RDA Agmt 2001 Lavery California Dealership Properties No. 1 LLC

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4.06 Completion of the Improvements and Use of the Property. The Developer, for itself, its successors and assigns, which may include lessee retained to operate an automobile dealership on the Property, hereby covenants and agrees diligently to perform in accordance with the following provisions ("Operating Covenants"): (a) To commence construction of the Improvements within twelve (12) months of the date the building permit is issued and to prosecute to completion the construction of the Improvements within twelve (12) months thereafter but in no case is construction required to begin prior to the completion of the Public Improvements described in Exhibit D attached hereto, which shall be completed no later than 365 days from the date of this Agreement. Developer may, at Developer's option, and subject to the written approval of the City of San Leandro, construct the public improvements set forth in Exhibit D subject to the negotiation and execution of a reimbursement agreement with the City of San Leandro for such construction; and (b) No later than 60 days after completion of the Improvements and issuance of certificate of occupancy by City and certificate of completion by Agency, H. W. McKevitt Co., Inc. and/or another dealership designated by Developer will commence operation of new automobile sales and related facilities (which may include used vehicle sales) and operate such new automobile sales and related facilities for no less than five (5) years from the date Developer satisfies all the requirements for issuance of a Certificate of Completion for the Improvements; and (c) Except as provided for in Section 5.05 of this Part, not, at any time during such five (5) year period, to sell, transfer or assign all or part of its interest in any portion of the Property without the prior written consent of the Agency, which consent shall not be unreasonably withheld provided that the transferee demonstrates the ability to fulfill the covenants in this Section 4.06. If Developer, or its successors or assigns, fail to open and operate a dealership for new and used automobile sales and related facilities as set forth in the aforementioned Operating Covenants for a period of 90 continuous days, after Developer has satisfied the requirements for issuance of a Certificate of Completion, Agency shall have as its sole and exclusive remedy the right to purchase the Property and Improvements thereon within 180 days from the earlier of: (i) the failure to continuously operate new automobile sales and related facilities for a period of 90 continuous days; or (ii) the giving of written notice to the Agency by Developer of the date as of which the new and used automobile sales and related facilities will cease operations. The Agency shall give written notice of its election to purchase the Property and Improvements within such 180 day period. If no notice is given, right to purchase shall expire. Disposition and Development Page 13 of 32 Agreement (Lavery California Dealership Properties No. 1 LLC)