Loading...
HomeMy WebLinkAboutA- 6 DDAgreementC:\Users\sbautista\Desktop\Agenda Items\04- Apr\A- 6 DDAgreement.doc RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: The Redevelopment Agency of the City of Azusa Attn: Executive Director 213 E. Foothill Blvd. Azusa, CA 91702-1295 Exempt from Recording Fee per Government Code ' 27383 (Space above for Recorder's Use) FIRST AMENDED 613-615 NORTH AZUSA AVENUE (REYES) DISPOSITION AND DEVELOPMENT AGREEMENT between THE REDEVELOPMENT AGENCY OF THE CITY OF AZUSA a California public agency and DR. RALPH REYES AND JEANNINE E. REYES, husband and wife [Dated as of April 7, 2003 for reference purposes only] C:\Users\sbautista\Desktop\Agenda Items\04- Apr\A- 6 DDAgreement.doc -1- ARTICLE 1. EFFECTIVE DATE; PARTIES; DEFINITIONS 1.1 Effective Date of Agreement. This First Amended 613-615 North Azusa Avenue (Reyes) Disposition and Development Agreement ("Agreement") is dated as of the 7th day of April, 1.2 2003, for reference purposes only. This Agreement will not become effective until the date ("Effective Date") on which all of the following are true: (i) This Agreement has been approved and executed by the appropriate authorities of the Developer, as defined in Section 1.2.21, and this Agreement has been delivered to the Agency; (ii) Following all legally required notices and hearings, this Agreement has been approved by the Agency's governing board and the City Council (acting as the Agency's legislative body); and (iii) This Agreement has been executed by the appropriate authorities of the Agency and delivered to Developer. If this Agreement has been approved and executed by the Developer and delivered to the Agency as provided in (i) above, but the Agency fails to approve and/or deliver this Agreement as described in (ii) and (iii) above by June 6, 2003, then this Agreement shall not become effective and any prior signatures and approvals of the Parties will be deemed void and of no force or effect. This Agreement shall be recorded against the Property at any time following the Effective Date. 1.2 Parties to Agreement. 1.2.1 The Agency. The address of the Agency is 213 E. Foothill Blvd., Azusa, CA 91702-1295; telephone 626-812-5200; facsimile 626-334-5464, with copies to Best Best & Krieger LLP, P.O. Box 1028, 3750 University Avenue, Suite 400, Riverside, CA 92501, Attention: Azusa Redevelopment Agency Counsel, facsimile (909) 686-3083. 1 All article and section references are to articles and sections of this Agreement unless otherwise stated. C:\Users\sbautista\Desktop\Agenda Items\04- Apr\A- 6 DDAgreement.doc -2- "Agency," as used in this Agreement, means THE REDEVELOPMENT AGENCY OF THE CITY OF AZUSA, a California public agency, and any nominee, assignee of, or successor to its rights, powers and responsibilities. Agency represents and warrants to Developer that, to the Agency's actual current knowledge: (i) The Agency is a public body, corporate and politic, exercising governmental functions and powers and organized and existing under the California Community Redevelopment Law (California Health & Safety Code Section 33000, et seq.) ("CRL"); (ii) The Agency has taken all actions required by law to approve the execution of this Agreement; (iii) The Agency's entry into this Agreement and/or the performance of the Agency's obligations under this Agreement does not violate any contract, agreement or other legal obligation of the Agency; (iv) The Agency's entry into this Agreement and/or the performance of the Agency's obligations under this Agreement does not constitute a violation of any state or federal statute or judicial decision to which the Agency is subject; (v) There are no pending lawsuits or other actions or proceedings that would prevent or impair the timely performance of the Agency's obligations under this Agreement; (vi) The Agency has the legal right, power and authority to enter into this Agreement and to consummate the transactions contemplated hereby, and the execution, delivery and performance of this Agreement has been duly authorized and no other action by Agency is requisite to the valid and binding execution, delivery and performance of this Agreement, except as otherwise expressly set forth herein; and (vii) The individual executing this Agreement is authorized to execute this Agreement on behalf of the Agency. C:\Users\sbautista\Desktop\Agenda Items\04- Apr\A- 6 DDAgreement.doc -3- The representations and warranties set forth above are material consideration to the Developer and the Agency acknowledges that the Developer is relying upon the representations set forth above in undertaking the Developer's obligations set forth in this Agreement. The Agency's representations and warranties shall survive the Close of Escrow (as herein defined below) and shall not be deemed merged with the Grant Deed. The term "Agency's actual current knowledge" means, and is limited to, the actual current knowledge of the Agency's Executive Director as of the Effective Date, without having undertaken any independent inquiry or investigation for the purpose of making such representation or warranty and without any duty of inquiry or investigation. All of the terms, covenants and conditions of this Agreement shall be binding on and shall inure to the benefit of the Agency and its nominees, successors and assigns. 1.2.2 The Developer. The Developer is Dr. Ralph Reyes and Jeannine E. Reyes, husband and wife. The address of the Developer for purposes of this Agreement is 613 North Azusa Avenue, Azusa, California 91702. Developer represents and warrants to Agency that, to the Developer's actual current knowledge: (i) The Developer's entry into this Agreement and/or the performance of the Developer's obligations under this Agreement does not violate any contract, agreement or other legal obligation of the Developer; (ii) The Developer's entry into this Agreement and/or the performance of the Developer's obligations under this Agreement does not constitute a violation of any state or federal statute or judicial decision to which the Developer is subject; (iii) There are no pending lawsuits or other actions or proceedings that would prevent or impair the timely performance of the Developer's obligations under this Agreement; and (iv) The Developer has the legal right, power and authority to enter into this Agreement and to consummate the transactions contemplated hereby and no other action by Developer is requisite to the valid and C:\Users\sbautista\Desktop\Agenda Items\04- Apr\A- 6 DDAgreement.doc -4- binding execution, delivery and performance of this Agreement, except as otherwise expressly set forth herein. The representations and warranties set forth herein are material consideration to the Agency and the Developer acknowledges that the Agency is relying upon the representations set forth above in undertaking the Agency's obligations set forth above. The term "Developer's actual current knowledge" means, and is limited to, the actual current knowledge of Dr. Ralph Reyes as of the Effective Date, without having undertaken any independent inquiry or investigation for the purpose of making such representation or warranty and without any duty of inquiry or investigation. All of the terms, covenants and conditions of this Agreement shall be binding on and shall inure to the benefit of the Developer and its permitted nominees, successors and assigns. Wherever the term "Developer" is used herein or therein, such term shall include any permitted nominee, assignee or successor of the Developer. The qualifications and identity of the Developer are of particular concern to the Agency, and it is because of such qualifications and identity that the Agency has entered into this Agreement with the Developer. No voluntary or involuntary successor-in-interest of the Developer shall acquire any rights or powers under this Agreement except as expressly set forth herein. Prior to the tenth (10th) anniversary of the Close of Escrow (defined below), the Developer may not assign or transfer all or any part of this Agreement or the Property (hereinafter defined) without the prior written approval of the Agency, which shall be given, withheld or conditioned as provided in Sections 3.5.15 and 3.5.17. 1.2.3 Agency and Developer are sometimes individually referred to herein as "Party" and collectively as "Parties." ARTICLE 2. RECITALS ABOUT THE PLAN AND PROJECT 2.1 The Redevelopment Plan and Project Area. The City Council of the City of Azusa ("City") has approved and adopted a redevelopment plan ("Redevelopment Plan") for the redevelopment project area known as the Merged Central Business District/West End Project Area ("Project Area") by its adoption of Ordinance No. 2382 on November 7, 1988. The original Central Business District Redevelopment Plan, amended five (5) times, was originally approved by C:\Users\sbautista\Desktop\Agenda Items\04- Apr\A- 6 DDAgreement.doc -5- Ordinance No. 2062 on September 18, 1978. The original West End Redevelopment Plan was approved by Ordinance No. 2196 on November 28, 1983. This Agreement is subject to the provisions of the Redevelopment Plan as it now exists and as it may be subsequently amended. The Redevelopment Plan is incorporated by this reference. The Project Area is located in the City of Azusa, California; its boundaries are specifically described in the Redevelopment Plan. 2.2 Purpose of this Agreement. The Parties have heretofore entered into that certain 613-615 North Azusa Avenue (Reyes) Disposition and Development Agreement ("Original DDA") dated as of the 6th day of May, 2002, for reference purposes only. In exchange for the mutual promises, covenants and agreements contained herein, the parties hereto wish to establish their rights and responsibilities with regard to the Property and one another and do hereby amend and supercede in the Original DDA in its entirety. This Agreement and the Exhibits attached hereto implement the Redevelopment Plan for the Project Area by providing for the disposition and development of real property in the City of Azusa as generally described in the Scope of Development attached hereto as Exhibit B, which Scope of Development shall be further supplemented as set forth in Section 3.3.6.2.11 herein (collectively, the "Development"). The development of the Property pursuant to this Agreement is in the best interests of the City and Agency and the health, safety, morals and welfare of its taxpayers and residents and is in accordance with public purposes set forth in federal, state and local law and regulation. Implementation of this Agreement will further the goals and objectives of the Redevelopment Plan and the City's General Plan by strengthening the City's land use and social structure and by alleviating economic and physical blight within the Project Area. ARTICLE 3. ACQUISITION, CONVEYANCE AND DEVELOPMENT OF THE PROPERTY 3.1 The Property. The subject property ("Property") consists of two lots totaling approximately 6,996 square feet of land, more or less, and located at 613 and 615 Azusa Avenue, Azusa, California 91702 (Assessor Parcel No. 8611-004-908). The Property is legally described on C:\Users\sbautista\Desktop\Agenda Items\04- Apr\A- 6 DDAgreement.doc -6- the attached Exhibit A. The Property is currently improved with a 3,256 square foot, single story building (the "Development Building"). The Property is currently owned by the Agency. 3.2 [Intentionally Left Blank]. 3.3 Conveyance of Property. In accordance with and subject to all the terms, conditions and covenants of this Agreement, the Agency agrees to convey fee simple defeasible title to the Property to Developer as more specifically set forth in the grant deed attached hereto as Exhibit D ("Grant Deed"), and Developer agrees to acquire such title from Agency pursuant to this Agreement, as more fully set forth below. 3.3.1 Purchase Price/ Cash Payment. In accordance with the time frames set forth herein, the Developer shall pay to the Agency as the "Purchase Price" for the Property the sum of Seventy Five Thousand Dollars ($75,000). The Purchase Price shall be paid for in full as the Close of Escrow in cash. 3.3.2 [Intentionally left blank.] 3.3.3 Escrow. 3.3.3.1 Opening of Escrow. Within the time period set forth in the Schedule of Performance attached hereto as Exhibit C, which Schedule of Performance shall be further supplemented as set forth herein, the Agency and Developer shall open an escrow ("Escrow") for the conveyance of the Property with Chicago Title Company ("Escrow Holder"), at a location mutually agreeable to the Parties. For purposes of this Agreement, the Escrow shall be deemed open on the date Escrow Holder shall have received a fully executed original or originally executed counterparts of this Agreement from Agency and Developer ("Opening of Escrow"), and Escrow Holder shall notify Agency and Developer, in writing, of the date Escrow is opened. Agency and Developer acknowledge and agree that the Opening of Escrow shall occur within five (5) days 1 following the 1 “Day” includes all calendar days except where a deadline falls on a weekend or holiday in which event the deadline will be extended to the next working day. C:\Users\sbautista\Desktop\Agenda Items\04- Apr\A- 6 DDAgreement.doc -7- Effective Date. This Agreement constitutes the joint basic escrow instructions of the Agency and the Developer for the conveyance of the Property, and a duplicate original of this Agreement shall be delivered to the Escrow Holder upon the Opening of Escrow. Agency and Developer agree to execute, deliver and be bound by any reasonable or customary supplemental or additional escrow instructions ("Additional Instructions") of Escrow Holder or other instruments as may be reasonably required by Escrow Holder in order to consummate the transaction contemplated by this Agreement. Any such Additional Instructions shall not conflict with, amend or supersede any portions of this Agreement unless expressly consented or agreed to in writing by Agency and Developer. 3.3.3.2 Close of Escrow. "Close of Escrow" or "Closing" means the recordation of the Grant Deed (defined herein) in Los Angeles County Official Records. Close of Escrow shall occur on or before December 31, 2003. Agency and Developer may, but shall not be obligated to, close the Escrow upon such earlier date as Agency and Developer mutually agree to in writing. The Closing shall be subject to the satisfaction or written waiver of all conditions precedent thereto. The Agency and the Developer agree to perform all acts necessary for the conveyance in sufficient time for title to be conveyed by the Outside Closing Date. Agency and Developer may mutually agree to change the Outside Closing Date by joint written notice to Escrow Holder. 3.3.4 Condition of Title. It shall be a condition to the Close of Escrow for Developer's benefit that title to any portion of the Property conveyed to Developer pursuant to this Agreement shall be subject only to the following conditions and exceptions to title ("Approved Condition of Title"): 3.3.4.1 A lien to secure payment of general and special real property taxes and assessments, if any, not delinquent; 3.3.4.2 The lien of supplemental taxes assessed pursuant to Chapter 3.5 commencing with Section 75 of the California Revenue and Taxation Code; C:\Users\sbautista\Desktop\Agenda Items\04- Apr\A- 6 DDAgreement.doc -8- 3.3.4.3 Matters affecting the condition of title created by or with the consent of Developer; 3.3.4.4 All exceptions that are disclosed by the "Title Report" described in Section 3.3.16 that are approved or deemed approved by Developer as provided therein; 3.3.4.5 All matters that would be shown by an accurate survey of the Property or by a physical inspection of the Property; 3.3.4.6 Any and all easements, documents and/or memoranda that are recorded against the Property upon the Close of Escrow pursuant to the terms and conditions of this Agreement; 3.3.4.7 All applicable laws, ordinances, rules and governmental regulations (including, but not limited to, those relative to building, zoning and land use) affecting the development, use, occupancy or enjoyment of the Property. 3.3.5 Title Policy. Title shall be evidenced by the willingness of Chicago Title Company ("Title Company") to issue its CLTA Owner's Form Policy of Title Insurance ("Title Policy") in the amount of the Purchase Price showing title to the Property vested in Developer, subject only to the Approved Condition of Title. The premium for the Title Policy shall be paid by Agency. Developer may, at its option, request an Extended Coverage ALTA Owner's Form Policy of Title Insurance ("ALTA Policy") provided that the issuance of said ALTA Policy does not delay the Close of Escrow. Any additional costs including, but not limited to, title and endorsement fees and survey fees incurred in connection with the issuance of such ALTA Policy shall be Developer's sole responsibility. The issuance by Title Company of the Title Policy or ALTA Policy in favor of Developer insuring fee title to the Property in the amount of the Purchase Price, subject only to the Approved Condition of Title, shall be conclusive evidence that Agency has complied with any C:\Users\sbautista\Desktop\Agenda Items\04- Apr\A- 6 DDAgreement.doc -9- contractual or statutory obligation, express or implied, to convey to Developer good and marketable title to the Property. 3.3.6 Conditions to Close of Escrow. 3.3.6.1 Developer's Conditions. Developer's obligation to accept title to the Property and pay the Purchase Price is subject to the satisfaction of the following conditions for Developer's benefit (or Developer's waiver thereof, it being agreed that Developer may waive any or all of such conditions) on or prior to the Outside Closing Date: 3.3.6.1.1 The Agency shall have deposited into Escrow the Grant Deed and all other documents and funds required of it under this Agreement; and 3.3.6.1.2 The Escrow Holder shall have received a commitment from the Title Company to issue the Title Policy or an ALTA Policy, as applicable, for the Property pursuant to this Agreement, subject only to the Approved Condition of Title; and 3.3.6.1.3 The City and the Agency shall have approved those development applications, entitlements and permits required for the Development, in accordance with this Agreement and all applicable local, state and federal laws and regulations including, without limitation, environmental approvals related thereto and all applicable judicial and administrative challenge periods with respect thereto shall have expired; and C:\Users\sbautista\Desktop\Agenda Items\04- Apr\A- 6 DDAgreement.doc -10- 3.3.6.1.4 The Agency and/or City, as applicable, shall have taken all actions and issued such approvals as legally required pursuant to provisions of the California Environmental Quality Act ("CEQA") as pre- conditions to the approval of the Development and all applicable judicial and administrative challenge periods have expired; and 3.3.6.1.5 The Developer shall have approved or been deemed to have approved the environmental condition and condition of title of the Property, as set forth in more detail in Section 3.3.15 and Section 3.3.16; and 3.3.6.1.6 All representations and warranties of the Agency hereunder shall be true as of the Effective Date and beyond and as of the Close of Escrow and shall continue thereafter for the full statutory period; and 3.3.6.1.7 The Developer shall have approved Escrow Holder's estimated closing costs statement. 3.3.6.2 Agency's Conditions. Agency's obligation to convey the Property is subject to the satisfaction of the following conditions for Agency's benefit (or Agency's waiver thereof, it being agreed that Agency may waive any or all of such conditions) on or prior to the Outside Closing Date: 3.3.6.2.1 The City and the Agency shall have approved those development applications, entitlements and permits required for the Development, in accordance with this Agreement and all applicable local, state and federal C:\Users\sbautista\Desktop\Agenda Items\04- Apr\A- 6 DDAgreement.doc -11- laws and regulations including, without limitation, environmental approvals related thereto and all applicable judicial and administrative challenge periods with respect thereto shall have expired; and 3.3.6.2.2 Developer shall have furnished to the Agency satisfactory evidence, in the Agency's sole discretion, of the Developer's ability to finance the acquisition, construction and operation of the Development in a form approved by the Agency. The evidence of said financing may include, without limitation: (a) a letter of commitment from a reputable lending institution approved by the Agency pursuant to Section 3.5.15, evidencing that institution's agreement to loan funds to acquire the Property and construct the Development; and/or (b) evidence of the Developer's ability to self-finance the acquisition, construction and operation of the Development; and 3.3.6.2.3 The Developer shall have tendered into Escrow all funds and documents required of it pursuant to this Agreement; and 3.3.6.2.4 The Developer shall have completed in a timely fashion all of its obligations that are to be completed prior to the Close of Escrow as provided in this Agreement and the Schedule of Performance; and 3.3.6.2.5 The Escrow Holder shall have received a commitment from the Title Company to issue the Title Policy or an C:\Users\sbautista\Desktop\Agenda Items\04- Apr\A- 6 DDAgreement.doc -12- ALTA Policy, as applicable, for the Property, subject only to the Approved Condition of Title; and 3.3.6.2.6 The Agency and/or City, as applicable, shall have taken all actions and issued such approvals as legally required pursuant to provisions of the California Environmental Quality Act ("CEQA") as pre- conditions to the approval of the Development; and 3.3.6.2.7 All representations and warranties of the Developer hereunder shall be true as of the Effective Date and beyond and as of the Close of Escrow and shall continue thereafter for the full statutory period; and 3.3.6.2.8 The Agency shall have approved Escrow Holder's estimated closing costs statement; and 3.3.6.2.9. The Developer shall have provided to Agency the insurance endorsements required by Section 3.5.9 hereof; and 3.3.6.2.10. The City's Planning Commission shall have provided or be deemed to have provided a determination of consistency with the City's general plan pursuant to Government Code Section 65402; and 3.3.6.2.11. The Developer shall have delivered to the Agency and the Agency shall have provided its written approval of a more specific Scope of Development and Schedule of Performance, which approval may be granted, C:\Users\sbautista\Desktop\Agenda Items\04- Apr\A- 6 DDAgreement.doc -13- conditioned or withheld in the Agency=s sole and absolute discretion. Upon and after Agency=s approval or conditional approval, the obligations of such supplemented Scope of Development and Schedule of Performance shall be deemed automatically incorporated by reference herein without further action by the parties or either of them; and 3.3.6.2.12. The Agency shall have caused the Demolition pursuant to Section 3.3.14 hereof. 3.3.7 Developer Payments and Documents. At least one (1) day prior to Closing, the Developer shall pay or tender (as applicable) to the Escrow Holder the following documents (in executed and recordable form, as necessary), fees, charges and costs promptly after the Escrow Holder has notified the Agency of the amount of such fees, charges and costs: 3.3.7.1 The Purchase Price; and 3.3.7.2 One-half (2) of the escrow fees, recording fees and notary fees attributable to the conveyance of the Property; and 3.3.7.3 The premium for any ALTA Policy and any charges for survey or other endorsements required as set forth in Section 3.3.5 of this Agreement; and 3.3.7.4 The prorated amount of ad valorem taxes, if applicable, upon the Property with respect to the period subsequent to transfer of title; and C:\Users\sbautista\Desktop\Agenda Items\04- Apr\A- 6 DDAgreement.doc -14- 3.3.7.5 Any additional changes customarily charged to buyers in accordance with common escrow practices in Los Angeles County; and 3.3.7.6 Such other documents and instruments required by the Escrow Holder in the performance of its contractual or statutory obligations. 3.3.8 Agency Payments and Documents. The Agency shall pay or tender (as applicable) to the Escrow Holder the following documents (in recordable form, as necessary), fees, charges and costs promptly after the Escrow Holder has notified the Agency of the amount of such fees, charges and costs: 3.3.8.1 One-half (2) of the escrow fees, recording fees and notary fees attributable to the conveyance of the Property; and 3.3.8.2 The premium for the Title Policy to be paid by the Agency as set forth in Section 3.3.5 of this Agreement; and 3.3.8.3 The prorated amount of ad valorem taxes, if applicable, upon the Property with respect to the period prior to transfer of title; and 3.3.8.4 Any state, county or city documentary transfer taxes or stamps relating to the conveyance of the Property; and 3.3.8.5 Any additional costs and charges customarily charged to sellers in accordance with common escrow practices in Los Angeles County; and 3.3.8.6 A FIRPTA Certificate and California Form 597 RE, and such other documents and instruments required by the Escrow Holder in the performance of its contractual or statutory obligations; and C:\Users\sbautista\Desktop\Agenda Items\04- Apr\A- 6 DDAgreement.doc -15- 3.3.8.7 The fully executed and recordable Grant Deed. 3.3.9 Escrow Holder Responsibilities. Upon the Closing, the Escrow Holder is authorized to: 3.3.9.1 Pay, and charge the Agency and the Developer, respectively, for any fees, charges and costs payable under Sections 3.3.7 and 3.3.8 of this Agreement. Before such payments or charges are made, the Escrow Holder shall notify the Agency and the Developer of the fees, charges and costs necessary to clear title and close the Escrow; and 3.3.9.2 Record in the following order: the Grant Deed and any other instruments delivered through the Escrow; and 3.3.9.3 Disburse such other funds and deliver such other documents to the Parties entitled thereto. 3.3.10 Deposit of Escrow Funds. All funds received in the Escrow shall be deposited by the Escrow Holder with other escrow funds of the Escrow Holder in an interest earning general escrow account. Such funds may be transferred to any other general escrow account or accounts. All disbursements shall be made by check of the Escrow Holder. All adjustments and prorations are to be made on the basis of a thirty (30) day month. 3.3.11 Amendment of Escrow Instructions. Any amendment to these escrow instructions shall be in writing and signed by the Agency and the Developer. At the time of any amendment, the Escrow Holder shall agree to carry out its duties as Escrow Holder under such amendment. C:\Users\sbautista\Desktop\Agenda Items\04- Apr\A- 6 DDAgreement.doc -16- 3.3.12 Notices. All communications from the Escrow Holder to the Agency or the Developer shall be directed to the addresses and in the manner established in Sections 1.2 and 5.1 of this Agreement for notices, demands and communications between the Agency and the Developer. 3.3.13 Parties Right to Terminate for Failure of Escrow to Close. If, for any reason other than the Default of the Agency or the Developer (as defined below) Escrow does not close on or before the Outside Closing Date or such other date that has been mutually agreed upon by the Parties, then either the Agency or the Developer may terminate this Agreement without cost, expense or liability to either Party. Upon such termination, the Escrow Holder shall return all funds and documents to the party depositing the same. The Agency and the Developer shall each bear one- half of Escrow Holder's fees and expenses. 3.3.14 Demolition. Prior to and as a condition precedent to the Close of Escrow, the Agency shall cause to be undertaken, at the Agency's sole cost and expense, the demolition and clearing of all structures and improvements on the Property ("Demolition"). Such Demolition shall occur within the time frames set forth in the Schedule of Performance. Developer shall relocate, at Developer's sole cost and expense, any and all of Developer's personal property and Developer's business concern from the Property within thirty (30) days following written notice to so relocate from Agency. By execution of this Agreement, Developer, on behalf of itself, its heirs, executors, administrators, successors and assigns, hereby expressly and unconditionally waives any claim for damages, relocation assistance benefits, interest, loss of goodwill, severance damages, or any other compensation or benefits other than as already expressly provided for in this Agreement, it being understood that this Agreement is entered into between the Parties as a complete and full disposition of all claims, liabilities, or benefits of any type or nature whatsoever relating to or in connection with the acquisition, disposition (including the Demolition) and Development of the Property. In the event Escrow fails to close for any reason whatsoever other than an uncured default of the Agency, the Parties agree and acknowledge that the Demolition shall have occurred the in the performance of this Agreement and neither the Agency, nor any of its officials, officers, employees or agents shall be liable to any person, including, without limitation, the Developer, for the Demolition. C:\Users\sbautista\Desktop\Agenda Items\04- Apr\A- 6 DDAgreement.doc -17- 3.3.15 Environmental Review. The Close of Escrow shall be contingent upon Developer's approval of the environmental condition of the Property prior to July 1, 2003, which date shall be the expiration of the "Environmental Review Period." 3.3.15.1 Developer shall have the right, at its sole cost, expense and liability, to commence Developer's environmental inspection of the Property immediately after the Opening of Escrow. No invasive testing or boring shall be done without prior written notification to Agency and Agency's written permission of the same, which Agency may withhold in its sole and absolute discretion. Copies of data, surveys and tests obtained or made pursuant to this Section shall be provided to the Agency within fifteen (15) days after receipt by the Developer. Any inspection and/or testing work shall be undertaken only after securing any necessary permits from the appropriate governmental agencies. Developer shall use care and consideration in connection with any of its inspections or tests and Agency shall have the right to be present during any inspection of the Property by Developer or its agents. Developer shall restore the Property to its original condition immediately after any and all tests and/or inspections. 3.3.15.2 Developer shall protect, indemnify, defend (with counsel reasonably acceptable to Agency) and hold the Property, Agency, the City and their officials, officers, employees, agents and attorneys free and harmless from and against any and all claims, damages, liens, stop notices, liabilities, losses, costs and expenses, including reasonable attorneys' fees and court costs and expenses (all of the foregoing, collectively "Liabilities"), resulting from Developer's inspection and testing of the Property, including, without limitation, repairing any and all damages to any portion of the Property, arising out of or related (directly or indirectly) to Developer's conducting such inspections, surveys, tests, and studies, except as to those Liabilities attributable to the negligence or willful misconduct of the Agency, the City and their officials, officers, employees, agents, contractors and attorneys. The Developer's indemnification obligations set forth herein shall survive the Close of Escrow, shall not be merged with the Grant Deed and shall survive the termination of this Agreement and Escrow prior to the Close of Escrow. C:\Users\sbautista\Desktop\Agenda Items\04- Apr\A- 6 DDAgreement.doc -18- 3.3.15.3 Prior to any entry upon the Property by Developer or Developer's agents, contractors, subcontractors or employees, for the purpose of testing pursuant to this Section 3.3.15, Developer shall deliver to Agency an original endorsement to Developer's commercial general liability insurance policy that evidences that Developer is carrying a commercial general liability insurance policy with a financially responsible insurance company acceptable to Agency, covering: (1) the activities of Developer, Developer's agents, contractors, subcontractors and employees on or upon the property and (2) Developer's indemnity obligation contained in Section 3.3.15. Such endorsement to such insurance policy shall evidence that such insurance policy shall have a per occurrence limit of at least One Million Dollars ($1,000,000) and an aggregate limit of at least Two Million Dollars ($2,000,000), shall name Agency and City and their officials, officers, employees, and agents as additional insureds, shall be primary and non-contributing with any other insurance available to Agency and City and shall contain a full waiver of subrogation clause. 3.3.15.4 If, during the Environmental Review Period, Developer determines that it is dissatisfied, in Developer's sole discretion, with the environmental condition of the Property, then, pursuant to Section 3.3.13, Developer may terminate this Agreement and the Escrow created pursuant hereto by delivering written notice to Agency and Escrow Holder on or before the expiration of the Environmental Review Period of Developer's election to terminate this Agreement. If Developer fails to deliver any such written termination notice to Agency and Escrow Holder on or before the expiration of the Environmental Review Period, then Developer shall conclusively be deemed to have approved the environmental condition of the Property and to have waived the requirement for a satisfactory appraisal. If Developer waives such contingencies, or is seemed to have waived such contingencies, then Developer shall conclusively be deemed satisfied with all aspects of the Property, including, without limitation, the condition and suitability for Developer's intended use. 3.3.16 Developer's Review of Title. The Close of Escrow shall be contingent upon Developer's approval or deemed approval of title to the Property pursuant to this Agreement. Within thirty (30) days from the Opening of Escrow, Agency shall obtain, and provide a copy to Agency, a C:\Users\sbautista\Desktop\Agenda Items\04- Apr\A- 6 DDAgreement.doc -19- standard preliminary report from the Title Company with respect to the Property, together with the underlying documents relating to the Schedule B exceptions set forth in such report (collectively, the "Title Report"). At Developer's election, Developer may obtain, at Developer's sole cost, expense and liability, an ALTA survey ("Survey") of the Property; provided that Developer's election to obtain the Survey shall in no event affect Developer's "Title Review Period" (as hereinafter defined) and shall in no event delay the Close of Escrow. Developer shall have until thirty (30) days after its receipt of the Title Report ("Title Review Period") to give Agency and Escrow Holder written notice ("Developer's Title Notice") of Developer's disapproving or conditional approval of any matters shown in the Title Report or survey (if applicable). The failure of Developer to give Developer's Title Notice on or before the end of the Title Review Period shall be conclusively deemed to constitute Developer's approval of the condition of title to the Property as set forth in the Title Report. If Developer disapproves or conditionally approves in writing any matter of title shown in the Title Report or survey (if applicable), then Agency may, but shall have no obligation to, within three (3) days after its receipt of Developer's Title Notice ("Agency's Election Period"), elect to eliminate or ameliorate to Developer's satisfaction the disapproved or conditionally approved title matters by giving Developer written notice ("Agency's Title Notice") of those disapproved or conditionally approved title matters, if any, that Agency agrees to so eliminate or ameliorate by the Closing Date; provided, that, Agency shall have no obligation to pay any consideration or incur any liability in order to eliminate or ameliorate such disapproved title matters. If Agency does not elect to eliminate or ameliorate any disapproved or conditionally approved title matters, or if Developer disapproves Agency's Title Notice, or if Agency fails to timely deliver Agency's Title Notice, then Developer shall have the right, upon delivery to Agency and Escrow Holder (on or before two (2) days following the expiration of Agency's Election Period) of a written notice, to either: (1) waive its prior disapproval, in which event said disapproved matters shall be deemed unconditionally approved; or (2) terminate this Agreement pursuant to Section 3.3.13 and the Escrow created pursuant thereto. Failure to take either one of the actions described in (1) and (2) above shall be deemed to be Developer's election to take the action described in (1) above. If, in Agency's Title Notice, Agency has agreed to either eliminate or ameliorate to Developer's satisfaction by the Closing Date certain disapproved or conditionally approved title C:\Users\sbautista\Desktop\Agenda Items\04- Apr\A- 6 DDAgreement.doc -20- matters described in Developer's Title Notice, but Agency fails to do so, then Developer shall have the right (which shall be Developer's sole and exclusive right or remedy for such failure), upon delivery to Agency and Escrow Holder (on or before one (1) day prior to the Closing Date) of a written notice to either: (x) waive its prior disapproval, in which event said disapproved matters shall be deemed approved; (y) terminate this Agreement pursuant to Section 3.3.13 and the Escrow created pursuant hereto, or (z) at the Developer's election, allow the Agency an additional period of time, not to exceed thirty (30) days, to eliminate or ameliorate to Developer's satisfaction the disapproved or conditionally approved title matters described in Developer's Title Notice. If the Developer elects to proceed pursuant to (z) above, the Closing Date set forth in the Schedule of Performance shall be automatically extended by the length of the additional time period that Developer provides to the Agency. Failure to take any one of the actions described in (x), (y) and (z) above shall be deemed to be Developer's election to take the action described in (x) above. In the event that the Developer elects to proceed pursuant to (z) above and the Agency fails to eliminate or ameliorate to Developer's satisfaction the disapproved or conditionally approved title matters described in Developer's Title Notice prior to the expiration of the additional time period allowed to the Agency, then Developer shall have the right (which shall be the Developer's sole and exclusive right or remedy for such failure), upon delivery to Agency and Escrow Holder (on or before one (1) day prior to the Closing Date, as it may be extended pursuant to the preceding paragraph) of a written notice to either: (1) waive its prior disapproval, in which event said disapproved matter shall be deemed approved; or (2) terminate this Agreement pursuant to Section 3.3.13 and the Escrow created pursuant hereto. Failure to take either one of the actions described in (1) and (2) above shall be deemed to be Developer's election to take the action described in (1) above. 3.3.17 Review of Documents and Materials. Agency agrees to provide to Developer for Developer's review those documents and materials, if any, respecting the Property (collectively, "Documents and Materials"), provided (i) such Documents and Materials are in Agency's possession and control or are reasonably available at no cost to Agency, and (ii) Agency does not represent, warrant or certify the accuracy, adequacy or completeness of the Documents and Materials. During the period commencing upon the date that the Agency first provides Developer C:\Users\sbautista\Desktop\Agenda Items\04- Apr\A- 6 DDAgreement.doc -21- with any Documents and Materials and ending at 5:00 p.m. PST on the thirtieth (30th) day thereafter ("Feasibility Period"), the Developer shall have the right to review and examine the Documents and Materials. The failure of Developer to disapprove in writing any of the Documents and Materials on or before the expiration of the Feasibility Period shall be deemed to constitute Developer's approval of all the soils, environmental and reports and engineering data pertaining to the Property and any architectural studies, grading plans, topographical maps and similar data regarding the Property. Developer shall keep all information contained in the Documents and Materials confidential, as provided below. If, during the Feasibility Period, Developer reasonably determines that it is dissatisfied with any aspects of the Property and/or its condition or suitability for Developer's intended use or with any of the Documents and Materials, then Developer may, pursuant to Section 3.3.13, terminate this Agreement and the Escrow created pursuant hereto by delivering written notice to Agency and Escrow Holder on or before the expiration of the Feasibility Period of Developer's election to terminate. If Developer fails to deliver any such written termination notice to Agency and Escrow Holder on or before the expiration of the Feasibility Period, then Developer shall be deemed to be satisfied with all aspects of the Documents and Materials and with all aspects of the Property, including, without implied limitation, the condition and suitability of the Property for Developer's intended use: 3.3.18 Reliance Upon Documents and Materials. Developer acknowledges that: (i) The Documents and Materials are being furnished to it solely for Developer's review in connection with its possible purchase of the Property; and (ii) Developer is using the Documents and Materials and relying on any information or conclusion contained in the Documents and Materials at its own risk, and, except to the extent that the Documents and Materials are prepared by the Agency, Agency shall have no liability for any inaccuracies, omissions, errors or other matters that appear in the Documents and Materials; and C:\Users\sbautista\Desktop\Agenda Items\04- Apr\A- 6 DDAgreement.doc -22- (iii) Developer will use the Documents and Materials solely in connection with its examination of the Property and for no other purpose whatsoever. 3.3.19 Developer's Representations and Warranties. In consideration of Agency entering into this Agreement and as an inducement to Agency to sell the Property to Developer, Developer makes the following representations and warranties, each of which is material and is being relied upon by Agency: Developer represents and warrants that it is purchasing the Property based solely upon Developer's inspection and investigation of the Property and all documents related thereto, or its opportunity to do so, and Developer is, subject to Agency's obligation to conduct the Demolition pursuant to Section 3.3.14 hereof, purchasing the Property in an "AS-IS, WHERE-IS" condition, without relying upon any representations or warranties, express, implied or statutory, of any kind. Without limiting the above, Developer acknowledges that neither Agency, except as expressly set forth in this Section 3.3.19, nor any other party has made any representations or warranties, express or implied, on which Developer is relying as to any matters, directly or indirectly, concerning the Property, including but not limited to, the land, the square footage of the Property, improvements and infrastructure, if any, development rights and exactions, expenses associated with the Property, taxes, assessments, bonds, permissible uses, title exceptions, water or water rights, topography, utilities, zoning of the Property, soil, subsoil, the purposes for which the Property is to be used, drainage, environmental or building laws, rules or regulations, toxic waste or Hazardous Materials or any other matters affecting or relating to the Property. Developer hereby expressly acknowledges that no such representations have been made. The Closing of Escrow for the Property by Developer hereunder shall be conclusive evidence that (1) Developer has fully and completely inspected (or has caused to be fully and completely inspected) the Property, (2) Developer accepts the Property as being in good and satisfactory condition and suitable for Developer's purposes, and (3) the Property fully comply with Agency's covenants and obligations hereunder. Developer shall perform and rely solely upon its own investigation concerning its intended use of the Property, the Property's fitness thereof, and the availability of such intended use under applicable statutes, ordinances, and regulations. Developer further acknowledges and agrees C:\Users\sbautista\Desktop\Agenda Items\04- Apr\A- 6 DDAgreement.doc -23- that Agency's cooperation with Developer in connection with Developer's due diligence review of the Property, whether by providing the Title Report other documents, or permitting inspection of the Property, shall not be construed as any warranty or representation, express or implied, of any kind with respect to the Property, or with respect to the accuracy, completeness, or relevancy of any such document. Furthermore, without limiting the generality of the foregoing, Developer hereby expressly waives, releases and relinquishes any and all claims, causes of action, rights and remedies Developer may now or hereafter have against Agency, the City, and their officials, officers, employees, and agents, whether known or unknown, with respect to any past, present or future presence or existence of Hazardous Materials on, under or about the Property or with respect to any past, present or future violations of any rules, regulations or laws, now or hereafter enacted, regulating or governing the use, handling, storage, release or disposal of Hazardous Materials, including, without limitation, (i) any and all rights Developer may now or hereafter have to seek contribution from Agency or City under Section 113(f)(i) of the Comprehensive Environmental Response, Compensation and Liability Act of 1980 ("CERCLA"), as amended by the Superfund Amendments and Reauthorization Act of 1986 (42 U.S.C.A. ' 9613), as the same may be further amended or replaced by any similar law, rule or regulation, (ii) any and all rights Developer may now or hereafter have against Agency or City under the Carpenter-Presley-Tanner Hazardous Substances Account Act (California Health and Safety Code, Section 25300, et seq.), as the same may be further amended or replaced by any similar law, rule or regulation, (iii) any and all claims, whether known or unknown, now or hereafter existing, with respect to the Property under Section 107 of CERCLA (42 U.S.C.A. ' 9607), and (iv) any and all claims, whether known or unknown, based on nuisance, trespass or any other common law or statutory provisions. Nothing in this paragraph shall operate as a release of any rights or remedies of the Developer against the Agency arising from the migration or release of Hazardous Materials from/on adjacent property owned by the Agency. As used herein, the term "Hazardous Material(s)" includes, without limitation, any hazardous or toxic materials, substances or wastes, such as (A) those materials identified in Sections 66680 through 66685 and Section 66693 through 66740 of Title 22 of the California Administrative Code, Division 4, Chapter 30, as amended from time to time, (B) those materials defined in Section 25501(j) of the California Health and Safety Code, (C) any materials, substances or wastes that are toxic, ignitable, C:\Users\sbautista\Desktop\Agenda Items\04- Apr\A- 6 DDAgreement.doc -24- corrosive or reactive and that are regulated by any local governmental authority, any agency of the state of California or any agency of the United States Government, (D) asbestos, (E) petroleum and petroleum based products, (F) urea formaldehyde foam insulation, (G) polychlorinated biphenyls (PCBs), and (H) freon and other chlorofluorocarbons. DEVELOPER HEREBY ACKNOWLEDGES THAT IT HAS READ AND IS FAMILIAR WITH THE PROVISIONS OF CALIFORNIA CIVIL CODE SECTION 1542 ("SECTION 1542"), WHICH IS SET FORTH BELOW: "A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR." BY INITIALING BELOW, DEVELOPER HEREBY WAIVES THE PROVISIONS OF SECTION 1542 SOLELY IN CONNECTION WITH THE MATTERS THAT ARE THE SUBJECT OF THE FOREGOING WAIVERS AND RELEASES: _______________ Developer's Initials The waivers and releases by Developer herein contained shall survive the Close of Escrow and the recordation of the Grant Deed and shall not be deemed merged into the Grant Deed upon its recordation. The release and waiver provisions of this Section 3.3.19 shall not apply to any cause of action, claim, demand or liability that is attributable to a breach of the Agency's representations and warranties under Section 3.3.20 or to the migration of Hazardous Materials onto or under the Property from any adjacent Agency-owned property. Upon the Close of Escrow, the Agency conditionally assigns to the Developer any rights, remedies, or chooses in action that the Agency may have against any prior owner of the C:\Users\sbautista\Desktop\Agenda Items\04- Apr\A- 6 DDAgreement.doc -25- Property in connection with the presence or release of Hazardous Materials on or under the surface of the Property; provided, however, that the Agency may revoke such assignment by written notice to the Developer upon: (i) the Agency's reasonable determination that such revocation is necessary to allow the Agency to assert a claim or defense against any such prior owner, and (ii) the Agency being made a party to a clean up order, lawsuit, or other proceeding concerning the presence or release of Hazardous Materials on or under the surface of the Property. Such revocation shall not operate to restrict the Developer's right to defend itself if it is named in any action by such prior owner(s). 3.3.20 Agency's Representations and Warranties Re: Condition of the Property. In consideration of Developer entering into this Agreement and as an inducement to Developer to purchase the Property from Agency, Agency represents and warrants that pursuant to California Health and Safety Code Section 25359.7, to the actual current knowledge of the Agency, the Agency is not aware of the release or the presence of any Hazardous Materials on or in the Property. 3.3.21 Taxes and Assessments. Any assessments and ad valorem taxes on the Property levied, assessed or imposed for any period commencing prior to conveyance of title shall be paid by the Agency. All assessments, ad valorem taxes, possessory interest taxes and personal property taxes levied or imposed upon the Property or upon this Agreement or any right hereunder for any period after the Closing shall be paid by the Developer. The Developer shall cause all taxes and assessments levied against the Property to be paid in a timely fashion. 3.5 Development of Property. Subject to the Agency's obligation regarding Demolition as set forth in Section 3.3.14 hereof, the Developer shall perform its obligations with respect to the Development in accordance with this Agreement, including, without implied limitation, the Scope of Development and Schedule of Performance attached as Exhibits B and C, respectively, the Grant Deed to the Property and any additional plans provided by the Developer and approved by the Agency and the City pursuant to this Agreement. 3.5.1 Preparation of Concept and Site Plans and Related Documents. Within the time set forth in the Schedule of Performance, the Developer shall prepare and submit to the C:\Users\sbautista\Desktop\Agenda Items\04- Apr\A- 6 DDAgreement.doc -26- Agency concept and site plans and related documents for the Development, for the Agency's review pursuant to Section 3.5.2 of this Agreement. The concept and site plans and related documents shall be consistent with the Scope of Development. The Agency's staff and the Developer shall hold regular progress meetings to coordinate the preparation and submission of the concept and site plans and related documents. The Agency's staff and the Developer shall communicate and consult informally as frequently as is necessary to assure that the formal submittal of any documents to the City receive prompt consideration. 3.5.2 Agency Approval of Concept Design Drawings. The Agency shall have the right of review and approval of all construction plans, drawings and related documents (collectively "Plans") for the development of the Property, including any proposed changes thereto. The Agency shall approve or disapprove the Plans within twenty (20) days from the date of their submission to the Agency. Failure by the Agency to either approve or disapprove within the time established in this Section 3.5.2 shall be deemed an approval. Any disapproval shall state in writing the reasons for disapproval and the changes requested by the Agency to be made. The Agency shall approve the Plans provided that the Plans conform to this Agreement. The Developer, upon receipt of a disapproval, shall revise such Plans and shall submit them to the Agency within thirty (30) days after receipt of notice of disapproval. The Agency shall use reasonable good faith efforts to expedite the City's processing and review of the Developer's plans, in a manner consistent with statute, the City's Municipal Code and this Agreement. The Agency shall approve or disapprove the Plans within twenty (20) days from the date of their submission to the Agency. Failure by the Agency to either approve or disapprove within the time established in this Section 3.5.2 shall be deemed an approval. This process shall continue until the Plans are finally approved. Any changes to the Plans required by the Agency shall not operate to extend the time for performance of the Developer's obligations hereunder, unless such changes are necessary due to the Agency-initiated deviations from the Scope of Development. The Agency and the Developer shall confer in good faith regarding appropriate time extensions for the Agency-initiated changes. C:\Users\sbautista\Desktop\Agenda Items\04- Apr\A- 6 DDAgreement.doc -27- 3.5.3 Governmental Requirements. If any governmental official, agency, department or bureau having jurisdiction over the Development (including, without implied limitation, the City) requires material revisions or corrections of the Agency-approved concept and site plans, the Developer and the Agency shall cooperate in efforts to obtain waivers of such requirements or to develop a mutually acceptable set of alternative concept and site plans. 3.5.4 Cost of Construction. All costs and expenses of designing, undertaking and completing the Development and providing all utilities therefor, shall be borne by the Developer at its sole cost, expense and liability. 3.5.5 Construction and Development Schedule of Performance. The Developer shall begin and complete all construction and development within the times specified in the Schedule of Performance or such reasonable extension of said dates as may be granted by the Agency. In addition to extensions of time provided by express provisions of this Agreement, the Schedule of Performance may be revised from time to time as mutually agreed upon in writing between the Developer and the Agency. From time to time during the period of construction and as reasonably requested by the Agency, the Developer shall report to the Agency on the progress of construction. The reports shall be in such form and detail as may reasonably be required by the Agency and shall include construction photographs taken since the last report. 3.5.6 Grading, Paving and Landscaping Plans. The Developer shall prepare and submit to the City for its approval, any preliminary and final, grading, paving and landscaping plans for the Property. These plans shall be prepared, submitted and approved by the City Engineer prior to the start of construction. The grading plans shall be prepared by a registered civil engineer. Developer shall complete installation of landscaping on the Property prior to the issuance of a certificate of occupancy. The landscaping plan, including plant materials and types, shall be subject to the approval of the City's Community Development Director in the same manner and within the same amounts of time as set forth in Section 3.5.2 hereof. C:\Users\sbautista\Desktop\Agenda Items\04- Apr\A- 6 DDAgreement.doc -28- 3.5.7 Right of Access. Until a Certificate of Completion is issued for the Development and for the purpose of assuring compliance with this Agreement, representatives of the Agency and the City shall have reasonable right of access to the Property without charge, during Agency business hours and after not less than forty-eight (48) hours prior written notice. Agency will use good faith efforts to minimize any interference that the Agency's entry may have upon the Developer's operations on the Property. 3.5.8 Indemnity. The Developer shall defend, indemnify and hold the Agency and the City, and their officers, directors, agents, servants, attorneys, employees and contractors harmless from and against all liability, loss, damage, costs, or expenses (including reasonable attorneys' fees and court costs) (all of the foregoing collectively, "Liabilities") arising from or as a result of the death of any person or any accident injury, loss or damage whatsoever caused to any person or to the property of any person and that shall be, or alleged to be, directly or indirectly, caused by any acts done thereon or any errors or omissions of the Developer or its officers, directors, agents, servants, attorneys, employees or contractors that are related to the construction of the Development. The Developer shall not be responsible for (and such indemnity shall not apply to) any acts, errors or omissions directly or indirectly caused by the Agency or the City, or their respective officers, directors, agents, servants, attorneys, employees or contractors. The Agency and the City shall not be responsible for any acts, errors or omissions of any person or entity except the Agency and the City and their respective officers, agents, servants, employees or contractors. The Developer's obligations under this Section 3.5.8 shall survive the expiration or termination of this Agreement. 3.5.9 Insurance. As a condition to the Close of Escrow, the Developer shall furnish or cause to be furnished to the Agency duplicate originals and appropriate endorsements to the Developer's commercial general liability and automobile insurance policies in the amounts set forth below, naming the Agency and the City as additional or co-insureds: (a) $1,000,000 for any one person; and (b) $3,000,000 for any one occurrence; and (c) $1,000,000 for any property damage. C:\Users\sbautista\Desktop\Agenda Items\04- Apr\A- 6 DDAgreement.doc -29- The policies shall be "occurrence," not "claims made," policies and shall be primary and non-contributing to any insurance that the Agency may elect to obtain. Such policies shall contain a full waiver of subrogation clause. The policies shall be issued by a carrier licensed to do business in California, with a then-current Best's rating of A:VIII or better. Said policies shall provide that they shall not be canceled or reduced in types of coverage or amount of coverage without at least thirty (30) days' prior written notice to the Agency and that such reduction or cancellation shall become effective until at least twenty (20) days after receipt by the Agency of the written notice thereof. The policy amounts set forth above shall not limit or define the extent of the Developer's indemnity liability pursuant to Section 3.5.8 or any other provision of this Agreement, or arising as a matter of law or at equity. The Developer shall also furnish or cause to be furnished to the Agency evidence satisfactory to the Agency that any contractor with whom it has contracted for the performance of work on the Development carries workers' compensation insurance as required by law. The Developer shall also maintain, or cause its contractor to maintain, all-risk course of construction insurance, insuring the Developer, the Agency and the City against all risk (including earthquake) of loss or damage to the Development. The obligations set forth in this Section shall remain in effect until a Certificate of Completion has been issued for the Development. 3.5.10 Governmental Permits and Compliance With Laws. Before commencement of construction or development of any buildings, structures or other work of improvement upon the Property, the Developer shall, at its own expense, secure or cause to be secured any and all permits, entitlements, or other approvals that may be required by or from the City or any other governmental agency with jurisdiction over the Development. The Agency shall provide reasonable non-financial assistance to the Developer in securing these permits or approvals. The Developer shall carry out the construction of the Development in conformity with all applicable laws, including all applicable federal and state labor and safety standards. 3.5.11 No Unlawful Discrimination. The Developer agrees that the Developer will not unlawfully discriminate against any employee or applicant for employment because of sex, C:\Users\sbautista\Desktop\Agenda Items\04- Apr\A- 6 DDAgreement.doc -30- marital status, race, color, religion, creed, national origin, or ancestry, and that the Developer will comply with all applicable local, state and federal fair employment laws and regulations. The Developer covenants and agrees that it will not unlawfully discriminate against or segregation of any person or group of persons on account of race, color, creed, religion, sex, marital status, ancestry or national origin in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Property, nor shall the Developer itself, or any person claiming under or through it, establish or permit any such practice or practices of unlawful discrimination or segregation with reference to the selection, location, number, use of occupancy of tenants, lessees, subtenants, sublessee or vendees of the Property. The foregoing covenants shall run with the land, be binding upon the Developer's transferee's, successors and assigns, and shall, to the extent provided by law, remain in effect in perpetuity. All deeds, leases or contracts relative to the Property, or the improvements constructed thereon, shall contain or be subject to substantially the following nondiscrimination and non- segregation clauses, pursuant to California Health and Safety Code Section 33435 and 33436. 3.5.12 In deeds: The grantee herein covenants by and for himself, his heirs, executors, administrators, and assigns, and all persons claiming under or through them, that there shall be no unlawful discrimination against or segregation of, any person or group of persons on account of race, color, creed, religion, sex, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land herein conveyed, nor shall the grantee himself or any person claiming under or through him, establish or permit any such practice or practices of unlawful discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees in the land herein conveyed. The foregoing covenants shall run with the land in perpetuity. 3.5.13 In leases: The lessee herein covenants by and for himself, his heirs, executors, administrators and assigns, and all persons claiming under or through him, and this lease is made and accepted upon the subject to the following conditions: That there shall be no unlawful discrimination against or segregation of any person or group of persons, on account of race, color, creed, religion, sex, marital status, national origin or ancestry, in the leasing, subleasing, transferring, C:\Users\sbautista\Desktop\Agenda Items\04- Apr\A- 6 DDAgreement.doc -31- use, occupancy, tenure or enjoyment of the land herein leased, nor shall the lessee himself, or any person claiming under or through him, establish or permit any such practice or practices of unlawful discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the land herein leased. 3.5.14 In contracts: There shall be no unlawful discrimination against or segregation of, any person or group of persons on account of race, color, creed, religion, sex, marital status, national origin, or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land, nor shall the transferee himself or any person claiming under or through him establish or permit any such practice or practices of unlawful discrimination or segregation with reference to the selection, location, number, use, or occupancy of tenants, lessees subtenants, sublessees or vendees of the land. Nothing in this Section 3.5.14 shall operate as a waiver of any legal defenses that the Developer may have for a breach of any covenant contained herein, or operate to impose additional burdens upon the Developer other than those imposed by current law. 3.5.15 Prohibition Against Transfer. Prior to the tenth (10th) anniversary of the recordation of the Grant Deed, the Developer may not, except as permitted by this Section 3.5.15 or Section 3.5.17, assign or attempt to assign this Agreement or any right or obligation herein, nor make any total or partial sale, transfer, conveyance or assignment of the Property or the improvements thereon, without prior written approval of the Agency, which may be given or withheld in the Agency's reasonable discretion. In determining whether to approve of such a partial sale, transfer, conveyance or assignment of the Property or the improvements thereon the Agency shall evaluate: (i) the financial ability of the proposed transferee to own and operate the Development and to meet the Developer's obligations under this Agreement; and (ii) the fitness and experience of the proposed transferee and its senior managerial personnel to own and operate the Development. The foregoing prohibition shall not apply to Sections 3.5.15.1 or 3.5.15.2, provided the Developer shall first notify the Agency in writing of the proposed action. The actions to which this exception applies are: C:\Users\sbautista\Desktop\Agenda Items\04- Apr\A- 6 DDAgreement.doc -32- 3.5.15.1 The granting of dedications, easements or permits to facilitate the development of the Property; or 3.5.15.2 The assignment of all of the Developer's rights and obligations hereunder, or the sale, transfer or lease of the entirety of the Property and any improvements thereon to an entity formed for the purpose of constructing and operating the Development, provided that the majority voting and ownership interest in such entity is held by Developer. Any such assignment, sale, transfer or conveyance pursuant to this Section 3.5.15.2 shall not relieve the Developer of liability for the timely and faithful performance of any assigned obligation, absent an express agreement between the Agency, the Developer and the third party transferee to the contrary. 3.5.16 Obligations Remain. No unpermitted sale, transfer, conveyance or assignment of all or any portion of this Agreement or the Property shall be deemed to relieve the Developer or any other party from any obligation under this Agreement, nor shall any such unpermitted sale, transfer, conveyance or assignment transfer any rights in the Property or this Agreement. 3.5.17 Permitted Encumbrances. Section 3.5.15 notwithstanding, Developer shall not, at any time prior to the tenth (10th) anniversary of the Close of Escrow, grant or permit any mortgage, deed of trust, sale and leaseback or any other form of conveyance or encumbrance in connection with the financing and development of the Property (a "Lien") other than a Permitted Encumbrance, as hereinafter defined. For purposes hereof, a "Permitted Encumbrance" is any Lien that secures financing: (i) provided to Developer by a nationally chartered bank or any finance subsidiary thereof, an insurance company (or affiliate thereof) rated at least B+ XII by A.M. Best; (ii) providing sufficient funds to permit the construction and long term financing of the Development; (iii) collateralized by C:\Users\sbautista\Desktop\Agenda Items\04- Apr\A- 6 DDAgreement.doc -33- the Property; (iv) with respect to which the Agency receives written notice prior to the recordation of any documentation recording such Lien; (v) with respect to which the lender agrees to give the Agency written notice concurrent with notice to Developer of any default under any of the financing documents pertaining to such Lien and the right to cure such default within any cure period afforded Developer by such lender or by law; and (vi) with respect to which the lender provides the Agency the right to purchase the lender's interest no less than three (3) days prior to the judicial or non- judicial foreclosure sale or transfer by deed in lieu of foreclosure. Nothing in this Agreement shall be deemed to obligate the holder of any Permitted Encumbrance to construct the Development or to guarantee such construction. Nothing in this Agreement shall be deemed to permit or authorize any such holder to develop the Property or construct improvements thereon except in strict compliance with this Agreement. Any right, title and interest in the Property (or any portion thereof) acquired by any means by any holder of a Lien, or by such holder's assignees or successors, shall be subject to the terms and provisions of this Agreement and the Grant Deed. The word "Lien" means all customary modes of financing real estate acquisition, construction and land development. 3.5.18 Certificate of Completion. Upon the Developer's receipt of notification from the City's Building Department that the Developer has satisfactorily completed any and all improvements required for the Development, the Developer shall be entitled to receive a Certificate of Completion substantially in the form and substance as set forth in Exhibit E. Except as otherwise provided therein, the Certificate of Completion shall be a conclusive determination of satisfactory completion by Developer of all of the obligations required to be completed under this Agreement for the Development. A Certificate of Completion will not constitute: (i) evidence of compliance with or satisfaction of any obligation of the Developer to any party other than Agency, (ii) evidence of compliance with or satisfaction of any obligation of the Developer to any holder of a mortgage or any insurer of a mortgage, or (iii) a notice of completion as referred to in California Civil Code Section 3093. 3.5.19 Covenants Running With the Land. C:\Users\sbautista\Desktop\Agenda Items\04- Apr\A- 6 DDAgreement.doc -34- 3.5.19.1 Use Covenant. The Developer covenants and agrees for itself, its assigns and all voluntary and involuntary successors in interest to the Property or any part thereof, that for the life of the Redevelopment Plan, the Property shall be put to no use other than those uses specified in the City's General Plan and zoning ordinances, the Grant Deed and this Agreement, as such documents may be amended from time to time. 3.5.19.2 Opening and Operation Covenant. Developer covenants and agrees that the Developer will construct and open the Development as required by this Agreement and, until the thirtieth (30th) anniversary of the earlier of the issuance of a Certificate of Completion, will continuously operate the Development, unless properly assigned or transferred pursuant to Section 3.5.15, in which case, this covenant shall bind the assignee/transferee for the full term hereof. The Developer will not be deemed to be in breach of this Section 3.5.19.2 should Developer temporarily cease to operate the Development for the following reasons: (i) general repair and/or maintenance, the construction of improvements, and the installation of utilities; (ii) acts of enforced delay as defined in Section 5.4 due to wear, insurrection, labor disputes, lockouts, third party litigation, acts of a public enemy or governmental authority; and (iii) the restoration and rebuilding of the Development, as more particularly described in Section 3.5.19.4, following casualty loss due to floods, earthquakes, fires, other acts of God or third parties. 3.5.19.3 Maintenance Covenant. The Developer covenants and agrees that the Developer shall maintain, or cause to be maintained, the interior and exterior appearances of the Property in a good condition, ordinary wear and tear excepted.. The maintenance covenant of this Section 3.5.19.3 shall remain in effect for the same period of time as the covenant set forth in Section 3.5.19.2. C:\Users\sbautista\Desktop\Agenda Items\04- Apr\A- 6 DDAgreement.doc -35- 3.5.19.4 Rebuilding Covenant. The Developer covenants and agrees that following the damage, destruction and/or demolition of the Property and/or Development by an act of God or casualty, including, but not limited to, fire, floods and earthquakes, the Developer will promptly restore and rebuild the Property and/or Development (as applicable) in substantially the same form as required by this Agreement, subject to such modifications as Agency and Developer may agree upon. The covenants of this Section 3.5.19.4 shall remain in effect for the same period of time as the covenant set forth in Section 3.5.19.2. 3.5.19.4.1 No Conveyance to Tax Exempt Entity. The Developer covenants and agrees for itself, its assigns and all voluntary and involuntary successors in interest to the Property or any part thereof, that the Property or any portion thereof may not be used, or otherwise sold, transferred, conveyed, assigned, leased, leased back, or hypothecated to or for any use that is partially or wholly exempt from the payment of real property taxes or which would cause the exemption of all or any portion of such real property taxes. 3.5.19.4.2 No Property Tax Contest. The Developer covenants and agrees for itself, its successors, its assigns and all voluntary and involuntary successors in interest to the Property or any part thereof, that, for any period that the Agency is allocated property taxes pursuant to Health and Safety Code Section 33670 or successor statute, the Developer shall not contest the assessed valuation of the Property or any part thereof, as established by the San Bernardino County Assessors Office. 3.5.19.5 Enforcement of Covenants. The covenants set forth in Sections 3.5.19.1 through 3.5.19.4 and Section 3.5.11 to 3.5.14 touch and concern the Property, and every part thereof, and constitute covenants running with the Property and every part thereof for the full term set forth therein. These covenants may be enforced by the Agency or the City (as an intended third party beneficiary), regardless of whether the Agency or the City currently or continue to own an interest in any property within the Project Area. C:\Users\sbautista\Desktop\Agenda Items\04- Apr\A- 6 DDAgreement.doc -36- The Developer irrevocably stipulates and agrees that breach of any of the covenants set forth in Section 3.5.19.1 through 3.5.19.4 and Section 3.5.11 to 3.5.14 will result in great and irreparable damage to the Agency and the City, will violate the public policy and the purposes of the CRL, and will result in damages to the Agency and the City that are either impracticable or extremely difficult to quantify. Accordingly, upon the breach of any covenant set forth in Sections 3.5.19.1 through 3.5.19.4 and Section 3.5.11 to 3.5.14, the Agency may institute an action for injunctive relief and/or for damages attributable to such breach. The covenants set forth in Sections 3.5.19.1 through 3.5.19.4 and Section 3.5.11 to 3.5.14 constitute obligations of the owner of the Property or any portion thereof. Neither the Developer nor any voluntary or involuntary successor in interest shall have any liability under this Agreement for the breach of any of the covenants described above, if such breach occurs at any time following the Developer's or successor's cessation or ownership of the Property. 3.5.20 Phase II of Development. During the term of this Agreement, the Agency and Developer shall regularly meet and confer and negotiate in good faith terms of potential additional assistance by the Agency for the addition of two additional residential units to the scope of the Development. Nothing contained herein shall be deemed a commitment of any source or amount of such funding. ARTICLE 4. DAMAGES AND REMEDIES 4.1 Civil Code Section 1542 This Agreement provides, in some instances, for limitations on damages and for sole and exclusive remedies in lieu of certain other remedies that would otherwise be available to the parties for the uncured breach of an obligation under this Agreement. The Agency and the Developer acknowledge and agree that such limitations are material consideration for their entry into this Agreement and, in the absence of such limitations, neither the Agency nor the Developer would have entered into this Agreement. As to those breaches of obligations that are subject to the above-described limitations, the Agency and the Developer hereby waive, to the maximum legal extent, any and all other claims, remedies and cause of action for damages, liabilities, losses or injuries, whether known or unknown, foreseeable or unforeseeable. C:\Users\sbautista\Desktop\Agenda Items\04- Apr\A- 6 DDAgreement.doc -37- Both the Agency and the Developer are aware of California Civil Code Section 1542, which provides: "A general release does not extend to claims which the creditor does not know or suspect to exist in his favor at the time of executing the release, which if known by him must have materially affected his settlement with the debtor." 4.2 Rights and Remedies Not Exclusive. Unless prohibited by law or otherwise provided by a specific term of this Agreement, the rights and remedies of the Agency and the Developer under this Agreement are nonexclusive, and all remedies hereunder may be exercised individually or cumulatively. In addition to those remedies expressly granted herein, the Parties shall also have the right to seek all other available legal and equitable remedies, including, without implied limitation, general and consequential damages, unless otherwise expressly provided to the contrary herein. 4.3 Notice and Opportunity to Cure. If either party to this Agreement believes that the other party has failed to perform any obligation of that party in accordance with the terms of this Agreement, the party alleging the default shall provide written notice ("Default Notice") to the other party, setting forth the nature of the alleged default. The party claimed to be in default shall have: (i) with respect to a default involving the payment of money, ten (10) days after its receipt of the Default Notice to completely cure such default, and (ii) with respect to any other type of default, ninety (90) days from the receipt of the Default Notice to completely cure such default or, if such default cannot reasonably be cured within such ninety (90) day period, to commence the cure of such default within the thirty (30) day period and diligently prosecute the cure to completion thereafter. If the party alleged to be in default fails to cure, or commence to cure (if applicable), as provided in the preceding paragraph, the party alleging the default may exercise such rights and remedies as provided for in this Agreement. 4.4 Remedies for Breach Prior to Close of Escrow. C:\Users\sbautista\Desktop\Agenda Items\04- Apr\A- 6 DDAgreement.doc -38- 4.4.1 Developer's Breach. If the Developer breaches any obligation hereunder that is to be performed prior to the Close of Escrow, and fails to cure such breach as provided in Section 4.3, the following are the Agency's sole and exclusive remedies: 4.4.1.1 The Agency may terminate this Agreement and the Escrow without cost, expense or liability; and 4.4.1.2 The Agency may obtain the amount set forth below as liquidated damages. THE AGENCY AND THE DEVELOPER STIPULATE THAT THE AGENCY WILL SUFFER DAMAGES IF ESCROW FAILS TO CLOSE DUE TO THE UNCURED MATERIAL DEFAULT OF THE DEVELOPER AND THAT SUCH DAMAGES WOULD BE EXTREMELY DIFFICULT OR IMPRACTICABLE TO QUANTIFY. IF ESCROW FAILS TO CLOSE DUE TO THE DEVELOPER'S DEFAULT, AND THE AGENCY ELECTS TO TERMINATE THIS AGREEMENT PURSUANT TO THIS SECTION 4.4.1, THE AGENCY AND THE DEVELOPER AGREE THAT THE AMOUNT OF TWENTY FIVE THOUSAND DOLLARS ($25,000) IS A REASONABLE ESTIMATION OF THE DAMAGES THAT THE AGENCY WILL SUFFER. UPON THE AGENCY'S ELECTION TO TERMINATE THIS AGREEMENT AS PROVIDED ABOVE, THE AGENCY SHALL RECEIVE FROM THE DEVELOPER THE SUM OF TWENTY FIVE THOUSAND DOLLARS ($25,000) AS LIQUIDATED DAMAGES AND AS ITS SOLE AND EXCLUSIVE REMEDY FOR SUCH DEFAULT. THE FOREGOING IS NOT A PENALTY, BUT CONSTITUTES LIQUIDATED DAMAGES TO THE AGENCY PURSUANT TO CALIFORNIA CIVIL CODE SECTIONS 1671 AND 1677. ______________ _________________ Agency's Initials Developer's Initials C:\Users\sbautista\Desktop\Agenda Items\04- Apr\A- 6 DDAgreement.doc -39- 4.4.2 Agency's Breach. If the Agency breaches any obligation hereunder that is to be performed prior to the Close of Escrow, and fails to cure such breach as provided in Section 4.3, the following are the Developer's sole and exclusive remedies: 4.4.2.1 The Developer may terminate this Agreement and the Escrow without cost, expense or liability; or and obtain the amount set forth below as liquidated damages; or 4.4.2.2 The Developer may institute an action for specific performance of the terms of this Agreement as to the conveyance of the title to the Property. THE AGENCY AND THE DEVELOPER STIPULATE THAT THE DEVELOPER WILL SUFFER DAMAGES IF ESCROW FAILS TO CLOSE DUE TO THE UNCURED MATERIAL DEFAULT OF THE AGENCY AND THAT SUCH DAMAGES WOULD BE EXTREMELY DIFFICULT OR IMPRACTICABLE TO QUANTIFY. IF ESCROW FAILS TO CLOSE DUE TO THE AGENCY'S DEFAULT, AND THE DEVELOPER ELECTS TO TERMINATE THIS AGREEMENT PURSUANT TO THIS SECTION 4.4.2, THE AGENCY AND THE DEVELOPER AGREE THAT THE AMOUNT OF TWENTY FIVE THOUSAND DOLLARS ($25,000) IS A REASONABLE ESTIMATION OF THE DAMAGES THAT THE DEVELOPER WILL SUFFER. UPON THE DEVELOPER'S ELECTION TO TERMINATE THIS AGREEMENT AS PROVIDED ABOVE, THE DEVELOPER SHALL RECEIVE FROM THE AGENCY THE SUM OF TWENTY FIVE THOUSAND DOLLARS ($25,000) AS LIQUIDATED DAMAGES AND AS ITS SOLE AND EXCLUSIVE REMEDY FOR SUCH DEFAULT. THE FOREGOING IS NOT A PENALTY, BUT CONSTITUTES LIQUIDATED DAMAGES TO THE DEVELOPER PURSUANT TO CALIFORNIA CIVIL CODE SECTION 1671. ______________ _________________ Agency's Initials Developer's Initials C:\Users\sbautista\Desktop\Agenda Items\04- Apr\A- 6 DDAgreement.doc -40- 4.5 Power of Termination. 4.5.1 The Grant Deed shall reserve to the Agency a power of termination in the Property, as such powers as described in California Civil Code Section 885.010, et seq. Notwithstanding anything else in this Agreement, to the contrary (inclusive of Section 4.3), the Agency shall, upon ninety (90) days written notice to the Developer, have the right, at its option and due to any cause set forth in this Section 4.5, to terminate the estate in the Property granted to the Developer and take possession of the Property and all improvements thereon, and to revest in the Agency the estate in the Property conveyed to the Developer and to vest title to all improvements constructed thereon, if after conveyance of title and prior to the recordation of the Certificate of Completion, the Developer (or its successors in interest) shall: (i) Fail to obtain a final certificate of occupancy (as provided by City's Municipal Code) for the shell and core improvements of the Development by the date set forth therefor in the Schedule of Performance; or (ii) Abandon or substantially suspend, or allow the abandonment or substantial suspension, of construction of all or any portion of the Development for thirty (30) days after written notice of such abandonment or suspension from the Agency; or (iii) Assign or attempt to assign this Agreement, or any rights or obligations herein, or transfer, or suffer any involuntary transfer, of the Property or any part thereof, in violation of this Agreement, and such violation shall not have been cured within thirty (30) days after of written notice thereof from the Agency; or (iv) Fail to cure within ninety (90) days after occurrence any default with respect to any financing secured by a deed of trust, mortgage or other security interest in the Property or any portion thereof. The sixty (60) day written notice specified in this Section 4.5 shall specify that the Agency proposes to take action pursuant to this Section 4.5 and shall specify which of the Developer's obligations set forth in subsections 4.5.1(i) through 4.5.1(iv) have been breached. The C:\Users\sbautista\Desktop\Agenda Items\04- Apr\A- 6 DDAgreement.doc -41- Agency may proceed with the remedy set forth herein only if the Developer does not cure such default within ninety (90) days following such notice. 4.5.2 The right of the Agency to reenter, repossess, terminate, vest and revest shall be subject and subordinate to, shall be limited by and shall not defeat, render invalid or limit any mortgage, deed of trust or other security interest required for any reasonable method of financing the construction of improvements on the Property and any other expenditures necessary to appropriately develop the Property under this Agreement (provided that the Agency has consented to such financing pursuant to Section 3.5.15) or any rights or interests provided in this Agreement for the protection of the holders of any such mortgage, deed of trust or other security interest. Any grant deed to the Property or any portion thereof conveyed or leased by the Developer to another party shall contain appropriate references and provisions to give effect to the Agency's rights as set forth in this Section 4.5. 4.5.3 Upon the Agency's exercise of its rights and powers as provided in this Section 4.5, the Developer or its successors shall convey by warranty deed to the Agency title to the Property and all improvements thereon in accordance with Civil Code Section 1109, as hereafter amended or substituted. Such conveyance shall be duly acknowledged by the Developer in a manner suitable for recordation. The Agency may enforce its rights pursuant to this Section 4.5 by means of an injunctive relief or forfeiture of title action filed in any court of competent jurisdiction. 4.5.4 Upon the revesting in the Agency of title to the Property by grant deed or court decree, the Agency shall use its reasonable good faith efforts to resell the Property at fair market value as soon and in such manner as the Agency shall find feasible and consistent with the objectives of the Community Redevelopment Law and of the Redevelopment Plan, to a qualified and responsible party or parties (as reasonably determined by the Agency) who will assume the Developer's obligation to begin and/or complete and/or operate the Development, or such other replacement project acceptable to the Agency in its sole and absolute discretion, in accordance with this Agreement and the Redevelopment Plan. Upon such resale of the Property (or any portion thereof), the proceeds thereof shall be applied as follows: C:\Users\sbautista\Desktop\Agenda Items\04- Apr\A- 6 DDAgreement.doc -42- (i) First, to pay any and all amounts required to release/reconvey any Permitted Encumbrance; and (ii) Second, to reimburse the Agency on its own behalf or on behalf of the City for all actual internal and third party costs and expenses previously or currently incurred by the Agency and the City related to the Property or the Development, including, but not limited to, customary and reasonable fees or salaries to third party personnel engaged in such actions, in connection with the recapture, management and resale of the Property or any part thereof; all taxes, assessments and utility charges paid by the City and/or the Agency with respect to the Property or portion thereof; 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 the Developer or the Agency or the City with respect to the making or completion of the Development or any part thereof upon the Property; and amounts otherwise owing to the Agency by the Developer or its successors in interest to the Property or any part thereof pursuant to the terms hereof; and (iii) Third, to the extent that any and all funds that are proceeds from such resale are thereafter available, taking into account any prior encumbrances with a claim thereto, to reimburse the Developer, or its successors in interest to the Property or any part thereof, equal to the sum of: (1) the portion of the Purchase Price that was paid to the Agency; and (2) the third party costs actually incurred and paid by the Developer for the development of the Property, including, but not limited to, costs of carry, taxes, and other items as set forth in the Developer's cost statement, which shall be subject to the Agency's reasonable approval; provided, however, that the Developer shall not be entitled to reimbursement for any expenses to the extent that such C:\Users\sbautista\Desktop\Agenda Items\04- Apr\A- 6 DDAgreement.doc -43- expenses relate to any liens or other encumbrances that are paid by the Agency pursuant to the provisions of subsections (i) or (ii) above. Any portion of the resale proceeds remaining after the foregoing applications shall be retained by the Agency as its sole and its exclusive property. 4.5.5 IMMEDIATELY FOLLOWING THE SIXTY (60) DAY PERIOD SPECIFIED ABOVE, THE AGENCY, ITS EMPLOYEES AND AGENTS SHALL HAVE THE RIGHT TO REENTER AND TAKE POSSESSION OF ALL OR ANY PORTION OF THE PROPERTY AND ITS IMPROVEMENTS WITHOUT PRIOR NOTICE OR COMPENSATION TO THE DEVELOPER. BY ITS INITIALS BELOW, THE DEVELOPER HEREBY EXPRESSLY WAIVES TO THE MAXIMUM LEGAL EXTENT ANY AND ALL RIGHTS THAT IT MAY HAVE UNDER CIVIL CODE SECTION 791 AND CODE OF CIVIL PROCEDURE SECTION 1162, AS THOSE STATUTES ARE AMENDED OR SUBSTITUTED, OR UNDER ANY OTHER STATUTES OR COMMON LAW PRINCIPLES OF SIMILAR EFFECT. DEVELOPER'S INITIALS _______ THE DEVELOPER ACKNOWLEDGES AND AGREES THAT THE AGENCY'S EXERCISE OF ITS POWER OF TERMINATION AND RIGHT OF REENTRY PURSUANT TO THIS SECTION 4.5 SHALL WORK A FORFEITURE OF THE ESTATE IN THE PROPERTY CONVEYED TO THE DEVELOPER HEREUNDER. THE DEVELOPER HEREBY EXPRESSLY WAIVES TO THE MAXIMUM LEGAL EXTENT ANY AND ALL EQUITABLE AND LEGAL DEFENSES THAT IT MAY HAVE TO SUCH FORFEITURE, INCLUDING, BUT NOT LIMITED TO, THE DEFENSES OF LACHES, WAIVER, ESTOPPEL, SUBSTANTIAL PERFORMANCE OR COMPENSABLE DAMAGES. THE DEVELOPER FURTHER EXPRESSLY WAIVES TO THE MAXIMUM LEGAL EXTENT ALL RIGHTS AND DEFENSES THAT IT MAY HAVE UNDER CIVIL CODE SECTION 3275 OR ANY OTHER STATUTE OR COMMON LAW PRINCIPLE OF SIMILAR EFFECT. C:\Users\sbautista\Desktop\Agenda Items\04- Apr\A- 6 DDAgreement.doc -44- THE DEVELOPER ACKNOWLEDGES THAT THE PROPERTY PURCHASE PRICE HAS BEEN ADJUSTED TO REFLECT THE POSSIBILITY OF FORFEITURE HEREUNDER AND FURTHER ACKNOWLEDGES THAT IT HAS RECEIVED INDEPENDENT AND ADEQUATE CONSIDERATION FOR ITS WAIVER AND RELINQUISHMENT OF RIGHTS AND REMEDIES. DEVELOPER'S INITIALS_______ The Agency's remedies under this Section 4.5 are not mutually exclusive and the Agency may elect to enforce any or all of them. 4.6 Prevailing Wages. 4.6.1 Public Works Determination. Developer has been alerted to the requirements of California Labor Code section 1770 et seq., including, without limitation S.B. 975, which require the payment of prevailing wage rates and the performance of other requirements if it is determined that this Agreement constitutes a public works contract. It shall be the sole responsibility of Developer to determine whether to pay prevailing wages for any or all work required by this Agreement. As a material part of this Agreement, Developer agrees to assume all risk of liability arising from any decision not to pay prevailing wages for work required by this Agreement. 4.6.2 Indemnification. As a further material part of this Agreement, Developer agrees to indemnify, defend and hold harmless the Agency, the City, their officials, officers, employees, consultants and agents from any and all claims, liability, loss, costs, damages, expenses, fines and penalties, of whatever type or nature, including all costs of defense and attorneys' fees, arising from any alleged failure of the Developer or Developer's contractors to comply with the prevailing wage laws of the State of California. If the Agency or any of the other indemnified parties are named as a party in any dispute arising from the failure of Developer or Developer's contractors to pay prevailing wages, Developer agrees that the Agency and those other indemnified parties may appoint their own independent counsel, and Developer agrees to pay all attorneys' fees and defense costs of Owner and the other indemnified parties as billed, in addition to all other damages, fines, penalties, and losses incurred by Agency and those other indemnified parties as a result of the action. C:\Users\sbautista\Desktop\Agenda Items\04- Apr\A- 6 DDAgreement.doc -45- ARTICLE 5. GENERAL TERMS 5.1 Notices and Demands. All notices or other communications required or permitted between the Agency and the Developer under this Agreement shall be in writing, and may be (i) personally delivered, (ii) sent by United States registered or certified mail, postage prepaid, return receipt requested, (iii) sent by telecopier/facsimile, or (iv) sent by nationally recognized overnight courier service (e.g., Federal Express), addressed to parties at the addresses provided in Article 1, subject to the right of either party to designate a different address for itself by notice similarly given. Any notice so given by registered or certified United States mail shall be deemed to have been given on the second (2nd) business day after the same is deposited in the United States mail. Any notice not so given by registered or certified mail, such as notices delivered by telecopier or courier service (e.g., Federal Express), shall be deemed given upon receipt of the same by the party to whom the notice is given. 5.2 Nonliability of Agency or City Officials and Employees. No board member, official, contractor, consultant, attorney or employee of the Agency or City shall be personally liable to the Developer, any voluntary or involuntary successors or assignees, or any lender or other party holding an interest in the Property, in the event of any default or breach by the Agency, or for any amount that may become due to the Developer or to its successors or assignees, or on any obligations arising under this Agreement. 5.3 Conflict of Interests. No board member, official, contractor, consultant, attorney or employee of the Agency or City shall have any personal interest, direct or indirect, in this Agreement nor shall any such board member, official or employee participate in any decision relating to this Agreement that affects his/her personal interests or the interests of any corporation, partnership or association in that he/she is directly or indirectly interested. 5.4 Time Deadlines Critical; Extensions and Delays; No Excuse Due to Economic Changes. Time is of the essence in the performance of the Agency's and Developer's obligations under this Agreement. In addition to specific provisions of this Agreement, providing for extensions C:\Users\sbautista\Desktop\Agenda Items\04- Apr\A- 6 DDAgreement.doc -46- of time, times for performance hereunder shall be extended where delays or defaults are due to war; insurrection; any form of labor dispute; lockouts; riots; floods; earthquakes; fires; acts of God or of third parties; third party litigation; acts of a public enemy; acts of governmental authorities; epidemics; quarantine restrictions; and freight embargoes (collectively, "Enforced Delays") provided, however, that the Party claiming the extension notify the other Party of the nature of the matter causing the default; and, provided further, that the extension of time shall be only for the period of the Enforced Delays. The foregoing notwithstanding, Developer expressly agrees that adverse changes in economic conditions, either of Developer specifically or the economy generally, or changes in market conditions or demands, shall not operate to excuse or delay the performance of each and every of Developer's obligations and covenants arising under this Agreement. Developer expressly assumes the sole risk of such adverse economic or market changes or conditions, whether foreseeable or not at the time of Developer's entry into this Agreement. Without limiting the generality of the foregoing, deadlines for performance may not be extended as provided above due to any inability of the Developer to obtain or maintain financing for the construction and/or operation of the Development. 5.5 Attorneys' Fees. In the event of the bringing of an arbitration, action or suit by a Party hereto against another Party hereunder by reason of any breach of any of the covenants or agreements or any intentional inaccuracies in any of the representations and warranties on the part of the other Party arising out of this Agreement or any other dispute between the Parties concerning this Agreement or the Property, then, in which event, the prevailing party in such action or dispute, whether by final judgment or arbitration award, shall be entitled to have and recover of and from the other Party all costs and expenses of suit or claim, including actual attorneys' fees. Any judgment, order or award entered in any final judgment or award shall contain a specific provision providing for the recovery of all costs and expenses of suit or claim, including actual attorneys' fees (collectively, the "Costs") incurred in enforcing, perfecting and executing such judgment or award. For the purposes of this Section 5.5, Costs shall include, without implied limitation, attorneys' and experts' fees, costs and expenses incurred in the following: (i) post judgment motions and appeals, C:\Users\sbautista\Desktop\Agenda Items\04- Apr\A- 6 DDAgreement.doc -47- (ii) contempt proceedings, (iii) garnishment, levy and debtor and third party examination; (iv) discovery; and (v) bankruptcy litigation. This Section 5.5 shall survive any termination of this Agreement. 5.6 Submission of Documents and Other Actions for Approval. Except where such approval is expressly reserved to the sole discretion of the approving party, all approvals required hereunder by either party shall not be unreasonably withheld or delayed. 5.7 Amendments to This Agreement. The Developer and the Agency agree to consider reasonable requests for amendments to this Agreement that may be made by any of the Parties hereto, lending institutions, bond counsel or financial consultants. Any amendments to this Agreement must be in writing and signed by the appropriate authorities of both the Agency and the Developer. The Agency's Executive Director or designee is authorized on behalf of the Agency to approve any documents relating to the implementation of this Agreement, including, without limitation, Additional Instructions, the Grant Deed, any minor amendments to this Agreement, or the granting of extensions of time to the Developer. 5.8 Jurisdiction and Venue. Any legal action or proceeding concerning this Agreement shall be filed and prosecuted in the appropriate California state court in the County of Los Angeles, California. Each party hereto irrevocably consents to the personal jurisdiction of that court. The Agency and the Developer each hereby expressly waive the benefit of any provision of federal or state law or judicial decision providing for the filing, removal, or change of venue to any other court or jurisdiction, including, without implied limitation, federal district court, due to any diversity of citizenship between the Agency and the Developer, due to the fact that either the City or the Agency is a party to such action or proceeding or due to the fact that a federal question or federal right is involved or alleged to be involved. Without limiting the generality of the foregoing, the Developer and the Agency specifically waive any rights provided to it pursuant to California Code of Civil Procedure Section 394. The Developer acknowledges that the provisions of this Section 5.8 are material consideration to the Agency for its entry into this Agreement, in that the Agency will avoid the potential cost, expense and inconvenience of litigating in a distant forum. C:\Users\sbautista\Desktop\Agenda Items\04- Apr\A- 6 DDAgreement.doc -48- 5.9 Interpretation. The Agency and the Developer acknowledge that this Agreement is the product of mutual arms-length negotiation and drafting and that each party has been represented by legal counsel in the negotiation and drafting of this Agreement. Accordingly, the rule of construction that provides the ambiguities in a document shall be construed against the drafter of that document shall have no application to the interpretation and enforcement of this Agreement. In any action or proceeding to interpret or enforce this Agreement, the finder of fact may refer to any extrinsic evidence not in direct conflict with any specific provision of this Agreement to determine and give effect to the intention of the Parties. 5.10 Counterpart Originals; Integration. This Agreement may be executed in duplicate originals, each of which is deemed to be an original, but when taken together shall constitute but one and the same instrument. This Agreement, and its Exhibits, which are attached hereto and incorporated by reference herein, represent the entire understanding of the parties and supersedes all negotiations, letters of intent, memoranda of understanding or previous agreements between the parties with respect to all or any part of the subject matter hereof. 5.11 No Waiver. Failure to insist on any one occasion upon strict compliance with any of the terms, covenants or conditions hereof shall not be deemed a waiver of such term, covenant or condition, nor shall any waiver or relinquishment of any rights or powers hereunder at any one time or more times be deemed a waiver or relinquishment of such other right or power at any other time or times. 5.12 Successors and Assigns. The terms, covenants and conditions of this Agreement shall be binding upon and inure to the benefit of the Parties hereto and their successors and assigns. Except as provided by Section 3.5.15.2, upon the permitted sale, transfer or conveyance by an owner of the Property of its interest therein in accordance with Section 3.5.15, such owner shall thereupon be relieved of its obligations under this Agreement from and after the date of sale, transfer or conveyance except with respect to any defaults in the performance of its obligations hereunder that occurred prior to such sale, transfer or conveyance, and the transferee shall thereafter be solely C:\Users\sbautista\Desktop\Agenda Items\04- Apr\A- 6 DDAgreement.doc -49- responsible for the performance of all of the duties and obligations of Developer under this Agreement. 5.13 No Third Party Beneficiaries. The performance of the Agency's and the Developer's respective obligations under this Agreement are not intended to benefit any party other than the Agency or the Developer, except as expressly provided otherwise herein. No person or entity not a signatory to this Agreement shall have any rights or causes of action against any party to this Agreement as a result of that party's performance or non-performance under this Agreement, except as expressly provided otherwise herein. 5.14 No Effect on Eminent Domain Authority. Nothing in this Agreement shall be deemed to limit, modify, or abridge or affect in any manner whatsoever the Agency's and the City's eminent domain powers with respect to the Property, the Development, or any other property owned by the Developer. 5.15 Survival of Representations and Warranties. The representations and warranties of the Parties set forth in this Agreement shall survive the recordation of the Grant Deed and the Close of Escrow and shall not be deemed merged into the Grant Deed upon its recordation. 5.16 Real Estate Commissions. The Agency and Developer each represent that it has not engaged any broker, agent or finder in connection with this Agreement. Neither Party shall be responsible, either directly or indirectly, for any broker's, agent's or finder's fees. Each Party shall indemnify, defend and hold the other Party and their officials, officers, employees and agents harmless for any actual or alleged claims, suits, damages or losses arising from the indemnifying Party's breach of the foregoing provision. 5.17 Tax Consequences. The Developer acknowledges that it may experience tax consequences as a result of its receipt of the benefits provided for in and related to this Agreement and agrees that it shall bear, at its sole cost and expense, any and all responsibility, liability, costs, and expenses connected in any way therewith. C:\Users\sbautista\Desktop\Agenda Items\04- Apr\A- 6 DDAgreement.doc -50- [Signatures on following pages] C:\Users\sbautista\Desktop\Agenda Items\04- Apr\A- 6 DDAgreement.doc -51- SIGNATURE PAGE TO DISPOSITION AND DEVELOPMENT AGREEMENT THE REDEVELOPMENT AGENCY OF THE CITY OF AZUSA, a California public agency By: __________________________________ Rick Cole Executive Director ATTEST: ________________________ Agency Secretary APPROVED AS TO LEGAL FORM: BEST BEST & KRIEGER LLP By: _________________________ Agency Counsel C:\Users\sbautista\Desktop\Agenda Items\04- Apr\A- 6 DDAgreement.doc -52- SIGNATURE PAGE TO DISPOSITION AND DEVELOPMENT AGREEMENT DR. RALPH REYES, husband By: ______________________________ Dr. Ralph Reyes JEANNINE E. REYES, wife By: ______________________________ Jeannine E. Reyes C:\Users\sbautista\Desktop\Agenda Items\04- Apr\A- 6 DDAgreement.doc -53- STATE OF CALIFORNIA } } COUNTY OF LOS ANGELES} On April 2, 2003, before me, the undersigned notary public, personally appeared Dr. Ralph Reyes and Jeannine E. Reyes,  proved to me on the basis of satisfactory evidence to be the persons whose names are subscribed to the within instrument and acknowledged to me that they executed the same in their authorized capacities, and that by their signatures on the instrument the persons, or the entity upon behalf of which the persons acted, executed the instrument. WITNESS my hand and official seal. ____________________________________ Signature of Notary Public CAPACITY CLAIMED BY SIGNER: ∼ Individual(s) ∼ Corporate______________________ Officer(s)______________________ ∼ Partner(s) ∼ Attorney-in-Fact ∼ Trustee(s) ∼ Subscribing Witness ∼ Guardian/Conservator ∼ Other__________________________ SIGNER IS REPRESENTING: NAME OF PERSON(S) OR ENTITY(IES) ____________________________________ C:\Users\sbautista\Desktop\Agenda Items\04- Apr\A- 6 DDAgreement.doc -54- STATE OF CALIFORNIA } } COUNTY OF LOS ANGELES} On ____________, 2003, before me, the undersigned notary public, personally appeared Rick Cole,  personally known to me OR ∼ proved to me on the basis of satisfactory evidence to be the person whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his authorized capacity, and that by his signature on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument. WITNESS my hand and official seal. ____________________________________ Signature of Notary Public CAPACITY CLAIMED BY SIGNER: ∼ Individual(s) ∼ Corporate______________________ Officer(s)______________________ ∼ Partner(s) ∼ Attorney-in-Fact ∼ Trustee(s) ∼ Subscribing Witness ∼ Guardian/Conservator ∼ Other__________________________ SIGNER IS REPRESENTING: NAME OF PERSON(S) OR ENTITY(IES) ____________________________________ C:\Users\sbautista\Desktop\Agenda Items\04- Apr\A- 6 DDAgreement.doc Exhibit A EXHIBIT A TO DISPOSITION AND DEVELOPMENT AGREEMENT Legal Description of Property The land referred to herein is situated in the County of Los Angeles, State of California, and is described as follows: The property is located at 615 North Azusa Avenue; assessors parcel number 8611-004-908, and is described legally as follows: Lots 39 and 40 in Block 37 in the City of Azusa, County of Los Angeles, State of California as per map recorded in Book 15, Page 93 of Miscellaneous Records, in the Office of the County Recorder of said County. C:\Users\sbautista\Desktop\Agenda Items\04- Apr\A- 6 DDAgreement.doc Exhibit B EXHIBIT B TO DISPOSITION AND DEVELOPMENT AGREEMENT Scope of Development 2 The proposed project involves the new construction of a mixed-use commercial and multi-family residential building containing approximately 7,787 square feet of gross building area. The building will house a 3,862 square foot of medical office space the first floor. The second floor will contain three residential rental units ranging in size from 890 to 910 square feet with exterior balconies ranging in size from 30 to 45 square feet. Also included on the second floor is a large conference room and administrative office that will serve the medical uses on the first floor. Three parking carports will be provided for the apartment uses at the rear of the property. Additionally: 1. The project design shall include, at a minimum, an elevator and stairway that services only the Property and is not shared by any other property. 2. The cost of building the elevator and stairway will be included in the Developer=s costs of project and will not be paid for by the City or Agency. Developer shall be solely responsible for the cost of designing, constructing, installing and obtaining all required governmental approvals for the Development of the Property. 3. The issues surrounding the proposed construction, use, and management of any elevator and/or stairway for the Property, as well as the proposed construction of any carports on the public parking lot on the west side of the Property shall be addressed in Developer=s supplemented Scope of Development to be provided to Agency and considered by Agency as a condition precedent to the conveyance of the Property pursuant to Section 3.3.6.2.11 of the Agreement. 4. It will be incumbent on Developer, at Developer=s sole cost and expense, to gain all necessary governmental approvals and resolve the issues surrounding items 1-3 to the Agency=s satisfaction prior to the transfer of title from the Agency in accordance with Section 3.3.6.2.11 of the Agreement. 2To be further supplemented pursuant to Section 3.3.6.2.11 of the Agreement. C:\Users\sbautista\Desktop\Agenda Items\04- Apr\A- 6 DDAgreement.doc Exhibit C EXHIBIT C TO DISPOSITION AND DEVELOPMENT AGREEMENT Schedule of Performance [attached following this page] C:\Users\sbautista\Desktop\Agenda Items\04- Apr\A- 6 DDAgreement.doc Exhibit C EXHIBIT C DISPOSITION AND DEVELOPMENT AGREEMENT Schedule of Performance2 Task Time Frame Date Agency Approval of Agreement April 7, 2003 (assumed Effective Date) Opening of Escrow 5 days from Effective Date April 14, 2003 Agency to Provide Preliminary Title Report 30 days from Effective Date May 7, 2003 Developer to Provide Developer's Title Notice 30 Days from receipt of Preliminary Title Report June 6, 2003 Agency to Provide “Documents and Materials” 30 Days from Effective Date May 30, 2003 Submission by Developer of Plans Within 60 days of Effective Date June 6, 2003 Agency to Make Election re: Title Issues Within 3 Days of receipt of Developer’s Title Notice June 11, 2003 Developer to Make Election re: Title Issues Within 2 Days of receipt of Agency Election July 13, 2003 Agency Approval/Disapproval of Plans Within 20 Days from receipt of Plans June 26, 2003 End of Environmental Review Period and Feasibility Period July 1, 2003 Developer to Re-Submit Plans Within 30 Days from receipt of Disapproval July 7, 2003 Agency Approval/Disapproval of Plans Within 20 days from receipt of Plans August 27, 2003 Developer submits construction documents, preliminary and final, grading, paving and landscaping plans and ancillary documents Within 30 days of final approval of Plan September 29, 2003 City Approval/Disapproval construction documents, preliminary and final, grading, paving and landscaping plans and ancillary documents Within 20 days from receipt of Plans October 20, 2003 Developer re-submits construction documents, preliminary and final, grading, paving and landscaping plans and ancillary documents Within 30 days from receipt of Disapproval November 19, 2003 City Approval/Disapproval of construction documents, preliminary and final, grading, paving and landscaping plans and ancillary documents Within 20 days from receipt of Plans December 9, 2003 2 To be further supplemented pursuant to Section 3.3.6.2.11 of the Agreement. C:\Users\sbautista\Desktop\Agenda Items\04- Apr\A- 6 DDAgreement.doc Exhibit C City Approval of supplemented Schedule of Performance and Scope of Development September 1, 2003 Developer to Provide Notice of Intent to Waive Title Issues or Permit Agency 30 days to clear title issues On or before one (1) business day prior to the Closing Date Up to December 30, 2003 (depending on Closing Date) Payments and Submittals provided to Escrow Holder At least one (1) day prior to Closing Commencement of Demolition of Building by Agency April 14, 2003 Completion of Demolition of Building by Agency May 14, 2003 Close of Escrow No later than December 31, 2003 Commencement of Construction of Building by Developer March 1, 2004 Obtain Certificate of Completion March 1, 2005 Obtain a final certificate of occupancy March 1, 2005 C:\Users\sbautista\Desktop\Agenda Items\04- Apr\A- 6 DDAgreement.doc Exhibit D EXHIBIT D TO DISPOSITION AND DEVELOPMENT AGREEMENT Grant Deed [attached following this page] C:\Users\sbautista\Desktop\Agenda Items\04- Apr\A- 6 DDAgreement.doc Exhibit D-1 EXHIBIT D [GRANT DEED TO BE CONFORMED TO DDA PRIOR TO RECORDATION] RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: Dr. Ralph and Jeannine E. Reyes 613 N. Azusa Ave. Azusa, California 91702 MAIL TAX STATEMENTS TO: Dr. Ralph and Jeannine E. Reyes 613 N. Azusa Ave. Azusa, California 91702 GRANT DEED For valuable consideration, receipt of which is hereby acknowledged, THE REDEVELOPMENT AGENCY OF THE CITY OF AZUSA, a public body, corporate and politic, of the State of California, herein called "Grantor," acting to carry out the Redevelopment Plan for the Redevelopment Agency of the City of Azusa ("City") Merged Central Business District/West End Project Area ("Project Area") (which plan is hereinafter referred to as the "Redevelopment Plan") under the Community Redevelopment Law of California, hereby grants to: Ralph Reyes and Jeannine E. Reyes, husband and wife as "Grantee," the real property (hereinafter referred to as the "Property"), described as: See attached Exhibit "1" attached hereto and incorporated by reference herein ("Property") Excepting therefrom: [INSERT TITLE EXCEPTIONS] And further: 1. The Property is conveyed subject to the Redevelopment Plan and pursuant to a Disposition and Development Agreement (the "Agreement"), as amended, entered into by and between Grantor, and the Grantee dated as of _______________, 200__, which Agreement is C:\Users\sbautista\Desktop\Agenda Items\04- Apr\A- 6 DDAgreement.doc Exhibit D-2 incorporated herein by reference. The Agreement is a public record and a copy of the Agreement is available for public inspection and copying at the office of the Grantor, 213 E. Foothill Blvd., Azusa, California 91702-1295. The Property is conveyed further subject to all easements, rights-of-way, covenants, conditions, restrictions, exceptions pursuant to the Agreement, reservations and all other matters of record. All initial capitalized terms used, but not otherwise defined herein, shall have the meanings ascribed to such terms in the Agreement. 2. The Grantee covenants and agrees for itself, its assigns and all voluntary and involuntary successors in interest to the Property or any part thereof, that for the life of the Redevelopment Plan, the Property shall be put to no use other than those uses specified in the City's General Plan and zoning ordinances, this Grant Deed and the Agreement, as the same may be amended from time to time. Nothing in this Section 2 shall limit, expand, modify or otherwise affect any right of the Grantee to continue any legal nonconforming use upon the Property following changes in the City's General Plan or zoning ordinances. 3. Grantee covenants and agrees that the Grantee will construct and open the Development as required by this Agreement and, until the thirtieth (30th) anniversary of the earlier of: (i) the Close of Escrow, or (ii) the issuance of a Certificate of Completion, will continuously operate the Development, unless properly assigned or transferred pursuant to Section 3.5.15, in which case, this covenant shall bind the assignee/transferee for the full term hereof. The Grantee will not be deemed to be in breach of this Section 4.5.19.2 should Grantee temporarily cease to operate the Development for the following reasons: (i) general repair and/or maintenance, the construction of improvements, and the installation of utilities; (ii) acts of enforced delay as defined in Section 5.4 due to wear, insurrection, labor disputes, lockouts, third party litigation, acts of a public enemy or governmental authority; and (iii) the restoration and rebuilding of the Development, as more particularly described in Section 3.5.19.4, following casualty loss due to floods, earthquakes, fires, other acts of God or third parties. 4. The Grantee covenants and agrees that except as otherwise provided herein the Grantee shall maintain, or cause to be maintained, the interior and exterior appearances of the Property in a good condition, ordinary wear and tear excepted. The maintenance covenant of this Section 4 shall remain in effect for the same period of time as the Operating Covenants set forth in Section 3 of this Deed. 5. The Grantee covenants and agrees that following the damage, destruction and/or demolition of the Property and/or Development by an act of God or casualty, including, but not limited to, fire, floods and earthquakes, the Grantee will promptly restore and rebuild the Property and/or Development (as applicable) in substantially the same form as required by the Agreement, subject to such modifications as Grantor and Grantee may agree upon. The covenants of this C:\Users\sbautista\Desktop\Agenda Items\04- Apr\A- 6 DDAgreement.doc Exhibit D-3 Section 5 shall remain in effect for the same period of time as the Operating Covenants set forth in Section 3 of this Deed. 5.1 The Developer covenants and agrees for itself, its assigns and all voluntary and involuntary successors in interest to the Property or any part thereof, that the Property or any portion thereof may not be used, or otherwise sold, transferred, conveyed, assigned, leased, leased back, or hypothecated to or for any use that is partially or wholly exempt from the payment of real property taxes or which would cause the exemption of all or any portion of such real property taxes. 5.2 The Developer covenants and agrees for itself, its successors, its assigns and all voluntary and involuntary successors in interest to the Property or any part thereof, that, for any period that the Agency is allocated property taxes pursuant to Health and Safety Code Section 33670 or successor statute, the Developer shall not contest the assessed valuation of the Property or any part thereof, as established by the San Bernardino County Assessors Office. The covenants set forth in this Deed touch and concern the Property, and every part thereof, and constitute covenants running with the Property and every part thereof. These covenants may be enforced by the Grantor or the City of Azusa (as an intended third party beneficiary), regardless of whether the Grantor or the City currently or continue to own an interest in any property within the Project Area. The Grantee irrevocably stipulates and agrees that breach of any of the covenants set forth in Section 8, 16, 17 or Sections 2 through 5 will result in great and irreparable damage to the Grantor and the City, will violate the public policy and the purposes of the CRL, and will result in damages to Grantor and the City that are either impracticable or extremely difficult to quantify. Accordingly, upon the breach of any covenant set forth in any such Section(s), Grantor may institute an action for injunctive relief and/or for damages attributable to such breach. The covenants set forth in Sections 2 through 5 constitute obligations of the owner of the Property or any portion thereof. Neither the Grantee nor any voluntary or involuntary successor in interest shall have any liability under this Grant Deed for the breach of any of the covenants described above, if such breach occurs at any time following the Grantee's or successor's cessation or ownership of the Property. 6. Prior to the tenth (10th) anniversary of the recordation of this Grant Deed, the Grantee shall not, except as permitted by the Agreement, sell, transfer, convey, assign or lease the whole or any part of the Property without the prior written approval of the Grantor (other than as expressly permitted in the Agreement). 7. This Section 7 reserves to the Grantor a power of termination in the Property, as such powers as described in California Civil Code Section 885.010, et seq. Notwithstanding anything else in this Deed or the Agreement to the contrary (inclusive of Section 4.3), the Grantor shall, upon ninety (90) days written notice to the Grantee, have the right, at its option and due to any cause set forth in this Section 7, to terminate the estate in the Property granted to the Grantee and take possession of the Property and all improvements thereon, and to revest in the Grantor the estate in the Property conveyed to the Grantee and to vest title to all improvements constructed thereon, if C:\Users\sbautista\Desktop\Agenda Items\04- Apr\A- 6 DDAgreement.doc Exhibit D-4 after conveyance of title and prior to the recordation of the Certificate of Completion for the Development, the Grantee (or its successors in interest) shall: (i) Fail to obtain a certificate of occupancy (as provided by City's Municipal Code) for the shell and core improvements of the Development by the date set forth in the Schedule of Performance attached to the Agreement; or (ii) Abandon or substantially suspend, or allow the abandonment or substantial suspension, of construction of all or any portion of the Development for thirty (30) days after written notice of such abandonment or suspension from the Grantor; or (iii) Assign or attempt to assign the Agreement, or any rights or obligations herein, or transfer, or suffer any involuntary transfer, of the Property or any part thereof, in violation of the Agreement, and such violation shall not have been cured within thirty (30) days after of written notice thereof from the Grantor; or (iv) Fail to cure within thirty (30) days after occurrence any default with respect to any financing secured by a deed of trust, mortgage or other security interest in the Property or any portion thereof. The sixty (60) day written notice specified in this Section 7 shall specify that the Grantor proposes to take action pursuant to this Section 7 and shall specify which of the Grantee's obligations set forth in subsections (i) through (iv) have been breached. The Grantor may proceed with the remedy set forth herein only if the Grantee does not cure such default within ninety (90) days following such notice. 7.1 The right of the Grantor to reenter, repossess, terminate, vest and revest shall be subject and subordinate to, shall be limited by and shall not defeat, render invalid or limit any mortgage, deed of trust or other security interest required for any reasonable method of financing the construction of improvements on the Property and any other expenditures necessary to appropriately develop the Property under the Agreement (provided that the Grantor has consented to such financing pursuant to Section 3.5.15 of the Agreement) or any rights or interests provided in the Agreement for the protection of the holders of any such mortgage, deed of trust or other security interest. Any deed to the Property or any portion thereof conveyed or leased by the Grantee to another party shall contain appropriate references and provisions to give effect to the Grantor's rights as set forth in this Section 7 of the Agreement. 7.2 Upon the Grantor's exercise of its rights and powers as provided in this Section 7 of the Agreement, the Grantee or its successors shall convey by warranty deed to the Grantor title to the Property and all improvements thereon in accordance with Civil Code Section C:\Users\sbautista\Desktop\Agenda Items\04- Apr\A- 6 DDAgreement.doc Exhibit D-5 1109, as hereafter amended or substituted. Such conveyance shall be duly acknowledged by the Grantee in a manner suitable for recordation. The Grantor may enforce its rights pursuant to this Section 7 by means of an injunctive relief or forfeiture of title action filed in any court of competent jurisdiction. 7.3 Upon the revesting in the Agency of title to the Property by grant deed or court decree, the Agency shall use its reasonable good faith efforts to resell the Property at fair market value as soon and in such manner as the Agency shall find feasible and consistent with the objectives of the Community Redevelopment Law and of the Redevelopment Plan, to a qualified and responsible party or parties (as reasonably determined by the Agency) who will assume the Grantee's obligation to begin and/or complete and/or operate the Development, or such other replacement project acceptable to the Agency in its sole and absolute discretion, in accordance with this Agreement and the Redevelopment Plan. Upon such resale of the Property (or any portion thereof), the proceeds thereof shall be applied as follows: (i) First, to pay any and all amounts required to release/reconvey any Permitted Encumbrance; and (ii) Second, to reimburse the Agency on its own behalf or on behalf of the City for all actual internal and third party costs and expenses previously or currently incurred by the Agency and the City related to the Property or the Development, including, but not limited to, customary and reasonable fees or salaries to third party personnel engaged in such actions, in connection with the recapture, management and resale of the Property or any part thereof; all taxes, assessments and utility charges paid by the City and/or the Agency with respect to the Property or portion thereof; 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 the Grantee or the Agency or the City with respect to the making or completion of the Development or any part thereof upon the Property; and amounts otherwise owing to the Agency by the Grantee or its successors in interest to the Property or any part thereof pursuant to the terms hereof; and (iii) Third, to the extent that any and all funds that are proceeds from such resale are thereafter available, taking into account any prior encumbrances with a claim thereto, to reimburse the Grantee, or its successors in interest to the Property or any part thereof, equal to the sum of: (1) the portion of the Purchase Price that had been paid to Grantor pursuant to the Note; and (2) the third party costs actually incurred and paid by the assignee for the development of the Property including, but not limited to, costs of carry, taxes, and other items as set forth in the Grantee's cost statement, which shall be subject to the Agency's reasonable approval; provided, however, that the Grantee shall not be entitled to reimbursement for any expenses to the extent C:\Users\sbautista\Desktop\Agenda Items\04- Apr\A- 6 DDAgreement.doc Exhibit D-6 that such expenses relate to any liens or other encumbrances that are paid by the Agency pursuant to the provisions of subsections (i) or (ii) above. Any portion of the resale proceeds remaining after the foregoing applications shall be retained by the Agency as its sole and its exclusive property. 7.4 IMMEDIATELY FOLLOWING THE SIXTY (60) DAY PERIOD SPECIFIED ABOVE, THE GRANTOR, ITS EMPLOYEES AND AGENTS SHALL HAVE THE RIGHT TO REENTER AND TAKE POSSESSION OF ALL OR ANY PORTION OF THE PROPERTY AND ITS IMPROVEMENTS WITHOUT PRIOR NOTICE OR COMPENSATION TO THE GRANTEE. BY ITS INITIALS BELOW, THE GRANTEE HEREBY EXPRESSLY WAIVES TO THE MAXIMUM LEGAL EXTENT ANY AND ALL RIGHTS THAT IT MAY HAVE UNDER CIVIL CODE SECTION 791 AND CODE OF CIVIL PROCEDURE SECTION 1162, AS THOSE STATUTES ARE AMENDED OR SUBSTITUTED, OR UNDER ANY OTHER STATUTES OR COMMON LAW PRINCIPLES OF SIMILAR EFFECT. GRANTEE'S INITIALS _____ THE GRANTEE ACKNOWLEDGES AND AGREES THAT THE GRANTOR'S EXERCISE OF ITS POWER OF TERMINATION AND RIGHT OF REENTRY PURSUANT TO THIS SECTION OF THE AGREEMENT SHALL WORK A FORFEITURE OF THE ESTATE IN THE PROPERTY CONVEYED TO THE GRANTEE HEREUNDER. THE GRANTEE HEREBY EXPRESSLY WAIVES TO THE MAXIMUM LEGAL EXTENT ANY AND ALL EQUITABLE AND LEGAL DEFENSES THAT IT MAY HAVE TO SUCH FORFEITURE, INCLUDING, BUT NOT LIMITED TO, THE DEFENSES OF LACHES, WAIVER, ESTOPPEL, SUBSTANTIAL PERFORMANCE OR COMPENSABLE DAMAGES. THE GRANTEE FURTHER EXPRESSLY WAIVES TO THE MAXIMUM LEGAL EXTENT ALL RIGHTS AND DEFENSES THAT IT MAY HAVE UNDER CIVIL CODE SECTION 3275 OR ANY OTHER STATUTE OR COMMON LAW PRINCIPLE OF SIMILAR EFFECT. THE GRANTEE ACKNOWLEDGES THAT THE PROPERTY PURCHASE PRICE HAS BEEN ADJUSTED TO REFLECT THE POSSIBILITY OF FORFEITURE HEREUNDER AND FURTHER ACKNOWLEDGES THAT IT HAS RECEIVED INDEPENDENT AND ADEQUATE CONSIDERATION FOR ITS WAIVER AND RELINQUISHMENT OF RIGHTS AND REMEDIES. GRANTEE'S INITIALS_____ 8. The Grantee agrees that the Grantee will not unlawfully discriminate against any employee or applicant for employment because of sex, marital status, race, color, religion, creed, national origin, or ancestry, and that the Grantee will comply with all applicable local, state and federal fair employment laws and regulations. C:\Users\sbautista\Desktop\Agenda Items\04- Apr\A- 6 DDAgreement.doc Exhibit D-7 The Grantee covenants and agrees that it will not unlawfully discriminate against or segregation of any person or group of persons on account of race, color, creed, religion, sex, marital status, ancestry or national origin in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Property, nor shall the Grantee itself, or any person claiming under or through it, establish or permit any such practice or practices of unlawful discrimination or segregation with reference to the selection, location, number, use of occupancy of tenants, lessees, subtenants, sublessee or vendees of the Property. The foregoing covenants shall run with the land, be binding upon the Grantee's transferee's, successors and assigns, and shall remain in effect in perpetuity. All deeds, leases or contracts relative to the Property, or the improvements constructed thereon, shall contain or be subject to substantially the following nondiscrimination and non- segregation clauses, pursuant to California Health and Safety Code Section 33435 and 33436. A. In deeds: "The grantee herein covenants by and for himself, his heirs, executors, administrators, and assigns, and all persons claiming under or through them, that there shall be no unlawful discrimination against or segregation of, any person or group of persons on account of race, color, creed, religion, sex, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land herein conveyed, nor shall the grantee himself or any person claiming under or through him, establish or permit any such practice or practices of unlawful discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees in the land herein conveyed. The foregoing covenants shall run with the land." B. In leases: "The lessee herein covenants by and for himself, his heirs, executors, administrators and assigns, and all persons claiming under or through him, and this lease is made and accepted upon the subject to the following conditions: That there shall be no unlawful discrimination against or segregation of any person or group of persons, on account of race, color, creed, religion, sex, marital status, national origin or ancestry, in the leasing, subleasing, transferring, use, occupancy, tenure or enjoyment of the land herein leased, nor shall the lessee himself, or any person claiming under or through him, establish or permit any such practice or practices of unlawful discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the land herein leased." C. In contracts: "There shall be no unlawful discrimination against or segregation of, any person or group of persons on account of race, color, creed, religion, sex, marital status, national origin, or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land, nor shall the transferee himself or any person claiming under or through him establish or permit any such practice or practices of unlawful discrimination or segregation with reference to the selection, location, number, use, or occupancy of tenants, lessees, subtenants, sublessees or vendees of the land." Nothing in this Section 8 shall operate as a waiver of any legal defenses that the Grantee may have for a breach of any covenant contained herein, or operate to impose additional burdens upon the Grantee other than those imposed by current law. C:\Users\sbautista\Desktop\Agenda Items\04- Apr\A- 6 DDAgreement.doc Exhibit D-8 9. No violation or breach of the covenants, conditions, restrictions, provisions or limitations contained in this Grant Deed shall defeat or render invalid or in any way impair the lien or charge of any mortgage, deed of trust or other financing or security instrument expressly permitted by the Agreement; provided, however, that any successor of Grantee to the Property or parcels thereof shall be bound by such remaining covenants, conditions, restrictions, limitations and provisions, whether such successor's title was acquired by foreclosure, deed in lieu of foreclosure, trustee's sale or otherwise. 10. All covenants contained in this Grant Deed shall run with the land and shall be binding upon the Grantee and for the benefit of the Grantor its successors and assigns and such covenants shall run in favor of the Grantor and for the entire period during which such covenants shall be in force and effect, without regard to whether the Grantor is or remains an owner of any land or interest therein to which such covenants relate. The Grantor, in the event of any breach of any such covenants, shall have the right to exercise all of the rights and remedies provided herein or otherwise available, and to maintain any actions at law or suits in equity or other proper proceedings to enforce the curing of such breach. The covenants contained in this Grant Deed shall be for the benefit of and shall be enforceable only by the Grantor and its successors and assigns. 11. The covenants contained in this Grand Deed, without regard to technical classification or designation, shall not be deemed to benefit or be enforceable by any person, firm or corporation, public or private, except Grantor and the City of Azusa and their successors and assigns. 12. In the event of any express conflict between this Grant Deed and the Agreement, the provisions of this Grant Deed shall control. 13. Grantee, its successors and assigns and all persons claiming under or through it (including, without limitation, all lessees) hereby covenants that the Property conveyed in this Deed is to be developed compatible with the Redevelopment Plan and that is approved by the Grantor. Grantee further covenants to commence and complete construction of the entirety of the Development on or before the date specified in the Agreement. Should Grantee fail to commence and complete construction by such date, the Grantor may exercise the rights under the Power of Termination in Section 7 of this Deed. IN WITNESS WHEREOF, the Grantor and Grantee have caused this instrument to be executed this _____ day of _______________, 200__. [Signatures on following pages] C:\Users\sbautista\Desktop\Agenda Items\04- Apr\A- 6 DDAgreement.doc Exhibit D-9 GRANTOR: Dated: THE REDEVELOPMENT AGENCY OF THE CITY OF AZUSA a California public agency By: Rick Cole Executive Director ATTEST: City Clerk APPROVED AS TO LEGAL FORM BEST BEST & KRIEGER LLP Agency Counsel C:\Users\sbautista\Desktop\Agenda Items\04- Apr\A- 6 DDAgreement.doc Exhibit D-10 GRANTEE: Dated: Ralph Reyes, husband By: Ralph Reyes Dated: Jeannine E. Reyes, wife By: Jeannine E. Reyes C:\Users\sbautista\Desktop\Agenda Items\04- Apr\A- 6 DDAgreement.doc Exhibit D-11 EXHIBIT "1" TO GRANT DEED LEGAL DESCRIPTION OF PROPERTY The land referred to herein is situated in the County of Los Angeles, State of California, and is described as follows: The property is located at 615 North Azusa Avenue, assessors parcel number 8611-004-908, ans is described legally as follows: Lots 39 and 40 in Block 37 in the City of Azusa, County of Los Angeles, State of California as per map recorded in Book 15, Page 93 of Miscellaneous Records, in the Office of the County Recorder of said County. C:\Users\sbautista\Desktop\Agenda Items\04- Apr\A- 6 DDAgreement.doc Exhibit D-12 STATE OF CALIFORNIA } } COUNTY OF LOS ANGELES} On April 2, 2003, before me, the undersigned notary public, personally appeared Dr. Ralph Reyes and Jeannine E. Reyes  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. WITNESS my hand and official seal. ____________________________________ Signature of Notary Public CAPACITY CLAIMED BY SIGNER: ∼ Individual(s) ∼ Corporate______________________ Officer(s)______________________ ∼ Partner(s) ∼ Attorney-in-Fact ∼ Trustee(s) ∼ Subscribing Witness ∼ Guardian/Conservator ∼ Other__________________________ SIGNER IS REPRESENTING: NAME OF PERSON(S) OR ENTITY(IES) ____________________________________ C:\Users\sbautista\Desktop\Agenda Items\04- Apr\A- 6 DDAgreement.doc Exhibit D-13 STATE OF CALIFORNIA } } COUNTY OF _______________________ } On _____________, 20___, before me, the undersigned notary public, personally appeared ______________________, ∼ personally known to me OR ∼ 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. WITNESS my hand and official seal. ____________________________________ Signature of Notary Public CAPACITY CLAIMED BY SIGNER: ∼ Individual(s) ∼ Corporate______________________ Officer(s)______________________ ∼ Partner(s) ∼ Attorney-in-Fact ∼ Trustee(s) ∼ Subscribing Witness ∼ Guardian/Conservator ∼ Other__________________________ SIGNER IS REPRESENTING: NAME OF PERSON(S) OR ENTITY(IES) ____________________________________ RVPUB\JSB\650272 Exhibit E EXHIBIT E TO DISPOSITION AND DEVELOPMENT AGREEMENT Certificate of Completion [attached behind this page] RVPUB\JSB\650272 Exhibit E-1 RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: Dr. Ralph and Jeannine E. Reyes 613 N. Azusa Ave. Azusa, California 91702 Exempt from Recording Fee per Government Code ' 27383 _________________________________________________________________________________ (Space above for Recorder's Use) CERTIFICATE OF COMPLETION I, [___________________], Executive Director of The Redevelopment Agency of the City of Azusa ("Agency"), certify as follows: By its Resolution No. [____], adopted and approved [___________], the Agency resolved as follows: Section 1. The improvements ("Development") required to be constructed in accordance with that certain Disposition and Development Agreement ("Agreement") dated as of May 6, 2002 for reference purposes only, as amended, between the Agency and Dr. Ralph Reyes and Jeannine E. Reyes ("Grantee") on that certain real property ("Property") described on the attached Exhibit 1 have been completed in accordance with the provisions of the Agreement. The Agreement was recorded on [___________], as Instrument No. [__________]. Section 2. Pursuant to Section 3.5.18 of the Agreement, this Certificate of Completion is a conclusive determination of the satisfactory completion of the Grantee's obligations under the Agreement with respect to the completion of the Development, including all buildings and all parking, landscaping and related improvements necessary to support the Development and its use and occupancy upon the Property; provided, however, that the Agency may enforce any covenants and obligations surviving this Certificate of Completion in accordance with the terms and conditions of the Agreement. The Agreement is an official record of the Agency and a copy of the Agreement may be inspected in the office of the Secretary of the Agency, located at 213 E. Foothill Blvd., Azusa, CA 91702-1295, during regular business hours. RVPUB\JSB\650272 Exhibit E-2 DATED AND ISSUED this ____, day of ________________, ____. Rick Cole Executive Director ATTEST: Agency Secretary RVPUB\JSB\650272 Exhibit E-3 EXHIBIT 1 TO CERTIFICATE OF COMPLETION Property Legal Description The land referred to herein is situated in the County of Los Angeles, State of California, and is described as follows: The property is located at 615 North Azusa Avenue, assessors parcel number 8611-004-908, ans is described legally as follows: Lots 39 and 40 in Block 37 in the City of Azusa, County of Los Angeles, State of California as per map recorded in Book 15, Page 93 of Miscellaneous Records, in the Office of the County Recorder of said County.