
the covenants or agreements or any intentional inaccuracies in any of the representations
and warranties on the part of the other Party arising out of this Agreement or any other
dispute between the Parties concerning this Agreement then, in that event, the prevailing
Party in such action or dispute, whether by final judgment or arbitration award, shall be
entitled to have and recover of and from the other Party all costs and expenses of suit or
claim, including actual attorneys' fees and expert witness fees. Any judgment, order or
award entered in any final judgment or award shall contain a specific provision providing
for the recovery of all costs and expenses of suit or claim, including actual attorneys' fees
and expert witness fees (collectively, "Costs ") incurred in enforcing, perfecting and
executing such judgment or award. For the purposes of this Section 4.19, Costs shall
include, without implied limitation, attorneys' and experts' fees, costs and expenses
incurred in the following: (i) post judgment motions and appeals, (ii) contempt
proceedings, (iii) garnishment, levy and debtor and third party examination; (iv)
discovery; and (v) bankruptcy litigation. This Section 4.19 shall survive any termination
of this Agreement.
4.20 Informal Dispute Resolution. The Parties shall attempt in good faith to
resolve any differences, controversy or claim arising out of or relating to this Agreement
promptly by negotiations between senior officials of the Parties who have authority to
15
settle the difference or controversy. The disputing Party may give the other Party written
notice ( "Dispute Notice ") that a dispute exists between them so that the provision of
Sections 4.20.1 and 4.20.2 shall apply.
4.20.1 Within twenty (20) days after receipt of a Dispute Notice, the
receiving Party shall submit to the disputing Party a written response. The Dispute
Notice and response shall include (a) a statement of each Party's position and a summary
of the evidence and arguments supporting its position, and (b) the name and title of the
official who shall represent that Party. The senior officials shall meet at a mutually
acceptable time and place or by telephone conference within thirty (30) days of the date
of the Dispute Notice, and thereafter as often as they reasonably deem necessary to
exchange relevant information and to attempt to resolve the dispute. In the event any
Party fails to provide a response to a Dispute Notice in accordance with this section or
fails to cooperate in the scheduling of, or to attend, the meetings, described above, to
resolve the dispute, then, with respect to that Party, the Resolution Period shall be
deemed to have run so that the dispute may immediately be subject to arbitration in
accordance with Section 4.20.2 below.
4.20.2 If the matter has not been resolved pursuant to Section 4.20.1
within ninety (90) days of the date of the Dispute Notice ( "Resolution Period "), (which
period may be extended by mutual agreement), or if any Party will not participate in such
procedure, the dispute shall be exclusively and finally settled by arbitration in Los
Angeles County, California, in accordance with the American Arbitration Association
Rules. Each Party to such dispute shall appoint an arbitrator, and such arbitrators shall
appoint an additional arbitrator. If, within thirty (30) days following the expiration of the
Resolution Period, any Party has not appointed an arbitrator, the American Arbitration
Association shall, at the request of the other Party, appoint an arbitrator on that Party's
behalf. The judgment upon any award rendered by arbitration shall be final and binding
upon the disputing Parties and may be entered by any court having the jurisdiction
thereof. The arbitration shall be in lieu of any other remedy and the award shall be final,
binding and enforceable upon the disputing Parties. The arbitrators shall have the right to
award costs as provided for in Section 4.19.
4.21 Jurisdiction and Venue. Any legal action or proceeding concerning this
Agreement shall be filed and prosecuted in the appropriate State of California court in the
County of Santa Clara, California. All Parties hereto irrevocably consent to the personal
jurisdiction of that court. All Parties each hereby expressly waive the benefit of any
provision of federal or state law or judicial decision providing for the filing, removal, or
change of venue to any other court or jurisdiction, including, without implied limitation,
federal district court, due to any diversity of citizenship between Town and CDG and
Client, due to the fact that Town is a party to such action or proceeding or due to the fact
that a federal question or federal right is involved or alleged to be involved. Without
limiting the generality of the foregoing, Town and CDG and Client specifically waive
any rights provided to it pursuant to California Code of Civil Procedure Section 394.
CDG and Client acknowledges that the provisions of this Section 4.21 are material
16
consideration to Town for its entry into this Agreement, in that Town will avoid the
potential cost, expense and inconvenience of litigating in a distant forum.
4.22 Interpretation. Town and CDG acknowledge that this Agreement is the
product of mutual arms - length negotiation and drafting and that both Parties have been
represented by legal counsel in the negotiation and drafting of this Agreement.
Accordingly, the rule of construction which provides that ambiguities in a document shall
be construed against the drafter of that document shall have no application to the
interpretation and enforcement of this Agreement. In any action or proceeding to
interpret or enforce this Agreement, the finder of fact may refer to any extrinsic evidence
not in direct conflict with any specific provision of this Agreement to determine and give
effect to the intention of the Parties with respect to any ambiguities in this Agreement.
4.23 No Waiver. Failure to insist on any occasion upon strict compliance with
any of the terms, covenants or conditions hereof shall not be deemed a waiver by any
Party of such term, covenant or condition, nor shall any waiver or relinquishment of any
rights or powers hereunder at any one time or more times be deemed a waiver or
relinquishment by any Party of such other right or power at any other time or times.
4.24 Successors and Assigns. The terms, covenants and conditions of this
Agreement shall be binding upon and inure to the benefit of the Parties hereto and their
voluntary and involuntary successors and assigns.
4.25 No Third Party Beneficiaries. The performance of the respective
obligations of Town and CDG and Client under this Agreement are not intended to
benefit any party other than Town or CDG or Client. No person or entity not a signatory
to this Agreement shall have any rights or causes of action against any Party to this
Agreement as a result of that Party's performance or non - performance under this
Agreement.
4.26 No Effect on Eminent Domain Authority. Nothing in this Agreement
shall be deemed to limit, modify, or abridge or affect in any manner whatsoever Town's
eminent domain powers with respect to any property.
4.27 Warranty Against Payment of Consideration. CDG warrants that it has
not paid or given, and will not pay or give, any third party any money or other
consideration for obtaining this Agreement. Third parties, for the purposes of this
Section 4.27, shall not include persons to whom fees are paid for professional services if
rendered by attorneys, financial consultants, accountants, engineers, architects and the
like when such fees are considered necessary by CDG.
4.28 Severabitity. Town and CDG declare that the provisions of this
Agreement are severable. If it is determined by a court of competent jurisdiction that any
term, condition or provision hereof is void, voidable, or unenforceable for any reason
whatsoever, then such tern, condition or provision shall be severed from this Agreement
and the remainder of the Agreement enforced in accordance with its terms.
17
4.29 Further Acts. Town and CDG each agree to take such additional acts and
execute such other documents as may be reasonable and necessary in the performance of
their obligations hereunder. The foregoing shall not, however, be deemed to require
Town to exercise its legislative discretion in any particular fashion or to provide to CDG
any remedy or claim for damages against Town based on the lawful exercise of Town's
discretion.
4.30 No Assignment, Transfer, Pledge or Hypothecation. CDG may not
assign, transfer, encumber or hypothecate its rights or obligations under this Agreement
to any person or entity, including but not limited to a Client, without the express written
consent of Town, which may be withheld in Town's sole and absolute discretion. Any
unpermitted assignment, transfer, pledge, encumbrance, or hypothecation, or any attempt
to do so, shall not confer any rights upon the purported assignee or transferee and shall
constitute CDG's immediate and incurable material default of this Agreement, and Town
may, without providing CDG notice or opportunity to cure, exercise those remedies
available to Town pursuant to Section 4.5 or 4.6.
4.31 Relationship of Parties. The Parties shall not be deemed in a relationship
of partners or a joint venture by virtue of this Agreement, nor shall either Party be an
agent, representative, trustee or fiduciary of the other. Neither Party shall have any
authority to bind the other to any agreement.
4.32 Non - Dedication of Property. The execution of this Agreement by CDG
does not result in the dedication of any CDG property for public use.
4.33 Indemnification. CDG and Client shall defend (with counsel reasonably
acceptable to the Town) the Town, its officials, agents and employees, and hold Town
harmless from and against any and all costs and expenses, including reasonable
attorney's fees, of defending any claim that this Agreement and /or the payment of the
Town Payments under this Agreement, violate or are illegal or impermissible as a result
of Government Code §53084.5 or violates or is otherwise illegal under the Constitution
of the State of California. The foregoing shall not apply to claims or actions caused by
the negligence or willful misconduct of the Town, its officers or employees. This
indemnity provision shall apply to any claim or cause of action initiated in state or
federal court. In the event this agreement is challenged in any administrative
proceeding before the BOE, the defense in such action shall be governed by Sections
4.2.6.
4.34 Defense of Agreement. In the event any person or entity, other than the
Parties to this Agreement, attempts to enjoin or otherwise challenge the validity of any
recital or provision of this Agreement, the Town, CDG and Client agree that each will
not take a position adverse to enforcement of this Agreement.
IN
SIGNATURE PAGE
TO
LOCATION AGREEMENT
Dated:
ATTEST
By:
Town Clerk
APPROVED AS TO LEGAL FORM:
By:
Town Attorney
IrGYM`A
TOWN OF LOS GATOS
a California municipal corporation
Q
Town Manager
Dated:
Dated:
SIGNATURE PAGE
TO
LOCATION AGREEMENT
CDG:
CALIFORNIA DEVELOPMENT GROUP,
LLC
a Texas limited liability company
By:
Its:
Managing Member
US Concrete, Inc.
a Delaware Corporation
By:
Its:
pill