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HomeMy WebLinkAboutResolution No. 11-R24RESOLUTION NO. 11-R24 A RESOLUTION OF THE GOVERNING BOARD OF THE REDEVELOPMENT AGENCY OF THE CITY OF AZUSA, CALIFORNIA, APPROVING THAT CERTAIN EXCLUSIVE NEGOTIATION AGREEMENT (229 S. AZUSA AVENUE)BETWEEN THE REDEVELOPMENT AGENCY OF THE CITY OF AZUSA AND KAL PACIFIC & ASSOCIATES, INC. WHEREAS, pursuant to the California Community Redevelopment Law (Health & Safety Code Sections 33000, et seq.) ("CRL"), the City Council of the City of Azusa ("City") ("City Council") approved and adopted a Redevelopment Plan ("Redevelopment Plan") for the redevelopment Project Area known as the Merged Central Business District and West End Redevelopment Project Area ("Project Area"); and WHEREAS, the Governing Board ("Board") of the Redevelopment Agency of the City of Azusa ("Agency") is engaged in activities to implement the Redevelopment Plan for the Project Area pursuant to the provisions of the CRL; and WHEREAS, pursuant to Health and Safety Code Section 33490, the Agency has adopted an implementation plan for the Project Area ("Implementation Plan") for the Project Area; and WHEREAS, the Agency owns that certain real property located within the Project Area generally located at 229 S. Azusa Avenue, in the City of Azusa, California (`Property"); and WHEREAS, Kal Pacific & Associates, Inc. (`Developer") desires to negotiate with the Agency for potential acquisition or lease of the Property for the purpose of developing a 100- to 200 -room hotel complex and restaurant (`Project") consistent with the Redevelopment Plan and the Implementation Plan, which is still in the conceptual stage and subject to changes and modifications, and Agency agrees to negotiate with Developer for Developer's potential acquisition or lease of the Property; and WHEREAS, Agency and Developer have come to terms regarding that certain Exclusive Negotiation Agreement (229 S. Azusa Avenue) which is attached hereto as Exhibit "A" and incorporated herein by reference, in order to, among other things, establish a specific, limited period of time for Agency and Developer to negotiate regarding the potential sale or lease of the Property from Agency to Developer and the potential redevelopment of the Project on the Property by Developer; and WHEREAS, Agency staff has determined the Agency's approval of the Agreement is exempt from the California Environmental Quality Act ("CEQA"), pursuant to State CEQA Guidelines Section 15061(b)(3), because it can be seen with certainty that there is no possibility that the Board's approval of the Exclusive Negotiation Agreement (229 S. Azusa Avenue) may have a significant effect on the environment. 1 45636.06001\5953629.1 NOW, THEREFORE, BE IT RESOLVED by the Governing Board of the Redevelopment Agency of the City of Azusa as follows: Section 1. The recitals set forth above are true and correct and are incorporated into this Resolution by this reference. Section 2. The Board hereby finds and determines that it can be seen with certainty that there is no possibility that the adoption of this Resolution and the Exclusive Negotiation Agreement (229 S. Azusa Avenue) may have a significant effect on the environment. Thus, the adoption of this Resolution is exempt from the requirements of CEQA pursuant to Section 15061(b)(3) of the State CEQA Guidelines. Section 3. The Board hereby approves the Exclusive Negotiation Agreement (229 S. Azusa Avenue), attached hereto and incorporated herein by reference, together with non - substantive changes and amendments as may be approved by the Executive Director and the Agency Counsel. Section 4. The Board hereby authorizes and directs the Executive Director and the Agency Counsel to take any action and execute any documents necessary to implement the Excusive Negotiation Agreement (229 S. Azusa Avenue). Section 5. The Board hereby authorizes and directs the Agency Secretary to file a Notice of Exemption with the Los Angeles County Recorder's Office on the Agency's behalf within five (5) days from the adoption of this Resolution. Section 6. The Agency Secretary shall certify to the passage and adoption of this resolution and the same shall thereupon take effect and be in force immediately upon its adoption. APPROVED AND ADOPTED this 16th day of May, 2011. oseph R. Rocha, Chairperson ATTEST: Vera Mendoza, Secretary APPROVED AS TO FORM: BEST BEST & KRRIIEGER//L`�LP Agency Counsel 2 45636.0600115953629.1 CERTIFICATION I HEREBY CERTIFY that the foregoing resolution was duly adopted by the Redevelopment Agency of the City of Azusa at a regular meeting held on the 16th day of May, 2011. AYES: COUNCILMEMBERS: GONZALES, CARRILLO, MACIAS, HANKS, ROCHA NOES: COUNCILMEMBERS: ABSTAIN: COUNCILMEMBERS: ABSENT: COUNCILMEMBERS: Vera Mendoza, Secretary 3 45636.0600 1\5953629.1 EXHIBIT "A" EXCLUSIVE NEGOTIATION AGREEMENT (229 S. AZUSA AVENUE) [See attached behind this page] 45636.0600115953629.1 11 THE REDEVELOPMENT AGENCY OF THE CITY OF AZUSA EXCLUSIVE NEGOTIATION AGREEMENT (229 S. Azusa Avenue) THIS EXCLUSIVE NEGOTIATION AGREEMENT (229 S. Azusa Avenue), is dated as of �I //(,_, 2011, for reference purposes only (this "Agreement'), and is entered into by and between the REDEVELOPMENT AGENCY OF THE CITY OF AZUSA, a public body corporate and politic ("Agency"), and KAL PACIFIC & ASSOCIATES, INC., a California corporation ("Developer"), to provide a specified period of time for the Developer to complete a feasibility study for the development of Property, as defined below, and obtain development entitlements and for the Developer and the Agency to attempt to negotiate a future DDA (as defined in Recital E, below). Agency and Developer are sometimes referred to in this Agreement, individually, as a "Party" and, collectively, as the "Parties." This Agreement is entered into by the Parties with reference to the following recited facts (each, a "Recital'): RECITALS A. The City of Azusa, California (the "City"), adopted the Redevelopment Plan for the Merged Central Business District and West End Redevelopment Project (the "Redevelopment Plan") covering that certain geographic area within the City specified in the Redevelopment Plan (the "Project Area"); B. Agency is the owner of certain real property located within the Project Area generally located at 229 S. Azusa Avenue in the City of Azusa and more specifically described in the legal descriptions attached to this Agreement as Exhibit "A" and incorporated herein by reference (the "Property"); C. Agency has adopted an implementation plan for the Redevelopment Plan, pursuant to Health & Safety Code Section 33490 or 33352 (the "Implementation Plan") and will comply therewith as applicable; and D. The intent of both Agency and Developer in entering into this Agreement is to establish a specific, limited period of time for Developer to: (1) conduct a study on the Property to determine whether it is feasible to develop the Property as a 100- to 200 -room hotel complex and restaurant consistent with the Redevelopment Plan and the Implementation Plan ("Project'); and, thereafter, (2) exclusively negotiate with Agency regarding a future agreement between them governing the potential sale [or lease] of the Property from Agency to Developer and the potential redevelopment of the Project on the Property by Developer, all subject to mutually agreeable terms, conditions, covenants, restrictions and agreements to be negotiated and documented in the future (this future agreement is referred to in this Agreement as a "DDA") in accordance with a Schedule of Performance attached to this Agreement as Exhibit "B" and incorporated herein by reference. 4563 6.06001%5927277.3 1 NOW, THEREFORE, IN VIEW OF THE GOALS AND OBJECTIVES OF THE AGENCY AND THE PROMISES OF AGENCY AND DEVELOPER SET FORTH IN THIS AGREEMENT, AGENCY AND DEVELOPER AGREE, AS FOLLOWS: 1. Incorporation of Recitals. The Recitals of fact set forth above are true and correct and are incorporated into this Agreement, in their entirety, by this reference. 2. Deposit. Within five (5) days of the Effective Date, defined below, Developer shall pay to Agency a deposit in the amount of Fifteen Thousand Dollars ($15,000.00) in immediately available funds (the "Deposit") to ensure that Developer will proceed diligently and in good faith to fulfill its obligations under this Agreement during the Negotiation Period and as part of the consideration for Agency's agreement not to negotiate with other persons during the Negotiation Period, pursuant to this Agreement. The Deposit shall be refundable to Developer in whole if Developer or Agency determines that, based. on the Feasibility Study, the Project is not feasible and terminates the Agreement within ten (10) days after Developer delivers the Feasibility Study to Agency as further described in Section 4(a)(i) below. If the Project is deemed feasible based on the Feasibility Study, the Deposit shall be refundable in part to reimburse Developer for the cost of the Feasibility Study in an amount not to exceed Nine Thousand Dollars ($9,000.00) as set forth in Section 4(a)(ii). The remainder of the Deposit shall be refunded to Developer upon execution of the DDA by both Developer and Agency. 3. Term of Agreement. (a) Effective Date. The rights and duties of Agency and Developer established by this Agreement shall commence on the first date on which all of the following have occurred ("Effective Date"): (1) the authorized representative(s) of Developer have signed three (3) originals of this Agreement and delivered such signed originals of this Agreement to Agency; (2) Agency governing body has approved this Agreement; and (3) the authorized representative(s) of Agency have signed this Agreement and delivered one (1) signed original of this Agreement to Developer. Agency shall give written notice to Developer of the Effective Date within seven (7) days following the occurrence of the Effective Date. This Agreement shall continue in effect for the period of two hundred forty (240) consecutive calendar days immediately following the Effective Date (the "Negotiation Period"), subject to the limitations of Section 3(b). (b) Extension of Negotiation Period. The Negotiation Period may be extended at the sole and absolute discretion of Agency's Executive Director for up to an additional thirty (30) calendar days, in the aggregate, if the milestones numbered 1 through 10, set forth in the Schedule of Performance, are met. If the Negotiation Period is extended pursuant to this Section 3(b), the Executive Director may also modify the deadlines for any remaining actions to be taken by either Agency or Developer, within such extended Negotiation Period. Notwithstanding the immediately preceding sentence, Section 7 or any other part of this Agreement, in no event (including any Unavoidable Delay(s)), shall the Negotiation Period exceed two hundred seventy (270) consecutive calendar days. (c) . Expiration of End of Negotiation Period. This Agreement shall automatically expire and be of no further force or effect at the end of the Negotiation Period. 2 45636.06001 \5927277.3 (d) Termination. Notwithstanding any other term, condition, covenant, restriction or agreement contained in this Agreement, this Agreement shall automatically expire and be of no further force or effect on the earlier to occur of either: (1) upon the expiration or earlier termination of the Negotiation Period; or (2) the signature of a separate future DDA by both Agency and Developer, in their respective sole and absolute discretion. 4. Obligations of Developer. During the Negotiation Period, Developer shall proceed diligently and in good faith to do all of the following in accordance with the Schedule of Performance: (a) Feasibility Study. Within ninety (90) days following the Effective Date, commission and complete, at Developer's sole cost and expense, and provide Agency with a copy of, a feasibility study to determine the feasibility of development of the proposed Project on the Property ("Feasibility Study"). The Feasibility Study shall be the sole property of Developer and shall consider, among other things, local and regional market demand, price sensitivity, rack rates, construction costs, operating costs, optimal number of rooms, amenities, and projected employment. (i) Early Termination and Refund of Deposit. Within ten (10) days of Developer's submission of the Feasibility Study to Agency, which submission shall occur no later than ninety (90) days following the Effective Date, Agency or Developer may terminate this Agreement if either Party determines, in its sole and absolute discretion, that the development of the Project is not supported by the Feasibility Study. Notice of such termination shall be delivered in writing to the other Party as set forth in Section 17. Upon such termination, Agency shall return the Deposit in its entirety to the Developer. At such time, Developer shall deliver to Agency an executed assignment in a form reasonably acceptable to Agency of Developer's ownership of the Feasibility Study, free of liens and encumbrances, and Developer shall use good faith, commercially reasonable efforts to deliver to Agency an estoppel certificate in a form reasonably acceptable to Agency from each person or entity which prepared the Feasibility Study, releasing Agency from any responsibility or liability for paying any costs or fees for the Feasibility Study. In addition to delivery of such executed assignment, Developer shall transfer all original versions of the Feasibility Study and any related documents to Agency. (ii) Acceptance of Feasibility Study; Reimbursement of Cost. If the Agreement is not terminated as set forth in 4(a)(i), Developer shall provide written documentation of the cost of the Feasibility Study satisfactory to Agency, and Agency shall reimburse Developer for such cost in an amount not to exceed Nine Thousand Dollars ($9,000.00). At such time, Developer shall deliver to Agency an executed assignment in a form reasonably acceptable to Agency of Developer's ownership of the Feasibility Study, free of liens and encumbrances, and Developer shall use good faith, commercially reasonable efforts to deliver to Agency an estoppel certificate in a form reasonably acceptable to Agency from each person or entity which prepared the Feasibility Study, releasing Agency from any responsibility or liability for paying any costs or fees for the Feasibility Study. In addition to delivery of such executed assignment, Developer shall transfer all original versions of the Feasibility Study and any related documents to Agency. 3 45 636.0600 1 \5927277.3 (b) Submittals to Agency. In accordance with the Schedule of Performance, Developer shall develop and present to Agency staff, for review, all of the following: (i) Proof of Contract. Within thirty (30) days of receipt of Agency's receipt of the Feasibility Study, provide proof of a contractual relationship, to Agency's reasonable satisfaction, between Developer and the relevant hotel company with regard to the development of the Project as. one of the following: Courtyard by Marriott, Hampton Inn, Hilton Garden Inn, or Holiday Inn Express, (ii) Conceptual Site Plan. Within forty-five (45) days of Agency's receipt of the Feasibility Study, complete and submit for Agency review a conceptual site plan for the Project. Agency shall review the site plan within ten (10) days of receipt of the site plan; (iii) Project Schedule. Within forty-five (45) days of Agency's receipt of the Feasibility Study, submit a proposed time schedule for commencement and completion of the Project, including demolition, construction phasing, completion and opening; (iv) Project Financing Plan. Within forty-five (45) days of Agency's receipt of the Feasibility Study, submit a proposed financing plan identifying financing sources for all private and public improvements proposed for the Project, by phase, if applicable. if Developer proposes to purchase the Property from Agency, the proposed financing plan shall include an analysis of residual land value, and if the Developer proposes a ground lease of the Property, the proposed financing plan shall include applicable market data to support the anticipated lease rate. The proposed financing plan shall include a written financial pro -forma in reasonable form and substance regarding the anticipated costs and returns related to development, operation, sale and lease (as applicable) of the Project, including a fifteen (15) -year cash flow projection; (v) Complete Development Plan. Within thirty (30) days of Agency's approval of the conceptual site plan for the Project, as set forth in Section 4(b)(ii), submit a complete conceptual development plan for the Project that describes and depicts both: (1) the location and orientation of proposed buildings; and (2) the architecture and elevations of the proposed buildings; (vi) Project Entitlements. Within thirty (30) days of Agency's receipt of approval of the conceptual site plan for the Project, as set forth in Section 4(b)(ii), submit to the City Planning Department a complete Development Application, as applicable, a complete Tentative Parcel Map or Tentative Tract Map application, as appropriate, including, entering into a reimbursement agreement with the City to deposit funds into a City account to pay for the services of an environmental consultant to be retained by the City to conduct and prepare any technical studies or reports requested by City or Agency staff for evaluation of the proposed Project pursuant to the California Environmental Quality Act, Public Resources Code Sections 21000, et seq. ("CEQA"). Whether or not any application or other information is "required," "necessary," "complete" or "final" shall be determined by City or Agency staff; and (vii) Development Entity and Project Financing. Within thirty (30) days of Agency's receipt of approval of the conceptual site plan for the Project, as set forth in 2 4563 6.0600 1 \5927277.3 Section 4(b)(ii), submit to Agency, in form and substance acceptable to Agency, written documentation of the entity responsible for development of the Project and unconditional and irrevocable letters of commitment from appropriate lenders and other sources of financing to sufficiently fund the Project. 5. Negotiation of DDA. During the first ninety (90) days of the Negotiation Period, Developer shall proceed diligently and in good faith to develop and submit to Agency all of the documents and information set forth in Section 4(a). For the next one hundred thirty (130) days, by the two hundred twentieth (220th) day of the Negotiation Period, if applicable, Developer shall proceed diligently and in good faith to develop and submit to Agency all of the documents and information set forth in Section 4(b) and both Agency and Developer shall proceed diligently and in good faith to negotiate and document the potential terms, conditions, covenants, restrictions and agreements of a future DDA between them. Agency and Developer shall generally cooperate with each other and supply such documents and information as may be reasonably requested by the other to facilitate the conduct of the negotiations. Both Agency and Developer shall exercise reasonable efforts to complete discussions relating to the terms, conditions, covenants, restrictions or agreements of a future DDA all as may be mutually acceptable to both Agency and Developer in their respective sole and absolute discretion. The exact terms and conditions of a future DDA, if any, shall be determined during the course of these negotiations. Nothing in this Agreement shall be interpreted or construed to be a representation or agreement by either Agency or Developer that a mutually acceptable future DDA will be produced from negotiations under this Agreement. Nothing in this Agreement shall impose any obligation on either Party to agree to a definitive DDA in the future. Nothing in this Agreement shall be interpreted or construed to be a guaranty, warranty or representation that any proposed DDA that may be negotiated by Agency staff and Developer will be approved by the Agency governing body. Developer acknowledges and agrees that Agency's consideration of any future DDA is subject to the sole and absolute discretion of the Agency governing body and any and all legally required public hearings, public meetings, notices, factual findings and other determinations required by law. 6. Restrictions Against Change in Ownership, Management and Control of Developer and Assignment of Agreement. (a) Agency Reliance on Developer Qualifications. The qualifications and identity of Developer and its principals are of particular concern to Agency. Developer's qualifications and identity are the reason that Agency has entered into this Agreement with Developer. During the Negotiation Period, no voluntary or involuntary successor -in -interest of Developer shall acquire any rights or powers under this Agreement, except as expressly provided in Sections 6(c). (b) Notice to Agencyof Changes. Developer shall promptly notify Agency in writing of any and all changes whatsoever in the identity of the business entities or individuals either comprising or in Control (as defined in Section 6(d)) of Developer, as well as any and all changes in the interest or the degree of Control of Developer by any such person, of which information Developer or any of its shareholders, partners, members, directors, managers or officers are notified or may otherwise have knowledge or information. Upon the occurrence of any significant or material change (more than 10%), whether voluntary or 5 45636.06001\5927277.3 involuntary, in ownership, management or Control of Developer (other than such changes occasioned by the death or incapacity of any individual) that has not been approved by Agency, prior to the time of such change, Agency may terminate this Agreement, without liability to Developer or any other person, by sending written notice of termination to Developer, referencing this Section 6(b). (c) Developer Assignment. Developer may only :assign its rights under this Agreement to a single purpose corporation or limited liability company ("Assignee") formed prior to the expiration of the Negotiation Period, subject to all of the following conditions: (i) Assignee shall be formed consisting of equity partners and a Managing Partner, which shall be a single purpose corporation or limited liability company consisting of Southwest Hospitality Management, LLC, Swoboda Hospitality Specialists LLC, and Developer; (ii) Managing Partner shall maintain a majority interest in the Assignee, and such majority interest and the membership of the Managing Partner shall not be changed without the Agency's prior written consent; and (iii) Assignee expressly assumes all of the obligations of Developer under this Agreement in a written assumption agreement reasonably satisfactory to Agency. Notwithstanding any assignment of this Agreement, Developer, shall, at all times, be responsible and obligated directly to Agency for performance of Developer's obligations under this Agreement. (d) Definitions of Affiliate and Control. For the purposes of this Agreement, the term "Affiliate" means any person, directly or indirectly, controlling or controlled by or under common control with Developer, whether by direct or indirect ownership of equity interests, by contract, or otherwise. For the purposes of this agreement, "Control" means possession; directly or indirectly, of the power to direct or cause the direction of the management and policies of an entity, whether by ownership of equity interests, by contract, or otherwise. 7. Unavoidable Delay. The time period for performance of any action to be taken by either Agency or Developer pursuant to this Agreement'shall be extended by the number of days by which an Unavoidable Delay(s) actually delays such performance, subject to the limitations set forth in this Section 7 and Sections 3(b)and 3(c). For the purposes of this Agreement "Unavoidable Delay" means delay in either Party performing any obligation under this Agreement, except payment of money, arising from or on account of any cause whatsoever beyond the Party's reasonable control, including strikes, labor troubles or other union activities, casualty, third -party legal actions related to Agency's approval of this Agreement or the pursuit of the activities contemplated by this Agreement, war, acts of terrorism or riots. Unavoidable Delay shall not include delay caused by a Party's financial condition, illiquidity, or insolvency. Any Party claiming Unavoidable Delay shall notify the other Party: (a) within ten (10) days after such Party knows of any such Unavoidable Delay; and (b) within five (5) days after such Unavoidable Delay ceases to exist. To be effective, any notice of an Unavoidable Delay must describe the Unavoidable Delay in reasonable detail. The Party seeking to be excused shall exercise its best efforts to cure the condition causing the Unavoidable Delay, within a reasonable time. Each Party expressly agrees that adverse changes in economic conditions, of either Party specifically or the economy generally, or changes in market conditions or demand shall not operate to excuse or delay the performance of each and every of each Party's obligations and covenants arising under this Agreement. Both Parties expressly assume the risk of such adverse economic or market changes, whether or not foreseeable as of the Effective Date of this Agreement. 6 45636.06001%59272 77.3 8. ' Developer Obligations to Review Draft Agreements and Attend Meetings. (a) Project Design and Planning. During the Negotiation Period, Developer shall also keep Agency staff advised on the progress of Developer in performing its obligations under this Agreement, on a regular basis or as requested by Agency staff, including, without limitation, having one or more of Developer's employees or consultants who are knowledgeable regarding this Agreement, the design and planning of the Project and the progress of negotiation of a future DDA, such that such person(s) can meaningfully respond to Agency governing body or Agency staff questions regarding the progress of the design and planning of the Project or the negotiation of a future DDA, attend both: (1) meetings with Agency staff, as reasonably scheduled by Agency staff; and (2) meetings of Agency governing body, when reasonably requested to do so by Agency staff. (b) DDA. During Negotiation Period, Developer shall diligently review and comment on drafts of a DDA prepared by Agency's legal counsel and, if the terms and conditions of such a DDA are agreed upon between Agency staff and Developer within the time period set forth in Section 5, submit the DDA signed by the authorized representative(s) of Developer to Agency Executive Director for submission to the Agency governing body for review and approval or disapproval prior to the expiration of the Negotiation Period. Any future DDA shall consist of terms, conditions, covenants, restrictions and agreements acceptable to both Developer and Agency governing body, in their respective sole and absolute discretion. (c) CEOA Documents. During the Negotiation Period, Developer shall diligently review and comment on draft environmental review documents relating to the Project prepared by the City's or the Agency's environmental consultant. 9. Developer to Pay All Costs and Expenses. All fees or expenses of engineers, architects, financial consultants, legal, planning or other consultants or contractors, retained by Developer for any study, analysis, evaluation, report, schedule, estimate, environmental review, planning or design activities, drawings, specifications or other activity or matter relating to the Property or the Project or negotiation or documentation of a future DDA that may be undertaken by Developer during the Negotiation Period, pursuant to or in reliance upon this Agreement or in Developer's discretion, regarding any matter relating to this Agreement, a future DDA, the Property or the Project, shall be the sole responsibility of and undertaken at the sole cost and expense of Developer, except as provided in Section 4(a)(ii), and no such activity or matter shall be deemed to be undertaken for the benefit of, at the expense of or in reliance upon Agency. Developer shall also pay all fees, charges and costs, make all deposits and provide all bonds or other security associated with the submission to and processing by the City or Agency of any and all applications and other documents and information to be submitted to the City or Agency by Developer pursuant to this Agreement or otherwise associated with the Project or the Property. Agency shall not be obligated to pay, reimburse or refund any expenses, fees, charges or costs incurred by Developer in pursuit of any study, analysis, evaluation, report, schedule, estimate, environmental review, planning and/or design activities, drawings, specifications or other activity or matter relating to this Agreement, the Property, the Project or negotiation or documentation of a future DDA that may be undertaken by Developer during the Negotiation Period, whether or not this Agreement is, eventually, terminated or extended or a DDA is entered into between Agency and Developer, in the future, except as provided in Section 4(a)(ii). 7 45636.06001\5927277.3 10. Agency Not To Negotiate With Others. (a) Negotiation. During the Negotiation Period, the Agency governing body and Agency staff 'shall not negotiate with any other person regarding the sale[, lease] or redevelopment of the Property, except as may be provided for in. the Redevelopment Plan. The term "negotiate," as used in this Agreement, means and refers to engaging in any discussions with a person other than Developer, regardless of how initiated, with respect to that person's redevelopment of the Property to the total or partial exclusion of Developer from redeveloping the Property, without Developer's written consent, subject to the provisions of Section 10(b). Notwithstanding the preceding provisions of this Section 10(a), Agency shall have the right to receive and retain unsolicited offers regarding redevelopment of the Property from persons other than Developer, but shall not negotiate with the proponent of any such offer during the Negotiation Period. Nothing in this Agreement shall prevent or prohibit Agency from discussing or disclosing the fact that Agency is a Party to this Agreement. (b) Redevelopment Plan Implementation. Notwithstanding any other provision of this Agreement (including Section 10(a)), implementation of the Redevelopment Plan shall be and remain in the sole and exclusive purview and discretion of Agency. Nothing in this Agreement shall limit, prevent, restrict or inhibit Agency from providing any information in its possession or control that would customarily be furnished to persons requesting information from Agency concerning Agency's activities, goals, matters of a similar nature relating to implementation of the Redevelopment Plan or as required by law to be disclosed, upon request or otherwise. 11. Acknowledgments and Reservations. (a) No Project Commitment. Agency and Developer agree that, if this Agreement expires or is terminated for any reason, or a future DDA is not approved and signed by both Agency and Developer, for any reason, neither Agency nor Developer shall be under any obligation, nor have any liability to each other or any other person regarding the sale or other disposition of the Property or the redevelopment of the Project or the Property. (b) No Agency Offer or Acceptance. Developer acknowledges and agrees that no provision of this Agreement shall be deemed to be an offer by Agency, nor an acceptance by Agency of any offer or proposal from Developer, for Agency to convey any estate or interest in the Property to Developer or for Agency to provide any financial or other assistance to Developer for redevelopment of the Project or the Property. (c) No Conveyance. Developer acknowledges and agrees that Developer 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 Agency. (d) Development Standards. Certain development standards and design controls for the Project may be established between Developer and Agency, but Agency and Developer understand and agree that the Project and the redevelopment of the Property must conform to all Agency, City and other applicable governmental development, land use and architectural regulations and standards. Drawings, plans and specifications for the Project shall 8 45636.0600115927277.3 be subject to the approval of Agency and the City, through the standard development application and design review processes for redevelopment projects within the Project Area. Nothing in this Agreement shall be considered approval of any plans or specifications for the Project or of the Project itself by either Agency or the City. , The Parties enter into this Agreement further acknowledging and intending that a complete and definitive future DDA may not be entered into between them, if at all, prior to review of the Project in accordance with CEQA by either the City or Agency. (e) No City or Agency Approval. Nothing in this Agreement, nor any comments provided by Agency staff, nor any failure of Agency staff to provide comments to any submittal under or pursuant to this Agreement shall: (1) modify or replace any land use entitlement process of either the City or Agency applicable to the Project, (2) limit the police power land use jurisdiction of either the City or Agency relative to the Project, (3) constitute an approval of all or any portion of the Project by the City or Agency pursuant to the police power land use jurisdiction of either the City or Agency or (4) constitute any approval of all or any portion of a future DDA with Developer by the City or Agency. (f) Agency Due Diligence. Agency reserves the right to reasonably obtain further information, data and commitments to ascertain the ability and capacity of Developer to purchase, lease, developand operate the Property or the Project. Developer acknowledges that it may be requested to make certain financial disclosures to Agency, its staff, legal counsel or other consultants, as part of the financial due diligence investigations of Agency relating to the potential sale of the Property and redevelopment of the Project on the Property by Developer and that any such disclosures may become public records. Agency shall maintain the confidentiality of financial information of Developer to the extent allowed by law, as determined by the City Attorney for the City of Azusa, California. (g) Required City and Agency Approval. Agency shall not be deemed to be a Party to any agreement for the acquisition of, lease of or disposition of real or personal property, financial commitments to Developer or development of the Project on the Property or elsewhere, until the terms and conditions of a complete future DDA are considered and approved by both the City Council and the Agency governing body, in their respective sole and absolute discretion, following any required public hearing(s), determinations, findings or other procedures. Developer expressly acknowledges and agrees that Agency will not be bound by any statement, promise or representation made by Agency staff or representatives during the course of negotiations of a future DDA and that Agency shall only be legally bound upon the approval of a complete DDA in the future by both the City Council and the Agency governing body, in their respective sole and absolute discretion, in accordance with law. (h) No Intent to be Bound. Further efforts by either Party to perform due diligence, arrange or obtain financing, or carry out other acts in contemplation of the possible acquisition, transfer or development of the Property or the Project shall not be deemed evidence of intent by either Party to be bound by any terms, conditions, covenants, restrictions or agreements relating to acquisition, transfer or development of the Property or the Project. 12. Nondiscrimination. Developer covenants by and for itself, himself or herself, its, his or her heirs, executors, administrators, and assigns, and all persons claiming under or 9 45636.06001\5927277.3 through it, him or her, and this Agreement is made and accepted upon and subject to the following conditions: (a) Standards. That there shall be no discrimination against or segregation of any person or group of persons, on account of any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the Property nor shall Developer, itself, himself or herself, or any person claiming under or through it, him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy, of tenants, lessees, subtenants, sublessees, or vendees in the Property. (b) Interpretation. Notwithstanding Section 12(a), with respect to familial status, Section 12(a) shall not be construed to apply to housing for older persons, as defined in Section 12955.9 of the Government Code. With respect to familial status, nothing in Section 12(a) shall be construed to affect Sections 51.2, 51.3, 51.4, 51.10, 51.11, and 799.5 of the Civil Code, relating to housing for senior citizens. Subdivision (d) of Section 51 and Section 1360 of the Civil Code and subdivisions (n), (o), and (p) of Section 12955 of the Government Code shall apply to.Section 12(a). 13. LIMITATION ON REMEDIES AND DAMAGES. (a) LIQUIDATED DAMAGES. THE DEVELOPER AND THE AGENCY ACKNOWLEDGE THAT IT IS EXTREMELY DIFFICULT AND IMPRACTICAL TO ASCERTAIN THE AMOUNT OF DAMAGES THAT WOULD BE SUFFERED BY THE DEVELOPER UPON THE BREACH OF THIS AGREEMENT BY THE AGENCY. HAVING MADE DILIGENT BUT UNSUCCESSFUL ATTEMPTS TO ASCERTAIN THE ACTUAL DAMAGES THE DEVELOPER WOULD SUFFER UPON THE BREACH OF THIS AGREEMENT BY THE AGENCY, THE DEVELOPER AND THE AGENCY AGREE THAT A REASONABLE ESTIMATE OF THE DEVELOPER'S DAMAGES IN SUCH EVENT 1S FIFTEEN THOUSAND DOLLARS ($15,000.00) ("LIQUIDATED DAMAGES AMOUNT"). THEREFORE, UPON THE BREACH OF THIS AGREEMENT BY THE AGENCY, THE AGENCY SHALL PAY THE LIQUIDATED DAMAGES AMOUNT TO THE DEVELOPER AND THIS AGREEMENT SHALL TERMINATE. RECEIPT OF THE LIQUIDATED DAMAGES AMOUNT SHALL BE THE DEVELOPER'S SOLE AND EXCLUSIVE REMEDY ARISING FROM ANY BREACH OF THIS AGREEMENT BY THE AGENCY EXCEPT FOR THOSE DAMAGES THAT DEVELOPER MAY SUFFER ARISING OUT OF OR RELATED TO THE AGENCY'S FRAUD OR WILLFUL MISCONDUCT. (b) DEVELOPER WAIVER AND RELEASE. AGENCY AND DEVELOPER EACH ACKNOWLEDGE AND AGREE THAT AGENCY WOULD NOT HAVE ENTERED INTO THIS AGREEMENT, IF IT WERE TO BE LIABLE TO THE DEVELOPER FOR ANY MONETARY DAMAGES, MONETARY RECOVERY OR ANY REMEDY IN THE EVENT OF A DEFAULT OF THIS AGREEMENT BY THE AGENCY, OTHER THAN TERMINATION OF THIS AGREEMENT AND PAYMENT OF THE LIQUIDATED DAMAGES AMOUNT. ACCORDINGLY, AGENCY AND DEVELOPER 10 45636.06001 \5927277.3 AGREE THAT THE DEVELOPER'S SOLE AND EXCLUSIVE RIGHT AND REMEDY DURING A DEFAULT OF THIS AGREEMENT BY THE AGENCY IS TO TERMINATE THIS AGREEMENT AND RECEIVE THE LIQUIDATED DAMAGES AMOUNT. THE DEVELOPER WAIVES ANY RIGHT TO PURSUE ANY REMEDY, OTHER THAN TERMINATION OF THIS AGREEMENT, AND TO RECOVER ANY AMOUNTS, OTHER THAN THE LIQUIDATED DAMAGES AMOUNT, FROM THE AGENCY AS A RESULT OF ANY DEFAULT OF THIS AGREEMENT BY THE AGENCY. (c) DEVELOPER 1542 ACKNOWLEDGMENT. THE DEVELOPER ACKNOWLEDGES THAT IT IS AWARE OF THE MEANING AND LEGAL EFFECT OF CALIFORNIA CIVIL CODE SECTION 1542, WHICH PROVIDES: A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER WOULD HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR. (d) DEVELOPER 1542 WAIVER. CALIFORNIA CIVIL CODE SECTION 1542 NOTWITHSTANDING, IT IS THE INTENTION OF THE DEVELOPER TO BE BOUND BY THE LIMITATION ON DAMAGES AND REMEDIES SET FORTH IN THIS SECTION 13, AND THE DEVELOPER HEREBY WAIVES AND RELEASES ANY AND ALL CLAIMS AGAINST THE AGENCY FOR MONETARY DAMAGES, MONETARY RECOVERY OR OTHER LEGAL OR EQUITABLE RELIEF RELATED TO ANY DEFAULT OR BREACH OF THIS AGREEMENT, EXCEPT AS SPECIFICALLY PROVIDED IN THIS SECTION 13, WHETHER OR NOT ANY SUCH RELEASED CLAIMS WERE KNOWN OR UNKNOWN TO THE DEVELOPER AS OF THE EFFECTIVE DATE OF THIS AGREEMENT. THE DEVELOPER SPECIFICALLY WAIVES THE BENEFITS OF CALIFORNIA CIVIL CODE SECTION 1542 AND ALL OTHER STATUTES AND JUDICIAL DECISIONS (WHETHER STATE OR FEDERAL) OF SIMILAR EFFECT WITH REGARD TO THE LIMITATIONS ON DAMAGES OR REMEDIES AND WAIVERS AND RELEASES OF ANY SUCH DAMAGES OR REMEDIES CONTAINED IN THIS SECTION 13. Imf is of Authorized Initials of Authorized Agency Representative Developer Representative 14. Default; Breach; Remedy. (a) Default. Failure or delay by either Party to perform any material term or provision of this Agreement shall constitute a default under this Agreement. If the Party who is claimed to be in default by the other Party cures, corrects or remedies the alleged default within fifteen (15) calendar days after receipt of a written "Notice of Default" (as defined in Section 14(b)), such Party shall not be in default under this Agreement. The notice and cure period provided in the immediately preceding sentence shall not, under any circumstances, extend the 11 45636.06001\5927277.3 Negotiation Period. If there are less than fifteen (15) days remaining in the Negotiation Period, the cure period allowed pursuant to this Section 14(a) shall be automatically reduced to the number of days remaining in the Negotiation Period. (b) Notice of Default. The Party claiming that a default has occurred shall give written notice of default ("Notice of Default") to the Party claimed to be in default, stating, with reasonable specificity, the nature of the alleged default and the actions necessary to cure such allege default. However, the injured Party shall have no right to exercise any remedy for a default under this Agreement, without first delivering such written Notice of Default.. (c) No Waiver. Any failure or delay by a Party in asserting any of its rights or remedies as to any default shall not operate as a waiver of any default or of any rights or remedies associated with a default. (d) Breach; Termination. If a default of either Party remains uncured for more than fifteen (15) calendar days following such Party's receipt of written notice of such default, a "breach" of this Agreement by the defaulting Party shall have occurred, except as otherwise provided in Section 14(a) during the last fifteen (15) calendar days of the Negotiation Period. In the event of a breach of this Agreement, the sole and exclusive remedy of the Party who is not in breach, shall be to terminate this Agreement by serving written notice of termination on the Party in breach and, in the case of a breach by Agency, Developer shall also be entitled to receive the Liquidated Damages Amount and the recovery of any damages (collectively, "Fraud Damages") arising out of or related to the Agency's fraud or willful misconduct (collectively, "Fraudulent Conduct"). Likewise, the Agency may recover Fraud Damages against Developer arising out of or related to Developer's Fraudulent Conduct. Upon receipt by the breaching Party of a written notice of termination (and in the case of a breach by the Agency, receipt by the Developer of the entire Liquidated Damages Amount), neither Party shall have any further rights against or obligation to the other Party unless the other Party is held by a court of competent jurisdiction to be guilty of Fraudulent Conduct, in which case the non - defaulting Party shall be entitled to Fraud Damages arising out of or related to such Fraudulent Conduct. The failure of Developer to timely make the deposit of funds required under this Agreement or to timely submit any item described in Section 4 shall be considered a "material" default under this Agreement by Developer. 15. Indemnification. (a) Agency Indemnification. Agency shall defend, indemnify, assume all responsibility for, and hold Developer and its officers, employees, contractors, agents, and representatives harmless from, all claims, demands, damages, defense costs or liability of any kind or nature (including attorneys' fees and costs) and for any damages to property or injuries to persons, including accidental death, which may be caused by or arise out of the Agency's performance or failure to perform its obligations pursuant to this Agreement or Agency's ownership or operation of the Property, whether such activities or performance thereof be by the Agency or by anyone employed or contracted with by the Agency and whether such damage shall accrue or be discovered before of after termination of this Agreement. Agency shall not be liable for property damage or bodily injury occasioned by the negligence of, willful misconduct 12 45636.06001\5927277.3 of, or breach of this Agreement by Developer or its officers, employees, contractors, agents, or representatives. (b) Developer Indemnification. Developer shall defend, indemnify, assume all responsibility for, and hold Agency and City, and their respective officers, employees, contractors, agents, and representatives harmless from, all claims, demands, damages, defense costs or liability of any kind or nature (including attorneys' fees and costs) and for any damages to property or injuries to persons, including accidental death, in connection with or arising from Developer's performance or nonperformance of its obligations under this Agreement, and the entry upon the Property by Developer and its consultants and contractors, whether such activities or performance thereof be by the Developer or by anyone employed by or contracted with the Developer and whether such damage shall accrue or be discovered before or after expiration or termination of this Agreement. Developer shall not be liable for property damage or bodily injury occasioned by the negligence of, willful misconduct of, or breach of this Agreement by Agency or City, or their respective officers, employees, contractors, agents, or representatives. 16. Compliance with Law. Developer acknowledges that any future DDA, if approved by the Agency governing body, will require Developer (among other things) to carry out the development of the Project in conformity with all applicable laws, including all applicable building, planning and zoning laws, environmental laws, safety laws and federal and state labor and wage laws. 17. Notice. All notices required under this Agreement shall be presented in person, by nationally recognized overnight (one business day) delivery service (i.e., Federal Express, United Parcel Service, etc.) or by first class certified or registered United States mail, with postage prepaid and return receipt requested, to the address for the Party set forth in this Section 17. Notice shall be deemed received by United States Postal Service delivery as of the third (3rd) business day after deposit with the United States Postal Service, addressed as required by this Section 17. Notice by personal service or nationally recognized overnight delivery service shall be effective upon delivery. Either Party may change its address for receipt of notices by notifying the other Party in writing. Rejection, other refusal to accept or the inability to deliver a notice because of a changed address of which no notice was given or other action by the Party to whom the notice is transmitted, shall be deemed receipt of the notice. To Developer: Kal Pacific & Associates, Inc. 31045 Temecula Parkway #201 Temecula, CA 92590 To Agency: Redevelopment Agency of the City of Azusa 213 East Foothill Boulevard Azusa, CA 91702 Attn: Executive Director 18. Warranty Against Payment of Consideration for Agreement. Developer represents and warrants that: (a) Developer has not employed or retained any person to solicit or 13 45636.0600115927277.3 secure this Agreement upon an agreement or understanding for a commission, percentage, brokerage, or contingent fee, excepting bona fide employees of Developer and third persons to whom fees are paid for professional services related to planning, design or construction of the Project or documentation of this Agreement;. and (b) no gratuities, in the form of entertainment, gifts or otherwise have been or will be given by Developer or any of its agents, employees or representatives to any elected or appointed official or employee of either the City or Agency in an attempt to secure this Agreement or favorable terms or conditions for this Agreement.. Breach of the representations or warranties of this Section 18 shall entitle Agency to terminate this Agreement, on two (2) days' notice to Developer. Upon any such termination of this Agreement by Agency, Developer shall immediately refund any payments made to or on behalf of Developer by the City or Agency pursuant to this Agreement or otherwise related to the Project or the Property, prior to the date of any such termination. 19. , Press Releases. During the Negotiation Period, Developer agrees to obtain the approval of Agency Executive Director or his or her designee or successor in function of any press release(s) Developer may propose relating to the Property, the Project or negotiation of a future DDA, prior to publication. . 20. Counterpart Originals. This Agreement may be signed by Agency and Developer in multiple counterpart originals, all of which together shall constitute a single agreement. 21. No Third -Party Beneficiaries. Nothing in this Agreement is intended to benefit any person or entity other than Agency or Developer. 22. Governing Law. Agency and Developer acknowledge and agree that this Agreement was negotiated, entered into and is to be fully performed in the City of Azusa, California. Agency and Developer agree that this Agreement shall be governed by, interpreted under, and construed and enforced in accordance with the laws of the State of California, without application of conflicts or choice of laws principles. 23. Waivers. No waiver of any breach or default of any term or condition contained in this Agreement shall be deemed a waiver of any preceding or succeeding breach or default of such term or condition, or of any other term or condition contained in this Agreement. No extension of the time for performance of any obligation or act, no waiver of any term or condition of this Agreement, nor any modification of this Agreement shall be enforceable against Agency or Developer, unless made in writing and executed by the Party against whom such extension, waiver or modification is sought to be enforced. 24. Principles of Interpretation. No inference in favor of or against any Party shall be drawn from the fact that such Party has drafted any part of this Agreement. The Parties have both participated substantially in the negotiation, drafting, and revision of this Agreement, with advice from legal and other counsel and advisers of their own selection. A word, term or phrase defined in the singular in this Agreement may be used in the plural, and vice versa, all in accordance with ordinary principles of English grammar, which shall govern all language in this Agreement. The words "include" and "including" in this Agreement shall be construed to be followed by the words: "without limitation." Each collective noun in this Agreement shall be 14 45636.06001\5927277.3 interpreted as if followed by the words "(or any part of it)," except where the context clearly requires otherwise. Every reference to any document, including this Agreement, refers to such document, as modified from time to time (excepting any modification that violates this Agreement), and includes all exhibits, schedules, addenda and riders to such document. The word "or" in this Agreement includes the word "and." Every reference to a law, statute, regulation, order, form or similar governmental requirement refers to each such requirement as amended, modified, renumbered, superseded or succeeded, from time to time. Headings at the beginning of each section and sub -section of this Agreement are solely for the convenience of reference of Agency and Developer and are not a part of this Agreement. Whenever required by the context of this Agreement, the singular shall include the plural and the masculine shall include the feminine and vice versa. Unless otherwise indicated, all references to sections are to this Agreement. All exhibits referred to in this Agreement are attached to this Agreement, unless otherwise specified. if the date on which Agency or Developer is required to take any action pursuant to the terms of this Agreement is not a business day of Agency, the action shall be taken on the next succeeding business day of Agency. 25. Attorneys' Fees. If either Party hereto files any action or brings any action or proceeding against the other arising out of this Agreement, then the prevailing party shall be entitled to recover as an element of its costs of suit, and not as damages, its reasonable attorneys' fees as fixed by the court, in such action or proceeding or in a separate action or proceeding brought to recover such attorneys' fees. For the purposes hereof the words "reasonable attorneys' fees" mean and include, in the case of Agency, salaries and expenses of the lawyers employed by Agency (allocated on an hourly basis) who may provide legal services to Agency in connection with the representation of Agency in any such matter. 26. Termination as a Result in Change of Law. Developer acknowledges that on January 10, 2011 Governor Jerry Brown proposed legislation to eliminate Redevelopment Agencies and the related funding source. As such, Developer and Agency agree that if there is a change in the law, that in the Agency's reasonable discretion, prevents the Agency or its successor from performing Agency's obligations hereunder, the Agency may terminate this Agreement by delivery of written notice to Developer. Termination of this Agreement pursuant to this Section shall not be a default under this Agreement and Developer shall not be entitled to damages as a result of this termination. This is intended to constitute a present, binding, unconditional obligation of the Agency. [Signatures on the following page] 15 45636.06001\5927277.3 SIGNATURE PAGE TO EXCLUSIVE NEGOTIATION AGREEMENT (229 S. Azusa Avenue) IN WITNESS WHEREOF, Agency and Developer have signed this Exclusive Negotiation Agreement (229 S. Azusa Avenue) by and through the signatures of their authorized representatives set forth below: AGENCY: REDEVELOPMENT AGENCY OF THE CITY OF AZUSA By: "A, Rt xecutive Director DEVELOPER: KAL PACIFIC & ASSOCIATES, INC., a Califo is corporation By: - V Name: .v Its: c ATTEST: By: By: Agency Secretary Name: Its: APPROVED AS TO FORM: By: .{�t14u, e Agency Counsel 16 45636.06001 \5927277.3 EXHIBIT "A" TO EXCLUSIVE NEGOTIATION AGREEMENT (229 S. Azusa Avenue) Property Legal Description [APN's: 8614-014-056, 8614-014-057, 8614-014-058] All that certain real property situated in the County of Los Angeles, State of California, described as follows: Parcel 1: Those portions of Lots 20 and 21 of Tract No. 13641, in the City of Azusa, County of Los Angeles, State of California, as shown on Map recorded in Book 328, Pages 18 and 19 of Maps, in the Office of the County Recorder of said County, and that portion of Lot 4 of Tract No. 13426, In the City of Azusa, County of Los Angeles, State of California, as shown on Map recorded in Book 268, Page 40 of Maps, in the Office of the County Recorder of said County, included within the foliowing described boundaries: Beginning at the Southwesterly corner of said Lot 20; thence along the Westerly line of said Lot 20, and the Westerly line of said Lot 21, North 00006'21" East 61.81 feet to the Easterly terminus of that course bearing and distance of North 73023'08" West, 12.52 feet, in the Northerly line of Parcel 16 of the highway right-of-way relinquished (REL -709) to the City of Azusa by Resolution of the California Highway Commission, a Certified Copy of which resolution is recorded in Book 83279, Page 904 Official Records, in said Office, and as shown on Map recorded in Book 7, Pages 91 to 98 inclusive of State Highway Maps, in said Office; thence along the Easterly prolongation of last said course, South 73023'08" East, 130.05 feet to the Easterly line of said Lot 20; thence South 89054'12" East 10.08 feet to the centerline of that alley, 20.00 feet wide, as shown on the Map of said Tract No. 13641; thence continuing South 89054'12" East, 10.08 feet to the Westerly line of said Lot 4; thence South 89053'22" East, 138.17 feet; thence South 75021'18" East, 27.89 feet to the Westerly line of the Easterly 10.00 feet of said Lot 4; thence along last said Westerly line South 00006'38" West 17.81 feet to the Southerly line of said Lot 4; thence along said Southerly line North 89054'50" West 165.00 feet to said Westerly line of said Lot 4; thence along a line perpendicular to said centerline, North 89053'39" West, 10.08 feet to said centerline; thence continuing North 89053'39" West, 10.06 feet to the Southeasterly corner of said Lot 20; thence along the Southerly line of said Lot 20, North 89054'50" East 124.69 feet to the Point of Beginning, together with that vacated portion of San Gabriel Avenue. Parcel 2: Exhibit "A" 45636.06001\5927277.3 Lots 5, 6 and 7 of Tract No. 13426, in the City of Azusa, County of Los Angeles, State of California, as per Map recorded in Book 268, Page 40 of Maps, In the Office of the County Recorder of said County. Excepting therefrom the East 10 feet of said Lots. Saving, excepting all oil, gas and other minerals in and under said property together with the exclusive rights to use such portion of said property lying more than 500 feet below the surface thereof for the extraction of oil, gas and other minerals from said property or properties in the vicinity thereof; however, with no right of surface entry whatsoever, in deed recorded November 29, 1978 as Instrument No. 78-1323374, Official Records. Parcel 3; Lots 17, 18 and 19 of Tract No. 13641, in the City of Azusa, County of Los Angeles, State of California, as per Map recorded in Book 328, Pages 18 and 19 of Maps, in the Office of the County Recorder of said County, together with that vacated portion of San Gabriel Avenue. Parcel 4: Lot 13 of Tract 13641, in the City of Azusa, County of Los Angeles, State of California, as per Map recorded in Book 328, Page 18 of Maps, in the Office of the County Recorder of said County, together with that vacated portion of San Gabriel Avenue. Parcel 5 Lot 14 of Tract 13641, in the City of Azusa, County of Los Angeles, State of California, as per Map recorded in Book 328, Pages 18 and 19 of Maps, in the Office of the County Recorder of said County, together with that vacated portion of San Gabriel Avenue. Parcel 6: Lot 15 of Tract 13641, in the City of Azusa, County of Los Angeles, State of California, as per Map recorded in Book 328, Pages 18 and 19 of Maps, in the Office of the County Recorder of said County. Except all oil, hydrocarbon substances and minerals of every kind and character lying more than 500 feet below the surface of said land, together with the right to drill into, through, and to use and occupy all Exhibit "A" 45636.0600115927277.3 parts of said land iyiny more than 500 Feet below ttm surface thereof for any and all purposes incidental to the exploration for and production of all, gas, hydrocarbon substances or minerals from said lands, but without, however, the right to use either the surface of said land or any portion of said 18r4 within 500 feet of the surface for any purpose or purposes whatsoever, as excepted and reserved by Carl F. Crandall and Sandra L. Crandall', In deed recorded September 12, 1986 as Instrument No. 86- 1206502, together wft that vacated portion of San Gabriel Avenue. Parcel 7; Lot 16 of Tract 13641,, in tate City of Azusa, County of Los Angeles, State of CaRfornla, as per Map recorded In Book 328, Pages 18 and 19 of Maps, In the Office of the County Recorder of said County. Except all oil, hydrocarbon substances and minerals of every kind and character lying more than 500 feet bebw the surface of said land, together with the right to drill into, through, and to use and occupy all parts of said land lying more'than.500 feet below the surface thereof for any and all purposes incidental to the exploration for and production of oil, gas, hydrocarbon substances of minerals from said lands but without, however, the right to use either the surface of said land or any portion of said farad within 500 feet of the surface for any purpose or purposes whatsoever, as excepted and reserved by Edger Reynolds, Ir.r and Connie L Reynolds, by deed recorded May 16,. 1986' as Instrument No. 86- 609667, together with that vacated portion of San Gabriet Avenue. Parcel 8: Lot 8, Tract 13426, in the City of Azusa, County of Los. Angeles, State of California, as per Map recorded in Book 268, Page 40 of Maps, in the Office of the County Recorder of said County. Except the East 10 Feet conveyed to the State of California by deed rei:6rded May 19, 1964 as Instrurment (40, 4944, LIMCial keMrSS That portion OF that certain alley, 20 feet wide, shown urn and dedicated by. the Map of Tract 13426, in the City of Azusa, County of Los Angeles, State of California„ as per Map recorded in Book 268, Page 40 of Maps, in the Office of the County Recorder of said County, which lies between the Westerly prolongation of the Northerly line of Lai 4 of said tract and of the hiorthedy line of the Southerly S feet of Let 11 of said tract. Except all oil, hydrocarbons substances and minerals of every kind and Character tying more than 500 feet below the surface of said land, together with the right to drill Into, through and to use and occupy all parts of said land lying more than 500 feet Mow the surface thereat for any and all purposes Incidental to the exploration for and production of oil, gas, hydrocarbon substances or minerals frorn said lands but without, however, the right to use either the surface of said land or any other Portion of said tarid within 500 Net of the surface for any purpose or purposes whatsoever, as excepted and reserved by the Azusa Agriculture Water Company, a Corporation, in deed recorded March 13, 1967 as Instrument No. 87.382036, Official Records, Assessor`s Pacer Number: 86,14-014-096, 6614-0Il4-OS?, W6IlO-QYE-a6O Exhibit "A" 45636.0600 1 15927277.3 EXHIBIT "B" TO EXCLUSIVE NEGOTIATION AGREEMENT (229 S. Azusa Avenue) -. ,Schedule of:Performanee ' .AMilestone ' Description - Seheduk. 1 Developer Deposit Payment of $15,000 deposit to Agency Within 5 days of Effective Date 2 Feasibility Study Submittal of a completed feasibility study Within 90 days of Effective to the Agency Date 3 Go/No Go Decision Last date that either Developer or Agency Within 10 days of submission Point may cancel the ENA with a full refund of of the Feasibility Study to the Developer De osit. Agency 4 Hotel Franchise Developer submits proof of contractual Within 30 days of receipt of relationship between Developer and Feasibility Study a licable hotel chain 5 Conceptual Site Developer shall submit a conceptual site Within 45 days of receipt of Plan plan for the Property Feasibility Stud 6 Approval of Site The Agency shall approve the Site Plan Within 10 days of receipt of Plan Conceptual Site Plan 7 Proposed Timeline Developer shall submit a proposed time Within 45 days of receipt of schedule including demolition, construction Feasibility Study phasing, com letion and opening. 8 Finance Plan Developer shall submit its Finance Plan to Within 45 days of receipt of the Agency Feasibility Stud 9 Design Plan and Based on the approved Site Plan, Developer Within 30 days of approval of Entitlement shall submit a complete conceptual Site Plan Application and development plan for the Project on the CEQA. Property that describes and depicts: (1) the location and placement of proposed buildings and (2) the architecture and elevations of the proposed buildings. Developer shall also file an application for re aired Ci entitlements and CE A. 10 Development Entity Developer shall submit documentation of Within 30 days of submitting and Financing development entity for the project and a Finance Plan letter identifying lenders and proof of abili to obtain Project financing. 11 Draft DDA Complete negotiations and final draft of Within 220 days of Effective Disposition and Develo Ment Agreement Date 12 Redevelopment Present development proposal and DDA to Within 240 days of Effective Agency/City Agency and City Council for approval Date Council Hearin Exhibit `B" 45636.06001\5927277.3