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Home My WebLink AboutResolution No. 11-C40RESOLUTION NO. 11-C40 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF AZUSA, CALIFORNIA, MAKING FINDINGS PURSUANT TO HEALTH AND SAFETY CODE SECTION 33433 AND APPROVING THE CONVEYANCE OF REAL PROPERTY BY THE REDEVELOPMENT AGENCY OF THE CITY OF AZUSA PURSUANT TO THAT CERTAIN DISPOSITION AND DEVELOPMENT AGREEMENT (9TH & ALAMEDA) WITH CITY VENTURES, LLC WHEREAS, pursuant to the provisions of the California Community Redevelopment Law (Health and Safety Code § 33000, et seg.), the City Council ("City Council") of the City of Azusa ("City") approved and adopted its Merged Central Business District and West End Redevelopment Plan ("Redevelopment Plan") applicable to certain geographic areas within the City ("Project Area") specified in the Redevelopment Plan; and WHEREAS, the Redevelopment Agency of the City of Azusa ("Agency") is engaged in activities to implement the Redevelopment Plan; and WHEREAS, the Agency owns that certain real property generally described as 906, 908 and 912 North Alameda Avenue, Azusa, California (Assessor's Parcel Nos. 8608-019-901, 8608-019-902, 8608-019-903 and 8608-019-904) ("Property"); and WHEREAS, Agency staff has negotiated the terms of that certain Disposition and Development Agreement (9th & Alameda) ("Agreement") with City Ventures, LLC, a Delaware limited liability company ("City Ventures"), providing for, among other things, Agency conveyance of the Property to City Ventures and City Ventures' redevelopment of the Property as two (2) affordable for -sale housing units and twelve (12) market rate for -sale housing units ("Project"); and WHEREAS, the Agency prepared and submitted to the City Council and made available for public review, a property disposition summary report ("Summary Report") setting forth: (1) the cost of the Agreement to the Agency; (2) the estimated value of the interest in the Property to be conveyed to City Ventures pursuant to the Agreement; (3) an explanation of how the conveyance of the Property to City Ventures pursuant to the Agreement will assist in the elimination of blight within the Project Area; and (4) a copy of the Agreement; and WHEREAS, the City caused notice of a joint public hearing before the City Council and the Agency's governing board regarding the proposed Agency conveyance of the Property to City Ventures pursuant to the Agreement to be published in a newspaper of general circulation within the City; and WHEREAS, -on June 6, 2011, the City Council and the Agency's governing board held a joint public hearing regarding the proposed Agency conveyance of the Property to City Ventures pursuant to the Agreement; and WHEREAS, the City Council, acting as the Agency's legislative body, must make certain findings under Health and Safety Code Section 33433 in connection with and approve the Agency's conveyance of the Property to City Ventures pursuant to the Agreement; and WHEREAS, City staff has determined that the Project constitutes a "project" under the California Environmental Quality Act, Public Resources Code Sections 21000, et seq. ("CEQA"), and has further determined that the Project is exempt from environmental review under CEQA pursuant to Public Resources Code Section 21084 and Title 14 California Code of Regulations Section 15332 because the Project is in -fill development (1) consistent with the applicable City General Plan designation and all applicable City General Plan policies, as well as with the applicable zoning designation and regulations; (2) occurring within City limits on a project site of no more than five acres substantially surrounded by urban uses; (3) the project site has no value as habitat for endangered, rare or threatened species; (4) approval of the project will not result in any significant effects relating to traffic, noise, air quality, or water quality; and (5) the site can be adequately served by all required utilities and public services. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Azusa, as follows: Section 1. The facts set forth in the recitals preceding this Resolution are true and correct and are hereby incorporated into this Resolution. Section 2. The City, acting as lead agency, hereby finds and determines that the Project constitutes a "project" under CEQA, and further finds and determines that the Project is exempt from environmental review under CEQA pursuant to Public Resources Code Section 21084 and Title 14 California Code of Regulations Section 15332 because the Project is in -fill development (1) consistent with the applicable City General Plan designation and all applicable City General Plan policies, as well as with the applicable zoning designation and regulations; (2) occurring within City limits on a project site of no more than five acres substantially surrounded by urban uses; (3) the project site has no value as habitat for endangered, rare or threatened species; (4) approval of the project will not result in any significant effects relating to traffic, noise, air quality, or water quality; and (5) the site can be adequately served by all required utilities and public services. The City authorizes and directs the City Clerk to file all appropriate notices under CEQA with the appropriate official of the County of Los Angeles, California, regarding the CEQA compliance actions of the City contained in this Resolution, within five (5) days following the date of adoption of this Resolution. Section 3. The documents and materials constituting the administrative record of proceedings on which this Resolution is based are located at the office of the City Clerk at 213 E. Foothill Boulevard, Azusa, California 91702-2550. The custodian for these records is the City Clerk. Section 4. Based on the information made available in the Summary Report, the staff report accompanying this Resolution, the oral presentation of staff and other written and oral evidence presented to the City at or before the public hearing regarding the proposed Agency conveyance of the Property to City Ventures pursuant to the Agreement, the City Council finds and determines that: (a) The Agency's conveyance of the Property to City Ventures pursuant to the Agreement will assist in the elimination of blight in the Project Area and provide housing affordable to low or moderate income persons; (b) The Agency's conveyance of the Property to City Ventures pursuant to the Agreement for development as affordable and market -rate housing is consistent with the implementation plan adopted by the Agency for the Project Area pursuant to Health and Safety Code Section 33490; (c) The consideration to the Agency for the conveyance of the Property to City Ventures pursuant to the Agreement is not less than the fair reuse value of the Property at the use and with the covenants, conditions and development costs imposed by the Agreement. Section 5. The City hereby approves, consents to and authorizes Agency conveyance of the Property to City Ventures pursuant to the Agreement. Section 6. This Resolution shall take effect immediately upon its adoption. Section 7. The City Clerk shall certify to the passage and adoption of this Resolution. PASSED, APPROVED AND ADOPTED this 6th day of June, 2011. oseph R. Rocha/ Mayor Y 1.0 1Y LII.LLV City Clerk I, Vera Mendoza, City Clerk of the City of Azusa, do hereby certify that the foregoing Resolution No. 11-C40 was duly and regularly passed and adopted by the City Council of the City of Azusa at a meeting thereof held on the 6th day of June, 2011, and was carried by the following vote: AYES COUNCIL MEMBERS: GONZALES, CARRILLO, MACIAS, HANKS, ROCHA NOES COUNCIL MEMBERS: NONE ABSTAIN : COUNCIL MEMBERS: NONE DISPOSITION AND DEVELOPMENT AGREEMENT (9th & Alameda) by and between the REDEVELOPMENT AGENCY OF THE CITY OF AZUSA, a California public body, corporate and politic and CITY. VENTURES, LLC, a Delaware limited liability company [Dated as of June 6, 2011 for reference purposes only] 45636,04000\6008147A REDEVELOPMENT AGENCY OF THE CITY OF AZUSA DISPOSITION AND DEVELOPMENT AGREEMENT (9th & Alameda) This DISPOSITION AND DEVELOPMENT AGREEMENT (9th & Alameda) ("Agreement") is dated as of June 6, 2011, for reference purposes only, and is entered into by and between the REDEVELOPMENT AGENCY OF THE CITY OF AZUSA, a California public body, corporate and politic ("Agency"), and CITY VENTURES, LLC, a Delaware limited liability company ("Developer"). Agency and Developer enter into this Agreement with reference to the following recitals of fact (each, a "Recital"): RECITALS A. Agency owns that certain real property generally identified with Assessor's Parcel Nos. 8608-019-901, 8608-019-902, 8608-019-903 and 8608-019-904 and located on North Alameda Avenue in the City of Azusa, County of Los Angeles, State of California (more specifically defined in Section 1 of this Agreement as the "Property"). B. Developer desires to acquire and redevelop the Property as two (2) affordable for - sale housing units and twelve (12) market rate for -sale housing units (more specifically defined in Section I of this Agreement as the "Project"); C. This Agreement implements the goals and objectives of Agency for the development of the Project on the Property, addresses certain affordable housing needs of the City and certain affordable housing obligations of Agency under the Redevelopment Plan (as defined in Section 1 of this Agreement) and the Community Redevelopment Law. The development of the Project on the Property pursuant to this Agreement is in the best interests of the City and Agency and the health, safety and welfare of the City's taxpayers and residents and is in accordance with the public purposes set forth in the Redevelopment Plan and the Community Redevelopment Law. Implementation of this Agreement will further the goals and objectives of the Redevelopment Plan and the City's general plan by: (1) strengthening the City's land use and social structure; (2) alleviating economic and physical blight in the City; and (3) providing needed affordable housing in the City. NOW, THEREFORE, FOR GOOD AND VALUABLE CONSIDERATION AND THE PROMISES AND COVENANTS OF AGENCY AND DEVELOPER SET FORTH IN THIS AGREEMENT, AGENCY AND DEVELOPER AGREE, AS FOLLOWS: TERMS AND CONDITIONS DEFINITIONS 1.1 Definitions. The following words, terms or phrases are used in this Agreement with the following meanings, unless the particular context or usage of a word, term or phrase requires another interpretation: s �rsrxa iQQ�1uTQ�ra r.' yw.' � 1.1.1 Affiliate. Any other Person, directly or indirectly, Controlling or Controlled by or under common Control with the specified Person. 1.1.2 Agency. The Redevelopment Agency of the City of Azusa, a California public body, corporate and politic, and any assignee of or successor to the rights, powers or responsibilities of the Redevelopment Agency of the City of Azusa. 1.1.3 Agency Parties. Collectively, Agency, its governing body, elected officials, employees, agents and attorneys. 1.1.4 Agency Party. Individually, Agency, its governing body, elected officials, employees, agents or attorneys. 1.1.5 Agency Grant Deed. A grant deed conveying the Agency's interest in the Property from Agency to Developer, at the Close of Escrow, substantially in the form of Exhibit "E" attached to this Agreement. 1.1.6 Agreement. This Disposition and Development Agreement (9th & Alameda) between Agency and Developer, including all of the exhibits attached to this Agreement. 1.1.7 Application. Any agreement, application, certificate, document or submission (or amendment of any of the foregoing): (a) necessary or appropriate for the Project, including any application for any building permit, Certificate of Occupancy, utility service or hookup, easement, covenant, condition, restriction, subdivision or such other instrument as Developer may reasonably request for the Project; or (b) to enable Developer to seek any Approval in accordance with this Agreement or the Regulatory Agreement. 1.1.8 Approval. Any license, permit, approval, consent, certificate, ruling, variance, authorization, conditional use permit, or amendment to any of the foregoing, as shall be necessary or appropriate under any Law for Developer to commence, perform or complete the construction of the Project on the Property, including any associated CEQA Document. 1.1.9 Automobile Liability Insurance. Insurance covering all owned, hired and non -owned vehicles used by Developer regarding the Project, with minimum limits of One, Million Dollars ($1,000,000) each accident. Any aggregate limit may not be less than two times the per accident limit. Such insurance shall be provided by a business or commercial vehicle policy and may be provided through a combination of primary and excess or umbrella policies. 1.1.10 Bankruptcy Law. Title 11, United States Code, and ' any other or successor State or Federal statute relating to assignment for the benefit of creditors, appointment of a receiver or trustee, bankruptcy, composition, insolvency, moratorium, reorganization, or similar matters. 1.1.11 Bankruptcy Proceeding. Any proceeding, whether voluntary or involuntary, under any Bankruptcy Law. 45636.04000\6008]47.4 2 1.1.12 Builder's Risk .Insurance. Builder's risk or course of construction insurance, at least as broad as the Insurance Services Office CP 10 30 -Causes Of Loss -Special Form, and including coverage for flood, if the Property is in a Special Flood Hazard Area as determined by the Federal Emergency Management Agency. Such insurance shall be on a completed value basis, but in any event not less than one hundred percent (100%) of the completed value of the subject construction, including cost of debris removal, but excluding foundation and excavations, with a total deductible not exceeding -One Hundred Thousand Dollars ($100,000). Such insurance shall have no coinsurance penalty provision and shall remain in effect with respect to each New Home within the Project until a Certificate of Occupancy has been issued for such New Home. 1.1.13 Business Day. Any weekday on which the City is open to conduct regular municipal functions with City personnel. 1.1.14 CEQA, The California Environmental Quality Act, Public Resources Code Section 21000, et seq. 1.1.15 CEQA Documents. Any exemption determination, any Negative Declaration (mitigated or otherwise) or any Environmental Impact Report (including any addendum or amendment to, or subsequent or supplemental Environmental Impact Report) required or permitted by any Government, pursuant to CEQA, to issue any discretionary Approval required to approve this Agreement. 1.1.16 Certificate of Occupancy. A Certificate of Occupancy as defined in the 2010 California Building Code, which is based on the 2009 International Building Code, as adopted by the City. 1.1.17 City. The City of Azusa, California, a California municipal corporation. 1.1.18 Claim. Any claim, loss, cost, damage, expense, liability, lien, action, cause of action (whether in tort, contract, under statute, at law, in equity or otherwise), charge, award, assessment, fine or penalty of any kind (including consultant and expert fees and expenses and investigation costs of whatever kind or nature, and if an Indemnitor improperly fails to provide a defense for an Indemnitee, then Legal Costs) and any judgment. 1.1.19 Close of Escrow. The first date on which the Escrow Agent has filed the Agency Grant Deed with the County for recording in the official records of the County in accordance with Section 4.8.1. 1.1.20 Completion Certificate. Agency's written certification acknowledging that the Project is complete in accordance with the terms and conditions of this Agreement, substantially in the form of Exhibit "F" attached to this Agreement. 1.1.21 Control. Possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether by ownership of Equity Interests, by contract or otherwise. 45636.0400016008147.4 3 1.1.22 County. The County of Los Angeles, California. 1.1.23 Default. An Escrow Default, Monetary Default or Non -Monetary Default. 1.1.24 Default Interest. Interest at an annual rate equal to the lesser of. (a) eight percent (8%) per annum; or (b) the Usury Limit. 1.1.25 Deposit. The amount of Twenty -Five Thousand Dollars ($25,000). 1.1.26 Developer. City Ventures, LLC, a Delaware limited liability company, and its assignees and transferees permitted by this Agreement. 1.1.27 Developer Official Action. The official action of the directors, managers, partners or other Persons in Control of Developer in substantially the form attached to this Agreement as Exhibit "D" authorizing Developer to enter into and perform this Agreement. 1.1.28 Developer Parties. Collectively, Developer and the directors, officers, employees, agents, shareholders, members, managers and partners of Developer. 1.1.29 Developer .Party. Individually, Developer or the directors, officers, employees or agents, shareholders, members, managers or partners of Developer. 1.1.30 Developer Title Policy. A standard CLTA owners' policy of title insurance issued by the Title Company, with coverage in the amount of the fair market value of the Property, as determined by an appraisal obtained by Developer at Developer's expense, showing title to the Property vested in Developer. 1.1.31 Due Diligence Completion Notice. A written notice from Developer delivered to both Agency and Escrow Agent, prior to the end of the Due Diligence Period, stating Developer's unconditional acceptance of the condition of the Property or stating Developer's rejection of the condition of the Property and refusal to accept a conveyance of title to the Property, describing in reasonable detail the actions that Developer reasonably believes are indicated to allow Developer to unconditionally accept the condition of the Property. 1.1.32 Due Diligence Investigations. Developer's due diligence investigations of the Property to determine the suitability of the Property for development of the Project, including investigation of the environmental and geotechnical suitability of the Property, as deemed appropriate in the reasonable discretion of Developer, all at the sole cost and expense of Developer. 1.1.33 Due Diligence Period. The time period of sixty (60) continuous days commencing on the day immediately following the Effective Date. 1.1.34 Effective Date. Defined in Section 2. 45636.0400016008147.4 4 I 1.1.35 Entitlement Date. The date on which Developer obtains all discretionary Approvals required for the construction of the Project on the Property from each Government. 1.1.36 Environmental Claim. Any and all claims, demands, damages, losses, liabilities, obligations, penalties, fines, actions, causes of action, judgments, suits, proceedings, costs, disbursements and expenses, including Legal Costs and fees and costs of environmental consultants and other experts, and all foreseeable and unforeseeable damages or costs of any kind or of any nature whatsoever, directly or indirectly, relating to or arising from any actual or alleged violation of any Environmental Law or Hazardous Substance Discharge. 1.1.37 Environmental Laws. All Federal, State, local or municipal laws, rules, orders, regulations, statutes, ordinances, codes, decrees or requirements of any government authority regulating, relating to, or imposing liability or standards of conduct concerning any Hazardous Substance, or pertaining to occupational health or industrial hygiene (and only to the extent that the occupational health or industrial hygiene laws, ordinances, or regulations relate to Hazardous Substances on, under, or about the Property), occupational or environmental conditions on, under, or about the Property, as now or may at any later time be in effect, including without limitation, the Comprehensive Environmental Response, Compensation and Liability Act of 1980 ("CERCLA") [42 USC Section 9601 et seq.]; the Resource Conservation and Recovery Act of 1976 ("RCRA") [42 USC Section 6901 et seq]; the Clean Water Act, also known as the Federal Water Pollution Control Act ("FWPCA") [33 USC Section 1251 et seq.]; the Toxic Substances Control Act ("TSCA") [15 USC Section 2601 et seq.]; the Hazardous Materials Transportation Act ("HMTA") [49 USC Section 1801 et seq.]; the Insecticide, Fungicide, Rodenticide Act [7. USC Section 6901 et seq.] the Clean Air Act [42 USC Section 7401 et seq.]; the Safe Drinking Water Act [42 USC Section 300f et seq.]; the Solid Waste Disposal 'Act [42 USC Section 6901 et seq.]; the Surface Mining Control and Reclamation Act [30 USC Section 101 et seq.] the Emergency Planning and Community Right to Know Act [42 USC Section 11001 et seg.]; the Occupational Safety and Health Act [29 USC Section 655 and 657]; the California Underground Storage of Hazardous Substances Act [California Health & Safety Code Section 25288 et seq.]; the California Hazardous Substances Account Act [California Health & Safety Code Section 25300 et seq.]; the California Safe Drinking Water and Toxic Enforcement Act [California Health & Safety Code Section 24249.5 et seq.] the Porter - Cologne Water Quality Act [California Water Code Section 13000 et seq.] together with any amendments of or regulations promulgated under the statutes cited above and any other Federal, State or local law, statute, ordinance or regulation now in effect or later enacted that pertains to occupational health or industrial hygiene, and only to the extent the occupational health or industrial hygiene laws, ordinances, or regulations relate to Hazardous Substances on, under, or about the Property, or the regulation or protection of the environment, including ambient air, soil, soil vapor, groundwater, surface water, or land use. 1.1.38 Equity Interest. All or any part of any direct equity or ownership interest(s) (whether stock, partnership interest, beneficial interest in a trust, membership interest in a limited liability company, or other interest of an ownership or equity nature) in any entity, at any tier of ownership, that directly owns or holds any ownership or equity interest in a Person. 45636.04000\6008147.4 5 1.1.39 Escrow. An escrow, as defined in Civil Code Section 1057 and Financial Code Section 17003(a), that is conducted by the Escrow Agent with respect to the sale of the Property from Agency to Developer pursuant to this Agreement. 1.1.40 Escrow Agent. First American Title Company, a California corporation, or such other Person mutually agreed upon in writing by both Agency and Developer. 1.1.41 Escrow Closing Statement. A statement prepared by the Escrow Agent indicating among other things, the Escrow Agent's estimate of all funds to be deposited or received by Agency or Developer, respectively, and all charges to be paid by Agency or Developer, respectively, through the Escrow. 1.1.42 Escrow Default. The unexcused failure to submit any document or funds to the Escrow Agent as reasonably necessary to close the Escrow, pursuant to the terms and conditions of this Agreement, after all other conditions precedent to the Close of Escrow for the benefit of such Party are satisfied or waived by such Party. 1.1.43 Escrow Opening Date. The first date on which a copy of this Agreement signed by both Agency and Developer and the Deposit are deposited with the Escrow Agent. 1.1.44 Event of Default. The occurrence of any one or more of the following: (a) Monetary Default. A Monetary Default (as -defined in Section 1.1.62) that continues, without being cured by the Party in Monetary Default, for seven (7) calendar days after Notice of such Monetary Default to the Party in Monetary Default, specifying in reasonable detail the amount of money not paid and the nature and calculation of each such payment; (b) Escrow Closing Default. An Escrow Default (as defined in Section 1.1.42) that continues, without being cured by the Party in Escrow Default, for seven (7) calendar days after Notice of such Escrow Default to the Party in Escrow Default, specifying in reasonable detail the document or funds not submitted; (c) Bankruptcy or Insolvency. Developer admits in writing that it is unable to pay its debts as they become due or becomes subject to any Bankruptcy Proceeding (except an involuntary Bankruptcy Proceeding dismissed within ninety (90) days after commencement), or a custodian or trustee is appointed to take possession of, or an attachment, execution or other judicial seizure is made with respect to, substantially all of Developer's assets or Developer's interest in this Agreement or the Project (unless such appointment, attachment, execution, or other seizure was involuntary, and is contested with diligence and continuity and vacated and discharged within ninety (90) days); (d) Transfer. The occurrence of a Transfer, whether voluntarily or involuntarily or by operation of Law, in violation of the terms and conditions of this Agreement; or 45636.04000\6008147.4 6 (e) Non -Monetary Default. Any Non -Monetary Default (as defined in Section 1.1.64), other than those specifically addressed in Section 1.1.44(c) or Section 1.1.44(d) that is not cured by the Party in Non -Monetary Default within thirty (30) days after Notice of such Non -Monetary Default to the Party in Non -Monetary Default, describing the Non -Monetary Default in reasonable detail, or, in the case of a Non -Monetary Default that cannot with reasonable diligence be cured within thirty (30) days after the effective date of such Notice of Non -Monetary Default, if the Party in Non -Monetary Default does not do all of the following: (i) within thirty (30) days after Notice of such Non -Monetary Default, advise the other Party of the intention of the Party in Non -Monetary Default to take all reasonable steps to cure such Non - Monetary Default; (ii) duly commence such cure within such period; and (iii) diligently prosecute such cure to completion within a reasonable time under the circumstances. 1.1.45 Executive Director. The Executive Director of Agency or his or her designee or successor in function. 1.1.46 Federal. The government of the United States of America. 1.1.47 Financing Plan. A plan prepared by the Developer setting forth all of the sources of equity or loan funds that the Developer proposes to use to finance all of the costs of development of the Project on the Property (whether paid, incurred, accrued or anticipated), and including all of the following documents and information: (a) each loan commitment made to the Developer by any Institutional Lender for any portion of the Project Construction Financing for the Project (if any); (b) any and all loan documents (including Security Instruments) to be made or entered into by or between the Institutional Lender providing the Project Construction Financing or Developer (including any related Affiliate or Third Person guaranty) regarding the Project Construction Financing for the Project (if any); (c) any agreements requested by any financing source identified in such financing plan to which the Agency is proposed to be a party as a condition precedent to such financing source providing its financing; (d) evidence of equity fund contributions to financing Project development costs, which evidence and equity fund contribution amounts shall both be reasonably acceptable to Agency; and (e) the construction budget for the Project that has been approved by the Institutional Lender providing the Project Construction Financing (if any). 1.1.48 FIRPTA Certificate. A certification that Agency is not a "foreign person" within the meaning of such term under Section 1445 of the United States Internal Revenue Code and sufficient to exempt Developer from the obligation to withhold any funds from Agency pursuant to Section 1445 of the United States Internal Revenue Code. 1.1.49 Form 593. A California Franchise Tax Board Form 593-C. 1.1.50 Government. Any and all courts, boards, agencies, commissions, offices, or authorities of any nature whatsoever for any governmental unit (Federal, State, County, district, municipal, City or otherwise) whether now or later in existence. 1.1.51 Hazardous Substance. Any flammable substances, explosives, radioactive materials, asbestos, asbestos -containing materials, polychlorinated biphenyls, chemicals known to cause cancer or reproductive toxicity, pollutants, contaminants, hazardous 45636.04000\6008147.4 7 wastes, medical wastes, toxic substances or related materials, explosives, petroleum, petroleum products and any "hazardous" or "toxic" material, substance or waste that is defined by those or similar terms or is regulated as such under any Law, including any material, substance or waste that is: (a) defined as a "hazardous substance" under Section 311 of the Water Pollution Control Act (33 U.S.C. § 1317), as amended; (b) substances designated as "hazardous substances" pursuant to 33 U.S.C. § 1321; (c) defined as a "hazardous waste" under Section 1004 of the Resource Conservation and Recovery Act of 1976, 42 U.S.C. § 6901, et seq., as amended; (d) defined as a "hazardous substance" or "hazardous waste" under Section 101 of the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended by the Superfund Reauthorization Act of 1986, 42 U.S.C. § 9601, et seq., or any so-called "superfund" or "superlien" law; (e) defined as a "pollutant' or "contaminant" under 42 U.S.C. § 9601(33); (f) defined as "hazardous waste" under 40 C.F.R. Part 260; (g) defined as a "hazardous chemical' under 29 C.F.R. Part 1910; (h) any matter within the definition of "hazardous substance" set forth in 15 U.S.C. § 1262; (i) any matter, waste or substance regulated under the Toxic Substances Control Act ("TSCA") [15 U.S.C. Sections 2601, et seq.]; 0) any matter, waste or substance regulated under the Hazardous Materials Transportation Act, 49 U.S.C. Sections 1801, et seq.; (k) those substances listed in the United States Department of Transportation (DOT)Table [49 C.F.R. 172.101]; (1) any matter, waste or substances designated by the EPA, or any successor authority, as a hazardous substance [40 C.F.R. Part 302]; (m) any matter, waste or substances defined as "hazardous waste" in Section 25117 of the California Health and Safety Code; (n) any substance defined as a "hazardous substance" in Section 25316 of the California Health and Safety Code; (o) any matter, waste, or substance that is subject to any other Law regulating, relating to or imposing obligations, liability or standards of conduct concerning protection of human health, plant life, animal life, natural resources, property or the enjoyment of life or property free from the presence in the environment of any solid, liquid, gas, odor or any form of energy from whatever source; or (p) other substances, materials, and wastes that are, or become, regulated or classified as hazardous or toxic under Law or in the regulations adopted pursuant to said Law, including manure, asbestos, polychlorinated biphenyl, flammable . explosives and radioactive material. 1.1.52 Hazardous Substance Discharge. Any deposit, discharge, generation, release, or spill of a Hazardous Substance that occurs at on, under, into or from the Property, or during transportation of any Hazardous Substance to or from the Property, or that arises at any time from the construction, installation, use or operation of the Project or any activities conducted at on, under or from the Property, whether or not caused by a Party. 1.1.53 Indemnify. Where this Agreement states that any Indemnitor shall "indemnify" any Indemnitee from, against, or for a particular Claim, that the Indemnitor shall indemnify the Indemnitee and defend and hold the Indemnitee harmless from and against such Claim (alleged or otherwise). "Indemnified" shall have the correlative meaning. 1.1.54 Indemnitee. Any Person entitled to be Indemnified under the terms of this Agreement. 1.1.55 Indemnitor. A Party that agrees to Indemnify any other Person under the terms of this Agreement. 4563 6.04000%008147.4 8 1.1.56 Insurance Documents. Copies of insurance policies and endorsements evidencing all insurance coverage required to be obtained by Developer pursuant to Section 6. 1.1.57 Institutional Lender. Any of the following: (a) a bank (State or Federal), trust company (in its individual or trust capacity), insurance company, credit union, - savings bank (State or Federal), pension, welfare or retirement fund or system, real estate investment trust (or an umbrella partnership or other entity of which a real estate investment trust is the majority owner), Federal or State agency regularly making or guaranteeing mortgage loans, investment bank or a Fortune 500 company; or (b) any Person that is an Affiliate of or is a combination of any one or more of the Persons described in clause "(a)" of this Section 1.1.57. 1.1.58 Law. Every law, ordinance, requirement, order, proclamation, directive, rule, and regulation of any Government applicable to the Property or the Project, in any way, including any development, use, maintenance, taxation, operation, or occupancy of, or environmental conditions affecting the Property or the Project, or relating to any taxes, or otherwise relating to this Agreement or any Party's rights, obligations or remedies under this Agreement, or any Transfer of any of the foregoing, whether in force on the Effective Date or passed, enacted, modified, amended or imposed at some later time, subject in all cases, however, to any applicable waiver, variance, or exemption. 1.1.59 Legal Costs. In reference to any Person, all reasonable costs and expenses such Person incurs in any legal proceeding (or other matter for which such Person is entitled to be reimbursed for its Legal Costs), including reasonable attorneys' fees, court costs and expenses and consultant and expert witness fees and expenses. 1.1.60 Lender. The holder of any Security Instrument and its successors and assigns. 1.1.61 Liability Insurance. Commercial General Liability insurance with a minimum liability limit of Five Million Dollars ($5,000,000) for any one occurrence and which may be provided through a combination of primary and excess or umbrella insurance policies. If commercial general liability insurance or other form with a general aggregate limit is used, the general aggregate limit shall be twice the required minimum liability limit for any one occurrence. 1.1.62 Monetary Default. Any failure by either Party to pay or deposit, when and as this Agreement requires, any amount of money, any bond or surety or evidence of any insurance coverage required to be provided under this Agreement, whether to or with a Party or a Third Person, except to the extent constituting an Escrow Default. 1.1.63 New Home. Any of the fourteen (14) single-family housing units in the Project. 1.1.64 Non -Monetary Default. The occurrence of any of the following, except to the extent constituting a Monetary Default or an Escrow Default: (a) any failure of a Party to perform any of its obligations under this Agreement; (b) any failure of a Party to comply with any material restriction or prohibition in this Agreement; or (c) any other event or 45636.04000\6008147.4 9 circumstance that, with passage of time or giving of Notice, or both, or neither, would constitute a breach of this Agreement by a Party. 1.1.65 Normal Business Hours. Any weekday, Monday through Thursday, excluding Federal or State recognized holidays, between the hours of 7:30 a.m. and 5:30 p.m. Pacific Time. 1.1.66 Notice. Any consent, demand, designation, election, notice, or request relating to this Agreement, including any Notice of Default. All Notices must be in writing. 1.1.67 Notice of Affordability Restrictions. A notice in substantially the form of Exhibit "C" attached to this Agreement. 1.1.68 Notice of Default. Any Notice claiming or giving Notice of a Default or alleged Default. 1.1.69 Notify. To give a Notice. 1.1.70 Outside Closing Date. The earlier of: (a) the date that is thirty (30) days following the Entitlement Date; (b) the date that is three hundred ninety-five (395) days following the Effective Date; or (c) another date mutually agreed upon in writing between the Parties for the Close of Escrow. 1.1.71 Parties. Collectively, Agency and Developer. 1.1.72 Party. Individually, either Agency or Developer, as applicable. 1.1.73 Permitted Encumbrance. Any of the following: (a) all items shown in the Preliminary Report, as exceptions to coverage under the proposed Developer Title Policy, that are approved by Developer pursuant to Section 3.3; (b) any lien for non -delinquent property taxes or assessments; (c) any Laws applicable to the Property; (d) the Redevelopment Plan; (e) this Agreement; (f) the Regulatory Agreement; (g) any existing improvements on the Property; (h) any Security Instrument securing any Project Construction Financing (as approved by Agency); and (i) any other document or encumbrance expressly required or allowed to be recorded against the Property or the Project under the terms of this Agreement. 1.1.74 Person. Any association, corporation, governmental entity or agency, individual, joint venture, joint-stock company, limited liability company, partnership, trust, unincorporated organization, or other entity of any kind. 1.1.75 Preliminary Report. A preliminary report issued by the Title Company in contemplation of the issuance of the Developer Title Policy, accompanied by the best available copies of all documents listed in Schedule B of the report as exceptions to coverage under the proposed policy of title insurance. 1.1.76 Prevailing Wage Action. Any of the following: (a) any determination by the State Department of Industrial Relations that prevailing wage rates should have been paid, but were not; (b) any determination by the State Department of Industrial Relations that higher 45636.0400016008147.4 10 prevailing wage rates than those paid should have been paid; (c) any administrative or legal action or proceeding arising under or regarding any failure to comply with any of California Labor Code Sections 1720 through 1781, as amended from time to time, or any Federal law regarding prevailing wages, including maintaining certified payroll records pursuant to California Labor Code Section 1776; or (d) any administrative or legal action or proceeding to recover wage amounts at law or in equity, including pursuant to California Labor Code Section 1781 or applicable Federal Law. 1.1.77 Prohibited Encumbrance. Any Security Instrument, mechanic's lien, easement or other encumbrance or interest in the Property recorded or asserted against the Property or the Project that is not a Permitted Encumbrance, 1.1.78 Project. Development of the following: (a) ten (10) single-family detached residences and two (2) residences above garage buildings that shall be available for sale at current market rates; and (b) two (2) residences above garage buildings that shall be limited to sale to and occupancy by Qualifying Households (defined in the Regulatory Agreement) pursuant to restrictions imposed by recordation of the Regulatory Agreement against the condominium estates in the Property containing these two (2) residences. The Project is further described in the Project Scope. The Project shall include all required or associated on-site and off-site improvements, hardscape improvements, parking areas and carports, and landscaping improvements to the Property, in accordance with plans and specifications approved by the City and any conditions imposed by the City in issuing development entitlements related to the Project. 1.1.79 Project Commencement Date. The date that is one hundred eighty (180) days following Close of Escrow. 1.1.80 Project Completion Date. The date that is three hundred sixty-five (365) days following the Project Commencement Date. 1.1.81 Project Construction Financing. One or more loans that Developer may obtain from one or more Institutional Lenders, the proceeds of which are to be used and applied to pay the reasonable costs of obtaining such loan(s) and the costs of planning, designing and building the Project. If obtained, such loan(s) shall provide for normal and customary disbursement controls for the payment of construction costs as construction progresses and normal and customary fees and expenses for loan(s) of similar size and purpose. 1.1.82 Project Scope. The detailed description of the primary elements of the Project attached to this Agreement as Exhibit `B." 1.1.83 Property. That certain real property and improvements legally described in Exhibit "A" attached to this Agreement. 1.1.84 Property Insurance. Insurance coverage for the Property and all improvements (excluding excavations and foundations) on or to the Property against loss, damage, or destruction, at least as broad as the Insurance Services Office CP 10 30 -Causes Of Loss -Special Form, and including flood coverage, if the Property is located in a Special Flood Hazard Area, as determined by the Federal Emergency Management Agency. Such insurance 45636.04000\6008147.4 11 shall be in an amount equal to one hundred percent (100%) of the replacement value (without deduction for depreciation) with no co-insurance penalty provision. Such insurance shall include ordinance or law, demolition and debris removal and increased cost of construction coverage and shall include coverage for explosion of steam and pressure boilers and similar apparatus located on the Property. Property Insurance shall take effect upon issuance of a Certificate of Occupancy for each completed New Home within the Project to replace Builder's Risk Insurance for such New Home. At any time that Builder's Risk Insurance is in effect for the entire Project, Developer shall not also be required to maintain Property Insurance for the Project. 1.1.85 Punchlist Work. Construction of an insubstantial nature that, if not completed, will not delay issuance of a final Certificate of Occupancy (or equivalent approval) for the Project by the City or materially interfere with use of the Project. 1.1.86 Purchase Price. Four Hundred Ten Thousand Dollars ($410,000). 1.1.87 Redevelopment Plan. The redevelopment plan adopted by the City and affecting the Property. 1.1.88 Regulatory Agreement. That certain "Declaration of Community Redevelopment Affordable Housing Conditions, Covenants and Restrictions (9th & Alameda)" to be entered into by and between Agency and Developer at Close of Escrow, substantially in the form of Exhibit "G" attached to this Agreement. 1.1.89 Security Instrument. Any security instrument, deed of trust, security deed, contract for deed, deed to secure debt, or other voluntary real property (including leasehold) security instrument(s) or agreement(s) intended to grant real property (including leasehold) security for any obligation (including a purchase -money or other promissory note) encumbering the Property, as entered into, renewed, modified, consolidated, increased, decreased, amended, extended, restated, assigned (wholly or partially), collaterally assigned, or supplemented from time to time, unless and until paid, satisfied, and discharged of record. If two or more such security instruments are consolidated or restated as a single lien or held by the same Lender (as applicable), then all such security instruments so consolidated or restated shall. constitute a single Security Instrument. A participation interest in a security instrument (or partial assignment of the secured loan) does not itself constitute a Security Instrument. 1.1.90 State. The State of California. 1.1.91 Third Person. Any Person that is not a Party, an Affiliate of a Party or an elected official, officer, director, manager, shareholder, member, principal, partner, employee or agent of a Party. 1.1.92 Title Company. First American Title Company, a California corporation, or such other Person mutually agreed upon in writing by both Agency and Developer. 1.1.93 Title Notice. A written notice from Developer to Agency stating Developer's acceptance of the state of the title to the Property, as described in the Preliminary Report, or Developer's disapproval of specific matters shown in Schedule B of the Preliminary 45636.04000\6008147.4 12 Report as exceptions to coverage under the proposed Developer Title Policy for the Property, describing in suitable detail the actions that Developer reasonably believes are indicated to obtain Developer's approval of the state of the title to the Property. 1.1.94 Title Notice Response. The written response of Agency to the Title Notice, in which Agency either elects to: (a) cause the removal from the Preliminary Report of any matters disapproved in the Title Notice; (b) obtain title or other insurance or endorsement in a form reasonably satisfactory to Developer insuring against any matters disapproved in the Title Notice; or (c) not take either action described in clauses "(a)" or "(b)" of this Section 1.1.94. 1.1.95 Title Notice Waiver. A written notice from Developer to Agency waiving Developer's previous disapproval in the Title Notice of specific matters shown in Schedule B of the Preliminary Report as exceptions to coverage under the proposed Developer Title Policy. 1.1.96 Transfer. Regarding any property, right or obligation, means any of the following, whether by operation of law or otherwise, whether voluntary or involuntary, and whether direct or indirect: (a) any assignment, conveyance, grant, hypothecation, mortgage, pledge, sale, or other transfer, whether direct or indirect, of all or any part of such property, right or obligation, or of any legal, beneficial, or equitable interest or estate in such property, right or obligation or any part of it (including the grant of any easement, lien, or other encumbrance); (b) any conversion, exchange, issuance, modification, reallocation, sale, or other transfer of any Equity Interest(s) in the owner of such property, right or obligation by the holders of such Equity Interest(s) that causes or results in a change in the identity of the Person(s) in Control of such owner; (c) any transaction described in clause "(b)" of this Section 1.1.96 affecting any Equity Interest(s) or any other interest in such property, right or obligation or in any such owner (or in any other direct or indirect owner at any higher tier of ownership) through any manner or means whatsoever; or (d) any transaction that is in substance equivalent to any of the foregoing. A transaction affecting Equity Interests, as referred to in clauses "(b)" through "(d)" of this Section 1.1.96, shall be deemed a Transfer by Developer even though Developer is not technically the transferor. A "Transfer" shall not, however, include any of the following (provided that the other Party has received Notice of such occurrence) relating to the Property or any Equity Interest: (i) a mere change in form of ownership with no material change in beneficial ownership that constitutes a tax-free transaction under Federal income tax law and the State real estate transfer tax; (ii) a conveyance only to member(s) of the immediate family(ies) of the transferor(s) or trusts for their benefit; (iii) any assignment in accordance with Section 11.21.3; (iv) the conveyance or dedication of any portion of the Property to any appropriate Government or the granting of easements or permits to facilitate construction of the Project, as required by Approvals applicable to the Project; (v) making of any Security Instrument relating to financing for acquisition of the Property or construction of the Project pursuant to this Agreement (subject to such financing and Security Instrument being considered and approved by Agency as part of the Financing Plan; (vi) the presale or sale of individual New Homes to retail homebuyers in the ordinary course of business; (vii) the lease or leaseback of models of New Homes in the ordinary course of business; or (viii) the conveyance of title to common area within the Property to a homeowners association formed for the Project. 45636.04000\6008147.4 13 1.1.97 Unavoidable Delay. A delay in either Party performing any obligation under this Agreement arising from or on account of any cause whatsoever beyond the Party's reasonable control, including strikes, labor troubles or other union activities, casualty, war, acts of terrorism, riots; litigation, governmental action or inaction, regional natural disasters, or inability to obtain materials. Unavoidable Delay shall not include delay caused by a Party's financial condition, illiquidity or insolvency. 1.1.98 Usury Limit. The highest rate of interest, if any, that Law allows under the circumstances. 1.1.99 Waiver of Subrogation. A provision in, or endorsement to, any insurance policy, by which the carrier agrees to waive rights of recovery by way of subrogation against either Party to this Agreement for any loss such policy covers. 1.1.100 Workers Compensation Insurance. Workers compensation insurance complying with the provisions of State law and an employer's liability insurance policy or endorsement to a liability insurance policy, with a minimum liability limit of One Million Dollars ($1,000,000) per accident for bodily injury or disease, covering all employees of Developer. 2. EFFECTIVE DATE. This Agreement shall not become effective until the date on which all of the following have occurred: ("Effective Date"): (a) Agency has received three (3) counterpart originals of this Agreement signed by the authorized representative(s) of Developer; (b) Agency has received a certified copy of the Developer Official Action signed by the authorized representative(s) of Developer; (c) this Agreement is approved by Agency's governing body; (d) this Agreement is signed by the authorized representative(s) of Agency; and (e) one (1) original of this Agreement signed by the authorized representative(s) of Agency has been delivered by Agency to Developer. Agency shall send Notice of the Effective Date to Developer within seven (7) days following the occurrence of the Effective Date. Developer shall sign and return a copy of such Notice to Agency within seven (7) days after receipt of such Notice. 3. PURCHASE AND SALE OF PROPERTY 3.1 Escrow. Agency shall convey the Property to Developer in consideration of the Purchase Price and Developer's promises and covenants set.forth in this Agreement. Developer shall accept conveyance of the Property from Agency, subject to the Permitted Encumbrances, pursuant to the terms and conditions of this Agreement. For the purposes.of exchanging funds and documents to complete the conveyance of the Property from Agency to Developer and the acquisition of the Property by Developer from Agency, pursuant to the terms and conditions of this Agreement, Agency and Developer agree to open the Escrow with the Escrow Agent. The provisions of Section 4 of this Agreement are the joint escrow instructions of the Parties to the Escrow Agent for conducting the Escrow. 3.2 Payment of Purchase Price. The Developer shall pay the Purchase Price, as follows: 45636.04000\6008]47.4 14 3.2.1 Deposit. Within five (5) calendar days following the Effective Date, Developer shall deliver the Deposit, in immediately available funds, to the Escrow Agent. The Deposit shall be refundable to the Developer until the Developer's acceptance of the Property in a Due Diligence Completion Notice pursuant to Section 3.4.5, at which time the Deposit shall be fully earned by Agency and non-refundable to Developer. Notwithstanding the foregoing provisions of this Section 3.2.1, the Deposit shall be refundable to the Developer upon the occurrence of any of the following prior to the Close of Escrow: (a) an Event of Default attributable to Agency occurs and damages are awarded to Developer pursuant to Section 10.2.1; (b) termination of this Agreement pursuant to Section 3.3, 3.4 or 4.14; or (c) subsequent to Developer's acceptance of the Property pursuant to Section 3.4.5 and through no fault of Developer, the occurrence of an actual violation of Environmental Law or a Hazardous Substance Discharge. 3.2.2 Before Close of Escrow. At least one (1) Business Day preceding the Escrow Closing Date, the Developer shall deposit the Purchase Price, less the amount of the Deposit, into the Escrow in immediately available funds. 3.3 Developer Approval of Property Title. 3.3.1 Title Notice. Within fifteen (15) days after the Effective Date, Agency shall request the Preliminary Report from the Title Company and that the Title Company deliver a copy of such Preliminary Report to Developer. Within thirty (30) days following Developer's receipt of the Preliminary Report, Developer shall send the Title Notice to both Agency and Escrow Agent. 3.3.2 Failure to Deliver Title Notice. If Developer fails to send the Title Notice to Agency and Escrow Agent within the time period provided in Section 3.3.1, Developer will be deemed to disapprove the status of title to the Property and refuse to accept conveyance of the Property and both Developer and Agency shall have the right to cancel the Escrow and terminate this Agreement upon seven (7) days Notice, in their respective sole and absolute discretion. 3.3.3 Title Notice Response. Within fifteen (15) days following Agency's receipt of the Title Notice (if any), Agency shall send the Title Notice Response to both Developer and Escrow Agent. If the Title Notice does not disapprove or conditionally approve any matter in the Preliminary Report or Developer fails to deliver the Title Notice, Agency shall not be required to send the Title Notice Response. If Agency does not send the Title Notice Response, if necessary, within the time period provided in this Section 3.3.3, Agency shall be deemed to elect not to take any action in reference to the Title Notice. If Agency elects in the Title Notice Response to take any action in reference to the Title Notice, Agency shall complete such action, prior to the Close of Escrow or as otherwise specified in the Title Notice Response. 3.3.4 Title Notice Waiver. If Agency elects or is deemed to have elected not to address one or more matters set forth in the Title Notice to Developer's reasonable satisfaction, then within ten (10) days after the earlier of: (i) Developer's receipt of the Agency's Title Notice Response; or (ii) the date for Agency to deliver its Title Notice Response pursuant to Section 3.3.3, Developer shall either: (a) refuse to accept the title to and conveyance of the 45636.04000\6008147.4 15 Property; or (b) waive its disapproval or conditional approval of all such matters set forth in the Title Notice by sending the Title Notice Waiver to both Agency and Escrow Agent. Failure by Developer to timely send the Title Notice Waiver, where the Title Notice Response or Agency's failure to deliver the Title Notice Response results in Agency's election not to address one or more matters set forth in the Title Notice to Developer's reasonable satisfaction, will be deemed Developer's continued refusal to accept the title to and conveyance of the Property, in which case both Developer and Agency shall have the right to cancel the Escrow and terminate this Agreement upon seven (7) days Notice, in their respective sole and absolute discretion. 3.3.5 No Termination Liability. Any termination of this Agreement and cancellation of the Escrow pursuant to a right provided in this Section 3.3 shall be without liability to the other Party or any other Person. Termination shall be accomplished by delivery of a Notice of termination to both the other Party and the Escrow Agent at least seven (7) days prior to the termination date. Following issuance of a Notice of termination of this Agreement pursuant to a right provided under this Section 3.3, the Parties and the Escrow Agent shall proceed pursuant to Section 4.12. Once a Notice of termination is given pursuant to this Section 3.3, delivery of a Title Notice or Title Notice Waiver shall have no force or effect and this Agreement shall terminate in accordance with the Notice of termination. 3.4 Developer Due Diligence Investigations. 3.4.1 Time and Expense. Developer shall complete all of its Due Diligence Investigations within the Due Diligence Period and shall conduct all of its Due Diligence Investigations at its sole cost and expense. 3.4.2 Right to Enter. Agency licenses Developer to enter the Property for the sole purpose of conducting the Due Diligence Investigations, subject to all of the terms and conditions of this Agreement. The license given in this Section 3.4 shall terminate with the termination of this Agreement. Any Due Diligence Investigations by Developer shall not unreasonably disrupt any then existing use or occupancy of the Property. Developer's exercise of the license provided in this Section 3.4 shall not extend the Due Diligence Period. 3.4.3 Limitations. Developer shall not conduct any intrusive or destructive testing of any portion of the Property, other than low volume soil samples, without Agency's prior written consent. Developer shall pay all of its vendors, inspectors, surveyors, consultants or agents engaged in any inspection or testing of the Property, such that no mechanics liens or similar liens for work performed are imposed upon the Property by any such Persons. Following the conduct of any Due Diligence Investigations on the Property, Developer shall restore the Property to substantially its condition prior to the conduct of such Due Diligence Investigations. 3.4.4 Indemnification of Agency. The activities of Developer or its agents directly or indirectly related to the Due Diligence Investigations shall be subject to Developer's indemnity, defense and hold harmless obligations pursuant to Section 10.6. Developer shall provide Agency with evidence of Liability Insurance in compliance with Section 6 prior to the commencement of any Due Diligence Investigations on the Property. 45636.04000\6008147.4 16 3.4.5 Due Diligence Completion Notice. Developer shall deliver a Due Diligence Completion Notice to Agency and Escrow Agent prior to the end of the Due Diligence Period. If Developer does not unconditionally accept the condition of the Property by delivery of its Due Diligence Completion Notice stating such unconditional acceptance, prior to the end of the Due Diligence Period, Developer shall be deemed to have rejected the condition of the Property and refused to accept conveyance of title to the Property. If the condition of the. Property is rejected or deemed rejected by Developer, then both Agency and Developer shall have the right to cancel the Escrow and terminate this Agreement, in their respective sole and absolute discretion, without liability to the other Party or any other Person, by delivery of a Notice of termination to the other Party and Escrow Agent, in which case the Parties and Escrow Agent shall proceed pursuant to Section 4.12. 3.5 "AS -IS" Acquisition. The Close of Escrow shall evidence Developer's unconditional and irrevocable acceptance of the Property in the Property's AS IS, WHERE IS, SUBJECT TO ALL FAULTS CONDITION AS OF THE CLOSE OF ESCROW, WITHOUT WARRANTY as to character, quality, performance, condition, title, physical condition, soil conditions, the presence or absence of fill, ocean or tidal impacts, shoring or bluff stability or support, subsurface support, zoning, land use restrictions, the availability or location of utilities or services, the location of any public infrastructure on or off of the Property (active, inactive or abandoned), the suitability of the Property for the Project or other use or the existence or absence of Hazardous Substances on or about the Property or any other property and with full knowledge of the physical condition of the Property, the nature of Agency's interest in and use of the Property, all laws applicable to the Property and any and all conditions, covenants, restrictions, encumbrances and all matters of record relating to the Property. The Close of Escrow shall constitute Developer's representation and warranty to Agency that: (a) Developer has had ample opportunity to inspect and evaluate the Property and the feasibility of the uses and activities Developer is entitled to conduct on the Property in accordance with this Agreement; (b) Developer is experienced in real estate development; (c) Developer is relying entirely on Developer's experience, expertise and its own inspection of the Property in its current state in proceeding with acquisition of the Property; (d) Developer accepts the Property in its present condition; (e) to the extent that Developer's own expertise with respect to any matter regarding the Property is insufficient to enable Developer to reach an informed conclusion regarding such matter, Developer has engaged the services of Persons qualified to advise Developer with respect to such matters; (f) Developer has received assurances acceptable to Developer by means independent of Agency or Agency's agents of the truth of all facts material to Developer's acquisition of the Property pursuant to this Agreement; and (g) the Property is being acquired by Developer as a result of Developer's own knowledge, inspection and investigation of the Property and not as a result of any representation made by Agency or Agency's agents relating to the condition of the Property. Agency hereby expressly and specifically disclaims any express or implied warranties regarding the Property. 3.6 Developer to Obtain all Approvals for the Project. 3.6.1 Submission of Development Application. Developer shall exercise reasonable efforts to prepare and submit all required Applications, documents, fees, charges or other items (including, without limitation, deposits, funds or sureties in the ordinary course) required for the construction of the Project, pursuant to all applicable Laws and Approvals, to 45636.0400016008147.4 17 each Government for review and approval, within a reasonable time that will allow Developer to obtain all Approvals required for the Project and begin physical construction of the Project on or before the Project Commencement Date. Further, Developer shall exercise reasonable efforts to obtain all discretionary Approvals required for the construction of the Project on the Property from each Government on or before the date that is three hundred sixty-five (365) calendar days following the Effective Date. Notwithstanding the foregoing provisions of this Section 3.6 or any other provision of this Agreement, prior to commencement of any part of the construction of the Project, Developer shall obtain all Approvals from each Government required for the construction of the Project. The City's zoning, building and land use regulations (whether contained in ordinances, the City's municipal code, conditions of approval or elsewhere) shall be applicable to the construction of the Project by Developer. 3.6.2 Reservations. The approval of this Agreement by the City or Agency shall not be binding on the City, City Council, Agency, Design Review Committee, or any other commission, committee, board or body of the City or Agency regarding any Approvals of the Project required by such bodies. No action by the City, or Agency with reference to this Agreement or any related documents shall be deemed to constitute issuance or waiver of any required City or Agency Approval regarding the Property, the Project or Developer. The Parties acknowledge and agree that this Agreement is not a statutory development agreement pursuant to Government Code Sections 65864, et seq. 4. JOINT ESCROW INSTRUCTIONS 4.1 Opening of Escrow. The conveyance of the Property from Agency to Developer shall take place through the Escrow to be administered by Escrow Agent. Developer shall cause the Escrow to be opened, including depositing the full amount of the Deposit in Escrow, within five (5) days following the Effective Date. Escrow Agent shall promptly confirm the Escrow Opening Date in writing to each of the Parties. If the Entitlement Date does not occur on or before the date that is three hundred sixty-five (365) calendar days following the Effective Date, then both Agency and Developer shall have the right to cancel the Escrow and terminate this Agreement, in their respective sole and absolute discretion, without liability to the other Party or any other Person, by delivery of a Notice of termination to the other Party and Escrow Agent, in which case the Parties and Escrow Agent shall proceed pursuant to Section 4.12. 4.2 Escrow Instructions. This Section 4 constitutes the joint escrow instructions of the Parties to Escrow Agent for conduct of the Escrow for the purchase and sale of the Property, as contemplated. by this Agreement. Developer and Agency shall sign such further escrow instructions consistent with the provisions of this Agreement as may be reasonably requested by Escrow Agent. In the event of any conflict between the provisions of this Agreement and any further escrow instructions requested by Escrow Agent, the provisions of this Agreement shall control. 4.3 Escrow Agent Authority. Agency and Developer authorize Escrow Agent to: 4.3.1 Charges. Pay and charge Agency and Developer for their respective shares of the applicable fees, taxes, charges and costs payable by either Agency or Developer 45636.04000\6008147.4 18 regarding the Escrow. Escrow Agent shall only proceed to close the Escrow after Escrow Agent receives approved Escrow Closing Statements from both Agency and Developer; 4.3.2 Settlement/Closing Statements. Release each Party's Escrow Closing Statement to the other Party; 4.3.3 Document Recording. File any documents delivered for recording through the Escrow with the office of the Recorder of the County for recordation in the official records of the County, pursuant to the joint instructions of the Parties; and 4.3.4 Counterpart Documents. Utilize documents signed by Agency or Developer in counterparts, including attaching separate signature pages to one version of the same document. 4.4 Developer's Conditions Precedent to Close of Escrow. Provided that the failure of any such condition to be satisfied is not due to a Default under this Agreement by Developer, Developer's obligation to accept conveyance of the Property from Agency through the Escrow shall be conditioned upon the satisfaction or waiver (waivers must be in writing and signed by Developer) of each of the following conditions precedent on or before the Outside Closing Date: 4.4.1 Title Policy. Developer accepts the state of the title of the Property, in accordance with Section 3.3, and the Title Company is committed to issue the Title Policy to Developer upon payment of Title Company's premium for such policy; 4.4.2 Property Condition. There has been no adverse change in the condition of the Property subsequent to Developer's delivery of its Due Diligence Completion Notice to Agency in accordance with Section 3.4; 4.4.3 Approvals. Issuance of all discretionary Approvals required from any Government for the construction of the Project on the Property on terms and conditions reasonably satisfactory to Developer, and the applicable appeals periods and statutes of limitations for challenge of the discretionary Approvals have lapsed without the initiation of a challenge to any of the discretionary Approvals; 4.4.4 Project Financing. Developer has provided Agency with either or a combination of the following described evidence of financing sources demonstrating the availability of sufficient funds to Developer for acquisition of the Property and construction of the Project pursuant to this Agreement: (a) a written commitment from at least one Institutional Lender to provide Project Construction Financing on terms reasonably acceptable to Developer; or (b) evidence of equity fund contributions to financing Project development costs, which evidence and equity fund contribution amounts are both reasonably acceptable to Agency; 4.4.5 Agency Escrow Deposits. Agency deposits all of the items into Escrow required by Section 4.7; and 4.4.6 Agency Pre -Closing Obligations. Agency perforins all of Agency's material obligations required to be performed by Agency pursuant to this Agreement prior to the 45636.04000\6008147.4 19 Close of Escrow and all of Agency's representations and warranties expressly set forth in this Agreement are true and correct. 4.5 Agency's Conditions Precedent to Close of Escrow. Provided that the failure of any such condition to be satisfied is not due to a Default under this Agreement by Agency, Agency's obligation to convey the_Property to Developer through the Escrow shall be conditioned upon the satisfaction or waiver (waivers must be in writing and signed by Agency) of each of the following conditions precedent prior to the Outside Closing Date: .4.5.1 Document Approval. Agency has received from Developer and approved all of the following described items in Agency's reasonable discretion, unless another provision of this Agreement provides for approval of such document in Agency's sole and absolute discretion, in which case Agency shall have approved the document in Agency's sole and absolute discretion: (a) A site plan, elevations and color schemes (including material samples) for the Project; (b) All Insurance Documents; and (c) The Financing Plan. 4.5.2 Title. Developer accepts the state of the title of the Property, in accordance with Section 3.3; 4.5.3 Due Diligence. Developer timely delivers its Due Diligence Completion Notice to both Agency and Escrow Agent stating Developer's unconditional acceptance of the condition of the Property, in accordance with Section 3.4; 4.5.4 Approvals. Issuance of all discretionary Approvals required from any Government for the construction of the Project on the Property on terms and conditions reasonably satisfactory to Agency; 4.5.5 65402 Finding. City Planning Commission has made all required findings and determinations pursuant to Government Code Section 65402 for Agency to convey the Property to Developer pursuant to this Agreement. Agency shall apply to the City Planning Commission for such finding within a reasonable time to allow the City Planning Commission to consider such finding prior to the reasonably anticipated Close of Escrow; 4.5.6 Developer Escrow Deposits. Developer deposits all of the items into Escrow required by Section 4.6; and 4.5.7 Developer Pre -Closing Obligations. Developer performs all of its material obligations required to be performed by Developer pursuant to this Agreement prior to Close of Escrow. 45636.04000\6008147.4 20 4.6 . Developer's Escrow Deposits. Developer shall deposit the following items into Escrow and, concurrently, provide a copy of each document submitted into Escrow to Agency, at least one (1) Business Day prior to the Close of Escrow: 4.6.1 Closing Funds. All amounts required to be deposited into Escrow by Developer under the terms of this Agreement to close the Escrow, including the Purchase Price, all in immediately Available funds; 4.6.2 Regulatory Agreement. The Regulatory Agreement signed by the authorized representative(s) of Developer in recordable form; 4.6.3 Agency Grant Deed and Certificate of Acceptance. The Agency Grant Deed initialed by and the Certificate of Acceptance attached to the Agency Grant Deed signed by the authorized representative(s) of Developer in recordable form; 4.6.4 Escrow Closing Statement. The Developer's Escrow Closing Statement signed by the authorized representative(s) of Developer; and 4.6.5 Other Reasonable Items. Any other documents or funds required to be delivered by Developer under the terms of this Agreement or as otherwise reasonably requested by Escrow Agent or Title Company in order to close the Escrow that have not previously been delivered by Developer. 4.7 . Agency's Escrow Deposits. Agency shall deposit the following documents into Escrow and, concurrently, provide a copy of each document deposited into Escrow to Developer, at least one (1) Business Day prior to the Close of Escrow: 4.7.1 Closing Funds. All amounts required to be deposited into Escrow by Agency under the terms of this Agreement to close the Escrow, all in immediately available funds; 4.7.2 Agency Grant Deed. The Agency Grant Deed signed by the authorized representative(s) of Agency in recordable form; 4.7.3 Escrow Closing Statement. The Agency's Escrow Closing Statement signed by the authorized representative(s) of Agency; 4.7.4 Regulatory Agreement. The Regulatory Agreement signed by the authorized representative(s) of Agency in recordable form; 4.7.5 Notice of Affordability Restrictions on Transfer of Property. The Notice of Affordability Restrictions on Transfer of Property signed by the authorized representative(s) of Agency in recordable form; 4.7.6 FIRPTA Affidavit. A FIRPTA affidavit signed by the authorized representative(s) of Agency, in the customary form provided by the Escrow Agent; 45636.04000\6008147.4 21 4.7.7 Form 593. A Form 593 signed by the authorized representative(s) of Agency; and 4.7.8 Other Reasonable Items. Any other documents or funds required to be delivered by Agency under the terms of this Agreement or as otherwise reasonably requested by Escrow Agent or Title Company in order to close the Escrow that have not been previously `delivered by Agency. 4.8 Closing Procedure. When each of Developer's Escrow deposits, as set forth in Section 4.6, and each of Agency's Escrow deposits, as set forth in Section 4.7, are deposited into Escrow, Escrow Agent shall request confirmation in writing from both Developer and Agency that each of their respective conditions precedent to the Close of Escrow, as set forth in Sections 4.4 and 4.5, respectively, are satisfied or waived. Within five (5) Business Days after Escrow Agent receives written confirmation from both Agency and Developer that each of their respective conditions precedent to the Close of Escrow are satisfied or waived, Escrow Agent shall close the Escrow by doing all of the following: 4.8.1 Recordation and Distribution of Documents. Escrow Agent shall cause the following documents to be filed with the Recorder of the County for recording in the official records of the Recorder of the County in the following order of priority at Close of Escrow: (a) the Agency Grant Deed; (b) the Regulatory Agreement; (c) the Notice of Affordability Restrictions; (d) the Security Instrument securing the Project Construction Financing (if any); and (e) any other documents to be recorded through Escrow upon the joint instructions of the Parties. At Close of Escrow, Escrow Agent shall deliver conformed copies of all documents filed for recording in the official records of the County through the Escrow to Agency, Developer and any other Person designated in the written joint escrow instructions of the Parties to receive an original or conformed copy of each such document. Each copy of a document filed for recording shall show all recording information. The Parties intend and agree that this Section 4.8.1 establishes the relative priorities of the documents to be recorded in the official records of the County through the Escrow, by providing for recordation of senior interests prior in time to junior interests, in the order provided in this Section 4.8.1; 4.8.2 Distribution of Other Documents. Escrow Agent shall deliver copies of all documents to be delivered through the Escrow that are not filed for recording to the Parties and any other Person designated in the written joint escrow instructions of the Parties to receive an original or copy of each such document. 4.8.3 Funds. Distribute all funds held by the Escrow Agent pursuant to the Escrow Closing Statements approved in writing by both Agency and Developer. 4.8.4 FIRPTA Affidavit. File the FIRPTA Affidavit with the United States Internal Revenue Service; 4.8.5 Form 593. File the Form 593 with the California Franchise Tax Board; Mrs 4.8.6 Title Policies. Obtain and deliver to Developer the Developer Title Policy issued by the Title Company. 45636.04000\6008147.4 22 4.9 Close of Escrow. The Close of Escrow shall occur on or before the Outside Closing Date. The Parties may mutually agree to change the Outside Closing Date by joint written instruction to Escrow Agent. The Executive Director is authorized to agree to one or more extensions of the Outside Closing Date on behalf of Agency up to a maximum time period extension of four (4) months in the aggregate, in the Executive Director's sole and absolute discretion. If for any reason (other than a Default or Event of Default by such Party) the Close of Escrow has not occurred on or before the Outside Closing Date, then any Party not then in Default under this Agreement may unilaterally cancel the Escrow and terminate this Agreement, without further action by the other Party (including Escrow cancellation instructions) and without liability to the other Party or any other Person for such cancellation and termination, by delivering Notice of termination to both the other Party and Escrow Agent. Following any such Notice of termination of this Agreement and cancellation of the Escrow, the Parties and Escrow Agent shall proceed pursuant to Section 4.12. Without limiting the right of either Party to cancel the Escrow and terminate this Agreement, pursuant to the first sentence of this Section 4.9, if the Escrow does not close on or before the Outside Closing Date and neither Party has exercised its contractual right to cancel the Escrow and terminate this Agreement under this Section 4.9 before the first date on which Escrow Agent Notifies both Parties that Escrow is in a position to close in accordance with the terms and conditions of this Agreement, then the Escrow shall close as soon as reasonably possible following the first date on which Escrow Agent Notifies both Parties that Escrow is in a position to close in accordance with the terms and conditions of this Agreement. 4.10 Escrow Costs. Escrow Agent shall notify Developer and Agency of the costs to be borne by each of them at the Close of Escrow by delivering an Escrow Closing Statement to both Agency and Developer at least two (2) Business Days prior to the Close of Escrow. Agency shall pay the premium charged by the Title Company for the Developer Title Policy, exclusive of any endorsements or other supplements to the coverage of the Developer Title Policy that may be requested by Developer. Developer shall pay all of the fees and other costs as the Escrow Agent may charge for the conduct of the Escrow, all recording fees, documentary transfer taxes and any and all other charges, fees and taxes levied by a Government relative to the conveyance of the Property through the Escrow and the cost of any endorsements or supplements to the coverage of the Developer Title Policy requested by Developer. 4.11 Escrow Cancellation Charges. If the Escrow fails to close due to Agency's Default under this Agreement, Agency shall pay all ordinary and reasonable Escrow and title order cancellation charges charged by Escrow Agent or Title Company, respectively. If the Escrow fails to close due to Developer's Default under this Agreement, Developer shall pay all ordinary and reasonable Escrow and title order cancellation charges charged by Escrow Agent or Title Company, respectively. If the Escrow fails to close for any reason other than the Default of either Developer or Agency, Developer and Agency shall each pay one-half (1/2) of any ordinary and reasonable Escrow and title order cancellation charges charged by Escrow Agent or Title Company, respectively. 4.12 Escrow Cancellation. If this Agreement is terminated pursuant to a contractual right granted to a Party in this Agreement to terminate this Agreement (other than due to an Event of Default by the other Party), the Parties shall do all of the following: 45636.04000\6008147.4 23 4.12.1 Cancellation Instructions. The Parties shall, within three (3) Business Days following Escrow Agent's written request, execute any reasonable Escrow cancellation instructions requested by Escrow Agent; 4.12.2 Return of Funds and Documents. Within ten (10) Business Days following receipt by the Parties of a settlement statement of Escrow and title order cancellation charges from Escrow Agent (if any) or within twenty (20) days following Notice of Termination, whichever is earlier: (a) Developer or Escrow Agent shall return to Agency all documents previously delivered by Agency to Developer or Escrow Agent regarding the Escrow; (b) Agency or Escrow Agent shall return to Developer all documents previously delivered by Developer to Agency or Escrow Agent regarding the Escrow; (c) Escrow Agent shall, except as otherwise provided for in this Agreement, return to Developer all funds deposited in Escrow, less Developer's share of customary and reasonable Escrow and title order cancellation charges (if any) in accordance with Section 4.11; and (d) Escrow Agent shall, except as otherwise provided in this Agreement, return to Agency all funds deposited in Escrow, less Agency's share of customary and reasonable Escrow and title order cancellation charges (if any) in accordance with Section 4.11. 4.13 Report to IRS. After the Close of Escrow and prior to the last date on which such report is required to be filed with the Internal Revenue Service under applicable Federal law, if such report is required pursuant to Internal Revenue Code Section 6045(e) of the Internal Revenue Code, Escrow Agent shall report the gross proceeds of the purchase and sale of the Property to the Internal Revenue Service on Form 1099-13, W-9 or such other form(s) as may be specified by the Internal Revenue Service pursuant to Internal Revenue Code Section 6045(e). Concurrently with the filing of such reporting form with the Internal Revenue Service, Escrow Agent shall deliver a copy of the filed form to both Agency and Developer. 4.14 Condemnation. If any portion of the Property or any interest in any portion of the Property becomes the subject of any eminent domain proceeding prior to Close of Escrow, including the filing of any notice of intended condemnation or proceedings in the nature of eminent domain commenced by any Government, Agency shall immediately give Notice to Developer of such occurrence and this Agreement shall terminate on the giving of such Notice. 5. PROJECT DEVELOPMENT 5.1 Developer's Covenant to Develop the Project. Developer covenants to and for the exclusive benefit of Agency that Developer shall commence, pursue and complete the development of the Project on the Property in accordance with the deadlines and other requirements of this Agreement and all applicable Laws and conditions of each Government. The covenants of this Section 5.1 shall run with the land of the Property and bind all successive owners of the Property, until the earlier of: (1) the first date on which a Certificate of Occupancy has been issued for each New Home in the Project; or (2) the forty-fifth (45th) anniversary of the date of the Close of Escrow. 5.2 Construction Start and Completion of Project. 45636.04000\6008147.4 24 5.2.1 Commencement. On or before the Project Commencement Date, Developer shall do all of the following: (a) If Developer is obtaining Project Construction Financing to finance the costs of construction of the Project, cause a Security Instrument securing repayment of the Project Construction Financing to be recorded against the Property and cause all conditions precedent to funding of the Project Construction Financing (other than progress of construction of the Project) to be satisfied; (b) If Developer is not obtaining Project Construction Financing to finance the costs of construction of the Project, Section 5.2.1(a) shall not apply, but Developer shall obtain Agency's determination in writing that sufficient sources of equity funds of Developer are committed to construction of the Project pursuant to this Agreement; and (c) Commence physical construction of the Project; 5.2.2 Construction Progress. Following the Project Commencement Date, Developer shall diligently proceed to pursue and complete the physical construction of the Project, in a good and workmanlike manner, in accordance with this Agreement, all applicable Laws and all Approvals for the Project issued by each Government. 5.2.3 Completion. On or before the Project Completion Date, Developer shall do all of the following: (a) Request the City to inspect each New Home and other building or improvement of the Project, as required by the applicable Approvals or Laws; (b) Correct any defects or deficiencies that may be disclosed by any inspection pursuant to Section 5.2.3(a); and (c) Request the City to issue all final Certificates of Occupancy or other Approvals necessary for the occupancy of the completed Project and take such other actions reasonably required to obtain all such Certificates of Occupancy or other Approvals. 5.2.4 Time Extensions. The Executive Director, in his or her sole and absolute discretion, may extend the Project Completion Date for up to an additional ninety (90) days, in the aggregate. 5.3 Compliance with Laws. All work performed in connection with the construction of the Project shall comply with all applicable Laws and Approvals. 5.4 Developer Attendance at Agency Meetings. Developer agrees to have one or more of its employees or consultants who are knowledgeable regarding this Agreement and the construction of the Project, such that such Person(s) can meaningfully respond to Agency governing body or Agency staff questions regarding the progress of the Project, attend meetings with Agency staff or meetings of the Agency governing body, when requested to do so by Agency staff, with reasonable advance Notice to Developer, but no more frequently than once a month. 45636.04000\6008147.4 25 5.5 Agency Right to Inspect Project and Property. Developer agrees that the Agency shall have the right of reasonable access to the Property, without the payment of charges or fees, during normal construction hours, during the period of construction of the Project. Any and all Agency representatives who enter the Property shall identify themselves at the construction management office or, if none, to the apparent on-site construction supervisor on the Property, upon their entrance onto the Property, shall at all times be accompanied by a Developer representative while on the Property and shall comply with all reasonable safety rules of Developer that are communicated by such Developer representative at the time of such entry onto the Property. Developer shall make a Developer representative available to accompany Agency representatives in entry upon the Property at all times during normal construction hours, upon reasonable advance Notice from Agency. Agency shall Indemnify Developer regarding Claims arising out of the exercise by Agency of the right of access to the Property provided in this Section 5.5, except to the extent that any such Claim arises from the negligence or willful misconduct of Developer or Developer's representatives. If in Agency's reasonable judgment it is necessary, Developer agrees that Agency shall have the further right, from time to time, at Agency's cost, to retain a consultant or consultants to inspect the Project and verify compliance by Developer with the provisions of this Agreement. Developer acknowledges and agrees that any such Agency inspections are for the sole purpose of protecting Agency's rights under this Agreement, are made solely for Agency's benefit, Agency's inspections may be superficial and general in nature, are for the purposes of informing Agency of the progress of the Project and the conformity of the Project with the terms and conditions of this Agreement, and Developer shall not be entitled to rely on any such inspection(s) as constituting Agency's approval, satisfaction or acceptance of any materials, workmanship, conformity of the Project with this Agreement or otherwise. Developer agrees to make its own regular inspections of the work of construction of the Project to determine that the progress and quality of the Project and all other requirements of the work of construction of the Project are being performed in a manner satisfactory to Developer. 5.6 PREVAILING WAGES. 5.6.1 RESPONSIBILITY. DEVELOPER AGREES WITH AGENCY THAT DEVELOPER SHALL ASSUME ANY AND ALL RESPONSIBILITY AND BE SOLELY RESPONSIBLE FOR DETERMINING WHETHER OR NOT LABORERS EMPLOYED RELATIVE TO THE CONSTRUCTION OF THE PROJECT MUST BE PAID THE PREVAILING PER DIEM WAGE RATE FOR THEIR LABOR CLASSIFICATION, AS DETERMINED BY THE STATE, PURSUANT TO LABOR CODE SECTIONS 1720, ET SEQ., OR PURSUANT TO APPLICABLE FEDERAL LAW. 5.6.2 AGENCY REPRESENTATION AND WARRANTY. AGENCY REPRESENTS AND WARRANTS TO DEVELOPER THAT AGENCY HAS ESTABLISHED A SEPARATE ACCOUNT FOR THE DEPOSIT OF LOW AND MODERATE INCOME HOUSING FUND MONEYS IN ACCORDANCE WITH HEALTH AND SAFETY CODE SECTION 33334.3, THAT ALL FUNDS USED BY AGENCY IN AGENCY'S PURCHASE OF THE PROPERTY, AND ANY COSTS OF DEMOLITION, SITE IMPROVEMENT, RELOCATION, MAINTENANCE, MANAGEMENT OR ANY OTHER EXPENDITURE BY AGENCY RELATED TO THE PROPERTY AND OCCURRING DURING AGENCY'S OWNERSHIP OF THE PROPERTY, WAS PAID FROM FUNDS DEPOSITED INTO SUCH 45636.04000\6008147.4 26 LOW AND MODERATE INCOME HOUSING FUND AND FROM NO OTHER FUNDS. AGENCY ACKNOWLEDGES THAT DEVELOPER MAY RELY ON AGENCY'S REPRESENTATIONS AND WARRANTIES EXPRESSLY SET FORTH IN THE IMMEDIATELY PRECEDING SENTENCE IN DETERMINING WHETHER OR NOT PREVAILING WAGES ARE REQUIRED TO BE PAID IN CONNECTION WITH THE CONSTRUCTION AND DEVELOPMENT OF THE PROJECT PURSUANT TO THIS AGREEMENT. AGENCY EXPRESSLY DISCLAIMS ANY REPRESENTATION OR WARRANTY REGARDING THE LEGAL, PRACTICAL OR OTHER EFFECT OF THE FACTS REPRESENTED OR WARRANTED BY AGENCY IN THIS SECTION 5.6.2 REGARDING WHETHER OR NOT PREVAILING WAGES ARE REQUIRED TO BE PAID IN CONNECTION WITH THE CONSTRUCTION AND DEVELOPMENT OF THE PROJECT PURSUANT TO THIS AGREEMENT. 5.6.3 WAIVERS AND RELEASES. DEVELOPER, ON BEHALF OF ITSELF, ITS SUCCESSORS, AND ASSIGNS, WAIVES AND RELEASES AGENCY FROM ANY RIGHT OF ACTION THAT MAY BE AVAILABLE TO ANY OF THEM PURSUANT TO STATE LABOR CODE SECTION 1781 OR APPLICABLE FEDERAL LAW. RELATIVE TO THE WAIVERS AND RELEASES CONTAINED IN THIS SECTION 5.6.2, DEVELOPER ACKNOWLEDGES THE PROTECTIONS OF CIVIL CODE SECTION 1542, WHICH READS AS FOLLOWS: 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 MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR. 5.6.4 INITIALS. BY INITIALING BELOW, DEVELOPER KNOWINGLY AND VOLUNTARILY WAIVES THE PROVISIONS OF SECTION 1542 SOLELY IN CONNECTION WITH THE WAIVERS AND RE ES OF SECTION 5.6.2: Inti of Authorized Developer Representative(s) 5.6.5 INDEMNITY. ADDITIONALLY, DEVELOPER SHALL INDEMNIFY AGENCY, PURSUANT TO SECTION 10.4, AGAINST ANY CLAIMS PURSUANT TO STATE LABOR CODE SECTION 1781 OR ANY OTHER LAW REQUIRING PAYMENT OF MINIMUM OR PREVAILING WAGE AMOUNTS ARISING FROM THIS AGREEMENT OR THE CONSTRUCTION OF ALL OR ANY PORTION OF THE PROJECT. 5.7 Developer Responsibility For Project Costs. The Developer acknowledges that the costs of developing the Project may exceed the financing or other funding sources available to the Developer for acquisition of the Property and development of the Project. Developer additionally acknowledges that the financing or other funding sources available to Developer for acquisition of the Property and development of the Project may be different in type or amount 45636.04000\6008]47.4 27 from those set forth in this Agreement. Accordingly, Developer acknowledges and agrees that Developer shall be responsible for paying all of the costs of acquisition of the Property and development of the Project, whether or not such costs exceed the financing or other funding sources available to the Developer for acquisition of the Property and development of the Project. Agency shall be under no obligation to contribute any financial assistance to the acquisition, development or construction of the Project. 5.8 No Agency Demolition, Construction or Financing. Agency and Developer agree that Agency is not committing to undertake or finance all or any portion of any required demolition or construction work, equipment, materials, engineering, design or any other matter associated with the Project. Developer agrees that Developer shall be solely responsible, at no cost to Agency, for all aspects of development of the Project, including planning, design, engineering, demolition of existing or other improvements on the Property, grading, construction or installation of public improvements, construction and all other activities related to development of the Project on the Property. 5.9 Completion Certificate. 5.9.1 Completion Certificate for Each New Home. Following completion of all common area improvements for the Project and the issuance of a final Certificate of Occupancy for a particular New Home in the Project by the City, Developer may request that the Agency inspect such completed New Home and issue a Completion Certificate for that particular New Home. Following the Agency's receipt of such a written request from Developer, the Executive Director shall promptly cause the particular New Home to be inspected as deemed appropriate by the Executive Director, in his or her sole and absolute discretion, to determine whether or not the New Home has been completed in compliance with this Agreement. If the Executive Director determines that the New Home is complete and in compliance with this Agreement, the Agency authorizes the Executive Director to issue a Completion Certificate for the particular New Home to Developer. If the Executive Director determines that the New Home is not complete or not in compliance with this Agreement, the Agency authorizes the Executive Director to send Notice of each non -conformity to Developer, within the later of (a) fifteen (15) calendar days following Agency's receipt of Developer's written request for a Completion Certificate; or (b) three (3) Business Days following the next regularly scheduled meeting of Agency for which such matter may be legally and reasonably placed on the agenda of such meeting for Agency consideration. The Notice shall contain the Executive Director's opinion of the action(s) Developer must take to obtain a Completion Certificate from the Executive Director for the particular New Home. If the reason for Developer's failure to complete the particular New Home in accordance with this Agreement is confined to the immediate unavailability of specific items or materials for construction or landscaping at a price reasonably acceptable to Developer or other minor Punchlist Work, the Agency authorizes the Executive Director, in his or her sole and absolute discretion, to issue a Completion Certificate upon the posting of a bond or irrevocable standby letter of credit by Developer, in form and substance reasonably acceptable to the Executive Director, in an amount representing the fair value of the work on the particular New Home remaining to be completed, as reasonably determined by the Executive Director. If the Executive Director fails to provide the Notice required in this Section 5.9.1, within the specified time period, Developer shall be deemed, conclusively and without further action of the Agency or the Executive Director, to have satisfied the requirements of this Agreement with 45636.04000\6008147.4 28 respect to the construction of the particular New Home, as if a Completion Certificate had been issued for the particular New Home by the Executive Director pursuant to this Agreement. Notwithstanding the foregoing provisions of this Section 5.9.1 or any other provision of this Agreement to the contrary, neither the Agency nor its Executive Director shall be required to issue a Completion Certificate for any New Home, unless and until all of the common area, landscaping and parking improvements for the Project are complete and the City has approved such improvements for use and occupancy. 5.9.2 Effect. A Completion Certificate shall only be evidence of the Agency's conclusive determination of satisfactory completion of the construction of the subject New Home in the Project in accordance with the terms of this Agreement. A Completion Certificate shall not constitute a Notice of Completion under California Civil Code Section 3093, nor shall it act to terminate the continuing reservations, covenants, restrictions or conditions contained in the Agency Grant Deed, Regulatory Agreement or any other instruments recorded against the Property or set forth in this Agreement or otherwise. A Completion Certificate is not evidence of the compliance of the subject New Home with any Laws or Approvals. A Completion Certificate shall not evidence the satisfaction of any obligation of Developer to the Agency under this Agreement or otherwise, other than Developer's obligation to complete the construction of the subject New Home. After the recordation of a Completion Certificate for a particular New Home, any Person then owning or thereafter purchasing, leasing or otherwise acquiring any interest in the subject New Home shall not (because of such ownership, purchase or lease) incur any obligation or liability under this Agreement regarding construction of the subject New Home, but such Person shall be bound by any other reservations, covenants, conditions, restrictions and interests affecting the subject New Home pursuant to this Agreement, the Agency Grant Deed, the Regulatory Agreement or otherwise. 6. INSURANCE 6.1 Developer. Developer shall maintain, to protect the Agency Parties against all insurable Claims resulting from the actions of Developer in connection with this Agreement, the Property and the Project, at the sole cost and expense of Developer: (a) Automobile Liability Insurance and Workers Compensation Insurance until a Completion Certificate is issued for all of the New Homes in the Project; (b) Builder's Risk Insurance until a Certificate of Occupancy is issued for the Project; and (c) Liability Insurance and Property Insurance on all areas of the Property, until sold as a completed New Home to a retail homebuyer. 6.2 Nature of Insurance. All insurance policies this Agreement requires shall be issued by carriers that: (a) are listed in the then current "Best's Key Rating Guide— Property/Casualty—United States & Canada" publication (or its equivalent, if such publication ceases to be published) with a minimum financial strength rating of "A-" and a minimum financial size category of "VII" (exception may be made for the State Compensation Insurance Fund when not specifically rated); and (b) are authorized to do business in the State by the State Department of Insurance. Workers Compensation Insurance may be placed with the State Compensation Insurance Fund. At the reasonable discretion of Agency, insurance provided by non -admitted or surplus lines carriers approved by the State Department of Insurance, with a "Best's Key Rating Guide—Property/Casualty—United States & Canada" publication (or its equivalent, if such publication ceases to be published) minimum financial strength rating of "A-" 45636.04000\6008147.4 29 and a minimum financial size category of "IX" may be accepted, if Developer evidences to Agency a reasonable need to use such non -admitted or surplus lines carriers, rather than insurers admitted by the State Department of Insurance. Developer may provide any insurance under a "blanket" or "umbrella" insurance policy, provided that: (i) such policy or a certificate of such policy shall specify the amount(s) of the total insurance allocated to the Property and the Project, which amount(s) shall equal or exceed the amount(s) required by this Agreement; and (ii) such policy otherwise complies with the insurance requirements of this Agreement. 6.3 Policy Requirements and Endorsements. All insurance policies required by this Agreement shall contain (by endorsement or otherwise) the following provisions: 6.3.1 Additional Insured/Loss Payee. Liability Insurance policies shall name the Agency Parties as "additional insured." Builder's Risk Insurance and Property Insurance policies shall name Agency as loss payee. 6.3.2 Primary Coverage. Any insurance or self-insurance maintained by the Agency Parties shall be excess of all insurance required under this Agreement and shall not contribute with any insurance required under this Agreement. 6.3.3 Deliveries to Agency. Developer shall deliver to Agency evidence of Liability Insurance prior to the commencement of any Due Diligence Investigations. Evidence of Developer's maintenance of all insurance policies required by this Agreement shall be delivered to Agency prior to the Close of Escrow. Builder's Risk Insurance shall incept no later than the time of initial contractor mobilization for the Project. No later than ten (10) days before any insurance required by this Agreement expires, is cancelled or its liability limits are reduced or exhausted, Developer shall deliver to Agency evidence of such Party's maintenance of all insurance this Agreement requires. Each insurance policy required by this Agreement shall state or be endorsed to state that coverage shall not be cancelled, suspended, voided, reduced in coverage or in limits, except after thirty (30) calendar days' advance written notice of such action has been given to Agency by certified mail, return receipt requested; provided; however, that only ten (10) days' advance written notice shall be required for any such action arising from non- payment of the premium for the insurance. Phrases such as "endeavor to" and "but failure to mail such notice shall impose no obligation or liability of any kind upon the company" shall not be included in the cancellation wording of any certificates or policies of insurance or endorsements to such policies applicable to the Agency Parties pursuant to this Agreement. 6.3.4 Waiver of Certain Claims. Developer shall cause each insurance carrier providing any Builder's Risk Insurance, Worker's Compensation Insurance or Property Insurance coverage under this Agreement to endorse their applicable policy(ies) with a Waiver of Subrogation with respect to the Agency Parties, if not already in the policy. To the extent that Developer obtains insurance with a Waiver of Subrogation, the Parties release each other, and their respective authorized representatives, from any Claims for damage to any Person or property to the extent such Claims are paid by such insurance policies obtained pursuant to and in satisfaction of the provisions of this Agreement. 6.3.5 No Representation. No Party makes any representation that the limits, scope, or forms of insurance coverage this Agreement requires are adequate or sufficient. 45636.0400016008147.4 30 6.3.6 No Claims Made Coverage. None of the insurance coverage required under this Agreement may be written on a claims -made basis. 6.3.7 Fully Paid and Non -Assessable. All insurance obtained and maintained by Developer in satisfaction of the requirements of this Agreement shall be fully paid for and non -assessable. 6.3.8 Agency Option to Obtain Coverage. During the continuance of an Event of Default arising from the failure of Developer to carry any insurance required by this Agreement, Agency may, in Agency's sole and absolute discretion, purchase any such required insurance coverage. Agency shall be entitled to immediate payment from Developer of any premiums and associated reasonable costs incurred by Agency to obtain or maintain such insurance coverage. Any amount becoming due and payable to Agency under this Section 6.3.8 that is not paid within fifteen (15) calendar days after written demand from Agency for payment of such amount, with an explanation of the amounts demanded, will bear Default Interest from the date of the demand until paid in full, with all such accrued interest. Any election by Agency to purchase or not to purchase insurance otherwise required by the terms of this Agreement to be carried by Developer shall not relieve Developer of its obligation to obtain and maintain any insurance coverage required by this Agreement. 6.3.9 Separation of Insured. All Liability Insurance and Automobile Liability Insurance shall provide for separation of insured for Developer and the Agency Parties. Insurance policies obtained in satisfaction of or in accordance with the requirements of this Agreement may provide a cross -suits exclusion for suits between named insured Persons, but shall not exclude suits between named insured Persons and additional insured Persons. 6.3.10 Deductibles and Self -Insured Retentions. Any deductibles or self- insured retentions under insurance policies required by this Agreement shall be declared to and approved by Agency. In the event of an insured loss, Developer shall pay all such deductibles or self-insured retentions regarding the Agency Parties. Each Liability Insurance or Automobile Liability Insurance policy issued in satisfaction of the requirements of this Agreement shall provide that, to the extent that Developer fails to pay all or any portion of a self-insured retention under such policy in reference to an otherwise insured loss, the Agency may pay the unpaid portion of such self-insured retention, in the Agency's sole and absolute discretion. 6.3.11 No Separate Insurance. Developer shall not carry separate or additional insurance concurrent in form or contributing in the event of loss with that required under this Agreement, unless Agency is made an additional insured thereon, as required by this Agreement for the insurance required to be carried by Developer under this Agreement. 6.3.12 Insurance Independent of Indemnification. The insurance requirements of this Agreement are independent of Developer's indemnification and other obligations under this Agreement and shall not be construed or interpreted in any way to satisfy, restrict, limit, or modify Developer's indemnification or other obligations or to limit Developer's liability under this Agreement, whether within, outside, or in excess of such coverage, and regardless of solvency or insolvency of the insurer that issues the coverage; nor shall the 4 5636.04 000160 0 8 1 4 7.4 31 provision of such insurance preclude Agency from taking such other actions as are available to it under any other provision of this Agreement or otherwise at law or in equity. 7. ONLY PERMITTED ENCUMBRANCES. Developer shall not record and shall not allow to be recorded against the Property any Security Instrument, lien or other encumbrance that is not a Permitted Encumbrance. Developer shall remove or cause to be removed any Prohibited Encumbrance made or recorded against the Property or shall assure the complete satisfaction of any such Prohibited Encumbrance to the satisfaction of the Agency, in the Agency's sole and absolute discretion. The covenants of Developer set forth in this Section 7 regarding the placement and removal of encumbrances on the Property shall run with the land of the Property and bind successive owners of the Property, until issuance (or deemed issuance) of a Completion Certificate for each New Home in the Project. 8. NOTICE OF LIENS. The Developer shall promptly Notify Agency of any Security Instrument or lien asserted against or attached to all or any portion of the Project or the Property, prior to the date of issuance of a Completion Certificate for each New Home in the Project, whether by voluntary act of Developer or otherwise; provided, however, that no Notice of filing of preliminary notices or mechanic's liens need be given by Developer to Agency, prior to suit being filed to foreclose any such mechanic's lien. 9. PROPERTY TAXES AND ASSESSMENTS. Developer shall pay, prior to delinquency, all real property taxes and assessments assessed or levied on or against the Property. Nothing in this Agreement shall be deemed to prohibit Developer from contesting the validity or amounts of any tax assessment, encumbrance or lien, nor to limit the remedies available to Developer in respect thereto, or for claiming exemptions available under State Revenue and Taxation Code Section 214(g). 10. REMEDIES AND INDEMNITY 10.1 PRE-CLOSING LIQUIDATED DAMAGES TO AGENCY. UPON THE OCCURRENCE OF AN EVENT OF DEFAULT BY DEVELOPER UNDER THIS AGREEMENT PRIOR TO THE CLOSE OF ESCROW, AGENCY MAY CANCEL THE ESCROW AND TERMINATE THIS AGREEMENT. UPON CANCELLATION OF THE ESCROW AND TERMINATION OF THIS AGREEMENT, AGENCY SHALL BE RELIEVED OF ALL OBLIGATIONS OF AGENCY UNDER THIS AGREEMENT, INCLUDING THE OBLIGATION TO SELL OR CONVEY THE PROPERTY TO DEVELOPER. ANY SUCH ESCROW CANCELLATION AND TERMINATION OF THIS AGREEMENT SHALL BE WITHOUT ANY LIABILITY OF AGENCY TO DEVELOPER OR ANY OTHER PERSON ARISING FROM SUCH ACTIONS. AGENCY AND DEVELOPER ACKNOWLEDGE THAT IT IS EXTREMELY DIFFICULT AND IMPRACTICAL TO ASCERTAIN THE AMOUNT OF DAMAGES THAT WOULD BE SUFFERED BY AGENCY, IN THE EVENT OF A CANCELLATION OF THE ESCROW AND TERMINATION OF THIS AGREEMENT DUE TO THE OCCURRENCE OF AN EVENT OF DEFAULT BY DEVELOPER UNDER THIS AGREEMENT, PRIOR TO THE CLOSE OF ESCROW. HAVING MADE DILIGENT BUT UNSUCCESSFUL ATTEMPTS TO ASCERTAIN THE ACTUAL DAMAGES AGENCY WOULD SUFFER, IN THE EVENT OF A CANCELLATION OF THE ESCROW AND TERMINATION OF THIS AGREEMENT DUE TO THE OCCURRENCE OF AN EVENT OF 45636.04000\6008147.4 - 32 DEFAULT BY DEVELOPER UNDER THIS AGREEMENT PRIOR TO THE CLOSE OF ESCROW, AGENCY AND DEVELOPER AGREE THAT A REASONABLE ESTIMATE OF AGENCY'S DAMAGES IN SUCH EVENT IS TWENTY-FIVE THOUSAND DOLLARS ($25,000). THEREFORE, UPON THE CANCELLATION OF THE ESCROW AND TERMINATION OF THIS AGREEMENT BY AGENCY DUE TO THE OCCURRENCE OF AN EVENT OF DEFAULT BY DEVELOPER UNDER THIS AGREEMENT, PRIOR TO THE CLOSE OF ESCROW, THE ESCROW AGENT SHALL IMMEDIATELY CANCEL THE ESCROW AND THE PARTIES AND ESCROW AGENT SHALL PROCEED IN ACCORDANCE WITH SECTIONS 4.12.1 AND 4.12.2. ALSO, ESCROW HOLDER SHALL PAY THE DEPOSIT (AS DEFINED IN THIS AGREEMENT) TO AGENCY, UPON ESCROW CANCELLATION, IN SATISFACTION OF DEVELOPER'S OBLIGATION TO PAY AGENCY TWENTY-FIVE THOUSAND DOLLARS ($25,000) IN LIQUIDATED DAMAGES PURSUANT TO THIS SECTION 10.1. THIS SECTION 10.1 IS DEVELOPER'S ESCROW INSTRUCTION TO ESCROW AGENT TO RELEASE THE DEPOSIT TO AGENCY UPON THE OCCURRENCE OF AN EVENT OF DEFAULT BY DEVELOPER UNDER THIS AGREEMENT PRIOR TO CLOSE OF ESCROW AND AGENCY'S CANCELLATION OF THE ESCROW AND TERMINATION OF THIS AGREEMENT PURSUANT TO THIS SECTION 10.1. RECEIPT OF THE DEPOSIT AS LIQUIDATED DAMAGES FROM DEVELOPER AS PROVIDED IN THIS SECTION 10.1 SHALL BE AGENCY'S SOLE AND EXCLUSIVE REMEDY UPON THE CANCELLATION OF THE ESCROW AND TERMINATION OF THIS AGREEMENT DUE TO THE OCCURRENCE OF AN EVENT OF DEFAULT BY DEVELOPER UNDER THIS AGREEMENT, PRIOR TO THE CLOSE OF ESCROW. Irdtials of Authorized Agency Initials 67rAhfhorized Developer Representative Representative(s) 10.2 DEVELOPER'S RIGHT TO SPECIFIC PERFORMANCE AND LIMITATION ON RECOVERY OF DAMAGES PRIOR TO CLOSE OF ESCROW. 10.2.1 ELECTION OF REMEDIES. DURING THE CONTINUANCE OF AN EVENT OF DEFAULT BY AGENCY UNDER THIS AGREEMENT PRIOR TO THE CLOSE OF ESCROW, DEVELOPER SHALL BE LIMITED TO EITHER OF THE FOLLOWING REMEDIES: (1) AN ACTION AGAINST AGENCY FOR SPECIFIC PERFORMANCE OF THIS AGREEMENT; OR (2) TERMINATION OF THIS AGREEMENT AND AN ACTION TO RECOVER UP TO A MAXIMUM AMOUNT OF TWENTY-FIVE THOUSAND DOLLARS ($25,000) OF AMOUNTS ACTUALLY PAID BY DEVELOPER PRIOR TO THE DATE OF SUCH EVENT OF DEFAULT TO THIRD PERSONS DIRECTLY RELATED TO DEVELOPER'S PERFORMANCE OF DEVELOPER'S OBLIGATIONS UNDER THIS AGREEMENT, BUT EXCLUSIVE OF AMOUNTS PAID OR ALLOCATED DIRECTLY OR INDIRECTLY TO INTERNAL COSTS OF DEVELOPER OR DEVELOPER'S EMPLOYEES, MEMBERS, SHAREHOLDERS, PARTNERS, AFFILIATES OR EMPLOYEES OR AGENTS OF ANY OF THEM. UNDER NO CIRCUMSTANCES SHALL AGENCY BE LIABLE TO DEVELOPER AS A RESULT OF AN EVENT OF 4 563 6 04000\6008147.4 33 DEFAULT BY AGENCY UNDER THIS AGREEMENT PRIOR TO CLOSE OF ESCROW FOR ANY AMOUNT EXCEEDING TWENTY-FIVE THOUSAND DOLLARS ($25,000) OR ANY SPECULATIVE, CONSEQUENTIAL, COLLATERAL, SPECIAL, PUNITIVE OR INDIRECT DAMAGES OR FOR ANY LOSS OF PROFITS SUFFERED OR CLAIMED TO HAVE BEEN SUFFERED BY DEVELOPER. 10.2.2 WAIVER OF RIGHTS. DEVELOPER ACKNOWLEDGES AND AGREES THAT AGENCY WOULD NOT HAVE ENTERED INTO THIS AGREEMENT, IF IT WERE TO BE LIABLE TO DEVELOPER FOR ANY MONETARY DAMAGES, MONETARY RECOVERY OR ANY REMEDY ARISING FROM AN EVENT OF DEFAULT UNDER THIS AGREEMENT BY AGENCY PRIOR TO THE CLOSE OF ESCROW, OTHER THAN SPECIFIC PERFORMANCE OF THIS AGREEMENT OR TERMINATION OF THIS AGREEMENT AND PAYMENT OF THE AMOUNTS SPECIFIED IN SECTION 10.1.1. ACCORDINGLY, AGENCY AND DEVELOPER AGREE THAT THE REMEDIES SPECIFICALLY PROVIDED FOR IN SECTION 10.1.1 ARE REASONABLE AND SHALL BE DEVELOPER'S SOLE AND EXCLUSIVE RIGHTS AND REMEDIES ARISING FROM AN EVENT OF DEFAULT UNDER THIS AGREEMENT BY AGENCY, DEVELOPER WAIVES ANY RIGHT TO PURSUE ANY REMEDY OR DAMAGES OTHER THAN THOSE SPECIFICALLY PROVIDED IN SECTION 10.1.1. 10.2.3 CIVIL CODE SECTION 1542 WAIVER. DEVELOPER ACKNOWLEDGES THE PROTECTIONS OF CIVIL CODE SECTION 1542 RELATIVE TO THE WAIVERS AND RELEASES CONTAINED IN THIS SECTION 10.1, WHICH CIVIL CODE SECTION READS AS FOLLOWS: 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 MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR. 10.2.4 ACKNOWLEDGMENT. BY INITIALING BELOW, DEVELOPER KNOWINGLY AND VOLUNTARILY WAIVES THE PROVISIONS OF SECTION 1542 AND ALL OTHER STATUTES AND JUDICIAL DECISIONS (WHETHER STATE OR FEDERAL) OF SIMILAR EFFECT SOLELY IN CO ECTION WITH THE WAIVERS AND RELEASES CONTAINED IN THIS SECTION 10 Initials of Authorized Developer Representative(s) 10.2.5 STATEMENT OF INTENT. CALIFORNIA CIVIL CODE SECTION 1542 NOTWITHSTANDING, IT IS THE INTENTION OF DEVELOPER TO BE BOUND BY THE LIMITATION ON DAMAGES AND REMEDIES SET FORTH IN THIS SECTION 10.1, AND DEVELOPER HEREBY RELEASES ANY AND ALL CLAIMS AGAINST AGENCY FOR MONETARY DAMAGES, MONETARY RECOVERY OR 45636.0400016008141.4 34 OTHER LEGAL OR EQUITABLE RELIEF RELATED TO ANY EVENT OF DEFAULT UNDER THIS AGREEMENT PRIOR TO THE CLOSE OF ESCROW, EXCEPT AS SPECIFICALLY PROVIDED IN THIS SECTION 10.1, WHETHER OR NOT ANY SUCH RELEASED CLAIMS WERE KNOWN OR UNKNOWN TO DEVELOPER AS OF THE EFFECTIVE DATE OF THIS AGREEMENT. 10.3 Exercise of Remedies for Default. A Party claiming a Default shall give Notice of such Default to the Party in Default, describing the Default in reasonable detail. A Party in Default shall have the opportunity to cure such Default prior to such Default becoming an Event of Default, in accordance with the provisions of Section 1.1.44. A Party shall not exercise any remedy available to that Party regarding a Default by the other Party, unless and until such Default results in an Event of Default. 10.4 Legal Actions. Either Party may institute legal action, at law or in equity, to enforce or interpret the rights or obligations of the Parties under this Agreement or recover damages, subject to the provisions of Section 10.1. 10.5 Rights and Remedies are Cumulative. Except as otherwise expressly stated in this Agreement, the rights and remedies of the Parties set forth in this Agreement are cumulative and the exercise by either Party of one or more of such rights or remedies shall not preclude the exercise by such Party, at the same or different times, of any other rights or remedies for the same Default or the same rights or remedies for any other Default by the other Party. Notwithstanding anything to the contrary in this Agreement, Agency shall have the right at all times following the Close of Escrow to exercise any or all rights, remedies or powers provided to Agency under the Agency Grant Deed or the Regulatory Agreement. 10.6 Indemnification. 10.6.1 Agency Indemnity Obligations. Agency shall Indemnify the Developer Parties against any Claim to the extent such Claim arises from any wrongful intentional act or negligence of the Agency Parties, exclusive of any violation of law relating to Agency's approval of or entry into this Agreement. Nothing in this Agreement is intended nor shall be interpreted to waive any limitation on Agency's liability, any exemption from liability in favor of Agency, any claim presentment requirement for bringing an action regarding any liability of Agency or any limitations period applicable to liability of Agency, all as set forth in Government Code Sections 800, et seq., Sections 900, et seq., or in any other law, or require Agency to Indemnify any Person (including Developer) beyond such limitations on Agency's liability. Agency shall not be required to Indemnify the Developer Parties to the extent that a Claim arises from a wrongful intentional act or negligence of the Developer Parties. 10.6.2 Developer Indemnity Obligations. Developer shall Indemnify the Agency Parties against any Claim to the extent such Claim arises from any wrongful intentional act or negligence of the Developer Parties. Developer shall also Indemnify the Agency Parties against any and all of the following: (a) any Application made by or at Developer's request; (b) any agreements that Developer (or anyone claiming by or through Developer) makes with a Third Person regarding the Property or the Project; (c) any workers compensation claim or determination relating to any employee of the Developer Parties or their contractors; (d) any 45636.04000\6008147.4 35 Prevailing Wage Action relating to this Agreement or the Project; and (e) any Environmental Claim attributable to any action or failure to act by the Developer Parties. Developer shall not be required to Indemnify the Agency Parties to the extent that a Claim arises from a wrongful intentional act or negligence of the Agency Parties. 10.6.3 Independent of Insurance Obligations. Developer's indemnification obligations under this Agreement shall not be construed or interpreted as in any way restricting, limiting, or modifying Developer's insurance or other obligations under this Agreement. Developer's obligation to Indemnify the Agency Parties under this Agreement is independent of Developer's insurance and other obligations under this Agreement. Developer's compliance with its insurance obligations and other obligations under this Agreement shall not in any way restrict, limit, or modify Developer's indemnification obligations under this Agreement and are independent of Developer's indemnification and other obligations under this Agreement. 10.6.4 Survival of Indemnification and Defense Obligations. The indemnity and defense obligations of the Parties under this Agreement shall survive the expiration or earlier termination of this Agreement, until any and all actual or prospective Claims regarding any matter subject to an indemnity obligation under this Agreement are fully, finally, absolutely and completely barred by applicable statutes of limitations. 10.6.5 Indemnification Procedures. Wherever this Agreement requires any Indemnitor to Indemnify any Indemnitee: (a) Prompt Notice. The Indemnitee shall promptly Notify the Indemnitor of any Claim. (b) Selection of Counsel. The Indemnitor shall select counsel reasonably acceptable to the Indemnitee. Counsel to Indemnitor's insurance carrier that is providing coverage for a Claim shall generally be deemed reasonably satisfactory, except in the event of a potential or actual conflict of interest for such counsel regarding such representation or Indemnitee reasonably determines that such counsel lacks competence, experience or capacity necessary to provide such representation. Even though the Indemnitor shall defend the Claim, Indemnitee may, at its option and its own expense, engage separate counsel to advise it regarding the Claim and its defense. The Indemnitee's separate counsel may attend all proceedings and meetings. The Indemnitor's counsel shall actively consult with the Indemnitee's separate counsel. (c) Cooperation. The Indemnitee shall reasonably cooperate with the Indemnitor's defense of the Indemnitee. (d) Settlement. The Indemnitor may only settle a Claim with the consent of the Indemnitee. Any settlement shall procure a complete release of the Indemnitee from the subject Claims, shall not require the Indemnitee to make any payment to the claimant and shall provide that neither the Indemnitee nor the Indemnitor on behalf of Indemnitee admits any liability. 45636.04000\600814 7.4 36 11. GENERAL PROVISIONS 11.1 Incorporation of Recitals. The Recitals of fact set forth preceding this Agreement are true and correct and are incorporated into this Agreement in their entirety by this reference. 11.2 City Not a Party. The City is not a Party to this Agreement. 11.3 Notices, Demands and Communications Between the Parties. 11.3.1 Delivery. Any and all Notices submitted by any Party to the other Party pursuant to or as required by this Agreement shall be proper, if in writing and dispatched by messenger for immediate personal delivery, nationally recognized overnight (one Business Day) courier (i.e., United Parcel Service, Federal Express, etc.) or by registered or certified United States mail, postage prepaid, return receipt requested, to the address of the recipient Party, as designated in Section 11.3.2. Notices may be sent in the same manner to such other addresses as either Party may from time to time designate by Notice in accordance with this Section 11.3. Notice shall be deemed received by the addressee, regardless of whether or when any return receipt is received by the sender or the date set forth on such return receipt, on the day that it is dispatched by messenger for immediate personal delivery, one Business Day after delivery to a nationally recognized overnight carrier or two (2) calendar days after it is placed in the United States mail in accordance with this Section 11.3.1. Any attorney representing a Party may give any Notice on behalf of such Party. 11.3.2 Addresses. The Notice addresses for the Parties, as of the Effective Date, are as follows: To Developer: City Ventures, LLC 2850 Redhill Avenue, Suite 200 Santa Ana, CA 92705 Attention: Mark Buckland, CEO With Copy To: Jon Goetz Kronick Moskovitz Tiedemann & Girard 1432 Higuera Street San Luis Obispo, CA 93401 To Agency: Redevelopment Agency of the City of Azusa 213 East Foothill Blvd. Azusa, CA 91702 Attention: Executive Director With Copy to: Elizabeth Hull, Esq. Best Best & Krieger LLP 5 Park Plaza Suite 1500 Irvine, CA 92614 45636.04000\6008147.4 37 11.4 Relationship of Parties. The Parties each intend and agree that Agency and Developer are independent contracting entities and do not intend by this Agreement to create any partnership, joint venture, or similar business arrangement, relationship or association between them. 11.5 Warranty Against Payment of Consideration for Agreement. Developer represents and warrants to the Agency that: (a) Developer has not employed or retained any Person to solicit or 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 Developer's agents, employees or representatives to any elected or appointed official or employee of either the City or the 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 11.5 shall entitle the Agency to terminate this Agreement or cancel the Escrow (or both) upon seven (7) days Notice to Developer and Escrow Agent. Upon any such termination of this Agreement, Developer shall immediately refund any payments made to or on behalf of Developer by the City or the Agency pursuant to this Agreement or otherwise related to the Property, any Approval, any CEQA Document, or the Project, prior to the date of any such termination. 11.6 No Discrimination or Segregation. Developer covenants by and for itself and all Persons claiming under or through Developer that this Agreement is made and accepted upon and subject to the following conditions: 11.6.1 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 leasing, subleasing, transferring, use, occupancy, tenure, or enjoyment of the Property nor shall Developer or any Person claiming under or through Developer 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, sublessees, subtenants, or vendees in the Property. 11.6.2 Interpretation. Notwithstanding Section 11.6.1, with respect to familial status, Section 11.6.1 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 11.6.1 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 11.6.1. 11.7 Non -liability of Agency Officials and Employees. No member, official or employee of Agency shall be personally liable to Developer, or any successor in interest to Developer, in the event of any Default by Agency under this Agreement or for any amount that 45636.04000\6008147.4 38 may become due to Developer or to Developer's successor, or on any obligations under the terms of this Agreement, except to the extent resulting from the gross negligence or willful act of such member, officer or employee. 11.8 Inspection of Books and Records. Agency shall have the right at all reasonable times, at Agency's cost and expense, to inspect the books and records of Developer pertaining to the Property or the Project. Agency shall not disclose proprietary information of Developer to Third Persons, unless required by law or otherwise resulting from or related to the pursuit of any remedies by or the assertion of any rights of Agency under this Agreement. 11.9 Calculation of Time Periods. Unless otherwise specified, all references to time periods in this Agreement measured in days shall be to consecutive calendar days, all references to time periods in this Agreement measured in months shall be to consecutive calendar months and all references to time periods in this Agreement measured in years shall be to consecutive calendar years. Any reference to Business Days in this Agreement shall mean consecutive Business Days. 11.10 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, termor 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 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. 11.11 Governing Law. The procedural and substantive laws of the State shall govem the interpretation and enforcement of this Agreement, without application of conflicts or choice of laws principles. The Parties acknowledge and agree that this Agreement is entered into, is to be fully performed in and relates to real property located in the County of Los Angeles, State of California. All legal actions arising from this Agreement shall be filed in the Superior Court of the State in and for the County or in the United States District Court with jurisdiction in the County. 11.12 Unavoidable Delay; Extension of Time of Performance. 11.12.1 Notice. Subject to any specific provisions of this Agreement stating that they are not subject to Unavoidable Delay or otherwise limiting or restricting the effects of an Unavoidable Delay, performance by either Party under this Agreement shall not be deemed or considered to be in Default, where any such Default is due to the occurrence of an Unavoidable 45636.04000\6008)47.4 - 39 Delay. Any Party claiming an Unavoidable Delay shall Notify the other Party: (a) within twenty (20) days after such Party knows of any such Unavoidable Delay; and (b) within twenty (20) 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 claiming an extension of time to perform due to an Unavoidable Delay shall exercise its commercially reasonable best efforts to cure the condition causing the Unavoidable Delays within a reasonable time. 11.12.2 Assumption of Economic Risks. 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 OR CHANGES IN THE ECONOMIC ASSUMPTIONS OF EITHER PARTY THAT MAY HAVE PROVIDED A BASIS FOR ENTERING INTO THIS AGREEMENT SHALL NOT OPERATE TO EXCUSE OR DELAY THE PERFORMANCE OF EACH AND EVERY ONE OF EACH PARTY'S OBLIGATIONS AND COVENANTS ARISING UNDER THIS AGREEMENT. ANYTHING IN THIS AGREEMENT TO THE CONTRARY NOTWITHSTANDING, THE PARTIES EXPRESSLY ASSUME THE RISK OF UNFORESEEABLE CHANGES IN ECONOMIC CIRCUMSTANCES OR MARKET DEMAND OR CONDITIONS AND WAIVE, TO THE GREATEST EXTENT ALLOWED BY LAW, ANY DEFENSE, CLAIM, OR CAUSE OF ACTION BASED IN WHOLE OR IN PART ON ECONOMIC NECESSITY, IMPRACTICABILITY, CHANGED ECONOMIC CIRCUMSTANCES, FRUSTRATION OF PURPOSE, OR SIMILAR THEORIES. THE PARTIES AGREE THAT ADVERSE CHANGES IN ECONOMIC CONDITIONS, EITHER OF THE PARTY SPECIFICALLY OR THE ECONOMY GENERALLY, OR CHANGES IN MARKET CONDITIONS OR DEMANDS, SHALL NOT OPERATE TO EXCUSE OR DELAY THE STRICT OBSERVANCE OF EACH AND EVERY ONE OF THE OBLIGATIONS, COVENANTS, CONDITIONS AND REQUIREMENTS OF THIS AGREEMENT. THE PARTIES EXPRESSLY ASSUME THE RISK OF SUCH ADVERSE ECONOMIC OR MARKET CHANGES, WHETHER OR NOT FORESEEABLE AS OF THE EFFECTIVE DATE. 474- InItials of Authorized Agency Initials of Authorized Developer Representative Representative(s) 11.13 Tax Consequences. Developer acknowledges and agrees that Developer shall bear any and all responsibility, liability, costs, and expenses connected in any way with any tax consequences experienced by Developer related to this Agreement. 11.14 Real Estate Commissions. Each Party: (a) represents and warrants that it did not engage or deal with any broker or finder in connection with this Agreement and no Person is entitled to any commission or finder's fee regarding this Agreement on account of any agreement or arrangement made by such Party; and (b) shall Indemnify the other Party against any breach of the representation and warranty set forth in clause "(a)" of this Section 11.14. 11.15 No Third -Party Beneficiaries. Nothing in this Agreement, express or implied, is intended to confer any rights or remedies under or by reason of this Agreement on any Person 45636.04000A60081424 40 other than the Parties and their respective permitted successors and assigns, nor is anything in this Agreement intended to relieve or discharge any obligation of any Third Person to any Party or give any Third Person any right of subrogation or action over or against any Party. 11.16 Developer Assumption of Risks of Legal Challenges. Developer assumes the risk of delays or damages that may result to Developer from any Third Person legal actions related to Agency's approval of this Agreement or any associated Approvals, even in the event that an error, omission or abuse of discretion by Agency is determined to have occurred. If a Third Person files a legal action regarding Agency's approval of this Agreement or any associated Approval (exclusive of legal actions alleging violation of Government Code Section 1090 by elected officials of Agency), Developer shall have the option to either: (a) cancel the Escrow and terminate this Agreement, in which case the Parties and the Escrow Agent shall proceed in accordance with Section 4.12; or (b) Indemnify Agency against such Third Person legal action, including all Legal Costs, monetary awards, sanctions, attorney fee awards, expert witness and consulting fees, and the expenses of any and all financial or performance obligations resulting from the disposition of the legal action; provided, however, that option "(a)" under this Section 11.16 shall only be available to Developer prior to the Close of Escrow. Should Developer fail to Notify Agency of Developer's election pursuant to this Section 11.16 at least fifteen (15) days before response to the legal action is required by Agency, then as of such date Developer shall be deemed to have elected to terminate this Agreement pursuant to this Section 11.16, without further Notice to or action by either Party. Agency shall reasonably cooperate with Developer in defense of the Agency in any legal action subject to this Section 11.16, subject to Developer completely performing Developer's indemnity obligations for such legal action. Should Developer elect to Indemnify Agency regarding a legal action subject to this Section 11.16, but fail to or stop providing such indemnification of Agency, then Agency shall have the right to terminate this Agreement or cancel the Escrow (or both) by Notice to Developer and Escrow Agent (if applicable). Nothing contained in this Section 11.16 is intended to be nor shall be deemed or construed to be an express or implied admission that Agency may be liable to Developer or any other Person for damages or other relief regarding any alleged or established failure of Agency to comply with any Law. Any legal action that is subject to this Section 11.16 (including any appeal periods and the pendency of any appeals) shall constitute an Unavoidable Delay and the time periods for performance by either Party under this Agreement may be extended pursuant to the provisions of this Agreement regarding Unavoidable Delay. 11.17 Effect. Subject to Section 11.21, this Agreement shall be binding upon and inure to the benefit of the Parties and their respective heirs, executors, administrators, legal representatives, successors and assigns. 11.18 Time Declared to be of the Essence. As to the performance of any obligation under this Agreement of which time is a component, the performance of such obligation within the time specified is of the essence. 11.19 Entire Agreement. This Agreement integrates all of the terms and conditions mentioned in this Agreement or incidental to this Agreement, and supersedes all negotiations or previous agreements between the Parties with respect to the Property or the Project. 45636.04000\6008147.4 41 11.20 Waivers and Amendments. All waivers of the provisions of this Agreement must be in writing and signed by the authorized representative(s) of the Party making the waiver. All amendments to this Agreement must be in writing and signed by the authorized representative(s) of both Agency and Developer. Failure to insist on any one occasion upon strict compliance with any term, covenant, condition, restriction or agreement contained in this Agreement shall not be deemed a waiver of such term, covenant, condition= restriction or agreement, nor shall any waiver or relinquishment of any rights or powers under this Agreement, at any one time or more times, be deemed a waiver or relinquishment of such right or power at any other time or times. 11.21 Prohibition Against Changes in Ownership, Management or Control of Developer or Assignment. 11.21.1 Developer Identity. Developer acknowledges and agrees that the qualifications and identity of Developer are of particular importance and concern to Agency. Developer further acknowledges and agrees that Agency has relied and is relying on the specific qualifications and identity of Developer and that Agency would not have entered into this Agreement but for the specific qualifications and identity of Developer. As a consequence, Transfers of Developer's rights or obligations under this Agreement or of all or any portion of the Property, except Transfers of ownership of New Homes after issuance of a Certificate of Occupancy for such New Home, are only permitted with the prior written consent of Agency, which may be withheld or conditioned in Agency's sole and absolute discretion. Developer represents and warrants to Agency that Developer has not made and agrees that Developer will not create or permit to be made or created any Transfer, except in accordance with this Section 11.21, either voluntarily, involuntarily or by operation of law. Any Transfer made in contravention of this Section 11.21 shall be voidable at the election of Agency. Developer acknowledges and agrees that the restrictions on Transfers set forth in this Section 11.21 are reasonable. 11.21.2 Delivery of Transfer Documents. All instruments and other legal documents proposed to effect any proposed Transfer shall be submitted to Agency for review, at least thirty-five (35) calendar days prior to the proposed date of the Transfer, and the written approval, disapproval or conditions of Agency regarding the proposed Transfer shall be provided to Developer, within thirty (30) calendar days following Agency's receipt of all proposed Transfer documents. 11.21.3 Assignment to Project Entity. Notwithstanding Section 11.21.1, Developer may assign Developer's rights under this Agreement, without Agency's consent, to a limited partnership, limited liability company or corporation, subject to all of the following conditions: (a) such assignee's sole purpose is development, ownership and operation of the Project on the Property; (b) such assignee expressly assumes all of the obligations of Developer under this Agreement in a written assumption agreement reasonably satisfactory to Agency; and (c) Developer or an Affiliate of Developer, at all times prior to issuance of a Certificate of Occupancy for each New Home within the Project, exercises Control over such assignee. Notwithstanding any assignment of this Agreement pursuant to this Section 11.21.3, Developer shall, at all times, be responsible and obligated directly to Agency for performance of Developer's obligations under this Agreement. 45636.04000\6008147.4 42 11 .22 Exhibit List. All of the exhibits attached to this Agreement are as follows: Exhibit A Property Legal Description Exhibit B Project Scope Exhibit C Notice of Affordability Restrictions Exhibit D Developer Official Action Exhibit E Agency Grant Deed Exhibit F Completion Certificate Exhibit G ' Regulatory Agreement 11.23 Executive Director Implementation. Agency shall implement this Agreement through its Executive Director. The Executive Director is hereby authorized by Agency to enter into agreements and sign documents referenced in this Agreement or reasonably required to implement this Agreement on behalf of Agency, issue approvals, interpretations or waivers and enter into certain amendments to this Agreement on behalf of Agency, to the extent that any such action(s) does/do not materially or substantially change the Project or increase the monetary obligations of Agency by more than Fifty Thousand Dollars ($50,000) in the aggregate. All other actions shall require the consideration and approval of the Agency governing body, unless expressly provided otherwise by action of the Agency governing body. Nothing in this Section 11.23 shall restrict the submission to the Agency governing body of any matter within the Executive Director's authority under this Section 11.23, in the Executive Director's sole and absolute discretion, to obtain the Agency governing body's express and specific authorization on such matter. The specific intent of this Section 11.23 is to authorize certain actions on behalf of Agency by the Executive Director, but not to require that such actions be taken by the Executive Director, without consideration by the Agency governing body. 11.24 Survival of Agreement. All of the provisions of this Agreement shall be applicable to any dispute between the Parties arising from this Agreement, whether prior to or following expiration or termination of this Agreement, until any such dispute is finally and completely resolved between the Parties, either by written settlement, entry of a non -appealable judgment or expiration of all applicable statutory limitations periods and all terms and conditions of this Agreement relating to dispute resolution, indemnification or limitations on damages or remedies shall survive any expiration or termination of this Agreement. 11.25 Counterparts. This Agreement shall be signed in three (3) originals each of which is deemed to be an original. The Parties may sign the three (3) originals in counterparts. This Agreement includes forty-four (44) pages and seven (7) exhibits (each exhibit is incorporated into this Agreement by reference) that constitute the entire understanding and Agreement of the Parties regarding the subject matter of this Agreement. 11.26 Facsimile or Electronic Signatures. Signatures delivered by facsimile or electronic means shall be binding as originals upon the Party so signing and delivering; provided, however, that original signature(s) of each Party shall be required for each document to be recorded. [Signatures on following page] 45636.04000\6008147.4 43 SIGNATURE PAGE TO DISPOSITION AND DEVELOPMENT AGREEMENT (9th & Alameda) IN WITNESS WHEREOF, the Parties have signed and entered into this Agreement by and through the signatures of their respective authorized representative(s) as follow: AGENCY: REDEVELOPMENT AGENCY OF THE CITY OF AZUSA, a California public body, corporate and politic By: F.M. elach Executive Director ATTEST: Vera Mendoza Agency Secretary APPROVED AS TO FORM: BEST BEST & KRIEGER LLP By Agency Counsel DEVELOPER: CITY VENTURES, LLC, a Delaware limited liability company 0 Title: 45636.04000\6008147.4 44 EXHIBIT A TO DISPOSITION AND DEVELOPMENT AGREEMENT (9th & Alameda) Property Legal Description inn - C,-Vf.,Ri-nom Zt tibn k. U- rr, E-?WXAQ No Address '8608-019-904 Lot: 24 Block: 14 Abbreviated Description: LOT:24 BLK:14 CITY:REGION/CLUSTER: 05/05116 M R 15-93-96 LOT 24 BLK 14 City/Muni/Twp: REGION/CLUSTER: 05/05116 906 N. Alameda Avenue 8608-019-903 Lot: 23 Block: 14 Abbreviated Description: LOT:23 BLK:14 CITY:REGION/CLUSTER: 05/05402 M R.15-93-96 LOT 23 BLK 14 City/Muni/Twp: REGION/CLUSTER: 05/05402 908 N. Alameda Avenue 8608-019-902 Lot: 22 Block: 14 Abbreviated Description: LOT:22 BLK:14 CITY:REGION/CLUSTER: 05/05116 M R 15-93-96 LOT 22 BLK 14 City/Muni/Twp: REGION/CLUSTER: 05/05116 912 N. Alameda Avenue 8608-019-901 Lot: 21 Block: 14 Abbreviated Description: LOT:21 BLK:14 CITY:REGION/CLUSTER: 05/05116 M R 15-93-96 LOT 21 BLK 14 City/Muni/Twp: REGION/CLUSTER: 05/05116 Exhibit A 4 5 63 6.04000%6008147.4 EXHIBIT B TO DISPOSITION AND DEVELOPMENT AGREEMENT (9th & Alameda) Project Scope [Attached behind this cover page] Exhibit B 45636.04000\6008147.4 7 7 A. City Ventures Ninth Street h IAL r --- Summary. Total Site: .64 acres Total Homes' 14,hornes z r4 HoMFs MW COTTAGE HOMES 10 HOMES ro 1290 S.F. average Z, A. City Ventures Ninth Street h IAL Conceptual Site Plan Ninth and Alameda RFP City Of Azusa Redevelopment Agency City Ventures and Mercy Housing I 2010323 - 05-19-11 r --- Summary. Total Site: .64 acres Total Homes' 14,hornes . Density: 21.9. homes/acre HoMFs COTTAGE HOMES 10 HOMES ro 1290 S.F. average Z, 2&3 bedrooms pcn�f ir P616 .2.5 baths .2 car tandem garages CARRIAGE HOMES 4 HOMES Typical 11755.F. average Carriage Home .2 & 3 bedrooms Si :2 baths 2 car tandem garages, OPEN SMCE Neighborhood Square 3000 51f. 2V 2"4storV setback Paseos/Walkways 4200 S.f. Private Yards 5000 S.f. Typical Miscellaneous open Space 3300 s.f. Cottage Home , Cottage homes (420 s.f./home) • Total 10 Homes - - -Carriage Homes (100 5.1/home) Total Open Space 15,500 SI "_I PARKING' Resident Garages 28 spaces Guest on -street 12 spaces Total Parking 40 spaces Power Pole. (2.8s I paces I /home) Conceptual Site Plan Ninth and Alameda RFP City Of Azusa Redevelopment Agency City Ventures and Mercy Housing I 2010323 - 05-19-11 EXHIBIT C TO DISPOSITION AND DEVELOPMENT AGREEMENT (9th & Alameda) Notice of Affordability Restrictions [Attached behind this cover page] Exhibit C 45636.04000\6008147.4 RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: Redevelopment Agency of the City of Azusa 213 East Foothill Blvd. Azusa, CA 91702 Attention: Executive Director EvIlph! SPACE ABOVE THIS LINE FOR RECORDER'S USE REDEVELOPMENT AGENCY OF THE CITY OF AZUSA NOTICE OF AFFORDABILITY RESTRICTIONS ON TRANSFER OF PROPERTY (9th & Alameda) NOTICE: Restrictions have been recorded restricting the price and terms at which the real property described below in this Notice ("Property") may be sold or rented. These affordability restrictions may limit the sales price or rents of the Property to an amount that is less than the fair market value of such amounts for the Property and limit the persons and households who are permitted to purchase or rent the Property to persons or households with certain income levels. Recorded Document Containing Affordability Restrictions: Declaration of Community Redevelopment Affordable Housing Covenants, Conditions and Restrictions (9th & Alameda) ("Affordability Restrictions") recorded (check one): as Document No. , official records of the County of Los Angeles, California, on ; or concurrently with this Notice, official records of the County of Los Angeles, California. Property Legal Description: See Exhibit "A" attached to this Notice. Property Street Address(es): , Azusa, California. Property Assessor's Parcel Number(s): Affordability Restrictions Summary (check as applicable): The Affordability Restrictions restrict the amount of rent that may be charged for rental housing units on the Property, as follows: N/A The Affordability Restrictions restrict the sales price that may be charged for the sale of one or more housing units on the Property, as follows: Two (2) of the housing units located on the Property are restricted for sale to individuals or families with an income that does not exceed the maximum allowable income of persons and families of moderate income for the County of Los Angeles, California, pursuant to Health and Safety Code Section 50093 and associated Exhibit C 45636.04000\6008147.4 regulations of the California Department of Housing and Community Development, at an "affordable housing cost " for such individuals or families, as defined in Health and Safety Code Section 50052.5 and accompanying regulations of the California Department of Housing and Community Development. The Affordability Restrictions restrict the -income level of tenants or purchasers of the Property, as follows: Two (2) of the housing units located on the Property are restricted for sale to individuals or families with an income that does not exceed the maximum allowable income of persons and families of moderate income for the County of Los Angeles, California, pursuant to Health and Safety Code Section 50093 and associated regulations of the California Department of Housing and Community Development. The Affordability Restrictions commence(d) on and terminate on (a time period of, This Notice may not contain all of the terms and conditions of the Affordability Restrictions affecting the Property. Interested persons should obtain and read a copy of the Affordability Restrictions to determine the extent of the Affordability Restrictions applicable to the Property. This Notice is recorded pursuant to and in compliance with Health and Safety Code Section 33334.3(0(3) and (4). REDEVELOPMENT AGENCY OF THE CITY OF AZUSA, a public body, corporate and politic F.M. Delach Executive Director Exhibit C 45636.04000\6008147.4 Exhibit "A" To Notice of Affordability Restrictions (9th & Alameda) Property Legal Description [TO BE PROVIDED] Exhibit C 45636.04000\6008147.4 EXHIBIT D TO DISPOSITION AND DEVELOPMENT AGREEMENT (9th & Alameda) Developer Official Action [Attached behind this cover page] Exhibit D 45636.04000\6008147.4 CERTIFICATION OF LLC AUTHORITY The undersigned members of CITY VENTURES, LLC, a Delaware limited, liability company ("LLC"), do hereby certify that we are all of the members of the LLC and that there are no other members. We further certify that the following named person(s): [INSERT NAMES OF AUTHORIZED INDIVIDUALS] be, and they are, authorized and empowered for and on behalf of and in the name of the LLC to sign, enter into, make, execute and deliver that certain Disposition and Development Agreement (9th & Alameda), dated [TO BE DETERMINED], 2011, by and between the Redevelopment Agency of the City of Azusa and the LLC ("Agreement"), and all other documents to be made or entered into by the LLC in connection with the transactions and activities contemplated in the Agreement, pursuant to which the LLC may acquire title to and develop that certain real property, generally, located at 906-912 North Alameda Avenue, in the City of Azusa, County of Los Angeles, State of California. The above-named persons are also authorized and empowered for and on behalf of and in the name of the LLC to perform the obligations of the LLC set forth in the Agreement and to take all actions that may be considered necessary or convenient to conclude the transactions and perform the obligations of the LLC pursuant to the Agreement. The authority conferred and certified to in this Certificate shall be considered retroactive and any and all acts authorized in this Certificate that were performed before the execution of this Certificate are approved and ratified. The authority conferred and certified to in this Certificate shall continue in full force and effect until the Redevelopment Agency of the City of Azusa shall have received notice in writing from all of the members of the LLC of the revocation of this Certificate. We further certify that: (1) the activities covered by the authorities certified to in this Certificate and the foregoing certifications constitute duly authorized activities of the LLC; (2) these authorities and certifications are now in full force and effect; and (3) there is no provision in any document under which the LLC is organized and/or that governs the LLC's continued existence or operation limiting the power of the undersigned to grant such authority or make the certifications set forth in this Certificate, and that the same are in conformity with the provisions of all such documents. LLC Members: [TO BE DETERMINED] [TO BE DETERMINED] Exhibit D 45636.04000\6008147.4 EXHIBIT E TO DISPOSITION AND DEVELOPMENT AGREEMENT (9th & Alameda) Ageney Grant Deed [Attached behind this cover Pagel Exhibit E 45636.04000\6008147.4 RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: [TO BE DETERMINED] APN SPACE ABOVE THIS LINE FOR RECORDER'S USE REDEVELOPMENT AGENCY OF THE CITY OF AZUSA GRANT DEED (9th & Alameda) FOR A VALUABLE CONSIDERATION, receipt of which is hereby acknowledged, REDEVELOPMENT AGENCY OF THE CITY OF AZUSA, a public body, corporate and politic ("Transferor"), does hereby grant to [TO BE DETERMINED], a [TO BE DETERMINED] ("Transferee"), all right, title and interest of Transferor in that certain real property located in the City of Azusa, County of Los Angeles, State of California, specifically described in Exhibit "A" attached to this Grant Deed ("Property") and made a part of this Grant Deed by this reference, SUBJECT TO the following retained and reserved rights and interests in the Property in favor of Transferor that shall run with the Property and bind Transferee and all successive owners of all or any portion of the Property: ASSOCIATED AGREEMENT. 1.1 Section 5.1 of that certain Disposition and Development Agreement (9th & Alameda), dated as of [TO BE DETERMINED], entered into between Transferor and Transferee ("DDA"), which reads as follows: 5.1 Developer's Covenant to Develop the Project. Developer covenants to and for the exclusive benefit of Agency that Developer shall commence, pursue and complete the development of the Project on the Property in accordance with the deadlines and other requirements of this Agreement and all applicable Laws and conditions of each Government. The covenants of this Section 5.1 shall run with the Property, until the earlier of: (1) the first date on which a Certificate of Occupancy has been issued for each New Home in the Project; or (2) the forty-fifth (45th) anniversary of the date of the Close of Escrow. Exhibit E 45636.04000\6008147.4 2. RESERVATION OF POWER OF TERMINATION REGARDING PROPERTY. 2.1 Reservation. Transferor hereby reserves a power of termination pursuant to Civil Code Sections 885.010, et seq., exercisable by Transferor, in its sole and absolute discretion, upon thirty (30) calendar days Notice to Transferee referencing this Section 2, to terminate the fee interest of Transferee in the Property or any improvements to the Property and revest such fee title in the Transferor and take possession of all or any portion of such real property and improvements, without compensation to Transferee, upon the occurrence of an "Event of Default" by Transferee under the DDA. Transferor shall not exercise such power of termination if Transferee cures the Event of Default within the thirty (30) day Notice period set forth in this Section 2.1. The power of termination reserved in this Section 2.1 shall terminate with respect to a legal parcel of land comprising a part of the Property on the date of issuance or deemed issuance of a Certificate of Occupancy for the New Home to be constructed on such parcel by the Transferee under the terms of the DDA. 2.2 Reconveyance to Transferor. Upon Transferor's exercise of its power of termination reserved in this Section 2, Transferee shall convey fee title to all legal parcels of land comprising the Property regarding which Transferor's reserved power under this Section 2 is in effect at the time of such exercise and all improvements on or to such Property to Transferor by grant deed, in accordance with Civil Code Section 1109, as such code section may hereafter be amended, renumbered, replaced or substituted. Such conveyance shall be duly acknowledged by Transferee and a notary public in a manner suitable for recordation with the County. Transferor may enforce its rights pursuant to this Section 2 by means of an injunctive relief or forfeiture of title action filed in any court of competent jurisdiction. 2.3 Disposition of Property. Upon the revesting in Transferor of title to all or any portion of the Property, whether by grant deed or court decree, Transferor shall exercise its reasonable good faith efforts to resell such Property at such Property's then fair reuse value, as soon and in such manner as Transferor shall find feasible, to a qualified and responsible Person or Persons who will assume Transferee's obligations to begin or complete or operate the Project, or for such other replacement development acceptable to Transferor, all in Transferor's sole and absolute discretion. Upon any such resale of all or a portion of the Property, the proceeds received by Transferor from such sale shall be applied, as follows: 2.3.1 First, to pay all amounts required to releaselreconvey all security instruments encumbering such Property and senior in lien position to the power reserved in this Section 2; and 2.3.2 Second, to reimburse Transferor for all actual internal and Third Person costs and expenses incurred by Transferor related to the Property, the Project or the DDA, including customary and reasonable fees or salaries to Third Person consultants (including Legal Costs) in connection with the recapture, management or resale of all or any portion of the Property; all taxes, assessments and utility charges paid by Transferor with respect to all or any portion of the Property; any payment made or necessary to be made to discharge or prevent from attaching or being made any subsequent encumbrances or liens due to obligations incurred by Transferee with respect to the Property or the development of the Project; and amounts otherwise Exhibit E 45636.04000\6008147.4 owing to Transferor from Transferee pursuant to the terms of the DDA or the Regulatory Agreement; and 2.3.3 Third, to the extent that any proceeds from such resale are, thereafter, available, to reimburse Transferee, the amount of the Third Person costs actually incurred and paid by Transferee regarding the construction of the Project, including costs of carry, taxes, and other items as set forth in a cost certification to be made by Transferee to Transferor, prior to any such reimbursement, which, certification shall be subject to Transferor's reasonable approval; provided, however, that Transferee shall not be entitled to reimbursement for any expenses relating to any loans, liens or other encumbrances that are paid by Transferor pursuant to the. provisions of Section 2.3.1 or Section 2.3.2 of this Grant Deed; and 2.3.4 Fourth, any portion of the proceeds from the resale of such Property remaining after the foregoing applications shall be retained by Transferor, as Transferor's sole and exclusive property. 2.4 Right of Re -Entry. IMMEDIATELY FOLLOWING THE THIRTY (30) DAY NOTICE PERIOD ,SPECIFIED IN SECTION 2.1, TRANSFEROR, ITS EMPLOYEES AND AGENTS SHALL HAVE THE RIGHT TO REENTER AND TAKE POSSESSION OF ALL OR ANY PORTION OF THE PROPERTY AND ANY IMPROVEMENTS ON OR TO THE PROPERTY, WITHOUT FURTHER NOTICE OR COMPENSATION TO TRANSFEREE. BY INITIALING BELOW, TRANSFEREE HEREBY EXPRESSLY WAIVES, TO THE MAXIMUM EXTENT ALLOWED BY LAW, ANY AND ALL RIGHTS THAT TRANSFEREE MAY HAVE UNDER CALIFORNIA CIVIL CODE SECTION 791 AND CALIFORNIA CODE OF CIVIL PROCEDURE SECTION 1162, AS THOSE STATUTES MAY BE AMENDED, REPLACED, RENUMBERED OR SUBSTITUTED, OR UNDER ANY OTHER STATUTES OR COMMON LAW PRINCIPLES OF SIMILAR EFFECT. Initials of Authorized Transferee Representative(s) 2.5 Transferee Acknowledgments. TRANSFEREE ACKNOWLEDGES AND AGREES THAT TRANSFEROR'S EXERCISE OF ITS POWER OF TERMINATION AND RIGHT OF REENTRY PURSUANT TO THIS SECTION 2 MAY WORK A FORFEITURE OF THE ESTATE IN THE PROPERTY CONVEYED TO TRANSFEREE THROUGH THIS GRANT DEED. TRANSFEREE HEREBY EXPRESSLY WAIVES, TO THE MAXIMUM EXTENT ALLOWED BY LAW, ANY AND ALL EQUITABLE AND LEGAL DEFENSES THAT TRANSFEREE MAY HAVE TO SUCH FORFEITURE, INCLUDING, BUT NOT LIMITED TO, THE DEFENSES OF LACHES, WAIVER, ESTOPPEL, SUBSTANTIAL PERFORMANCE OR COMPENSABLE DAMAGES. TRANSFEREE FURTHER EXPRESSLY WAIVES, TO THE MAXIMUM EXTENT ALLOWED BY LAW, ANY AND ALL RIGHTS AND DEFENSES THAT TRANSFEREE MAY HAVE UNDER CALIFORNIA CIVIL CODE SECTION 3275 OR ANY OTHER STATUTE OR COMMON LAW PRINCIPLE OF SIMILAR EFFECT. TRANSFEREE ACKNOWLEDGES THAT THE TERMS AND CONDITIONS OF THE DDA UNDER WHICH TRANSFEROR HAS MADE THIS GRANT DEED REFLECT THE POSSIBILITY OF FORFEITURE BY VIRTUE OF THE Exhibit E 45636.04000\6008147.4 EXERCISE OF TRANSFEROR'S POWER OF TERMINATION PROVIDED IN THIS SECTION 2. TRANSFEREE FURTHER ACKNOWLEDGES THAT TRANSFEREE HAS RECEIVED INDEPENDENT AND ADEQUATE CONSIDERATION FOR TRANSFEREE'S WAIVER AND RELINQUISHMENT OF RIGHTS AND REMEDIES PURSUANT TO THIS SECTION 2. Initials of Authorized Transferee Representative(s) 2.6 NO DISCRIMINATION OR SEGREGATION. Transferee, on behalf of itself and all persons claiming under or through Transferee, accepts this Grant Deed and the Property upon and subject to the following conditions: 2.7 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 leasing, subleasing, transferring, use, occupancy, tenure, or enjoyment of the Property nor shall Developer or any Person claiming under or through Developer 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, sublessees, subtenants, or vendees in the Property. 2.8 Interpretation. Notwithstanding Section 3.1, with respect to familial status, Section 3.1 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 3.1 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 3.1. f Remainder of page intentionally left blank] Exhibit E 45636.04000\6008147.4 2.9 INCORPORATION OF DDA DEFINITIONS. Any terms indicated to be defined terms by initial capitalization in this Grant Deed that are not specifically defined in this Grant Deed shall have the meaning ascribed to the same term in the DDA. REDEVELOPMENT AGENCY OF THE CITY OF AZUSA, a public body, corporate and politic F.M. Delach Executive Director Exhibit E 45636.04000\6008147.4 Exhibit "A" To Grant Deed (9th & Alameda) Property Legal Description [TO BE PROVIDED] Exhibit E 45636.04000\6008147.4 Certificate of Acceptance of Grant Deed (9th & Alameda) This is to certify that the interest in real property conveyed by the attached Grant Deed from the REDEVELOPMENT AGENCY OF THE CITY OF AZUSA, a public body, corporate and politic, to [TO BE DETERMINED], a [TO BE DETERMINED], is hereby accepted by the undersigned officer(s) on behalf of [TO BE DETERMINED] and [TO BE DETERMINED] consents to recordation of such Grant Deed in the official records of the County of Los Angeles, California. [TO BE DETERMINED], a [TO BE DETERMINED] Exhibit E 45636.0400016008147.4 EXHIBIT F TO DISPOSITION AND DEVELOPMENT AGREEMENT (9th & Alameda) Completion Certificate [Attached behind this cover page] Exhibit F 45636.04000\6008147.4 RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: [TO BE DETERMINED] APN SPACE ABOVE THIS LINE FOR RECORDER'S USE REDEVELOPMENT AGENCY OF THE CITY OF AZUSA COMPLETION CERTIFICATE Disposition and Development Agreement (9th & Alameda) In his or her capacity as Executive Director of the Redevelopment Agency of the City of Azusa, a public body, corporate and politic ("Agency"), the undersigned certifies that: (1) the Agency and [TO BE DETERMINED], a [TO BE DETERMINED] ("Developer"), are parties to that certain Disposition and Development Agreement (9th & Alameda), dated as of [TO BE DETERMINED] ("Agreement"); and (2) the portion of the Project described in the Agreement as the Nev.- Home required to be constructed pursuant to the Agreement on that certain real property specifically described in the legal description attached to this Completion Certificate as Exhibit "A" is complete in accordance with the provisions of the Agreement. This Completion Certificate constitutes conclusive evidence that the Developer's obligation under the Agreement to construct the New Home on the Property has been satisfied, including any and all buildings, parking areas, landscaping areas and related improvements necessary to support or meet any requirements applicable to the New Home and its use and occupancy, exclusive of any Punchlist Work. Notwithstanding any other provision of this Completion Certificate, the operating, use, maintenance, non-discrimination, non -segregation, construction and other terms, provisions, covenants, conditions, restrictions and agreements set forth in the Agreement or the Regulatory Agreement, other than those specifically requiring construction of the New Home on the Property, shall continue in full force and effect and the Agency may enforce any and all such terms, provisions, covenants, conditions, restrictions or agreements in accordance with the Agreement or the Regulatory Agreement. Nothing contained in this Completion Certificate shall waive or modify any term, provision, covenant, condition, restriction or agreement contained in any other document. The Agreement and the Regulatory Agreement are official records of the Agency and a copy of the Agreement or the Regulatory Agreement may be inspected in the offices of the Agency located at 213 East Foothill Blvd., Azusa, California 91702, during the regular business hours of the Agency. All terms indicated to be defined terms in this Completion Certificate by initial capitalization, but not specifically defined in this Completion Certificate, shall have the meaning ascribed to the same term in the Agreement. Exhibit F 45636.04000\6008147.4 ISSUED as of [TO BE DETERMINED]. F.M. Delach Executive Director Exhibit F 45636.04000\6008147.4 NOTARY ACKNOWLEDGMENT (California All -Purpose Acknowledgment) STATE OF CALIFORNIA ) ) ss. COUNTY OF LOS ANGELES ) On , before me, , notary public, personally appeared who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature of Notary Public ATTACHED TO: COMPLETION CERTIFICATE [Disposition and Development Agreement (9th & Alameda)] Exhibit F 45636.0400016008147.4 EXHIBIT "A" TO COMPLETION CERTIFICATE DISPOSITION AND DEVELOPMENT AGREEMENT (9th & Alameda) Property Legal Description [TO BE PROVIDED] Exhibit F 45636.04000\6006147.4 EXHIBIT G TO DISPOSITION AND DEVELOPMENT AGREEMENT (9th & Alameda) Regulatory Agreement [Attached behind this cover page] Exhibit G 45636.04000\6008147.4 RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: Redevelopment Agency of the City of Azusa 213 East Foothill Blvd. Azusa, CA 91702 Attention: Executive Director EXEMPT FROM RECORDING FEES PURSUANT TO GOVT. CODE § 2783 REDEVELOPMENT AGENCY OF THE CITY OF AZUSA DECLARATION OF COMMUNITY REDEVELOPMENT AFFORDABLE HOUSING COVENANTS, CONDITIONS AND RESTRICTIONS (9th & Alameda) THIS DECLARATION OF COMMUNITY REDEVELOPMENT AFFORDABLE HOUSING COVENANTS, CONDITIONS AND RESTRICTIONS (this "Declaration") is dated as of [TO BE DETERMINED] ("Effective Date"), and is made and entered into by and between the REDEVELOPMENT AGENCY OF THE CITY OF AZUSA, a public body, corporate and politic ("Agency"), and [TO BE DETERMINED], a [TO BE DETERMINED] ("Developer"), with reference to the following recited facts (each, a "Recital'). RECITALS A. Developer purchased that certain real property specifically described in Exhibit "A" to this Regulatory Agreement ("Property") from Agency pursuant to the terms of that certain Disposition and Development Agreement (9th & Alameda), dated as of [TO BE DETERMINED], 2011, between Agency and Developer ("DDA"); B. The Property is located in an area of the City of Azusa that is subject to a redevelopment plan adopted by the City of Azusa ("Project Area"); C. The Developer is obligated under the terms of the DDA to construct fourteen (14) New Homes on the Property, including two (2) Affordable Homes (as defined in Section 1 of this Declaration), as more specifically described in the DDA ("Project"), and convey each Affordable Home to a Qualifying Household (as defined in Section 1 of this Declaration) at an Affordable Housing Cost (as defined in Section 1 of this Declaration), all for the purpose of increasing and improving the supply of affordable owner -occupied housing in the Project Area; D. This Declaration is intended, among other purposes, to restrict the use of the Property to affordable housing for Qualifying Households at Affordable Housing Cost, until recordation of a final condominium map for the Project (pursuant to Sections 2.2 through 2.4 of Exhibit G 45636.0400016008147.4 this Declaration), after which time this Declaration is intended to only restrict the use of the legal parcels designated for development of the two Affordable Homes until the passage of forty-five (45) years following the date of the original conveyance of both of the Affordable Homes to Qualifying Households at an Affordable Housing Cost for occupancy by Qualifying Households as their primary residences, but not to restrict the use of the other twelve (12) New Homes to be constructed on the Property as part of the Project (except as set forth in Section 2.4); NOW, THEREFORE, IN CONSIDERATION OF THE PROMISES, COVENANTS AND UNDERTAKINGS SET FORTH IN THIS DECLARATION AND FOR OTHER GOOD AND VALUABLE CONSIDERATION, THE RECEIPT AND SUFFICIENCY OF WHICH IS HEREBY ACKNOWLEDGED, DEVELOPER AND AGENCY COVENANT, DECLARE AND AGREE FOR THEMSELVES, THEIR SUCCESSORS AND ASSIGNS, AS FOLLOWS: 1. DEFINITIONS. As used in this Declaration, the following words, phrases and terms shall have the meaning as provided in the initial paragraph of this Declaration, in the Recitals or in this Section 1, unless the specific context of usage of a particular word, phrase or term requires otherwise: 1.1 Affordable Home. Each of the two (2) separate residential dwelling units in the Project constructed or to be constructed on the Property for sale to Qualifying Households, whether in the form of a single-family residence, town -home, condominium or another form, and the associated legal parcel of the Property on or in which each dwelling unit is located, respectively. 1.2 Affordable Housing Cost. An "affordable housing cost" as defined in Health and Safety Code Section 50052.5 and accompanying regulations of the California Department of Housing and Community Development. 1.3 Affordability Period. The time period beginning on the Effective Date and ending on the forty-fifth (45th) anniversary of the Completion Date. 1.4 City. The City of Azusa, California, a municipal corporation. 1.5 Certificate of Occupancy. A Certificate of Occupancy as defined in the 2010 California Building Code, which is based on the 2009 International Building Code, as adopted by the City. 1.6 Completion Date. As to each Affordable Home, the first date on which fee title to such Affordable Home is conveyed by Owner to a Qualifying Household at an Affordable Housing Cost. 1.7 Default. Any Monetary Default or Non -Monetary Default. 1.8 Default Interest. Interest at an annual rate equal to the lesser of. (a) eight percent (8%) per annum; or (b) the Usury Limit. 1.9 Developer Transfer Notice. Defined in Section 2.8.1. Exhibit G 4563 6.04000\6008147.4 1.10 Event of Default. The occurrence of any one or more of the following: 1.10.1 Monetary Default. A Monetary Default that continues for ten (10) calendar days after Notice to the defaulting Party from Agency, specifying in reasonable detail the amount of money not paid and the nature and calculation of each such payment; 1.10.2 Non -Monetary Default. Any Non -Monetary Default that is not cured within thirty (30) days after Notice to the defaulting Party from Agency describing the Non - Monetary Default in reasonable detail, or, in the case of a Non -Monetary Default that cannot with reasonable diligence be cured within thirty (30) days after the effective date of such Notice, if the defaulting Party does not do all of the following: (a) within thirty (30) days after Notice of such Non -Monetary Default, advise Agency of the intention of the defaulting Party to take all reasonable steps to cure such Non -Monetary Default; (b) duly commence such cure within such period, and then diligently prosecute such cure to completion; and (c) complete such cure within a reasonable time under the circumstances. 1.11 Exempt Transfer. Defined in Section 3.9. 1.12 Maintenance Deficiency. The occurrence of an adverse condition on any area of the specified property in contravention of the Maintenance Standard . 1.13 Maintenance Standard. Maintenance of the specified property in good condition and repair and a neat, clean and orderly condition, including, without limitation, maintenance, repair, reconstruction and replacement of any and all asphalt, concrete, landscaping, utility systems, irrigation systems, drainage facilities or systems, grading, subsidence, retaining walls or similar support structures, foundations, ornamentation, and all other improvements on or to the specified property, now existing or made in the future by or with the consent of the Person specified as having the obligation to maintain the specified property, as necessary to maintain the appearance and character of the specified property, including all of the following: (a) maintaining the surfaces in a level, smooth and evenly covered condition; (b) removing all papers, mud, sand, debris, filth and refuse and sweeping areas to the extent reasonably necessary to keep areas in a clean and orderly condition; (c) removing or covering graffiti with the type of surface covering originally used on the affected area, (d) installing, operating, keeping in repair and replacing where necessary, such artificial lighting facilities as shall be reasonably required; (e) maintaining, mowing, weeding, trimming and watering all landscaped areas and making such replacements of plants and other landscaping material as necessary to maintain the appearance and character of the landscaping; (f) properly maintaining windows, structural elements, and painted exterior surface areas of improvements in a clean and presentable manner; (g) keeping outdoor areas free of accumulated debris, appliances, inoperable motor vehicles or motor vehicle parts, or free of storage of lumber, building materials or equipment; (h) parking of any commercial motor vehicle in excess of 10,000 pounds gross weight anywhere at the specified property on other than on a temporary basis; and (i) the use of garage areas for purposes other than the parking of motor vehicles and the storage of personal possessions of the owners or occupants of the specified property. 1.14 Monetary Default. Any failure by Developer or Owner, as applicable, to pay or deposit, when and as this Declaration requires, any amount of money, any bond or surety or Exhibit G 45636.04000\6008147.4 evidence of any insurance coverage required to be provided under this Declaration, whether to or with the Agency or a Third Person. 1.15 Non -Monetary Default. Any or all of the following, excepting any such failure constituting a Monetary Default: (a) failure of a Party to perform any of its obligations under this Declaration; (b) failure of a Party to comply with any affirmative or negative covenant or material restriction or prohibition in this Declaration; or (c) occurrence of any other event or circumstance that, with the passage of time or giving of Notice, or both, or neither, would constitute a breach of this Declaration by a Party. 1.16 Notice. Any consent, demand, designation, election, notice, or request relating to this Declaration, including any Notice of Default. All Notices must be in writing. 1.17 Notice of Default. Any Notice claiming or giving Notice of a Default or alleged Default. 1.18 Owner. Each Qualifying Household purchaser of an Affordable Home in compliance with this Declaration. 1.19 Parties. Collectively, Agency, Developer and, after acquisition of an Affordable Home, such Affordable Home's Owner. 1.20 Party. Individually, either Agency, Developer or, after acquisition of an Affordable Home, such Affordable Home's Owner, as applicable. 1.21 Person. Any association, corporation, governmental entity or agency, individual, joint venture, joint-stock company, limited liability company, partnership, trust, unincorporated organization or other entity of any kind. 1.22 Property. That certain real property located within the City of Azusa, County of Los Angeles, State of California, specifically described in the legal descriptions attached as Exhibit "A" to this Declaration, which is incorporated into this Declaration by this reference. 1.23 Purchase Money Deed of Trust. A deed of trust recorded against the Owner's title to its Affordable Home securing repayment of such Owner's then current Purchase Money Loan. 1.24 Purchase Money Loan. A loan from a Federal or State chartered bank, savings and loan or credit union to the then current Owner of an Affordable Home, the proceeds of which were entirely used by such Owner to acquire title to the subject Affordable Home. 1.25 Purchase Price. The amount paid by the then current Owner of the subject Affordable Home to acquire title to the Affordable Home from the Developer or the previous Owner of the Affordable Home, plus any associated Sale Costs paid by the then current Owner. 1.26 Qualifying Household. An individual or family with an income that does not exceed the maximum allowable income of persons and families of moderate income for the Exhibit G 45636.04000\6008147.4 County pursuant to Health and Safety Code Section 50093 and associated regulations of the California Department of Housing and Community Development. 1.27 Record, recorded, recording or recordation. Recordation of the referenced document in the official records of the County. 1.28 Resale. Transfer of an Affordable Home by its Owner: 1.29 Resale Purchaser. Transferee of an Affordable Home from the Affordable Home's immediately prior Owner. 1.30 Resale Transfer Notice. Defined in Section 3.8.1. 1.31 Sale Costs. All of the following related to a Transfer of an Affordable Home: (a) the seller's portion of any closing costs; (b) the actual cost of necessary health and safety related repairs to the Affordable Home; and (c) costs of obtaining homeowners association documents (if any). 1.32 Third Person. Any Person that is not a Party, an affiliate of a Party, a relative of a Party or an elected official, officer, director, manager, shareholder, member, principal, partner, employee or agent of a Party. 1.33 Transfer. Regarding any property, right or obligation means any of the following, whether by operation of law or otherwise, whether voluntary or involuntary, and whether direct or indirect, any assignment, conveyance, grant, hypothecation, mortgage, pledge, sale, or other transfer, whether direct or indirect, of all or any part of such property, right or obligation, or of any legal, beneficial, or equitable interest or estate in such property, right or obligation or any part of it (including the grant of any easement, lien, or other encumbrance) or any change in the occupancy of any Property from being occupied by Owner as Owner's principal residence to being rented by Owner to any other person, exclusive of any of the following (provided that the Agency has received written notice of such occurrence) relating to the Property: (a) a mere change in form of ownership with no material change in beneficial ownership and such change in ownership is a tax-free transaction under United States income tax law and the State of California real estate transfer tax law; (b) a conveyance only to member(s) of the immediate family(ies) of the transferor(s) or trusts for their benefit; or (c) a collateral conveyance pursuant to a Purchase Money Deed of Trust. 1.34 Unavoidable Delay. A delay in a Party performing any obligation under this Declaration, arising from or on account of any cause whatsoever beyond the Party's reasonable control, including strikes, labor troubles or other union activities, casualty, war, acts of terrorism, riots, litigation, governmental action or inaction, regional natural disasters or inability to obtain required materials. Unavoidable Delay shall not include delay caused by a Party's financial condition, illiquidity, or insolvency. 1.35 Usury Limit. The highest rate of interest, if any, that Law allows under the circumstances. Exhibit G 45636.04000\6008147.4 2. DEVELOPER COVENANTS 2.1 Acknowledgment of Potential Impact of Declaration. Developer acknowledges and agrees that Agency has informed Developer that this Declaration imposes certain restrictions on the occupancy and resale of the Property during the Affordability Period. Developer agrees that the Agency may record this Declaration against the Property in the official records of the County of Los Angeles, California. Initials of Authorized Developer Representative 2.2 Release of Certain Real Property upon Recordation of Final Subdivision Map. Following recordation of a final map approved by the City for the Project, in accordance with the California Subdivision Map Act (California Government Code Section 66410, et seq.), Developer's satisfaction of all requirements of the Davis -Stirling Common Interest Development Act (California Civil Code Section 1350, et seq.) to create the Project as a condominium project, as defined in such act, following written request from Developer for such release and as long as Developer is not in Default under this Declaration or the DDA, Agency shall sign an instrument, in recordable form, releasing those separate interests in the condominium project that are not designated for development of Affordable Homes from the provisions of this Declaration, except the provisions of Sections 2.4, 2.5, 2.6 or 2.7. Notwithstanding any such release of property from the obligations of this Declaration, all obligations and liabilities of Developer arising pursuant to this Declaration prior to the time of any such release shall survive and continue following such release, until completely satisfied. The form and substance of any release document shall be subject to the reasonable approval of Agency. Prior to the Agency being obligated to make the release described in this Section 2.2, Agency and Developer shall have agreed on which condominium units within the Project will be designated for development of Affordable Homes. 2.3 Reservation of Property for Affordable Housing. Developer, on behalf of itself and each successor or assign of Developer, including each Owner, covenants and agrees that throughout the Affordability Period: (a) the Property, including each Affordable Home, shall be reserved and restricted for ownership and residential use and occupancy as the primary residence of a Qualifying Household at an Affordable Housing Cost; (b) neither Developer nor any Owner shall lease, sublease or rent all or any portion of the Property, including each Affordable Home, to any Person, except as expressly provided in Section 3.10; (c) neither Developer nor any Owner shall Transfer all or any portion of the Property, including each Affordable Home, to any Person who is not a Qualifying Household; (d) neither Developer nor any Owner shall Transfer all or any portion of the Property, including each Affordable Home, to a Qualifying Household for more than an Affordable Housing Cost for such Qualifying Household; and (e) neither Developer nor any Owner shall Transfer all or any portion of the Property, including each Affordable Home, to a Qualifying Household for a use other thansuch Qualifying Household's primary residence. 2.4 Developer Covenant to Build Project. Developer covenants to and for the exclusive benefit of Agency that Developer shall commence, pursue and complete the Exhibit G 45636.04000\6008147.4 development of the Project in accordance with the deadlines and other requirements of the DDA. The covenants of Developer under this Section 2.4 shall run with the land of the Property and bind all successor owners of the Property until the earlier of: (1) the first date on which a final Certificate of Occupancy has been issued by the City for each of the New Homes in the Project; or (2) the forty-fifth (45th) anniversary of the Effective Date. 2.5 Developer Covenant Regarding No Discrimination or Segregation. Developer covenants by and for itself and all Persons claiming under or through Developer 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 leasing, subleasing, transferring, use, occupancy, tenure, or enjoyment of the Property nor shall Developer or any Person claiming under or through Developer 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, sublessees, subtenants, or vendees in the Property. Notwithstanding the first sentence of this Section 2.5, with respect to familial status, this Section 2.5 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 this Section 2.5 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 this Section 2.5. 2.6 Agency Right to Inspect Property. Developer agrees that Agency shall have the right of reasonable access to the Property, without the payment of charges or fees, during normal construction hours, during the period of construction of the Project. Any and all Agency representatives who enter the Property shall identify themselves at the construction management office or, if none, to the apparent on-site construction supervisor on the Property, upon their entrance onto the Property, shall at all times be accompanied by a Developer representative while on the Property and shall comply with all reasonable safety rules of Developer that are communicated by such Developer representative at the time of such entry onto the Property. Developer shall make a Developer representative available to accompany Agency representatives in entry upon the Property at all times during normal construction hours, upon reasonable advance Notice from Agency. If in Agency's reasonable judgment it is necessary, Developer agrees that Agency shall have the further right, from time to time, at Agency's cost, to retain a consultant or consultants to inspect the Project and verify compliance by Developer with the provisions of this Declaration or the DDA. Developer acknowledges and agrees that any such Agency inspections are for the sole purpose of protecting Agency's rights under this Declaration or the DDA, are made solely for Agency's benefit, may be superficial and general in nature, are for the purposes of informing Agency of the progress of the Project and the conformity of the Project with the terms and conditions of this Declaration or the DDA, and Developer shall not be entitled to rely on any such inspection(s) as constituting Agency's approval, satisfaction or acceptance of any materials, workmanship, conformity of the Project with this Declaration, the DDA or otherwise. Developer agrees to make its own regular inspections of the work of construction of the Project to determine that the progress and quality of the Project and all other Exhibit G 45636.04000\6008147.4 requirements of the work of construction of the Project are being performed in a manner satisfactory to Developer. 2.7 Developer Property Maintenance. Developer, for itself, its successors and assigns, covenants and agrees that: 2.7.1 Maintenance Obligation. All portions of the Property owned or controlled by Developer shall be continuously maintained by Developer, at Developer's sole cost and expense, in accordance with the Maintenance Standard. 2.7.2 Agency Remedies. During the continuance of a Maintenance Deficiency regarding any portion of the Property owned or controlled by Developer, the Agency may send Notice to Developer of the Maintenance Deficiency. If Developer fails to cure or commence and diligently pursue to cure the Maintenance Deficiency within thirty (30) calendar days following delivery of Notice of the Maintenance Deficiency, Agency may conduct a public hearing, following transmittal of Notice of the public hearing to Developer, at least, ten (10) days prior to the scheduled date of such public hearing, to verify whether a Maintenance Deficiency regarding the Property exists. If, upon the conclusion of the public hearing, Agency finds that a Maintenance Deficiency exists and remains uncured, Agency shall have the right to enter the affected portion of the Property and perform all acts necessary to cure the Maintenance Deficiency or to take any other action at law or in equity that may then be available to Agency to accomplish the abatement of the Maintenance Deficiency. Any sum expended by Agency for the abatement of a Maintenance Deficiency pursuant to this Section 2.7.2 shall be reimbursed to Agency by Developer within thirty (30) calendar days after Notice to Developer requesting payment. If any amount becoming due to Agency under this Section 2.7.2 is not paid within thirty (30) calendar days after Notice to Developer requesting payment, Developer shall also pay Default Interest on such amount, until such amount is paid in full. 2.8 First Sale of Completed Affordable Homes by Developer. 2.8.1 Agency Notice. Developer, for itself, its successors and assigns, hereby covenants and agrees that Developer shall not Transfer an Affordable Home (or any interest in an Affordable Home), without first giving Notice to Agency (each, a "Developer Transfer Notice") and obtaining the written concurrence of Agency that the proposed Transfer complies with this Declaration. Within fifteen (15) days following the receipt of a Developer Transfer Notice, Agency shall deliver to Developer a written concurrence or objection to the Transfer of the Affordable Home. Each Developer Transfer Notice shall include all of the following information: (a) the identity of the proposed First Purchaser, including the identity of all persons in the household of the proposed First Purchaser proposing to reside in the Affordable Home; (b) all of the documentation described in Section 3.4 regarding the household of the proposed First Purchaser; (c) the proposed sale price of the Affordable Home payable by the proposed First Purchaser, including the terms of the Purchase Money Loan to be obtained by the Exhibit G 4 563 6.04000\6008147.4 proposed First Purchaser and the estimated amount of Sale Costs, real estate broker fees and other costs or charges payable by the proposed First Purchaser to acquire ownership of the Affordable Home; (d) the name, address, and telephone number of the escrow agent proposed to conduct the escrow for the Transfer of the Affordable Home from Developer to the proposed First Purchaser; (e) a written acknowledgment and agreement from the proposed First Purchaser for the benefit of Agency that the ownership and occupancy of the subject Affordable Home is subject to this Declaration; and (i) such other information as Agency may reasonably request. 2.8.2 First Purchaser Qualifications. Developer acknowledges and agrees that, in accordance with Section 2.3, each proposed First Purchaser of an Affordable Home must be a Qualifying Household, the proposed sale price of an Affordable Home to a First Purchaser must be an Affordable Housing Cost for such First Purchaser and the First Purchaser must occupy the Affordable Home as its principal residence. Developer further agrees that Agency shall have the right and reasonable opportunity, prior to each conveyance of an Affordable Home to a First Purchaser, to verify that each proposed sale of the Affordable Home will be to a Qualifying Household at an Affordable Housing Cost for such Qualifying Household and that the First Purchaser intends to occupy the Affordable Home as its principal residence after acquiring title to the Affordable Home. 2.8.3 Effect of First Sale on Developer Obligations. Upon conveyance of an Affordable Home to a First Purchaser in compliance with this Declaration, Developer's obligations under Sections 2.4 and 2.7 shall be satisfied regarding the subject Affordable Home and the particular Affordable Home shall be subject to all of the covenants of Section 3, in addition to being subject to all of the other covenants, conditions, restrictions and agreements of this Declaration. 3. OWNER COVENANTS 3.1 Owner Covenants of Qualification to Own Affordable Home. Owner hereby covenants, represents and warrants to Agency that as of the date on which such Owner is approved by Developer for acquisition of an Affordable Home, the total household income for such Owner did not exceed the maximum household income permitted for a Qualifying Household. Owner hereby further covenants, represents and warrants to Agency that, as of the date on which such Owner acquires title to its Affordable Home: (a) Owner shall promptly occupy the Affordable Home after the date on which such Owner acquires title to its Affordable Home as Owner's principal place of residence; (b) Owner has not entered into any arrangement to, and shall not sell, lease, rent, transfer or assign the Affordable Home to any Third Person during the Affordability Period, except as expressly allowed by this Declaration for resale to a Qualifying Household at an Affordable Housing Cost (except as provided in Section 3.10); (c) Owner has no present intention to and will not lease or rent any room or sublet or rent a portion of the Affordable Home to any relative of the Owner or to any Third Person (except as provided Exhibit G 45636.040006008147.4 in Section 3.10); and (d) the aggregate sum payable each month by Owner following Owner's acquisition of title to its Affordable Home towards principal and interest on such Owner's Purchase Money Loan, any loan insurance fees associated with such loans, property taxes and assessments, fire and casualty insurance covering replacement value of property improvements, property maintenance and repairs, a reasonable allowance for utilities, including garbage collection, sewer, water, electricity, gas, and other heating, cooking and refrigeration fuels, but exclusive of telephone service, and home owner association fees, all in relation to the Affordable Home, does not exceed an Affordable Housing Cost for the Owner's household. 3.2 Owner Voluntary Submission to Declaration. Owner acknowledges that, without the limitations imposed by this Declaration, Owner would not have been able to acquire its Affordable Home. Therefore, Owner agrees that all of the covenants, conditions and restrictions created by this Declaration are: (a) required to increase and preserve housing available to Qualifying Households in the City; (b) reasonable in light of their purposes; and (c) approved in every -respect by Owner. Owner acknowledges that in acquiring its Affordable Home, the sole and exclusive benefit sought by Owner was decent and affordable shelter and Owner has received such benefit. Owner further acknowledges that ownership of its Affordable Home is not intended to give Owner a business opportunity or right, expectation or entitlement to any profits from any sale of its Affordable Home. Therefore, Owner agrees not to challenge the covenants, conditions or restrictions of this Declaration or any right of Developer or Agency created under this Declaration and acknowledges and agrees that the covenants, conditions or restrictions of this Declaration are not an unreasonable restraint on any right of Owner to Transfer all or any part of Owner's Affordable Home. 3.3 Residency Verification. Owner for itself, its heirs, successors and assigns, covenants and agrees that Agency shall have the right and reasonable opportunity, at least once every twelve (12) months, to verify Owner's continued occupancy of such Owner's Affordable Home as its principal place of residence and Owner agrees to cooperate in providing evidence of such residency. 3.4 Occupant Income Information. Each Owner covenants and agrees to provide any or all of the following information or documentation to Agency, upon request by Agency: (1) copies of filed Federal and State income tax returns and copy of each W2 Wage and Earnings Statement for the three (3) most recently concluded income tax years for each adult Person in the Owner's household; (2) an income verification form from the current employer(s) of all employed adult Person's in the Owner's Household; (3) an income verification form from the United States Social Security Administration or the California Department of Social Services for each Person in the Owner's household who receives assistance from either of such agencies (if any); or (4) for each adult Person in the Owner's household who is unemployed or has no such income tax return, another form of independent income verification. 3.5 Household Income Changes. Each Affordable Home will continue to be treated as occupied by a Qualifying Household, even if during Owner's residency, Owner's household ceases to be a Qualifying Household, as long as Owner's household was a Qualifying Household on the date Owner acquired title to its Affordable Home. No resident of an Affordable Home shall be denied continued occupancy of the Affordable Home solely because the income of the individual or household increases (or family size decreases) in a manner that causes the Exhibit G 45636.04000\6008147 4 individual or household to cease being a Qualifying Household, as long as the income of the individual or household did not exceed the maximum income allowable for a Qualifying Household on the date such individual or household acquired title to its Affordable Home, 3.6 Inspections. Each Owner covenants and agrees to permit Agency to inspect Owner's Affordable Home, from time -to -time, for purposes of verifying compliance with this Declaration, upon seven (7) days prior written notice to Owner. 3.7 Owner Covenant Regarding No Discrimination or Searegation. Owner covenants by and for itself and all Persons claiming under or through such Owner 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 leasing, subleasing, transferring, use, occupancy, tenure, or enjoyment of Owner's Affordable Home nor shall Owner or any Person claiming under or through Owner 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, sublessees, subtenants, or vendees in Owner's Affordable Home. Notwithstanding the first sentence of this Section 3.7, with respect to familial status, this Section 3.7 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 this Section 3.7 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 this Section 3.7. 3.8 Resale of Affordable Home by Owner. 3.8.1 Agency Notice. Owner, for itself, its successors and assigns, hereby covenants and agrees that Owner shall not Transfer its Affordable Home (or any interest in its Affordable Home), other than a collateral transfer under a Purchase Money Deed of Trust for the benefit of the beneficiary of such Purchase Money Deed of Trust, without first giving Notice to Agency (each, a "Resale Transfer Notice") and obtaining the written concurrence of Agency that the proposed Transfer complies with this Declaration. Within fifteen (15) days following the receipt of a Resale Transfer Notice, Agency shall deliver to Owner a written concurrence or objection to the Transfer of the Affordable Home. Each Resale Transfer Notice shall include all of the following information: (a) the identity of the proposed Resale Purchaser, including the identity of all persons in the household of the proposed Resale Purchaser proposing to reside in the Affordable Home; (b) all of the documentation described in Section 3.4 regarding the household of the proposed Resale Purchaser; (c) the proposed resale price of the Affordable Home payable by the proposed Resale Purchaser, including the terms of the Purchase Money Loan to be assumed or Exhibit G 45636.0400016008147.4 obtained by the proposed Resale Purchaser, the estimated amount of Sale Costs, real estate broker fees and other resale costs or charges payable by the Owner or the proposed Resale Purchaser regarding the Resale of the subject Affordable Home; (d) the name, address, and telephone number of the escrow agent proposed to conduct the escrow for the Transfer of the Affordable Home from the Owner to the proposed Resale Purchaser; (e) a written acknowledgment and agreement from the proposed Resale Purchaser for the benefit of Agency, in recordable form, that the ownership and occupancy of the subject Affordable Home is subject to this Declaration; and (f) such other information as Agency may reasonably request. 3.8.2 Resale Purchaser Qualifications. Owner acknowledges and agrees that, in accordance with Section 2.3, all Resale Purchasers of Owner's Affordable Home must be a Qualifying Household, the proposed resale price of Owner's Affordable Home must be an Affordable Housing Cost for such Resale Purchaser and the Resale Purchaser must occupy the Affordable Home as its principal residence. Owner agrees that Agency shall have the right and reasonable opportunity, prior to each Resale of Owner's Affordable Home, to verify that each proposed Resale of Owner's Affordable Home will be to a Qualifying Household at an Affordable Housing Cost for such Qualifying Household and that the Resale Purchaser intends to occupy the Affordable Home as its principal residence after acquiring title to the Affordable Home. 3.9 Transfers Not Requiring Agency Consent. Notwithstanding the foregoing, Agency consent or approval shall not be required for any of the following Transfers (each, an "Exempt Transfer"; 3.9.1 Conveyance as a Result of Marriage. A transfer of title to an Affordable Home by the Owner to himself/herself and his/her spouse (such that the spouses become co -Owners of the Affordable Home) as a result of a marriage; 3.9.2 Conveyance to a Revocable Living Trust. A transfer of title to an Affordable Home by the Owner to a revocable living trust established by such Owner for estate planning purposes, where such Owner is a beneficiary of such trust; 3.9.3 Conveyances between Co -Owners as a Result of Death, Voluntary Conveyance, or Divorce. If there is more than one individual constituting the Owner of the Affordable Home (i.e., spouses, joint tenants, etc.), a transfer of one Owner's interest in the Affordable Home to the other Owner by reason of death, voluntary conveyance, or divorce; 3.9.4 Conveyance to a Person who is Not a Co -Owner as a Result of Death. Upon the death of an Owner, a Transfer of the Affordable Home to a Qualifying Household that meets the other requirements of this Declaration for ownership and occupancy of the Affordable Home. If the transferee of the Affordable Home upon the death of an Owner is not a Qualifying Household who meets the requirements of this Declaration for ownership and occupancy of the Affordable Home, the Transfer is not an Exempt Transfer and the transferee Exhibit G 45636.0400016008147.4 shall, within one hundred eighty (180) days after the date the transferee obtains title to the Affordable Home, transfer fee title to the Affordable Home to a Qualifying Household at an Affordable Housing Cost pursuant to this Declaration; 3.9.5 Purchase Money Deed of Trust. The execution of a Purchase Money Deed of Trust, including pursuant to a refinancing transaction in accordance with Section 3.13, provided that the lien is being created in good faith and for value; 3.9.6 Foreclosure of Purchase Money Deed of Trust. Any foreclosure or deed in lieu of foreclosure with respect to a Purchase Money Deed of Trust. 3.10 . Temporary Rentals. If Agency determines, in Agency's sole and absolute discretion, that extenuating circumstances justify the temporary rental of an Affordable Home by its Owner, as when such Owner must temporarily relocate to another area of the country, but will return to occupy the Affordable Home as such Owner's primary residence within less than twelve (12) months. However, even if Agency allows temporary rental of an Affordable Home, the tenant must be a Qualifying Household and the rent must not exceed an Affordable Housing Cost for such tenant. Agency may impose conditions upon the Owner and the tenant as a condition to consenting to temporary rental of an Affordable Home, in the sole and absolute discretion of Agency. 3.11 Owner Affordable Home Maintenance. Owner, for itself, its successors and assigns, covenants and agrees that: 3.11.1 Owner Obligation. Owner's Affordable Home shall be continuously maintained by Owner, at Owner's sole cost and expense, in accordance with the Maintenance Standard. 3.11.2 Agency Remedies. During the continuance of a Maintenance Deficiency regarding Owner's Affordable Home, Agency may send Notice to Owner of such Maintenance Deficiency. If Owner fails to cure or commence and diligently pursue to cure the Maintenance Deficiency within thirty (30) calendar days following its receipt of Notice of the Maintenance Deficiency, Agency may conduct a public hearing, following transmittal of Notice of the public hearing to Owner, at least ten (10) days prior to the scheduled date of such public hearing, to verify whether a Maintenance Deficiency exists regarding Owner's Affordable Home. If, upon the conclusion of the public hearing, Agency finds that a Maintenance Deficiency exists regarding Owner's Affordable Home and remains uncured, Agency shall have the right to enter the exterior areas of Owner's Affordable Home and perforin all acts necessary to cure the Maintenance Deficiency or to take any other action at law or in equity that may then be available to Agency to accomplish the abatement of the Maintenance Deficiency. Any sum expended by Agency for the abatement of a Maintenance Deficiency pursuant to this Section 3.11.2 shall be reimbursed to Agency by Owner within thirty (30) calendar days after Notice to Owner requesting payment. If any amount becoming due to Agency under this Section 3.11.2 is not paid within thirty (30) calendar days after Notice to Owner requesting payment, Owner shall also pay Default Interest on such amount, until such amount is paid in full. Exhibit G 45636.04000\6008147.4 3.12 Only Purchase Monev Encumbrances. Owner shall only be allowed to encumber its Affordable Home with Purchase Money Deeds of Trust. Encumbering the title to an Affordable Home with other than Purchase Money Deeds of Trust is prohibited and shall constitute a Monetary Default under this Declaration. The outstanding balance of the Owner's then current Purchase Money Loan shall never exceed the Purchase Price paid by such Owner to acquire the subject Affordable Home. Owner acknowledges and agrees by accepting a Transfer of an Affordable Home subject to this Declaration that Agency has a substantial interest in promoting stability of ownership of the Owner's Affordable Home and that the restriction on encumbrance in this Section 3.12 is reasonable and reasonably calculated to avoid potential foreclosure and sale of the Owner's Affordable Home. 3.13 Refinancin¢. Owner shall be entitled to enter into a refinancing transaction that meets all of the following requirements: (a) the transaction represents a refinancing of all of the Owner's then current Purchase Money Loan; (b) the refinancing loan bears for its entire term a fixed annual percentage rate that is lower than the annual percentage rate of the loan being refinanced; (c) the entirety of the gross proceeds of the refinancing loan, less reasonable and customary costs of processing the refinancing loan, obtaining appraisals, and the like not exceeding three percent (3%) of the refinancing loan amount, are used to refinance the entire balance of the Owner's then current Purchase Money Loan (no "cash out" to Owner and the Affordable Home is completely released from the lien of the then current Purchase Money Deed of Trust securing the loan being refinanced); (d) the refinancing loan does not provide Owner with the ability to obtain cash advances or other "cash out" options; and (e) Owner's monthly principal and interest expenses or loan term are reduced relative to the same elements of the loan being refinanced. A refinancing loan obtained by Owner that satisfies all of the requirements of this Section 3.13 shall, upon closing of such loan, be considered Owner's then current Purchase Money Loan and the deed of trust securing such refinancing loan shall be considered the then current Purchase Money Deed of Trust. 4. COVENANTS RUN WITH THE LAND. The Parties hereby declare their mutual specific intent that the covenants, conditions, restrictions, reservations and agreements set forth in this Declaration are part of a plan for the promotion and preservation of affordable housing within the territorial jurisdiction of the Agency and that each shall be deemed covenants running with the land of the Property and each Affordable Home, binding upon each successor -in -interest of Developer, including each Owner, for the duration of the Affordability Period. Regardless of classification or characterization, each of the covenants, conditions, restrictions and agreements contained in this Declaration touch and concern the land of the Property and each Affordable Home, and each of them is expressly declared to be for the benefit and in favor of the Agency for the duration of the Affordability Period, regardless of whether or not the Agency is or remains an owner of any land or interest in land to which such covenants, conditions, restrictions or agreements relate. The Agency, in the event of any Default or breach of this Declaration, has the right to exercise all of the rights and remedies, and to maintain any actions at law or suits in equity or other proper proceedings, to enforce the curing of such Default or breach, as provided in this Declaration, at law or in equity. Each and every contract, deed or other instrument hereafter executed covering or conveying all or any portion of or any interest in the Property or an Affordable Home shall incorporate all of the provisions of this Declaration, either expressly or by reference, and any contract, deed or other instrument transferring any estate or interest in an Affordable Home, shall conclusively be deemed to have been executed, delivered and Exhibit G 45636,04000A6008147.4 accepted subject to the agreements, covenants, conditions, reservations, and restrictions of this Declaration, regardless of whether such agreements, covenants, conditions, reservations and restrictions are set forth in or referenced such contract, deed or other instrument. 5. AGENCY REMEDIES. If an Event of Default occurs, the Agency shall have the right to exercise any or all of the remedies described in this Section 5, all cumulative (so exercise of one remedy shall not preclude exercise of another remedy), in addition to such other remedies as may be available at law or in equity, under any other provisions of this Declaration or pursuant to the Agency Grant Deed or the DDA. 5.1 Suits Before End of Affordability Period. The Agency may sue the defaulting Party for damages or other relief, from time to time, at the Agency's election, without terminating this Declaration, including by mandamus or other suit, action or proceeding at law or in equity, to require the defaulting Party to perform the covenants or agreements or observe the conditions or restrictions of this Declaration, or enjoin any acts or things that may be unlawful or in violation of the rights of the Agency under this Declaration; or by other action at law or in equity, as necessary or convenient to enforce the covenants, agreements, conditions or restrictions of this Declaration. 5.2 Receipt of Moneys. No receipt of money by the Agency from any Person after any Notice of Default to a Party shall affect any Notice previously given to such Party, or waive the Agency's right to enforce payment or deposit of any amount payable or later falling due, or the Agency's right to enter the Property or an Affordable Home, it being agreed that after service of Notice of Default or the commencement of suit or proceedings, or after final order or judgment, the Agency may demand, receive, and collect any moneys due or thereafter falling due, without in any manner affecting such Notice, proceeding, order, suit or judgment, all such moneys collected being deemed payments on account of the applicable Party's liability to the Agency. 5.3 No Waiver. No failure by the Agency to insist upon strict performance of any condition, covenant, agreement, restriction or reservation of this Declaration or to exercise any right or remedy upon a Default and no acceptance of full or partial payment of any amount due or becoming due to the Agency during the continuance of any such Default shall waive any such Default or such condition, covenant, agreement, restriction or reservation. No obligation of a Party under this Declaration shall be modified and no Default, shall be waived, except by a written instrument signed by the Agency. No waiver of any Default shall modify this Declaration. Each and every covenant, agreement, condition, restriction and reservation of this Declaration shall continue in full force and effect with respect to any other then -existing or subsequent Default of such condition, covenant, agreement, restriction or reservation of this Declaration. 5.4 Damages. The Agency may recover from each other Party all damages the Agency incurs by reason of such Party's Default and reimbursement of the Agency's reasonable out of pocket costs, including reasonable attorney fees. The Agency may recover such damages at any time after another Party's Default, including after the expiration of the Affordability Period. Notwithstanding any applicable law to the contrary, the Agency need not commence separate actions to enforce another Party's obligations for each amount or payment not paid, or Exhibit G' 45636.04000\6008147.4 each month's accrual of damages and costs for the other Party's Default, but may bring and prosecute a single combined action for all such damages and costs. 5.5 Inunction of Breaches. Whether or not an Event of Default has occurred, the Agency may obtain a court order enjoining each other Party from continuing any Default or from committing any threatened Default. 5.6 Specific Enforcement. Developer and Owner agree that specific enforcement of their respective non -monetary obligations under this Declaration is one of the reasons that the Agency entered into this Declaration and that, if Developer or Owner Defaults or breaches in performance or failure to perform any such obligation, potential monetary damages to the Agency, as well as to prospective Qualifying Households, would be difficult, if not impossible, to evaluate and quantify. Therefore, in addition to any other relief to which the Agency may be entitled as a consequence of a Default by Developer or Owner under this Declaration, Developer and each Owner agree to the imposition of the remedy of specific performance against Developer or any Owner under this Declaration. 5.7 Enforcement. The Agency or the City, as successor in interest to the Agency, shall have the power to enforce this Declaration and no other Person shall have any right or power to enforce any provision of this Declaration on behalf of the Agency or the City or to compel the Agency or the City to enforce any provision of this Declaration against Developer, Owner or the Affordable Homes, except to the extent required or authorized by Health and Safety Code Section 33334.3(0(7). 6. GENERAL PROVISIONS 6.1 Relationship of Parties. Nothing contained in this Declaration shall be interpreted or understood by any of the Parties, or by any Third Person, as creating the relationship of employer and employee, principal and agent, limited or general partnership, or joint venture between or among Agency, Developer or any Owner. 6.2 Goveming Law. This Declaration shall be governed by the substantive and procedural laws of the State of California, without application of conflicts or choice of laws principles. 6.3 Amendment. This Declaration may be amended only by a written instrument signed by Agency and each other Party then owning an estate in property then subject to this Declaration. 6.4 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 Declaration. The Parties have participated substantially in the negotiation, drafting, and revision of this Declaration, with advice from counsel and other advisers of their own selection. A term defined in the singular in this Declaration may be used in the plural, and vice versa, all in accordance with ordinary principles of English grammar, which govern all language in this Declaration. The words "include" and "including" in this Declaration shall be construed to be followed by the words: "without limitation." Each collective noun in this Declaration shall be interpreted as if followed by the words "(or any part of it)," except where the context clearly requires otherwise. Every Exhibit G 45636.04000\6008147.4 reference to any document, including this Declaration, refers to such document as modified from time to time (except, at the Agency's option, any modification that violates this Declaration), and includes all exhibits, schedules, and riders to such document. The word "or" in this Declaration 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. 6.5 Attorney's Fees. In the event that a Party brings an action to enforce this Declaration or otherwise arising out of this Declaration, the prevailing Party in such action shall be entitled to recover from the other Party reasonable attorney fees to be fixed by the court in which a judgment is entered, as well as the costs of such suit. For the purposes of this Declaration, the words "reasonable attorney fees" in the case of the Agency, include the salaries, costs and overhead of the lawyers employed in the Office of the City Attorney of the City who are legal counsel to the Agency in such an action, as allocated on an hourly basis. 6.6 Severability. If any tern or provision of this Declaration or its application to any Person, property or circumstance shall to any extent be invalid or unenforceable, then the remainder of this Declaration, or the application of such term or provision to Persons, properties or circumstances, other than those as to which it is invalid or unenforceable, shall not be affected by such invalidity. All remaining provisions of this Declaration shall be valid and be enforced to the fullest extent applicable law allows. 6.7 Time is of the Essence. Time is of the essence with respect to the performance of each term, provision, covenant, condition, restriction, reservation or agreement contained in this Declaration. 6.8 Unavoidable Delay; Extension of Time of Performance. Performance by a Party under this Declaration shall not be deemed or considered to be in Default, where any such Default is due to the occurrence of an Unavoidable Delay. 6.9 Titles and Headings for Reference Only. The titles and headings of the articles, paragraphs or sections of this Declaration are for convenience and reference only and are not to be considered a part of this Declaration and shall not in any way interpret, modify or restrict the meaning of any term, provision, covenant, condition, restriction, reservation or agreement . contained in this Declaration. 6.10 Notices. 6.10.1 Delivery. Any and all Notices sent by a Party to another Party pursuant to or as required by this Declaration shall be proper, if in writing and transmitted to the address of the recipient Party designated in Section 6.10.2, by one or more of the following methods: (a) messenger for immediate personal delivery; (b) a nationally recognized overnight (one Business Day) delivery service (i.e., Federal Express, United Parcel Service, etc.); or (c) registered or certified United States mail, postage prepaid, return. receipt requested. Such Notices may be sent in the same manner to such other address as a Party may from time to time designate by Notice, in accordance with this Section 6.10. Any such Notice shall be deemed to be received by the addressee, regardless of whether or when. any return receipt is received by the Exhibit G 45636.0400016008 1 47 4 sender or the date set forth on such return receipt, on the day that it is delivered by personal delivery, on the date of delivery by a nationally recognized overnight courier service or three (3) calendar days after it is placed in the United States mail, as provided in this Section 6.10. Rejection, other refusal to accept or the inability to deliver a Notice because of a changed address of which no notice was given, shall be deemed receipt of the Notice. Any attorney representing a Party may give any Notice on behalf of such Party. 6.10.2 Addresses. The following are the authorized addresses for the submission of Notices to the Parties, as of the Effective Date: To Agency: Redevelopment Agency of the City of Azusa 213 East Foothill Blvd. Azusa, CA 91702 Attention: Executive Director To Developer: [TO BE DETERMINED] 6.10.3 Entire Agreement. This Declaration may be signed in counterpart originals, each of which shall be deemed to be an original, and all of which together shall constitute one and the same instrument. This Declaration includes eighteen (18) pages and one (1) exhibit. This Declaration and the DDA constitute the entire understanding and integrate all of the terms, conditions, covenants, restrictions, reservations, terms, provisions and agreements of the Parties regarding the Property and each Affordable Home and supersede all negotiations or previous agreements between the Parties with respect to each Affordable Home. None of the terms, conditions, covenants, restrictions, reservations, terms, provisions or agreements set forth in this Declaration or the DDA shall be deemed to be merged with any deed conveying title to any estate or interest in the Property or an Affordable Home. [Signatures on following page] Exhibit G 45636.04000\6008147.4 SIGNATURE PAGE TO DECLARATION OF COMMUNITY REDEVELOPMENT AFFORDABLE HOUSING COVENANTS, CONDITIONS AND RESTRICTIONS (9th & Alameda) IN WITNESS WHEREOF, Agency and Developer have caused this Declaration to be signed or on their behalf by their duly authorized representatives, as set forth below: AGENCY: REDEVELOPMENT AGENCY OF THE CITY OF AZUSA, a California public body, corporate and politic F.M. Delach Executive Director DEVELOPER: [TO BE DETERMINED], a [TO BE DETERMINED] C Title: Exhibit G 45636.04000\6008147.4 EXHIBIT "A" TO DECLARATION OF COMMUNITY REDEVELOPMENT AFFORDABLE HOUSING COVENANTS, CONDITIONS AND RESTRICTIONS (9th & Alameda) Property Legal Description [TO BE PROVIDED] Exhibit G 45636.04000\6008147.4