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Home My WebLink AboutR26-Economic Development Agency r \ , CITY OF SAN BERNARDINO ECONOMIC DEVELOPMENT AGENCY ORIGINAL FROM: Maggie Pacbeco Executive Director SUBJECf: Joint Public Hearing - La Plaeita on 2nd Street, LLC Disposition and Development Agreement (DDA) (Uptown Redevelopment Project Area) DATE: November 15, 2006 Svnonsis or Previous Commission/CounciVCommittee Aetion(s): On August 24, 2006, Redevelopment Committee Members Estrada, Johnson and Baxter unanimously voted to recommend that the Community Development Commission consider this action for approval. Recommended Motion(s): Open/Close Joint Public Hearing (Mavor and Common Council) A: Resolution of the Mayor and Common Council of the City of San Bernardino consenting to the sale of certain Property and the funding of certain public improvements as identified in the 2006 Disposition and Development Agreement (''DDA'') by and between the Redevelopment Agency of the City of San Bernardino ("Agency") and La Placita on 2nd Street, a California limited liability corporation and making certain environmental findings related to the development of the proposed Project (Communitv Develooment Commission) B: Resolution of the Community Development Commission of the City of San Bernardino (I) approving the 2006 Disposition and Development Agreement ("DDA") by and between the Redevelopment Agency of the City of San Bernardino ("Agency") and La Placita on 2nd Street, a California limited liability corporation; (2) authorizing the Executive Director of the Agency to execute said DDA relating to the sale of certain Property in the City of San Bernardino; and (3) making certain findings thereto related to the development of the Project and the funding of certain public improvements Contact Person(s): Maggie Pacheco Uptown Redevelopment Project Area Phone: (909) 663-1044 Project Area(s): Ward(s): Supporting Data Attached: ItI Staff Report ItI Resolution(s) ItI Agreement(s)/Contract(s) ItI Map(s) 0 Letters Max FUNDING REQUIREMENTS: Amount: $ 2,843,800 Source: Uptown Bond Proceeds & Developer Funds SIGNATURE: Budget Authority: 2006-2007 EDA Budget f Commission/Council Notes: ~j/Jl'5,t, - ~? c/:>r. ,.:VJ/J6 --'19 .ee>t? - R?: $/) P;\Agendas\Comm Dev Commission\CDC 2006\11-20-06 La Placila on 2nd Street SR.doc COMMISSION MEETING AGENDA Meeting Date: 1112012006 Agenda Item Number: ~ ECONOMIC DEVELOPMENT AGENCY STAFF REPORT JOINT PUBLIC HEARING - LA PLACITA ON 2ND STREET, LLC DISPOSITION AND DEVELOPMENT AGREEMENT (DDA) (UPTOWN REDEVELOPMENT PROJECT AREA) BACKGROUND/CURRENT ISSUE: In October 2004, Merona Enterprises, Inc. ("Merona"), acquired four (4) parcels (APN: 0138-263-02 and APN's: 0138-301-01, 06 and 10) (the "Developer Property") generally located between 2nd Street, 3rd Street and west of "K" Street. Some of these parcels are occupied with several businesses such as the EI Tigre Market. Shortly after the purchase of these parcels, representatives of Merona contacted the Agency concerning developing a larger and new shopping center of approximately 100,000 square feet of retail buildings. Merona also discussed attracting a named retail grocer to anchor the project and occupy approximately 45,000 square feet of the new building (the "Project"). On March 30, 2006, Merona transferred the Developer Property to La Placita on 2nd Street, LLC ("Developer"), in anticipation of accommodating their specific development plans. The site for the proposed Project will be comprised of nine (9) parcels: I) the Developer Property; 2) three (3) parcels owned by the Agency on "K" Street (APN: 0138-301-03,04 and 05) (the "Agency Property"); and 3) two (2) parcels privately owned by two (2) different parties (APN: 0138-301-07) (the "Belichesky Property") and (APN: 0138-301-08) (the "Spar Property") located south of 3rd Street, north of 2nd Street, west of "K" Street and east of Giovanola A venue (the "Project Site"). There is one (I) business located on the Belichesky Property and a billboard located on the Spar Property. CBS Outdoor ("CBS Billboard Company") owns the billboard. Collectively, the Agency Property, Belichesky Property and Spar Property shall be known as the "Property". The Developer has opened escrow to purchase the Spar Property. For the relationship of the parcels to one another, refer to the attached agenda material. Over the past two (2) years, the Developer, City Officials and Agency Staff have been working together concerning the style and type of shopping center, development of alternate uses such as transit oriented housing and the Agency's financial participation in the Project. In the beginning, the Developer presented the concept of a larger shopping center with a major grocer to anchor the Project; however, at the time, the Developer was unable to obtain a grocer that would enter the San Bernardino market area. Then, the Developer proposed a mixed residential/retail concept wherein they explored building a residential development coupled with a scaled down retail component of approximately 20,000 square feet of new buildings. While this was happening, a major grocer approached the Developer to become a tenant on the Project Site and they were able to negotiate a lease with this major grocer for a new market building that would require at least 45,000 square feet. Now that the Developer has a major grocer as their anchor tenant (Superior Super Warehouse), they went back to the original concept of a larger shopping center. The remaining 55,000 square feet of new retail building space will be for businesses such as fast food and sit down restaurants, shoe store, men/women's clothing, dry cleaning, etc. The type of brand names that could become tenants on the Project might include Subway, Quiznos, Pizza Loco, Foot Locker, Starbucks, TJ. Max, etc. P:\Ageooas\Conun Dev Commission\CDC 2006\1 ] -20-06 La Placila on 2nd Street SRdoc COMMISSION MEETING AGENDA Meeting Date: 1112012006 Agenda Item Number: Economic Development Agency Staff Report La Placita on 2nd Street - Uptown Redevelopment Project Area Page 2 At the same time, the City of San Bernardino ("City") had a study conducted by the Solimar Research Group concerning the economic feasibility of alternative development scenarios at the Project Site. The study of the area showed that it would be economically feasible and the Project Site was a prime candidate for infill transit oriented development due to the easy access to the Metrolink Station. Because of their commitment to Superior Super Warehouse, the Developer did not want to pursue the transit oriented development at the Project Site but agreed that in order to capitalize on the opportunity for infill transit oriented development, the Developer entered into negotiations with a single property owner to acquire property which consists of eleven (II) parcels comprising sixty percent (60%) of the total parcels on the south side of 2nd Street between "K" Street and Mt. Vernon Avenue (the "Kovats Property"). The Developer has now completed the acquisition of the Kovats Property. At this time, the Developer desires to move ahead with their approximate 100,000 square foot development plans for the Project Site and particularly because they seek to complete their commitment to Superior Super Warehouse to deliver the 45,000 square feet store pad by fall of 2007. Consequently, it is proposed that the Agency enter into a Disposition and Development Agreement ("DDA") with the Developer, which will contain the following salient points, in addition to the items referenced above: . The Agency will sell the Agency Property to the Developer at the fair market value of approximately $272,800 or the appraised value, whichever is greater. At the opening of the escrow, the Developer will deposit the sum of $27,280. . The Agency will use its best efforts through negotiations or through condemnation to acquire the Belichesky Property (appraised value is $205,000) and relocate the Video Mart video store. Once the Agency acquires the Belichesky Property and relocates the business, the Agency will then sell the Belichesky Property to the Developer in an amount that is equal to the Agency's acquisition cost, relocation costs, legal fees and any other costs associated with the acquisition and tenant relocation. . The Developer will assign to the Agency the opened escrow for the acquisition of the Spar Property. The Agency will use its best efforts in working with the CBS Billboard Company to facilitate the relocation of one (I) unilluminated, double-sided billboard from the Spar Property. On behalf of the Developer, the Agency has offered CBS Billboard Company an amount equal to the payment schedule contained in the State of California, Department of Transportation Manual, Exhibit 7-Ex-14 (Rev II2005)(commonly referred to as the "Caltrans Schedule") in the amount of $19,441. However, CBS Billboard Company does not accept the Caltrans Schedule and is requiring that the billboard be relocated. Moreover, under the City's Development Code, new billboards are prohibited and thus, the billboard will need to be relocated outside the City limits. In the meantime, the Agency will continue to work with CBS Billboard Company to negotiate a price for the relocation of the billboard. Once the Agency acquires the Spar Property and relocates the billboard, the Agency will sell the Spar Property to the Developer for an amount that is equal to the Agency's acquisition cost, relocation costs, legal fees and any other costs associated with the acquisition and billboard relocation. P:\Agendas\Comm [lev CommissionlCOC 2Q06\1 1-20-06 La Placilll on 2nd SIret.'1 SR.doc COMMISSION MEETING AGENDA Meeting Date: 11120/2006 Agenda Item Number: Economic Development Agency Staff Report La Placita on 2nd Street - Uptown Redevelopment Project Area Page 3 . The Developer has requested that a maximum exposure cap be included in the DDA in the amount of $500,000 ("Upset Figure"). And in the event that the Belichesky/Spar Property costs are estimated by the Developer or the Agency to exceed the Upset Figure, the Developer may terminate the DDA subject to the provisions of Section 1.07 and 5.09 of the DDA. . The Developer will construct an upscale shopping center consisting of approximately 100,000 square feet of which approximately 45,000 square feet will be for a new Superior Super Grocery Store as an anchor tenant, or such other anchor tenant as agreed to by the Agency. The Developer will invest approximately $22 million for on and off-site improvements and will agree to develop the Project Site with a beautiful architectural treatment complimentary to the Spanish architecture of the Santa Fe Depot. The Developer will also ensure that prevailing wages are paid for the off-site public improvements. Demolition of the existing shopping center will commence within six (6) months from the approval date of the DDA. Completion of the new shopping center will occur within two (2) years from the approval date of the DDA. Under theDDA, it is proposed that the Agency will contribute up to $2 million towards the cost of the off-site public improvements as required by the City. As such, both the Agency and the Mayor and Common Council are required to make certain findings related to the use of tax increment (bond proceeds) from the Uptown Redevelopment Project Area for the construction of public improvements. . The Agency will use its best efforts, but is under no obligation, to acquire 1.45 acres which is made up of nine (9) parcels (APN's: 0138-302-03, 13,27 and 28 and APN's: 0138-293-01, 02, 06, 09 and 10) (referred to as the "Additional Property") on the south side of 2nd Street between "K" Street and Mt. Vernon Avenue. The Additional Property is contiguous with the Kovats Property that the Developer has already acquired and it is envisioned that this property would be used to create one (I) large cohesive development site for an infill transit oriented development and/or mixed uses; however, this development scenario would require a general plan amendment. The acquisition of the Additional Property will be subject to a separate agreement at a later date, and it is not a condition precedent to closing of escrow for the sale of the various properties and development of the Project as defined in the DDA. ENVIRONMENTAL IMPACT: On August 16, 2004, the Community Development Commission considered and certified an Environmental Impact Report ("EIR") (SCH#2003031072) in accordance with the California Environmental Quality Act ("CEQA") that addressed the impacts of the proposed development of the Project and mitigation measures in connection with the development of the proposed Project. These mitigation measures include the development of various off-site improvements. FISCAL IMPACT: The Developer's construction costs for the Project is estimated to be approximately $22 million. After the Project is completed, it is estimated that the gross tax increment revenue generated through the expiration of the Uptown Redevelopment Project Area (June 2027) will be approximately $4.5 million. 1':\Agcndas\Comm Dcv Commission\CDC 2006\] 1-20-06 La Pllldta on 2nd Slreet SR.doc COMMISSION MEETING AGENDA Meeting Date: 11/20/2006 Agenda Item Number: Economic Development Agency Staff Report La Placita on 2nd Street - Uptown Redevelopment Project Area Page 4 Please refer to the attached Summary Report, Section II, for a breakdown of the costs of the Agreement to the Agency. RECOMMENDATION: That the Mayor and Common Council and the Community Development Commission adopt the attached Resolutions. Maggie Pachec , Executive Director P:\Agcndas\Conun Dcv Commission\ClX: 2006\] 1.2()'()61.a Placita on 2nd Street SR,doc COMMISSION MEETING AGENDA Meeting Date: III20/2006 Agenda Item Number: I I I I I I I I I I I I I I ,. I I I I I I I I I , , I I I I I I I I I I , I I I I I I I I I I I I I I _-1 ,. \ < '" w 15 o !'? , ~'" . . >- ~o:-' o~:a Q) 0 I Q. , q 0; ~ ~ _ .,-.r, o .. - to- .. r-OD - lJJ;;: ... lJJ a:: l- V) o ~F. ,11> . ,.,~ ~ '2: 'aJ~~ " Q, 0; ; ~ <h .,; ~ ~ ... _ --.j IV) " @~ vi @ ~, '\ .. << a: 0:: 1-1- ro' ,- :. - . I: . I I I I I I L I I I I I I I .0 .", I ~ I 1 0" ~ . ..:onatf/~' ~<fj, ~ rc Cl . ci :_", I -- ~~ol -2: ;SC! I mil: ~i I :,: - - --I 1--- ~ ... \ :} I Q' tN" .\::10 \:.:.\ .~~ i 'I - (0 \." ,,\ C\J I \oJ '" ~O - I I I I I I I 'I 0,1 I I 1 I ........ I ....._______1 2: o '311 tf V) -0 c: C\J ,.. l .1 NONl:J311 lW r >, ". en '" .c <.J 'r< M '" '" ... '" "- en I- '" "- o M '" :> '" '" SUMMARY REPORT PURSUANT TO HEALTH AND SAFETY CODE SECTION 33433 OF THE CALIFORNIA COMMUNITY REDEVELOPMENT LAW ON A DISPOSITION AND DEVELOPMENT AGREEMENT BY AND BETWEEN THE REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO AND LA PLACITA ON 2ND STREET, LLC (REFERRED TO AS THE "DEVELOPER") - UPTOWN REDEVELOPMENT PROJECT AREA INTRODUCTION This Summary Report has been prepared by the Redevelopment Agency of the City of San Bernardino (the "Agency") pursuant to Section 33433 of the California Health and Safety Code. This Summary Report sets forth certain details of the proposed Disposition and Development Agreement (the "DDA") between the Agency and La Placita on 2nd Street, a California limited liability corporation (the "Developer"), regarding the sale of approximately I acre of land consisting of five (5) parcels identified as APN's: 0138-301 -03, 04, and 05 (the "Agency Property"), APN: 0138-301-07 (the "Belichesky Property") and APN: 0138-301-08 (the "Spar Property") (collectively the "Property"), generally located west of "K" Street, east of Giovanola Avenue, north of 2nd Street and south of3'd Street in the City of San Bernardino (the "City"). This Summary Report is organized into the following six (6) sections: I. Salient Points of the Proposed DDA: This section includes a description of the project and the major responsibilities to be assumed by the Agency and the Developer. II. Cost of the DDA to the Al!ency: This section outlines the proposed DDA costs to the Agency. III. Estimated Valne of the Interests to be conveyed by the DDA determined at the Hil!hest and Best use Permitted under the Redevelopment Plan: This section summarizes the value of the Property to be conveyed by the DDA to the Developer at the highest use permitted. IV. Estimated Reuse Value of the Interests to be conveved determined at the required use and with the Conditions. Covenants and Development Costs required by the Proposed DDA: This section summarizes the agreed purchase price for the Property. V. Blil!ht Alleviation: This section describes the existing blighting conditions in and around the Property that is the subject of the DDA, and an explanation of how the proposed DDA will assist in alleviating the blighting conditions. VI. Conformance with the AB 1290 Implementation Plan: This section identifies how the proposed DDA will result in a development activity that fulfills goals and objectives established in the Agency's AB 1290 Five-Year Implementation Plan. I. SALIENT POINTS OF THE PROPOSED DDA A. Description of the Proposed Project The purpose of the proposed DDA is to sell the Property to the Developer for use in a redevelopment project. The proposed project, on approximately 8.7 acres, is to construct approximately 100,000 square feet of new commercial/retail facilities (the "Project" or "Project I P:\Ajendal\Agendll Altal;:hmcnts\Sunmary Reports\2006\] ].20-06 La. Placita 5unwnary Repon,doI,; Site"). As part of the Project, the Developer will construct a new super market approximately 45,000 square feet in size. In addition, the Developer will undertake and construct off-site improvements as required by the City. B. Agency Responsibilities I. Enter into a DDA with the Developer for the sale of the Property to the Developer. 2. Sell the Agency Property to the Developer for the price of $272,800 or the appraised fair market value, to be determined six (6) months prior to the close of escrow, whichever is greater. 3. The Agency will accept a previously opened escrow, from the Developer, for the acquisition of the Spar Property. There is one (I) unilluminated, double-sided billboard located on the Spar Property (the "Spar Property Billboard") that will need to be relocated. The Agency will use its best efforts in negotiating with the owner of the billboard, CBS Outdoor (the "CBS Billboard Company"), to facilitate the relocation of the Spar Property Billboard. The Developer will pay the Agency all costs incurred by the Agency in connection with the acquisition of the Spar Property and relocation of the Spar Property Billboard. 4. The Agency will use its best efforts to acquire the Belichesky Property. Negotiations with the Belichesky Property Owner have not been successful and the Agency has initiated action to acquire the Belichesky Property through condemnation. There is also one (I) business located on the Belichesky Property that will need to be relocated. The Agency will sell the Belichesky Property to the Developer at not less than the fair market value or negotiated price between the Belichesky Property Owner and the Agency. In addition, the Developer will pay the Agency all other costs incurred by the Agency in connection with the acquisition of the Belichesky Property, including business relocation. 5. Contribute up to $2,000,000 towards the cost of the off-site improvements required by the City. 6. The Agency will use its best efforts, but is under no obligation to acquire approximately 1.45 acres ofland: APN's: 0138-302-03, 13,27 and 28 and APN's: 0138-293-01, 02, 06, 09 and 10, located on the south side of 2nd Street between "K" Street and Mt. V emon Avenue (the "Additional Property"). The acquisition of the Additional Property will be subject to a separate agreement and is not a condition precedent to closing escrow for the sale of the Property and development of the Project as defined in the DDA. C. Developer Responsibilities 1. Enter into a DDA with the Agency for the purchase of the Property. 2. Construct approximately 100,000 square feet of new commercial/retail facilities to include a new 45,000 square foot super market together with all on- and off-site improvements. 3. Acquire the Agency Property for the acquisition price of $272,800 or the appraised fair market value, to be determined six (6) months prior to the close of escrow, whichever is greater. 4. Advance all funds necessary to the Agency in connection with the acquisition, relocation, etc. ofthe Belichesky Property and the Spar Property. 2 P:\Agenda$\Aacnda AuachmcnLSlSumrnlll'y Repons\2006\11-20-06 La P1acita SurnrTIIII'y Report.drx 5. Acquire the Spar Property from the Agency. The purchase price will be the total of all costs and fees incurred by the Agency in connection with the acquisition of the Spar Property and relocation of one (1) billboard. 6. Acquire the Belichesky Property from the Agency. The purchase price will be the total of all costs and fees incurred by the Agency in connection with the acquisition of the Belichesky Property and relocation compensation of one (I) business. 7. Construct off-site improvements required by the City and the payment of prevailing wages for the construction of all off-site improvements. 8. Negotiate an agreement with the Agency for the purchase and development of the Additional Property as defined in Section 1.06 of the DDA. II. COST OF THE DDA TO THE AGENCY The estimated cost of the DDA to the Agency is as follows: Spar Property Acquisition Spar Property Billboard Removal/Lease Buyout Belichesky Property Acquisition Business Relocation Legal Fees Agency Property Off-Site Improvements Sub-Total Approximate Costs $ 90,000 $100,000 $206,000 $75,000 $100,000 $272,800 $2.000.000 $2,843,800 $843.800 $2,000,000 Less Reimbursement by Developer Net Estimated Cost of the DDA to the Agency III. ESTIMATED VALUE OF THE INTERESTS TO BE CONVEYED BY THE DDA, DETERMINED AT THE HIGHEST AND BEST USE PERMITTED UNDER THE REDEVELOPMENT PLAN Given the location and current use characteristics of the Property, use in a commercial/retail development represents the highest and best use of the Property. The approximate fair market value of the Property is $568,800. IV. ESTIMATED REUSE VALUE OF THE INTERESTS TO BE CONVEYED DETERMINED AT THE REQUIRED USE AND WITH THE CONDITIONS, COVENANTS AND DEVELOPMENT COSTS REQUIRED BY THE PROPOSED DDA The approximate fair market value of the Property is $568,800. 3 P:\Aaendas\Aj:c:nda AnachmElIlslSurrmary Reporu\2006\11-20-06 La P\acita Sunvnary Report.doc V. BLIGHT ALLEVIATION The Project Site is in a dilapidated state. One (1) structure in the Project Site has been abandoned and burned with its roof caving in. The Developer will cause the demolition of all structures on the Project Site and will construct a new 100,000 square foot commercial/retail center with a beautiful architectural treatment complimentary to the Spanish architecture of the Santa Fe Depot along with the appropriate water features, landscaping, parking, lighting, improvements, etc. Once the construction is completed on the Project Site, including the Property, approximately 8.7 acres of blighted land will be eliminated and a significant portion of Sub-Area B of the Project Area will be revitalized. VI. CONFORMANCE WITH THE AB 1290 IMPLEMENTATION PLAN The Five-Year Implementation Plan adopted by the Agency contains several broad operational goals and objectives. Among these are the following: . Eliminate blighting influences, including deteriorating buildings, uneconomic land uses, obsolete structures, and other environmental, economic, and social deficiencies. . Facilitate land assembly to prevent piecemeal development that would leave economic potential underachieved. . Replan, redesign and redevelop underdeveloped areas that are stagnant or improperly utilized. The proposed DDA will assist the Agency in meeting the objectives and goals of its Five-Year Implementation Plan in the following way: I. The execution of the DDA with the Developer will continue the redevelopment activities of blight elimination; improving economic deficiencies in the Uptown Redevelopment Project Area; replan, redesign and redevelop underdeveloped land that is underutilized. Based upon the preceding factors, the proposed DDA is consistent with the adopted Five-Year Implementation Plan. 4 P:\Aicrw!as\Agt:nda AlIacllmenls\Summary Reporu\2006\11-20-06 La Placita SumrTIlIl)' Report,(\()(: 1 2 3 4 5 6 7 8 9 RESOLUTION NO. RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO CONSENTING TO THE SALE OF CERTAIN PROPERTY AND THE FUNDING OF CERTAIN PUBLIC IMPROVEMENTS AS IDENTIFIED IN THE 2006 DISPOSITION AND DEVELOPMENT AGREEMENT ("DDA") BY AND BETWEEN THE REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO ("AGENCY") AND LA PLACITA ON 2ND STREET, A CALIFORNIA LIMITED LIABILITY CORPORATION AND ACCEPTING THE COMMUNITY DEVELOPMENT COMMISSION'S CERTAIN ENVIRONMENTAL FINDINGS RELATED TO THE DEVELOPMENT OF THE PROPOSED PROJECT 10 WHEREAS, the City of San Bernardino, California (the "City"), is a municipal corporatio 11 and charter city, duly organized and existing pursuant to the provisions of the constitution of th 12 State of California; and 13 WHEREAS, the Redevelopment Agency of the City of San Bernardino (the "Agency"), is 14 public body, corporate and politic, existing under the laws of the State of California, Health an 15 Safety Code 33101, and is charged with the mission of redeveloping blighted and underutilized land 16 and 17 WHEREAS, on November 4, 2003, the Agency acquired title to that certain real propert 18 consisting of approximately .57 acres located at 1109 West 3rd Street (APN: 0138-301-03), 24 19 North "K" Street (APN: 0138-301-04) and 232 North "K" Street (APN: 0138-301-05), (the "Agenc 20 Property") in the Uptown Redevelopment Project Area (the "Project Area") for Two Hundre 21 Seventy-Two Thousand Eight Hundred Dollars ($272,800); and 22 WHEREAS, the Agency Property has been vacant for approximately three (3) years; and 23 WHEREAS, the Agency is entering into a 2006 Disposition and Development Agreemen 24 (the "DDA") with La Placita on 2nd Street, a California limited liability corporation (th 25 "Developer"), pursuant to which the Agency will transfer the Agency Property to the Developer; and 26 WHEREAS, the DDA provides for the Agency to use its best efforts to acquire one (I 27 privately owned parcel identified as APN: 0138-301-07 (the "Belichesky Property"); and 28 L . 1 r:\A&tnd..\Rellllu.fiaAJ\RetolutID!II'UOO6\II.20-06 La PluU. MCC ReM.dDC 1 WHEREAS, the DDA provides that under certain circumstances, the Agency will acquir 2 one (1) privately owned parcel identified as APN: 0138-301-08 (the "Spar Property") and cause t 3 be removed and terminated that certain billboard lease; and 4 WHEREAS, the Agency Property, Belichesky Property and Spar Property are hereafte 5 referred to as the property (the "Property"); and 6 WHEREAS, the Developer owns property identified as APN: 0138-301-01, 06, and 10 an 7 APN: 0138-263-02 (the "Developer Property"); and 8 WHEREAS, the project site consists of the Developer Property and the Property (the "Projec 9 Site"); and 10 WHEREAS, the DDA contemplates that the Developer will use the Property in th 11 development of approximately 100,000 square feet of new commercial/retail building space (th 12 "Project"); and 13 WHEREAS, the Agency has prepared and published a notice of joint public hearing in Th 14 San Bernardino County Sun newspaper on October 2 and 9, 2006, regarding the consideration an 15 approval of the DDA; and 16 WHEREAS, pursuant to Health and Safety Code Section 33433, the Agency may transfer th 17 Agency Property, Belichesky Property and Spar Property to the Developer subject to the Mayor an 18 Common Council (the "Council") and the Community Development Commission (th 19 "Commission") adopting a Resolution consenting to and authorizing the Agency to transfer th 20 Agency Property, Belichesky Property and Spar Property in light of the findings set forth herein; and 21 WHEREAS, the Agency has prepared a Summary Report pursuant to Health and Safety 22 Code Section 33433 that describes the salient points of the DDA and identifies the cost of the DDA 23 to the Agency; and 24 WHEREAS, pursuant to Health and Safety Code Section 33445, the Agency must obtain the 25 consent of the Council and the Council and the Commission must make certain findings prior to the 26 Agency paying for the costs of installation and construction of improvements which are publicly 27 owned; and 28 2 P:\Ageodas\Resolutions\Resotutions\ZOO6\Jl.1A).O(i La P1acita MCC Reso.doc 1 WHEREAS, the Agency is the "lead agency" for the Project, under the California 2 Environmental Quality Act (the "CEQA"), California Public Resources Code Sections 21000, et 3 seQ., in accordance with Public Resources Code Section 21067 and Title 14 California Code of 4 Regulations Sections 15050 and 15051; and 5 WHEREAS, on August 16, 2004, the Commission considered and certified an 6 Environmental Impact Report (the "EIR") (SCH#2003031072) in accordance with CEQA that 7 addressed the impacts of the proposed development of the Project Site and mitigation measures in 8 connection with the proposed development of the Project Site; and 9 WHEREAS, on October 16, 2006, the joint public hearing was continued to November 6, 10 2006; and 11 WHEREAS, on November 6, 2006, the joint public hearing was continued to November 20, 12 2006; and 13 WHEREAS, it is appropriate for the Council to take action with respect to the disposition of 14 the Property and consenting to the expenditure of Agency Tax Increment Funds for the provision of 15 public improvements to the Developer by the Agency as set forth in the DDA. 16 NOW, THEREFORE, IT IS HEREBY RESOLVED, DETERMINED AND ORDERED BY 17 THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO, AS 18 FOLLOWS: 19 Section 1. On August 16, 2004, the Commission considered and certified an EIR 20 (SCH#200303 I 072) in accordance with CEQA that addressed the impacts of the proposed 21 development of the Project and mitigation measures in connection with the proposed development 22 of the Project and the Council hereby accepts and adopts the Commission's findings related to the 23 EIR. 24 Section 2. On November 20, 2006, the Council conducted a full and fair joint public 25 hearing with the Commission, as the governing board of the Agency, relating to the approval of the 26 disposition of the Property from the Agency to the Developer, and the funding of public 27 improvements and the development thereof pursuant to the DDA. The minutes ofthe City Clerk for 28 the November 20, 2006 meeting of the Council shall include a record of all communication and 3 t:\Ar;cada.\RaoIuUou\RaGlullunl\Z006\11-Zo-06 La rladt. MCC IUso.dK 1 testimony submitted to the Council by interested persons relating to the joint public hearing and the 2 approval ofthe DDA. 3 Section 3. This Resolution is adopted in satisfaction of the provisions of Health and 4 Safety Code Sections 33431 and 33433 relating to the disposition and the transfer of the Property 5 by the Agency to the Developer on the terms and conditions set forth in the DDA. A copy of the 6 DDA, in the form submitted at this joint public hearing, is on file with the City Clerk. The Council 7 hereby consents to the sale of the Property to the Developer in accordance with the terms and 8 provisions of the DDA and further authorizes the Agency to enter into said DDA. 9 Section 4. Pursuant to Health and Safety Code Section 33445, the Council hereby 10 makes the following findings concerning the installation and construction of improvements which 11 are publicly owned: (\) that the improvements are of benefit to the Project Area; (2) that no other 12 reasonable means of financing the improvements are available to the community; and (3) that the 13 payment of the cost of the improvements will assist in the elimination of one or more blighting 14 conditions inside the Project Area and is consistent with the implementation plan adopted pursuant 15 to Health and Safety Code Section 33490. 16 Section 5. On November 20, 2006, the Council conducted a full and fair joint public 17 hearing with the Commission, relating to the disposition of the Property from the Agency to the 18 Developer and the development thereof pursuant to the DDA. The minutes of the City Clerk for the 19 November 20, 2006 meeting of the Council shall include a record of all communication and 20 testimony submitted to the Council by interested persons relating to the joint public hearing and the 21 approval of the DDA. 22 Section 6. This Resolution shall take effect upon its adoption and execution in the 23 manner as required by the City Charter. 24 /1/ 25 //1 26 /1/ 27 /1/ 28 /1/ 4 r:\Ace...~_t60......lutlell.\1006\11-1o-lKi..... PlIIdl. MCC Rua.doc: 1 2 3 4 5 6 7 8 RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO CONSENTING TO THE SALE OF CERTAIN PROPERTY AND THE FUNDING OF CERTAIN PUBLIC IMPROVEMENTS AS IDENTIFIED IN THE 2006 DISPOSITION AND DEVELOPMENT AGREEMENT ("DDA") BY AND BETWEEN THE REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO ("AGENCY") AND LA PLACITA ON 2ND STREET, A CALIFORNIA LIMITED LIABILITY CORPORATION AND ACCEPTING THE COMMUNITY DEVELOPMENT COMMISSION'S CERTAIN ENVIRONMENTAL FINDINGS RELATED TO THE DEVELOPMENT OF THE PROPOSED PROJECT I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Mayor and 9 Common Council of the City of San Bernardino at a , 2006, by the following vote to wit: meeting Navs Abstain Absent Rachel G. Clark, City Clerk 21 The foregoing resolution is hereby approved this 22 23 24 25 day of ,2006. Patrick J. Morris, Mayor City of San Bernardino 26 Approved as to Form: 27 28 5 r:\Acftld.s\ResolutloJlf\RnollllluRrUOO6\11.Zll-06l.1 rZadl. MCC ReM.due 1 2 3 4 5 6 7 8 9 10 RESOLUTION NO. RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF SAN BERNARDINO (1) APPROVING THE 2006 DISPOSITION AND DEVELOPMENT AGREEMENT ("DDA") BY AND BETWEEN THE REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO ("AGENCY") AND LA PLACITA ON 2ND STREET, A CALIFORNIA LIMITED LIABILITY CORPORATION; (2) AUTHORIZING THE EXECUTIVE DIRECTOR OF THE AGENCY TO EXECUTE SAID DDA RELATING TO THE SALE OF CERTAIN PROPERTY IN THE CITY OF SAN BERNARDINO; AND (3) MAKING CERTAIN FINDINGS THERETO RELATED TO THE DEVELOPMENT OF THE PROJECT AND THE FUNDING OF CERTAIN PUBLIC IMPROVEMENTS WHEREAS, the Redevelopment Agency of the City of San Bernardino (the "Agency"), is a 11 public body, corporate and politic, existing under the laws of the State of California, Health and 12 Safety Code 33101, and is charged with the mission of redeveloping blighted and underutilized 13 land; and 14 WHEREAS, on November 4, 2003, the Agency acquired title to that certain real property 15 consisting of approximately .57 acres located at 1109 West 3rd Street (APN: 0138-301-03), 240 16 North "K" Street (APN: 0138-301-04) and 232 North "K" Street (APN: 0138-301-05), (the 17 "Agency Property") in the Uptown Redevelopment Project Area (the "Project Area"); and 18 WHEREAS, the Agency is entering into a 2006 Disposition and Development Agreement 19 (the "DDA") with La Placita on 2nd Street, a California limited liability corporation (the 20 "Developer"), pursuant to which the Agency will transfer the Agency Property to the Developer; 21 and 22 WHEREAS, the DDA provides for the Agency to use its best efforts to acquire one (1) 23 privately owned parcel identified as APN: 0138-301-07 (the "Belichesky Property"); and 24 WHEREAS, the DDA provides for the Agency to use its best efforts to acquire one (1) 25 privately owned parcel identified as APN: 0138-301-08 (the "Spar Property"); and 26 WHEREAS, the Agency Property, Belichesky Property and Spar Property are hereafter 27 referred to as the property (the "Property"); and 28 1 P:\Agendas\Rcsolulioll5lJlc50lulionsIJ006\11.2G-06 LaPlal;i1a CDC Ruo_doc 1 WHEREAS, the Developer owns property identified as APN: 0138-301-01, 06, and 10 and 2 APN: 0138-263-02 (the "Developer Property"); and 3 WHEREAS, the project site consists of the Developer Property and the Property (the 4 "Project Site"); and 5 WHEREAS, the DDA contemplates that the Developer will use the Property for the 6 development of approximately 100,000 square feet of new commerciaVretail building space (the 7 "Project"); and 8 WHEREAS, the Agency has prepared and published a notice of joint public hearing in The 9 San Bernardino County Sun newspaper on October 2 and 9, 2006, regarding the consideration and 10 approval ofthe DDA; and 11 WHEREAS, pursuant to Health and Safety Code Section 33433, the Agency may transfer 12 the Property to the Developer subject to the Mayor and Common Council (the "Council") and the 13 Community Development Commission (the "Commission") adopting appropriate Resolutions 14 consenting to and authorizing, as necessary, the Agency to transfer the Property in light of the 15 findings set forth herein; and 16 WHEREAS, the Agency has prepared a Summary Report pursuant to Health and Safety 17 Code Section 33433 that describes the salient points of the DDA and identifies the cost of the DDA 18 to the Agency; and 19 WHEREAS, pursuant to Health and Safety Code Section 33445, the Agency must obtain the 20 consent of the Commission and the Council and the Commission must make certain findings prior to 21 the Agency paying for the costs of installation and construction of improvements which are publicly 22 owned; and 23 WHEREAS, the Agency is the "lead agency" for the Project, under the California 24 Environmental Quality Act (the "CEQA"), California Public Resources Code Sections 21000, et 25 sea., in accordance with Public Resources Code Section 21067 and Title 14 California Code 0 26 Regulations Sections 15050 and 15051; and 27 WHEREAS, on August 16, 2004, the Commission considered and certified an 28 Environmental Impact Report (the "EIR") (SCH#2003031072) in accordance with CEQA that 2 P.\Aa:endas\Resolulions\ResoJulioDt\2006\II-Zo-06 u. Pla&:ita COC Reio,doc 1 addressed the impacts of the proposed 100,000 square foot development of the Project Site and 2 mitigation measures in connection with the proposed development of the Project Site; and 3 WHEREAS, on October 16, 2006, the joint public hearing was continued to November 6, 4 2006; and 5 WHEREAS, on November 6, 2006, the joint public hearing was continued to November 20, 6 2006;and 7 WHEREAS, it is appropriate for the Commission to take action with respect to the 8 disposition of the Agency Property, Belichesky Property and Spar Property to the Developer by the 9 Agency and to approve the DDA as set forth in this Resolution. 10 NOW, TIIEREFORE, THE COMJ\illNITY DEVELOPMENT COMMISSION OF THE CITY 11 OF SAN BERNARDINO DOES HEREBY RESOLVE, DETERMINE AND ORDER, AS FOLLOWS: 12 Section 1. On August 16, 2004, the Commission considered and certified an EIR 13 (SCH#2003031072) in accordance with CEQA that addressed the impacts of the proposed Project 14 and mitigation measures in connection with the proposed Project. 15 Section 2. On November 20, 2006, the Commission, as the governing board of the 16 Agency, conducted a full and fair joint public hearing with the Council, relating to the approval of 17 the disposition of the Property from the Agency to the Developer, the funding of public 18 improvements and the development thereof pursuant to the DDA. The minutes of the City Clerk for 19 the November 20,2006 meeting of the Commission shall include a record of all communication and 20 testimony submitted to the Commission by interested persons relating to the joint public hearing and 21 the approval of the DDA. 22 Section 3. Pursuant to Health and Safety Code Section 33445, the Commission hereby 23 makes the following findings concerning the installation and construction of improvements which 24 are publicly owned: (I) that the improvements are of benefit to the Project Area; (2) that no other 25 reasonable means of financing the improvements are available to the community; and (3) that the 26 payment of the cost of the improvements will assist in the elimination of one or more blighting 27 conditions inside the Project Area and is consistent with the implementation plan adopted pursuant 28 to Health and Safety Code Section 33490. 3 p,\Agendas\RCIOlulions\Resolulions\2006\11.20-06 La Placila CDC Resodo<: 1 Section 4. The Commission hereby receives and approves the Summary Report and the 2 other written materials submitted to the Commission at the meeting at which this Resolution is 3 adopted. The Summary Report contains information required under Health and Safety Code Section 4 33433. 5 Section 5. This Resolution is adopted in satisfaction of the provisions of Health and 6 Safety Code Section 33433 relating to the disposition and the transfer of the Agency Property, 7 Belichesky Property and Spar Property by the Agency to the Developer on the terms and conditions 8 set forth in the DDA. A copy of the DDA, in the form submitted at this joint public hearing, is on 9 file with the City Clerk. The Commission hereby finds and determines that the disposition and 10 redevelopment of the Property by the Developer, in accordance with the DDA, is consistent with the 11 Project Area Redevelopment Plan, the Five-Year Implementation Plan and the City's General Plan. 12 Section 6. The Commission hereby approves the DDA. The Executive Director of the 13 Agency is hereby authorized and directed to execute the DDA on behalf of the Agency together with 14 nonsubstantive and conforming changes as may be recommended by the Executive Director of the 15 Agency and Agency Counsel. The Executive Director of the Agency is hereby authorized to take all 16 appropriate actions as set forth in the DDA to implement the disposition and redevelopment of the 17 Property. 18 Section 7. 19 III 20 III 21 III 22 III 23 III 24 III 25 III 26 III 27 III 28 III The Resolution shall become effective immediately upon its adoption. 4 P \Agendas\Rcsolutions\Resolutions\2006\1 1_20-06 La Placila CDC Re5odoc 1 2 3 4 5 6 7 8 RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF SAN BERNARDINO (1) APPROVING THE 2006 DISPOSITION AND DEVELOPMENT AGREEMENT ("DDA") BY AND BETWEEN THE REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO ("AGENCY") AND LA PLACITA ON 2ND STREET, A CALIFORNIA LIMITED LIABILITY CORPORATION; (2) AUTHORIZING THE EXECUTIVE DIRECTOR OF THE AGENCY TO EXECUTE SAID DDA RELATING TO THE SALE OF CERTAIN PROPERTY IN THE CITY OF SAN BERNARDINO; AND (3) MAKING CERTAIN FINDINGS THERETO RELATED TO THE DEVELOPMENT OF THE PROJECT AND THE FUNDING OF CERTAIN PUBLIC IMPROVEMENTS I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Community 9 Development Commission of the City of San Bernardino at a , 2006, by the following vote to wit: meeting The foregoing resolution is hereby approved this 21 22 23 20 Nays Abstain Absent Secretary day of ,2006. Patrick J. Morris, Chairperson Community Development Commission of the City of San Bernardino 24 Approved as to Form: 25 By: ~ 26 Agency C nse) 27 28 5 P,\Alcndas\ReJOlulionl~lo]utionIIl006\11-20-06 La Placila CDC Re.o,doc RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO Attention: Executive Director 201 North "E" Street, Suite 301 San Bernardino, California 92401 (Space Above Line for Use By Recorder) Recording Fee Exempt Pursuant to Government Code Section 6103 2006 DISPOSITION AND DEVELOPMENT AGREEMENT BY AND BETWEEN REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO AND LA PLACITA ON 2ND STREET, LLC, A CALIFORNIA LIMITED LIABILITY COMPANY 2006 DISPOSITION AND DEVELOPMENT AGREEMENT (La Placita on 2nd Street) THIS 2006 DISPOSITION AND DEVELOPMENT AGREEMENT (the "Agreement") is entered into as of November 20, 2006, by and between the Redevelopment Agency of the City of San Bernardino, a public body, corporate and politic (the "Agency") and La Placita on 2nd Street, LLC, a California limited liability company (the "Developer"). The Agency and the Developer hereby agree as follows: Section 1.01. Puroose of Agreement. The purpose of this Agreement is to implement the Redevelopment Plan for the Uptown Redevelopment Project Area (the "Project Area") by providing for the purchase and redevelopment of the Property, as defined below, and the Developer Property, as defined below, by the Developer. The purchase, sale, redevelopment and construction of the Property and/or of the Developer Property shall be governed by and subject to this Agreement. For purposes of this Agreement, the term "Property" shall mean the Agency Property, as defined below, and the Belichesky Property, as defined below, and is located in the City of San Bernardino (the "City"), the County of San Bernardino (the "County"), California (the "State"). As of the date of this Agreement, the Agency owns that certain real property (the "Agency Property"), located in the City, County and State, having Assessor Parcel Number 0138-301-03, Assessor Parcel Number 0138-301-04 and Assessor Parcel Number 0138- 301-05, the legal description of which is more particularly described in Exhibit "A-I" attached hereto and incorporated herein by this reference. The redevelopment of the Agency Property, the Belichesky Property and the Developer Property pursuant to this Agreement is in the vital and best interests of the City, the Agency and the health, safety and welfare of its residents, and in accord with the public purposes and provisions of applicable state and local laws. The Agency has determined that the development and use of the Property and the Developer Property as contemplated by this Agreement is consistent with the Redevelopment Plan for the Project Area. Section 1.02. The Prooertv and the Proiect. (a) The Property includes approximately .77 acres of land, more or less, consisting of four (4) parcels, is generally situated and bordered on the East by "K" Street, on the South by 2nd Street, on the North by 3rd Street and on the West by the future Giovanola Avenue, and is located within the City, County and State. The Property is referred to as Assessor Parcel Number 0138-301-03, Assessor Parcel Number 0138-301-04, Assessor Parcel Number 0138- 301-05 and Assessor Parcel Number 0138-301-07. The Agency will exercise its best efforts to purchase the Belichesky Property prior to the Close of Escrow. Promptly following the purchase of the Property from the Agency, the Developer shall undertake the redevelopment, improvement and use of the Property together with the Developer Property as an upscale shopping center, having a Superior Grocery Store as the anchor tenant, or such other anchor tenant as agreed to by the Agency in its sole and absolute discretion. The development of the Property and the Developer Property is referred to herein as the "Project". The Developer represents to the Agency that the Project shall consist of commercial and retail improvements, and that the Developer shall construct on the Property and on the Developer Property approximately one 4812-3945-3441.1 11114/06jmm I P:\Agendas\Agcnda AIl~hmenls\Agnas-Ameoo 2006\11-20-06 La Placita Hnal DDAdoc hundred thousand (100,000) square feet of commercial and retail buildings. The Developer represents that it has submitted the necessary applications to the City and has commenced the process for the City review and approval of the development of the aforementioned Project. (b) The Developer owns commercially improved real property located in the City and State consisting of four (4) parcels and referred to as Assessor Parcel Number 0138- 263-02 (the "Developer's Supermarket Parcel"), Assessor Parcel Number 0138-301-01, Assessor Parcel Number 0138-301-06 and Assessor Parcel Number 0138-301-10 (collective]y, together with the Spar Property, as defined below, Assessor Parcel Number 0138-30] -08, on the date that the Deve]oper, as buyer, acquires fee simple title in and to the Spar Property from Spar, as defined below, or its successors and/or assigns, as seller, the "Deve]oper Property"). The ]egal description for the Developer Property is attached hereto and incorporated herein by this reference as Exhibit "A-2". (c) The Belichesky-Fi]ipovic Trust (the "Be]ichesky-Filipovic Trust") owns that certain improved rea] property located in the City and the State consisting of one (1) parcel and referred to as Assessor Parcel Number 0138-301-07 (the "Be]ichesky Property"). The lega] description of the Be]ichesky Property is attached hereto and incorporated herein by this reference as Exhibit "A-3". (d) Alice Spar and other persons and/or entities (collective]y, "Spar") own that certain improved rea] property located in the City and the State consisting of one (1) parcel and referred to as Assessor Parcel Number 0138-301-08 (the "Spar Property"). The "Spar Property" shall also mean and include that certain billboard (the "Spar Property Billboard") located on the Spar Property and/or the lease, sublease, license or other agreement for the lease, sublease, license or other use of the Spar Property Billboard on or at the Spar Property (the "Spar Property Billboard Lease"). The ]egal description of the Spar Property is attached hereto and incorporated herein by this reference as Exhibit "A-4". (e) The Deve]oper, or an affiliate of the Developer, owns fee simple title in and to that certain real property (the "Kovats Property") located in the City, the County and the State, the legal description of which is attached hereto and incorporated herein by this reference as Exhibit "F'. (f) As of on or before May 6, 2008, the Deve]oper intends that the Property and the Deve]oper Property should have an estimated assessed valuation of not less than Twenty- Two Million Dollars ($22,000,000), in the aggregate. (g) Within one (1) year after the execution by the Agency of the Certificate of Completion, the Developer intends that the Property and the Deve]oper Property may create, or result in the creation of, an estimated one hundred and fifty (150) new full-time permanent jobs. (h) Within one (1) year after the execution by the Agency of the Certificate of Completion, and continuing annually thereafter, it is the intent of the Deve]oper that the Property and the Developer Property are estimated to create, or result in the creation of, approximately Three Hundred Thousand Dollars ($300,000) sales tax revenues to be received by the City. 4812.3945.3441.1 11114/06 jmm 2 P:\Agcllllas\Agenda Allachments\Agnl11s-Amend 2006\11-20-061.8 Placil8 Final DDA.doc Section 1.03. Parties to the Agreement. (a) The Agency is a public body, corporate and politic, exercISIng governmental functions and powers and organized and existing under Chapter 2 of the Community Redevelopment Law of the State of California Health and Safety Code Section 33000, et seq. The principal office of the Agency is located at 201 North "E" Street, Suite 301, San Bernardino, California 92401. (b) The City of San Bernardino is not a party to this Agreement. (c) The Developer is a California limited liability company, and is duly organized and validly existing under the laws of the State of California. The principal office of the Developer is 9550 Firestone Blvd., Suite 105, Downey, CA 90241. Section 1.04. Restrictions Against Change in Ownership. Management and Control of Developer and Assignment of Agreement. The qualifications and identity of the Developer are of particular concern to the Agency. It is because of those qualifications and identity that the Agency has entered into this Agreement with the Developer. Prior to the issuance of a Certificate of Completion as set forth in Section 3.07, 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. Except as set forth in Section 3.04, the Developer shall not assign all or any part of this Agreement or any rights hereunder prior to the issuance of the Certificate of Completion with respect to the Project without the prior written approval of the Executive Director of the Agency, which approval shall not be unreasonably withheld or delayed. The Developer shall promptly notify the Agency in writing of any and all changes whatsoever in the identity of the business entities and individuals either comprising or in control of the Developer, as well as any and all changes in the interest or the degree of control of the Developer by any such party, of which information the Developer or any of its members, partners or officers have been notified or may otherwise have knowledge or information. This Agreement may be terminated by the Agency prior to the Close of the Escrow as set forth in Section 2.03 if there is any significant or material change, whether voluntary or involuntary, in membership. ownership, management or control of the Developer other than such changes occasioned by the death or incapacity of any individual that has not been approved by the Agency prior to the time of such change or the Agency may seek other appropriate relief in the event that at any time following the Close of Escrow and prior to issuance of the Certificate of Completion such a change in the ownership, or control of the Developer occurs with respect to the Project; provided, however, that (i) the Agency shall first notify the Developer in writing of its intention to terminate this Agreement or to exercise any other remedy, and (ii) the Developer shall have twenty (20) calendar days following its receipt of such written notice to commence and thereafter diligently and continuously proceed with the cure of the default of the Developer hereunder and submit evidence of the initiation of satisfactory completion of such cure to the Agency in a form and substance deemed satisfactory to the Agency, in its reasonable discretion. 4812-3945-3441.1 11/14/06 jrnm 3 P:\Agendas\Agenda Allachmcnls\Agrmls-Amend 2006\] 1-20-0(i La J>lacila Final DnA.doc Section 1.05. Benefit to Proiect Area. The Agency has determined that the development of the Property and the Developer Property in accordance with this Agreement will materially assist in the elimination of blight and the implementation of the Redevelopment Plan for the Project Area. Section 1.06. Additional Propertv. The Agency shall exercise its best efforts to negotiate and execute a disposition and development agreement with the Developer for the purchase of that certain real property consisting of nine (9) parcels located in the City, County and State and referred to as Assessor Parcel Number 0138-293-01, Assessor Parcel Number 0138-293-02, Assessor Parcel Number 0138-293-06, Assessor Parcel Number 0138-293-09, Assessor Parcel Number 0138-293-10, Assessor Parcel Number 0138-302-03, Assessor Parcel Number 0138-302-27, Assessor Parcel Number 0138-302-13 and Assessor Parcel Number 0138- 302-28 (collectively, the "Additional Property"), the legal description of such Additional Property is attached hereto and incorporated herein by this reference as Exhibit "G". The Additional Property located on the south side of 2nd Street is bordered to the north by 2nd Street and to the east by K Street and is located between K Street and Mount Vernon. The Additional Property consists of approximately 1.45 acres of land. All terms and provisions with regard to the acquisition and disposition of the Additional Property shall be undertaken pursuant to such disposition and development agreement to assist the Developer in its mixed-use development of the Kovats Property, as defined below, pursuant to the terms, covenants and conditions of such separate disposition and development agreements to be mutually executed and agreed to by and between the Developer and the Agency. The approval and execution of such disposition and development agreement with respect to the Additional Property shall not be a condition precedent that must be satisfied or waived by either party prior to the Closing of Escrow, as defined below. Section 1.07. Purchase of the Belichesky Property and of the Spar Property. (a) The Agency shall use its best efforts to purchase the Belichesky Property prior to the Close of Escrow but the Agency shall have no obligation, duty or liability to the Developer to purchase the Belichesky Property. The Developer shall use its best efforts to purchase the Spar Property prior to the Close of Escrow and the purchase escrow of the Developer may be assigned to the Agency in the manner as hereinafter provided. The purchase by the Agency of the Belichesky Property shall be a condition precedent to the Close of Escrow, and the Developer shall pay to the Agency the Belichesky Property Purchase Price, as defined below, including, without limitation, the Belichesky Property Condemnation Costs, as defined below, if applicable, the Belichesky Property Business Relocation Costs, as defined below, if applicable, and the Belichesky Property Maintenance Costs, as defined below, if applicable (collectively, the "Belichesky Property Costs"). The purchase by the Developer of the Spar Property, whether directly from the owner thereof or from the Agency, shall be a condition precedent to the Close of Escrow, and the Developer shall pay the Spar Property Purchase Price, as defined below, the Spar Property Billboard Relocation Costs, as defined below, and the Spar Property Billboard Lease Termination Costs, as defined below (collectively, the "Spar Property Costs"). The Belichesky Property Costs and the Spar Property Costs shall not exceed Five Hundred Thousand Dollars ($500,000) (the "Upset Figure"), in the aggregate. The Agency shall provide written statements to the Developer on a monthly basis setting forth the then current 4812.3945.3441.1 11/14/06 jrnm 4 P:\Agendas\Agenda Altachmelll~\Agrmts.^melld 20l16\J ].20-06 La Placito Final DUA.doc amount expended by the Agency of the Belichesky Property Costs and the Spar Property Costs to enable the Developer to ascertain if and when the Upset Figure may be achieved for purposes of providing the notice to the Agency as set forth in the following sentence. In the event that the Belichesky Property Costs and the Spar Property Costs are reasonably estimated by the Developer to exceed the Upset Figure based upon the aforesaid monthly statements to be transmitted by the Agency to the Developer, the Developer shall, at its sole election, provide written notice to the Agency that the Developer intends to terminate this Agreement and not pay any costs in excess of the Upset Figure; provided, however, that the Developer shall remain liable to the Agency for the payment and/or reimbursement of all Belichesky Property Costs and Spar Property Costs paid and/or incurred by the Agency through and including the effective date of any such termination by the Developer. (b) Prior to the Close of Escrow, should the Agency, as buyer, be unable and unsuccessful in its efforts to purchase the Belichesky Property in an arms length transaction (the "Belichesky Property Arms Length Transaction") pursuant to the terms, covenants and conditions of an agreement of purchase and sale, as mutually agreed to and executed by and between the Agency, as purchaser, and the Belichesky-Filipovic Trust, or its successors and/or assigns, as seller, the Agency will exercise its best efforts to acquire fee simple title in and to the Belichesky Property through the exercise by the Agency of its powers of eminent domain and/or condemnation, if applicable (the "Belichesky Property Condemnation Proceedings"), provided that the Agency has and continues to have the right and power to exercise eminent domain and/or condemnation, if applicable. Prior to the Close of Escrow, should the Agency acquire fee simple title in the Belichesky Property pursuant to the Belichesky Property Condemnation Proceedings, the Developer shall pay to the Agency the Belichesky Property Purchase Price which shall include, without limitation, the Belichesky Property Condemnation Costs, as defined below. (c) Should the Agency acquire fee title in and to the Belichesky Property pursuant to the Belichesky Property Condemnation Proceedings, the Belichesky Property Purchase Price shall also include, without limitation, all acquisition amounts, fees, costs and expenses incurred by the Agency to acquire fee title in and to the Belichesky Property and/or to relocate one (I) or more commercial businesses and/or one (I) or more persons from the Belichesky Property, pursuant to the Belichesky Property Condemnation Proceedings, including, without limitation, all filing fees, consultant fees and costs, appraiser fees and costs, title fees and costs, business and/or individual relocation fees, costs, expenses, amounts and/or settlements, attorneys' fees and costs, expert witness fees and costs and/or court costs (collectively, the "Belichesky Property Condemnation Costs"). (d) Should the Agency acquire fee simple title in and to the Belichesky Property prior to the Close of Escrow, and should this Agreement be terminated by the Agency or by the Developer in accordance with the terms, covenants and conditions of this Agreement, the Developer shall pay to the Agency, upon ten (10) calendar days' prior written notice from the Agency to the Developer, the Belichesky Property Purchase Price, including, without limitation, the Belichesky Property Condemnation Costs, if applicable, the Belichesky Property Business Relocation Costs, if applicable, the Belichesky Property Maintenance Costs, as defined below, if applicable, together with the Developer's share of the reasonable and customary fees, expenses and costs to cancel the Escrow less a credit in the amount of the Deposit, and interest earned 4812-3945-3441.1 11/14/06 jmm 5 P:\Agendas\Agenda Allach.mcnls\Agrmls-Amend 2006\11-20.-06 La Placita Final DDA.doc thereon that was deposited by the Developer with the Escrow Holder in this Escrow provided the Developer is not in default under this Agreement. (e) Prior to the Close of Escrow, should the Agency be unable to purchase and acquire fee simple title in and to the Belichesky Property pursuant to the Belichesky Property Arms Length Transaction and/or pursuant to the Belichesky Property Condemnation Proceedings, the Developer shall pay to the Agency, upon ten (10) calendar days' prior written notice from the Agency to the Developer, the Belichesky Property Costs, as incurred or paid by an or behalf of the Agency, together with the Developer's share of the reasonable and customary fees, expenses and costs to cancel the Escrow as provided for in Section 2.02(c) less a credit in the amount of the Deposit, and interest earned thereon, that was deposited by the Developer with the Escrow Holder in this Escrow provided the Developer is not in default under this Agreement. (f) In the event that the Developer prior to acquiring the fee title to the Spar Property is unable to successfully negotiate with the billboard company for the removal of the Spar Property Billboard and the termination of the applicable Spar Property Billboard Lease with respect to the billboard sign presently located upon the Spar Property, the Developer may assign the purchase and sale agreement and the escrow instructions for the acquisition of the Spar Property to the Agency and the Agency shall accept such assignment in accordance with the following set forth conditions. Upon such assignment by the Developer to the Agency for the acquisition of the Spar Property, the Developer shall provide all moneys to the Agency as necessary for the close of escrow by the Agency of the Spar Property acquisition, and the Developer shall thereafter continue to remit moneys to the Agency for the continued efforts by the Agency to accomplish the removal of the Spar Property Billboard whether by an action to be filed by the Agency in eminent domain or otherwise to seeks a termination of the Spar Property Billboard Lease. The provisions relative to the Upset Figure as set forth in subsection (a) above shall be applicable to the period of time that the Spar Property may be held in the name of the Agency. Upon any termination of this Agreement by either party, the Agency shall, if requested by the Developer, quit claim to the Developer any and all interest that the Agency has at that time in the Spar Property to the Developer provided that all Spar Property Costs have been fully paid to the Agency prior to the time that the Developer requests such quit claim of the Spar Property from the Agency to the Developer. (g) Upon the Developer electing the provisions of subsection (f) above, the parties shall in good faith implement the procedures set forth in subsections (b), (c), (d) and (e) with respect to the Spar Property, the payment of the Spar Property Costs and the removal of the Spar Property Billboard and termination of the Spar Property Billboard Lease whether through an action in eminent domain undertaken by the Agency or through direct negotiations by the Agency as the then current owner of the Spar Property with the owner of the billboard as lessee upon the Spar Property. ARTICLE II DISPOSITION OF THE PROPERTY Section 2.01. Purchase and Sale of the Property. Subject to all of the terms, conditions and provisions of this Agreement and for the consideration of the purchase price (them 4812-3945-3441.1 11114/06 jmm 6 1':\Agcndas\Agenda Auachments\Agrll1ls-Amend 2006\] J-20.06 La Placilll "inal DDA.doc "Purchase Price") as herein set forth, the Agency hereby agrees to sell to the Developer merchantable lien free fee simple title and the Developer hereby agrees to purchase the following: all of the right, title and interest of the Agency in the Property as more fully described in Exhibit "A-I" and in Exhibit "A-3" including all right, title and interest of the Agency in and to any land lying in the right-of-way of any existing or proposed highway, street, road, avenue or alley abutting or adjoining the Property. The Purchase Price which the Agency agrees to accept from the Developer and which the Developer agrees to pay to the Agency for the Property is the combined dollar amount equal to the Agency Property Purchase Price, as defined below, and the Belichesky Property Purchase Price, as defined below: (a) Agencv Property Purchase Price. The "Agency Property Purchase Price" is the greater of Two Hundred Seventy-Two Thousand Eight Hundred Dollars ($272,800) or the fair market value of the Agency Property, as determined by an appraisal (the "Appraisal") completed by an independent and highly qualified MAl appraiser (the "Appraiser") having at least ten (10) years of extensive experience in the appraisal of commercial and retail real properties located in the City with a fair market valuation date that is not greater than six (6) months prior to the Closing Date (as defined below), in cash. The Appraiser and the Appraisal must be approved by the Agency in its sole and absolute discretion. The cost of the Appraisal shall be reimbursed by the Developer to the Agency upon the Close of Escrow, and the Appraisal shall be the property of the Agency. The Agency Property Purchase Price shall be paid, in cash, to the Agency in the following manner and in the following dollar amounts: (i) Twenty-Seven Thousand Two Hundred and Eighty Dollars ($27,280) representing the Deposit as defined in Section 2.02(a); and (ii) the balance of the Agency Property Purchase Price, as additional cash, to be deposited to the Escrow by the Developer as provided in this Article II of this Agreement. (b) Belicheskv Property Purchase Price. The Belichesky Property Purchase Price shall mean the amounts paid by the Agency to purchase the Belichesky Property, including, without limitation, the purchase price, all title costs, appraisal fees, survey fees and costs, environmental assessment fees and costs, consultant fees, all fees and costs incurred by the Agency in connection with the due diligence investigation, study and inspection of the Belichesky Property, escrow fees and costs, recording costs, the relocation from the Belichesky Property of one (1) or more businesses and/or one (1) or more persons (the "Belichesky Property Business Relocation"), if applicable, the Belichesky Property Condemnation Costs, if applicable, the Belichesky Property Maintenance Costs, if applicable, and all other fees, costs, expenses and amounts, including, without limitation, attorneys' fees and costs, expert witness fees and costs and/or court costs, paid or incurred by, or on behalf of the Agency, however designated, to acquire a fee simple title in and to the Belichesky Property and/or in connection with the Belichesky Property Business Relocation (collectively, the "Belichesky Property Business Relocation Costs"). The Developer shall tender to the Escrow Holder, as defined below, in cash, the Belichesky Property Purchase Price to the Agency five (5) business days prior to the Closing Date or the date (the "Belichesky Property Closing Date") that the deed conveying fee simple 4812-3945-3441.1 111l4/06jmm 7 P:\Agendas\Agcnda Anoclllnents\Agrmls-Arncnd 2006\11-20-06 La l'ladlP Final DDA.doc title in and to the Belichesky Property from the Belichesky-Filipovic Trust, or its successors and/or assigns, as seller, to the Agency, as buyer, is recorded in the official real estate records for the County of San Bernardino, State of California, whichever occurs first. On or before ten (10) business days' prior to the Closing Date, or prior to the Belichesky Property Closing Date, whichever occurs first, the Agency shall deliver to the Developer statements, certificates and/or invoices in support of the Belichesky Property Purchase Price. Additionally, the Developer shall pay to the Agency, on or before ten (10) calendar days' after receipt by the Developer of one (1) or more invoices from the Agency, after the Belichesky Property Closing Date, (i) all fees, costs, expenses and/or amounts, including, without limitation, all attorneys' fees and costs, expert witness fees and costs, and court costs to maintain, to operate and/or to repair the Belichesky Property, and/or one (1) or more buildings, structures and/or improvements located at the Belichesky Property (collectively, the "Belichesky Property Maintenance Costs"); and/or (ii) the Belichesky Property Business Relocation Costs and/or (iii) the Belichesky Property Condemnation Costs, if applicable, paid or incurred by or on behalf of the Agency after the Belichesky Property Closing Date. . (c) Spar Propertv Purchase Price. The Developer, as buyer, shall purchase the Spar Property from Spar or from the Agency as provided in Section 1.07 hereof, or its successors and/or assigns, as seller, and shall pay the Spar Property Purchase Price, as defined below. The Spar Property Purchase Price shall mean the amounts paid by the Developer to purchase the Spar Property, including, without limitation, the purchase price, all title costs, appraisal fees, survey fees and costs, environmental assessment fees and costs, all consultant fees, all fees and costs incurred by the Developer in connection with the due diligence investigation, study and inspection of the Spar Property, escrow fees and costs, recording costs, attorneys' fees and costs, expert witness fees and costs, and court costs, and all other fees, costs, expenses and/or amounts to purchase, acquire, remove, relocate and/or destroy the Spar Property Billboard (collectively, the "Spar Property Billboard Removal Costs"), and/or to buy-out, to fully discharge and/or to terminate the Spar Property Billboard Lease (collectively, the "Spar Property Billboard Lease Termination Costs"). The Developer is obligated to purchase the Spar Property as a condition precedent to the Close of Escrow whether from Spar or the Agency as provided in Section 1.07. Commencing on the execution date of this Agreement by both parties, and monthly thereafter, through and including the date of the execution by the Agency of the Certificate of Completion, the Developer shall deliver to the Agency one (1) or more certificates, statements, invoices, agreements, documents and/or instruments acceptable to the Agency in its sole and absolute discretion, evidencing and supporting the Spar Property Purchase Price, the Spar Property Billboard Removal Costs and/or the Spar Property Billboard Lease Termination Costs, as applicable. Section 2.02. Deposit and Pavment of the Purchase Price. (a) Deposit. Within five (5) calendar days following the execution of this Agreement by both parties, the Developer shall deliver to the Escrow Holder the sum of Twenty- Seven Thousand Two Hundred and Eighty Dollars ($27,280) for the purchase of the Agency Property without allocation to the Belichesky Property to be acquired by the Developer from the Agency. This sum upon its receipt by the Escrow Holder is referred to in this Agreement as the "Deposit". Upon receipt of the Deposit together with a fully executed copy of this Agreement, 4BI2-3945-3441.1 111l4/06jmm 8 P:\Agelldas\Agenda Altachmenls\Agnms-Amend 2006\11-20-06 La Placila Final DnA.doc the Escrow Holder shall cause the Escrow (as hereinafter defined) to be opened as provided in Section 2.03, and the Escrow Holder shall place the Deposit into an interest-bearing escrow account with the interest thereon to accrue to the benefit of the Developer. At the Close of Escrow (as hereinafter defined), the Deposit, together with interest earned thereon, shall be applied as a credit to the Agency Property Purchase Price. (b) Pavment of Balance of the Purchase Price. The Developer shall tender to the Escrow Holder on the Closing Date additional cash funds in the amount of the Purchase Price less the Deposit, which funds when combined with the Deposit shall equal the Purchase Price. (c) Deposit Return. The Deposit, less an amount equal to the customary and reasonable escrow cancellation charges of the Escrow Holder, shall be returned to the Developer in the event that: (i) the Agency or the Developer terminates this Agreement pursuant to Section 2.03(b); or (ii) the Developer does not deliver its Due Diligence Approval Certificate (as hereinafter defined) to the Escrow Holder pursuant to Section 2.03(c) and this Agreement is terminated; or (iii) the Developer's conditions precedent to the Close of Escrow described in Section 2.16(1), (2), (3), (4), (5), (6), (7), (8), (9), (10) or (II) are not satisfied, unless satisfaction has been waived by the Developer, and this Agreement is terminated; or (iv) the Property is materially damaged prior to the Close of Escrow, or an action of eminent domain is commenced by a governmental entity other than the Agency attempting to acquire fee title with respect to the Agency Property prior to the Close of Escrow, and the Developer elects to terminate this Agreement pursuant to Section 2.25; or (v) the Agency terminates this Agreement, in its sole and absolute discretion, in accordance with, pursuant to, and in the manner provided for, in Section 5.08(a), Section 5.08(b), Section 5.08(c) and/or Section 5.08(d) of this Agreement. In the event the Agency terminates this Agreement pursuant to Section 5.08(a), Section 5.08(b), Section 5.08(c) and/or Section 5.08(d) of this Agreement and the Agency has acquired the Belichesky Property pursuant to the Belichesky Property Arms Length Transaction and/or pursuant to the Belichesky Property Condemnation Proceedings, prior to the termination by the Agency of this Agreement pursuant to Section 5.08, upon ten (10) calendar days' prior written notice from the Agency to the Developer, the Developer shall pay to the Agency the Belichesky Property Purchase Price, including, without limitation, the Belichesky Property Condemnation Costs, if applicable, the Belichesky Property Business Relocation Costs, if applicable, and/or the Belichesky Property Maintenance Costs, if applicable. . 4812-3945-3441.1 11114106 jmm 9 P:\Agendas\Agcnda Anacbmcrns\Agrmts.Amelld 2006\] 1.20.06 La Placit3 Final DDAdoc 4812-3945-3441.1 11I14/06jrnm (vi) the Agency tenninates this Agreement, in its sole and absolute discretion, in accordance with, pursuant to, and in the manner provided for, in Section 5.08(a), Section 5.08(b), Section 5.08(c) and/or Section 5.08(d) of this Agreement. In the event the Agency terminates this Agreement pursuant to Section 5.08(a), Section 5.08(b), Section 5.08(c) and/or Section 5.08(d) of this Agreement and the Agency is unable to purchase and acquire the Belichesky Property pursuant to the Belichesky Property Arms Length Transaction and/or pursuant to the Belichesky Property Condemnation Proceedings, prior to the tennination by the Agency of this Agreement pursuant to Section 5.08, upon ten (10) calendar days' prior written notice from the Agency to the Developer, the Developer shall pay to the Agency that portion of the Belichesky Property Purchase Price, including, without limitation, the Belichesky Property Condemnation Costs, if applicable, the Belichesky Property Business Relocation Costs, if applicable, and/or the Belichesky Property Maintenance Costs, if applicable, as paid or incurred by the Agency, or on behalf of the Agency, in its efforts to: (x) purchase and acquire, or to attempt to purchase and acquire, the Belichesky Property, (y) to relocate and/or to remove, and/or to attempt to relocate and/or to remove, one (I) or more businesses and/or persons from the Belichesky Property, and/or (z) to maintain, operate and/or repair, and/or to attempt to maintain, operate and/or repair, the Belichesky Property. (vii) the Developer tenninates this Agreement in accordance with, pursuant to, and in the manner provided for, in Section 5.09(a), Section 5.09(b), Section 5.09(c), Section 5.09(f) and/or Section 5.09(g) of this Agreement. In the event the Agency tenninates this Agreement pursuant to Section 5.09(a), Section 5.09(b), Section 5.09(c), Section 5.09(f) and/or Section 5.09(g) of this Agreement and the Agency has acquired the Belichesky Property pursuant to the Belichesky Property Arms Length Transaction and/or pursuant to the Belichesky Property Condemnation Proceedings, prior to the termination by the Developer of this Agreement pursuant to Section 5.09, upon ten (10) calendar days' prior written notice from the Developer to the Agency, the Developer shall pay to the Agency the Belichesky Property Purchase Price, including, without limitation, the Belichesky Property Condemnation Costs, if applicable, the Belichesky Property Business Relocation Costs, if applicable, and/or the Belichesky Property Maintenance Costs, if applicable. (viii) the Developer terminates this Agreement, in its sole and absolute discretion, in accordance with, pursuant to, and in the manner provided for, in Section 5.09(a), Section 5.09(b), Section 5.09(c), Section 5.09(f) and/or Section 5.09(g) of this Agreement. In the event the Developer terminates this Agreement pursuant to Section 5.09(a), Section 5.09(b), Section 5.09(c), Section 5.08(f) and/or Section 5.08(g) of this Agreement and the Agency is unable to purchase and acquire the Belichesky Property pursuant to the Belichesky Property Arms Length Transaction and/or pursuant to the Belichesky Property Condemnation Proceedings, prior to the tennination by the Developer of this Agreement pursuant to Section 5.09, upon ten (10) calendar days' prior written notice from the P:\Agcnda~\Agcn(/p Attachmcnls\Agrmts-Amcnd 2006\11.20-06 La Placita Final DDAdoc 10 Developer to the Agency, the Developer shall pay to the Agency that portion of the Belichesky Property Purchase Price, including, without limitation, the Belichesky Property Condemnation Costs, if applicable, the Belichesky Property Business Relocation Costs, if applicable, and/or the Belichesky Property Maintenance Costs, if applicable, as paid or incurred by the Agency, or on behalf of the Agency, in its efforts to: (x) to purchase and acquire, and/or to attempt to purchase and acquire, the Belichesky Property, (y) to relocate and/or to remove, and/or to attempt to relocate and/or to remove, one (I) or more businesses and/or persons from the Belichesky Property, and/or (z) to maintain, operate and/or repair, or to attempt to maintain, operate and/or repair, the Belichesky Property. (ix) the Developer terminates this Agreement, in its sole and absolute discretion, in accordance with, pursuant to, and in the manner provided for, in Section 1.07 in the event the Developer determines that the Upset Figure will be exceeded and provided that the Developer has remitted to the Agency all Belichesky Property Costs and all Spar Property Costs determined by the Agency as required under this Agreement. Section 2.03. Opening and Closing of Escrow. (a) The transfer and sale of the Property shall take place through an Escrow (the "Escrow") to be administered at First American Title Insurance Company (the "Title Company"), an escrow department of the Title Company, or such other escrow or title insurance company mutually agreed upon by the Seller and the Agency (the "Escrow Holder"). The Escrow shall be deemed open (the "Opening of Escrow") upon the receipt by the Escrow Holder of a fully executed copy of this Agreement and the Deposit. The Escrow Holder shall promptly confirm to the parties the escrow number and the title insurance order number assigned to the Escrow. (b) In the event that the Developer has not delivered its Due Diligence Approval Certificate to the Agency and the Escrow Holder within one hundred twenty (120) calendar days from the Opening of Escrow, subject to Section 2.09(a), Section 2.13(a), Section 2.14, Section 2.15(a) or Section 2.15(b), subject to the provisions of Section 2.15(c), then in such event this Agreement shall terminate upon written notice to the Escrow Holder from either the Agency or the Developer, whereupon the Deposit, together with interest earned thereon, shall be returned by the Escrow Holder to the Developer, less an amount equal to the customary and reasonable escrow cancellation charges payable to the Escrow Holder, without further or separate instruction to the Escrow Holder, and the parties shall each be relieved and discharged from all further responsibility or liability under this Agreement. The Developer shall pay all fees, costs and expenses, including, without limitation, all attorneys' fees and costs, expert witness fees and costs, and court costs, and those other fees, costs, expenses and/or amounts incurred by the Developer in connection with the Developer's due diligent investigation, study and inspection of the Property. (c) Provided that the Developer has delivered its Due Diligence Approval Certificate within the period of time authorized in Section 2.03(b), subject to Section 2.09(a), 4812-3945-3441.1 1 11 14/06 jrnm 11 P:\Agendas\Agcnda Atlachmenls\Agrnus"Amcnd 2006\1 ]-21J-06 La Pladla Final DDA.doc 2.l3(a), 2.14, 2.15(a) or 2.15(b), subject to Section 2.15(c), then the Closing Date of the Escrow shall occur within thirty (30) calendar days thereafter, subject to the provisions of Section 2.16 and Section 2.17. The words "Close of Escrow," "Closing Date" and "Closing" shall mean and refer to the date when the Escrow Holder is in receipt of the Purchase Price and the related Escrow documents of the parties and the Escrow Holder is in a position to comply with the final written escrow closing instructions of the parties and cause the Agency Grant Deed for the Property to be recorded and the policy of insurance for the Property to be delivered to the Developer. Section 2.04. Escrow Instructions. This Agreement also constitutes escrow instructions of the parties to the Escrow Holder. Additionally, the Developer and the Agency each agree to execute the customary supplemental escrow instructions of the Escrow Holder in the form provided by the Escrow Holder to its clients in real property escrow transactions administered by it. In the event of a conflict between the additional terms of such customary supplemental escrow instructions of the Escrow Holder and the provisions of this Agreement, this Agreement shall supersede and be controlling. Upon any termination of this Agreement or cancellation of the Escrow, the Developer shall be solely responsible for the payment of the escrow cancellation costs of the Escrow Holder, the Escrow Holder shall forthwith return all monies, as provided in this Agreement, and documents, less only the Escrow Holder's customary and reasonable escrow cancellation fees and expenses, as set forth herein. Section 2.05. Convevance of Title. On or before 12:00 noon on the business day preceding the Closing Date, the Agency shall deliver to the Escrow Holder a grant deed in the form attached hereto as Exhibit "C" (the "Agency Grant Deed") duly executed and acknowledged by the Agency, which Agency Grant Deed shall convey all of its merchantable lien free of the right, title and interest of the Agency in the Property to the Developer. The Escrow Holder shall be instructed to record the Agency Grant Deed in the Official Records of San Bernardino County, California, if and when Escrow Holder holds the various instruments and funds for the accounts of the parties as set forth herein and can obtain for the Developer a CL T A owner's standard coverage policy of title insurance (the "Title Policy") issued by the Title Company with liability in an amount equal to the Purchase Price together with such endorsements to the policy as may be reasonably requested by the Developer, at the sole cost and expense of the Developer, insuring that the Property with fee title to the Property vested in the Developer is free and clear of options, rights of first refusal or other purchase rights, leases or other possessory interests, lis pendens and monetary liens and/or encumbrances and subject only to: (1) non-delinquent real property taxes; (2) non-monetary title exceptions approved by the Developer pursuant to Section 2.13 below; (3) applicable provisions of the parcel map/subdivision map for the Property as prepared and approved by the Developer; (4) the effect of the Redevelopment Plan for the Project Area; 4812-3945-3441.1 11l14/06jrnm 12 P:\Agendas\Agenda Altachments\Agrmls-Amend 2006\11-2Q.-06la Placila Final DDA,doc (5) the effect of any conditions imposed by the City as part of the development plan approvals for the Project as approved by the Developer; (6) the provisions of the Agency Grant Deed; (7) the applicable provisions of this Agreement; and (8) such other title exceptions, if any, resulting from documents being recorded or delivered through Escrow. Section 2.06. Additional Closing Obligations of Agencv. On or before 12:00 noon on the business day preceding the Closing Date unless indicated otherwise, the Agency . shall deliver to the Escrow Holder, unless indicated to be delivered directly to the Developer, copies of the following documents and other items: (1) a certificate of non-foreign status (the "Non-Foreign Affidavit") executed by the Agency, in the customary form provided by the Escrow Holder, and a California Franchise Tax Board Form 590-RE executed by the Agency; (2) two (2) duplicate original copies of the Closing Statement described in Section 2.21, duly executed by the Agency; (3) evidence of the existence, organization and authority of the Agency and of the authority of persons executing documents on behalf of the Agency reasonably satisfactory to the Escrow Holder and Title Company; and (4) any other documents, instruments, funds and records required to be delivered to the Developer under the terms of this Agreement, which have not been previously delivered, including, without limitation, written evidence that all conditions contained in Section 2.16 and Section 2.17 have been met or duly waived by the appropriate party. Section 2.07. Closing Obligations of Developer. On or before 12:00 noon on the business day preceding the Closing Date, the Developer shall deliver to the Escrow Holder copies of the following documents and other items: (1) an acknowledgment and acceptance of the Agency Grant Deed, duly executed and acknowledged by the Developer. (2) two (2) duplicate original copies of the Closing Statement, duly executed by the Developer. (3) evidence of the existence, organization and authority of the Developer and of the authority of persons executing documents on behalf of the Developer reasonably satisfactory to the Escrow Holder and the Title Company. (4) any other documents, instruments or funds required to be delivered by the Developer under the terms of this Agreement or as otherwise required by 4812-3945-3441.1 11114/06 jrnm 13 r:\Agcndas\Agcnda AlIachmcnIS\Agrmls.Amcnd 2006\11-20-06 La I'lacila Final DDA.doc " Escrow Holder or Title Company in order to close Escrow, which have not previously been delivered, including those funds and documents as required by Section 2.02(a) and 2.02(b) hereof and Section 2.06(4). Section 2.08. Inspections and Review. (a) Due Diligence Items. Within five (5) business days after the execution of this Agreement, the Agency shall deliver true, correct and complete copies or originals of the following documents and items (collectively, "Due Diligence Items") to the Developer: (1) copies of all soils, seismic, geologic, drainage, engineering, environmental and similar type reports and surveys, including, but not limited to, any Property Environmental Site Assessments, surveys, relating to the Property if any, in the possession or control of the Agency. (2) notices of violations, including, but not limited to, zoning ordinances, development or building codes affecting the Property within the Agency's possession or control. (3) disclosure of any legal matters affecting the use or condition of the Property within the knowledge of the Agency. (4) a copy of the Redevelopment Plan for the Project Area. (b) Certain Definitions. For the purpose of this Agreement, the terms set forth below shall have the following meaning: (i) "environmental laws" means all federal, state, local, or municipal laws, rules, orders, regulations, statutes, ordinances, codes, decrees, or requirements of any government authority regulating, relating to, or imposing liability of standards of conduct concerning any hazardous substance, as later defined, or pertaining to occupational health or industrial hygiene, and only to the extent that the occupational health or industrial hygiene laws, ordinances, or regulations relate to hazardous substances on, under, or about the Property, occupational or environmental conditions on, under, or about the Property, as now or may at any later time be in effect, including without limitation, the Comprehensive Environmental Response, Compensation and Liability Act of 1980 ("CERCLA") [42 USC Section 9601 et seq.]; the Resource Conservation and Recovery Act of 1976 ("RCRA") [42 USC Section 6901 et seq.]; the Clean Water Act, also known as the Federal Water Pollution Control Act ("FWPCA") [33 USC Section 1251 et seq.]; the Toxic Substances Control Act ("TSCA") [15 USC Section 2601 et seq.]; the Hazardous Materials Transportation Act ("HMTA") [49 USC Section 1801 et seq.]; the Insecticide, Fungicide, Rodenticide Act [7 USC Section 6901 et seq.] the Clean Air Act [42 USC Section 7401 et seq.]; the Safe Drinking Water Act [42 USC Section 300f et seq.]; the Solid Waste Disposal Act [42 USC Section 6901 et seq.]; the Surface Mining 4812-3945-3441.1 I 1/1 4/06 jrnm 14 P:\Agern1as\Agenda Auachmcnts\Agrmts-Ameod 2006\il-2()..()6 La Placita f'inal DDA.doc 4812-3945-3441.1 11l14/06jmm Control and Reclamation Act [30 USC Section 101 et seq.] the Emergency Planning and Community Right to Know Act [42 USC Section 11001 et seq.]; the Occupational Safety and Health Act [29 USC Section 655 and 657]; the California Underground Storage of Hazardous Substances Act [H & S C Section 25280 et seq.]; the California Hazardous Substances Account Act [H & S C Section 25300 et seq.]; the California Safe Drinking Water and Toxic Enforcement Act [H & S C Section 25249.5 et seq.] the Porter-Cologne Water Quality Act [Water Code Section 13000 et seq.] together with any amendments of or regulations promulgated under the statutes cited above and any other federal, state, or local law , statute, ordinance, or regulation now in effect or later enacted that pertains to occupational health or industrial hygiene, and only to the extent the occupational health or industrial hygiene laws, ordinances, or regulations relate to hazardous substances on, under, or about the Property, or the regulation or protection of the environment, including ambient air, soil, soil vapor, groundwater, surface water, or land use. (ii) "hazardous substances" includes without limitation: those substances included within the definitions of "hazardous substance," "hazardous waste," "hazardous material," "toxic substance," "solid waste," or "pollutant or contaminate" in CERCLA, RCRA, TSCA, HMTA, or under any other environmental law; and those substances listed in the United States Department of Transportation (DOT) Table [49 CFR 172.101], or by the EPA, or any successor agency, as hazardous substances [40 CFR Part 302]; and other substances, materials, and wastes that are or become regulated or classified as hazardous or toxic under federal, state, or local laws or regulations; and any material, waste, or substance that is: (I) a petroleum or refined petroleum product, (2) asbestos, (3) polychlorinated biphenyl, (4) designated as a hazardous substance pursuant to 33 USC Section 1321 or listed pursuant to 33 USC Section 1317, (5) a flammable explosive, (6) a radioactive material, or (7) lead and/or lead-based paint. P:\Agcndas\Agcnda AUacl1menls\Agrmls-Amend 2006\11-20-06 La I'lacila Final nDA.duc 15 Section 2.09. Due Diligence Investigation of the Propertv By the Developer. (a) Within one hundred and twenty (120) calendar days from and after the Opening of Escrow, and subject to the extensions of time set forth below in Sections 2.09(a), 2. 13 (a), 2.14, 2.15(a) or 2.l5(b), subject to the provisions of Section 2.15(c), the Developer shall have the right to examine, inspect and investigate the Property (the "Due Diligence Period") to determine whether the condition of the Property is acceptable to the Developer and to obtain such development project approvals from the City for the improvement of the Project as the Developer may require in its sole and absolute discretion. Notwithstanding any other provision in this Agreement to the contrary, should the Agency acquire fee simple title in the Belichesky Property on or after the Opening of Escrow but prior to the Closing Date, (i) the Due Diligence Period for the Belichesky Property only shall be extended by the number of calendar days after the Opening of Escrow until the date that the Agency acquired fee simple title in the Belichesky Property, not to exceed one hundred and fifty (150) calendar days from the Opening of Escrow (the "Belichesky Property Due Diligence Extension"). The Closing shall be extended thirty (30) calendar days after the Belichesky Property Due Diligence Extension (the "Closing Date Extension"). Notwithstanding anything to the contrary in this Section 2.09(a), or in any other provision of this Agreement, except as provided for in Section 2.15(b), the Belichesky Property Due Diligence Extension and/or any other due diligence extension, if any, in the aggregate, may not extend beyond one hundred and fifty (150) calendar days from the Opening of Escrow. No such Due Diligence Period, including extensions thereto, shall be applicable under this Agreement with respect to the Spar Property whether the Spar Property is acquired directly by the Developer from Spar or from the Agency in the manner as provided in Section 1.07. (b) During the Due Diligence Period, the Agency shall permit the Developer, its engineers, analysts, contractors and agents to conduct such physical inspections and testing of the Property as the Developer deems prudent with respect to the physical condition of the Property, including the inspection or investigation of soil and subsurface soil geotechnical condition, drainage, seismic and other geological and topographical matters, surveys the potential presence of any hazardous substances, if any. (c) Any such investigation work on the Property may be conducted by the Developer and/or its agents during any normal business hours upon seventy-two (72) hours' prior written notice to the Agency, which notice will include a description of any investigation work or tests to be conducted by the Developer on the Property. Upon the Agency's written request, the Developer will provide the Agency with copies of any test results. (d) During the Due Diligence Period, the Developer shall also have the right to investigate all matters relating to the zoning, use and compliance with other applicable laws, which relate to the use and development and improvement of the Property. The Developer may submit an application to the City and any other regulatory agency with jurisdiction for any and all necessary development project approvals for the improvement of the Project. The Agency hereby consents to the submission of such development project approval applications by the Developer. 4812-3945-3441.1 11l14/06jrnm 16 P:\Agendas\Agcnda Auochmenls\Agnms.Amcnd 2006\1 ].20-06 La PIlICita Final DDA.doc (e) The Agency shall cooperate fully to assist the Developer in completing such inspections and investigations of the condition of the Property. The Agency shall have the right, but not the obligation, to accompany the Developer during such investigations and/or inspections. The Developer shall pay for all costs and expenses associated with the conduct of all such Due Diligence investigation including the cost of submitting any development project approval application as relates to the Project to any regulatory jurisdiction. Section 2.10. Due Diligence Approval Certificate. Within one hundred and twenty (120) calendar days following the Opening of Escrow, the Developer shall complete its investigation of the Property, subject to the extensions of time set forth in Sections 2.09(a), 2.I3(a), 2.14, 2.15(a) or 2.15(b), subject to Section 2.15(c), and deliver a due diligence approval certificate signed by the Developer (the "Due Diligence Approval Certificate") to the Escrow Holder which either: (i) indicates that the Developer accepts the condition of the Property; or (ii) contains a description of the matters or exceptions relating to the condition of the Property, which the Developer was not able to accept or resolve to its satisfaction during the Due Diligence Period. Section 2.1 I. Books and Records. As part of the Developer's due diligence investigations during the Due Diligence Period, subject to the extensions of time set forth in Section 2.09(a), 2.I3(a), 2.14, 2.15(a) or 2.l5(b), subject to Section 2.15(c), the Developer shall be afforded full opportunity by the Agency to examine all books and records, which relate to the Property in the possession of the Agency and/or the Agency's agents or employees, including the reasonable right to make copies of such books and records. During the Due Diligence Period, the Agency will make sufficient staff available to assist the Developer with obtaining access to information relating to the Property, which is in the possession or control of the Agency. Section 2.12. Condition of the Property and Developer's Release. The Developer acknowledges and agrees that it shall be given a full opportunity under this Agreement to inspect and investigate every aspect of the Property during the Due Diligence Period, subject to the extensions of time set forth in Sections 2.09(a), 2.l3(a), 2.14, 2.l5(a) or 2.15(b), subject to Section 2.15(c). The Developer shall accept the delivery of possession to the Property on the Close of Escrow in an "AS IS," "WHERE IS" and "SUBJECT TO ALL FAULTS" condition. The Developer further agrees and represents to the Agency that by a date no later than the end of the Due Diligence Period, subject to the extensions of time set forth in Section 2.09(a), Section 2.I3(a), Section 2.14, 2.15(a) or 2.15(b), subject to Section 2. 15(c), the Developer shall have conducted and completed, or waived the completion, of all of its independent investigation of the condition of the Property which the Developer may believe to be indicated. The Developer hereby acknowledges that it shall rely solely upon its own investigation of the Property and its own review of such information and documentation, as it deems appropriate for the purpose of accepting the condition and possession of the Property. The Developer is not relying on any statement or representation by the Agency relating to the condition of the Property unless such statement or representation is specifically contained in this Agreement. Without limiting the foregoing, and except as expressly set forth in Section 4812.3945.3441.1 ] 1114/06 jrnm 17 P:\Agcndas\Agcnda AlIachmcnlslAgrmts-Amcnd 2006\11.20.06 La Placita Final DDA.doc 2.24(a)(11), the Agency makes no representations or warranties as to whether the Property presently complies with environmental laws or whether the Property contains any hazardous substance, as these terms are defined in Section 2.08(b) hereof. Furthermore, to the extent that the Agency has provided the Developer with information relating to the condition of the Property, including information and reports prepared by or on behalf of the City of San Bernardino, the Agency makes no representation or warranty with respect to the accuracy, completeness or methodology or content of such reports or information. Without limiting the above, except to the extent covered by an express representation or warranty of the Agency set forth in this Agreement, the Developer, on behalf of itself and its successors and assigns, waives and releases the Agency and its successors and assigns from any and all costs or expenses whatsoever, including, without limitation, attorneys' fees and costs, whether direct or indirect, known or unknown, foreseen or unforeseen, arising from or relating to the physical condition of the Property, the condition of the soils, the suitability of the soils for the improvement of the Project as proposed, or any law or regulation applicable thereto, including the presence or alleged presence or harmful or hazardous substances in, under or about the Property including, without limitation, any claims under or on account of (i) CERCLA and similar statutes and any regulations promulgated thereunder or (ii) any other environmental laws. The Developer expressly waives any rights or benefits available to it with respect to the foregoing release under any provision of applicable law which generally provides that a general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time the release is agreed to, which, if known to such creditor, would materially affect a settlement. By execution of this Agreement, the Developer acknowledges that it fully understands the foregoing, and with this understanding, nonetheless elects to and does assume all risk for claims known or unknown, described in this Section 2.12 without limiting the generality of the foregoing: The undersigned acknowledges that it has been advised by legal counsel and is familiar with the provisions of California Civil Code Section 1542, which provides as follows: "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." The undersigned, being aware of this Code Section, hereby expressly waives any rights it may have thereunder, as well as under any other statutes or common law principles of similar effect. Initials of Developer: 4812-3945-3441.1 11114/06 jmm 18 P:\Agendas\Agenda Allacl1ments\Agrmls-Amend 2006\] 1-20.06 La Pla!;ila Final DI)A.doc The provisions of this Section 2.12 shall survive the Close of Escrow. Section 2.13. Review and Approval of Condition of Title by the Developer. (a) Within fifteen (15) calendar days following the Opening of Escrow, the Agency shall cause to be delivered to the Developer a preliminary title report or title commitment for a CL T A standard coverage policy of title insurance issued by the Title Company describing the state of title of the Property, together with copies of all exceptions specified therein and with all easements plotted which are recorded as a public record, but excluding matters disclosed on a survey (the "Preliminary Title Report"). For purposes of this Agreement, the term "Preliminary Title Report" shall also mean the Belichesky Property Preliminary Title Report, as defined below, if applicable. The Developer shall notify the Agency in writing of any objections the Developer may have to the title exceptions contained in the Preliminary Title Report (the "Developer's Title Objection Notice") prior to the expiration of the Due Diligence Period, as may be extended in this Section 2.13(a). The Agency shall have a period of five (5) business days after receipt of the Developer's Title Objection Notice in which to deliver written notice to the Developer (the "Agency's Title Notice") of the Agency's election to either (i) agree to remove the objectionable items prior to the Close of Escrow, or (ii) decline to remove any such title exceptions; provided, however, that the Agency shall be required to remove all monetary liens and encumbrances created by or as a result of the Agency's activities. If the Agency notifies the Developer of its election to terminate Escrow rather than remove the objectionable items, the Developer shall have the right, by written notice delivered to the Agency within five (5) business days after the Developer's receipt of the Agency's Title Notice, to agree to accept the Property subject to the objectionable items, in which event the Agency's election to terminate the Escrow shall be of no effect, and the Developer shall take title at the Close of Escrow subject to such objectionable title items. Notwithstanding any other provision in this Agreement to the contrary, should the Agency acquire fee simple title in the Belichesky Property after the Opening of Escrow but prior to the Close of Escrow: (i) the Agency shall deliver, or cause to be delivered, within five (5) business days following acquisition by the Agency of fee simple title in the Belichesky Property to the Developer, a preliminary title report or title commitment for a CLTA standard coverage policy of title insurance issued by the Title Company, describing the state of title of the Belichesky Property (the "Belichesky Property Preliminary Title Report"), together with copies of all exceptions specified therein and with all easements plotted which are recorded as a public record, but excluding matters disclosed on a survey; (ii) the Due Diligence Period for the review and approval of the condition of the title for the Belichesky Property only shall be extended by the number of calendar days after the Opening of Escrow, but prior to the Closing Date, through and including the date that the Agency acquired fee simple title in the Belichesky Property, not to exceed one hundred and fifty (150) calendars days from the Opening of Escrow (the "Belichesky Property Title Due Diligence Extension"). The Closing shall be extended by thirty (30) calendar days after the Belichesky Property Title Due Diligence Extension, which closing must occur no later than one hundred and eighty (180) calendar days from the Opening of Escrow. The Developer shall notify the Agency in writing of any objections the Developer may have to the title exceptions contained in the Belichesky Preliminary Title Report (the "Developer's Belichesky Title Objection Notice") prior to the expiration of the Due Diligence 4812-3945-3441.1 I II 1 4/06 jrnm 19 P:\Agendas\Agenda AllachmcntsV\grnus-Amcnd 2006\11-20-06 La Placita Final DDA.doc 1-- Period, as extended in this Section 2.13(a). The Agency shall have a period of five (5) business days after receipt of the Developer's Belichesky Title Objection Notice (the "Agency's Belichesky Title Notice") in which to deliver written notice to the Developer of the Agency's election to either (i) agree to remove the objectionable items prior to the Close of Escrow, or (ii) decline to remove any such title exceptions; provided, however, that the Agency shall be required to remove all monetary liens and encumbrances created by or as a result of the Agency's activities. If the Agency notifies the Developer of its election to terminate Escrow rather than remove the objectionable items, the Developer shall have the right, by written notice delivered to the Agency within five (5) business days after the Developer's receipt of the Agency's Belichesky Title Notice to agree to accept the Belichesky Property subject to the objectionable items, in which event the Agency's election to terminate the Escrow shall be of no effect, and the Developer shall take title at the Close of Escrow subject to such objectionable title items. Notwithstanding anything to the contrary in this Section 2.13(a) or in any other provision of the Agreement, except as provided for in Section 2.l5(b), the Belichesky Property Title Due Diligence Extension, and/or any other due diligence extension relating to or connection with the Preliminary Title Report, or anyone of them, shall not extend, in the aggregate, beyond one hundred fifty (150) calendar days from the Opening of Escrow. (b) The Agency covenants not to further encumber and not to place any further liens or encumbrances on the Property, including, but not limited to, covenants, conditions, restrictions, easements, liens, options to purchase, options to lease, leases, tenancies, or other possessory interests without the prior written consent of the Developer which consent may be withheld by the Developer at the sole discretion of the Developer. Upon the issuance of any amendment or supplement to the Belichesky Property Preliminary Title Report, if any, which adds additional exceptions, including, but not limited to, adding additional exceptions for matters shown on the Survey as hereinafter defined, the foregoing right of review and approval shall also apply to said amendment or supplement, provided that the period for the Developer to review such amendment or supplement shall be the later of the expiration of the Due Diligence Period, as may be extended in Section 2.13(a), or ten (10) calendar days from receipt of the amendment or supplement, and Escrow shall be deemed extended by the amount of time necessary to allow such review and approval in the time and manner set forth above. (c) Regardless of whether the Spar Property is acquired directly by the Developer from Spar or from the Agency in the manner as provided in Section 1.07, the Developer at its sole cost and expense shall provide for and acquire all such title insurance policies and preliminary title reports as the Developer may deem appropriate at its sole cost and expense for any acquisition of the Spar Property. Section 2.14. Survev. The Developer may at its sole cost and separate expense obtain a survey of the Property, or any portion thereof, prepared by a land surveyor duly licensed by the State of California and in compliance with ALTAlACSM standards ("Survey"). For purposes of this Agreement, the term "Survey" shall mean the Belichesky Property Survey (as defined below), if applicable. The Survey shall be in a form acceptable to the Title Company for the deletion of the standard survey exception in the Title Policy relating to boundaries, without 4812.3945-3441.1 I 111 4/06 jrnm 20 P:\Agendas\Agcmla AlIachmcnl~\Agrmts-^mcnd 2006\11-20-06 Lll Placita rinal DDAdoc the addition of further exceptions unless the same are acceptable to the Developer in its sole and absolute discretion. The Developer shall have until the end of the Due Diligence Period to complete and examine the Survey and to notify Agency in writing of any objections the Developer has to the Survey (the "Developer's Survey Objection Notice"). The Agency shall have a period of five (5) business days after receipt of the Developer's Survey Objection Notice in which to deliver written notice to the Developer (the "Agency's Survey Notice") of the Agency's election to either (i) agree to remove the objectionable items prior to the Close of Escrow or (ii) decline to remove such items. If the Agency notifies the Developer of its intention to not remove the objectionable items, the Developer shall have the right, by written notice delivered to the Agency within five (5) business days after the Developer's receipt of Agency's Survey Notice, to agree to accept the Property subject to the objectionable items, in which event, the Agency's election to terminate the Escrow shall be of no effect, and the Developer shall accept the Property at the Close of Escrow subject to such objectionable items. Prior to the Closing, the Survey shall be recertified to the Developer and the Title Company. The Survey will be performed at the Developer's sole cost and expense. Notwithstanding any other provision in this Agreement to the contrary, should the Agency acquire fee simple title in the Belichesky Property after the Opening of Escrow but prior to the Close of Escrow: (i) the Developer may obtain, at its sole cost and expense, a survey of the Belichesky Property prepared by a land surveyor duly licensed by the State and in compliance with ALTAlACSM standards (the "Belichesky Property Survey"); and (ii) the Due Diligence Period to complete, review and approve the Belichesky Property Survey only shall be extended by the number of calendar days after the Opening of Escrow, but prior to the Closing Date, through and including the date that the Agency acquired fee simple title in the Belichesky Property, not to exceed one hundred and fifty (150) calendars days from the Opening of Escrow (the "Belichesky Property Survey Due Diligence Extension"). The Closing shall be extended by thirty (30) calendar days after the Belichesky Property Survey Due Diligence Extension, which closing must occur not later than one hundred and eighty (180) calendar days after the Opening of Escrow. Notwithstanding anything to the contrary in this Section 2.14, or in any other provision of this Agreement, except as provided for in Section 2.15(b), the Belichesky Property Survey Due Diligence Extension, and/or any other due diligence extension relating to, or in connection with, the Survey, or anyone of them, may not extend, in the aggregate, beyond one hundred and fifty (150) calendar days from the Opening of Escrow. The Developer shall notify the Agency in writing of any objections the Developer may have to the Belichesky Property Survey (the "Developer's Belichesky Property Survey Objection Notice") prior to the expiration of the Due Diligence Period as extended in this Section 2.14. The Agency shall have a period of five (5) business days after receipt of the Developer's Belichesky Property Survey Objection Notice (the "Agency's Belichesky Property Survey Notice") in which to deliver written notice to the Developer of the Agency's election to either (i) agree to remove the objectionable items prior to the Close of Escrow, or (ii) decline to remove any such title exceptions. If the Agency notifies the Developer of its election to terminate Escrow rather than remove the objectionable items, the Developer shall have the right, by written notice delivered to the Agency within five (5) business days after the Developer's receipt of the Agency's Belichesky Property Survey Notice, to agree to accept the Property subject to the objectionable items, in which event the Agency's election to terminate the Escrow shall be of no 4812.3945.3441.1 11l14106jmm 21 P:\AgcndaslAgenda AtlaclmlCnts\Agrmts-Amcnd 2006\11-20.06 La Placil3 Final DDA.doc effect, and the Developer shall take title at the Close of Escrow subject to such objectionable title items. Section 2.15. Extension of Due Diligence Period. (a) In the event Agency fails to provide to the Developer the documents and other information required by Sections 2.08 by the date(s) set forth therein, the Due Diligence Period for such information shall be extended by one (I) day for each day of the delay by the Agency to permit the Developer to perform an adequate due diligence review, but not to exceed a total of one hundred and fifty (150) calendar days from the Opening of Escrow. The Developer will use its best efforts to notify Agency of any documents the Agency has failed to deliver to the Developer within the time periods provided in Section 2.08. (b) In the event that the Executive Director of the Agency makes a finding that the Developer has undertaken substantial work to complete the Due Diligence examination, inspection and investigation of the Project during the Due Diligence Period, the Executive Director of the Agency shall, upon the written request of the Developer, authorize an extension of the Due Diligence Period for up to an additional sixty (60) calendar days. (c) Notwithstanding anything to the contrary in Sections 2.09(a), 2.13(a), 2.14 or 2.15(a), or in any other provision of this Agreement, except as provided for in Section 2.15(b), the Due Diligence Period may not be extended, or any reason whatsoever, beyond one hundred fifty (150) calendars days from the Opening of Escrow. Section 2.16. Developer's Conditions Precedent to Close Escrow. The Developer's obligation to complete the purchase of the Property and Close the Escrow shall be conditioned upon the fulfillment of the following conditions precedent, all of which shall be satisfied, or waived in writing pursuant to Section 2.19, prior to the Close of Escrow: (I) The Agency shall not have defaulted on any material term of this Agreement to be performed by the Agency hereunder, and each representation and warranty made by the Agency in this Agreement shall remain true and correct. For purposes of this subsection (I) only, a representation that is limited to the Agency's knowledge or notice shall be false if the factual matter that is subject to the representation is false, notwithstanding any lack of knowledge or notice to the Agency; (2) the Developer's approval of the Preliminary Title Report and the Survey, if applicable, within the time periods specified in Sections 2.13 and 2.14; (3) the Developer's approval of the contents of all Due Diligence Items, and the other investigations of the Property made by the Developer and/or its designees pursuant to Sections 2.08 and 2.09 herein on or before the expiration of the Due Diligence Period, or such later date if the Due Diligence Period is extended pursuant to Section 2.09(a), 2.13(a), 2.14, 2.15(a) or 2.15(b), subject to Section 2.15(c). The Developer shall be deemed to have disapproved such Due Diligence Items unless they are 4812-3945-3441.1 11/14/06 jmm 22 P:\Agcndas\Agellda Attal;hmellls\Agrnus-Amend 2006\1]-20-06 La Placita Final DDA.doc 4812-3945-3441.1 11114/06 jrnm approved on or before 5:00 p.m. on the day of the Due Diligence Period, or such later date if the Due Diligence Period is extended pursuant to Sections 2.09(a), 2.13(a), 2.14, 2.15(a) or 2.15(b), subject to the provisions Section 2.15(c) herein; (4) the Developer has submitted to the Agency a written certification duly executed by an authorized officer of the Developer stating that the Developer has either (i) obtained a construction loan commitment (the "Loan Commitment") from an institutional lender, or from any other entity or person, which loan proceeds shall be used by the Developer to construct and develop the Project, and such Loan Commitment shall be acceptable to the Agency in its sole and absolute discretion; or (ii) intends to apply equity funds of the Developer for the commencement of the development of the Project immediately after the Close of Escrow, and that such financing or other equity funds will be in a principal amount and upon such terms and conditions sufficient to complete the construction of the Project as described in this Agreement; (5) the Developer's approval of any notice of change in representation or warranty given by the Agency pursuant to Section 2.24(a) hereof; (6) the Title Company has committed to issue the policy of title insurance, in favor of the Developer in the form described in Section 2.05; (7) all tenant leases, subleases and/or licenses and/or agreements (collectively, the "Leases") for the lease, sublease, license and/or other use of the premises located at the Developer Property, or any portion thereof, have been terminated; (8) The Agency must have acquired fee simple title in and to the Belichesky Property; (9) The City shall have issued all entitlements and building permits to construct and develop the Project; and (10) Either (i) the Developer must have purchased and acquired fee simple title in and to the Spar Property, or (ii) the Agency has acquired title to the Spar Property in the manner provided in Section 1.07 and the Agency has been successful in the removal of the Spar Property Billboard and the termination of the Spar Property Billboard Lease. (11) The Belichesky Property Costs and the Spar Property may not, and will not, exceed amount of the Upset Figure of Five Hundred Thousand Dollars ($500,000), in the aggregate, unless waived by the Developer at its sole election and discretion. P:\Agcndas\Agcnda Auacluncms\Agrmls-Amend 2006\11-20-06 La Placita Final DDA.doc 23 Section 2.17. The Agencv's Conditions Precedent to Close Escrow. The Agency's obligation to convey the Property to the Developer shall be conditioned upon the fulfillment of the following conditions precedent, all of which shall be satisfied, or waived in writing pursuant to Section 2.19, prior to the Close of Escrow: (I) the Developer has accepted the condition of the Property and submitted its Due Diligence Approval Certification to the Escrow Holder on or before the date set forth in this Agreement; (2) the Developer has accepted the condition of title of the Property on or before the date set forth in Section 2. J3; (3) the Developer shall not be in default of any material term of this Agreement to be performed by the Developer hereunder and each representation and warranty of the Developer made in this Agreement shall remain true and correct; (4) the Developer shall be satisfied, or waive satisfaction, of each of the conditions precedent set forth in Section 2.16 and the Escrow is in a condition to close within one hundred and fifty (150) calendar days following the Opening of Escrow subject to the extensions provided for in Section 2.09(a), Section 2.J3(a), Section 2.14, Section 2.15 (a) or Section 2.15(b), if applicable, and subject to Section 2.l5(c). Notwithstanding anything to the contrary in this Agreement, the Closing may not be extended beyond one hundred and eighty (180) calendar days from the Opening of Escrow; (5) the Developer shall have executed the documents and made the deposit of funds as required by Section 2.02(b) hereof in such form as to allow for the recordation of the Agency Grant Deed; (6) the Agency must have acquired fee simple title in and to the Belichesky Property, and the Developer must have paid to the Agency the Belichesky Property Costs; (7) the Developer must have either (i) purchased the Spar Property directly from Spar, or (ii) is seeking to acquire the Spar Property from the Agency upon the Close of Escrow, and in all events the Developer shall have paid to the Agency the Spar Property Costs; (8) the Leases have been terminated, all tenants, subtenants, licensees and/or occupants (collectively, the "Tenants") under the Leases have vacated possession of their respective leasehold, subleasehold or hired premises, the Developer has paid all relocation costs to the Tenants and the Agency is in receipt of evidence satisfactory to the Agency in its sole and absolute 4812.3945-3441.1 11114/06jmm 24 i':\Agendas\Agcnda Anachmenls\Agrmts.Amcnd 20116\1] .20.06 La I'lacita Final DDA,doc discretion that such relocation costs have been paid by the Developer to the Tenants and have been unconditionally accepted by the Tenants; (9) the Developer must have delivered the Loan Commitment to the Agency, and the Agency must have approved the Loan Commitment, in its sole and absolute discretion; (10) the Belichesky Property Costs and the Spar Property Costs do not exceed the amount of the Upset Figure equal to Five Hundred Thousand Dollars ($500,000), in the aggregate, unless waived by the Developer at its sole election and discretion. Section 2.18. Distribution of Documents and Purchase Price after Closing Date bv Escrow Holder. The Escrow Holder shall deliver to the Developer within three (3) business days following the Closing Date a conformed copy of the Agency Grant Deed, as recorded, and the policy of title insurance issued by the Title Company in favor of the Developer. The Escrow Holder shall deliver to the Agency the Purchase Price less Escrow costs, expenses and the various prorations chargeable to the Agency hereunder. Section 2.19. Satisfaction of Conditions. Where satisfaction of any of the foregoing conditions requires action by the Developer or by the Agency, each party shall use its diligent best efforts, in good faith, and at its own cost, to satisfy such condition. Where satisfaction of any of the foregoing conditions requires the approval of a party, such approval shall be in such party's sole and absolute discretion. Either party may waive any of the conditions set forth in this Agreement, but any such waiver shall be effective only if contained in a writing signed by the applicable party and delivered to the Escrow Holder. Section 2.20. [RESERVED -- NO TEXT] Section 2.21. Prorations, Closing Costs, Possession. (a) Real and personal property taxes for the Property shall be prorated by the parties to the Closing Date as to the actual number and calendar days calculated on a 365/366 days a year basis that the Agency is responsible for (i) all such taxes, if any, for the fiscal year of the applicable taxing authority occurring prior to the Current Tax Period (as defined below) and (ii) that portion of such taxes for the Current Tax Period to 11 :59 p.m. on the Closing Date, whether or not the same shall be payable prior to the Closing Date. The phrase "Current Tax Period" refers to the fiscal year of the applicable taxing authority in which the Closing occurs. All tax prorations shall be based upon the latest available tax statement. If the tax statements for the fiscal tax year during which Escrow closes do not become available until after the Closing Date, then the rates and assessed values of the previous year, with known changes, shall be used, and the parties shall re-prorate said taxes outside of Escrow following the Closing Date when such tax statements become available. The Agency shall be responsible for and shall payor reimburse the Developer upon demand for any real or personal property taxes payable following the Closing Date applicable to any period of time prior to the Closing Date as a result of any 4812.3945.3441.1 11/14/06jmm 25 P:\Agcndas\Agenda AlIal;hmems\Agrmts-Amcnd 2006\11-20-06 La I'lac;la Final DDA.doc change in the tax assessment by reason of reassessment, changes in use of the Property, changes in ownership, errors by the Assessor or otherwise. (b) The Developer shall be entitled to exclusive possession of the Property immediately upon the Close of Escrow. (c) The Agency shall pay the cost of the premium for only one (I) CLTA owner's standard coverage policy of title insurance covering the Agency Property, and the Belichesky Property in the amount of the Purchase Price together with all title charges, including . endorsements reasonably requested by the Developer to remove disapproved items shown on the Preliminary Title Report or Survey pursuant to Sections 2.13 and 2.14 above, as agreed to by the Agency. The Agency shall pay one-half (Y2) of the customary and reasonable escrow fees, which may be charged by the Escrow Holder in connection with the close of Escrow. The Developer shall pay the additional cost of the Survey and requested CLTA survey policy endorsements to the extent such endorsements are unrelated to removal of any disapproved items shown on the Preliminary Title Report or Survey pursuant to Sections 2.13 and 2.14 above, as agreed to by the Agency, the additional premium for an ALTA extended coverage policy, if elected by the Developer, which exceeds the premium for the one (I) CLTA owner's standard coverage policy of title insurance covering the Agency Property and the Belichesky Property, plus the cost of recording the Agency Grant Deed, together with one-half (112) of the cost of the customary and reasonable escrow fees charged by Escrow Holder in connection with the Close of Escrow. The Developer shall pay any documentary or other transfer taxes payable on account of the conveyance of the Property to the Developer. (d) The Developer shall pay to the Escrow Holder the Belichesky Property Costs. (e) The Developer shall pay the Spar Property Costs. Any other Escrow-related transaction expenses or escrow closing costs incurred by the Escrow Holder in connection with this transaction shall be apportioned and paid for by the parties to this Agreement in the manner customary in San Bernardino County, California. No later than three (3) business days prior to the Closing Date, the Escrow Holder shall prepare for approval by the Developer and the Agency a closing statement ("Closing Statement") on the Escrow Holder's standard form indicating, among other things, the Escrow Holder's estimate of all closing costs, pay-off amounts for the release and reconveyance of all liens secured by the Property and prorations made pursuant to this Agreement. The Developer and the Agency shall assist the Escrow Holder in determining the amount of all prorations. Section 2.22. Breach of Article II bv the Agencv; Specific Performance Remedv of Developer. In the event that the Agency commits a material breach of its obligations under this Article II prior to the Close of Escrow and fails to transfer the Property to the Developer as agreed herein, the Developer shall have the right to file an appropriate court action in the Superior Court, County of San Bernardino, for specific performance to require the Agency 4812-3945-3441.1 II II 4/06 jmm 26 P:\Agclldas\Agcnda Auachmcllls\Agrmls.Amend 2006\1 1-20-()6 La I'lacila FinalDDA.doc to transfer the Property as agreed herein. The Developer shall not seek any other damages or remedies against the Agency for any such failure to transfer the Property. Section 2.23. Breach bv the Developer of Article II; Liquidated Damages Payable by the Developer to the Agency. IN THE EVENT THAT THE DEVELOPER COMMITS A MATERIAL BREACH OF ITS OBLIGATIONS UNDER THIS ARTICLE II PRIOR TO THE CLOSE OF ESCROW, THE DAMAGES THAT THE AGENCY WILL INCUR BY REASON THEREOF ARE AND WILL BE IMPRACTICAL AND EXTREMELY DIFFICULT TO ESTABLISH. THE DEVELOPER AND THE AGENCY, IN A REASONABLE EFFORT TO ASCERTAIN WHAT THE AGENCY'S DAMAGES WOULD BE IN THE EVENT OF SUCH A DEFAULT BY THE DEVELOPER, HAVE AGREED THAT SUCH DAMAGES SHALL BE IN AN AMOUNT EQUAL TO THE SUM OF TWENTY-SEVEN THOUSAND TWO HUNDRED AND EIGHTY DOLLARS ($27,280) PLUS THE TERMINATION COSTS PROVIDED FOR IN SECTION 2.02(c)(vLOR IN SECTION 2.02(c)(vi), AS APPROPRIATE, AS LIQUIDATED DAMAGES. SUCH SUM SHALL BE PAID TO THE AGENCY IN THE EVENT OF SUCH DEFAULT BY THE DEVELOPER AS LIQUIDATED DAMAGES, WHICH DAMAGES SHALL BE THE AGENCY'S SOLE AND EXCLUSIVE REMEDY AT LAW OR IN EQIDTY IN THE EVENT OF AND FOR SUCH DEFAULT BY THE DEVELOPER. WITHOUT LIMITING THE FOREGOING PROVISIONS OF THIS PARAGRAPH, THE AGENCY WAIVES ANY AND ALL RIGHTS WHICH THE AGENCY OTHERWISE WOULD HAVE HAD UNDER CIVIL CODE SECTION 3389 TO SPECIFICALLY ENFORCE THIS AGREEMENT. THE AGENCY AND THE DEVELOPER ACKNOWLEDGE AND AGREE THAT EACH OF THEM HAS READ AND UNDERSTANDS THE PROVISIONS OF THIS SECTION AND EACH AGREES TO BE BOUND BY ITS TERMS. Initials of Developer Initials of Agency Section 2.24. Representations, Warranties and Covenants. (a) Representations, Warranties and Covenants by the Agency. The Agency hereby makes the following representations, warranties and covenants and acknowledges that the execution of this Agreement by the Developer has been made and the acquisition by the Developer of the Property will have been made in material reliance by the Developer on such representations, warranties and covenants: (I) Warranties True. Each and every undertaking and obligation of the Agency under this Agreement shall be performed by the Agency timely when due; and that all representations and warranties of the Agency under this Agreement and its exhibits shall be true in all material respects at the Closing as though they were made at the time of Closing. (2) Due Organization. The Agency is a community redevelopment agency, duly formed and operating under the laws of California. The Agency has the legal power, right and authority to enter into this Agreement and to execute the instruments and documents referenced herein, and to consummate the transactions contemplated hereby. 4812-3945-3441.1 11/14/06 jmm 27 P:\Agcndas\Agenda Altachmcllls\Agrrms-Amelld 2006\] J.20.{)6 La l'Iocila Final DDA.do<: 4812~394S~3441.l 11/14/06 jmm (3) Requisite Action. The Agency has taken all requisite action and obtained all requisite consents in connection with entering into this Agreement and the instruments and documents referenced herein and the consummation of the transactions contemplated hereby, and no consent of any other party is required. (4) Enforceabilitv of Agreement. The persons executing any instruments for or on behalf of the Agency have been authorized to act on behalf of the Agency and that this Agreement is valid and enforceable against the Agency in accordance with its terms and each instrument to be executed by the Agency pursuant hereto or in connection therewith will, when executed, be valid and enforceable against the Agency in accordance with its terms. No approval, consent, order or authorization of, or designation or declaration of any other person, is required in connection with the valid execution and delivery of and compliance with this Agreement by the Agency. (5) Title. Prior to the Closing, the Agency will be the owner of, and the Developer will acquire hereunder, the entire right, title and interest in the Property to effectively vest in the Developer good and marketable fee simple title to the Property, that the Developer will acquire the Property free and clear of all liens, encumbrances, claims, rights, demands, easements, leases or other possessory interests, agreements, covenants, conditions, and restrictions of any kind or character, including, without limiting the generality of the foregoing, liens or claims for taxes, mortgages, conditional sales contracts, or other title retention agreement, deeds of trust, security agreements and pledges and mechanics liens, except: (i) the matters described in Section 2.05, and (ii) the exceptions to title approved by the Developer pursuant to Section 2.13. (6) No Litigation. There are no pending or, to the best of the Agency's knowledge, threatened claims, actions, allegations or lawsuits of any kind, whether for personal injury, property damage, property taxes or otherwise, that could materially and adversely affect the value or use of the Property or prohibit the sale thereof, nor to the best of the Agency's knowledge, is there any governmental investigation of any type or nature pending or threatened against or relating to the Property or the transactions contemplated hereby. (7) Operation and Condition Pending Closing. Between the date of this Agreement and the Close of Escrow, the Agency will continue to manage, operate and maintain the Agency Property in the same manner as existed prior to the execution of this Agreement. However, the Agency may demolish one (I) or more buildings, structures and/or improvements located at the Property, remove Hazardous Materials from the Property, and shall not to operate the video store nor maintain the billboard sign P:\Agendas\Agcnda Auachmenls\Agrmls-Amend 2006\II.2()...()6 Ul Placila Final DDA.doc 28 located on the Spar Property beyond any period of time reasonably required to remove such billboard sign. (8) Contracts. There are no contracts or agreements to which the Agency is a party relating to the operation, maintenance, development, improvement or ownership of the Property which will survive the Close of Escrow except as may be set forth in the Agency Grant Deed or other agreements by the Developer. (9) Development of Proiect. Although the Agency makes no representation or warranty that the Property is suitable for the development or operation of the Project, the Agency has no present knowledge of any condition of the Property which would prevent its development in accordance with the Scope of Development. (10) RESERVED - NO TEXT. (II) RESERVED - NO TEXT. (12) The Agencv's Knowledge. For purposes of this Section 2.24, the terms "to the best of the Agency's knowledge" or "to the Agency's knowledge" shall mean the actual knowledge of Executive Director of the Agency. If the Agency becomes aware of any act or circumstance which would change or render incorrect, in whole or in part, any representation or warranty made by the Agency under this Agreement, whether as of the date given or any time thereafter through the Closing Date and whether or not such representation or warranty was based upon the Agency's knowledge and/or belief as of a certain date, the Agency will give immediate written notice of such changed fact or circumstance to the Developer, but such notice shall not release the Agency of its liabilities or obligations with respect thereto. All representations and warranties contained in this Section 2.24(a) are true and correct on the date hereof and on the Closing Date and the Agency's liability for misrepresentation or breach of warranty, representation or covenant, wherever contained in this Agreement, shall survive the execution and delivery of this Agreement and the Close of Escrow. (b) Representations, Warranties and Covenants bv the Developer. The Developer hereby makes the following representations, warranties and covenants and acknowledges that the execution of this Agreement by the Agency has been made in material reliance by the Agency on such representations, warranties and covenants: (I) The Developer is a duly organized and validly existing California limited liability company. The Developer has the legal right, power and authority to enter into this Agreement and the instruments and documents referenced herein and to consummate the transactions contemplated hereby. The persons executing this Agreement and the instruments referenced herein on behalf of the Developer hereby represent and warrant 4812.J945.3441.1 11114/06 jrnrn 29 r:\Agcndas\Agcnda Auachments\Agrnus-Amcnd 2(Xl6\1 1-2()..{)6 LII i'Jacila Final DDA.doc that such persons have the power, right and authority to bind the Developer. (2) The Developer has taken all requisite action and obtained all requisite consents in connection with entering into this Agreement and the instruments and documents referenced herein and the consummation of the transactions contemplated hereby, and no consent of any other party is required. (3) This Agreement is, and all agreements, instruments and documents to be executed by the Developer pursuant to this Agreement shall be, duly executed by and are or shall be valid and legally binding upon the Developer and enforceable in accordance with their respective terms. (4) Neither the execution of this Agreement nor the consummation of the transactions contemplated hereby shall result in a breach of or constitute a default under any other agreement, document, instrument or other obligation to which the Developer is a party or by which the Developer may be bound, or under law, statute, ordinance, rule, governmental regulation or any writ, injunction, order or decree of any court or governmental body applicable to the Developer or to the Property. (5) Within sixty (60) calendar days after the mutual execution of this Agreement, the Developer, or an affiliate of the Developer, shall initiate the entitlement process with the City for the Kovats Property. The development of the Kovats Property as a mixed-use development shall be completed two and one-half years (2 1/2) after the mutual execution of this Agreement. All representations and warranties contained in this Section 2.24(b) are true and correct on the date hereof and on the Closing Date and the Developer's liability for misrepresentation or breach of warranty, representation or covenant, wherever contained in this Agreement, shall survive the execution and delivery of this Agreement and the Closing. Section 2.25. Damage. Destruction and Condemnation. Prior to the Agency's delivery of possession of the Property to the Developer at the Close of Escrow, the risk of loss or damage to the Property shall remain upon the Agency. If the Property suffers damages as a result of any casualty prior to the Close of Escrow, which may materially diminish its value, then the Agency shall give written notice thereof to the Developer promptly after the occurrence of the casualty. The Developer can elect to either: (i) accept the Property in its damaged condition or (ii) the Developer may terminate this Agreement and recover the Deposit as set forth in Section 2.02. The Developer shall confirm the exercise of its election under subparagraph (i) or (ii) of the preceding sentence within thirty (30) calendar days after its receipt after notice from the Agency. 4812.3945.3441.1 11/14/06 jrnm 30 1>:\Agendas\Agenda AttachmcRls\Agrmls-Amcnd 2006\1 J -20-06 La Plocila Hnal DnA.doc In the event that, prior to the Close of Escrow, any governmental entity shall commence any actions of eminent domain or similar type proceedings to take any portion of the Property, the Agency shall give prompt written notice thereof to the Developer, and the Developer shall have the option either: (i) to elect not to acquire the Property, terminate this Agreement and recover the Deposit as set forth in Section 2.02; or (ii) the Developer may complete the acquisition of the Property under this Agreement, in which case the Developer shall be entitled to all the proceeds of such taking; provided, however, that the Agency agrees that it shall not settle or compromise the proceedings before the Close of Escrow without the Developer's prior written consent, which consent will not be unreasonably withheld or delayed. The Developer shall confirm the exercise of its election under subparagraph (i) or (ii) of the preceding sentence within thirty (30) calendar days after its receipt of notice from the Agency. ARTICLE III DEVELOPMENT OF THE PROJECT Section 3.01. Development of the Proiect bv Developer. (a) Scope of Development. It is the intent of the parties that promptly following the Close of the Escrow the Developer shall redevelop the Project. The Project consists of the elements set forth in the Scope of Development attached hereto as Exhibit "B". Subject to the terms, covenants, conditions and restrictions of this Agreement, the Project shall consist of an upscale commercial and retail shopping center with Superior Super Warehouse, or such other grocery store approved by the Agency and the City in their sole and absolute discretion, as an anchor tenant, and the Project shall have architecture complementary to the Santa Fe Depot located in the vicinity. (b) The City's zoning ordinance and the City's building requirements will be applicable to the use and development of the Project. The Developer acknowledges that any change in the plans for development for the Project as set forth in the Scope of Development shall be subject to the City's zoning ordinance and building requirements. No action by the Agency or the City with reference to this Agreement or related documents shall be deemed to constitute a waiver of any City requirements which are applicable to the Project or to the Developer, any successor in interest of the Developer or any successor in interest pertaining to the Project, except by modification or variance approved by the City consistent with this Agreement. (c) The Scope of Development set forth in Exhibit "B" is hereby approved by the Agency upon its execution of this Agreement. The Project shall be developed and completed in conformance with the approved Scope of Development and any and all other plans, specifications and similar development documents required by this Agreement, except for such changes as may be mutually agreed upon in writing by and between the Developer and the Agency. The Agency agrees to approve preliminary and construction plans and preliminary and landscaping plans, if reasonably consistent with the approved Scope of Development. (d) The approval of the Scope of Development by the Agency hereunder shall not be binding upon the City Councilor the Planning Commission of the City with respect to any approvals of the Project required by such other bodies. If any revisions of the Scope of 4812-3945-3441.1 11/14106 jrnrn 31 P:\Agendas\Agcnda Auacbmcnts\Agrmts-Amcnd 2006\11-20..06 La Placita Final DDA.doc - - j Development, in the form as approved by the Agency in said Exhibit "B", shall be required by another government official, agency, department or bureau having jurisdiction over the development of the Project, the Developer and the Agency shall cooperate in efforts to provide waivers as to such revisions to thus cause said Exhibit "B" to be modified to comply with such revisions, or to obtain approvals of any such revisions from the applicable governmental agency which have been made by the Developer and have thereafter been approved by the Agency. The Agency shall not unreasonably withhold or delay approval of such revisions. (e) Notwithstanding any provision to the contrary in this Agreement, the Developer agrees to accept and comply fully with any and all reasonable conditions of approval applicable to all permits and other governmental actions affecting the development of the Project and consistent with this Agreement. (f) The Developer shall cause landscaping plans in connection with development of the Project to be prepared by a licensed landscape architect. The Developer shall prepare and submit to the City for its approval, preliminary and landscaping plans for the Project, which are consistent with City Code requirements. These plans shall be prepared, submitted and approved within the times respectively established therefore in the Schedule of Performance as shown on Exhibit "D" attached hereto and incorporated herein by reference and shall be consistent with the Scope of Development. (g) The Developer shall prepare and submit development plans, construction drawings and related documents for the development of the Project consistent with the Scope of Development to the City. The development plans, construction drawings and related documents shall be in the form of drawings, plans and specifications. Drawings, plans and specifications are hereby defined as those, which contain sufficient detail necessary to obtain a building permit from the City. (h) During the preparation of all drawings and plans in connection with the development of the Project, the Developer shall provide to the Agency regular progress reports to advise the Agency of the status of the preparation by the Developer, and the submission to and review by the City of construction plans and related documents. The Developer shall communicate and consult with the Agency as frequently as is necessary to ensure that any such plans and related documents submitted by the Developer to the City are being processed in a timely fashion. (i) The Agency shall have the right of reasonable architectural review and approval of building exteriors and design of the structures to be constructed on the Project. The Agency shall also have the right to review all plans, drawings and related documents pertinent to the development of the Project in order to ensure that they are consistent with this Agreement and with the Scope of Development. (j) The Developer shall timely submit to the City for its review and approval any and all plans, drawings and related documents pertinent to the development of the Project and the development of the Kovats Property, as required by the City. The Agency shall cooperate with and shall assist the Developer in order for the Developer to obtain the approval of 4812-3945-3441.1 11/l4/06jrnm 32 P:\Agendas\Agcnda Auachments\Agrmts-Amend 2006\1 ].2(}..{l(j La Plocita final DDA_doc any and all development plans, construction drawings and related documents submitted by the Developer to the City in connection with the Project and in connection with the Kovats Property consistent with this Agreement within ninety (90) calendar days following the City's receipt of the plans, drawings and related documents (collectively, the "Project Plans") pertinent to the development of the Project and receipt of the plans, drawings and related documents (collectively, the "Kovats Plans") pertinent to the development of the Kovats Property. Any failure by the City to approve the Project Plans and/or the Kovats Plans, or any portion or part thereof, or to issue necessary permits for the development of the Project within said ninety (90) calendar day period and/or for the development of the Kovats Property within said ninety (90) calendar day period shall constitute an enforced delay hereunder, and the Schedule of Performance shall be extended by that period of time beyond said ninety (90) calendar day period in which the City approves said plans; provided, however, that in the event that the City disapproves of any of the Project Plans and/or the Kovats Plans, or any portion or part thereof, the Developer shall within thirty (30) calendar days after receipt of such disapproval revise and resubmit the Project Plans and/or the Kovats Plans in a manner that addresses the City's requirements and thereafter negotiate in good faith to obtain the City's approval thereof. (k) The Agency shall in good faith use its best efforts to cause the City to approve In a timely fashion the Project Plans, which are consistent with the Scope of Development. (I) The Agency shall approve any modified or revised plans, drawings and related documents to which reference is made in this Agreement within the times established in the Schedule of Performance as long as such plans, drawings and related documents are generally consistent with the Scope of Development and any other plans, which have been approved by the Agency. Upon any disapproval of plans, drawings or related documents, the Agency shall state in writing the reasons for such disapproval. The Developer, upon receipt of notice of any disapproval, shall promptly revise such disapproved portions of the plans, drawings or related documents in a manner that addresses the reasons for disapproval and reasonably meets the requirements of the Agency in order to obtain the Agency's approval thereof. The Developer shall resubmit such revised plans, drawings and related documents to the Agency as soon as possible after its receipt of the notice of disapproval and, in any event, no later than thirty (30) calendar days thereafter. The Agency shall approve or disapprove such revised plans, drawings and related documents in the same manner and within the same times as provided in this Section for approval or disapproval of plans, drawings and related documents initially submitted to the Agency. (m) If the Developer desires to make any change in the construction drawings, plans and specifications and related documents after their approval by the Agency and/or the City, the Developer shall submit the proposed change in writing to the Agency and/or the City for approval. The Agency shall notify the Developer of approval or disapproval thereof in writing within thirty (30) calendar days after submission to the Agency. This thirty (30) calendar day period may be extended by mutual consent of the Developer and the Agency. Any such change shall, in any event, be deemed to be approved by the Agency unless rejected, in whole or in part, by written notice thereof submitted by the Agency to the Developer, setting forth in detail the reasons therefore, and such rejection shall be made within said thirty (30)-calendar day 4812.3945.3441.1 11/14/06 jmm 33 P:\Agendas\Agcnda Attachmcnls\Agrmts-Amend 2006\1] .20-06 La I'lacita Final DJ)A.doc period unless extended as pennitted herein. The Agency shall use its best efforts to cause the City to review and approve or disapprove such changes within thirty (30) calendar days after the receipt by the City of such changes in the construction drawings, plans, specifications and/or related documents. (n) The Developer, upon receipt of a notice of disapproval by the Agency and/or the City, may revise such portions of the proposed change in construction drawings, plans and specifications and related documents as are rejected and shall thereafter resubmit such revisions to the Agency and/or the City for approval in the manner provided in Section 3.01(m) hereof. (0) The Developer shall have the right during the course of construction to make changes in construction of structures and "minor field changes" without seeking the approval of the Agency; provided, however, that such changes do not affect the type of use to be conducted within all or any portion of a structure. Said "minor field changes" shall be defined as those changes from the approved construction drawings, plans and specifications which have no substantial effect on the improvements and are made in order to expedite the work of construction in response to field conditions. Nothing contained in this Section shall be deemed to constitute a waiver of or change in the City's Building Code requirements governing such "minor field changes" or in any and all approvals by the City otherwise required for such "minor field changes". (p) The cost of constructing the Project, including, without limitation, all off- site public improvements in connection with, relating to, or arising from, the construction and/or development of the Project, shall be borne by the Developer which, if any, are required by the City as a condition of approval for the Project. The Developer shall comply with all applicable State laws relative to the payment of prevailing wages with respect to the construction and development of all off-site public improvements, in connection with or relating to the Project, and shall provide written verification of such compliance to the Agency upon written request from the Agency to the Developer. (q) The Developer shall at its expense cause to be prepared, and shall pay any and all fees pertaining to the review and approval of the development project approvals by the City, including the cost and preparation of all required construction, planning and other documents reasonably required by governmental bodies pertinent to the development of the Project hereunder including, but not limited to, specifications, drawings, plans, maps, permit applications, land use applications, zoning applications and design review documents. (r) The Developer shall pay for any and all costs, including but not limited to the costs of design, construction, relocation, and securing of pennits for utility improvements and connections, which may be required in developing the Project. The Developer shall obtain any and all necessary approvals prior to the commencement of applicable portions of said construction, and the Developer shall take reasonable precautions to ensure the safety and stability of surrounding properties during said construction. 4812-3945-3441.1 11/14/06 jrnm 34 P:\Agcndas\Agenda Attachmmls\Agrmls-Amend 2006\11.20-06 La Placiln Final DDA,doc (s) The Developer shall commence the work of improvements of the Project on the Property immediately upon the Close of Escrow for the Property and following the issuance of building permits for the Project and thereafter shall diligently prosecute such construction to completion. All construction and development obligations and responsibilities of the Developer as related to the Project shall be initiated and completed within the times specified in the Schedule of Performance attached hereto, or within such reasonable extensions of such times as may be granted by the Agency or as otherwise provided for in this Agreement. The Developer shall substantially complete the improvements of the Project within two (2) years following the commencement of the work of improvements. The Schedule of Performance shall be subject to revision from time to time as mutually agreed upon in writing by and between the Developer and the Agency. Any and all deadlines for performance by the parties shall be extended for any times attributable to delays, which are not the fault of the perfonning party and are caused by the other party, other than periods for review and approval or reasonable disapprovals of plans, drawings and related documents, specifications or applications for permits as provided in this Agreement. (t) During the period of construction of the Project, the Developer shall submit to the Agency written progress reports when and as reasonably requested by the Agency but in no event more frequently than every four (4) weeks. The reports shall be in such form and detail as may reasonably be required by the Agency, and shall include a reasonable number of construction photographs taken since the last such report submitted by the Developer. In addition, the Developer will attend Agency meetings when requested to do so by Agency Staff. (u) Prior to the commencement of any construction, the Developer shall furnish, or shall cause to be furnished, to the Agency duplicate originals or appropriate certificates of public indemnity and liability insurance in the amount of One Million Dollars ($1,000,000) combined single limit, naming the Agency and the City as additional insureds. Said insurance shall cover comprehensive general liability including, but not limited to, contractual liability; acts of subcontractors; premises-operations; explosion, collapse and underground hazards, if applicable; broad form property damage, and personal injury including libel, slander and false arrest. In addition, the Developer shall provide to the Agency adequate proof of comprehensive automobile liability insurance covering owned, non-owned and hired vehicles, combined single limit in the amount of One Million Dollars ($1,000,000) each occurrence; and proof of workers' compensation insurance. Any and all insurance policies required hereunder shall be obtained from insurance companies admitted in the State of California and rated at least B+: XII in Best's Insurance Guide. All said insurance policies shall provide that they may not be canceled unless the Agency and the City receive written notice of cancellation at least thirty (30) calendar days prior to the effective date of cancellation. Any and all insurance obtained by the Developer hereunder shall be primary to any and all insurance which the Agency and/or City may otherwise carry, including self insurance, which for all purposes of this Agreement shall be separate and apart from the requirements of this Agreement. Any insurance policies governing the Property as obtained by the Agency shall not be transferred from the Agency to the Developer. Appropriate insurance means those insurance policies approved by the Agency Counsel consistent with the foregoing. Any and all insurance required hereunder shall be maintained and kept in force until the Agency has issued the Certificate of Completion in connection with the development of the Project. 4812.3945-3441.1 11/14/06jmm 35 P:\Agendas\Agcnda Alladlmcnls\Agrnus-Amend 2006\1 1-20-06 l.a Placil3 final DDA.doc (v) The Developer for itself and its successors and assigns agrees that in the construction of the Project, the Developer will not discriminate against any employee or applicant for employment because of sex, marital status, race, color, religion, creed, national origin, or ancestry. Notwithstanding the foregoing, the Developer will use best efforts to offer employment opportunities to local residents and will seek to acquire goods and services from local vendors. (w) The Developer shall carry out its construction of the Project in conformity with all applicable laws, and the Off-Site Public Improvements shall be constructed and installed in accordance with all applicable state labor standards and requirements as required pursuant to California law for public improvements paid or reimbursed with government funds. (x) The Developer shall, at its own expense, secure or shall cause to be secured, any and all permits, which may be required for such construction, development or work by the City or any other governmental agency having jurisdiction thereof. The Agency shall cooperate in good faith with the Developer in the Developer's efforts to obtain from the City or any other appropriate governmental agency any and all such permits and, upon applicable to the development of the Project. (y) Officers, employees, agents or representatives of the Agency shall have the right of reasonable access to the Project, without the payment of charges or fees, during normal construction hours during the period of construction of the Project for the purpose of verifying compliance by the Developer within the terms of this Agreement. Such officers, employees, agents or representatives of the Agency shall be those persons who are so identified by the Executive Director of the Agency. Any and all officers, employees, agents or representatives of the Agency who enter the Project pursuant hereto shall identify themselves at the job site office upon their entrance onto the Project and shall at all times be accompanied by a representative of the Developer while on the Project; provided, however, that the Developer shall make a'representative of the Developer available for this purpose at all times during normal construction hours upon reasonable notice from the Agency. The Agency shall indemnify and hold the Developer harmless from injury, property damage or liability arising out of the exercise by the Agency and/or the City of this right of access, other than injury, property damage or liability relating to the negligence and/or wrongful act or omission of the Developer and/or its members, partners, officers, employees, agents, representatives and/or independent contractors. (z) The Agency shall inspect relevant portions of the construction site prior to issuing any written statements reflecting adversely on the Developer's compliance with the terms and conditions of this Agreement pertaining to development of the Project. (aa) The Developer shall comply with all obligations imposed under State law in connection with the development of the Project in accordance with the requirements of any supervisory agency having jurisdiction over the Project. The Developer acknowledges that it is not the responsibility of the Agency to monitor or enforce any such requirements and the Developer agrees to hold harmless from and indemnify the Agency against any liability, cost or claim resulting from the Developer's breach of the requirements of any such supervisory agency, as such requirements may be amended or interpreted from time to time as applicable to the 4812.3945.3441.1 11114/06jrnm 36 P:\Agcooas\Agcnda Altacluncnls\Agrmts-Amcoo 2006\] 1-20-06 La PIlu.:ila Final DJ)A.doc Project. Such obligations to be assumed by the Developer include, but are not limited to, compliance with the mitigation monitoring plan approved by the Agency as part of the environmental review and approval in connection with the approval of this Agreement by the governing body of the Agency. Section 3.02. [RESERVED -- NO TEXT]. Section 3.03. Taxes. Assessments. Encumbrances and Liens. The Developer shall pay prior to the delinquency all real property taxes and assessments assessed and levied on or against the Project subsequent to the Close of Escrow. The Developer shall not place and shall not allow to be placed on the Project any mortgage, trust deed, deed of trust, encumbrance or lien not otherwise authorized by this Agreement except for the deed of trust securing the construction loan and encumbering the Property and the Developer Property which loan funds shall be used by the Developer to fund the construction and development of the Project in accordance with this Agreement shall be permitted. The Developer shall remove, or shall have removed, any levy or attachment made on the Project, or shall assure the satisfaction thereof. Nothing herein contained shall be deemed to prohibit the Developer from contesting the validity or amounts of any tax assessment, encumbrance or lien, nor to limit the remedies available to the Developer in respect thereto. The covenants of the Developer set forth in this Section relating to the placement of any unauthorized mortgage, trust deed, deed of trust, encumbrance or lien, shall remain in effect only until the Certificate of Completion has been recorded with respect to redevelopment of the Project. Section 3.04. Change in Ownership Management and Control of the Developer -- Assignment and Transfer. (a) Transfer as used in this Section 3.04, the term "Transfer" means: (l) Any total or partial sale, assignment or conveyance, or any trust or power, or any transfer in any other mode or form, by the Developer of more than a 49% interest, or series of such sales, assignments and the like which in the aggregate exceed a disposition of more than a 49% interest, with respect to its interest in this Agreement, the Property or the Project, or any part thereof or any interest therein, or of the improvements constructed thereon, or any contract or agreement to do any of the same; or (2) Any total or partial sale, assignment, conveyance, or transfer in any other mode or form, of or with respect to any ownership interest of the Developer, or series of such sales, assignments and the like which in the aggregate exceeded a disposition of more than a 49% interest; or (3) Any merger, consolidation, or sale of all or substantially all of the assets of the Developer in this Agreement, the Property and/or the Project, or series of such sales, assignments and the like which in the aggregate exceeded a disposition of more than a 49% interest. 4812-3945-3441.1 11114/06jmm 37 P:\Agendas\Agcooa Attachmcnts\Agrmts-Amelld 2006\11-20-06 I.a Pladta r'inal DDA.doc (b) This Agreement is entered into solely for the purpose of the redevelopment of the Project and the improvement of the Project and the subsequent operation and use of the Project by the Developer in accordance with the terms hereof. The Developer recognizes that the qualifications and identity of the Developer are of particular concern to the Agency, in view of: (1) the importance of the redevelopment of the Project to the general welfare of the community; and (2) the fact that a Transfer is for all practical purposes a transfer or disposition of the responsibilities of the Developer, as applicable, with respect to the redevelopment of the Project. The Developer further recognizes and acknowledges that it is because of the qualifications and identity of the Developer that the Agency is entering into this Agreement with the Developer, and, as a consequence, Transfers are permitted only as provided in this Agreement. (c) The limitations on a Transfer as set forth in this Section 3.04 shall apply until such time as a Certificate of Completion is approved by the Agency and filed for recordation as provided in Section 3.07. Except as expressly permitted in this Agreement, the Developer represents and agrees that it has not made nor shall it create or suffer to be made or created, any Transfer, either voluntarily or by operation of law without the prior written approval of the Agency until such time as a Certificate of Completion has been recorded. After the date of recordation of a Certificate of Completion, certain other provisions of this Agreement shall nonetheless be applicable to subsequent conveyances of interest in the Project, or portions thereof, as provided in Article IV of this Agreement. Any Transfer made in contravention of this Section 3.04 shall be voidable at the election of the Agency and shall then be deemed to be a default under this Agreement. (d) The following types of a Transfer shall be permitted and approved by the Agency and are referred to herein as a "Permitted Transfer": (1) Any Transfer by the Developer creating a security interest in the Project, or any portion thereof, for acquisition of the Property or any financing for the construction and improvement of the Project, which conforms to the provisions of Section 3.05; (2) Any Transfer directly resulting from the foreclosure of a Security Financing Interest created by the Developer in the Property and/or the Project or the granting of a deed in lieu of foreclosure of a Security Financing Interest; (3) Any Transfer of stock or equity of the Developer, which does not change management, or operational control of the Property or the Project; 4812-3945-3441.1 11/14/06 jrnm 38 1':\Agcndas\Agenda Allachmcnts\Agrmts-Amcnd 2006\11.20-061.a Placila l'inal DDA.doc (4) Any Transfer of any interest in the Developer, irrespective of the percentage of ownership: (A) to members of the family, i.e. spouse, brother, sister, nephew, niece, parent, child and/or issue of any of the same, of the Developer or; (B) to a trust for the benefit of any such family member; or (C) to any affiliate of or other entity controlled by the Developer, or (D) to any other entity in which the Developer owns a controlling interest. (e) No Permitted Transfer of this Agreement or any interest in the Property or the Project, by the Developer, other than a Permitted Transfer created pursuant to a Security Financing Interest, shall be effective unless, at the time of the Permitted Transfer, the person or entity to which such Transfer is made, shall expressly assume the obligations of the Developer under this Agreement and such person also agrees to be subject to the conditions and restrictions to which the Developer is subject under this Agreement. Such an assumption of obligation shall be evidenced by a written instrument delivered to the Agency in a recordable form, which is satisfactory to the Agency. (f) Provided the particular transaction satisfies the applicable provisions of Section 3.04(d), the Developer is not required to give the Agency advance notice of such a Permitted Transfer. The Agency may, in its reasonable discretion, approve in writing any other Transfer as requested by the Developer, provided such proposed transferee can demonstrate successful and satisfactory experience in the ownership, operation, and management of an operation similar to the Project. Any such transferee for itself and its successors and assigns, and for the benefit of the Agency shall expressly assume all of the obligations of the Developer to the Agency under this Agreement. There shall be submitted to the Agency for review all instruments and other legal documents proposed to effect any such other Transfer; and the approval or disapproval of the Agency shall be provided to the Developer in writing within thirty (30) calendar days from receipt by the Agency of Owner's or the Operator's request, and the Agency approval of a transfer and shall not be unreasonably withheld or delayed. (g) Following the issuance of a Certificate of Completion, the Developer shall be released by the Agency from any liability under this Agreement which may arise from a default of a successor in interest occurring after the date of such a Transfer; provided, however, that the covenants of the Developer as set forth in Article IV of this Agreement shall run with the land for the term as provided in Article IV. Section 3.05. Secured Financings; Right of Holders. (a) Notwithstanding any provision of Section 3.04 to the contrary, mortgages, deeds of trust, or any other form of lien required for any reasonable method of financing the acquisition of the Property and/or the construction and improvement of the Project, or any portion thereof, are permitted before the recordation of the Certificate of Completion, referred to in Section 3.07 of this Agreement. The Developer shall notify the Agency in writing in advance of any mortgage, deed of trust, or other form of lien for financing if the Developer proposes to enter into the same before the recordation of any Certificate of Completion. The Developer shall not enter into any such conveyance for acquisition or construction financing without the prior 4812-3945-3441.1 IJ/I4/06jmm 39 P:\Agcndas\Agcnda Auacllmcnls\Agrmls-Amend 2006\1 1.20-06 I..a Plocila HnalDDA.dnc written approval of the Agency, which approval the Agency will not unreasonably withhold if any such conveyance is given to a responsible financial or lending institution including, without limitation, banks, savings and loan institutions, insurance companies, real estate investment trusts, pension programs and the like, or other acceptable persons or entities for the purpose of acquiring the Property and/or of constructing the Project. (b) The Developer shall promptly notify the Agency of any mortgage, deed of trust or other refinancing, encumbrance or lien that has been created or attached thereto prior to completion of the construction of the improvements of the Project whether by voluntary act of the Developer or otherwise; provided, however, that no notice of filing of preliminary notices or mechanic's liens need be given by the Developer to the Agency prior to suit being filed to foreclose such mechanic's lien. (c) The words "mortgage" and "deed of trust" as used herein shall be deemed to include all other customary and appropriate modes of financing real estate construction and land development. (d) The holder of any mortgage, deed of trust or other security interest authorized by this Agreement shall in no manner be obligated by the provisions of this Agreement to construct or complete the improvement of the Project or to guarantee such construction or completion. (e) Whenever the Agency shall deliver any notice or demand to the Developer with respect to any breach or default by the Developer in the completion of construction of the improvements, or any breach or default of any other obligations which, if not cured by the Developer, entitle the Agency to terminate this Agreement or exercise its right to re-enter the Property and/or the Project, or a portion thereof under Section 5.07, the Agency shall at the same time deliver to each holder of record of any mortgage, deed of trust or other security interest authorized by this Agreement a copy of such notice or demand. Each such holder shall insofar as the rights of the Agency are concerned have the right, at its option, to commence the cure or remedy of any such default and to diligently and continuously proceed with such cure or remedy, within one hundred twenty (120) calendar days after the receipt of the notice; and to add the cost thereof to the security interest debt and the lien of its security interest. If such default shall be a default which can only be remedied or cured by such holder upon obtaining possession, such holder shall seek to obtain possession with diligence and continuity through a receiver or otherwise, and shall remedy or cure such default within one hundred twenty (120) calendar days after obtaining possession; provided that in the case of a default which cannot with diligence be remedied or cured, or the remedy or cure of which cannot be commenced, within such one hundred twenty (120) calendar day period, such holder shall have such additional time as is reasonably necessary to remedy or cure such default of the Developer. Nothing contained in this Agreement shall be deemed to permit or authorize such holder to undertake or continue the construction or completion of the improvements beyond the extent necessary to conserve or protect the improvements or construction already made without first having expressly assumed the Developer's obligations by written agreement satisfactory to the Agency. The holder in that event must agree to complete, in the manner provided in this Agreement, the improvements to which the lien or title of such holder relates and must submit evidence satisfactory to the Agency 4812-3945-3441.1 I 1 114/06 jrnm 40 1):\Agendas\^gend~ Alla<:hmcnts\Agrmts-Amend 2006\11-20..06 La Placilll rinal DDA.doc that it has the qualifications and financial responsibility necessary to perform such obligations. Any such holder completing such improvements in accordance herewith shall be entitled, upon written request made to the Agency, to be issued Certificate of Completion by the Agency. (f) In any case where, one hundred eighty (180) calendar days after default by the Developer the holder of any mortgage, deed of trust or other security interest creating a lien or encumbrance upon the Property and/or the Project, or any portion thereof, has not exercised the option to construct the applicable portions of the Project, or has exercised the option but has not proceeded diligently and continuously with construction, the Agency may purchase the mortgage, deed of trust or other security interest by payment to the holder of the amount of the unpaid debt, including principal, accrued and unpaid interest, late charges, costs, expenses and other amounts payable to the holder by the Developer under the loan documents between holder and the Developer. If the ownership of the Property and/or the Project has vested in the holder, the Agency may at its option but not its obligation be entitled to a conveyance from the holder to the Agency upon payment to the holder of an amount equal to the sum of the following: (I) The unpaid mortgage, deed of trust or other security interest debt, including principal, accrued and unpaid interest, late charges, costs, expenses and other amounts payable to the holder by the Developer under the loan documents between the holder and the Developer, at the time title became vested in the holder less all appropriate credits, including those resulting from collection and application of rentals and other income received during foreclosure proceedings. (2) All expenses, if any, incurred by the holder with respect to foreclosure. (3) The net expenses, if any, exclusive of general overhead, incurred by the holder as a direct result of the subsequent ownership or management of the Property or the Project, such as insurance premiums and real estate taxes. (4) The cost of any improvements made by such holder. (5) An amount equivalent to the interest that would have accrued on the aggregate on such amounts had all such amounts become part of the mortgage or deed of trust debt and such debt had continued in existence to the date of payment by the Agency. (6) After expiration of the aforesaid one hundred eighty (180) calendar day period, the holder of any mortgage, deed of trust or other security affected by the option created by this Section, may demand, in writing, that the Agency act pursuant to the option granted hereby. If the Agency fails to exercise the right herein granted within sixty (60) calendar days from the date of such written demand, the Agency shall be conclusively deemed to have waived such right of purchase of the mortgage, deed of trust or other security interest. 4812-3945-3441.1 11/14/06 jmm 41 P:\Agcnda~\Agellda AlIachmcllls\Agrmts-Amcnd 2006\11-20-06 La Placita j'inal DDA.doc (g) In the event of a default or breach by the Developer of a mortgage, deed of trust or other security interest with respect to the Project, or any portion thereof, prior to the issuance of a Certificate of Completion for the Project, or any portion thereof, and the holder has not exercised its option to complete the development, the Agency may cure the default but is under no obligation to do so prior to completion of any foreclosure. In such event, the Agency shall be entitled to reimbursement from the Developer of all costs and expenses incurred by the Agency in curing the default. The Agency shall also be deemed to have a lien of the Agency as may arise under this Section 3.05(g) upon the Project, or any portion thereof to the extent of such costs and disbursements. Any such lien shall be subordinate and subject to mortgages, deeds of trust or other security instruments executed by the Developer for the purpose of obtaining the funds to construct and improve the Project as authorized herein. Section 3.06. Right of the Agency to Satisfy Other Liens on the Property after Conveyance of Title. After the conveyance of title to the Property by the Agency to the Developer and prior to the recordation of the Certificate of Completion as referred to in Section 3.07 of this Agreement, and after the Developer has had a reasonable time to challenge, cure or satisfy any unauthorized liens or encumbrances on the Property, the Agency shall after one hundred twenty (120) calendar days' prior written notice to the Developer have the right to satisfy any such liens or encumbrances; provided, however, that nothing in this Agreement shall require the Developer to payor make provisions for the payment of any tax, assessment, lien or charge so long as the Developer in good faith shall contest the validity or amount thereof, and so long as such delay in payment shall not subject the Property, or any portion thereof, to forfeiture or sale. Section 3.07. Certificate of Completion. (a) Following the written request therefore by the Developer and the completion of construction of the Project, excluding any normal and minor building "punch-list" items to be completed by the Developer, the Agency shall furnish the Developer with a Certificate of Completion for the Project substantiated in the form set forth in Exhibit "E" attached hereto and incorporated herein by this reference. (b) The Agency shall not unreasonably withhold the issuance of a Certificate of Completion. A Certificate of Completion shall be, and shall so state, that it is a conclusive determination of satisfactory completion of all of the Developer's obligations under this Agreement, except for the provisions of Article IV which by their terms are intended to run with the land. After the recordation of the Certificate of Completion, any party then owning or thereafter purchasing, leasing or otherwise acquiring any interest in the Property and/or the Project shall not because of such ownership, purchase, lease or acquisition incur any obligation or liability under this Agreement, except that such party shall be bound by any covenants contained in the grant deed or other instrument of transfer which grant deed or other instrument of transfer shall include the provisions of Section 4.0I through 4.04, inclusive, of this Agreement. (c) Any Certificate of Completion shall be in such form as to permit it to be recorded in the Recorder's Office of the County where the Project is located. 4812-3945.3441.1 11/14/06 jrnm 42 1':\Agcndas\Agcnda Auachmcnls\Agrmts-Amend 2006\1] -20-06 La Placila Pinal DDA.doc (d) If the Agency refuses or fails to furnish a Certificate of Completion after written request from the Developer, the Agency shall, within fifteen (15) calendar days after the written request or within three (3) calendar days after the next regular meeting of the Agency, whichever date occurs later, provide to the Developer a written statement setting forth the reasons with respect to the Agency's refusal or failure to furnish a Certificate of Completion. The statement shall also contain the Agency's opinion of the action the Developer must take to obtain a Certificate of Completion. If the reason for such refusal is confined to the immediate unavailability of specific items or materials for construction or landscaping at a price reasonably acceptable to the Developer or other minor building "punch-list" items, the Agency may issue its Certificate of Completion upon the posting of a bond or irrevocable letter of credit, reasonably approved as to form and substance by the Agency Counsel and obtained by the Developer in an amount representing a fair value of the work not yet completed as reasonably determined by the Agency. If the Agency shall have failed to provide such written statement within the foregoing period, the Developer shall be deemed conclusively and without further action of the Agency to have satisfied the requirements of this Agreement with respect to the Project as if a Certificate of Completion had been issued therefore. (e) A Certificate of Completion shall not constitute evidence of compliance with or satisfaction of any obligation of the Developer to any holder of a mortgage, or any insurer of a mortgage securing money loaned to finance the improvements described herein, or any part thereof. A Certificate of Completion shall not be deemed to constitute a notice of completion as referred to in Section 3093 of the California Civil Code, nor shall it act to terminate the continuing covenants or conditions subsequent contained in the Agency Grant Deed attached hereto as Exhibit "C". The issuance of a Certificate of Completion by the Agency pursuant to this Section 3.07 shall not in any manner terminate any of the other obligations or responsibilities of the Agency which are not specifically stated to terminate as of the date of issuance of a Certificate of Completion but are intended to remain in full force and effect pursuant to this Agreement, including, but not limited to, those as set forth in Section 3.08 below. Section 3.08. Agencv Pavment of Off-Site Public Improvements. (a) Off-Site Public Improvements. The Developer shall construct and develop all off-site public improvements (collectively, the "Off-Site Public Improvements") which Off- Site Public Improvements are described in Exhibit "H" attached hereto and incorporated herein by this reference and are those as required by the City and/or by any other governmental authority in connection with, relating to, or arising from, the construction and development of the Project. The Agency shall reimburse the Developer for all costs and expenses actually paid by the Developer to construct and develop the Off-Site Public Improvements, in an amount not to exceed Two Million Dollars ($2,000,000) (the "Maximum Off-Site Public Improvement Costs"), in the aggregate, except as set forth in subsection (b) below, provided, however, that: (I) the Agency, the city engineer (the "City Engineer"), the City and all other governmental entities having jurisdiction thereof have approved and accepted, in their sole discretion, the Off-Site Public Improvements, as constructed, developed, installed and made by or on behalf of the Developer in connection with the Project; (2) the Off-Site Public Improvements comply with all 4812.3945.3441.1 11/14/06 jmm 43 P:\Agcndas\Agenda Auachmcnts\Agrmts.Amcnd 2006\11-2()..1)6 La I'lacita Final DDAdoc federal, state, municipal and local laws, statutes, regulations, codes, ordinances, rules, orders, policies and procedures, as amended from time to time; (3) the Developer has paid prevailing wages pursuant to Labor Code Section 1720, et seq., in connection with the construction, development and installation of the Off-Site Public Improvements and shall provide the Agency with written verification to the Agency, the City Engineer and the City that the Off-Site Public Improvements comply with all federal, state, municipal and local prevailing wage laws; (4) the Developer must prepare, submit and publish all contractor bids and award contracts to third party contractors in compliance with all federal, state, municipal and local laws, statutes, regulations, codes, ordinances, rules, orders, policies and procedures, as amended from time to time, in connection with the construction, development and approval of the Off-Site Public Improvements (collectively, the HContracts"); (5) the Developer must provide the Agency, the City Engineer and the City with invoices, statements, certificates, copies of mutually executed contracts, purchase orders, and all such other agreements, documents and/or instruments, as required by and satisfactory to the Agency, the City Engineer and the City, in their sole and absolute discretion, evidencing and supporting such expenditures in connection with the construction, development and/or, installation by or for the Developer of the Off-Site Public Improvements, or any portion thereof (singularly, theHInvoice" and collectively, the "Invoices"); and (6) the Agency shall make payment to the Developer, once per month, equal to the approved amount of each Invoice provided the Agency, the City Engineer and the City have approved and accepted the Off-Site Public Improvement work performed by or for the Developer, and have received and approved the form and content of each of the Contracts and each Invoice. (b) In the event that upon receipt by the Developer of the final conditions of approval from the City for the Project, it is determined that the Off-Site Public Improvements then being required by the City to be undertaken by the Developer will reasonably exceed the Maximum Off-Site Public Improvement Costs, the Developer may submit a written request to the Executive Director of the Agency that an amendment to this Agreement to increase the Maximum Off-Site Public Improvement Costs be considered by the governing body of the Agency prior to the commencement of the process for the advertisement and receipt of bids for the construction and installation of the Off-Site Public Improvements. (c) In the event that upon receipt of bids by the Developer in the manner as required in subsection (a) above, and whether or not the dollar amount of the Maximum Off-Site Improvement Costs has previously been amended by the Agency and the Developer as provided in subsection (b) above, the Developer may submit a written request to the Executive Director of the Agency that an amendment to this Agreement to increase the Maximum Off-Site Public Improvement Costs be considered by the governing body of the Agency prior to the award of the bid by the Developer to the lowest responsible bidder and the commencement of the construction of the Off-Site Public Improvements. (d) Nothing contained herein shall at anytime be deemed to require the Agency to approve any amendment to this Agreement and/or any amendment or increase to the Maximum Off-Site Improvement Costs except at its sole and absolute discretion. Any written request for an increase in the Maximum Off-Site Improvement Costs that is properly submitted by the Developer to the Execute Director of the Agency shall be thereupon submitted by the Executive Director of the Agency to the governing body of the Agency with such 4812-3945-3441.1 11114/06 jmm 44 1':\AgcndaslAgenda AnachmcnlslAgrmts-Amcnd 211Q6\11.20-06 La PliICita Hila! DDAdoc recommendation for action thereon as deemed appropriate by the Executive Director of the Agency at their sole discretion. ARTICLE IV USE OF THE SITE . Section 4.01. Uses. (a) The Developer covenants and agrees for itself, its successors, and assigns that the Project shall consist of and be used solely for commercial and retail purposes. The covenant of this Section 4.01(a) shall run with the land for the terms as set forth in the Agency Grant Deed. (b) The Developer further covenants and agrees for itself, its successors and assigns, that the Project shall be improved and developed in accordance with the Scope of Development. The Developer covenants to develop the Project in conformity with all applicable laws. The covenants of this Section 4.01(b) shall also run with the land until the later to occur of the recordation of the Certificate of Completion or the fifth (5th) anniversary date after the recordation of the Agency Grant Deed. (c) It is understood and agreed by the Developer that neither the Developer, nor its assigns or successors shall use or otherwise sell, transfer, convey, assign, lease, leaseback or hypothecate the Project or any portion thereof to any entity or party, or for any use of the Project, that is partially or wholly exempt from the payment of real property taxes pertinent to the Project, or any portion thereof, or which would cause the exemption of the payment of all or any portion of such real property taxes. The covenant of this Section 4.01(c) shall run with the land for the term as set forth in the Agency Grant Deed. Section 4.02. Maintenance of the Property. The Developer covenants and agrees for itself, its successors, and assigns to maintain the Project in a good condition free from any accumulation of debris or waste material, subject to normal construction job-site conditions, and shall maintain in a neat, orderly, healthy and good condition the landscaping required to be planted in accordance with the Scope of Development. In the event the Developer, or its successors or assigns, fails to perform the maintenance as required herein, the Agency shall have the right, but not the obligation, to enter the Project and undertake, such maintenance activities. In such event, the Developer shall reimburse the Agency for all reasonable sums incurred by it for such maintenance activities as set forth in the Agency Grant Deed. The covenant of this Section 4.02 shall run with the land for the term as set forth in the Agency Grant Deed. Section 4.03. Obligation to Refrain from Discrimination. The Developer covenants and agrees for itself, its successors, its assigns and every successor in interest to the Project or any part thereof, that there shall be no discrimination against or segregation of any person, or group of persons, on account of sex, marital status, race, color, religion, creed, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Project; nor shall the Developer, itself or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, 4812.3945-3441.1 11/14/06 jmm 45 P:\Agcndas\Agenda AlIachmenls\Agrmls-Amend 2006\11.2(1-06 La Placila Final DVA.doc sublessee or vendees of the Project. The covenant of this Section 4.03 shall run with the land for the term as set forth in the Agency Grant Deed with respect to the Project. Section 4.04. Form of Nondiscrimination and Nonsegregation Clauses. The Developer covenants and agrees for itself, its successors, its assigns, and every successor in interest to the Project, or any part thereof, that the Developer, such successors and such assigns shall refrain from restricting the sale, lease, sublease, rental, transfer, use, occupancy, tenure or enjoyment of the Project, or any part thereof, on the basis of sex, marital status, race, color, religion, creed, ancestry or national origin of any person. All deeds, leases or contracts pertaining thereto shall contain or be subject to substantially the following nondiscrimination or nonsegregation clauses: (I) In deeds: "The grantee herein covenants by and for itself, its successors and assigns, and all persons claiming under or through them, that there shall be no 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 premises herein conveyed, nor shall the grantee or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessee, or vendees in the premises herein conveyed. The foregoing covenants shall run with the land". (2) In leases: "The Lessee herein covenants by and for itself, its successors and assigns, and all persons claiming under or through them, and this lease is made and accepted upon and subject to the following conditions: That there shall be no 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 premises herein leased nor shall the lessee itself, or any person claiming under or through it, es.tablish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy, of tenants lessees, sublessee, subtenants, or vendees in the premises herein leased". (3) In contracts: "There shall be no 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 premises herein conveyed or leased, nor shall the transferee or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy, of tenants, lessees, sublessees, subtenants, or vendees of the premises herein transferred." 4812-3945-3441.1 11114/06 jmm 46 P:\Agcooas\Agcroda Auachmems\Agrmts-Amcnd 2006\11-20.{)6 La 1'1acila Final DDA.doc The foregoing provision shall be binding upon and shall obligate the contracting party or parties and any subcontracting party or parties, or other transferees under the instrument. The covenant of this Section 4.04 shall run with the land in perpetuity. ARTICLE V DEFAULTS. REMEDIES AND TERMINATION Section 5.01. Defaults - General. (a) In the event that a breach or default may occur prior to the Close of Escrow, the remedies of the parties shall be as set forth in Article II of this Agreement. (b) From and after the Close of Escrow and subject to the extensions of time set forth in Section 6.05 hereof, failure or delay by either party to perform any term or provision of this Agreement shall constitute a default under this Agreement; provided, however, that if a party otherwise in default commences to cure, correct or remedy such default within thirty (30) calendar days after receipt of written notice specifying such default and shall diligently and continuously prosecute such cure, correction or remedy to completion, and where any time limits for the completion of such cure, correction or remedy are specifically set forth in this Agreement, then within said time limits, such party shall not be deemed to be in default hereunder. -(c) The injured party shall give written notice of default to the party in default, specifying the default complained of by the nondefaulting party. Delay in giving such notice shall not constitute a waiver of any default nor shall it change the time of default. (d) Any failure or delays by either party in asserting any of its rights and remedies as to any default shall not operate as a waiver of any default or of any such rights or remedies. Delays by either party in asserting any of its rights and remedies shall not deprive either party of its right to institute and maintain any actions or proceedings, which it may deem necessary to protect, assert or enforce any such rights or remedies. Section 5.02. Legal Actions. (a) In addition to any other rights or remedies, either party may institute legal action to cure, correct, or remedy any default, to recover damages for any default, or to obtain any other remedy consistent with the purposes of this Agreement. Such legal actions must be instituted in the Superior Court of the County of San Bernardino, State of California, in any other appropriate court in that County, or in the Federal District Court in the Central District of California. (b) The laws of the State of California shall govern the interpretation and enforcement of this Agreement. (c) In the event that any legal action is commenced by the Developer against the Agency, service of process on the Agency shall be made by personal service upon the Executive Director or Chair of the Agency, or in such other manner as may be provided by law. 4812.3945.3441.1 11114/06 jmm 47 P:\.A.gcndas\Ageoda Auactunents\Agrmts-Amcnd 2006\11-20-06 l..a Placita Final DDA_doc (d) In the event that any legal action is commenced by the Agency against the Developer, service of process on the' Developer shall be made by personal service on Luis Armona or Armando Delgado, Merona Enterprises, Inc., clo La Placita on 2nd Street, 9550 Firestone Blvd., Suite 105, Downey, CA 90241, as an authorized corporate officer of the Developer, or such other Agent for service of process and at such address as may be specified in written notice to the Agency, or in such other manner as may be provided by law, and shall be valid whether made within or without the State of California. Section 5.03. Rights and Remedies are Cumulative. Except with respect to any rights and remedies expressly declared to be exclusive in or otherwise restricted by the provisions of Article II of this Agreement as relates to a default or breach occurring before the Close of Escrow, the rights and remedies of the parties as set forth in this Article V following the Close of Escrow are cumulative and the exercise by either party of one or more of such rights or remedies shall not preclude the exercise by it, at the same or different times, of any other rights or remedies for the same default or any other default by the other party. Section 5.04. Damages. If either party defaults with regard to any provision of this Agreement, the nondefaulting party shall serve written notice of such default upon the defaulting party. If the defaulting party does not diligently commence to cure such default after service of the notice of default and promptly complete the cure of such default within a reasonable time, not to exceed ninety (90) calendar days, or such shorter period as may otherwise be specified in this Agreement for default, after the service of written notice of such a default the applicable party shall be deemed to be in default under this Agreement. In the event that a default relates to a matter arising after the Close of Escrow, the defaulting party shall be liable to the other party for damages caused by such default. In the event that a default relates to a matter arising before the Close of Escrow, the remedies of the parties shall be limited to the liquidated damage sums as set forth in Article II of this Agreement. Section 5.05. Specific Performance Prior to Close of Escrow. Except as otherwise provided in Section 2.22 hereof, prior to the Close of Escrow neither party shall have or assert the equitable remedy of specific performance in the event of a default or breach, and the remedies of the parties with respect to such a breach or default prior to the Close of Escrow shall be limited to the termination rights and liquidated damage amounts or as set forth in Article II of this Agreement. Prior and after the Close of Escrow if either party defaults under any of the provisions of this Agreement, the nondefaulting party shall serve written notice of such default upon such defaulting party. If the defaulting party does not commence to cure the default and diligently and continuously proceed with such cure within thirty (30) calendar days after service of the notice of default, and such default is not cured within a reasonable time thereafter and where any time limits for the completion of such cure, correction or remedy are specifically set forth in this Agreement, then within said time limits, the nondefaulting party, at its option, may institute an action for specific performance of the terms of this Agreement, except as otherwise provided in Section 5.04 hereof. 4812.3945.3441.1 11l14/06jrnm 48 P:\Agendas\Agenda Auacbmcnls\Agrmts-Amcnd 2006\11-20-06 La Placita Finllll>DA,doc Section 5.06. Agencv Rights of Termination Following Close of Escrow. (a) Subject to written notice of default which shall specify the Developer's default and the action required to commence cure of same and upon thirty (30) calendar days notice to the Developer of the Agency's intent to terminate this Agreement pursuant to this Section, the Agency at its option may terminate this Agreement if the Developer in breach of this Agreement assigns or attempts to assign this Agreement, or any right therein, or attempts to make any total or partial sale, transfer or conveyance of the whole or any part of the Project or the improvements to be developed thereon in violation of the terms of this Agreement, and the Developer does not correct such violation within thirty (30) calendar days from the date of receipt of such notice. (b) Subject to written notice of default, which shall specify the Developer's default and the action required to commence cure of same and upon thirty (30) calendar days notice to the Developer of the Agency's intent to terminate this Agreement pursuant to this Section, the Agency at its option may terminate this Agreement if the Developer: (a) does not within the time limits set forth in this Agreement or as specifically provided in the Schedule of Performance, subject to extensions authorized by this Agreement due to force majeure or otherwise, submit development plans, construction drawings and related documents acceptable to the Planning Department and Building Division of the City for plan check purposes and in order to obtain building permits for the Project, together with applicable fees therefore, all prepared to the minimum acceptable standards as required by the Planning Department and Building Division of the City for commencement of formal review of such documents and as required by this Agreement, or (b) does not carry out its other responsibilities under this Agreement or in accordance with any modification or variance, precise plan, design review and other environmental or governmental approvals and such default is not cured or the Developer does not commence and diligently and continuously proceed with such cure within thirty (30) calendar days after the date of receipt of written demand therefore from the Agency. (c) Subject to written notice of default which shall specify the Developer's default and the action required to commence cure of same and upon thirty (30) calendar days notice to the Developer of the Agency's intent to terminate this Agreement pursuant to this Section, the Agency at its option may terminate this Agreement if upon satisfaction of all conditions precedent and concurrent therefore under this Agreement, the Developer does not take title to the Property under tender of conveyance by the Agency, and such breach is not cured within thirty (30) calendar days after the date of receipt by the Developer of written demand therefore from the Agency. Section 5.07. Right to Reenter, Repossess and Revest. (a) The Agency shall, upon thirty (30) calendar days notice to the Developer which notice shall specify this Section 5.07, have the right, at its option, to re-enter and take possession of all or any portion of the Project, or any portion thereof, together with all improvements thereon, and to terminate and revest in the Agency the estate conveyed to the Developer hereunder, if after conveyance of title, the Developer, or its successors in interest, shall: 4812-3945-3441.1 1l/14/06jrnm 49 P:\Agcndas\Agenda Attachmcnts\Agrmts"Amcoo 2006\)1-20-06 La Plocita final ODA.doc I I I (I) Fail to commence construction of all or any portion of the improvements as required by this Agreement for a period of ninety (90) calendar days after written notice to proceed from the Agency; provided that the Developer shall not have obtained an extension or postponement to which the Developer may be entitled pursuant to Section 6.05 hereof; or (2) Abandon or substantially suspend construction of all or any portion of the improvements for a period of ninety (90) calendar days after written notice of such abandonment or suspension from the Agency; provided that the Developer shall not have obtained an extension or postponement to which the Developer may be entitled to pursuant to Section 6.05 hereof; or (3) Assign or attempt to assign this Agreement, or any rights herein, or transfer, or suffer any involuntary transfer, of the Project or any part thereof, in violation of this Agreement, and such violation shall not have been cured within thirty (30) calendar days after the date of receipt of written notice thereof from the Agency to the Developer. (b) The thirty (30) calendar day written notice specified in this Section shall specify that the Agency proposes to take action pursuant to this Section and shall specify which of the Developer's obligations set forth in Subsections (I) through (3) herein have been breached. The Agency shall proceed with its remedy set forth herein only in the event that the Developer continues in default of said obligation(s) for a period of thirty (30) calendar days following such notice or, upon commencing to cure such default, fails to diligently and continuously prosecute said cure to satisfactory conclusion. (c) The right of the Agency to reenter, repossess, terminate, and revest shall be subject and subordinate to, shall be limited by and shall not defeat, render invalid or limit: (I) Any mortgage, deed of trust or other security interest permitted by this Agreement; (2) Any rights or interests provided in this Agreement for the protection of the holders of such mortgages, deeds of trust or other security interests; (3) Any leases, declarations of covenants, conditions and restrictions, easement agreements or other recorded documents applicable to the Project. (d) The grant deed to the Property and/or to the Project, or to any portion thereof, conveyed by the Developer to another party shall contain appropriate references and provisions to give effect to the Agency's right, as set forth in this Section under specified circumstances prior to the recordation of a Certificate of Completion with respect to such portion, to reenter and take possession of such portion, or any part thereof, with all improvements thereon, and to terminate and revest in the Agency the estate conveyed to the Developer. 4812-3945-3441.1 11/14/06 jmm 50 P:\Agendas\Agcnda Attachmenls\Agrmts.Amcnd 2006\]] .20-06 La l>Jacila Final DDA.doc (e) Upon the revesting in the Agency of title to the Property, or any part thereof, as provided in this Section, the Agency shall, pursuant to its responsibilities under State law, use its best efforts to resell the Property, or any part thereof, at fair market value as soon and in such manner as the Agency shall find feasible and consistent with the objectives of such law, to a qualified and responsible party or parties, as determined by the Agency, who will assume the obligations of making or completing the improvements, or such other improvements in their stead as shall be satisfactory to the Agency and in accordance with the uses specified for the Property, or any part thereof. Upon such resale of the Project, the Property, or any part thereof, the proceeds thereof shall be applied: (1) First, to make 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 with respect to the making or completion of the agreed improvements or any part thereof on the Property, or any portion thereof; next to reimburse the Agency on its own behalf or on behalf of the City for all actual costs and expenses incurred by the Agency and the City, including but not limited to customary and reasonable fees or salaries to third party personnel engaged in such action but excluding the Agency's or the City's general overhead expense, in connection with the recapture, management and resale of the Property, or any portion thereof; all taxes, assessments and water and sewer charges paid by the City and/or the Agency with respect to the Property or any portion thereof; any amounts otherwise owing to the Agency by the Developer and its successor transferee; and (2) Second, to the extent that any and all funds which are proceeds from such resale are thereafter available, to reimburse the Developer, or its successor transferee, up to the amount equal to the sum of: (I) the Purchase Price paid by the Developer for the Property, or allocable to the applicable part thereof; and (2) the costs incurred for the development of the Property, or applicable part thereof, or for the construction of the improvements thereon including, but not limited to, costs of carry, taxes and items set forth in the Developer's cost statement which shall be submitted to and approved by the Agency. (3) Any balance remaining after the foregoing application of proceeds shall be retained by the Agency. (f) Notwithstanding anything herein to the contrary, all rights of the Agency to re-enter the Project, or any portion thereof, under this Section 5.07 shall terminate upon the issuance of a Certificate of Completion for the Project. Section 5.08. Right to Terminate Bv The Agencv Prior to Close of Escrow. Upon ten (10) calendar days' prior written notice from the Agency to the Developer and to the Escrow Holder, the Agency may elect to terminate this Agreement pursuant to this Section 5.08(a), Section 5.08(b), Section 5.08(c) and/or Section 5.08(d), without any 4812-3945-3441.1 ItI14/06jmm 51 P:\Agendas\Agenda AUilCtunenls\Agrmls-Amcnd 2006\11-20.06 I.a PIacita Final DDA.doc further liability or obligation by the Agency to the Developer, except for the return of the Deposit, and interest earned thereon, which Deposit and interest earned thereon shall be paid by the Escrow Holder to the Developer provided the Developer is not in default under this Agreement: (a) the Agency, as buyer, does not purchase and acquire fee simple title in and to the Belichesky Property from the Belichesky-Filipovic Trust, or its successors and/or assigns, as seller, pursuant to the Belichesky Property Arms Length Transaction and/or pursuant to the Belichesky Property Condemnation Proceedings; (b) the Developer does not purchase and acquire fee simple title in and to the Spar Property either directly or assign the purchase thereof to the Agency and/or does not pay the Spar Property Costs, as applicable; (c) the Property and/or the Developer Property, without the Belichesky Property and/or without the Spar Property, or any portion thereof, cannot be constructed, developed, improved and/or reconfigured in a manner acceptable to the Agency in its sole and absolute discretion; (d) the Agency has the right to terminate this Agreement in accordance with the terms, covenants and/or conditions of this Agreement. Should the Agency terminate this Agreement pursuant to this Section 5.08(a), Section 5.08(b), Section 5.08(c) and/or Section 5.08(d), the Developer shall pay to the Agency the termination costs provided for in Section 2.02(c)(v) or in Section 2.02(c)(vi), as applicable, within ten (10) calendar days' from the date that the Developer is in receipt of written notice from the Agency to the Developer stating the Agency's election to terminate this Agreement pursuant to this Section 5.08. Section 5.09. Right to Terminate By The Developer Prior to Close of Escrow. Upon ten (10) calendar days' prior written notice from the Developer to the Agency and to the Escrow Holder, the Developer may elect to terminate this Agreement pursuant to this Section 5.09(a), Section 5.09(b), Section 5.09(c), Section 5.09(f) and/or Section 5.09(g), and the Deposit, and interest earned thereon, shall be paid by the Escrow Holder to the Developer provided the Developer is not in default under this Agreement: (a) the Agency, as buyer, does not purchase and acquire fee simple title in and to the Belichesky Property from the Belichesky-Filipovic Trust, or its successors and/or assigns, as seller, pursuant to the Belichesky Property Arms Length Transaction and/or pursuant to the Belichesky Property Condemnation Proceedings; (b) the Developer, as buyer, is not able to purchase and acquire fee simple title in and to the Spar Property from Spar or the Agency, or their successors and/or assigns, as seller, notwithstanding the good faith and best efforts of the Developer; 4812-3945-3441.1 1 II 14/06 jmm 52 P:\Agcndas\Agenda Auachmenls\Agrmts-Amcnd 2006\1 J -20-06 La Placila Final DDAdoc (c) the Property and/or the Developer Property, without the Belichesky Property and/or without the Spar Property, or any portion thereof, cannot be constructed, developed, improved and/or reconfigured in a manner acceptable to the Agency in its sole and absolute discretion; (d) [ reserved ]; (e) [reserved]; (f) the Belichesky Property Costs and the Spar Property Costs exceed the Upset Figure of Five Hundred Thousand Dollars ($500,000), in the aggregate, unless waived by the Developer at its sole election and discretion; (g) the Developer has the right to terminate this Agreement in accordance with the terms, covenants and/or conditions of this Agreement. Should the Developer terminate this Agreement pursuant to this Section 5.09(a), Section 5.09(b), Section 5.09(c), and/or Section 5.09(f), the Developer shall pay to the Agency the termination costs provided for in Section 2.02(c)(vii) or in Section 2.02(c)(viii), as applicable, within ten (10) calendar days' from the date that the Agency is in receipt of written notice from the Developer to the Agency stating the Developer's election to terminate this Agreement pursuant to this Section 5.09. In the event the Developer terminates this Agreement pursuant to and in accordance with Section 5.09(f), the Agency, upon ten (10) calendar days' prior written notice from the Agency to the Developer, may nullify this termination by the Developer and require both the Developer and the Agency to renegotiate, and agree upon, the excess Upset Figure payment by one (I) or by both of the parties of those amounts that exceed the aggregate Upset Figure provided for in 5.09(f) of this Agreement. If the Agency and the Developer are unable to determine and mutually agree upon the excess Upset Figure payment within thirty (30) calendar days from the date that the Developer is in receipt of such written notice from the Agency, this Agreement shall automatically terminate without any further duty or obligation by any party to notify the other. ARTICLE VI GENERAL PROVISIONS Section 6.01. Notices, Demands and Communications between the Parties. (a) Any and all notices, demands or communications submitted by any party to another party pursuant to or as required by this Agreement shall be proper if in writing and dispatched by messenger for immediate personal delivery, or by registered or certified United States mail, postage prepaid, return receipt requested, to the principal office of the Agency and the Developer, as applicable, as designated in Section 1.03(a) and Section 1.03(b) hereof. Such written notices, demands and communications may be sent in the same manner to such other 4812-3945-3441.1 11/l4/06 jrnm 53 P:\Agclldas\Agenda Attacllments\Agrmls-Amclld 2(Xl6\1 ].20-06 La Placila Final DDA.doc addresses as either party may from time to time designate as provided in this Section. Any such notice, demand or communication shall be deemed to be received by the addressee, regardless of whether or when any return receipt is received by the sender or the date set forth on such return receipt, on the day that it is dispatched by messenger for immediate personal delivery, or two (2) business days after it is placed in the United States mail as heretofore provided. (b) In addition to the submission of notices, demands or communications to the parties as set forth above, copies of all notices shall also be delivered by facsimile as follows: to the Developer: Merona Enterprises, Inc. c/o La Placita on 2nd Street, LLC 9550 Firestone Boulevard, Suite 105 Downey, California 90241 Telephone: 562-862-4360 FAX: 562-745-2341 with copy to: FAX: to the Agency: Redevelopment Agency of the City of San Bernardino Attention: Maggie Pacheco, Executive Director 201 North "E" Street, Suite 301 San Bernardino, California 92401 FAX: (909) 663-2294 with copy to: Lewis Brisbois Bisgaard & Smith LLP Attention: Mr. Timothy J. Sabo 650 Hospitality Lane, Suite 600 San Bernardino, California 92408 FAX: (909) 387-1138 Section 6.02. Conflict of Interest. No member, official or employee of the Agency having any conflict of interest, direct or indirect, related to this Agreement and the development of the Project shall participate in any decision relating to this Agreement. The parties represent and warrant that they do not have knowledge of any such conflict of interest. Section 6.03. Warrantv Against Payment of Consideration for Agreement. The Developer warrants that it has not paid or given, and will not payor give, any third party any money or other consideration for obtaining this Agreement. Third parties, for the purposes of this Section, shall not include persons to whom fees are paid for professional services if rendered by attorneys, financial consultants, brokers, accountants, engineers, architects and the like when such fees are considered necessary by the Developer. 4812-3945-3441.1 11/l4/06jmm 54 P:\Agcndas\Agenda Allachmcnts\Agrmts"Amcnd 2006\11-2(J..()(i 1.a Placita Final DDA.doc Section 6.04. Nonliability of Agency Officials and Employees. No member, official or employee of the Agency shall be personally liable to the Deyeloper, or any successor in interest, in the event of any default or breach by the Agency or for any amount which may become due to the Developer or to its successor, or on any obligations under the terms of this Agreement, except for gross negligence or willful acts of such member, officer or employee. Section 6.05. Enforced Delay: Extension of Time of Performance. In addition to specific provisions of this Agreement, performance by either party hereunder shall not be deemed to be in default, or considered to be a default, where delays or defaults are due to the force majeure events of war, insurrection, strikes, lockouts, riots, floods, earthquakes, fires, casualties, acts of God, acts of the public enemy, epidemics, quarantine restrictions, freight embargoes or lack of transportation, weather-caused delays, inability to secure necessary labor, materials or tools, delays of any contractors, subcontractor or supplier, which are not attributable to the fault of the party claiming an extension of time to prepare or acts or failure to act of any public or governmental agency or entity, including the City; provided, however, that acts or failure to act of the City or the Agency shall not extend the time for the Agency to act hereunder except for delays associated with lawsuit or injunction including but without limitation to lawsuits pertaining to the approval of this Agreement, and the like. An extension of time for any such force majeure cause shall be for the period of the enforced delay and shall commence to run from the date of occurrence of the delay; provided however, that the party which claims the existence of the delay has first provided the other party with written notice of the occurrence of the delay within ten (10) days of the commencement of such occurrence of delay. The inability of the Developer to obtain a satisfactory commitment from a construction lender for the improvement of the Project or to satisfy any other condition of this Agreement relating to the redevelopment of the Project shall not be deemed to be a force majeure event or otherwise provide grounds for the assertion of the existence of a delay under this Section 6.05. The parties hereto expressly acknowledge and agree that changes in either general economic conditions or changes in the economic assumptions of any of them which may have provided a basis for entering into this Agreement and which occur at any time after the execution of this Agreement, are not force majeure events and do not provide any party with grounds for asserting the existence of a delay in the performance of any covenant or undertaking which may arise under this Agreement. Each party expressly assumes the risk that changes in general economic conditions or changes in such economic assumptions relating to the terms and covenants of this Agreement could impose an inconvenience or hardship on the continued performance of such party under this Agreement, but that such inconvenience or hardship is not a force majeure event and does not excuse the performance by such party of its obligations under this Agreement. Section 6.06. Inspection of Books and Records. The Agency shall have the right at all reasonable times at the Agency's cost and expense to inspect the books and records of the Developer pertaining to the Project and/or the development thereof as necessary for the Agency, in its reasonable discretion, to enforce its rights under this Agreement; provided, however, that the Agency shall give the Developer at least twenty-four (24) hours' prior written notice of such exercise of the right to inspect said books and records. Matters discovered by the Agency shall not be disclosed to third parties unless required by law or unless otherwise resulting from or 4812-3945-3441.1 11114/06jmm 55 P:\Agendas\Agenda Auachmenls\Agrnus-Amend 2006\11-20-06 La Placita Final DUA.doc related to the pursuit of any remedies or the assertion of any rights of the Agency hereunder. The Developer shall also have the right at all reasonable times to inspect the books and records of the Agency pertaining to the Project and/or the development thereof as pertinent to the purposes of this Agreement. Section 6.07. Approvals. (a) Approvals required of the Agency or the Developer, or any officers, agents or employees of either the Agency or the Developer, shall not be unreasonably withheld and approval or disapproval shall be given within the time set forth in the Schedule of Performance or, if no time is given, within a reasonable time. (b) The Executive Director of the Agency is authorized to sign on his or her own authority amendments to this Agreement, which are of routine or technical nature, including minor adjustments to the Schedule of Performance. Section 6.08. Real Estate Commissions. The Agency shall not be liable for any other real estate commissions, brokerage fees or finder fees, which may arise from or related to this Agreement. Section 6.09. Indemnification. The Developer agrees to indemnify, defend, protect and hold harmless the City and the Agency, and their officers, employees and agents from and against all actions, causes of action, claims, costs, damages, demands, fees, judgments, liability and obligations, including, without limitation, all attorneys' fees, costs and court costs, arising from or related to any act or omission of the Developer, its agents, employees, contractors, successors and/or assigns, in performing its obligations hereunder. The Agency agrees to indemnify, defend, protect and hold harmless the Developer and its officers, employees and agents, from and against all actions, causes of action, claims, costs, damages, demands, fees, judgment, liability and obligations, including, without limitation, attorneys' fees, costs and court costs, arising from or related to any act or omission of the Agency in performing its obligations hereunder except that the Agency shall have no liability hereunder which arises, directly or indirectly, from the gross negligence or wrongful conduct of the Developer, its agents, employees, contractors, or the successors and/or assigns, of either of them. Section 6.10. Release of Developer from Liabilitv. Notwithstanding any provision herein to the contrary, the Developer shall be relieved of any and all liability for the obligations of the Developer hereunder with regard to the Project when a Certificate of Completion has been issued by the Agency hereunder with respect thereto, other than any covenants and obligations provided by the grant deed by which the Property are conveyed to the Developer hereunder. Section 6.11. Attornevs' Fees. If either party hereto files any action or brings any action or proceeding against the other arising out of this Agreement, or is made a party to any action or proceeding brought by the Escrow Agent, then as between the Developer and the Agency, the prevailing party shall be entitled to recover as an element of its costs of suit, and not 4812-3945-3441.1 11114/06jmm 56 P:\Ageodas\Agcnda Auachmcnts\Agrmls-Amend 2006\1 ]-2(}.{)6 La Placilo final DVA_doc as damages, its reasonable attorneys' fees as fixed by the Court in such action or proceeding or in a separate action or proceeding brought to recover such attorneys' fees. Section 6.12. Effect. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, executors, administrators, legal representatives, successors and assigns. Section 6.13. Severance. If any provisions of this Agreement are held to be illegal or invalid or unenforceable, such provisions shall be fully severable. The Agreement shall be construed and enforced as if such illegal, invalid or unenforceable provision had never comprised a part thereof, the remaining provisions thereof shall remain in full force and shall not be affected by the illegal, invalid, or unenforceable provisions or by its severance therefrom, Section 6.14. Time is of the Essence. Time is of the essence in this Agreement. Section 6.15. Business Registration Certificate. The Developer warrants that it possesses, or shall obtain immediately after the execution and delivery of this Agreement, and maintain during the period of time which is the longer of (i) the term of this Agreement or (ii) the date that the Project is owned by the Developer, a business registration certificate pursuant to Title 5 of the City of San Bernardino Municipal Code, together with any and all other licenses, permits, qualifications, insurance and approvals of whatever nature that are legally required to be maintained by the Developer to conduct its business activities within the City. ARTICLE VII ENTIRE AGREEMENT. WAIVERS AND AMENDMENT Section 7.01. Entire Agreement. (a) This Agreement shall be executed in three (3) duplicate originals each of which is deemed to be an original. This Agreement includes (_) pages and _ (_) Exhibits lettered "A" through "R", inclusive, which constitute the entire understanding and Agreement of the parties. (b) This Agreement integrates all of the terms and conditions mentioned herein or incidental hereto, and supersedes all negotiations or previous agreements between the parties with respect to all or any portion of the Project and the development thereof. (c) None of the terms, covenants, agreements or conditions set forth in this Agreement shall be deemed to be merged with the grant deed conveying title to the Property, and this Agreement shall continue in full force and effect before and after such conveyance until issuance of the Certificate of Completion. (d) All waivers of the prOVISIOns of this Agreement and all amendments hereto must be in writing and signed by the appropriate authorities of the Agency and the Developer. 4812-3945-3441.1 111l4/06 jmm 57 r:\Agendas\Age~a Allacllmcnts\Agrmts-Amend 2006\1 J -20-06 La Placila Final DDA.doc ARTICLE VIII TIME FOR ACCEPTANCE OF AGREEMENT BY AGENCY AND RECORDATION Section 8.0 I. Execution and Recordation. (a) In the event that the Developer has not approved, executed and delivered this Agreement to the Agency within forty-five (45) calendar days after approval hereof by the governing body of the Agency, then no provision of this Agreement shall be of any force or effect for any purpose and the Agency shall have no further authorization to execute and deliver this Agreement thereafter. The date of this Agreement shall be the date when this Agreement shall have been approved by the Agency. (b) The Developer and the Agency agree to permit recordation of a notice of agreement in the form attached hereto and incorporated herein by this reference as Exhibit "I" , concurrently upon the Close of Escrow in the Office of the County Recorder for the County where the Property is located. /// /// /// /// /// /// /// /// /// /// /// /// /// /// 4812-3945-3441.1 11/14/06 jmm 58 P:\Agendas\Agcnda Atlactllncnls\Agrmts-Amend 2006\] J -20-06 La Placita final DDA.doc IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as ofthe dates set forth below. AGENCY Redevelopment Agency of the City of San Bernardino, a public body, corporate and politic Date: By: Maggie Pacheco, Executive Director APPROVED AS TO FORM AND LEGAL CONTENT: A~ DEVELOPER La Placita on 2nd Street, LLC, a California limited liability company Date: By: Title: [All Signatures Must Be Notarized] 4812-3945-3441.1 11114/06jmm 59 P:\Agcndas\Agenda Allachmcnts\Agrmls-Amcnd 2006\11-20-06 La Placita Final DDA.lloc EXHIBIT "A-I" LEGAL DESCRIPTION OF THE AGENCY PROPERTY Agencv Property THAT PORTION OF LOT 14 IN BLOCK 15 OF RANCHO SAN BERNARDINO, IN THE CITY OF SAN BERNARDINO, COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 7 OF MAPS, PAGE 2, RECORDS OF SAID COUNTY, DESCRIBED AS FOLLOWS: APN: 0138-301-03 BEGINNING AT THE INTERSECTION OF THE WEST LINE OF "K" STREET, WITH THE SOUTH LINE OF THIRD STREET, AS SAID LINE IS DEFINED BY DEED FROM SANTA FE LAND IMPROVEMENT COMPANY, IN THE CITY OF SAN BERNARDINO, DATED OCTOBER 15, 1917, THENCE SOUTH ALONG SAID WEST LINE OF "K" STREET, 54.5 FEET, THENCE WEST AND PARALLEL WITH THE SOUTH LINE OF THIRD STREET, 155 FEET, THENCE NORTH 54.5 FEET, MORE OR LESS, TO THE SOUTH LINE OF THIRD STREET, THENCE EAST ALONG THE SOUTH LINE OF THIRD STREET, 155 FEET TO THE POINT OF BEGINNING. APN: 0138-301-04 COMMENCING AT THE SOUTHWEST CORNER OF THIRD AND "K" STREETS, THE SOUTH LINE OF SAID THIRD STREET, BEING DESIGNATED BY DEED FROM SANTA FE LAND AND IMPROVEMENT COMPANY, TO THE CITY OF SAN BERNARDINO, DATED OCTOBER 15, 1917 AND RECORDED NOVEMBER 14, 1917 IN BOOK 622, PAGE 157, OF DEEDS, SAID POINT BEING 262.5 FEET SOUTH AND 20 FEET WEST OF THE NORTHEAST CORNER OF SAID LOT 14; THENCE SOUTH ALONG THE WEST LINE OF "K" STREET, 54.5 FEET TO THE POINT OF BEGINNING; THENCE CONTINUING SOUTH ALONG THE WEST LINE OF SAID "K" STREET, 50 FEET TO A POINT 367 FEET SOUTH AND 20 FEET WEST OF THE NORTHWEST CORNER OF SAID LOT 14; THENCE WEST 155 FEET TO THE WEST LINE OF THE EAST ONE-HALF OF SAID LOT 14;THENCE NORTH ALONG THE WEST LINE OF SAID EAST ONE-HALF, 50 FEET TO A POINT 54.5 FEET SOUTH OF THE SOUTH LINE OF THIRD STREET; THENCE EAST PARALLEL TO THE SOUTH LINE OF SAID THIRD STREET, 155 FEET TO THE POINT OF BEGINNING. APN: 0138-301-05 BEGINNING 367 FEET SOUTH AND 20 FEET WEST OF THE NORTHEAST CORNER OR SAID LOT; THENCE SOUTH 50 FEET; THENCE WEST 146 Y2 FEET; THENCE NORTH 50 FEET; THENCE EAST 146 Yz FEET TO THE POINT OF BEGINNING. 4812.3945.3441.1 11l14/06jmm A-1-1 EXHIBIT A-2 LEGAL DESCRIPTION OF THE DEVELOPER PROPERTY Developer Property THAT PORTION OF LOT 14, BLOCK 15 OF THE SAN BERNARDINO RANCHO, IN THE CITY OF SAN BERNARDINO, COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA, AS PER PLAT RECORDED IN BOOK 7 OF MAPS, PAGE 2, RECORDS OF SAID COUNTY, DESCRffiED AS FOLLOWS: PARCEL A: BEGINNING AT A POINT IN THE WEST LINE OF UK" STREET, WHICH IS 20 FEET WEST AND 141.5 FEET NORTH OF THE SOUTHEAST CORNER OF SAID LOT 14; THENCE NORTH 75 FEET, MORE OR LESS, TO A POINT 417 FEET SOUTH OF THE NORTH LINE OF SAID LOT 14; THENCE WEST 155 FEET MORE OR LESS, TO THE WEST LINE OF THE EAST ONE-HALF OF SAID LOT 14; THENCE SOUTH 75 FEET MORE OR LESS, TO A POINT 141.5 FEET NORTH OF THE SOUTH LINE OF SAID LOT 14; THENCE EAST 155 FEET, MORE OR LESS, TO THE PLACE OF BEGINNING. PARCEL B: BEGINNING AT THE NORTH LINE OF SECOND STREET, DISTANT THEREON 75 FEET WEST OF THE NORTHWEST CORNER OF UK" AND SECOND STREETS, WHICH CORNER IS 21.5 FEET NORTH AND 20 FEET WEST OF THE SOUTHEAST CORNER OF SAID LOT 14; THENCE NORTH 120 FEET; THENCE WEST 89 FEET, MORE OR LESS, TO THE WEST LINE OF THE EAST HALF OF SAID LOT 14; THENCE SOUTH 120 FEET; THENCE EAST 80 FEET TO THE POINT OF BEGINNING. PARCEL C: THAT PORTION OF LOTS 11,12,13 AND 14, BLOCK 15, OF THE RANCHO SAN BERNARDINO, IN THE COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA, AS PER PLAT RECORDED IN BOOK 7 OF MAPS, PAGE 2, RECORDS OF SAID COUNTY, MORE P ARTICULARL Y DESCRffiED AS FOLLOWS: BEGINNING AT THE INTERSECTION OF THE EAST LINE OF SAID LOT 13; WITH A LINE WHICH IS PARALLEL WITH AND DISTANT 21.5 FEET NORTHERLY OF THE SOUTHERLY LINE OF SAID LOT 13; THENCE SOUTH 89 DEG. 55' 20' WEST ALONG SAID PARALLEL LINE AND ALONG A LINE WHICH IS PARALLEL AND DISTANT 21.5 FEET NORTHERLY FROM THE SOUTHERLY LINE OF SAID LOT 11 AND 12, A 4812-3945-34411 11/14/06 jmm A-2 -1 DISTANCE OF 985.94 FEET TO A POINT WHICH LIES NORTH 89 DEG. 55' 20" EAST ALONG SAID PARALLEL LINE, 429.21 FEET FROM THE EAST LINE OF MOUNT VERNON A VENUE (82.5 FEET IN WIDTH); THENCE NORTHWESTERLY AND NORTHEASTERLY ALONG THE EASTERLY LINE OF THAT CERTAIN PARCEL OF LAND DESCRIBED IN DEED OF EASEMENT FOR HIGHWAY PURPOSES RECORDED JUNE 29,1933, IN BOOK 720 OF OFFICIAL RECORDS, PAGE 306, AS FOLLOWS: ALONG THE ARC OF A CURVE TANGENT TO LAST COURSE CONCAVE NORTHEASTERLY AND HAVING A RADIUS OF 14.23 FEET, A DISTANCE OF 31.89 FEET; THENCE NORTH 38 DEG. 19' 50" EAST TANGENT OF SAID CURVE 231.42 FEET; THENCE NORTHEASTERLY ALONG THE ARC OF A CURVE TANGENT TO LAST COURSE CONCA VE SOUTHEASTERLY AND HAVING A RADIUS OF 170.09 FEET, A DISTANCE OF 224.46 FEET TO A POINT IN THE SOUTHERLY LINE OF THIRD STREET, AS CONVEYED TO THE CITY OF SAN BERNARDINO BY DEED RECORDED IN BOOK 622 OF DEEDS, PAGE 157; THENCE LEAVING THE EASTERLY LINE OF SAID EASEMENT PARCEL (BOOK 720 OF OFFICIAL RECORDS, PAGE 306) NORTH 85 DEG. 56' 50" EAST ALONG SAID SOUTHERLY LINE OF THIRS STREET, A DISTANCE OF 663.10 FEET TO THE EASTERLY LINE OF SAID LOT 13; THENCE CONTINUING EAST ALONG THE SOUTH LINE OF SAID THIRD STREET, 172.50 FEET; THENCE SOUTH 14.5 FEET PARALLEL WITH THE WEST LINE OF "K" STREET, SO-CALLED; THENCE EAST TO THE EAST LINE OF THE WEST '/2 OF LOT 14; THENCE SOUTH ALONG THE EAST LINE OF THE WEST 1/2 OF SAID LOT 14,213 FEET; THENCE WEST PARALLEL WITH THE SOUTH LINE OF THIRD STREET TO A POINT WHICH IS SOUTH, BEARING ALONG A LINE PARALLEL TO THE WEST LINE OF SAID LOT 14 FROM THE NORTHEAST CORNER OF THE PARCEL HEREIN DESCRIBED WHICH IS LOCATED ON THE SOUTH LINE OF THIRD STREET; THENCE SOUTH 103.90 FEET, MORE OR LESS, TO A POINT 45.5 FEET NORTH OF THE SOUTH LINE OF SAID LOT 14; THENCE WEST PARALLEL TO AND 45.5 FEET NORTH OF SAID LOT 14; THENCE WEST PARALLEL TO AND 45.5 FEET NORTH OF THE SOUTH LINE OF SAID LOT 14; 172.50 FEET, MORE OR LESS, TO THE EAST LINE OF SAID LOT 13; THENCE SOUTH ALONG THE EAST LINE OF SAID LOT 13, 24 FEET TO THE POINT OF BEGINNING. APN: 0138-301-06 (All of Parcel A), APN: 0138-301-08 (All of Parcel B) and APN's: 0138- 263-02 and 0138-301-01 and 0138-301-10 (Portions of Parcel C) 4812-3945-3441.1 11114/06 jmm A-2- 2 EXHIBIT "A-3" LEGAL DESCRIPTION OF THE BELICHESKY PROPERTY Belicheskv Property THAT PORTION OF LOT 14 IN BLOCK 15 OF SAN BERNARDINO RANCHO, IN THE CITY OF SAN BERNARDINO, AS PER PLAT RECORDED IN BOOK 7 OF MAPS, PAGE 2, RECORDS OF SAID COUNTY, DESCRIBED AS FOLLOWS: COMMENCING AT THE NORTHWEST CORNER OF uK" STREET AND 2ND STREET, SAID PORTION BEING 21.5 FEET NORTH AND 20 FEET WEST OF THE SOUTHEAST CORNER OF SAID LOT 14; THENCE NORTH 120 FEET; THENCE WEST 75 FEET; THENCE SOUTH 120 FEET; THENCE EAST 75 FEET TO THE POINT OF BEGINNING. EXCEPTING: BEGINNING AT A POINT WHICH IS 20 FEET WEST AND 21.5 FEET NORTH OF THE SOUTHEAST CORNER OF SAID LOT 14, SAID POINT BEING IN THE WEST LINE OF UK" STREET; THENCE NORTH ALONG THE WEST LINE OF UK" STREET, 24 FEET; THENCE WEST AND PARALLEL WITH THE NORTH LINE OF SECOND STREET, 75 FEET; THENCE SOUTHERLY AND PARALLEL WITH THE WEST LINE OF UK" STREET, 24 FEET TO THE NORTH LINE OF SECOND STREET; THENCE EAST ALONG THE NORTH LINE OF SECOND STREET, 75 FEET TO THE POINT OF BEGINNING. APN: 0138-301-07 4812-3945-3441.1 11l14/06jmm A-3 - 1 EXHIBIT "A-4" LEGAL DESCRIPTION OF THE SPAR PROPERTY THAT PORTION OF LOT 14, BLOCK 15 OF THE SAN BERNARDINO RANCHO, IN THE CITY OF SAN BERNARDINO, COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA, AS PER PLAT RECORDED IN BOOK 7 OF MAPS, PAGE 2, RECORDS OF SAID COUNTY, DESCRffiED AS FOLLOWS: APN: 0138-301-08 BEGINNING AT THE NORTH LINE OF SECOND STREET, DISTANT THEREON 75 FEET WEST OF THE NORTHWEST CORNER OF UK" AND SECOND STREETS, WHICH CORNER IS 21.5 FEET NORTH AND 20 FEET WEST OF THE SOUTHEAST CORNER OF SAID LOT 14; THENCE NORTH 120 FEET; THENCE WEST 89 FEET, MORE OR LESS, TO THE WEST LINE OF THE EAST HALF OF SAID LOT 14; THENCE SOUTH 120 FEET; THENCE EAST 80 FEET TO THE POINT OF BEGINNING. 4812-3945-3441.1 11114/06 jmm A-4 - 1 EXHIBIT "8" PROJECT DESCRIPTION AND SCOPE OF DEVELOPMENT Construct an approximately 100,000 square foot retail center on approximately 7.65 acres located between 2nd and 3rd Street and between "K" Street and Giovanola Avenue. The new retail center will include a new 45,000 square foot supermarket along with the appropriate parking, lighting, landscaping, irrigation, etc. as required to meet the requirements of the Development Code and the approval of the Planning Commission, Community Development Commission, and/or any other legislative body where approval is required. 4812.3945-3441.1 11114/06 jmm B-1 EXHIBIT "C" AGENCY GRANT DEED 4812-3945-3441.1 I III 4/06 jrnm C - 1 RECORDING REQUESTED BY AND ) AFfER RECORDING MAIL TO: ) ) Merona Enterprises, Inc. ) clo La Placita on 2nd Street ) 9550 Firestone Blvd., Suite 105 ) Downey, CA 90241 ) ) Exempt from Recording Fee ) pursuant to Gov't Code Section 27383 ) (Space Above for Recorder's Use) REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO AGENCY GRANT DEED For valuable consideration, the receipt of which is hereby acknowledged, the REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO, a public body, corporate and politic of the State of California (the "Grantor") hereby grants to LA PLACIT A ON 2ND STREET, LLC, a California limited liability company (the "Grantee"), that certain real property located in the City of San Bernardino, State of California, the legal description of which is more particularly described in Exhibit "A" attached hereto and incorporated herein by this reference (the "Property"). I. The Property is conveyed subject to that certain 2006 Disposition and Development Agreement dated as of November _, 2006 ("Agreement") By and Between the Redevelopment Agency of the City Of San Bernardino, a public body, corporate and politic, and La Placita on 2nd Street, LLC, a California limited liability company. The provisions of the Agreement are incorporated herein by this reference and shall be deemed to be a part hereof as if set forth at length herein. 2. The Grantee covenants by and for itself, its heirs, executors, administrators and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex, age, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Property, nor shall the Grantee or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees in or on the Property. All deeds, leases or contracts made relative to the Property shall contain the following nondiscrimination clauses: (a) In deeds: "The grantee herein covenants by and for itself, its heirs, executors, administrators and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex, age, marital status, 4812-3945-3441.1 11/14/06jrnm C - 2 national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land herein conveyed, nor shall the grantee, or any person claiming under or through the grantee, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, locations, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees in or on the land herein conveyed. The foregoing covenants shall run with the land." (b) In leases: "The lessee herein covenants by and for itself, its heirs, executors, administrators and assigns, and all persons claiming under or through them, and this lease is made and accepted upon and subject to the following conditions: That there shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex, age, 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 itself, or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy, of tenants, lessees, subtenants, sublessees or vendees in the land herein leased." (c) In contracts: "There shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex, age, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land, nor shall the transferee itself, or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the land." 3. No violation or breach of the covenants, conditions, restrictions, provisions or limitations contained in this Agency 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 permitted by the Agreement; provided, however, that any successor of Grantee to the Property 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. 4. The covenants contained in this Agency Grant Deed against discrimination and segregation shall remain in effect in perpetuity. 5. The covenants contained in this Agency Grant Deed shall be binding for the benefit of the Grantor and its successors and assigns, and such covenants shall run in favor of the Grantor for the entire period during which such covenants shall be in full force and effect, without regard to whether the Grantor is or remains an owner of any land or interest herein to 4812-3945-3441.1 11/14/06 jmm C - 3 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, and to maintain any actions at law or suits in equity or other proper proceedings, to enforce the curing of such breach as provided in the Agreement or by law. The covenants contained in this Agency Grant Deed shall be for the benefit of and shall be enforceable only by the Grantor and its successor. IN WITNESS WHEREOF, the Grantor and Grantee have caused this instrument to be executed on their behalf by their respective officers thereunto duly authorized this _ day of , 2006. Grantor: REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO, a public body, corporate and politic By: Maggie Pacheco, Executive Director ATTEST: Agency Secretary APPROVED AS TO FORM: Lewis Brisbois Bisgaard & Smith LLP By: Agency Counsel 4812-3945-3441.1 11/14/06 jmm C-4 ACCEPTANCE OF AGENCY GRANT DEED THE PROVISIONS OF THIS AGENCY GRANT DEED ARE HEREBY APPROVED AND ACCEPTED. Grantee: LA PLACIT A ON 2ND STREET, LLC, a California limited liability company By: Name: Title: Date: 4812.3945-3441.1 11l14/06jrnm C - 5 EXHIBIT "A" LEGAL DESCRIPTION THAT PORTION OF LOT 14 IN BLOCK 15 OF RANCHO SAN BERNARDINO, IN THE CITY OF SAN BERNARDINO, COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 7 OF MAPS, PAGE 2, RECORDS OF SAID COUNTY, DESCRIBED AS FOLLOWS: APN: 0138-301-03 BEGINNING AT THE INTERSECTION OF THE WEST LINE OF "K" STREET, WITH THE SOUTH LINE OF THIRD STREET, AS SAID LINE IS DEFINED BY DEED FROM SANTA FE LAND IMPROVEMENT COMPANY, IN THE CITY OF SAN BERNARDINO, DATED OCTOBER IS, 1917, THENCE SOUTH ALONG SAID WEST LINE OF "K" STREET, 54.5 FEET, THENCE WEST AND PARALLEL WITH THE SOUTH LINE OF THIRD STREET, 155 FEET, THENCE NORTH 54.5 FEET, MORE OR LESS, TO THE SOUTH LINE OF THIRD STREET, THENCE EAST ALONG THE SOUTH LINE OF THIRD STREET, 155 FEET TO THE POINT OF BEGINNING. APN: 0138-301-04 COMMENCING AT THE SOUTHWEST CORNER OF THIRD AND "K" STREETS, THE SOUTH LINE OF SAID THIRD STREET, BEING DESIGNATED BY DEED FROM SANTA FE LAND AND IMPROVEMENT COMPANY, TO THE CITY OF SAN BERNARDINO, DATED OCTOBER IS, 1917 AND RECORDED NOVEMBER 14,1917 IN BOOK 622, PAGE 157, OF DEEDS, SAID POINT BEING 262.5 FEET SOUTH AND 20 FEET WEST OF THE NORTHEAST CORNER OF SAID LOT 14; THENCE SOUTH ALONG THE WEST LINE OF "K" STREET, 54.5 FEET TO THE POINT OF BEGINNING; THENCE CONTINUING SOUTH ALONG THE WEST LINE OF SAID "K" STREET, 50 FEET TO A POINT 367 FEET SOUTH AND 20 FEET WEST OF THE NORTHWEST CORNER OF SAID LOT 14; THENCE WEST 155 FEET TO THE WEST LINE OF THE EAST ONE-HALF OF SAID LOT 14; THENCE NORTH ALONG THE WEST LINE OF SAID EAST ONE-HALF, 50 FEET TO A POINT 54.5 FEET SOUTH OF THE SOUTH LINE OF THIRD STREET; THENCE EAST PARALLEL TO THE SOUTH LINE OF SAID THIRD STREET, 155 FEET TO THE POINT OF BEGINNING. APN: 0138-301-05 BEGINNING 367 FEET SOUTH AND 20 FEET WEST OF THE NORTHEAST CORNER OR SAID LOT; THENCE SOUTH 50 FEET; THENCE WEST 146 Y2 FEET; THENCE NORTH 50 FEET; THENCE EAST 146 Y2 FEET TO THE POINT OF BEGINNING. 4812-3945-3441.1 11/14/06 jrnm C-6 THAT PORTION OF LOT 14 IN BLOCK 15 OF SAN BERNARDINO RANCHO, IN THE CITY OF SAN BERNARDINO, AS PER PLAT RECORDED IN BOOK 7 OF MAPS, PAGE 2, RECORDS OF SAID COUNTY, DESCRIBED AS FOLLOWS: COMMENCING AT THE NORTHWEST CORNER OF "K" STREET AND 2ND STREET, SAID PORTION BEING 21.5 FEET NORTH AND 20 FEET WEST OF THE SOUTHEAST CORNER OF SAID LOT 14; THENCE NORTH 120 FEET; THENCE WEST 75 FEET; THENCE SOUTH 120 FEET; THENCE EAST 75 FEET TO THE POINT OF BEGINNING. EXCEPTING: BEGINNING AT A POINT WHICH IS 20 FEET WEST AND 21.5 FEET NORTH OF THE SOUTHEAST CORNER OF SAID LOT 14, SAID POINT BEING IN THE WEST LINE OF "K" STREET; THENCE NORTH ALONG THE WEST LINE OF "K" STREET, 24 FEET; THENCE WEST AND PARALLEL WITH THE NORTH LINE OF SECOND STREET, 75 FEET; THENCE SOUTHERLY AND PARALLEL WITH THE WEST LINE OF "K" STREET, 24 FEET TO THE NORTH LINE OF SECOND STREET; THENCE EAST ALONG THE NORTH LINE OF SECOND STREET, 75 FEET TO THE POINT OF BEGINNING. APN: 0138-301-07 4812-3945-3441.1 111l4/06jrnm C -7 EXHIBIT "D" SCHEDULE OF PERFORMANCE (Days shall be calendar days, and all dates herein are subject to change due to force majeure in accordance with Section 6.05 of the Agreement) Agency approval of DDA is November 20, 2006 The Developer shall commence the following within the time periods provided herein: (a) (b) (c) (d) (e) (f) 4812-3945-3441.1 11114/06jrnm The Developer will open Escrow within thirty (30) days after the date of the Agreement, and the Agency will deposit deeds in Escrow as soon as practicable thereafter prior to the then anticipated Close of Escrow. The Developer will obtain building permits within one hundred eighty (180) calendar days after the Close of Escrow for the initial phase or phases, as applicable, of the Project. Mass grade the entire Property area, as appropriate, shall commence within ninety (90) calendar days after approval of the master grading plan. The Developer shall commence to demolish the unused portion of the El Tigre building located on the Project, at its sole cost and expense, within one hundred eighty (180) calendars days from the mutual execution of the Agreement. The Developer shall complete the demolition of the unused portion of the El Tigre building located on the Project, within two hundred forty (240) calendar days from the mutual execution of the Agreement. Street improvements and the other Off-Site Public Improvements will be commenced by the Developer upon completion of the sewer and water. The development of street improvements and the other Off-Site Public Improvements will be based upon construction phasing. Landscaping will commence upon completion of the street improvements. (g) The Developer shall commence construction within sixty (60) calendar days after the Developer has obtained the applicable building permits for that portion of the Project as required by item (b) above. (h) The Project will be completed within two (2) years after commencement of the work of the improvements after the issuance of the first building permit for the vertical structures comprising the Project have been issued for the Property. D-1 EXHIBIT "E" Merona Enterprises, Inc. clo La Placita on 2nd Street 9550 Firestone Blvd., Suite 105 Downey, CA 90241 ) ) ) ) ) ) ) ) WHEN RECORDED, MAIL TO: (Space Above Line For Use By Recorder) CERTIFICATE OF COMPLETION I, ' the Secretary of the Redevelopment Agency of the City of San Bernardino (the "Agency") hereby certify as follows: Section 1. The improvements required to be constructed in accordance with that certain Disposition and Development Agreement (the "Agreement") dated November -, 2006, by and among the Agency and La Placita on 2nd Street, LLC, a California limited liability company (the "Developer"), on Assessor Parcel Number 0138-301-01, Assessor Parcel Number 0138-301-03, Assessor Parcel Number 0138-301-04, Assessor Parcel Number 0138-301-05, Assessor Parcel Number 0138-301-06, Assessor Parcel Number 0138-301-07, Assessor Parcel Number 0138-301-08, Assessor Parcel Number 0138-301-10 and Assessor Parcel Number 0138- 263-02 (the "Project") more fully described in Exhibit "A" attached hereto and incorporated herein by this reference, have been completed in accordance with the provisions of said Agreement. Section 2. This Certificate of Completion shall constitute a conclusive determination of satisfaction of the agreements and covenants contained in the Agreement with respect to the obligations of the Developer, and its successors and assigns, to construct and develop the Project, excluding any normal and customary tenant improvements and minor building "punch-list" items, and including any and all buildings and any and all parking, landscaping and related improvements necessary to support or which meet the requirements applicable to the Project and its use and occupancy on the Project, whether or not said improvements are on the Project or on other property subject to the Agreement, all as described in the Agreement, and to otherwise comply with the Developer's obligations under the Agreement with respect to the Project and the dates for the beginning and completion of construction of improvements thereon under the Agreement; provided, however, that the Agency may enforce any covenant surviving this Certificate of Completion in accordance with the terms and conditions of the Agreement and the Agency Grant Deed pursuant to which the Property was conveyed under the Agreement. Said Agreement is an official record of the Agency and a copy of said Agreement may be inspected in the office of the Secretary of the Redevelopment Agency 4812-3945-3441.1 11/14/06jmm E-1 of the City of San Bernardino located at 201 North "E" Street, Suite 301, San Bernardino, California, during regular business hours. Section 3. The Project to which this Certificate of Completion pertains is more fully described in Exhibit "A" attached hereto. DATED AND ISSUED this day of ,200_. By: Maggie Pacheco, Executive Director Redevelopment Agency of the City of San Bernardino 4812.3945.3441.1 11/14/06 jmm E.2 EXHIBIT "A" THAT PORTION OF LOT 14 IN BLOCK 15 OF RANCHO SAN BERNARDINO, IN THE CITY OF SAN BERNARDINO, COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 7 OF MAPS, PAGE 2, RECORDS OF SAID COUNTY, DESCRIBED AS FOLLOWS: APN: 0138-301-03 BEGINNING AT THE INTERSECTION OF THE WEST LINE OF uK" STREET, WITH THE SOUTH LINE OF THIRD STREET, AS SAID LINE IS DEFINED BY DEED FROM SANTA FE LAND IMPROVEMENT COMPANY, IN THE CITY OF SAN BERNARDINO, DATED OCTOBER IS, 1917, THENCE SOUTH ALONG SAID WEST LINE OF uK" STREET, 54.5 FEET, THENCE WEST AND PARALLEL WITH THE SOUTH LINE OF THIRD STREET, 155 FEET, THENCE NORTH 54.5 FEET, MORE OR LESS, TO THE SOUTH LINE OF THIRD STREET, THENCE EAST ALONG THE SOUTH LINE OF THIRD STREET, 155 FEET TO THE POINT OF BEGINNING. APN: 0138-301-04 COMMENCING AT THE SOUTHWEST CORNER OF THIRD AND UK" STREETS, THE SOUTH LINE OF SAID THIRD STREET, BEING DESIGNATED BY DEED FROM SANTA FE LAND AND IMPROVEMENT COMPANY, TO THE CITY OF SAN BERNARDINO, DATED OCTOBER IS, 1917 AND RECORDED NOVEMBER 14, 1917 IN BOOK 622, PAGE 157, OF DEEDS, SAID POINT BEING 262.5 FEET SOUTH AND 20 FEET WEST OF THE NORTHEAST CORNER OF SAID LOT 14; THENCE SOUTH ALONG THE WEST LINE OF UK" STREET, 54.5 FEET TO THE POINT OF BEGINNING; THENCE CONTINUING SOUTH ALONG THE WEST LINE OF SAID UK" STREET, 50 FEET TO A POINT 367 FEET SOUTH AND 20 FEET WEST OF THE NORTHWEST CORNER OF SAID LOT 14; THENCE WEST 155 FEET TO THE WEST LINE OF THE EAST ONE-HALF OF SAID LOT 14; THENCE NORTH ALONG THE WEST LINE OF SAID EAST ONE-HALF, 50 FEET TO A POINT 54.5 FEET SOUTH OF THE SOUTH LINE OF THIRD STREET; THENCE EAST PARALLEL TO THE SOUTH LINE OF SAID THIRD STREET, 155 FEET TO THE POINT OF BEGINNING. APN: 0138-301-05 BEGINNING 367 FEET SOUTH AND 20 FEET WEST OF THE NORTHEAST CORNER OR SAID LOT; THENCE SOUTH 50 FEET; THENCE WEST 146 Y2 FEET; THENCE NORTH 50 FEET; THENCE EAST 146 Y2 FEET TO THE POINT OF BEGINNING. 4812-3945-3441.1 11114/06jmm E- 3 THAT PORTION OF LOT 14 IN BLOCK 15 OF SAN BERNARDINO RANCHO, IN THE CITY OF SAN BERNARDINO, AS PER PLAT RECORDED IN BOOK 7 OF MAPS, PAGE 2, RECORDS OF SAID COUNTY, DESCRffiED AS FOLLOWS: COMMENCING AT THE NORTHWEST CORNER OF "K" STREET AND 2ND STREET, SAID PORTION BEING 21.5 FEET NORTH AND 20 FEET WEST OF THE SOUTHEAST CORNER OF SAID LOT 14; THENCE NORTH 120 FEET; THENCE WEST 75 FEET; THENCE SOUTH 120 FEET; THENCE EAST 75 FEET TO THE POINT OF BEGINNING. EXCEPTING: BEGINNING AT A POINT WHICH IS 20 FEET WEST AND 21.5 FEET NORTH OF THE SOUTHEAST CORNER OF SAID LOT 14, SAID POINT BEING IN THE WEST LINE OF "K" STREET; THENCE NORTH ALONG THE WEST LINE OF "K" STREET, 24 FEET; THENCE WEST AND PARALLEL WITH THE NORTH LINE OF SECOND STREET, 75 FEET; THENCE SOUTHERLY AND PARALLEL WITH THE WEST LINE OF "K" STREET, 24 FEET TO THE NORTH LINE OF SECOND STREET; THENCE EAST ALONG THE NORTH LINE OF SECOND STREET, 75 FEET TO THE POINT OF BEGINNING. APN: 0138-301-07 4812-3945-3441.1 11114106 jmm E-4 THAT PORTION OF LOT 14, BLOCK 15 OF THE SAN BERNARDINO RANCHO, IN THE CITY OF SAN BERNARDINO, COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA, AS PER PLAT RECORDED IN BOOK 7 OF MAPS, PAGE 2, RECORDS OF SAID COUNTY, DESCRIBED AS FOLLOWS: PARCEL A: BEGINNING AT A POINT IN THE WEST LINE OF "K" STREET, WHICH IS 20 FEET WEST AND 141.5 FEET NORTH OF THE SOUTHEAST CORNER OF SAID LOT 14; THENCE NORTH 75 FEET, MORE OR LESS, TO A POINT 417 FEET SOUTH OF THE NORTH LINE OF SAID LOT 14; THENCE WEST 155 FEET MORE OR LESS, TO THE WEST LINE OF THE EAST ONE-HALF OF SAID LOT 14; THENCE SOUTH 75 FEET MORE OR LESS, TO A POINT 141.5 FEET NORTH OF THE SOUTH LINE OF SAID LOT 14; THENCE EAST 155 FEET, MORE OR LESS, TO THE PLACE OF BEGINNING. PARCEL B: BEGINNING AT THE NORTH LINE OF SECOND STREET, DISTANT THEREON 75 FEET WEST OF THE NORTHWEST CORNER OF "K" AND SECOND STREETS, WHICH CORNER IS 21.5 FEET NORTH AND 20 FEET WEST OF THE SOUTHEAST CORNER OF SAID LOT 14; THENCE NORTH 120 FEET; THENCE WEST 89 FEET, MORE OR LESS, TO THE WEST LINE OF THE EAST HALF OF SAID LOT 14; THENCE SOUTH 120 FEET; THENCE EAST 80 FEET TO THE POINT OF BEGINNING. PARCEL C: THAT PORTION OF LOTS 11,12,13 AND 14, BLOCK 15, OF THE RANCHO SAN BERNARDINO, IN THE COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA, AS PER PLAT RECORDED IN BOOK 7 OF MAPS, PAGE 2, RECORDS OF SAID COUNTY, MORE PARTICULARLY DESCRIBED AS FOLLOWS: BEGINNING AT THE INTERSECTION OF THE EAST LINE OF SAID LOT 13; WITH A LINE WHICH IS PARALLEL WITH AND DISTANT 21.5 FEET NORTHERLY OF THE SOUTHERLY LINE OF SAID LOT 13; THENCE SOUTH 89 DEG. 55'. 20' WEST ALONG SAID PARALLEL LINE AND ALONG A LINE WHICH IS PARALLEL AND DISTANT 21.5 FEET NORTHERLY FROM THE SOUTHERLY LINE OF SAID LOT 11 AND 12, A DISTANCE OF 985.94 FEET TO A POINT WHICH LIES NORTH 89 DEG. 55' 20" EAST ALONG SAID PARALLEL LINE, 429.21 FEET FROM THE EAST LINE OF MOUNT VERNON A VENUE (82.5 FEET IN WIDTH); THENCE NORTHWESTERLY AND NORTHEASTERLY ALONG THE EASTERLY LINE OF THAT CERTAIN PARCEL OF LAND DESCRIBED IN DEED OF EASEMENT FOR HIGHWAY PURPOSES RECORDED JUNE 29,1933, IN BOOK 720 OF OFFICIAL RECORDS, PAGE 306, AS FOLLOWS: 4812-)945-3441.1 11/14/06 jmm E-5 ALONG THE ARC OF A CURVE TANGENT TO LAST COURSE CONCAVE NORTHEASTERLY AND HAVING A RADIUS OF 14.23 FEET, A DISTANCE OF 31.89 FEET; THENCE NORTH 38 DEG. 19' 50" EAST TANGENT OF SAID CURVE 231.42 FEET; THENCE NORTHEASTERLY ALONG THE ARC OF A CURVE TANGENT TO LAST COURSE CONCA VE SOUTHEASTERLY AND HAVING A RADIUS OF 170.09 FEET, A DISTANCE OF 224.46 FEET TO A POINT IN THE SOUTHERLY LINE OF THIRD STREET, AS CONVEYED TO THE CITY OF SAN BERNARDINO BY DEED RECORDED IN BOOK 622 OF DEEDS, PAGE 157; THENCE LEAVING THE EASTERLY LINE OF SAID EASEMENT PARCEL (BOOK 720 OF OFFICIAL RECORDS, PAGE 306) NORTH 85 DEG. 56' 50" EAST ALONG SAID SOUTHERLY LINE OF THIRS STREET, A DISTANCE OF 663.10 FEET TO THE EASTERLY LINE OF SAID LOT 13; THENCE CONTINUING EAST ALONG THE SOUTH LINE OF SAID THIRD STREET, 172.50 FEET; THENCE SOUTH 14.5 FEET PARALLEL WITH THE WEST LINE OF "K" STREET, SO-CALLED; THENCE EAST TO THE EAST LINE OF THE WEST V2 OF LOT 14; THENCE SOUTH ALONG THE EAST LINE OF THE WEST V2 OF SAID LOT 14, 213 FEET; THENCE WEST PARALLEL WITH THE SOUTH LINE OF THIRD STREET TO A POINT WHICH IS SOUTH, BEARING ALONG A LINE PARALLEL TO THE WEST LINE OF SAID LOT 14 FROM THE NORTHEAST CORNER OF THE PARCEL HEREIN DESCRIBED WHICH IS LOCATED ON THE SOUTH LINE OF THIRD STREET; THENCE SOUTH 103.90 FEET, MORE OR LESS, TO A POINT 45.5 FEET NORTH OF THE SOUTH LINE OF SAID LOT 14; THENCE WEST PARALLEL TO AND 45.5 FEET NORTH OF SAID LOT 14; THENCE WEST PARALLEL TO AND 45.5 FEET NORTH OF THE SOUTH LINE OF SAID LOT 14; 172.50 FEET, MORE OR LESS, TO THE EAST LINE OF SAID LOT 13; THENCE SOUTH ALONG THE EAST LINE OF SAID LOT 13, 24 FEET TO THE POINT OF BEGINNING. APN: 0138-301-06 (All of Parcel A), APN: 0138-301-08 (All of Parcel B) and APN's: 0138- 263-02 and 0138-301-01 and 0138-301-10 (Portions of Parcel C) 4812-3945-3441.1 11/14/06 jmm E-6 EXHIBIT "F" LEGAL DESCRIPTION OF KOVATS PROPERTY Kovats Property APN's: 0138-293-03. 04. 05. 07 and 08 THE WEST 45 FEET OF LOT 13, THE EAST 3 FEET OF LOT 13 AND ALL OF LOT 14, LOT 15, LOT 17 AND LOT 18, BLOCK 8, INSURANCE LOAN AND LAND COMPANY SUBDIVISION, IN THE CITY OF SAN BERNARDINO, COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA, AS PER PLAT RECORDED IN BOOK 16 OF MAPS, PAGE 37, RECORDS OF SAID COUNTY. APN's: 0138-291-02. 03. 04. 05 AND 19 LOTS 14, 15, 16, 17, 18, 19 AND 20, BLOCK 5, INSURANCE LOAN AND LAND COMPANY SUBDIVISION, IN THE CITY OF SAN BERNARDINO, COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA, AS PER PLAT RECORDED IN BOOK 16 OF MAPS, PAGE 37, RECORDS OF SAID COUNTY. APN: 0138-302-26 LOTS 3 TO 9, INCLUSIVE, BLOCK 1, WRIGHT'S SUBDIVISION OF LOTS 5 AND 6, BLOCK 15, RANCHO SAN BERNARDINO, IN THE CITY OF SAN BERNARDINO, COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 18 OF MAPS, PAGE 36, RECORDS OF SAID COUNTY. 4812.3945-3441.1 11114/06 jmm F-l EXHIBIT "G" LEGAL DESCRIPTION OF ADDITIONAL PROPERTY Additional Property APN's: 0138-293-01. 02, 06, 09 and 10 LOTS 11, 12, 16, 19 AND 20, BLOCK 8, INSURANCE LOAN AND LAND COMPANY SUBDIVISION, IN THE CITY OF SAN BERNARDINO, COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA, AS PER PLAT RECORDED IN BOOK 16 OF MAPS, PAGE 37, RECORDS OF SAID COUNTY. APN: 0138-302-03 and 27 LOTS 10, 11 AND 12, BLOCK I, WRIGHT'S SUBDIVISION OF LOTS 5 AND 6, BLOCK IS, RANCHO SAN BERNARDINO, IN THE CITY OF SAN BERNARDINO, COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 18 OF MAPS, PAGE 36, RECORDS OF SAID COUNTY. APN: 0138-302-13 THE SOUTH 40 FEET OF LOT 1 AND LOT 2, BLOCK I, WRIGHT'S SUBDIVISION OF LOTS 5 AND 6, BLOCK IS, RANCHO SAN BERNARDINO, IN THE CITY OF SAN BERNARDINO, COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 18 OF MAPS, PAGE 36, RECORDS OF SAID COUNTY. APN: 0138-302-28 LOT 1 AND LOT 2, BLOCK I, WRIGHT'S SUBDIVISION OF LOTS 5 AND 6, BLOCK IS, RANCHO SAN BERNARDINO, IN THE CITY OF SAN BERNARDINO, COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 18 OF MAPS, PAGE 36, RECORDS OF SAID COUNTY. EXCEPTING: SOUTH 40 FEET OF LOT 1 AND LOT 2. 4812-3945-3441.1 11114/06 jrnm G-l EXHIBIT "H" OFF-SITE PUBLIC IMPROVEMENTS Off-site improvements included the installation and construction of the following: New street lights; trees and landscaping; three (3) fire hydrants; curbs and cutters; sidewalks; driveway approaches; utilities; traffic signals; catch basin; handicap access ramps; street resurfacing; street median 4812-3945-3441.1 11/14106 jmm H-l EXHIBIT "I" NOTICE OF AGREEMENT 4812-3945-3441.1 1l/14/06 jmm 1- 1 Recording Requested by and When Recorded Return to: The Redevelopment Agency of the City of San Bernardino 201 North "E" Street, Suite 301 San Bernardino, CA 9240 I Exempt from Recording Fee per Government Code Section 27383 (Space above for Recorder's Use) NOTICE OF AGREEMENT The undersigned, the REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO, a public body, corporate and politic (the "Agency"), and La Placita on 2nd Street, LLC, a California limited liability company (the "Developer") are parties to that certain DISPOSITION AND DEVELOPMENT AGREEMENT (the "Agreement") dated as of November _, 2006, for reference purposes only, by and between the Agency and Developer. Said Agreement contains obligations, covenants and restrictions affecting certain property ("Site") which is legally described on the attached Attachment No. I. The Agreement is a public record of the Agency and is available for inspection and copying at the Agency's offices located at 201 North "E" Street, Suite 301, San Bernardino, California. REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO, a public body, corporate and politic By: Maggie Pacheco, Executive Director ATTEST: Agency Secretary APPROVED AS TO LEGAL FORM: Agency Counsel 4812-3945.3441.1 11114/06 jrnm 1-2 NOTARY ACKNOWLEDGMENT STATE OF CALIFORNIA } } ss. COUNTY OF SAN BERNARDINO} On before me, notary public, personally appeared , 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(ies) upon behalf of which the person acted, executed the instrument. WITNESS my hand and official seal. Signature of Notary Public 4812-3945-3441.1 11l14/06jmm 1-3 A IT ACHMENT NO.1 TO NOTICE OF AGREEMENT Legal Description of Site THAT PORTION OF LOT 14 IN BLOCK 15 OF RANCHO SAN BERNARDINO, IN THE CITY OF SAN BERNARDINO, COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 7 OF MAPS, PAGE 2, RECORDS OF SAID COUNTY, DESCRIBED AS FOLLOWS: APN: 0138-301-03 BEGINNING AT THE INTERSECTION OF THE WEST LINE OF "K" STREET, WITH THE SOUTH LINE OF THIRD STREET, AS SAID LINE IS DEFINED BY DEED FROM SANTA FE LAND IMPROVEMENT COMPANY, IN THE CITY OF SAN BERNARDINO, DATED OCTOBER 15, 1917, THENCE SOUTH ALONG SAID WEST LINE OF "K" STREET, 54.5 FEET, THENCE WEST AND PARALLEL WITH THE SOUTH LINE OF THIRD STREET, 155 FEET, THENCE NORTH 54.5 FEET, MORE OR LESS, TO THE SOUTH LINE OF THIRD STREET, THENCE EAST ALONG THE SOUTH LINE OF THIRD STREET, 155 FEET TO THE POINT OF BEGINNING. APN: 0138-301-04 COMMENCING AT THE SOUTHWEST CORNER OF THIRD AND "K" STREETS, THE SOUTH LINE OF SAID THIRD STREET, BEING DESIGNATED BY DEED FROM SANTA FE LAND AND IMPROVEMENT COMPANY, TO THE CITY OF SAN BERNARDINO, DATED OCTOBER 15,1917 AND RECORDED NOVEMBER 14, 19171N BOOK 622, PAGE 157, OF DEEDS, SAID POINT BEING 262.5 FEET SOUTH AND 20 FEET WEST OF THE NORTHEAST CORNER OF SAID LOT 14; THENCE SOUTH ALONG THE WEST LINE OF "K" STREET, 54.5 FEET TO THE POINT OF BEGINNING; THENCE CONTINUING SOUTH ALONG THE WEST LINE OF SAID "K" STREET, 50 FEET TO A POINT 367 FEET SOUTH AND 20 FEET WEST OF THE NORTHWEST CORNER OF SAID LOT 14; THENCE WEST 155 FEET TO THE WEST LINE OF THE EAST ONE-HALF OF SAID LOT 14; THENCE NORTH ALONG THE WEST LINE OF SAID EAST ONE-HALF, 50 FEET TO A POINT 54.5 FEET SOUTH OF THE SOUTH LINE OF THIRD STREET; THENCE EAST PARALLEL TO THE SOUTH LINE OF SAID THIRD STREET, 155 FEET TO THE POINT OF BEGINNING. 4812-3945-3441.1 11/14106 jmm 1-4 APN: 0138-301-05 BEGINNING 367 FEET SOUTH AND 20 FEET WEST OF THE NORTHEAST CORNER OR SAID LOT; THENCE SOUTH 50 FEET; THENCE WEST 1461/2 FEET; THENCE NORTH 50 FEET; THENCE EAST 146 \12 FEET TO THE POINT OF BEGINNING. THAT PORTION OF LOT 14 IN BLOCK 15 OF SAN BERNARDINO RANCHO, IN THE CITY OF SAN BERNARDINO, AS PER PLAT RECORDED IN BOOK 7 OF MAPS, PAGE 2, RECORDS OF SAID COUNTY, DESCRIBED AS FOLLOWS: COMMENCING AT THE NORTHWEST CORNER OF "K" STREET AND 2ND STREET, SAID PORTION BEING 21.5 FEET NORTH AND 20 FEET WEST OF THE SOUTHEAST CORNER OF SAID LOT 14; THENCE NORTH 120 FEET; THENCE WEST 75 FEET; THENCE SOUTH 120 FEET; THENCE EAST 75 FEET TO THE POINT OF BEGINNING. EXCEPTING: BEGINNING AT A POINT WHICH IS 20 FEET WEST AND 21.5 FEET NORTH OF THE SOUTHEAST CORNER OF SAID LOT 14, SAID POINT BEING IN THE WEST LINE OF "K" STREET; THENCE NORTH ALONG THE WEST LINE OF "K" STREET, 24 FEET; THENCE WEST AND PARALLEL WITH THE NORTH LINE OF SECOND STREET, 75 FEET; THENCE SOUTHERLY AND PARALLEL WITH THE WEST LINE OF "K" STREET, 24 FEET TO THE NORTH LINE OF SECOND STREET; THENCE EAST ALONG THE NORTH LINE OF SECOND STREET, 75 FEET TO THE POINT OF BEGINNING. APN: 0138-301-07 THAT PORTION OF LOT 14, BLOCK 15 OF THE SAN BERNARDINO RANCHO, IN THE CITY OF SAN BERNARDINO, COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA, AS PER PLAT RECORDED IN BOOK 7 OF MAPS, PAGE 2, RECORDS OF SAID COUNTY, DESCRIBED AS FOLLOWS: PARCEL A: BEGINNING AT A POINT IN THE WEST LINE OF "K" STREET, WHICH IS 20 FEET WEST AND 141.5 FEET NORTH OF THE SOUTHEAST CORNER OF SAID LOT 14; THENCE NORTH 75 FEET, MORE OR LESS, TO A POINT 417 FEET SOUTH OF THE NORTH LINE OF SAID LOT 14; THENCE WEST 155 FEET MORE OR LESS, TO THE WEST LINE OF THE EAST ONE-HALF OF SAID LOT 14; THENCE SOUTH 75 FEET MORE OR LESS, TO A POINT 141.5 FEET NORTH OF THE SOUTH LINE OF SAID LOT 14; THENCE EAST 155 FEET, MORE OR LESS, TO THE PLACE OF BEGINNING. PARCEL B: BEGINNING AT THE NORTH LINE OF SECOND STREET, DISTANT THEREON 75 FEET WEST OF THE NORTHWEST CORNER OF "K" AND SECOND STREETS, WHICH CORNER IS 21.5 FEET NORTH AND 20 FEET WEST OF THE SOUTHEAST CORNER OF 4812-3945-3441.1 11114/06 jrnm 1-5 SAID LOT 14; THENCE NORTH 120 FEET; THENCE WEST 89 FEET, MORE OR LESS, TO THE WEST LINE OF THE EAST HALF OF SAID LOT 14; THENCE SOUTH 120 FEET; THENCE EAST 80 FEET TO THE POINT OF BEGINNING. PARCEL C: THAT PORTION OF LOTS 11,12,13 AND 14, BLOCK 15, OF THE RANCHO SAN BERNARDINO, IN THE COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA, AS PER PLAT RECORDED IN BOOK 7 OF MAPS, PAGE 2, RECORDS OF SAID COUNTY, MORE PARTICULARLY DESCRIBED AS FOLLOWS: BEGINNING AT THE INTERSECTION OF THE EAST LINE OF SAID LOT 13; WITH A LINE WHICH IS PARALLEL WITH AND DISTANT 21.5 FEET NORTHERLY OF THE SOUTHERLY LINE OF SAID LOT 13; THENCE SOUTH 89 DEG. 55' 20' WEST ALONG SAID PARALLEL LINE AND ALONG A LINE WHICH IS PARALLEL AND DISTANT 21.5 FEET NORTHERLY FROM THE SOUTHERLY LINE OF SAID LOT 11 AND 12, A DISTANCE OF 985.94 FEET TO A POINT WHICH LIES NORTH 89 DEG. 55' 20" EAST ALONG SAID PARALLEL LINE, 429.21 FEET FROM THE EAST LINE OF MOUNT VERNON AVENUE (82.5 FEET IN WIDTH); THENCE NORTHWESTERLY AND NORTHEASTERLY ALONG THE EASTERLY LINE OF THAT CERTAIN PARCEL OF LAND DESCRIBED IN DEED OF EASEMENT FOR HIGHWAY PURPOSES RECORDED JUNE 29, 1933, IN BOOK 720 OF OFFICIAL RECORDS, PAGE 306, AS FOLLOWS: ALONG THE ARC OF A CURVE TANGENT TO LAST COURSE CONCAVE NORTHEASTERLY AND HAVING A RADIUS OF 14.23 FEET, A DISTANCE OF 31.89 FEET; THENCE NORTH 38 DEG. 19' 50" EAST TANGENT OF SAID CURVE 231.42 FEET; THENCE NORTHEASTERLY ALONG THE ARC OF A CURVE TANGENT TO LAST COURSE CONCA VE SOUTHEASTERLY AND HAVING A RADIUS OF 170.09 FEET, A DISTANCE OF 224.46 FEET TO A POINT IN THE SOUTHERLY LINE OF THIRD STREET, AS CONVEYED TO THE CITY OF SAN BERNARDINO BY DEED RECORDED IN BOOK 622 OF DEEDS, PAGE 157; THENCE LEAVING THE EASTERLY LINE OF SAID EASEMENT PARCEL (BOOK 720 OF OFFICIAL RECORDS, PAGE 306) NORTH 85 DEG. 56' 50" EAST ALONG SAID SOUTHERLY LINE OF THIRS STREET, A DISTANCE OF 663.10 FEET TO THE EASTERLY LINE OF SAID LOT 13; THENCE CONTINUING EAST ALONG THE SOUTH LINE OF SAID THIRD STREET, 172.50 FEET; THENCE SOUTH 14.5 FEET PARALLEL WITH THE WEST LINE OF uK" STREET, SO-CALLED; THENCE EAST TO THE EAST LINE OF THE WEST \12 OF LOT 14; THENCE SOUTH ALONG THE EAST LINE OF THE WEST \12 OF SAID LOT 14, 213 FEET; THENCE WEST PARALLEL WITH THE SOUTH LINE OF THIRD STREET TO A POINT WHICH IS SOUTH, BEARING ALONG A LINE PARALLEL TO THE WEST LINE OF SAID LOT 14 FROM THE NORTHEAST CORNER OF THE PARCEL HEREIN DESCRIBED WHICH IS LOCATED ON THE SOUTH LINE OF THIRD STREET; THENCE SOUTH 103.90 FEET, MORE OR LESS, TO A POINT 45.5 FEET NORTH OF THE SOUTH LINE OF SAID LOT 14; THENCE WEST PARALLEL TO AND 45.5 FEET NORTH OF SAID LOT 14; THENCE 4812.3945-3441.1 11I14/06jmm 1-6 WEST PARALLEL TO AND 45.5 FEET NORTH OF THE SOUTH LINE OF SAID LOT 14; 172.50 FEET, MORE OR LESS, TO THE EAST LINE OF SAID LOT 13; THENCE SOUTH ALONG THE EAST LlNE OF SAID LOT 13, 24 FEET TO THE POINT OF BEGINNING. APN: 0138-301-06 (All of Parcel A), APN: 0138-301-08 (All of Parcel B) and APN's: 0138- 263-02 and 0138-301-01 and 0138-301-10 (Portions of Parcel C). 4812-3945-3441.1 11/14/06 jmm 1-7 RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO Attention: Executive Director 201 North "E" Street, Suite 301 San Bernardino, California 92401 (Space Above Line for Use By Recorder) Recording Fee Exempt Pursuant to Government Code Section 6103 2006 DISPOSITION AND DEVELOPMENT AGREEMENT BY AND BETWEEN REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO AND LA PLACITA ON 2ND STREET, LLC, A CALIFORNIA LIMITED LIABILITY COMPANY 2006 DISPOSITION AND DEVELOPMENT AGREEMENT (La Placita on 2Dd Street) THIS 2006 DISPOSITION AND DEVELOPMENT AGREEMENT (the "Agreement") is entered into as of November 20, 2006, by and between the Redevelopment Agency of the City of San Bernardino, a public body, corporate and politic (the "Agency") and La Placita on 2nd Street, LLC, a California limited liability company (the "Developer"). The Agency and the Developer hereby agree as follows: Section l.0l. Puroose of Agreement. The purpose of this Agreement is to implement the Redevelopment Plan for the Uptown Redevelopment Project Area (the "Project Area") by providing for the purchase and redevelopment of the Property, as defined below, and the Developer Property, as defined below, by the Developer. The purchase, sale, redevelopment and construction of the Property and/or of the Developer Property shall be governed by and subject to this Agreement. For purposes of this Agreement, the term "Property" shall mean the Agency Property, as defined below, and the Belichesky Property, as defined below, and is located in the City of San Bernardino (the "City"), the County of San Bernardino (the "County"), California (the "State"). As of the date of this Agreement, the Agency owns that certain real property (the "Agency Property"), located in the City, County and State, having Assessor Parcel Number 0138-301-03, Assessor Parcel Number 0138-301-04 and Assessor Parcel Number 0138- 301-05, the legal description of which is more particularly described in Exhibit "A-I" attached hereto and incorporated herein by this reference. The redevelopment of the Agency Property, the Belichesky Property and the Developer Property pursuant to this Agreement is in the vital and best interests of the City, the Agency and the health, safety and welfare of its residents, and in accord with the public purposes and provisions of applicable state and local laws. The Agency has determined that the development and use of the Property and the Developer Property as contemplated by this Agreement is consistent with the Redevelopment Plan for the Project Area. Section 1.02. The Propertv and the Proiect. (a) The Property includes approximately .77 acres of land, more or less, consisting of four (4) parcels, is generally situated and bordered on the East by "K" Street, on the South by 2nd Street, on the North by 3rd Street and on the West by the future Giovanola Avenue, and is located within the City, County and State. The Property is referred to as Assessor Parcel Number 0138-301-03, Assessor Parcel Number 0138-301-04, Assessor Parcel Number 0138- 301-05 and Assessor Parcel Number 0138-301-07. The Agency will exercise its best efforts to purchase the Belichesky Property prior to the Close of Escrow. Promptly following the purchase of the Property from the Agency, the Developer shall undertake the redevelopment, improvement and use of the Property together with the Developer Property as an upscale shopping center, having a Superior Grocery Store as the anchor tenant, or such other anchor tenant as agreed to by the Agency in its sole and absolute discretion. The development of the Property and the Developer Property is referred to herein as the "Project". The Developer represents to the Agency that the Project shall consist of commercial and retail improvements, and that the Developer shall construct on the Property and on the Developer Property approximately one 4812.3945-3441.1 till 4106 jmm I P:\Ageodas\Agenda Anachments\Agnnls-Amend 2006\11-2Q..06 La Placita Filial DDA.doc hundred thousand (100,000) square feet of commercial and retail buildings, The Developer represents that it has submitted the necessary applications to the City and has commenced the process for the City review and approval of the development of the aforementioned Project. (b) The Developer owns commercially improved real property located in the City and State consisting of four (4) parcels and referred to as Assessor Parcel Number 0138- 263-02 (the "Developer's Supermarket Parcel"), Assessor Parcel Number 0138-301-01, Assessor Parcel Number 0138-301-06 and Assessor Parcel Number 0138-301-10 (collectively, together with the Spar Property, as defined below, Assessor Parcel Number 0138-301-08, on the date that the Developer, as buyer, acquires fee simple title in and to the Spar Property from Spar, as defined below, or its successors and/or assigns, as seller, the "Developer Property"), The legal description for the Developer Property is attached hereto and incorporated herein by this reference as Exhibit "A-2", (c) The Belichesky-Filipovic Trust (the "Belichesky-Filipovic Trust") owns that certain improved real property located in the City and the State consisting of one (I) parcel and referred to as Assessor Parcel Number 0138-301-07 (the "Belichesky Property"), The legal description of the Belichesky Property is attached hereto and incorporated herein by this reference as Exhibit "A-3", (d) Alice Spar and other persons and/or entities (collectively, "Spar") own that certain improved real property located in the City and the State consisting of one (1) parcel and referred to as Assessor Parcel Number 0138-301-08 (the "Spar Property"), The "Spar Property" shall also mean and include that certain billboard (the "Spar Property Billboard") located on the Spar Property and/or the lease, sublease, license or other agreement for the lease, sublease, license or other use of the Spar Property Billboard on or at the Spar Property (the "Spar Property Billboard Lease"), The legal description of the Spar Property is attached hereto and incorporated herein by this reference as Exhibit "A-4", (e) The Developer, or an affiliate of the Developer, owns fee simple title in and to that certain real property (the "Kovats Property") located in the City, the County and the State, the legal description of which is attached hereto and incorporated herein by this reference as Exhibit "P', (f) As of on or before May 6, 2008, the Developer intends that the Property and the Developer Property should have an estimated assessed valuation of not less than Twenty- Two Million Dollars ($22,000,000), in the aggregate, (g) Within one (I) year after the execution by the Agency of the Certificate of Completion, the Developer intends that the Property and the Developer Property may create, or result in the creation of, an estimated one hundred and fifty (150) new full-time permanent jobs, (h) Within one (I) year after the execution by the Agency of the Certificate of Completion, and continuing annually thereafter, it is the intent of the Developer that the Property and the Developer Property are estimated to create, or result in the creation of, approximately Three Hundred Thousand Dollars ($300,000) sales tax revenues to be received by the City. 4812-3945-3441.1 11114106 jnun 2 P:\Aaendu\Ageoda Atlachmellls\Agnnls-Amend 2006\11-20-06 La Placita Final DDAdoc Section 1.03. Parties to the Agreement. (a) The Agency is a public body, corporate and politic, exercising governmental functions and powers and organized and existing under Chapter 2 of the Community Redevelopment Law of the State of California Health and Safety Code Section 33000, et seq. The principal office of the Agency is located at 201 North "E" Street, Suite 301, San Bernardino, California 92401. (b) The City of San Bernardino is not a party to this Agreement. (c) The Developer is a California limited liability company, and is duly organized and validly existing under the laws of the State of Califomia. The principal office of the Developer is 9550 Firestone Blvd., Suite lOS, Downey, CA 90241. Section 1.04. Restrictions Against Change in Ownership. Management and Control of Developer and Assignment of Agreement. The qualifications and identity of the Developer are of particular concern to the Agency. It is because of those qualifications and identity that the Agency has entered into this Agreement with the Developer. Prior to the issuance of a Certificate of Completion as set forth in Section 3.07, 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. Except as set forth in Section 3.04, the Developer shall not assign all or any part of this Agreement or any rights hereunder prior to the issuance of the Certificate of Completion with respect to the Project without the prior written approval of the Executive Director of the Agency, which approval shall not be unreasonably withheld or delayed. The Developer shall promptly notify the Agency in writing of any and all changes whatsoever in the identity of the business entities and individuals either comprising or in control of the Developer, as well as any and all changes in the interest or the degree of control of the Developer by any such party, of which information the Developer or any of its members, partners or officers have been notified or may otherwise have knowledge or information. This Agreement may be terminated by the Agency prior to the Close of the Escrow as set forth in Section 2.03 if there is any significant or material change, whether voluntary or involuntary, in membership, ownership, management or control of the Developer other than such changes occasioned by the death or incapacity of any individual that has not been approved by the Agency prior to the time of such change or the Agency may seek other appropriate relief in the event that at any time following the Close of Escrow and prior to issuance of the Certificate of Completion such a change in the ownership, or control of the Developer occurs with respect to the Project; provided, however, that (i) the Agency shall first notify the Developer in writing of its intention to terminate this Agreement or to exercise any other remedy, and (ii) the Developer shall have twenty (20) calendar days following its receipt of such written notice to commence and thereafter diligently and continuously proceed with the cure of the default of the Developer hereunder and submit evidence of the initiation of satisfactory completion of such cure to the Agency in a form and substance deemed satisfactory to the Agency, in its reasonable discretion. 4812-3945-3441.1 11114106 jrnm 3 P:\Agendasl.Agenda AllachmeNs\AgrITl.S-Amend 2006\11-20-06 La Placita Flnll DDA.doc Section 1.05. Benefit to Proiect Area. The Agency has detennined that the development of the Property and the Developer Property in accordance with this Agreement will materially assist in the elimination of blight and the implementation of the Redevelopment Plan for the Project Area. Section 1.06. Additional Property. The Agency shall exercise its best efforts to negotiate and execute a disposition and development agreement with the Developer for the purchase of that certain real property consisting of nine (9) parcels located in the City, County and State and referred to as Assessor Parcel Number 0138-293-01, Assessor Parcel Number 0138-293-02, Assessor Parcel Number 0138-293-06, Assessor Parcel Number 0138-293-09, Assessor Parcel Number 0138-293-10, Assessor Parcel Number 0138-302-03, Assessor Parcel Number 0138-302-27, Assessor Parcel Number 0138-302-13 and Assessor Parcel Number 0138- 302-28 (collectively, the "Additional Property"), the legal description of such Additional Property is attached hereto and incorporated herein by this reference as Exhibit "0". The Additional Property located on the south side of 2nd Street is bordered to the north by 2nd Street and to the east by K Street and is located between K Street and Mount Vernon. The Additional Property consists of approximately 1.45 acres of land. All terms and provisions with regard to the acquisition and disposition of the Additional Property shall be undertaken pursuant to such disposition and development agreement to assist the Developer in its mixed-use development of the Kovats Property, as defined below, pursuant to the terms, covenants and conditions of such separate disposition and development agreements to be mutually executed and agreed to by and between the Developer and the Agency. The approval and execution of such disposition and development agreement with respect to the Additional Property shall not be a condition precedent that must be satisfied or waived by either party prior to the Closing of Escrow, as defined below. Section 1.07. Purchase of the Belichesky Propertv and of the Spar Property. (a) The Agency shall use its best efforts to purchase the Belichesky Property prior to the Close of Escrow but the Agency shall have no obligation, duty or liability to the Developer to purchase the Belichesky Property. The Developer shall use its best efforts to purchase the Spar Property prior to the Close of Escrow and the purchase escrow of the Developer may be assigned to the Agency in the manner as hereinafter provided. The purchase by the Agency of the Belichesky Property shall be a condition precedent to the Close of Escrow, and the Developer shall pay to the Agency the Belichesky Property Purchase Price, as defined below, including, without limitation, the Belichesky Property Condemnation Costs, as defined below, if applicable, the Belichesky Property Business Relocation Costs, as defined below, if applicable, and the Belichesky Property Maintenance Costs, as defined below, if applicable (collectively, the "Belichesky Property Costs"). The purchase by the Developer of the Spar Property, whether directly from the owner thereof or from the Agency, shall be a condition precedent to the Close of Escrow, and the Developer shall pay the Spar Property Purchase Price, as defined below, the Spar Property Billboard Relocation Costs, as defined below, and the Spar Property Billboard Lease Tennination Costs, as defined below (collectively, the "Spar Property Costs"). The Belichesky Property Costs and the Spar Property Costs shall not exceed Five Hundred Thousand Dollars ($500,000) (the "Upset Figure"), in the aggregate. The Agency shall provide written statements to the Developer on a monthly basis setting forth the then current 4812-3945-344I.l 1l/14106 jmm 4 P:\Agendas\Agenda Anacluteols\Agrmls-AJrend ~11-20-06 La Placitll Final DDAdoc amount expended by the Agency of the Belichesky Property Costs and the Spar Property Costs to enable the Developer to ascertain if and when the Upset Figure may be achieved for purposes of providing the notice to the Agency as set forth in the following sentence. In the event that the Belichesky Property Costs and the Spar Property Costs are reasonably estimated by the Developer to exceed the Upset Figure based upon the aforesaid monthly statements to be transmitted by the Agency to the Developer, the Developer shall, at its sole election, provide written notice to the Agency that the Developer intends to terminate this Agreement and not pay any costs in excess of the Upset Figure; provided, however, that the Developer shall remain liable to the Agency for the payment and/or reimbursement of all Belichesky Property Costs and Spar Property Costs paid and/or incurred by the Agency through and including the effective date of any such termination by the Developer. (b) Prior to the Close of Escrow, should the Agency, as buyer, be unable and unsuccessful in its efforts to purchase the Belichesky Property in an arms length transaction (the "Belichesky Property Arms Length Transaction") pursuant to the terms, covenants and conditions of an agreement of purchase and sale, as mutually agreed to and executed by and between the Agency, as purchaser, and the Belichesky-Filipovic Trust, or its successors and/or assigns, as seller, the Agency will exercise its best efforts to acquire fee simple title in and to the Belichesky Property through the exercise by the Agency of its powers of eminent domain and/or condemnation, if applicable (the "Belichesky Property Condemnation Proceedings"), provided that the Agency has and continues to have the right and power to exercise eminent domain and/or condemnation, if applicable. Prior to the Close of Escrow, should the Agency acquire fee simple title in the Belichesky Property pursuant to the Belichesky Property Condemnation Proceedings, the Developer shall pay to the Agency the Belichesky Property Purchase Price which shall include, without limitation, the Belichesky Property Condemnation Costs, as defined below. (c) Should the Agency acquire fee title in and to the Belichesky Property pursuant to the Belichesky Property Condemnation Proceedings, the Belichesky Property Purchase Price shall also include, without limitation, all acquisition amounts, fees, costs and expenses incurred by the Agency to acquire fee title in and to the Belichesky Property and/or to relocate one (I) or more commercial businesses and/or one (I) or more persons from the Belichesky Property, pursuant to the Belichesky Property Condemnation Proceedings, including, without limitation, all filing fees, consultant fees and costs, appraiser fees and costs, title fees and costs, business and/or individual relocation fees, costs, expenses, amounts and/or settlements, attorneys' fees and costs, expert witness fees and costs and/or court costs (collectively, the "Belichesky Property Condemnation Costs"). (d) Should the Agency acquire fee simple title in and to the Belichesky Property prior to the Close of Escrow, and should this Agreement be terminated by the Agency or by the Developer in accordance with the terms, covenants and conditions of this Agreement, the Developer shall pay to the Agency, upon ten (10) calendar days' prior written notice from the Agency to the Developer, the Belichesky Property Purchase Price, including, without limitation, the Belichesky Property Condemnation Costs, if applicable, the Belichesky Property Business Relocation Costs, if applicable, the Belichesky Property Maintenance Costs, as defined below, if applicable, together with the Developer's share of the reasonable and customary fees, expenses and costs to cancel the Escrow less a credit in the amount of the Deposit, and interest earned 4812-3945.3441.1 1lI14I06jrnm 5 P:\Agendas\Agenda AlIachmenls\Agmu-Amend 2006\11.:w-{)6 La Placila Final DDA.doc ,- thereon that was deposited by the Developer with the Escrow Holder in this Escrow provided the Developer is not in default under this Agreement. (e) Prior to the Close of Escrow, should the Agency be unable to purchase and acquire fee simple title in and to the Belichesky Property pursuant to the Beiichesky Property Arms Length Transaction and/or pursuant to the Belichesky Property Condemnation Proceedings, the Developer shall pay to the Agency, upon ten (10) calendar days' prior written notice from the Agency to the Developer, the Belichesky Property Costs, as incurred or paid by an or behalf of the Agency, together with the Developer's share of the reasonable and customary fees, expenses and costs to cancel the Escrow as provided for in Section 2.02( c) less a credit in the amount of the Deposit, and interest earned thereon, that was deposited by the Developer with the Escrow Holder in this Escrow provided the Developer is not in default under this Agreement. (1) In the event that the Developer prior to acquiring the fee title to the Spar Property is unable to successfully negotiate with the billboard company for the removal of the Spar Property Billboard and the termination of the applicable Spar Property Billboard Lease with respect to the billboard sign presently located upon the Spar Property, the Developer may assign the purchase and sale agreement and the escrow instructions for the acquisition of the Spar Property to the Agency and the Agency shall accept such assignment in accordance with the following set forth conditions. Upon such assignment by the Developer to the Agency for the acquisition of the Spar Property, the Developer shall provide all moneys to the Agency as necessary for the close of escrow by the Agency of the Spar Property acquisition, and the Developer shall thereafter continue to remit moneys to the Agency for the continued efforts by the Agency to accomplish the removal of the Spar Property Billboard whether by an action to be filed by the Agency in eminent domain or otherwise to seeks a termination of the Spar Property Billboard Lease. The provisions relative to the Upset Figure as set forth in subsection (a) above shall be applicable to the period of time that the Spar Property may be held in the name of the Agency. Upon any termination of this Agreement by either party, the Agency shall, if requested by the Developer, quit claim to the Developer any and all interest that the Agency has at that time in the Spar Property to the Developer provided that all Spar Property Costs have been fully paid to the Agency prior to the time that the Developer requests such quit claim of the Spar Property from the Agency to the Developer. (g) Upon the Developer electing the provisions of subsection (1) above, the parties shall in good faith implement the procedures set forth in subsections (b), (c), (d) and (e) with respect to the Spar Property, the payment of the Spar Property Costs and the removal of the Spar Property Billboard and termination of the Spar Property Billboard Lease whether through an action in eminent domain undertaken by the Agency or through direct negotiations by the Agency as the then current owner of the Spar Property with the owner of the billboard as lessee upon the Spar Property. ARTICLE II DISPOSITION OF THE PROPERTY Section 2.01. Purchase and Sale of the Property. Subject to all of the terms, conditions and provisions of this Agreement and for the consideration of the purchase price (the 4812-3945-3441.1 11114106 jmm 6 P:\Agendas\Agenda Altacrunents\Agrnls-AlIWlnd 2006\11-2()..()6 La Platiu Fmal DDA.doc "Purchase Price") as herein set forth, the Agency hereby agrees to sell to the Developer merchantable lien free fee simple title and the Developer hereby agrees to purchase the following: all of the right, title and interest of the Agency in the Property as more fully described in Exhibit "A-I" and in Exhibit "A-3" including all right, title and interest of the Agency in and to any land lying in the right-of-way of any existing or proposed highway, street, road, avenue or alley abutting or adjoining the Property. The Purchase Price which the Agency agrees to accept from the Developer and which the Developer agrees to pay to the Agency for the Property is the combined dollar amount equal to the Agency Property Purchase Price, as defined below, and the Belichesky Property Purchase Price, as defined below: (a) Agencv Property Purchase Price. The "Agency Property Purchase Price" is the greater of Two Hundred Seventy-Two Thousand Eight Hundred Dollars ($272,800) or the fair market value of the Agency Property, as determined by an appraisal (the "Appraisal") completed by an independent and highly qualified MAl appraiser (the "Appraiser") having at least ten (10) years of extensive experience in the appraisal of commercial and retail real properties located in the City with a fair market valuation date that is not greater than six (6) months prior to the Closing Date (as defined below), in cash. The Appraiser and the Appraisal must be approved by the Agency in its sole and absolute discretion. The cost of the Appraisal shall be reimbursed by tile Developer to tile Agency upon the Close of Escrow, and the Appraisal shall be the property of the Agency. The Agency Property Purchase Price shall be paid, in cash, to the Agency in the following manner and in the following dollar amounts: (i) Twenty-Seven Thousand Two Hundred and Eighty Dollars ($27,280) representing the Deposit as defined in Section 2.02(a); and (ii) the balance of the Agency Property Purchase Price, as additional cash, to be deposited to the Escrow by the Developer as provided in this Article II of this Agreement. (b) Belicheskv Property Purchase Price. The Belichesky Property Purchase Price shall mean the amounts paid by the Agency to purchase the Belichesky Property, including, without limitation, the purchase price, all title costs, appraisal fees, survey fees and costs, environmental assessment fees and costs, consultant fees, all fees and costs incurred by the Agency in connection with the due diligence investigation, study and inspection of the Belichesky Property, escrow fees and costs, recording costs, the relocation from the Belichesky Property of one (I) or more businesses and/or one (I) or more persons (the "Belichesky Property Business Relocation"), if applicable, the Belichesky Property Condemnation Costs, if applicable, the Belichesky Property Maintenance Costs, if applicable, and all other fees, costs, expenses and amounts, including, without limitation, attorneys' fees and costs, expert witness fees and costs and/or court costs, paid or incurred by, or on behalf of the Agency, however designated, to acquire a fee simple title in and to the Belichesky Property and/or in connection with the Belichesky Property Business Relocation (collectively, the "Belichesky Property Business Relocation Costs"). The Developer shall tender to the Escrow Holder, as defined below, in cash, the Belichesky Property Purchase Price to the Agency five (5) business days prior to the Closing Date or the date (the "Belichesky Property Closing Date") that the deed conveying fee simple 4812.3945.3441.l 11l14106jmm 7 P:\Agendas\Agenda Altachmenl.s\A8fmls-Amend 2006\11-20-06 LIl Placiu Fmal DDA.doc title in and to the Belichesky Property from the Belichesky-Filipovic Trust, or its successors and/or assigns, as seller, to the Agency, as buyer, is recorded in the official real estate records for the County of San Bernardino, State of California, whichever occurs first. On or before ten (10) business days' prior to the Closing Date, or prior to the Belichesky Property Closing Date, whichever occurs first, the Agency shall deliver to the Developer statements, certificates and/or invoices in support of the Belichesky Property Purchase Price. Additionally, the Developer shall pay to the Agency, on or before ten (10) calendar days' after receipt by the Developer of one (1) or more invoices from the Agency, after the Belichesky Property Closing Date, (i) all fees, costs, expenses and/or amounts, including, without limitation, all attorneys' fees and costs, expert witness fees and costs, and court costs to maintain, to operate and/or to repair the Belichesky Property, and/or one (I) or more buildings, structures and/or improvements located at the Belichesky Property (collectively, the "Belichesky Property Maintenance Costs"); and/or (ii) the Belichesky Property Business Relocation Costs and/or (iii) the Belichesky Property Condemnation Costs, if applicable, paid or incurred by or on behalf of the Agency after the Belichesky Property Closing Date. (c) Spar Propertv Purchase Price. The Developer, as buyer, shall purchase the Spar Property from Spar or from the Agency as provided in Section 1.07 hereof, or its successors and/or assigns, as seller, and shall pay the Spar Property Purchase Price, as defined below. The Spar Property Purchase Price shall mean the amounts paid by the Developer to purchase the Spar Property, including, without limitation, the purchase price, all title costs, appraisal fees, survey fees and costs, environmental assessment fees and costs, all consultant fees, all fees and costs incurred by the Developer in connection with the due diligence investigation, study and inspection of the Spar Property, escrow fees and costs, recording costs, attorneys' fees and costs, expert witness fees and costs, and court costs, and all other fees, costs, expenses and/or amounts to purchase, acquire, remove, relocate and/or destroy the Spar Property Billboard (collectively, the "Spar Property Billboard Removal Costs"), and/or to buy-out, to fully discharge and/or to terminate the Spar Property Billboard Lease (collectively, the "Spar Property Billboard Lease Termination Costs"). The Developer is obligated to purchase the Spar Property as a condition precedent to the Close of Escrow whether from Spar or the Agency as provided in Section 1.07. Commencing on the execution date of this Agreement by both parties, and monthly thereafter, through and including the date of the execution by the Agency of the Certificate of Completion, the Developer shall deliver to the Agency one (I) or more certificates, statements, invoices, agreements, documents and/or instruments acceptable to the Agency in its sole and absolute discretion, evidencing and supporting the Spar Property Purchase Price, the Spar Property Billboard Removal Costs and/or the Spar Property Billboard Lease Termination Costs, as applicable. Section 2.02. DepOsit and Payment of the Purchase Price. (a) Deposit. Within five (5) calendar days following the execution of this Agreement by both parties, the Developer shall deliver to the Escrow Holder the sum of Twenty- Seven Thousand Two Hundred and Eighty Dollars ($27,280) for the purchase of the Agency Property without allocation to the Belichesky Property to be acquired by the Developer from the Agency. This sum upon its receipt by the Escrow Holder is referred to in this Agreement as the "Deposit". Upon receipt of the Deposit together with a fully executed copy of this Agreement, 4812.3945.3441.1 11114106 jrnm 8 P:\Agcndu\Agenda Atuclunenls\A8nnl.S-Amend 2006\] I-~ La Placita Final DDA.doc the Escrow Holder shall cause the Escrow (as hereinafter defined) to be opened as provided in Section 2.03, and the Escrow Holder shall place the Deposit into an interest-bearing escrow account with the interest thereon to accrue to the benefit of the Developer. At the Close of Escrow (as hereinafter defined), the Deposit, together with interest earned thereon, shall be applied as a credit to the Agency Property Purchase Price. (b) Pavment of Balance of the Purchase Price. The Developer shall tender to the Escrow Holder on the Closing Date additional cash funds in the amount of the Purchase Price less the Deposit, which funds when combined with the Deposit shall equal the Purchase Price. (c) Devosit Return. The Deposit, less an amount equal to the customary and reasonable escrow cancellation charges of the Escrow Holder, shall be returned to the Developer in the event that: (i) the Agency or the Developer tenninates this Agreement pursuant to Section 2.03(b); or (ii) the Developer does not deliver its Due Diligence Approval Certificate (as hereinafter defined) to the Escrow Holder pursuant to Section 2.03( c) and this Agreement is tenninated; or (iii) the Developer's conditions precedent to the Close of Escrow described in Section 2.16(1), (2), (3), (4), (5), (6), (7), (8), (9), (10) or (II) are not satisfied, unless satisfaction has been waived by the Developer, and this Agreement is tenninated; or (iv) the Property is materially damaged prior to the Close of Escrow, or an action of eminent domain is commenced by a governmental entity other than the Agency attempting to acquire fee title with respect to the Agency Property prior to the Close of Escrow, and the Developer elects to tenninate this Agreement pursuant to Section 2.25; or (v) the Agency tenninates this Agreement, in its sole and absolute discretion, in accordance with, pursuant to, and in the manner provided for, in Section 5.08(a), Section 5.08(b), Section 5.08(c) and/or Section 5.08(d) of this Agreement. In the event the Agency tenninates this Agreement pursuant to Section 5.08(a), Section 5.08(b), Section 5.08(c) and/or Section 5.08(d) of this Agreement and the Agency has acquired the BeIichesky Property pursuant to the Belichesky Property Arms Length Transaction and/or pursuant to the Belichesky Property Condemnation Proceedings, prior to the tennination by the Agency of this Agreement pursuant to Section 5.08, upon ten (10) calendar days' prior written notice from the Agency to the Developer, the Developer shall pay to the Agency the Belichesky Property Purchase Price, including, without limitation, the Belichesky Property Condemnation Costs, if applicable, the Belichesky Property Business Relocation Costs, if applicable, and/or the Belichesky Property Maintenance Costs, if applicable. 4812.3945.3441.1 III I 4106 j nun 9 P:\Agendas\Agenda Anachme0t5\Agmls-Amend 2006\11-2().{)(j La Placita Fmal DDAdoc 4812-3945-3441.1 11I14l06jrnm (vi) the Agency terminates this Agreement, in its sole and absolute discretion, in accordance with, pursuant to, and in the manner provided for, in Section 5.08(a), Section 5.08(b), Section 5.08(c) and/or Section 5.08(d) of this Agreement. In the event the Agency terminates this Agreement pursuant to Section 5.08(a), Section 5.08(b), Section 5.08(c) and/or Section 5.08(d) of this Agreement and the Agency is unable to purchase and acquire the Belichesky Property pursuant to the Belichesky Property Arms Length Transaction and/or pursuant to the Belichesky Property Condemnation Proceedings, prior to the termination by the Agency of this Agreement pursuant to Section 5.08, upon ten (10) calendar days' prior written notice from the Agency to the Developer, the Developer shall pay to the Agency that portion of the Belichesky Property Purchase Price, including, without limitation, the Belichesky Property Condemnation Costs, if applicable, the Belichesky Property Business Relocation Costs, if applicable, and/or the Belichesky Property Maintenance Costs, if applicable, as paid or incurred by the Agency, or on behalf of the Agency, in its efforts to: (x) purchase and acquire, or to attempt to purchase and acquire, the Belichesky Property, (y) to relocate and/or to remove, and/or to attempt to relocate and/or to remove, one (1) or more businesses and/or persons from the Belichesky Property, and/or (z) to maintain, operate and/or repair, and/or to attempt to maintain, operate and/or repair, the Belichesky Property. (vii) the Developer terminates this Agreement in accordance with, pursuant to, and in the manner provided for, in Section 5.09(a), Section 5.09(b), Section 5.09(c), Section 5.09(f) and/or Section 5.09(g) of this Agreement. In the event the Agency terminates this Agreement pursuant to Section 5.09(a), Section 5.09(b), Section 5.09(c), Section 5.09(f) and/or Section 5.09(g) of this Agreement and the Agency has acquired the Belichesky Property pursuant to the Belichesky Property Arms Length Transaction and/or pursuant to the Belichesky Property Condemnation Proceedings, prior to the termination by the Developer of this Agreement pursuant to Section 5.09, upon ten (10) calendar days' prior written notice from the Developer to the Agency, the Developer shall pay to the Agency the Belichesky Property Purchase Price, including, without limitation, the Belichesky Property Condemnation Costs, if applicable, the Belichesky Property Business Relocation Costs, if applicable, and/or the Belichesky Property Maintenance Costs, if applicable. (viii) the Developer terminates this Agreement, in its sole and absolute discretion, in accordance with, pursuant to, and in the manner provided for, in Section 5.09(a), Section 5.09(b), Section 5.09(c), Section 5.09(f) and/or Section 5.09(g) of this Agreement. In the event the Developer terminates this Agreement pursuant to Section 5.09(a), Section 5.09(b), Section 5.09(c), Section 5.08(f) and/or Section 5.08(g) of this Agreement and the Agency is unable to purchase and acquire the Belichesky Property pursuant to the Belichesky Property Arms Length Transaction and/or pursuant to the Belichesky Property Condemnation Proceedings, prior to the termination by the Developer of this Agreement pursuant to Section 5.09, upon ten (10) calendar days' prior written notice from the P:\Agendas\Agenda AuachmenlS\A&mls-Amend 2006\1 1-2l).{)6 la P1acita Fmal DOAdot: 10 Developer to the Agency, the Developer shall pay to the Agency that portion of the Belichesky Property Purchase Price, including, without limitation, the Belichesky Property Condemnation Costs, if applicable, the Belichesky Property Business Relocation Costs, if applicable, and/or the Belichesky Property Maintenance Costs, if applicable, as paid or incurred by the Agency, or on behalf of the Agency, in its efforts to: (x) to purchase and acquire, and/or to attempt to purchase and acquire, the Belichesky Property, (y) to relocate and/or to remove, and/or to attempt to relocate and/or to remove, one (I) or more businesses and/or persons from the Belichesky Property, and/or (z) to maintain, operate and/or repair, or to attempt to maintain, operate and/or repair, the Belichesky Property. (ix) the Developer terminates this Agreement, in its sole and absolute discretion, in accordance with, pursuant to, and in the manner provided for, in Section 1.07 in the event the Developer determines that the Upset Figure will be exceeded and provided that the Developer has remitted to the Agency all Belichesky Property Costs and all Spar Property Costs determined by the Agency as required under this Agreement. Section 2.03. Opening and Closing of Escrow. (a) The transfer and sale of the Property shall take place through an Escrow (the "Escrow") to be administered at First American Title Insurance Company (the "Title Company"), an escrow department of the Title Company, or such other escrow or title insurance company mutually agreed upon by the Seller and the Agency (the "Escrow Holder"). The Escrow shall be deemed open (the "Opening of Escrow") upon the receipt by the Escrow Holder of a fully executed copy of this Agreement and the Deposit. The Escrow Holder shall promptly confirm to the parties the escrow number and the title insurance order number assigned to the Escrow. (b) In the event that the Developer has not delivered its Due Diligence Approval Certificate to the Agency and the Escrow Holder within one hundred twenty (120) calendar days from the Opening of Escrow, subject to Section 2.09(a), Section 2.13(a), Section 2.14, Section 2.15(a) or Section 2.15(b), subject to the provisions of Section 2.15(c), then in such event this Agreement shall terminate upon written notice to the Escrow Holder from either the Agency or the Developer, whereupon the Deposit, together with interest eamed thereon, shall be returned by the Escrow Holder to the Developer, less an amount equal to the customary and reasonable escrow cancellation charges payable to the Escrow Holder, without further or separate instruction to the Escrow Holder, and the parties shall each be relieved and discharged from all further responsibility or liability under this Agreement. The Developer shall pay all fees, costs and expenses, including, without limitation, all attorneys' fees and costs, expert witness fees and costs, and court costs, and those other fees, costs, expenses and/or amounts incurred by the Developer in connection with the Developer's due diligent investigation, study and inspection of the Property. (c) Provided that the Developer has delivered its Due Diligence Approval Certificate within the period of time authorized in Section 2.03(b), subject to Section 2.09(a), 4812.3945.3441.1 11l14106jrnm 11 P;\Agendas\Agenda Attachml:nts\Agrn15-Amend 2006\11-20-06 La Plac:illl Final DDA.doc 2. 13(a), 2.14, 2.15(a) or 2.15(b), subject to Section 2.15(c), then the Closing Date of the Escrow shall occur within thirty (30) calendar days thereafter, subject to the provisions of Section 2.16 and Section 2.17. The words "Close of Escrow," "Closing Date" and "Closing" shall mean and refer to the date when the Escrow Holder is in receipt of the Purchase Price and the related Escrow documents of the parties and the Escrow Holder is in a position to comply with the final written escrow closing instructions of the parties and cause the Agency Grant Deed for the Property to be recorded and the policy of insurance for the Property to be delivered to the Developer. Section 2.04. Escrow Instructions. This Agreement also constitutes escrow instructions of the parties to the Escrow Holder. Additionally, the Developer and the Agency each agree to execute the customary supplemental escrow instructions of the Escrow Holder in the form provided by the Escrow Holder to its clients in real property escrow transactions administered by it. In the event of a conflict between the additional terms of such customary supplemental escrow instructions of the Escrow Holder and the provisions of this Agreement, this Agreement shall supersede and be controlling. Upon any termination of this Agreement or cancellation of the Escrow, the Developer shall be solely responsible for the payment of the escrow cancellation costs of the Escrow Holder, the Escrow Holder shall forthwith return all monies, as provided in this Agreement, and documents, less only the Escrow Holder's customary and reasonable escrow cancellation fees and expenses, as set forth herein. Section 2.05. Convevance of Title. On or before 12:00 noon on the business day preceding the Closing Date, the Agency shall deliver to the Escrow Holder a grant deed in the form attached hereto as Exhibit "c" (the "Agency Grant Deed") duly executed and acknowledged by the Agency, which Agency Grant Deed shall convey all of its merchantable lien free of the right, title and interest of the Agency in the Property to the Developer. The Escrow Holder shall be instructed to record the Agency Grant Deed in the Official Records of San Bernardino County, California, if and when Escrow Holder holds the various instruments and funds for the accounts of the parties as set forth herein and can obtain for the Developer a CLTA owner's standard coverage policy of title insurance (the "Title Policy") issued by the Title Company with liability in an amount equal to the Purchase Price together with such endorsements to the policy as may be reasonably requested by the Developer, at the sole cost and expense of the Developer, insuring that the Property with fee title to the Property vested in the Developer is free and clear of options, rights of first refusal or other purchase rights, leases or other possessory interests, lis pendens and monetary liens and/or encumbrances and subject only to: (1) non-delinquent real property taxes; (2) non-monetary title exceptions approved by the Developer pursuant to Section 2.13 below; (3) applicable provisions of the parcel map/subdivision map for the Property as prepared and approved by the Developer; (4) the effect of the Redevelopment Plan for the Project Area; 4812-3945-3441.1 11l14/06jmm 12 P;\Agendas\Agenda Attacbments\Agm1:s.Amend 2006\11-20-06 La Placita Final DDA.doc (5) the effect of any conditions imposed by the City as part of the development plan approvals for the Project as approved by the Developer; (6) the provisions of the Agency Grant Deed; (7) the applicable provisions of this Agreement; and (8) such other title exceptions, if any, resulting from documents being recorded or delivered through Escrow. Section 2.06. Additional Closing Obligations of Agency. On or before 12:00 noon on the business day preceding the Closing Date unless indicated otherwise, the Agency shall deliver to the Escrow Holder, unless indicated to be delivered directly to the Developer, copies of the following documents and other items: (1) a certificate of non-foreign status (the "Non-Foreign Affidavit") executed by the Agency, in the customary form provided by the Escrow Holder, and a California Franchise Tax Board Form 590-RE executed by the Agency; (2) two (2) duplicate original copies of the Closing Statement described in Section 2.21, duly executed by the Agency; (3) evidence of the existence, organization and authority of the Agency and of the authority of persons executing documents on behalf of the Agency reasonably satisfactory to the Escrow Holder and Title Company; and (4) any other documents, instruments, funds and records required to be delivered to the Developer under the terms of this Agreement, which have not been previously delivered, including, without limitation, written evidence that all conditions contained in Section 2.16 and Section 2.17 have been met or duly waived by the appropriate party. Section 2.07. Closing Obligations of Developer. On or before 12:00 noon on the business day preceding the Closing Date, the Developer shall deliver to the Escrow Holder copies of the following documents and other items: (1) an acknowledgment and acceptance of the Agency Grant Deed, duly executed and acknowledged by the Developer. (2) two (2) duplicate original copies of the Closing Statement, duly executed by the Developer. (3) evidence of the existence, organization and authority of the Developer and of the authority of persons executing documents on behalf of the Developer reasonably satisfactory to the Escrow Holder and the Title Company. (4) any other documents, instruments or funds required to be delivered by the Developer under the terms of this Agreement or as otherwise required by 4812-3945-3441.l 11114106 jmm 13 P:\Agendasl.Agenda Anathmems\AgrnU-Amend 2006\11-20-06 La Placita Final DDA.doc Escrow Holder or Title Company in order to close Escrow, which have not previously been delivered, including those funds and documents as required by Section 2.02(a) and 2.02(b) hereof and Section 2.06(4). Section 2.08. Inspections and Review. (a) Due Diligence Items. Within five (5) business days after the execution of this Agreement, the Agency shall deliver true, correct and complete copies or originals of the following documents and items (collectively, "Due Diligence Items") to the Developer: (I) copies of all soils, seismic, geologic, drainage, engineering, environmental and similar type reports and surveys, including, but not limited to, any Property Environmental Site Assessments, surveys, relating to the Property if any, in the possession or control of the Agency. (2) notices of violations, including, but not limited to, zoning ordinances, development or building codes affecting the Property within the Agency's possession or control. (3) disclosure of any legal matters affecting the use or condition of the Property within the knowledge of the Agency. (4) a copy of the Redevelopment Plan for the Project Area. (b) Certain Definitions. For the purpose of this Agreement, the terms set forth below shall have the following meaning: (i) "environmental laws" means all federal, state, local, or municipal laws, rules, orders, regulations, statutes, ordinances, codes, decrees, or requirements of any government authority regulating, relating to, or imposing liability of standards of conduct concerning any hazardous substance, as later defined, or pertaining to occupational health or industrial hygiene, and only to the extent that the occupational health or industrial hygiene laws, ordinances, or regulations relate to hazardous substances on, under, or about the Property, occupational or environmental conditions on, under, or about the Property, as now or may at any later time be in effect, including without limitation, the Comprehensive Environmental Response, Compensation and Liability Act of 1980 ("CERCLA") [42 USC Section 9601 et seq.]; the Resource Conservation and Recovery Act of 1976 ("RCRA") [42 USC Section 6901 et seq.]; the Clean Water Act, also known as the Federal Water Pollution Control Act ("FWPCA") [33 USC Section 1251 et seq.]; the Toxic Substances Control Act ("TSCA") [15 USC Section 2601 et seq.]; the Hazardous Materials Transportation Act ("HMTA") [49 USC Section 1801 et seq.]; the Insecticide, Fungicide, Rodenticide Act [7 USC Section 6901 et seq.] the Clean Air Act [42 USC Section 7401 et seq.]; the Safe Drinking Water Act [42 USC Section 300f et seq.]; the Solid Waste Disposal Act [42 USC Section 6901 et seq.]; the Surface Mining 4812-3945-3441.1 11/14l06jmm 14 P:\Asendas\Agenda Alladunenls~-Amend 2006\11-2l}.{)6 La P\al:;ita Final DDA.o:1oc 4812-3945-3441.1 11114106jrnm Control and Reclamation Act [30 USC Section 101 et seq.] the Emergency Planning and Community Right to Know Act [42 USC Section 11001 et seq.]; the Occupational Safety and Health Act [29 USC Section 655 and 657]; the California Underground Storage of Hazardous Substances Act [H & S C Section 25280 et seq.]; the California Hazardous Substances Account Act [H & S C Section 25300 et seq.]; the California Safe Drinking Water and Toxic Enforcement Act [H & S C Section 25249.5 et seq.] the Porter-Cologne Water Quality Act [Water Code Section 13000 et seq.] together with any amendments of or regulations promulgated under the statutes cited above and any other federal, state, or local law , statute, ordinance, or regulation now in effect or later enacted that pertains to occupational health or industrial hygiene, and only to the extent the occupational health or industrial hygiene laws, ordinances, or regulations relate to hazardous substances on, under, or about the Property, or the regulation or protection of the environment, including ambient air, soil, soil vapor, groundwater, surface water, or land use. (ii) "hazardous substances" includes without limitation: those substances included within the definitions of "hazardous substance," "hazardous waste," "hazardous material," "toxic substance," "solid waste," or "pollutant or contaminate" in CERCLA, RCRA, TSCA, HMTA, or under any other environmental law; and those substances listed in the United States Department of Transportation (DOT) Table [49 CFR 172.101], or by the EPA, or any successor agency, as hazardous substances [40 CFR Part 302]; and other substances, materials, and wastes that are or become regulated or classified as hazardous or toxic under federal, state, or local laws or regulations; and any material, waste, or substance that is: (I) a petroleum or refined petroleum product, (2) asbestos, (3) polychlorinated biphenyl, (4) designated as a hazardous substance pursuant to 33 USC Section 1321 or listed pursuant to 33 USC Section 1317, (5) a flammable explosive, (6) a radioactive material, or (7) lead and/or lead-based paint. P:\Agendas\A&enda Attachments\Agmu-Amend 2006\11-20-06 La Placita Final DDA.doc 15 Section 2.09. Due Diligence Investigation of the Propertv Bv the Developer. (a) Within one hundred and twenty (120) calendar days from and after the Opening of Escrow, and subject to the extensions of time set forth below in Sections 2.09(a), 2.13(a), 2.14, 2.15(a) or 2.15(b), subject to the provisions of Section 2.15(c), the Developer shall have the right to examine, inspect and investigate the Property (the "Due Diligence Period") to determine whether the condition of the Property is acceptable to the Developer and to obtain such development project approvals from the City for the improvement of the Project as the Developer may require in its sole and absolute discretion. Notwithstanding any other provision in this Agreement to the contrary, should the Agency acquire fee simple title in the Belichesky Property on or after the Opening of Escrow but prior to the Closing Date, (i) the Due Diligence Period for the Belichesky Property only shall be extended by the number of calendar days after the Opening of Escrow until the date that the Agency acquired fee simple title in the Belichesky Property, not to exceed one hundred and fifty (150) calendar days from the Opening of Escrow (the "Belichesky Property Due Diligence Extension"). The Closing shall be extended thirty (30) calendar days after the Belichesky Property Due Diligence Extension (the "Closing Date Extension"). Notwithstanding anything to the contrary in this Section 2.09(a), or in any other provision of this Agreement, except as provided for in Section 2.15(b), the Belichesky Property Due Diligence Extension and/or any other due diligence extension, if any, in the aggregate, may not extend beyond one hundred and fifty (150) calendar days from the Opening of Escrow. No such Due Diligence Period, including extensions thereto, shall be applicable under this Agreement with respect to the Spar Property whether the Spar Property is acquired directly by the Developer from Spar or from the Agency in the manner as provided in Section 1.07. (b) During the Due Diligence Period, the Agency shall permit the Developer, its engineers, analysts, contractors and agents to conduct such physical inspections and testing of the Property as the Developer deems prudent with respect to the physical condition of the Property, including the inspection or investigation of soil and subsurface soil geotechnical condition, drainage, seismic and other geological and topographical matters, surveys the potential presence of any hazardous substances, if any. (c) Any such investigation work on the Property may be conducted by the Developer and/or its agents during any normal business hours upon seventy-two (72) hours' prior written notice to the Agency, which notice will include a description of any investigation work or tests to be conducted by the Developer on the Property. Upon the Agency's written request, the Developer will provide the Agency with copies of any test results. (d) During the Due Diligence Period, the Developer shall also have the right to investigate all matters relating to the zoning, use and compliance with other applicable laws, which relate to the use and development and improvement of the Property. The Developer may submit an application to the City and any other regulatory agency with jurisdiction for any and all necessary development project approvals for the improvement of the Project. The Agency hereby consents to the submission of such development project approval applications by the Developer. 4812-3945-3441.1 11114106 jnun 16 P;\Agendas\Agenda Attac~ntS\Agrmls-Arnend 2006\11.20-06 La Placila Filial DDA.doc (e) The Agency shall cooperate fully to assist the Developer in completing such inspections and investigations of the condition of the Property. The Agency shall have the right, but not the obligation, to accompany the Developer during such investigations and/or inspections. The Developer shall pay for all costs and expenses associated with the conduct of all such Due Diligence investigation including the cost of submitting any development project approval application as relates to the Project to any regulatory jurisdiction. Section 2.10. Due Diligence Approval Certificate. Within one hundred and twenty (120) calendar days following the Opening of Escrow, the Developer shall complete its investigation of the Property, subject to the extensions of time set forth in Sections 2.09(a), 2.13(a), 2.14, 2.l5(a) or 2. 15(b), subject to Section 2.15(c), and deliver a due diligence approval certificate signed by the Developer (the "Due Diligence Approval Certificate") to the Escrow Holder which either: (i) indicates that the Developer accepts the condition of the Property; or (ii) contains a description of the matters or exceptions relating to the condition of the Property, which the Developer was not able to accept or resolve to its satisfaction during the Due Diligence Period. Section 2.11. Books and Records. As part of the Developer's due diligence investigations during the Due Diligence Period, subject to the extensions of time set forth in Section 2.09(a), 2.I3(a), 2.14, 2.15(a) or 2. 15(b), subject to Section 2.l5(c), the Developer shall be afforded full opportunity by the Agency to examine all books and records, which relate to the Property in the possession of the Agency and/or the Agency's agents or employees, including the reasonable right to make copies of such books and records. During the Due Diligence Period, the Agency will make sufficient staff available to assist the Developer with obtaining access to information relating to the Property, which is in the possession or control of the Agency. Section 2.12. Condition of the Propertv and Developer's Release. The Developer acknowledges and agrees that it shall be given a full opportunity under this Agreement to inspect and investigate every aspect of the Property during the Due Diligence Period, subject to the extensions of time set forth in Sections 2.09(a), 2.13(a), 2.14, 2.l5(a) or 2.15(b), subject to Section 2. 15(c). The Developer shall accept the delivery of possession to the Property on the Close of Escrow in an "AS IS," "WHERE IS" and "SUBJECT TO ALL FAULTS" condition. The Developer further agrees and represents to the Agency that by a date no later than the end of the Due Diligence Period, subject to the extensions of time set forth in Section 2.09(a), Section 2.I3(a), Section 2.14, 2.15(a) or 2.15(b), subject to Section 2. 15(c), the Developer shall have conducted and completed, or waived the completion, of all of its independent investigation of the condition of the Property which the Developer may believe to be indicated. The Developer hereby acknowledges that it shall rely solely upon its own investigation of the Property and its own review of such information and documentation, as it deems appropriate for the purpose of accepting the condition and possession of the Property. The Developer is not relying on any statement or representation by the Agency relating to the condition of the Property unless such statement or representation is specifically contained in this Agreement. Without limiting the foregoing, and except as expressly set forth in Section 4812.3945-3441.1 1lI14106jmm 17 P:\Agendas\Agenda Attachments\Agrrru-Amend 2006\] 1-20-06 La Pladla Final DDA.doc 2.24(a)(11), the Agency makes no representations or warranties as to whether the Property presently complies with environmental laws or whether the Property contains any hazardous substance, as these terms are defined in Section 2.08(b) hereof. Furthermore, to the extent that the Agency has provided the Developer with information relating to the condition of the Property, including information and reports prepared by or on behalf of the City of San -Bernardino, the Agency makes no representation or warranty with respect to the accuracy, completeness or methodology or content of such reports or information. Without limiting the above, except to the extent covered by an express representation or warranty of the Agency set forth in this Agreement, the Developer, on behalf of itself and its successors and assigns, waives and releases the Agency and its successors and assigns from any and all costs or expenses whatsoever, including, without limitation, attorneys' fees and costs, whether direct or indirect, known or unknown, foreseen or unforeseen, arising from or relating to the physical condition of the Property, the condition of the soils, the suitability of the soils for the improvement of the Project as proposed, or any law or regulation applicable thereto, including the presence or alleged presence or harmful or hazardous substances in, under or about the Property including, without limitation, any claims under or on account of (i) CERCLA and similar statutes and any regulations promulgated thereunder or (ii) any other environmental laws. The Developer expressly waives any rights or benefits available to it with respect to the foregoing release under any provision of applicable law which generally provides that a general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time the release is agreed to, which, if known to such creditor, would materially affect a settlement. By execution of this Agreement, the Developer acknowledges that it fully understands the foregoing, and with this understanding, nonetheless elects to and does assume all risk for claims known or unknown, described in this Section 2.12 without limiting the generality of the foregoing: The undersigned acknowledges that it has been advised by legal counsel and is familiar with the provisions of California Civil Code Section 1542, which provides as follows: "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." The undersigned, being aware of this Code Section, hereby expressly waives any rights it may have thereunder, as well as under any other statutes or common law principles of similar effect. Initials of Developer: 4812-3945.3441.1 1l/14106 jmm 18 P:\AgendasV\geDda AUlIChmcnls\AgmV.s-Amend 2006\11-20-06 La P1aI::ita FUlll DDA.doc The provisions of this Section 2.12 shall survive the Close of Escrow. Section 2.13. Review and Approval of Condition of Title bv the Developer. (a) Within fifteen (15) calendar days following the Opening of Escrow, the Agency shall cause to be delivered to the Developer a preliminary title report or title commitment for a CL T A standard coverage policy of title insurance issued by the Title Company describing the state of title of the Property, together with copies of all exceptions specified therein and with all easements plotted which are recorded as a public record, but excluding matters disclosed on a survey (the "Preliminary Title Report"). For purposes of this Agreement, the term "Preliminary Title Report" shall also mean the Belichesky Property Preliminary Title Report, as defined below, if applicable. The Developer shall notify the Agency in writing of any objections the Developer may have to the title exceptions contained in the Preliminary Title Report (the "Developer's Title Objection Notice") prior to the expiration of the Due Diligence Period, as may be extended in this Section 2.l3(a). The Agency shall have a period of five (5) business days after receipt of the Developer's Title Objection Notice in which to deliver written notice to the Developer (the "Agency's Title Notice") of the Agency's election to either (i) agree to remove the objectionable items prior to the Close of Escrow, or (ii) decline to remove any such title exceptions; provided, however, that the Agency shall be required to remove all monetary liens and encumbrances created by or as a result of the Agency's activities. If the Agency notifies the Developer of its election to terminate Escrow rather than remove the objectionable items, the Developer shall have the right, by written notice delivered to the Agency within five (5) business days after the Developer's receipt of the Agency's Title Notice, to agree to accept the Property subject to the objectionable items, in which event the Agency's election to terminate the Escrow shall be of no effect, and the Developer shall take title at the Close of Escrow subject to such objectionable title items. Notwithstanding any other provision in this Agreement to the contrary, should the Agency acquire fee simple title in the Belichesky Property after the Opening of Escrow but prior to the Close of Escrow: (i) the Agency shall deliver, or cause to be delivered, within five (5) business days following acquisition by the Agency of fee simple title in the Belichesky Property to the Developer, a preliminary title report or title commitment for a CL T A standard coverage policy of title insurance issued by the Title Company, describing the state of title of the Belichesky Property (the "Belichesky Property Preliminary Title Report"), together with copies of all exceptions specified therein and with all easements plotted which are recorded as a public record, but excluding matters disclosed on 1\ survey; (ii) the Due Diligence Period for the review and approval of the condition of the title for the Belichesky Property only shall be extended by the number of calendar days after the Opening of Escrow, but prior to the Closing Date, through and including the date that the Agency acquired fee simple title in the Belichesky Property, not to exceed one hundred and fifty (150) calendars days from the Opening of Escrow (the "Belichesky Property Title Due Diligence Extension"). The Closing shall be extended by thirty (30) calendar days after the Belichesky Property Title Due Diligence Extension, which closing must occur no later than one hundred and eighty (180) calendar days from the Opening of Escrow. The Developer shall notify the Agency in writing of any objections the Developer may have to the title exceptions contained in the Belichesky Preliminary Title Report (the "Developer's Belichesky Title Objection Notice") prior to the expiration of the Due Diligence 4812-3945-3441.1 11/14/06 jrnm 19 P;\Agendas\Agenda Attachments\Agmls-Amend 2006\11-20-06 La Placita Final DDA.doc Period, as extended in this Section 2.13(a). The Agency shall have a period of five (5) business days after receipt of the Developer's Belichesky Title Objection Notice (the "Agency's Belichesky Title Notice") in which to deliver written notice to the Developer of the Agency's election to either (i) agree to remove the objectionable items prior to the Close of Escrow, or (ii) decline to remove any such title exceptions; provided, however, that the Agency shall be required to remove all monetary liens and encumbrances created by or as a result of the Agency's activities. If the Agency notifies the Developer of its election to terminate Escrow rather than remove the objectionable items, the Developer shall have the right, by written notice delivered to the Agency within five (5) business days after the Developer's receipt of the Agency's Belichesky Title Notice to agree to accept the Belichesky Property subject to the objectionable items, in which event the Agency's election to terminate the Escrow shall be of no effect, and the Developer shall take title at the Close of Escrow subject to such objectionable title items. Notwithstanding anything to the contrary in this Section 2. 13 (a) or in any other provision of the Agreement, except as provided for in Section 2.l5(b), the Belichesky Property Title Due Diligence Extension, andlor any other due diligence extension relating to or connection with the Preliminary Title Report, or anyone of them, shall not extend, in the aggregate, beyond one hundred fifty (150) calendar days from the Opening of Escrow. (b) The Agency covenants not to further encumber and not to place any further liens or encumbrances on the Property, including, but not limited to, covenants, conditions, restrictions, easements, liens, options to purchase, options to lease, leases, tenancies, or other possessory interests without the prior written consent of the Developer which consent may be withheld by the Developer at the sole discretion of the Developer. Upon the issuance of any amendment or supplement to the Belichesky Property Preliminary Title Report, if any, which adds additional exceptions, including, but not limited to, adding additional exceptions for matters shown on the Survey as hereinafter defined, the foregoing right of review and approval shall also apply to said amendment or supplement, provided that the period for the Developer to review such amendment or supplement shall be the later of the expiration of the Due Diligence Period, as may be extended in Section 2.13(a), or ten (10) calendar days from receipt of the amendment or supplement, and Escrow shall be deemed extended by the amount of time necessary to allow such review and approval in the time and manner set forth above. (c) Regardless of whether the Spar Property is acquired directly by the Developer from Spar or from the Agency in the manner as provided in Section 1.07, the Developer at its sole cost and expense shall provide for and acquire all such title insurance policies and preliminary title reports as the Developer may deem appropriate at its sole cost and expense for any acquisition of the Spar Property. Section 2.14. Survey. The Developer may at its sole cost and separate expense obtain a survey of the Property, or any portion thereof, prepared by a land surveyor duly licensed by the State of California and in compliance with ALTNACSM standards ("Survey"). For purposes of this Agreement, the term "Survey" shall mean the Belichesky Property Survey (as defined below), if applicable. The Survey shall be in a form acceptable to the Title Company for the deletion of the standard survey exception in the Title Policy relating to boundaries, without 4812-3945-3441.1 11114106 jmm 20 P:\Asendas\Agenda AlIachments\Agmls-Amend 2006\ll.20-{)6 La Placita rlllal ODA.d<x; the addition of further exceptions unless the same are acceptable to the Developer in its sole and absolute discretion. The Developer shall have until the end of the Due Diligence Period to complete and examine the Survey and to notify Agency in writing of any objections the Developer has to the Survey (the "Developer's Survey Objection Notice"). The Agency shall have a period of five (5) business days after receipt of the Developer's Survey Objection Notice in which to deliver written notice to the Developer (the "Agency's Survey Notice") of the Agency's election to either (i) agree to remove the objectionable items prior to the Close of Escrow or (ii) decline to remove such items. If the Agency notifies the Developer of its intention to not remove the objectionable items, the Developer shall have the right, by written notice delivered to the Agency within five (5) business days after the Developer's receipt of Agency's Survey Notice, to agree to accept the Property subject to the objectionable items, in which event, the Agency's election to terminate the Escrow shall be of no effect, and the Developer shall accept the Property at the Close of Escrow subject to such objectionable items. Prior to the Closing, the Survey shall be recertified to the Developer and the Title Company. The Survey will be performed at the Developer's sole cost and expense. Notwithstanding any other provision in this Agreement to the contrary, should the Agency acquire fee simple title in the Belichesky Property after the Opening of Escrow but prior to the Close of Escrow: (i) the Developer may obtain, at its sole cost and expense, a survey of the Belichesky Property prepared by a land surveyor duly licensed by the State and in compliance with ALTNACSM standards (the "Belichesky Property Survey"); and (ii) the Due Diligence Period to complete, review and approve the Belichesky Property Survey only shall be extended by the number of calendar days after the Opening of Escrow, but prior to the Closing Date, through and including the date that the Agency acquired fee simple title in the Belichesky Property, not to exceed one hundred and fifty (150) calendars days from the Opening of Escrow (the "Belichesky Property Survey Due Diligence Extension"). The Closing shall be extended by thirty (30) calendar days after the Belichesky Property Survey Due Diligence Extension, which closing must occur not later than one hundred and eighty (180) calendar days after the Opening of Escrow. Notwithstanding anything to the contrary in this Section 2.14, or in any other provision of this Agreement, except as provided for in Section 2.15(b), the Belichesky Property Survey Due Diligence Extension, and/or any other due diligence extension relating to, or in connection with, the Survey, or anyone of them, may not extend, in the aggregate, beyond one hundred and fifty (150) calendar days from the Opening of Escrow. The Developer shall notify the Agency in writing of any objections the Developer may have to the Belichesky Property Survey (the "Developer's Belichesky Property Survey Objection Notice") prior to the expiration of the Due Diligence Period as extended in this Section 2.14. The Agency shall have a period of five (5) business days after receipt of the Developer's Belichesky Property Survey Objection Notice (the "Agency's Belichesky Property Survey Notice") in which to deliver written notice to the Developer of the Agency's election to either (i) agree to remove the objectionable items prior to the Close of Escrow, or (ii) decline to remove any such title exceptions. If the Agency notifies the Developer of its election to terminate Escrow rather than remove the objectionable items, the Developer shall have the right, by written notice delivered to the Agency within five (5) business days after the Developer's receipt of the Agency's Belichesky Property Survey Notice, to agree to accept the Property subject to the objectionable items, in which event the Agency's election to terminate the Escrow shall be of no 4812.3945-3441.1 11114106 jmm 21 P:,^&endas\Agenda Au-.::hmenls\Agrmls-Amend 2006\11-2().{)(j La Placila final DDA.doc effect, and the Developer shall take title at the Close of Escrow subject to such objectionable title items. Section 2.15. Extension of Due Diligence Period. (a) In the event Agency fails to provide to the Developer the documents and other information required by Sections 2.08 by the date(s) set forth therein, the Due Diligence Period for such information shall be extended by one (1) day for each day of the delay by the Agency to pennit the Developer to perform an adequate due diligence review, but not to exceed a total of one hundred and fifty (150) calendar days from the Opening of Escrow. The Developer will use its best efforts to notify Agency of any documents the Agency has failed to deliver to the Developer within the time periods provided in Section 2.08. (b) In the event that the Executive Director of the Agency makes a finding that the Developer has undertaken substantial work to complete the Due Diligence examination, inspection and investigation of the Project during the Due Diligence Period, the Executive Director of the Agency shall, upon the written request of the Developer, authorize an extension of the Due Diligence Period for up to an additional sixty (60) calendar days. (c) Notwithstanding anything to the contrary in Sections 2.09(a), 2. 13(a), 2.14 or 2.15(a), or in any other provision of this Agreement, except as provided for in Section 2.15(b), the Due Diligence Period may not be extended, or any reason whatsoever, beyond one hundred fifty (150) calendars days from the Opening of Escrow. Section 2.16. Developer's Conditions Precedent to Close Escrow. The Developer's obligation to complete the purchase of the Property and Close the Escrow shall be conditioned upon the fulfillment of the following conditions precedent, all of which shall be satisfied, or waived in writing pursuant to Section 2.19, prior to the Close of Escrow: (1) The Agency shall not have defaulted on any material term of this Agreement to be performed by the Agency hereunder, and each representation and warranty made by the Agency in this Agreement shall remain true and correct. For purposes of this subsection (1) only, a representation that is limited to the Agency's knowledge or notice shall be false if the factual matter that is subject to the representation is false, notwithstanding any lack of knowledge or notice to the Agency; (2) the Developer's approval of the Preliminary Title Report and the Survey, if applicable, within the time periods specified in Sections 2.13 and 2.14; (3) the Developer's approval of the contents of all Due Diligence Items, and the other investigations of the Property made by the Developer and/or its designees pursuant to Sections 2.08 and 2.09 herein on or before the expiration of the Due Diligence Period, or such later date if the Due Diligence Period is extended pursuant to Section 2.09(a), 2.13(a), 2.14, 2.15(a) or 2.15(b), subject to Section 2.15(c). The Developer shall be deemed to have disapproved such Due Diligence Items unless they are 4812-3945-3441.1 11114106 jrnrn 22 P:\Agendas\Agenda AUlIChments\Agrm$-Amend 2006\11-20-06 La Placita Final DDA.doc 4812-3945-3441.1 1lI14106 jmm approved on or before S:OO p.m. on the day of the Due Diligence Period, or such later date if the Due Diligence Period is extended pursuant to Sections 2.09(a), 2.13(a), 2.14, 2.lS(a) or 2.IS(b), subject to the provisions Section 2.IS(c) herein; (4) the Developer has submitted to the Agency a written certification duly executed by an authorized officer of the Developer stating that the Developer has either (i) obtained a construction loan conunitment (the "Loan Conunitment") from an institutional lender, or from any other entity or person, which loan proceeds shall be used by the Developer to construct and develop the Project, and such Loan Conunitment shall be acceptable to the Agency in its sole and absolute discretion; or (ii) intends to apply equity funds of the Developer for the commencement of the development of the Project immediately after the Close of Escrow, and that such financing or other equity funds will be in a principal amount and upon such terms and conditions sufficient to complete the construction of the Project as described in this Agreement; (S) the Developer's approval of any notice of change in representation or warranty given by the Agency pursuant to Section 2.24(a) hereof; (6) the Title Company has conunitted to issue the policy of title insurance, in favor of the Developer in the form described in Section 2.0S; (7) all tenant leases, subleases and/or licenses and/or agreements (collectively, the "Leases") for the lease, sublease, license and/or other use of the premises located at the Developer Property, or any portion thereof, have been terminated; (8) The Agency must have acquired fee simple title in and to the Belichesky Property; (9) The City shall have issued all entitlements and building permits to construct and develop the Project; and (10) Either (i) the Developer must have purchased and acquired fee simple title in and to the Spar Property, or (ii) the Agency has acquired title to the Spar Property in the manner provided in Section 1.07 and the Agency has been successful in the removal of the Spar Property Billboard and the termination of the Spar Property Billboard Lease. (II) The Belichesky Property Costs and the Spar Property may not, and will not, exceed amount of the Upset Figure of Five Hundred Thousand Dollars ($SOO,OOO), in the aggregate, unless waived by the Developer at its sole election and discretion. P:\Agendas\Agenda Anaclunents\Agrms-Amend 2006\ll-20-06la Placita Final DDA.doc 23 Section 2.17. The Agency's Conditions Precedent to Close Escrow. The Agency's obligation to convey the Property to the Developer shall be conditioned upon the fulfillment of the following conditions precedent, all of which shall be satisfied, or waived in writing pursuant to Section 2.19, prior to the Close of Escrow: (1) the Developer has accepted the condition of the Property and submitted its Due Diligence Approval Certification to the Escrow Holder on or before the date set forth in this Agreement; (2) the Developer has accepted the condition of title of the Property on or before the date set forth in Section 2.13; (3) the Developer shall not be in default of any material term of this Agreement to be performed by the Developer hereunder and each representation and warranty of the Developer made in this Agreement shall remain true and correct; (4) the Developer shall be satisfied, or waive satisfaction, of each of the conditions precedent set forth in Section 2.16 and the Escrow is in a condition to close within one hundred and fifty (150) calendar days following the Opening of Escrow subject to the extensions provided for in Section 2.09(a), Section 2.13(a), Section 2.14, Section 2.15 (a) or Section 2.15(b), if applicable, and subject to Section 2.15(c). Notwithstanding anything to the contrary in this Agreement, the Closing may not be extended beyond one hundred and eighty (180) calendar days from the Opening of Escrow; (5) the Developer shall have executed the documents and made the deposit of funds as required by Section 2.02(b) hereof in such form as to allow for the recordation of the Agency Grant Deed; (6) the Agency must have acquired fee simple title in and to the Belichesky Property, and the Developer must have paid to the Agency the Belichesky Property Costs; (7) the Developer must have either (i) purchased the Spar Property directly from Spar, or (ii) is seeking to acquire the Spar Property from the Agency upon the Close of Escrow, and in all events the Developer shall have paid to the Agency the Spar Property Costs; (8) the Leases have been terminated, all tenants, subtenants, licensees and/or occupants (collectively, the "Tenants") under the Leases have vacated possession of their respective leasehold, subleasehold or hired premises, the Developer has paid all relocation costs to the Tenants and the Agency is in receipt of evidence satisfactory to the Agency in its sole and absolute 4812-3945-3441.1 11/14106 jrnm 24 P:\Ageodas\Agend. Anllthmems\Agrrru-Amc:nd 2006\11-2Q.Q6 La Placill FmaJ DDA.doc discretion that such relocation costs have been paid by the Developer to the Tenants and have been unconditionally accepted by the Tenants; (9) the Developer must have delivered the Loan Commitment to the Agency, and the Agency must have approved the Loan Commitment, in its sole and absolute discretion; (10) the Belichesky Property Costs and the Spar Property Costs do not exceed the amount of the Upset Figure equal to Five Hundred Thousand Dollars ($500,000), in the aggregate, unless waived by the Developer at its sole election and discretion. Section 2.18. Distribution of Documents and Purchase Price after Closing Date bv Escrow Holder. The Escrow Holder shall deliver to the Developer within three (3) business days following the Closing Date a conformed copy of the Agency Grant Deed, as recorded, and the policy of title insurance issued by the Title Company in favor of the Developer. The Escrow Holder shall deliver to the Agency the Purchase Price less Escrow costs, expenses and the various prorations chargeable to the Agency hereunder. Section 2.19. Satisfaction of Conditions. Where satisfaction of any of the foregoing conditions requires action by the Developer or by the Agency, each party shall use its diligent best efforts, in good faith, and at its own cost, to satisfy such condition. Where satisfaction of any of the foregoing conditions requires the approval of a party, such approval shall be in such party's sole and absolute discretion. Either party may waive any of the conditions set forth in this Agreement, but any such waiver shall be effective only if contained in a writing signed by the applicable party and delivered to the Escrow Holder. Section 2.20. [RESERVED -- NO TEXT] Section 2.21. Prorations. Closing Costs. Possession. (a) Real and personal property taxes for the Property shall be prorated by the parties to the Closing Date as to the actual number and calendar days calculated on a 365/366 days a year basis that the Agency is responsible for (i) all such taxes, if any, for the fiscal year of the applicable taxing authority occurring prior to the Current Tax Period (as defined below) and (ii) that portion of such taxes for the Current Tax Period to 11:59 p.m. on the Closing Date, whether or not the same shall be payable prior to the Closing Date. The phrase "Current Tax Period" refers to the fiscal year of the applicable taxing authority in which the Closing occurs. All tax prorations shall be based upon the latest available tax statement. If the tax statements for the fiscal tax year during which Escrow closes do not become available until after the Closing Date, then the rates and assessed values of the previous year, with known changes, shall be used, and the parties shall re-prorate said taxes outside of Escrow following the Closing Date when such tax statements become available. The Agency shall be responsible for and shall payor reimburse the Developer upon demand for any real or personal property taxes payable following the Closing Date applicable to any period of time prior to the Closing Date as a result of any 4812-3945-3441.1 11114106 jmm 25 P:\Agendas\Agenda Attachments\Agnnls-Amend 2006\11.2()..{l(j La PJacita Final DDA.doc change in the tax assessment by reason of reassessment, changes in use of the Property, changes in ownership, errors by the Assessor or otherwise. (b) The Developer shall be entitled to exclusive possession of the Property immediately upon the Close of Escrow. (c) The Agency shall pay the cost of the premium for only one (I) CLTA owner's standard coverage policy of title insurance covering the Agency Property, and the Belichesky Property in the amount of the Purchase Price together with all title charges, including endorsements reasonably requested by the Developer to remove disapproved items shown on the Preliminary Title Report or Survey pursuant to Sections 2.13 and 2.14 above, as agreed to by the Agency. The Agency shall pay one-half (112) of the customary and reasonable escrow fees, which may be charged by the Escrow Holder in connection with the close of Escrow. The Developer shall pay the additional cost of the Survey and requested CL T A survey policy endorsements to the extent such endorsements are unrelated to removal of any disapproved items shown on the Preliminary Title Report or Survey pursuant to Sections 2.13 and 2.14 above, as agreed to by the Agency, the additional premium for an ALTA extended coverage policy, if elected by the Developer, which exceeds the premium for the one (I) CLTA owner's standard coverage policy of title insurance covering the Agency Property and the Belichesky Property, plus the cost of recording the Agency Grant Deed, together with one-half (112) of the cost of the customary and reasonable escrow fees charged by Escrow Holder in connection with the Close of Escrow. The Developer shall pay any documentary or other transfer taxes payable on account of the conveyance of the Property to the Developer. (d) The Developer shall pay to the Escrow Holder the Belichesky Property Costs. (e) The Developer shall pay the Spar Property Costs. Any other Escrow-related transaction expenses or escrow closing costs incurred by the Escrow Holder in connection with this transaction shall be apportioned and paid for by the parties to this Agreement in the manner customary in San Bernardino County, California. No later than three (3) business days prior to the Closing Date, the Escrow Holder shall prepare for approval by the Developer and the Agency a closing statement ("Closing Statement") on the Escrow Holder's standard form indicating, among other things, the Escrow Holder's estimate of all closing costs, pay-off amounts for the release and reconveyance of all liens secured by the Property and prorations made pursuant to this Agreement. The Developer and the Agency shall assist the Escrow Holder in detennining the amount of all prorations. Section 2.22. Breach of Article II by the Agency; SDecific Performance Remedy of Develooer. In the event that the Agency commits a material breach of its obligations under this Article II prior to the Close of Escrow and fails to transfer the Property to the Developer as agreed herein, the Developer shall have the right to file an appropriate court action in the Superior Court, County of San Bernardino, for specific performance to require the Agency 4812.3945.3441.1 111l4l06jmm 26 P;\Agenda5\Agenda Allachments\Agrn1s-Amend 2006\11-20-06 u Pladla Final DVA.doc to transfer the Property as agreed herein. The Developer shall not seek any other damages or remedies against the Agency for any such failure to transfer the Property. Section 2.23. Breach bv the Developer of Article II; Liquidated Damages Payable by the Developer to the Agency. IN THE EVENT THAT THE DEVELOPER COMMITS A MATERIAL BREACH OF ITS OBLIGATIONS UNDER THIS ARTICLE IT PRIOR TO THE CLOSE OF ESCROW, THE DAMAGES THAT THE AGENCY WILL INCUR BY REASON THEREOF ARE AND WILL BE IMPRACTICAL AND EXTREMELY DIFFICULT TO ESTABLISH. THE DEVELOPER AND THE AGENCY, IN A REASONABLE EFFORT TO ASCERTAIN WHAT THE AGENCY'S DAMAGES WOULD BE IN THE EVENT OF SUCH A DEFAULT BY THE DEVELOPER, HAVE AGREED THAT SUCH DAMAGES SHALL BE IN AN AMOUNT EQUAL TO THE SUM OF TWENTY-SEVEN THOUSAND TWO HUNDRED AND EIGHTY DOLLARS ($27,280) PLUS THE TERMINATION COSTS PROVIDED FOR IN SECTION 2.02(c)(vLOR IN SECTION 2.02(c)(vi), AS APPROPRIATE, AS LIQUIDATED DAMAGES. SUCH SUM SHALL BE PAID TO THE AGENCY IN THE EVENT OF SUCH DEFAULT BY THE DEVELOPER AS LIQUIDATED DAMAGES, WHICH DAMAGES SHALL BE THE AGENCY'S SOLE AND EXCLUSIVE REMEDY AT LAW OR IN EQUITY IN THE EVENT OF AND FOR SUCH DEFAULT BY THE DEVELOPER. WITHOUT LIMITING THE FOREGOING PROVISIONS OF THIS PARAGRAPH, THE AGENCY WAIVES ANY AND ALL RIGHTS WHICH THE AGENCY OTHERWISE WOULD HAVE HAD UNDER CIVIL CODE SECTION 3389 TO SPECIFICALLY ENFORCE THIS AGREEMENT. THE AGENCY AND THE DEVELOPER ACKNOWLEDGE AND AGREE THAT EACH OF THEM HAS READ AND UNDERSTANDS THE PROVISIONS OF THIS SECTION AND EACH AGREES TO BE BOUND BY ITS TERMS. Initials of Developer Initials of Agency Section 2.24. Reoresentations. Warranties and Covenants. (a) Representations. Warranties and Covenants by the Agency. The Agency hereby makes the following representations, warranties and covenants and acknowledges that the execution of this Agreement by the Developer has been made and the acquisition by the Developer of the Property will have been made in material reliance by the Developer on such representations, warranties and covenants: (I) Warranties True. Each and every undertaking and obligation of the Agency under this Agreement shall be performed by the Agency timely when due; and that all representations and warranties of the Agency under this Agreement and its exhibits shall be true in all material respects at the Closing as though they were made at the time of Closing. (2) Due Organization. The Agency is a community redevelopment agency, duly formed and operating under the laws of California. The Agency has the legal power, right and authority to enter into this Agreement and to execute the instruments and documents referenced herein, and to consummate the transactions contemplated hereby. 4812.3945.3441.1 111l4/06jrnm 27 P:\Agendas\Agenda Attaehmenls\Agmts-Amend 2006\11-20-06 La Placila Final DDA.doc 4812-3945-3441.1 1lI14106 jnun (3) Requisite Action. The Agency has taken all requisite action and obtained all requisite consents in connection with entering into this Agreement and the instruments and documents referenced herein and the consummation of the transactions contemplated hereby, and no consent of any other party is required. (4) Enforceabilitv of Agreement. The persons executing any instruments for or on behalf of the Agency have been authorized to act on behalf of the Agency and that this Agreement is valid and enforceable against the Agency in accordance with its terms and each instrument to be executed by the Agency pursuant hereto or in connection therewith will, when executed, be valid and enforceable against the Agency in accordance with its terms. No approval, consent, order or authorization of, or designation or declaration of any other person, is required in connection with the valid execution and delivery of and compliance with this Agreement by the Agency. (5) Title. Prior to the Closing, the Agency will be the owner of, and the Developer will acquire hereunder, the entire right, title and interest in the Property to effectively vest in the Developer good and marketable fee simple title to the Property, that the Developer will acquire the Property free and clear of all liens, encumbrances, claims, rights, demands, easements, leases or other possessory interests, agreements, covenants, conditions, and restrictions of any kind or character, including, without limiting the generality of the foregoing, liens or claims for taxes, mortgages, conditional sales contracts, or other title retention agreement, deeds of trust, security agreements and pledges and mechanics liens, except: (i) the matters described in Section 2.05, and (ii) the exceptions to title approved by the Developer pursuant to Section 2.13. (6) No Litigation. There are no pending or, to the best of the Agency's knowledge, threatened claims, actions, allegations or lawsuits of any kind, whether for personal injury, property damage, property taxes or otherwise, that could materially and adversely affect the value or use of the Property or prohibit the sale thereof, nor to the best of the Agency's knowledge, is there any governmental investigation of any type or nature pending or threatened against or relating to the Property or the transactions contemplated hereby. (7) Ooeration and Condition Pending Closing. Between the date of this Agreement and the Close of Escrow, the Agency will continue to manage, operate and maintain the Agency Property in the same manner as existed prior to the execution of this Agreement. However, the Agency may demolish one (I) or more buildings, structures and/or improvements located at the Property, remove Hazardous Materials from the Property, and shall not to operate the video store nor maintain the billboard sign P:\Agendas\Agenda AttKhmenls\Agrms-Amend 2006\11-20-06 La Placitl Anal DDA.doc 28 located on the Spar Property beyond any period of time reasonably required to remove such billboard sign. (8) Contracts. There are no contracts or agreements to which the Agency is a party relating to the operation, maintenance, development, improvement or ownership of the Property which will survive the Close of Escrow except as may be set forth in the Agency Grant Deed or other agreements by the Developer. (9) Develooment of Proiect. Although the Agency makes no representation or warranty that the Property is suitable for the development or operation of the Project, the Agency has no present knowledge of any condition of the Property which would prevent its development in accordance with the Scope of Development. (10) RESERVED - NO TEXT. (II) RESERVED - NO TEXT. (12) The Al!encv's Knowledge. For purposes of this Section 2.24, the terms "to the best of the Agency's knowledge" or "to the Agency's knowledge" shall mean the actual knowledge of Executive Director of the Agency. If the Agency becomes aware of any act or circumstance which would change or render incorrect, in whole or in part, any representation or warranty made by the Agency under this Agreement, whether as of the date given or any time thereafter through the Closing Date and whether or not such representation or warranty was based upon the Agency's knowledge and/or belief as of a certain date, the Agency will give immediate written notice of such changed fact or circumstance to the Developer, but such notice shall not release the Agency of its liabilities or obligations with respect thereto. All representations and warranties contained in this Section 2.24(a) are true and correct on the date hereof and on the Closing Date and the Agency's liability for misrepresentation or breach of warranty, representation or covenant, wherever contained in this Agreement, shall survive the execution and delivery of this Agreement and the Close of Escrow. (b) Reoresentations. Warranties and Covenants bv the Develooer. The Developer hereby makes the following representations, warranties and covenants and acknowledges that the execution of this Agreement by the Agency has been made in material reliance by the Agency on such representations, warranties and covenants: (I) The Developer is a duly organized and validly existing California limited liability company. The Developer has the legal right, power and authority to enter into this Agreement and the instruments and documents referenced herein and to consummate the transactions contemplated hereby. The persons executing this Agreement and the instruments referenced herein on behalf of the Developer hereby represent and warrant 4812-3945-3441.1 11l14lO6jrnm. 29 P:\Agendas\Agellda Auaclunents\AgmVs-Amend 2006\1 1-20-<16 La Placka Final DDA.doc that such persons have the power, right and authority to bind the Developer. (2) The Developer has taken all requisite action and obtained all requisite consents in connection with entering into this Agreement and the instruments and documents referenced herein and the consummation of the transactions contemplated hereby, and no consent of any other party is required. (3) This Agreement is, and all agreements, instruments and documents to be executed by the Developer pursuant to this Agreement shall be, duly executed by and are or shall be valid and legally binding upon the Developer and enforceable in accordance with their respective terms. (4) Neither the execution of this Agreement nor the consummation of the transactions contemplated hereby shall result in a breach of or constitute a default under any other agreement, document, instrument or other obligation to which the Developer is a party or by which the Developer may be bound, or under law, statute, ordinance, rule, governmental regulation or any writ, injunction, order or decree of any court or governmental body applicable to the Developer or to the Property. (5) Within sixty (60) calendar days after the mutual execution of this Agreement, the Developer, or an affiliate of the Developer, shall initiate the entitlement process with the City for the Kovats Property. The development of the Kovats Property as a mixed-use development shall be completed two and one-half years (2 1/2) after the mutual execution of this Agreement. All representations and warranties contained in this Section 2.24(b) are true and correct on the date hereof and on the Closing Date and the Developer's liability for misrepresentation or breach of warranty, representation or covenant, wherever contained in this Agreement, shall survive the execution and delivery of this Agreement and the Closing. Section 2.25. Damage, Destruction and Condemnation. Prior to the Agency's delivery of possession of the Property to the Developer at the Close of Escrow, the risk of loss or damage to the Property shall remain upon the Agency. If the Property suffers damages as a result of any casualty prior to the Close of Escrow, which may materially diminish its value, then the Agency shall give written notice thereof to the Developer promptly after the occurrence of the casualty. The Developer can elect to either: (i) accept the Property in its damaged condition or (ii) the Developer may terminate this Agreement and recover the Deposit as set forth in Section 2.02. The Developer shall confmn the exercise of its election under subparagraph (i) or (ii) of the preceding sentence within thirty (30) calendar days after its receipt after notice from the Agency. 4812-3945-3441.1 11/14/06 jnun 30 P:\Agendas\Agenda Allaclunents\Agrmls-Amend 2006\11-20-06 La Placlla Final DDA,doc In the event that, prior to the Close of Escrow, any governmental entity shall commence any actions of eminent domain or similar type proceedings to take any portion of the Property, the Agency shall give prompt written notice thereof to the Developer, and the Developer shall have the option either: (i) to elect not to acquire the Property, terminate this Agreement and recover the Deposit as set forth in Section 2.02; or (ii) the Developer may complete the acquisition of the Property under this Agreement, in which case the Developer shall be entitled to all the proceeds of such taking; provided, however, that the Agency agrees that it shall not settle or compromise the proceedings before the Close of Escrow without the Developer's prior written consent, which consent will not be unreasonably withheld or delayed. The Developer shall confirm the exercise of its election under subparagraph (i) or (ii) of the preceding sentence within thirty (30) calendar days after its receipt of notice from the Agency. ARTICLE III DEVELOPMENT OF THE PROJECT Section 3.01. Development of the Proiect bv Developer. (a) Scope of Development. It is the intent of the parties that promptly following the Close of the Escrow the Developer shall redevelop the Project. The Project consists of the elements set forth in the Scope of Development attached hereto as Exhibit "B". Subject to the terms, covenants, conditions and restrictions of this Agreement, the Project shall consist of an upscale commercial and retail shopping center with Superior Super Warehouse, or such other grocery store approved by the Agency and the City in their sole and absolute discretion, as an anchor tenant, and the Project shall have architecture complementary to the Santa Fe Depot located in the vicinity. (b) The City's zoning ordinance and the City's building requirements will be applicable to the use and development of the Project. The Developer acknowledges that any change in the plans for development for the Project as set forth in the Scope of Development shall be subject to the City's zoning ordinance and building requirements. No action by the Agency or the City with reference to this Agreement or related documents shall be deemed to constitute a waiver of any City requirements which are applicable' to the Project or to the Developer, any successor in interest of the Developer or any successor in interest pertaining to the Project, except by modification or variance approved by the City consistent with this Agreement. (c) The Scope of Development set forth in Exhibit "B" is hereby approved by the Agency upon its execution of this Agreement. The Project shall be developed and completed in conformance with the approved Scope of Development and any and all other plans, specifications and similar development documents required by this Agreement, except for such changes as may be mutually agreed upon in writing by and between the Developer and the Agency. The Agency agrees to approve preliminary and construction plans and preliminary and landscaping plans, if reasonably consistent with the approved Scope of Development. (d) The approval of the Scope of Development by the Agency hereunder shall not be binding upon the City Councilor the Planning Commission of the City with respect to any approvals of the Project required by such other bodies. If any revisions of the Scope of 4812-3945-3441.1 111l4106jmm 31 P:\Agendas\Agenda Allachrnents\Agrmls-Arnend 2006\11-20-()6 La Placit. Final DDA.doc Development, in the form as approved by the Agency in said Exhibit "B", shall be required by another government official, agency, department or bureau having jurisdiction over the development of the Project, the Developer and the Agency shall cooperate in efforts to provide waivers as to such revisions to thus cause said Exhibit "B" to be modified to comply with such revisions, or to obtain approvals of any such revisions from the applicable govemmental agency which have been made by the Developer and have thereafter been approved by the Agency. The Agency shall not unreasonably withhold or delay approval of such revisions. (e) Notwithstanding any provision to the contrary in this Agreement, the Developer agrees to accept and comply fully with any and all reasonable conditions of approval applicable to all pennits and other governmental actions affecting the development of the Project and consistent with this Agreement. (f) The Developer shall cause landscaping plans in connection with development of the Project to be prepared by a licensed landscape architect. The Developer shall prepare and submit to the City for its approval, preliminary and landscaping plans for the Project, which are consistent with City Code requirements. These plans shall be prepared, submitted and approved within the times respectively established therefore in the Schedule of Performance as shown on Exhibit "D" attached hereto and incorporated herein by reference and shall be consistent with the Scope of Development. (g) The Developer shall prepare and submit development plans, construction drawings and related documents for the development of the Project consistent with the Scope of Development to the City. The development plans, construction drawings and related documents shall be in the form of drawings, plans and specifications. Drawings, plans and specifications are hereby defined as those, which contain sufficient detail necessary to obtain a building pennit from the City. (h) During the preparation of all drawings and plans in connection with the development of the Project, the Developer shall provide to the Agency regular progress reports to advise the Agency of the status of the preparation by the Developer, and the submission to and review by the City of construction plans and related documents. The Developer shall communicate and consult with the Agency as frequently as is necessary to ensure that any such plans and related documents submitted by the Developer to the City are being processed in a timely fashion. (i) The Agency shall have the right of reasonable architectural review and approval of building exteriors and design of the structures to be constructed on the Project. The Agency shall also have the right to review all plans, drawings and related documents pertinent to the development of the Project in order to ensure that they are consistent with this Agreement and with the Scope of Development. G) The Developer shall timely submit to the City for its review and approval any and all plans, drawings and related documents pertinent to the development of the Project and the development of the Kovats Property, as required by the City. The Agency shall cooperate with and shall assist the Developer in order for the Developer to obtain the approval of 4812.3945.3441.1 11/14106 jrnm 32 P:\Agendas\Agenda AnachmEnts\Agnnls-Amend 2006\11-20-06 ~ Plleil. Final DCA-doc any and all development plans, construction drawings and related documents submitted by the Developer to the City in connection with the Project and in connection with the Kovats Property consistent with this Agreement within ninety (90) calendar days following the City's receipt of the plans, drawings and related documents (collectively, the "Project Plans") pertinent to the development of the Project and receipt of the plans, drawings and related documents (collectively, the "Kovats Plans") pertinent to the development of the Kovats Property. Any failure by the City to approve the Project Plans and/or the Kovats Plans, or any portion or part thereof, or to issue necessary permits for the development of the Project within said ninety (90) calendar day period and/or for the development of the Kovats Property within said ninety (90) calendar day period shall constitute an enforced delay hereunder, and the Schedule of Performance shall be extended by that period of time beyond said ninety (90) calendar day period in which the City approves said plans; provided, however, that in the event that the City disapproves of any of the Project Plans and/or the Kovats Plans, or any portion or part thereof, the Developer shall within thirty (30) calendar days after receipt of such disapproval revise and resubmit the Project Plans and/or the Kovats Plans in a manner that addresses the City's requirements and thereafter negotiate in good faith to obtain the City's approval thereof. (k) The Agency shall in good faith use its best efforts to cause the City to approve in a timely fashion the Project Plans, which are consistent with the Scope of Development. (I) The Agency shall approve any modified or revised plans, drawings and related documents to which reference is made in this Agreement within the times established in the Schedule of Performance as long as such plans, drawings and related documents are generally consistent with the Scope of Development and any other plans, which have been approved by the Agency. Upon any disapproval of plans, drawings or related documents, the Agency shall state in writing the reasons for such disapproval. The Developer, upon receipt of notice of any disapproval, shall promptly revise such disapproved portions of the plans, drawings or related documents in a manner that addresses the reasons for disapproval and reasonably meets the requirements of the Agency in order to obtain the Agency's approval thereof. The Developer shall resubmit such revised plans, drawings and related documents to the Agency as soon as possible after its receipt of the notice of disapproval and, in any event, no later than thirty (30) calendar days thereafter. The Agency shall approve or disapprove such revised plans, drawings and related documents in the same manner and within the same times as provided in this Section for approval or disapproval of plans, drawings and related documents initially submitted to the Agency. (m) If the Developer desires to make any change in the construction drawings, plans and specifications and related documents after their approval by the Agency and/or the City, the Developer shall submit the proposed change in writing to the Agency and/or the City for approval. The Agency shall notify the Developer of approval or disapproval thereof in writing within thirty (30) calendar days after submission to the Agency. This thirty (30) calendar day period may be extended by mutual consent of the Developer and the Agency. Any such change shall, in any event, be deemed to be approved by the Agency unless rejected, in whole or in part, by written notice thereof submitted by the Agency to the Developer, setting forth in detail the reasons therefore, and such rejection shall be made within said thirty (30)-calendar day 4812-3945-3441.1 1l/14106 jmm 33 P:\Agendas\Agenda Atlachments\Agrmls-Amcnd 2006\11-2{)..{l6 La Placita Final DDA.doc period unless extended as permitted herein. The Agency shall use its best efforts to cause the City to review and approve or disapprove such changes within thirty (30) calendar days after the receipt by the City of such changes in the construction drawings, plans, specifications and/or related documents. (n) The Developer, upon receipt of a notice of disapproval by the Agency and/or the City, may revise such portions of the proposed change in construction drawings, plans and specifications and related documents as are rejected and shall thereafter resubmit such revisions to the Agency and/or the City for approval in the manner provided in Section 3.01(m) hereof. (0) The Developer shall have the right during the course of construction to make changes in construction of structures and "minor field changes" without seeking the approval of the Agency; provided, however, that such changes do not affect the type of use to be conducted within all or any portion of a structure. Said "minor field changes" shall be defined as those changes from the approved construction drawings, plans and specifications which have no substantial effect on the improvements and are made in order to expedite the work of construction in response to field conditions. Nothing contained in this Section shall be deemed to constitute a waiver of or change in the City's Building Code requirements governing such "minor field changes" or in any and all approvals by the City otherwise required for such "minor field changes". (p) The cost of constructing the Project, including, without limitation, all off- site public improvements in connection with, relating to, or arising from, the construction and/or development of the Project, shall be borne by the Developer which, if any, are required by the City as a condition of approval for the Project. The Developer shall comply with all applicable State laws relative to the payment of prevailing wages with respect to the construction and development of all off-site public improvements, in connection with or relating to the Project, and shall provide written verification of such compliance to the Agency upon written request from the Agency to the Developer. (q) The Developer shall at its expense cause to be prepared, and shall pay any and all fees pertaining to the review and approval of the development project approvals by the City, including the cost and preparation of all required construction, planning and other documents reasonably required by governmental bodies pertinent to the development of the Project hereunder including, but not limited to, specifications, drawings, plans, maps, permit applications, land use applications, zoning applications and design review documents. (r) The Developer shall pay for any and all costs, including but not limited to the costs of design, construction, relocation, and securing of permits for utility improvements and connections, which may be required in developing the Project. The Developer shall obtain any and all necessary approvals prior to the commencement of applicable portions of said construction, and the Developer shall take reasonable precautions to ensure the safety and stability of surrounding properties during said construction. 4812-3945-3441.1 1l1l4lO6jrnm 34 P:\Agendas\Agend.a AlIacbmenl5\Agrtrts-Amend 2006\II.20-()6 La Placita Final DDA.doc (s) The Developer shall commence the work of improvements of the Project on the Property immediately upon the Close of Escrow for the Property and following the issuance of building permits for the Project and thereafter shall diligently prosecute such construction to completion. All construction and development obligations and responsibilities of the Developer as related to the Project shall be initiated and completed within the times specified in the Schedule of Performance attached hereto, or within such reasonable extensions of such times as may be granted by the Agency or as otherwise provided for in this Agreement. The Developer shall substantially complete the improvements of the Project within two (2) years following the commencement of the work of improvements. The Schedule of Performance shall be subject to revision from time to time as mutually agreed upon in writing by and between the Developer and the Agency. Any and all deadlines for performance by the parties shall be extended for any times attributable to delays, which are not the fault of the performing party and are caused by the other party, other than periods for review and approval or reasonable disapprovals of plans, drawings and related documents, specifications or applications for permits as provided in this Agreement. (t) During the period of construction of the Project, the Developer shall submit to the Agency written progress reports when and as reasonably requested by the Agency but in no event more frequently than every four (4) weeks. The reports shall be in such form and detail as may reasonably be required by the Agency, and shall include a reasonable number of construction photographs taken since the last such report submitted by the Developer. In addition, the Developer will attend Agency meetings when requested to do so by Agency Staff. (u) Prior to the commencement of any construction, the Developer shall furnish, or shall cause to be furnished, to the Agency duplicate originals or appropriate certificates of public indemnity and liability insurance in the amount of One Million Dollars ($1,000,000) combined single limit, naming the Agency and the City as additional insureds. Said insurance shall cover comprehensive general liability including, but not limited to, contractual liability; acts of subcontractors; premises-operations; explosion, collapse and underground hazards, if applicable; broad form property damage, and personal injury including libel, slander and false arrest. In addition, the Developer shall provide to the Agency adequate proof of comprehensive automobile liability insurance covering owned, non-owned and hired vehicles, combined single limit in the amount of One Million Dollars ($1,000,000) each occurrence; and proof of workers' compensation insurance. Any and all insurance policies required hereunder shall be obtained from insurance companies admitted in the State of California and rated at least B+: XII in Best's Insurance Guide. All said insurance policies shall provide that they may not be canceled unless the Agency and the City receive written notice of cancellation at least thirty (30) calendar days prior to the effective date of cancellation. Any and all insurance obtained by the Developer hereunder shall be primary to any and all insurance which the Agency and/or City may otherwise carry, including self insurance, which for all purposes of this Agreement shall be separate and apart from the requirements of this Agreement. Any insurance policies governing the Property as obtained by the Agency shall not be transferred from the Agency to the Developer. Appropriate insurance means those insurance policies approved by the Agency Counsel consistent with the foregoing. Any and all insurance required hereunder shall be maintained and kept in force until the Agency has issued the Certificate of Completion in connection with the development of the Project. 4812.3945.3441.1 t 1I14106jrnm 35 P;\Agendas\Agenda AltactunelllS\Agrmls--Amend 2006\11.20-06 L.a PJaciUl final DDA.doc (v) The Developer for itself and its successors and assigns agrees that in the construction of the Project, the Developer will not discriminate against any employee or applicant for employment because of sex, marital status, race, color, religion, creed, national origin, or ancestry. Notwithstanding the foregoing, the Developer will use best efforts to offer employment opportunities to local residents and will seek to acquire goods and services from local vendors. (w) The Developer shall carry out its construction of the Project in conformity with all applicable laws, and the Off-Site Public Improvements shall be constructed and installed in accordance with all applicable state labor standards and requirements as required pursuant to California law for public improvements paid or reimbursed with government funds. (x) The Developer shall, at its own expense, secure or shall cause to be secured, any and all permits, which may be required for such construction, development or work by the City or any other governmental agency having jurisdiction thereof. The Agency shall cooperate in good faith with the Developer in the Developer's efforts to obtain from the City or any other appropriate governmental agency any and all such permits and, upon applicable to the development of the Project. (y) Officers, employees, agents or representatives of the Agency shall have the right of reasonable access to the Project, without the payment of charges or fees, during normal construction hours during the period of construction of the Project for the purpose of verifying compliance by the Developer within the terms of this Agreement. Such officers, employees, agents or representatives of the Agency shall be those persons who are so identified by the Executive Director of the Agency. Any and all officers, employees, agents or representatives of the Agency who enter the Project pursuant hereto shall identify themselves at the job site office upon their entrance onto the Project and shall at all times be accompanied by a representative of the Developer while on the Project; provided, however, that the Developer shall make a representative of the Developer available for this purpose at all times during normal construction hours upon reasonable notice from the Agency. The Agency shall indemnify and hold the Developer harmless from injury, property damage or liability arising out of the exercise by the Agency and/or the City of this right of access, other than injury, property damage or liability relating to the negligence and/or wrongful act or omission of the Developer and/or its members, partners, officers, employees, agents, representatives and/or independent contractors. (z) The Agency shall inspect relevant portions of the construction site prior to issuing any written statements reflecting adversely on the Developer's compliance with the terms and conditions of this Agreement pertaining to development of the Project. (aa) The Developer shall comply with all obligations imposed under State law in connection with the development of the Project in accordance with the requirements of any supervisory agency having jurisdiction over the Project. The Developer acknowledges that it is not the responsibility of the Agency to monitor or enforce any such requirements and the Developer agrees to hold harmless from and indemnify the Agency against any liability, cost or claim resulting from the Developer's breach of the requirements of any such supervisory agency, as such requirements may be amended or interpreted from time to time as applicable to the 4812-3945-3441.1 11/14/06jmm 36 P:\Agendas\Agenda Altac;hmentslAgrmts-Amend 2006\11-2()..()6 La Placita Final DDA.doc Project. Such obligations to be assumed by the Developer include, but are not limited to, compliance with the mitigation monitoring plan approved by the Agency as part of the environmental review and approval in connection with the approval of this Agreement by the governing body of the Agency. Section 3.02. [RESERVED -- NO TEXT]. Section 3.03. Taxes, Assessments. Encumbrances and Liens. The Developer shall pay prior to the delinquency all real property taxes and assessments assessed and levied on or against the Project subsequent to the Close of Escrow. The Developer shall not place and shall not allow to be placed on the Project any mortgage, trust deed, deed of trust, encumbrance or lien not otherwise authorized by this Agreement except for the deed of trust securing the construction loan and encumbering the Property and the Developer Property which loan funds shall be used by the Developer to fund the construction and development of the Project in accordance with this Agreement shall be permitted. The Developer shall remove, or shall have removed, any levy or attachment made on the Project, or shall assure the satisfaction thereof. Nothing herein contained shall be deemed to prohibit the Developer from contesting the validity or amounts of any tax assessment, encumbrance or lien, nor to limit the remedies available to the Developer in respect thereto. The covenants of the Developer set forth in this Section relating to the placement of any unauthorized mortgage, trust deed, deed of trust, encumbrance or lien, shall remain in effect only until the Certificate of Completion has been recorded with respect to redevelopment of the Project. Section 3.04. Change in Ownership Management and Control of the Developer __ Assignment and Transfer. (a) Transfer as used in this Section 3.04, the term "Transfer" means: (I) Any total or partial sale, assignment or conveyance, or any trust or power, or any transfer in any other mode or form, by the Developer of more than a 49% interest, or series of such sales, assignments and the like which in the aggregate exceed a disposition of more than a 49% interest, with respect to its interest in this Agreement, the Property or the Project, or any part thereof or any interest therein, or of the improvements constructed thereon, or any contract or agreement to do any of the same; or (2) Any total or partial sale, assignment, conveyance, or transfer in any other mode or form, of or with respect to any ownership interest of the Developer, or series of such sales, assignments and the like which in the aggregate exceeded a disposition of more than a 49% interest; or (3) Any merger, consolidation, or sale of all or substantially all of the assets of the Developer in this Agreement, the Property and/or the Project, or series of such sales, assignments and the like which in the aggregate exceeded a disposition of more than a 49% interest. 4812-3945-3441.1 11l14106jrnm 37 P:\A~OOas\Agenda Attac::lunentS\Agrms-Amelld 2006\11.20-06 La Placila Final DDA.doc (b) This Agreement is entered into solely for the purpose of the redevelopment of the Project and the improvement of the Project and the subsequent operation and use of the Project by the Developer in accordance with the terms hereof. The Developer recognizes that the qualifications and identity of the Developer are of particular concern to the Agency, in view of: (I) the importance of the redevelopment of the Project to the general welfare of the community; and (2) the fact that a Transfer is for all practical purposes a transfer or disposition of the responsibilities of the Developer, as applicable, with respect to the redevelopment of the Project. The Developer further recognizes and acknowledges that it is because of the qualifications and identity of the Developer that the Agency is entering into this Agreement with the Developer, and, as a consequence, Transfers are permitted only as provided in this Agreement. (c) The limitations on a Transfer as set forth in this Section 3.04 shall apply until such time as a Certificate of Completion is approved by the Agency and filed for recordation as provided in Section 3.07. Except as expressly permitted in this Agreement, the Developer represents and agrees that it has not made nor shall it create or suffer to be made or created, any Transfer, either voluntarily or by operation of law without the prior written approval of the Agency until such time as a Certificate of Completion has been recorded. After the date of recordation of a Certificate of Completion, certain other provisions of this Agreement shall nonetheless be applicable to subsequent conveyances of interest in the Project, or portions thereof, as provided in Article IV of this Agreement. Any Transfer made in contravention of this Section 3.04 shall be voidable at the election of the Agency and shall then be deemed to be a default under this Agreement. (d) The following types of a Transfer shall be permitted and approved by the Agency and are referred to herein as a "Permitted Transfer": (I) Any Transfer by the Developer creating a security interest in the Project, or any portion thereof, for acquisition of the Property or any financing for the construction and improvement of the Project, which conforms to the provisions of Section 3.05; (2) Any Transfer directly resulting from the foreclosure of a Security Financing Interest created by the Developer in the Property and/or the Project or the granting of a deed in lieu of foreclosure of a Security Financing Interest; (3) Any Transfer of stock or equity of the Developer, which does not change management, or operational control of the Property or the Project; 4812-3945-3441.1 11114106 jrnm 38 P:\Agendas\A8enda AIl;ll;h~s\Aflrm.s-Amend 2006\11-20-06 La PIal;:i1a Final DDA.doc (4) Any Transfer of any interest in the Developer, irrespective of the percentage of ownership: (A) to members of the family, i.e. spouse, brother, sister, nephew, niece, parent, child and/or issue of any of the same, of the Developer or; (B) to a trust for the benefit of any such family member; or (C) to any affiliate of or other entity controlled by the Developer, or (D) to any other entity in which the Developer owns a controlling interest. (e) No Permitted Transfer of this Agreement or any interest in the Property or the Project, by the Developer, other than a Permitted Transfer created pursuant to a Security Financing Interest, shall be effective unless, at the time of the Permitted Transfer, the person or entity to which such Transfer is made, shall expressly assume the obligations of the Developer under this Agreement and such person also agrees to be subject to the conditions and restrictions to which the Developer is subject under this Agreement. Such an assumption of obligation shall be evidenced by a written instrument delivered to the Agency in a recordable form, which is satisfactory to the Agency. (f) Provided the particular transaction satisfies the applicable provisions of Section 3.04(d), the Developer is not required to give the Agency advance notice of such a Permitted Transfer. The Agency may, in its reasonable discretion, approve in writing any other Transfer as requested by the Developer, provided such proposed transferee can demonstrate successful and satisfactory experience in the ownership, operation, and management of an operation similar to the Project. Any such transferee for itself and its successors and assigns, and for the benefit of the Agency shall expressly assume all of the obligations of the Developer to the Agency under this Agreement. There shall be submitted to the Agency for review all instruments and other legal documents proposed to effect any such other Transfer; and the approval or disapproval of the Agency shall be provided to the Developer in writing within thirty (30) calendar days from receipt by the Agency of Owner's or the Operator's request, and the Agency approval of a transfer and shall not be unreasonably withheld or delayed. (g) Following the issuance of a Certificate of Completion, the Developer shall be released by the Agency from any liability under this Agreement which may arise from a default of a successor in interest occurring after the date of such a Transfer; provided, however, that the covenants of the Developer as set forth in Article IV of this Agreement shall run with the land for the term as provided in Article IV. Section 3.05. Secured Financings: Right of Holders. (a) Notwithstanding any provision of Section 3.04 to the contrary, mortgages, deeds of trust, or any other form of lien required for any reasonable method of financing the acquisition of the Property and/or the construction and improvement of the Project, or any portion thereof, are permitted before the recordation of the Certificate of Completion, referred to in Section 3.07 of this Agreement. The Developer shall notify the Agency in writing in advance of any mortgage, deed of trust, or other form of lien for financing if the Developer proposes to enter into the same before the recordation of any Certificate of Completion. The Developer shall not enter into any such conveyance for acquisition or construction financing without the prior 4812-3945-3441.1 11I14106 jrnrn 39 P:\Agendas\Ageoda A1tachmenls\AgmlS-Ameod 2006\1 ]-20-06 La PJacila FilL1ll ODA.doc written approval of the Agency, which approval the Agency will not unreasonably withhold if any such conveyance is given to a responsible financial or lending institutionincluding, without limitation, banks, savings and loan institutions, insurance companies, real estate investment trusts, pension programs and the like, or other acceptable persons or entities for the purpose of acquiring the Property and/or of constructing the Project. (b) The Developer shall promptly notify the Agency of any mortgage, deed of trust or other refinancing, encumbrance or lien that has been created or attached thereto prior to completion of the construction of the improvements of the Project whether by voluntary act of the Developer or otherwise; provided, however, that no notice of filing of preliminary notices or mechanic's liens need be given by the Developer to the Agency prior to suit being filed to foreclose such mechanic's lien. (c) The words "mortgage" and "deed of trust" as used herein shall be deemed to include all other customary and appropriate modes of financing real estate construction and land development. (d) The holder of any mortgage, deed of trust or other security interest authorized by this Agreement shall in no manner be obligated by the provisions of this Agreement to construct or complete the improvement of the Project or to guarantee such construction or completion. (e) Whenever the Agency shall deliver any notice or demand to the Developer with respect to any breach or default by the Developer in the completion of construction of the improvements, or any breach or default of any other obligations which, if not cured by the Developer, entitle the Agency to terminate this Agreement or exercise its right to re-enter the Property and/or the Project, or a portion thereof under Section 5.07, the Agency shall at the same time deliver to each holder of record of any mortgage, deed of trust or other security interest authorized by this Agreement a copy of such notice or demand. Each such holder shall insofar as the rights of the Agency are concerned have the right, at its option, to commence the cure or remedy of any such default and to diligently and continuously proceed with such cure or remedy, within one hundred twenty (120) calendar days after the receipt of the notice; and to add the cost thereof to the security interest debt and the lien of its security interest. If such default shall be a default which can only be remedied or cured by such holder upon obtaining possession, such holder shall seek to obtain possession with diligence and continuity through a receiver or otherwise, and shall remedy or cure such default within one hundred twenty (120) calendar days after obtaining possession; provided that in the case of a default which cannot with diligence be remedied or cured, or the remedy or cure of which cannot be commenced, within such one hundred twenty (120) calendar day period, such holder shall have such additional time as is reasonably necessary to remedy or cure such default of the Developer. Nothing contained in this Agreement shall be deemed to permit or authorize such holder to undertake or continue the construction or completion of the improvements beyond the extent necessary to conserve or protect the improvements or construction already made without first having expressly assumed the Developer's obligations by written agreement satisfactory to the Agency. The holder in that event must agree to complete, in the manner provided in this Agreement, the improvements to which the lien or title of such holder relates and must submit evidence satisfactory to the Agency 4812-3945-3441.1 11114/06 jrnm 40 P:\Agendas\Agenda Amdunents\AgrmlS-Amend 2OQ6\11-20-06 La Placit8 Finlll DDA.doc that it has the qualifications and financial responsibility necessary to perform such obligations. Any such holder completing such improvements in accordance herewith shall be entitled, upon written request made to the Agency, to be issued Certificate of Completion by the Agency. (f) In any case where, one hundred eighty (180) calendar days after default by the Developer the holder of any mortgage, deed of trust or other security interest creating a lien or encumbrance upon the Property and/or the Project, or any portion thereof, has not exercised the option to construct the applicable portions of the Project, or has exercised the option but has not proceeded diligently and continuously with construction, the Agency may purchase the mortgage, deed of trust or other security interest by payment to the holder of the amount of the unpaid debt, including principal, accrued and unpaid interest, late charges, costs, expenses and other amounts payable to the holder by the Developer under the loan documents between holder and the Developer. If the ownership of the Property and/or the Project has vested in the holder, the Agency may at its option but not its obligation be entitled to a conveyance from the holder to the Agency upon payment to the holder of an amount equal to the sum of the following: (1) The unpaid mortgage, deed of trust or other security interest debt, including principal, accrued and unpaid interest, late charges, costs, expenses and other amounts payable to the holder by the Developer under the loan documents between the holder and the Developer, at the time title became vested in the holder less all appropriate credits, including those resulting from collection and application of rentals and other income received during foreclosure proceedings. (2) All expenses, if any, incurred by the holder with respect to foreclosure. (3) The net expenses, if any, exclusive of general overhead, incurred by the holder as a direct result of the subsequent ownership or management of the Property or the Project, such as insurance premiums and real estate taxes. (4) The cost of any improvements made by such holder. (5) An amount equivalent to the interest that would have accrued on the aggregate on such amounts had all such amounts become part of the mortgage or deed of trust debt and such debt had continued in existence to the date of payment by the Agency. (6) After expiration of the aforesaid one hundred eighty (180) calendar day period, the holder of any mortgage, deed of trust or other security affected by the option created by this Section, may demand, in writing, that the Agency act pursuant to the option granted hereby. If the Agency fails to exercise the right herein granted within sixty (60) calendar days from the date of such written demand, the Agency shall be conclusively deemed to have waived such right of purchase of the mortgage, deed of trust or other security interest. 4812-3945-344Ll 11114106 jmm 41 P:\Agenda.s\Agenda Attlldlments\AgrmU.Amend 2006\] l-2O-{)(j La Placila Final DDA.doc (g) In the event of a default or breach by the Developer of a mortgage, deed of trust or other security interest with respect to the Project, or any portion thereof, prior to the issuance of a Certificate of Completion for the Project, or any portion thereof, and the holder has not exercised its option to complete the development, the Agency may cure the default but is under no obligation to do so prior to completion of any foreclosure. In such event, the Agency shall be entitled to reimbursement from the Developer of all costs and expenses incurred by the Agency in curing the default. The Agency shall also be deemed to have a lien of the Agency as may arise under this Section 3.05(g) upon the Project, or any portion thereof to the extent of such costs and disbursements. Any such lien shall be subordinate and subject to mortgages, deeds of trust or other security instruments executed by the Developer for the purpose of obtaining the funds to construct and improve the Project as authorized herein. Section 3.06. Right of the Agency to Satisfv Other Liens on the Property after Conveyance of Title. After the conveyance of title to the Property by the Agency to the Developer and prior to the recordation of the Certificate of Completion as referred to in Section 3.07 of this Agreement, and after the Developer has had a reasonable time to challenge, cure or satisfy any unauthorized liens or encumbrances on the Property, the Agency shall after one hundred twenty (120) calendar days' prior written notice to the Developer have the right to satisfy any such liens or encumbrances; provided, however, that nothing in this Agreement shall require the Developer to payor make provisions for the payment of any tax, assessment, lien or charge so long as the Developer in good faith shall contest the validity or amount thereof, and so long as such delay in payment shall not subject the Property, or any portion thereof, to forfeiture or sale. Section 3.07. Certificate of Completion. (a) Following the written request therefore by the Developer and the completion of construction of the Project, excluding any normal and minor building "punch-list" items to be completed by the Developer, the Agency shall furnish the Developer with a Certificate of Completion for the Project substantiated in the form set forth in Exhibit "E" attached hereto and incorporated herein by this reference. (b) The Agency shall not unreasonably withhold the issuance of a Certificate of Completion. A Certificate of Completion shall be, and shall so state, that it is a conclusive determination of satisfactory completion of all of the Developer's obligations under this Agreement, except for the provisions of Article IV which by their terms are intended to run with the land. After the recordation of the Certificate of Completion, any party then owning or thereafter purchasing, leasing or otherwise acquiring any interest in the Property and/or the Project shall not because of such ownership, purchase, lease or acquisition incur any obligation or liability under this Agreement, except that such party shall be bound by any covenants contained in the grant deed or other instrument of transfer which grant deed or other instrument of transfer shall include the provisions of Section 4.01 through 4.04, inclusive, of this Agreement. (c) Any Certificate of Completion shall be in such form as to permit it to be recorded in the Recorder's Office of the County where the Project is located. 4812.3945.3441.1 11114106jrnm 42 P:\Agendas\Agenda Anachmenls\AgrnW.s-Amend 2006\] 1-20-06 La Placita Final DDA.doc (d) If the Agency refuses or fails to furnish a Certificate of Completion after written request from the Developer, the Agency shall, within fifteen (15) calendar days after the written request or within three (3) calendar days after the next regular meeting of the Agency, whichever date occurs later, provide to the Developer a written statement setting forth the reasons with respect to the Agency's refusal or failure to furnish a Certificate of Completion. The statement shall also contain the Agency's opinion of the action the Developer must take to obtain a Certificate of Completion. If the reason for such refusal is confined to the immediate unavailability of specific items or materials for construction or landscaping at a price reasonably acceptable to the Developer or other minor building "punch-list" items, the Agency may issue its Certificate of Completion upon the posting of a bond or irrevocable letter of credit, reasonably approved as to form and substance by the Agency Counsel and obtained by the Developer in an amount representing a fair value of the work not yet completed as reasonably determined by the Agency. If the Agency shall have failed to provide such written statement within the foregoing period, the Developer shall be deemed conclusively and without further action of the Agency to have satisfied the requirements of this Agreement with respect to the Project as if a Certificate of Completion had been issued therefore. (e) A Certificate of Completion shall not constitute evidence of compliance with or satisfaction of any obligation of the Developer to any holder of a mortgage, or any insurer of a mortgage securing money loaned to finance the improvements described herein, or any part thereof. A Certificate of Completion shall not be deemed to constitute a notice of completion as referred to in Section 3093 of the California Civil Code, nor shall it act to terminate the continuing covenants or conditions subsequent contained in the Agency Grant Deed attached hereto as Exhibit "C". The issuance of a Certificate of Completion by the Agency pursuant to this Section 3 .07 shall not in any manner terminate any of the other obligations or responsibilities of the Agency which are not specifically stated to terminate as of the date of issuance of a Certificate of Completion but are intended to remain in full force and effect pursuant to this Agreement, including, but not limited to, those as set forth in Section 3.08 below. Section 3.08. Agencv Pavment of Off-Site Public Improvements. (a) Off-Site Public Improvements. The Developer shall construct and develop all off-site public improvements (collectively, the "Off-Site Public Improvements") which Off- Site Public Improvements are described in Exhibit "H" attached hereto and incorporated herein by this reference and are those as required by the City and/or by any other governmental authority in connection with, relating to, or arising from, the construction and development of the Project. The Agency shall reimburse the Developer for all costs and expenses actually paid by the Developer to construct and develop the Off-Site Public Improvements, in an amount not to exceed Two Million Dollars ($2,000,000) (the "Maximum Off-Site Public Improvement Costs"), in the aggregate, except as set forth in subsection (b) below, provided, however, that: (I) the Agency, the city engineer (the "City Engineer"), the City and all other governmental entities having jurisdiction thereof have approved and accepted, in their sole discretion, the Off-Site Public Improvements, as constructed, developed, installed and made by or on behalf of the Developer in connection with the Project; (2) the Off-Site Public Improvements comply with all 4812.3945.3441.1 11/14106 jmm 43 P:\Agendas\Agenda Altachments\Agnms-Amend 2006\] 1-20-06 La Placi!a Final DDA.doc federal, state, municipal and local laws, statutes, regulations, codes, ordinances, rules, orders, policies and procedures, as amended from time to time; (3) the Developer has paid prevailing wages pursuant to Labor Code Section 1720, et seq., in connection with the construction, development and installation of the Off-Site Public Improvements and shall provide the Agency with written verification to the Agency, the City Engineer and the City that the Off-Site Public Improvements comply with all federal, state, municipal and local prevailing wage laws; (4) the Developer must prepare, submit and publish all contractor bids and award contracts to third party contractors in compliance with all federal, state, municipal and local laws, statutes, regulations, codes, ordinances, rules, orders, policies and procedures, as amended from time to time, in connection with the construction, development and approval of the Off-Site Public Improvements (collectively, the "Contracts"); (5) the Developer must provide the Agency, the City Engineer and the City with invoices, statements, certificates, copies of mutually executed contracts, purchase orders, and all such other agreements, documents and/or instruments, as required by and satisfactory to the Agency, the City Engineer and the City, in their sole and absolute discretion, evidencing and supporting such expenditures in connection with the construction, development and/or, installation by or for the Developer of the Off-Site Public Improvements, or any portion thereof (singularly, the "Invoice" and collectively, the "Invoices"); and (6) the Agency shall make payment to the Developer, once per month, equal to the approved amount of each Invoice provided the Agency, the City Engineer and the City have approved and accepted the Off-Site Public Improvement work performed by or for the Developer, and have received and approved the form and content of each of the Contracts and each Invoice. (b) In the event that upon receipt by the Developer of the final conditions of approval from the City for the Project, it is determined that the Off-Site Public Improvements then being required by the City to be undertaken by the Developer will reasonably exceed the Maximum Off-Site Public Improvement Costs, the Developer may submit a written request to the Executive Director of the Agency that an amendment to this Agreement to increase the Maximum Off-Site Public Improvement Costs be considered by the governing body of the Agency prior to the commencement of the process for the advertisement and receipt of bids for the construction and installation of the Off-Site Public Improvements. (c) In the event that upon receipt of bids by the Developer in the manner as required in subsection (a) above, and whether or not the dollar amount of the Maximum Off-Site Improvement Costs has previously been amended by the Agency and the Developer as provided in subsection (b) above, the Developer may submit a written request to the Executive Director of the Agency that an amendment to this Agreement to increase the Maximum Off-Site Public Improvement Costs be considered by the governing body of the Agency prior to the award of the bid by the Developer to the lowest responsible bidder and the commencement of the construction of the Off-Site Public Improvements. (d) Nothing contained herein shall at anytime be deemed to require the Agency to approve any amendment to this Agreement and/or any amendment or increase to the Maximum Off-Site Improvement Costs except at its sole and absolute discretion. Any written request for an increase in the Maximum Off-Site Improvement Costs that is properly submitted by the Developer to the Execute Director of the Agency shall be thereupon submitted by the Executive Director of the Agency to the goveming body of the Agency with such 4812-3945-3441.1 1lI14f06 jrnm 44 P:\Agendas\Agenda Anachmenls\Agmu-Amend 2006\11.2(}{)6 La Placita Final DDA.doc recommendation for action thereon as deemed appropriate by the Executive Director of the Agency at their sole discretion. ARTICLE IV USE OF THE SITE Section 4.01. Uses. (a) The Developer covenants and agrees for itself, its successors, and assigns that the Project shall consist of and be used solely for commercial and retail purposes. The covenant of this Section 4.01(a) shall run with the land for the terms as set forth in the Agency Grant Deed. (b) The Developer further covenants and agrees for itself, its successors and assigns, that the Project shall be improved and developed in accordance with the Scope of Development. The Developer covenants to develop the Project in conformity with all applicable laws. The covenants of this Section 4.01(b) shall also run with the land until the later to occur of the recordation of the Certificate of Completion or the fifth (5th) anniversary date after the recordation of the Agency Grant Deed. (c) It is understood and agreed by the Developer that neither the Developer, nor its assigns or successors shall use or otherwise sell, transfer, convey, assign, lease, leaseback or hypothecate the Project or any portion thereof to any entity or party, or for any use of the Project, that is partially or wholly exempt from the payment of real property taxes pertinent to the Project, or any portion thereof, or which would cause the exemption of the payment of all or any portion of such real property taxes. The covenant of this Section 4.01(c) shall run with the land for the term as set forth in the Agency Grant Deed. Section 4.02. Maintenance of the Property. The Developer covenants and agrees for itself, its successors, and assigns to maintain the Project in a good condition free from any accumulation of debris or waste material, subject to normal construction job-site conditions, and shall maintain in a neat, orderly, healthy and good condition the landscaping required to be planted in accordance with the Scope of Development. In the event the Developer, or its successors or assigns, fails to perform the maintenance as required herein, the Agency shall have the right, but not the obligation, to enter the Project and undertake, such maintenance activities. In such event, the Developer shall reimburse the Agency for all reasonable sums incurred by it for such maintenance activities as set forth in the Agency Grant Deed. The covenant of this Section 4.02 shall run with the land for the term as set forth in the Agency Grant Deed. Section 4.03. Obligation to Refrain from Discrimination. The Developer covenants and agrees for itself, its successors, its assigns and every successor in interest to the Project or any part thereof, that there shall be no discrimination against or segregation of any person, or group of persons, on account of sex, marital status, race, color, religion, creed, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Project; nor shall the Developer, itself or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, 4812-3945-3441.1 11/14106 jmrn 45 P:\Agendas\Agenda Allachments\Agrmls-Amend 2006\11-20-06 La Placita Final DDA.doc sublessee or vendees of the Project. The covenant of this Section 4.03 shall run with the land for the term as set forth in the Agency Grant Deed with respect to the Project. Section 4.04. Form of Nondiscrimination and Nonsegregation Clauses. The Developer covenants and agrees for itself, its successors, its assigns, and every successor in interest to the Project, or any part thereof, that the Developer, such successors and such assigns shall refrain from restricting the sale, lease, sublease, rental, transfer, use, occupancy, tenure or enjoyment of the Project, or any part thereof, on the basis of sex, marital status, race, color, religion, creed, ancestry or national origin of any person. All deeds, leases or contracts pertaining thereto shall contain or be subject to substantially the following nondiscrimination or nonsegregation clauses: (1) In deeds: "The grantee herein covenants by and for itself, its successors and assigns, and all persons claiming under or through them, that there shall be no 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 premises herein conveyed, nor shall the grantee or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessee, or vendees in the premises herein conveyed. The foregoing covenants shall run with the land". (2) In leases: "The Lessee herein covenants by and for itself, its successors and assigns, and all persons claiming under or through them, and this lease is made and accepted upon and subject to the following conditions: That there shall be no 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 premises herein leased nor shall the lessee itself, or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy, of tenants lessees, sublessee, subtenants, or vendees in the premises herein leased". (3) In contracts: "There shall be no 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 premises herein conveyed or leased, nor shall the transferee or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy, of tenants, lessees, sublessees, subtenants, or vendees of the premises herein transferred." 4812-3945-3441.1 11/14106 jmm 46 P:\Agendas\Agenda Auacbmems\Agmv.s-Amend 2006\11-20-06 La Placita Final DDAdoc The foregoing provision shall be binding upon and shall obligate the contracting party or parties and any subcontracting party or parties, or other transferees under the instrument. The covenant of this Section 4.04 shall run with the land in perpetuity. ARTICLE V DEF AUL TS. REMEDIES AND TERMINATION Section 5.0 I. Defaults - General. (a) In the event that a breach or default may occur prior to the Close of Escrow, the remedies of the parties shall be as set forth in Article II of this Agreement. (b) From and after the Close of Escrow and subject to the extensions of time set forth in Section 6.05 hereof, failure or delay by either party to perform any term or provision of this Agreement shall constitute a default under this Agreement; provided, however, that if a party otherwise in default commences to cure, correct or remedy such default within thirty (30) calendar days after receipt of written notice specifying such default and shall diligently and continuously prosecute such cure, correction or remedy to completion, and where any time limits for the completion of such cure, correction or remedy are specifically set forth in this Agreement, then within said time limits, such party shall not be deemed to be in default hereunder. (c) The injured party shall give written notice of default to the party in default, specifying the default complained of by the nondefaulting party. Delay in giving such notice shall not constitute a waiver of any default nor shall it change the time of default. (d) Any failure or delays by either party in asserting any of its rights and remedies as to any default shall not operate as a waiver of any default or of any such rights or remedies. Delays by either party in asserting any of its rights and remedies shall not deprive either party of its right to institute and maintain any actions or proceedings, which it may deem necessary to protect, assert or enforce any such rights or remedies. Section 5.02. Legal Actions. (a) In addition to any other rights or remedies, either party may institute legal action to cure, correct, or remedy any default, to recover damages for any default, or to obtain any other remedy consistent with the purposes of this Agreement. Such legal actions must be instituted in the Superior Court of the County of San Bernardino, State of California, in any other appropriate court in that County, or in the Federal District Court in the Central District of California. (b) The laws of the State of California shall govern the interpretation and enforcement of this Agreement. (c) In the event that any legal action is commenced by the Developer against the Agency, service of process on the Agency shall be made by personal service upon the Executive Director or Chair of the Agency, or in such other manner as may be provided by law. 4812-3945-3441.1 11114106jmm 47 P:\Agendas\Agenda Allachmr:nts\Agmts-Ameoo 2OQ6\11-2(}.{t6 La P!acita Final DDA.doc (d) In the event that any legal action is commenced by the Agency against the Developer, service of process on the Developer shall be made by personal service on Luis Armona or Armando Delgado, Merona Enterprises, Inc., c/o La Placita on 2nd Street, 9550 Firestone Blvd., Suite 105, Downey, CA 90241, as an authorized corporate officer of the Developer, or such other Agent for service of process and at such address as may be specified in written notice to the Agency, or in such other manner as may be provided by law, and shall be valid whether made within or without the State of California. Section 5.03. Rights and Remedies are Cumulative. Except with respect to any rights and remedies expressly declared to be exclusive in or otherwise restricted by the provisions of Article II of this Agreement as relates to a default or breach occurring before the Close of Escrow, the rights and remedies of the parties as set forth in this Article V following the Close of Escrow are cumulative and the exercise by either party of one or more of such rights or remedies shall not preclude the exercise by it, at the same or different times, of any other rights or remedies for the same default or any other default by the other party. Section 5.04. Damages. If either party defaults with regard to any provision of this Agreement, the nondefaulting party shall serve written notice of such default upon the defaulting party. If the defaulting party does not diligently commence to cure such default after service of the notice of default and promptly complete the cure of such default within a reasonable time, not to exceed ninety (90) calendar days, or such shorter period as may otherwise be specified in this Agreement for default, after the service of written notice of such a default the applicable party shall be deemed to be in default under this Agreement. In the event that a default relates to a matter arising after the Close of Escrow, the defaulting party shall be liable to the other party for damages caused by such default. In the event that a default relates to a matter arising before the Close of Escrow, the remedies of the parties shall be limited to the liquidated damage sums as set forth in Article II of this Agreement. Section 5.05. Specific Performance Prior to Close of Escrow. Except as otherwise provided in Section 2.22 hereof, prior to the Close of Escrow neither party shall have or assert the equitable remedy of specific performance in the event of a default or breach, and the remedies of the parties with respect to such a breach or default prior to the Close of Escrow shall be limited to the termination rights and liquidated damage amounts or as set forth in Article II of this Agreement. Prior and after the Close of Escrow if either party defaults under any of the provisions of this Agreement, the nondefaulting party shall serve written notice of such default upon such defaulting party. If the defaulting party does not commence to cure the default and diligently and continuously proceed with such cure within thirty (30) calendar days after service of the notice of default, and such default is not cured within a reasonable time thereafter and where any time limits for the completion of such cure, correction or remedy are specifically set forth in this Agreement, then within said time limits, the nondefaulting party, at its option, may institute an action for specific performance of the terms of this Agreement, except as otherwise provided in Section 5.04 hereof. 4812-3945-3441.1 11114106 jmm 48 P:\Agendas\Agenda Atlachments\Agrnu-Amend 2006\1 1-20-06 l..t Placila F'maJ DDA.doc Section 5.06. Agencv Rights of Termination Following Close of Escrow. (a) Subject to written notice of default which shall specify the Developer's default and the action required to commence cure of same and upon thirty (30) calendar days notice to the Developer of the Agency's intent to terminate this Agreement pursuant to this Section, the Agency at its option may terminate this Agreement if the Developer in breach of this Agreement assigns or attempts to assign this Agreement, or any right therein, or attempts to make any total or partial sale, transfer or conveyance of the whole or any part of the Project or the improvements to be developed thereon in violation of the terms of this Agreement, and the Developer does not correct such violation within thirty (30) calendar days from the date of receipt of such notice. (b) Subject to written notice of default, which shall specify the Developer's default and the action required to commence cure of same and upon thirty (30) calendar days notice to the Developer of the Agency's intent to terminate this Agreement pursuant to this Section, the Agency at its option may terminate this Agreement if the Developer: (a) does not within the time limits set forth in this Agreement or as specifically provided in the Schedule of Performance, subject to extensions authorized by this Agreement due to force majeure or otherwise, submit development plans, construction drawings and related documents acceptable to the Planning Department and Building Division of the City for plan check purposes and in order to obtain building permits for the Project, together with applicable fees therefore, all prepared to the minimum acceptable standards as required by the Planning Department and Building Division of the City for commencement of formal review of such documents and as required by this Agreement, or (b) does not carry out its other responsibilities under this Agreement or in accordance with any modification or variance, precise plan, design review and other environmental or governmental approvals and such default is not cured or the Developer does not commence and diligently and continuously proceed with such cure within thirty (30) calendar days after the date of receipt of written demand therefore from the Agency. (c) Subject to written notice of default which shall specify the Developer's default and the action required to commence cure of same and upon thirty (30) calendar days notice to the Developer of the Agency's intent to terminate this Agreement pursuant to this Section, the Agency at its option may terminate this Agreement if upon satisfaction of all conditions precedent and concurrent therefore under this Agreement, the Developer does not take title to the Property under tender of conveyance by the Agency, and such breach is not cured within thirty (30) calendar days after the date of receipt by the Developer of written demand therefore from the Agency. Section 5.07. Right to Reenter. Repossess and Revest. (a) The Agency shall, upon thirty (30) calendar days notice to the Developer which notice shall specify this Section 5.07, have the right, at its option, to re-enter and take possession of all or any portion of the Project, or any portion thereof, together with all improvements thereon, and to terminate and revest in the Agency the estate conveyed to the Developer hereunder, if after conveyance of title, the Developer, or its successors in interest, shall: 4812-3945-3441.1 11/14/06 jmm 49 P:\Agendas\Agenda Attacbmenls\Agrmts-Amend 2006\11.20-{)6 La Placita Final DDA.doc (I) Fail to commence construction of all or any portion of the improvements as required by this Agreement for a period of ninety (90) calendar days after written notice to proceed from the Agency; provided that the Developer shall not have obtained an extension or postponement to which the Developer may be entitled pursuant to Section 6.05 hereof; or (2) Abandon or substantially suspend construction of all or any portion of the improvements for a period of ninety (90) calendar days after written notice of such abandonment or suspension from the Agency; provided that the Developer shall not have obtained an extension or postponement to which the Developer may be entitled to pursuant to Section 6.05 hereof; or (3) Assign or attempt to assign this Agreement, or any rights herein, or transfer, or suffer any involuntary transfer, of the Project or any part thereof, in violation of this Agreement, and such violation shall not have been cured within thirty (30) calendar days after the date of receipt of written notice thereof from the Agency to the Developer. (b) The thirty (30) calendar day written notice specified in this Section shall specify that the Agency proposes to take action pursuant to this Section and shall specify which of the Developer's obligations set forth in Subsections (I) through (3) herein have been breached. The Agency shall proceed with its remedy set forth herein only in the event that the Developer continues in default of said obligation(s) for a period of thirty (30) calendar days following such notice or, upon commencing to cure such default, fails to diligently and continuously prosecute said cure to satisfactory conclusion. (c) The right of the Agency to reenter, repossess, tenninate, and revest shall be subject and subordinate to, shall be limited by and shall not defeat, render invalid or limit: (I) Any mortgage, deed of trust or other security interest pennitted by this Agreement; (2) Any rights or interests provided in this Agreement for the protection of the holders of such mortgages, deeds of trust or other security interests; (3) Any leases, declarations of covenants, conditions and restrictions, easement agreements or other recorded documents applicable to the Project. (d) The grant deed to the Property and/or to the Project, or to any portion thereof, conveyed by the Developer to another party shall contain appropriate references and provisions to give effect to the Agency's right, as set forth in this Section under specified circumstances prior to the recordation of a Certificate of Completion with respect to such portion, to reenter and take possession of such portion, or any part thereof, with all improvements thereon, and to tenninate and revest in the Agency the estate conveyed to the Developer. 4812-3945-3441.1 1lI141ll6 jrnm 50 P:\Agendas\Agcoo.a Auachmems\Agnllu-Amend 2006\11-2O-{l6 La P1acka Fmal DDAdoc I (e) Upon the revesting in the Agency of title to the Property, or any part thereof, as provided in this Section, the Agency shall, pursuant to its responsibilities under State law, use its best efforts to resell the Property, or any part thereof, at fair market value as soon and in such manner as the Agency shall find feasible and consistent with the objectives of such law, to a qualified and responsible party or parties, as determined by the Agency, who will assume the obligations of making or completing the improvements, or such other improvements in their stead as shall be satisfactory to the Agency and in accordance with the uses specified for the Property, or any part thereof. Upon such resale of the Project, the Property, or any part thereof, the proceeds thereof shall be applied: (I) First, to make 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 with respect to the making or completion of the agreed improvements or any part thereof on the Property, or any portion thereof; next to reimburse the Agency on its own behalf or on behalf of the City for all actual costs and expenses incurred by the Agency and the City, including but not limited to customary and reasonable fees or salaries to third party personnel engaged in such action but excluding the Agency's or the City's general overhead expense, in connection with the recapture, management and resale of the Property, or any portion thereof; all taxes, assessments and water and sewer charges paid by the City and/or the Agency with respect to the Property or any portion thereof; any amounts otherwise owing to the Agency by the Developer and its successor transferee; and (2) Second, to the extent that any and all funds which are proceeds from such resale are thereafter available, to reimburse the Developer, or its successor transferee, up to the amount equal to the sum of: (I) the Purchase Price paid by the Developer for the Property, or allocable to the applicable part thereof; and (2) the costs incurred for the development of the Property, or applicable part thereof, or for the construction of the improvements thereon including, but not limited to, costs of carry, taxes and items set forth in the Developer's cost statement which shall be submitted to and approved by the Agency. (3) Any balance remaining after the foregoing application of proceeds shall be retained by the Agency. (f) Notwithstanding anything herein to the contrary, all rights of the Agency to re-enter the Project, or any portion thereof, under this Section 5.07 shall terminate upon the issuance of a Certificate of Completion for the Project. Section 5.08. Right to Terminate By The Agency Prior to Close of Escrow. Upon ten (10) calendar days' prior written notice from the Agency to the Developer and to the Escrow Holder, the Agency may elect to terminate this Agreement pursuant to this Section 5.08(a), Section 5.08(b), Section 5.08(c) and/or Section 5.08(d), without any 4812.3945.3441.1 1II14/06 jrnm 51 P:\Agendas\Agenda Allachmenls\Agmu-Amend 2006\11-20-{)6 La Placila Filial DDA_doc further liability or obligation by the Agency to the Developer, except for the return of the Deposit, and interest earned thereon, which Deposit and interest earned thereon shall be paid by the Escrow Holder to the Developer provided the Developer is not in default under this Agreement: (a) the Agency, as buyer, does not purchase and acquire fee simple title in and to the Belichesky Property from the Belichesky-Filipovic Trust, or its successors and/or assigns, as seller, pursuant to the Belichesky Property Arms Length Transaction and/or pursuant to the Belichesky Property Condemnation Proceedings; (b) the Developer does not purchase and acquire fee simple title in and to the Spar Property either directly or assign the purchase thereof to the Agency and/or does not pay the Spar Property Costs, as applicable; (c) the Property and/or the Developer Property, without the Belichesky Property and/or without the Spar Property, or any portion thereof, cannot be constructed, developed, improved and/or reconfigured in a manner acceptable to the Agency in its sole and absolute discretion; (d) the Agency has the right to tenninate this Agreement in accordance with the terms, covenants and/or conditions of this Agreement. Should the Agency terminate this Agreement pursuant to this Section 5.08(a), Section 5.08(b), Section 5.08(c) and/or Section 5.08(d), the Developer shall pay to the Agency the tennination costs provided for in Section 2.02(c)(v) or in Section 2.02(c)(vi), as applicable, within ten (10) calendar days' from the date that the Developer is in receipt of written notice from the Agency to the Developer stating the Agency's election to tenninate this Agreement pursuant to this Section 5.08. Section 5.09. Right to Terminate Bv The Developer Prior to Close of Escrow. Upon ten (10) calendar days' prior written notice from the Developer to the Agency and to the Escrow Holder, the Developer may elect to tenninate this Agreement pursuant to this Section 5.09(a), Section 5.09(b), Section 5.09(c), Section 5.09(f) and/or Section 5.09(g), and the Deposit, and interest earned thereon, shall be paid by the Escrow Holder to the Developer provided the Developer is not in default under this Agreement: (a) the Agency, as buyer, does not purchase and acquire fee simple title in and to the Belichesky Property from the Belichesky-Filipovic Trust, or its successors and/or assigns, as seller, pursuant to the Belichesky Property Arms Length Transaction and/or pursuant to the Belichesky Property Condemnation Proceedings; (b) the Developer, as buyer, is not able to purchase and acquire fee simple title in and to the Spar Property from Spar or the Agency, or their successors and/or assigns, as seller, notwithstanding the good faith and best efforts of the Developer; 4812.3945-3441.1 I J/I4J06jrnm 52 P:\Agendas\Agenda A.IIachmentsl.Agmn-Amend 2006\11-20-06 La Placita Final DOA.doc (c) the Property and/or the Developer Property, without the Belichesky Property and/or without the Spar Property, or any portion thereof, cannot be constructed, developed, improved and/or reconfigured in a manner acceptable to the Agency in its sole and absolute discretion; (d) [ reserved]; (e) [ reserved]; (f) the Belichesky Property Costs and the Spar Property Costs exceed the Upset Figure of Five Hundred Thousand Dollars ($500,000), in the aggregate, unless waived by the Developer at its sole election and discretion; (g) the Developer has the right to terminate this Agreement in accordance with the terms, covenants and/or conditions of this Agreement. Should the Developer terminate this Agreement pursuant to this Section 5.09(a), Section 5.09(b), Section 5.09(c), and/or Section 5.09(f), the Developer shall pay to the Agency the termination costs provided for in Section 2.02(c)(vii) or in Section 2.02(c)(viii), as applicable, within ten (10) calendar days' from the date that the Agency is in receipt of written notice from the Developer to the Agency stating the Developer's election to terminate this Agreement pursuant to this Section 5.09. In the event the Developer terminates this Agreement pursuant to and in accordance with Section 5.09(f), the Agency, upon ten (10) calendar days' prior written notice from the Agency to the Developer, may nullify this termination by the Developer and require both the Developer and the Agency to renegotiate, and agree upon, the excess Upset Figure payment by one (1) or by both of the parties of those amounts that exceed the aggregate Upset Figure provided for in 5.09(f) of this Agreement. If the Agency and the Developer are unable to determine and mutually agree upon the excess Upset Figure payment within thirty (30) calendar days from the date that the Developer is in receipt of such written notice from the Agency, this Agreement shall automatically terminate without any further duty or obligation by any party to notify the other. ARTICLE VI GENERAL PROVISIONS Section 6.01. Notices, Demands and Communications between the Parties. (a) Any and all notices, demands or communications submitted by any party to another party pursuant to or as required by this Agreement shall be proper if in writing and dispatched by messenger for immediate personal delivery, or by registered or certified United States mail, postage prepaid, return receipt requested, to the principal office of the Agency and the Developer, as applicable, as designated in Section 1.03(a) and Section 1.03(b) hereof. Such written notices, demands and communications may be sent in the same manner to such other 4812-3945-3441.1 11114106 jmm 53 P:\Agenda5\Agenda Atlacbmenls\Agrlt1ls-Amend 2006\] 1-20..(16 La Placita Final DDA.doc addresses as either party may from time to time designate as provided in this Section. Any such notice, demand or communication shall be deemed to be received by the addressee, regardless of whether or when any return receipt is received by the sender or the date set forth on such return receipt, on the day that it is dispatched by messenger for immediate personal delivery, or two (2) business days after it is placed in the United States mail as heretofore provided. (b) In addition to the submission of notices, demands or communications to the parties as set forth above, copies of all notices shall also be delivered by facsimile as follows: to the Developer: Merona Enterprises, Inc. c/o La Placita on 2nd Street, LLC 9550 Firestone Boulevard, Suite 105 Downey, California 90241 Telephone: 562-862-4360 FAX: 562-745-2341 with copy to: FAX: to the Agency: Redevelopment Agency of the City of San Bernardino Attention: Maggie Pacheco, Executive Director 201 North "E" Street, Suite 301 San Bernardino, California 92401 FAX: (909) 663-2294 with copy to: Lewis Brisbois Bisgaard & Smith LLP Attention: Mr. Timothy J. Sabo 650 Hospitality Lane, Suite 600 San Bernardino, California 92408 FAX: (909) 387-1138 Section 6.02. Conflict of Interest. No member, official or employee of the Agency having any conflict of interest, direct or indirect, related to this Agreement and the development of the Project shall participate in any decision relating to this Agreement. The parties represent and warrant that they do not have knowledge of any such conflict of interest. Section 6.03. Warrantv Against Pavment of Consideration for Agreement. The Developer warrants that it has not paid or given, and will not payor give, any third party any money or other consideration for obtaining this Agreement. Third parties, for the purposes of this Section, shall not include persons to whom fees are paid for professional services if rendered by attorneys, financial consultants, brokers, accountants, engineers, architects and the like when such fees are considered necessary by the Developer. 4812.3945.3441.1 1II14106 jnun 54 P:\Agendas\Agenda AlIachmetltS\Agmu-Amend 2006\11-2O-<l6l.a Placila Final DDA.doc Section 6.04. Nonliability of Agency Officials and Employees. No member, official or employee of the Agency shall be personally liable to the Developer, or any successor in interest, in the event of any default or breach by the Agency or for any amount which may become due to the Developer or to its successor, or on any obligations under the terms of this Agreement, except for gross negligence or willful acts of such member, officer or employee. Section 6.05. Enforced Delay: Extension of Time of Performance. In addition to specific provisions of this Agreement, performance by either party hereunder shall not be deemed to be in default, or considered to be a default, where delays or defaults are due to the force majeure events of war, insurrection, strikes, lockouts, riots, floods, earthquakes, fires, casualties, acts of God, acts of the public enemy, epidemics, quarantine restrictions, freight embargoes or lack of transportation, weather-caused delays, inability to secure necessary labor, materials or tools, delays of any contractors, subcontractor or supplier, which are not attributable to the fault of the party claiming an extension of time to prepare or acts or failure to act of any public or governmental agency or entity, including the Oty; provided, however, that acts or failure to act of the City or the Agency shall not extend the time for the Agency to act hereunder except for delays associated with lawsuit or injunction including but without limitation to lawsuits pertaining to the approval of this Agreement, and the like. An extension of time for any such force majeure cause shall be for the period of the enforced delay and shall commence to run from the date of occurrence of the delay; provided however, that the party which claims the existence of the delay has first provided the other party with written notice of the occurrence of the delay within ten (10) days of the commencement of such occurrence of delay. The inability of the Developer to obtain a satisfactory commitment from a construction lender for the improvement of the Project or to satisfy any other condition of this Agreement relating to the redevelopment of the Project shall not be deemed to be a force majeure event or otherwise provide grounds for the assertion of the existence of a delay under this Section 6.05. The parties hereto expressly acknowledge and agree that changes in either general economic conditions or changes in the economic assumptions of any of them which may have provided a basis for entering into this Agreement and which occur at any time after the execution of this Agreement, are not force majeure events and do not provide any party with grounds for asserting the existence of a delay in the performance of any covenant or undertaking which may arise under this Agreement. Each party expressly assumes the risk that changes in general economic conditions or changes in such economic assumptions relating to the terms and covenants of this Agreement could impose an inconvenience or hardship on the continued performance of such party under this Agreement, but that such inconvenience or hardship is not a force majeure event and does not excuse the performance by such party of its obligations under this Agreement. Section 6.06. Inspection of Books and Records. The Agency shall have the right at all reasonable times at the Agency's cost and expense to inspect the books and records of the Developer pertaining to the Project and/or the development thereof as necessary for the Agency, in its reasonable discretion, to enforce its rights under this Agreement; provided, howeyer, that the Agency shall give the Developer at least twenty-four (24) hours' prior written notice of such exercise of the right to inspect said books and records. Matters discovered by the Agency shall not be disclosed to third parties unless required by law or unless otherwise resulting from or 4812.3945.3441.1 11114106 jrnm 55 P;\Agendas\Agenda Allachmcnls\Agmv.s-Asrend 2006\11-20-06 La Placila Final DDA.doc related to the pursuit of any remedies or the assertion of any rights of the Agency hereunder. The Developer shall also have the right at all reasonable times to inspect the books and records of the Agency pertaining to the Project and/or the development thereof as pertinent to the purposes of this Agreement. Section 6.07. Approvals. (a) Approvals required of the Agency or the Developer, or any officers, agents or employees of either the Agency or the Developer, shall not be unreasonably withheld and approval or disapproval shall be given within the time set forth in the Schedule of Performance or, if no time is given, within a reasonable time. (b) The Executive Director of the Agency is authorized to sign on his or her own authority amendments to this Agreement, which are of routine or technical nature, including minor adjustments to the Schedule of Performance. Section 6.08. Real Estate Commissions. The Agency shall not be liable for any other real estate commissions, brokerage fees or finder fees, which may arise from or related to this Agreement. Section 6.09. Indemnification. The Developer agrees to indemnify, defend, protect and hold harmless the City and the Agency, and their officers, employees and agents from and against all actions, causes of action, claims, costs, damages, demands, fees, judgments, liability and obligations, including, without limitation, all attorneys' fees, costs and court costs, arising from or related to any act or omission of the Developer, its agents, employees, contractors, successors and/or assigns, in performing its obligations hereunder. The Agency agrees to indemnify, defend, protect and hold harmless the Developer and its officers, employees and agents, from and against all actions, causes of action, claims, costs, damages, demands, fees, judgment, liability and obligations, including, without limitation, attorneys' fees, costs and court costs, arising from or related to any act or omission of the Agency in performing its obligations hereunder except that the Agency shall have no liability hereunder which arises, directly or indirectly, from the gross negligence or wrongful conduct of the Developer, its agents, employees, contractors, or the successors and/or assigns, of either of them. Section 6.10. Release of Developer from Liability. Notwithstanding any provision herein to the contrary, the Developer shall be relieved of any and all liability for the obligations of the Developer hereunder with regard to the Project when a Certificate of Completion has been issued by the Agency hereunder with respect thereto, other than any covenants and obligations provided by the grant deed by which the Property are conveyed to the Developer hereunder. Section 6.11. Attorneys' Fees. If either party hereto files any action or brings any action or proceeding against the other arising out of this Agreement, or is made a party to any action or proceeding brought by the Escrow Agent, then as between the Deyeloper and the Agency, the prevailing party shall be entitled to recover as an element of its costs of suit, and not 4812.3945-3441.1 11114106 jmm 56 P:\Agendas\Agenda AlIachments\Agrmts-Amend 2006\] 1-20-06 u. P\acila Fmal DDA.doc as damages, its reasonable attorneys' fees as fixed by the Court in such action or proceeding or in a separate action or proceeding brought to recover such attorneys' fees. Section 6.12. Effect. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, executors, administrators, legal representatives, successors and assigns. Section 6.13. Severance. If any provisions of this Agreement are held to be illegal or invalid or unenforceable, such provisions shall be fully severable. The Agreement shall be construed and enforced as if such illegal, invalid or unenforceable provision had never comprised a part thereof, the remaining provisions thereof shall remain in full force and shall not be affected by the illegal, invalid, or unenforceable provisions or by its severance therefrom, Section 6.14. Time is of the Essence. Time is of the essence in this Agreement. Section 6.15. Business Registration Certificate. The Developer warrants that it possesses, or shall obtain immediately after the execution and delivery of this Agreement, and maintain during the period of time which is the longer of (i) the term of this Agreement or (ii) the date that the Project is owned by the Developer, a business registration certificate pursuant to Title 5 of the City of San Bernardino Municipal Code, together with any and all other licenses, permits, qualifications, insurance and approvals of whatever nature that are legally required to be maintained by the Developer to conduct its business activities within the City. ARTICLE VII ENTIRE AGREEMENT. WAIVERS AND AMENDMENT Section 7.01. Entire Agreement. (a) This Agreement shall be executed in three (3) duplicate originals each of which is deemed to be an original. This Agreement includes (-l pages and _ (_) Exhibits lettered "A" through "H", inclusive, which constitute the entire understanding and Agreement of the parties. (b) This Agreement integrates all of the terms and conditions mentioned herein or incidental hereto, and supersedes all negotiations or previous agreements between the parties with respect to all or any portion of the Project and the development thereof. (c) None of the terms, covenants, agreements or conditions set forth in this Agreement shall be deemed to be merged with the grant deed conveying title to the Property, and this Agreement shall continue in full force and effect before and after such conveyance until issuance of the Certificate of Completion. (d) All waivers of the provIsIons of this Agreement and all amendments hereto must be in writing and signed by the appropriate authorities of the Agency and the Developer. 4812-3945-3441.1 11114/06 jmm 57 P:\Agendas\Ageooa Atlachmcnts\Agrn'fs-AlIlI!:od 2006\1 1-z0..06 (.. P1acil. Fmal DDA.doc ARTICLE VIII TIME FOR ACCEPTANCE OF AGREEMENT BY AGENCY AND RECORDATION Section 8.01. Execution and Recordation. (a) In the event that the Developer has not approved, executed and delivered this Agreement to the Agency within forty-five (45) calendar days after approval hereof by the governing body of the Agency, then no provision of this Agreement shall be of any force or effect for any purpose and the Agency shall have no further authorization to execute and deliver this Agreement thereafter. The date of this Agreement shall be the date when this Agreement shall have been approved by the Agency. (b) The Developer and the Agency agree to pennit recordation of a notice of agreement in the form attached hereto and incorporated herein by this reference as Exhibit ''f' , concurrently upon the Close of Escrow in the Office of the County Recorder for the County where the Property is located. 1/1 /II 1/1 /II /II /II /II /II /II 1/1 /II /II /II /II 4812-3945-3441.1 11/l4l06jrnm 58 P:\Agendas\Agenda Auaclunents\Agmts-Amend 2006\11-~ La Placka Fmal DDA.doc IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the dates set forth below. AGENCY Redevelopment Agency of the City of San Bernardino, a public body, corporate and politic Date: By: Maggie Pacheco, Executive Director APPROVED AS TO FORM AND LEGAL CONTENT: ~/~I Agency Couns DEVELOPER La Placita on 2nd Street, LLC, a California limited liability company Date: By: Title: [All Signatures Must Be Notarized] 4812-3945-3441.1 ] 11l4/06jmm 59 P:\Agcndas\Allcnda Auachmenls\Agrmls-Amend 2006\1] .20-06 La Placita t'inall>lJAdoc EXHIBIT "A-I" LEGAL DESCRIPTION OF THE AGENCY PROPERTY A2encv Propertv THAT PORTION OF LOT 14 IN BLOCK 15 OF RANCHO SAN BERNARDINO, IN THE CITY OF SAN BERNARDINO, COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 7 OF MAPS, PAGE 2, RECORDS OF SAID COUNTY, DESCRffiED AS FOLLOWS: APN: 0138-301-03 BEGINNING AT THE INTERSECTION OF THE WEST LINE OF uK" STREET, WITH THE SOUTH LINE OF THIRD STREET, AS SAID LINE IS DEFINED BY DEED FROM SANTA FE LAND IMPROVEMENT COMPANY, IN THE CITY OF SAN BERNARDINO, DATED OCTOBER 15, 1917, THENCE SOUTH ALONG SAID WEST LINE OF UK" STREET, 54.5 FEET, THENCE WEST AND PARALLEL WITH THE SOUTH LINE OF THIRD STREET, 155 FEET, THENCE NORTH 54.5 FEET, MORE OR LESS, TO THE SOUTH LINE OF THIRD STREET, THENCE EAST ALONG THE SOUTH LINE OF THIRD STREET, 155 FEET TO THE POINT OF BEGINNING. APN: 0138-301-04 COMMENCING AT THE SOUTHWEST CORNER OF THIRD AND "K" STREETS, THE SOUTH LINE OF SAID THIRD STREET, BEING DESIGNATED BY DEED FROM SANTA FE LAND AND IMPROVEMENT COMPANY, TO THE CITY OF SAN BERNARDINO, DATED OCTOBER 15,1917 AND RECORDED NOVEMBER 14, 1917 IN BOOK 622, PAGE 157, OF DEEDS, SAID POINT BEING 262.5 FEET SOUTH AND 20 FEET WEST OF THE NORTHEAST CORNER OF SAID LOT 14; THENCE SOUTH ALONG THE WEST LINE OF UK" STREET, 54.5 FEET TO THE POINT OF BEGINNING; THENCE CONTINUING SOUTH ALONG THE WEST LINE OF SAID "K" STREET, 50 FEET TO A POINT 367 FEET SOUTH AND 20 FEET WEST OF THE NORTHWEST CORNER OF SAID LOT 14; THENCE WEST 155 FEET TO THE WEST LINE OF THE EAST ONE-HALF OF SAID LOT 14;THENCE NORTH ALONG THE WEST LINE OF SAID EAST ONE-HALF, 50 FEET TO A POINT 54.5 FEET SOUTH OF THE SOUTH LINE OF THIRD STREET; THENCE EAST PARALLEL TO THE SOUTH LINE OF SAID THIRD STREET, 155 FEET TO THE POINT OF BEGINNING. APN: 0138-301-05 BEGINNING 367 FEET SOUTH AND 20 FEET WEST OF THE NORTHEAST CORNER OR SAID LOT; THENCE SOUTH 50 FEET; THENCE WEST 146 \12 FEET; THENCE NORTH 50 FEET; THENCE EAST 146 Y, FEET TO THE POINT OF BEGINNING. 4812-3945-3441.1 11114106 jmm A-I - 1 EXHIBIT A.2 LEGAL DESCRIPTION OF THE DEVELOPER PROPERTY Developer Property THAT PORTION OF LOT 14, BLOCK 15 OF THE SAN BERNARDINO RANCHO, IN THE CITY OF SAN BERNARDINO, COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA, AS PER PLAT RECORDED IN BOOK 7 OF MAPS, PAGE 2, RECORDS OF SAID COUNTY, DESCRffiED AS FOLLOWS: PARCEL A: BEGINNING AT A POINT IN THE WEST LINE OF "K" STREET, WHICH IS 20 FEET WEST AND 141.5 FEET NORTH OF THE SOUTHEAST CORNER OF SAID LOT 14; THENCE NORTH 75 FEET, MORE OR LESS, TO A POINT 417 FEET SOUTH OF THE NORTH LINE OF SAID LOT 14; THENCE WEST 155 FEET MORE OR LESS, TO THE WEST LINE OF THE EAST ONE-HALF OF SAID LOT 14; THENCE SOUTH 75 FEET MORE OR LESS, TO A POINT 141.5 FEET NORTH OF THE SOUTH LINE OF SAID LOT 14; THENCE EAST 155 FEET, MORE OR LESS, TO THE PLACE OF BEGINNING. PARCEL B: BEGINNING AT THE NORTH LINE OF SECOND STREET, DISTANT THEREON 75 FEET WEST OF THE NORTHWEST CORNER OF "K" AND SECOND STREETS, WHICH CORNER IS 21.5 FEET NORTH AND 20 FEET WEST OF THE SOUTHEAST CORNER OF SAID LOT 14; THENCE NORTH 120 FEET; THENCE WEST 89 FEET, MORE OR LESS, TO THE WEST LINE OF THE EAST HALF OF SAID LOT 14; THENCE SOUTH 120 FEET; THENCE EAST 80 FEET TO THE POINT OF BEGINNING. PARCEL C: THAT PORTION OF LOTS 11,12,13 AND 14, BLOCK 15, OF THE RANCHO SAN BERNARDINO, IN THE COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA, AS PER PLAT RECORDED IN BOOK 7 OF MAPS, PAGE 2, RECORDS OF SAID COUNTY, MORE PARTICULARLY DESCRffiED AS FOLLOWS: BEGINNING AT THE INTERSECTION OF THE EAST LINE OF SAID LOT 13; WITH A LINE WHICH IS PARALLEL WITH AND DISTANT 21.5 FEET NORTHERLY OF THE SOUTHERLY LINE OF SAID LOT 13; THENCE SOUTH 89 DEG. 55' 20' WEST ALONG SAID PARALLEL LINE AND ALONG A LINE WHICH IS PARALLEL AND DISTANT 21.5 FEET NORTHERLY FROM THE SOUTHERLY LINE OF SAID LOT 11 AND 12, A 4812.3945.3441.1 11/14/06jmm A-2 - 1 DISTANCE OF 985.94 FEET TO A POINT WHICH LIES NORTH 89 DEG. 55' 20" EAST ALONG SAID PARALLEL LINE, 429.21 FEET FROM THE EAST LINE OF MOUNT VERNON AVENUE (82.5 FEET IN WIDTH); THENCE NORTHWESTERLY AND NORTHEASTERLY ALONG THE EASTERLY LINE OF THAT CERTAIN PARCEL OF LAND DESCRffiED IN DEED OF EASEMENT FOR HIGHWAY PURPOSES RECORDED JUNE 29, 1933, IN BOOK 720 OF OFFICIAL RECORDS, PAGE 306, AS FOLLOWS: ALONG THE ARC OF A CURVE TANGENT TO LAST COURSE CONCAVE NORTHEASTERLY AND HAVING A RADIUS OF 14.23 FEET, A DISTANCE OF 31.89 FEET; THENCE NORTH 38 DEG. 19' 50" EAST TANGENT OF SAID CURVE 231.42 FEET; THENCE NORTHEASTERLY ALONG THE ARC OF A CURVE TANGENT TO LAST COURSE CONCA VE SOUTHEASTERLY AND HAVING A RADIUS OF 170.09 FEET, A DISTANCE OF 224.46 FEET TO A POINT IN THE SOUTHERLY LINE OF THIRD STREET, AS CONVEYED TO THE CITY OF SAN BERNARDINO BY DEED RECORDED IN BOOK 622 OF DEEDS, PAGE 157; THENCE LEAVING THE EASTERLY LINE OF SAID EASEMENT PARCEL (BOOK 720 OF OFFICIAL RECORDS, PAGE 306) NORTH 85 DEG. 56' 50" EAST ALONG SAID SOUTHERLY LINE OF THIRS STREET, A DISTANCE OF 663.10 FEET TO THE EASTERLY LINE OF SAID LOT 13; THENCE CONTINUING EAST ALONG THE SOUTH LINE OF SAID THIRD STREET, 172.50 FEET; THENCE SOUTH 14.5 FEET PARALLEL WITH THE WEST LINE OF "K" STREET, SO-CALLED; THENCE EAST TO THE EAST LINE OF THE WEST \12 OF LOT 14; THENCE SOUTH ALONG THE EAST LINE OF THE WEST \12 OF SAID LOT 14, 213 FEET; THENCE WEST PARALLEL WITH THE SOUTH LINE OF THIRD STREET TO A POINT WHICH IS SOUTH, BEARING ALONG A LINE PARALLEL TO THE WEST LINE OF SAID LOT 14 FROM THE NORTHEAST CORNER OF THE PARCEL HEREIN DESCRffiED WHICH IS LOCATED ON THE SOUTH LINE OF THIRD STREET; THENCE SOUTH 103.90 FEET, MORE OR LESS, TO A POINT 45.5 FEET NORTH OF THE SOUTH LINE OF SAID LOT 14; THENCE WEST PARALLEL TO AND 45.5 FEET NORTH OF SAID LOT 14; THENCE WEST PARALLEL TO AND 45.5 FEET NORTH OF THE SOUTH LINE OF SAID LOT 14; 172.50 FEET, MORE OR LESS, TO THE EAST LINE OF SAID LOT 13; THENCE SOUTH ALONG THE EAST LINE OF SAID LOT 13, 24 FEET TO THE POINT OF BEGINNING. APN: 0138-301-06 (All of Parcel A), APN: 0138-301-08 (All of Parcel B) and APN's: 0138- 263-02 and 0138-301-01 and 0138-301-10 (Portions of Parcel C) 4812-3945-3441.1 11114106 jmm A-2- 2 EXHmIT "A-3" LEGAL DESCRIPTION OF THE BELICHESKY PROPERTY Belicheskv Property THAT PORTION OF LOT 14 IN BLOCK 15 OF SAN BERNARDINO RANCHO, IN THE CITY OF SAN BERNARDINO, AS PER PLAT RECORDED IN BOOK 7 OF MAPS, PAGE 2, RECORDS OF SAID COUNTY, DESCRIBED AS FOLLOWS: COMMENCING AT THE NORTHWEST CORNER OF "K" STREET AND 2ND STREET, SAID PORTION BEING 21.5 FEET NORTH AND 20 FEET WEST OF THE SOUTHEAST CORNER OF SAID LOT 14; THENCE NORTH 120 FEET; THENCE WEST 75 FEET; THENCE SOUTH 120 FEET; THENCE EAST 75 FEET TO THE POINT OF BEGINNING. EXCEPTING: BEGINNING AT A POINT WHICH IS 20 FEET WEST AND 21.5 FEET NORTH OF THE SOUTHEAST CORNER OF SAID LOT 14, SAID POINT BEING IN THE WEST LINE OF "K" STREET; THENCE NORTH ALONG THE WEST LINE OF "K" STREET, 24 FEET; THENCE WEST AND PARALLEL WITH THE NORTH LINE OF SECOND STREET, 75 FEET; THENCE SOUTHERLY AND PARALLEL WITH THE WEST LINE OF "K" STREET, 24 FEET TO THE NORTH LINE OF SECOND STREET; THENCE EAST ALONG THE NORTH LINE OF SECOND STREET, 75 FEET TO THE POINT OF BEGINNING. APN: 0138-301-07 4812.3945.3441.1 11l14l06jmm A-3 - 1 EXHffiIT "A-4" LEGAL DESCRIPTION OF THE SPAR PROPERTY THAT PORTION OF LOT 14, BLOCK 15 OF THE SAN BERNARDINO RANCHO, IN THE CITY OF SAN BERNARDINO, COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA, AS PER PLAT RECORDED IN BOOK 7 OF MAPS, PAGE 2, RECORDS OF SAID COUNTY, DESCRmED AS FOLLOWS: APN: 0138-301-08 BEGINNING AT THE NORTH LINE OF SECOND STREET, DISTANT THEREON 75 FEET WEST OF THE NORTHWEST CORNER OF UK" AND SECOND STREETS, WHICH CORNER IS 21.5 FEET NORTH AND 20 FEET WEST OF THE SOUTHEAST CORNER OF SAID LOT 14; THENCE NORTH 120 FEET; THENCE WEST 89 FEET, MORE OR LESS, TO THE WEST LINE OF THE EAST HALF OF SAID LOT 14; THENCE SOUTH 120 FEET; THENCE EAST 80 FEET TO THE POINT OF BEGINNING. 4812-3945.3441.1 11/14/06 jmm A-4 - 1 EXHIBIT "B" PROJECT DESCRIPTION AND SCOPE OF DEVELOPMENT Construct an approximately 100,000 square foot retail center on approximately 7.65 acres located between 2nd and 3rd Street and between "K" Street and Giovanola Avenue. Tbe new retail center will include a new 45,000 square foot supermarket along with the appropriate parking, lighting, landscaping, irrigation, etc. as required to meet the requirements of the Development Code and the approval of the Planning Commission, Community Development Commission, and/or any other legislative body where approval is required. 4812.3945.3441.1 11I14/06jrnm B-1 EXHIBIT "C" AGENCY GRANT DEED 4812-3945-3441.1 11/14106 jrnrn C -1 RECORDING REQUESTED BY AND ) AFTER RECORDING MAIL TO: ) ) Merona Enterprises, Inc. ) c/o La Placita on 2nd Street ) 9550 Firestone Blvd., Suite 105 ) Downey, CA 90241 ) ) Exempt from Recording Fee ) pursuant to Gov't Code Section 27383 ) (Space Above for Recorder's Use) REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO AGENCY GRANT DEED For valuable consideration, the receipt of which is hereby acknowledged, the REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO, a public body, corporate and politic of the State of California (the "Grantor") hereby grants to LA PLACITA ON 2ND STREET, LLC, a California limited liability company (the "Grantee"), that certain real property located in the City of San Bernardino, State of California, the legal description of which is more particularly described in Exhibit "A" attached hereto and incorporated herein by this reference (the "Property"). I. The Property is conveyed subject to that certain 2006 Disposition and Development Agreement dated as of November _, 2006 ("Agreement") By and Between the Redevelopment Agency of the City Of San Bernardino, a public body, corporate and politic, and La Placita on 2nd Street, LLC, a California limited liability company. The provisions of the Agreement are incorporated herein by this reference and shall be deemed to be a part hereof as if set forth at length herein. 2. The Grantee covenants by and for. itself, its heirs, executors, administrators and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex, age, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Property, nor shall the Grantee or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees in or on the Property, All deeds, leases or contracts made relative to the Property shall contain the following nondiscrimination clauses: (a) In deeds: "The grantee herein covenants by and for itself, its heirs, executors, administrators and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex, age, marital status, 4812-3945-344 Ll 11114106 jrnm C-2 national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land herein conveyed, nor shall the grantee, or any person claiming under or through the grantee, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, locations, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees in or on the land herein conveyed. The foregoing covenants shall run with the land." (b) In leases: "The lessee herein covenants by and for itself, its heirs, executors, administrators and assigns, and all persons claiming under or through them, and this lease is made and accepted upon and subject to the following conditions: That there shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex, age, 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 itself, or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy, of tenants, lessees, subtenants, sublessees or vendees in the land herein leased." (c) In contracts: "There shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex, age, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land, nor shall the transferee itself, or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the land." 3. No violation or breach of the covenants, conditions, restnctlOns, provisions or limitations contained in this Agency 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 permitted by the Agreement; provided, however, that any successor of Grantee to the Property 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. 4. The covenants contained in this Agency Grant Deed against discrimination and segregation shall remain in effect in perpetuity. 5. The covenants contained in this Agency Grant Deed shall be binding for the benefit of the Grantor and its successors and assigns, and such covenants shall run in favor of the Grantor for the entire period during which such covenants shall be in full force and effect, without regard to whether the Grantor is or remains an owner of any land or interest herein to 4812-3945-3441.1 11114106 jrnrn C - 3 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, and to maintain any actions at law or suits in equity or other proper proceedings, to enforce the curing of such breach as provided in the Agreement or by law. The covenants contained in this Agency Grant Deed shall be for the benefit of and shall be enforceable only by the Grantor and its successor. IN WITNESS WHEREOF, the Grantor and Grantee have caused this instrument to be executed on their behalf by their respective officers thereunto duly authorized this _ day of , 2006. Grantor: REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO, a public body, corporate and politic By: Maggie Pacheco, Executive Director ATTEST: Agency Secretary APPROVED AS TO FORM: Lewis Brisbois Bisgaard & Smith LLP By: Agency Counsel 4812-3945-3441.1 11I14106 jmm C-4 ACCEPTANCE OF AGENCY GRANT DEED THE PROVISIONS OF THIS AGENCY G~ DEED ARE HEREBY APPROVED AND ACCEPTED. Grantee: LA PLACITA ON 2ND STREET, LLC, a California limited liability company By: Name: Title: Date: 4812.3945.3441.1 1I1l4lO6jrnm C - 5 EXHIBIT "A" LEGAL DESCRIPTION THAT PORTION OF LOT 14 IN BLOCK 15 OF RANCHO SAN BERNARDINO, IN THE CITY OF SAN BERNARDINO, COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 7 OF MAPS, PAGE 2, RECORDS OF SAID COUNTY, DESCRffiED AS FOLLOWS: APN: 0138-301-03 BEGINNING AT THE INTERSECTION OF THE WEST LINE OF "K" STREET, WITH THE SOUTH LINE OF THIRD STREET, AS SAID LINE IS DEFINED BY DEED FROM SANTA FE LAND IMPROVEMENT COMPANY, IN THE CITY OF SAN BERNARDINO, DATED OCTOBER 15, 1917, THENCE SOUTH ALONG SAID WEST LINE OF "K" STREET, 54.5 FEET, THENCE WEST AND PARALLEL WITH THE SOUTH LINE OF THIRD STREET, 155 FEET, THENCE NORTH 54.5 FEET, MORE OR LESS, TO THE SOUTH LINE OF THIRD STREET, THENCE EAST ALONG THE SOUTH LINE OF THIRD STREET, 155 FEET TO THE POINT OF BEGINNING. APN: 0138-301-04 COMMENCING AT THE SOUTHWEST CORNER OF THIRD AND "K" STREETS, THE SOUTH LINE OF SAID THIRD STREET, BEING DESIGNATED BY DEED FROM SANTA FE LAND AND IMPROVEMENT COMPANY, TO THE CITY OF SAN BERNARDINO, DATED OCTOBER 15, 1917 AND RECORDED NOVEMBER 14, 1917 IN BOOK 622, PAGE 157, OF DEEDS, SAID POINT BEING 262.5 FEET SOUTH AND 20 FEET WEST OF THE NORTHEAST CORNER OF SAID LOT 14; THENCE SOUTH ALONG THE WEST LINE OF "K" STREET, 54.5 FEET TO THE POINT OF BEGINNING; THENCE CONTINUING SOUTH ALONG THE WEST LINE OF SAID "K" STREET, 50 FEET TO A POINT 367 FEET SOUTH AND 20 FEET WEST OF THE NORTHWEST CORNER OF SAID LOT 14; THENCE WEST 155 FEET TO THE WEST LINE OF THE EAST ONE-HALF OF SAID LOT 14; THENCE NORTH ALONG THE WEST LINE OF SAID EAST ONE-HALF, 50 FEET TO A POINT 54.5 FEET SOUTH OF THE SOUTH LINE OF THIRD STREET; THENCE EAST PARALLEL TO THE SOUTH LINE OF SAID THIRD STREET, 155 FEET TO THE POINT OF BEGINNING. APN: 0138-301-05 BEGINNING 367 FEET SOUTH AND 20 FEET WEST OF THE NORTHEAST CORNER OR SAID LOT; THENCE SOUTH 50 FEET; THENCE WEST 146 '/2 FEET; THENCE NORTH 50 FEET; THENCE EAST 146 \12 FEET TO THE POINT OF BEGINNING. 4812-3945-3441.1 11114/06 jrnm C-6 THAT PORTION OF LOT 14 IN BLOCK 15 OF SAN BERNARDINO RANCHO, IN THE CITY OF SAN BERNARDINO, AS PER PLAT RECORDED IN BOOK 7 OF MAPS, PAGE 2, RECORDS OF SAID COUNTY, DESCRlliED AS FOLLOWS: COMMENCING AT THE NORTHWEST CORNER OF uK" STREET AND 2ND STREET, SAID PORTION BEING 21.5 FEET NORTH AND 20 FEET WEST OF THE SOUTHEAST CORNER OF SAID LOT 14; THENCE NORTH 120 FEET; THENCE WEST 75 FEET; THENCE SOUTH 120 FEET; THENCE EAST 75 FEET TO THE POINT OF BEGINNING. EXCEPTING: BEGINNING AT A POINT WHICH IS 20 FEET WEST AND 21.5 FEET NORTH OF THE SOUTHEAST CORNER OF SAID LOT 14, SAID POINT BEING IN THE WEST LINE OF uK" STREET; THENCE NORTH ALONG THE WEST LINE OF uK" STREET, 24 FEET; THENCE WEST AND PARALLEL WITH THE NORTH LINE OF SECOND STREET, 75 FEET; THENCE SOUTHERLY AND PARALLEL WITH THE WEST LINE OF uK" STREET, 24 FEET TO THE NORTH LINE OF SECOND STREET; THENCE EAST ALONG THE NORTH LINE OF SECOND STREET, 75 FEET TO THE POINT OF BEGINNING. APN: 0138-301-07 4812-3945-3441.1 11/14106 jmm C-7 EXHffiIT "D" SCHEDULE OF PERFORMANCE (Days shall be calendar days, and all dates herein are subject to change due to force majeure in accordance with Section 6.05 of the Agreement) Agency approval of DDA is November 20, 2006 The Developer shall commence the following within the time periods provided herein: (d) (e) (f) (g) (h) 4812-3945-3441.1 1lI14106 jnun (a) The Developer will open Escrow within thirty (30) days after the date of the Agreement, and the Agency will deposit deeds in Escrow as soon as practicable thereafter prior to the then anticipated Close of Escrow. (b) The Developer will obtain building permits within one hundred eighty (180) calendar days after the Close of Escrow for the initial phase or phases, as applicable, of the Project. (c) Mass grade the entire Property area, as appropriate, shall commence within ninety (90) calendar days after approval of the master grading plan. The Developer shall commence to demolish the unused portion of the EI Tigre building located on the Project, at its sole cost and expense, within one hundred eighty (180) calendars days from the mutual execution of the Agreement. The Developer shall complete the demolition of the unused portion of the El Tigre building located on the Project, within two hundred forty (240) calendar days from the mutual execution of the Agreement. Street improvements and the other Off-Site Public Improvements will be commenced by the Developer upon completion of the sewer and water. The development of street improvements and the other Off-Site Public Improvements will be based upon construction phasing. Landscaping will commence upon completion of the street improvements. The Developer shall commence construction within sixty (60) calendar days after the Developer has obtained the applicable building permits for that portion of the Project as required by item (b) above. The Project will be completed within two (2) years after commencement of the work of the improvements after the issuance of the first building permit for the vertical structures comprising the Project have been issued for the Property. D - 1 EXHIBIT "E" WHEN RECORDED, MAIL TO: ) ) Merona Enterprises, Inc. ) c/o La Placita on 2nd Street ) 9550 Firestone Blvd., Suite 105 ) Downey, CA 90241 ) ) ) (Space Above Line For Use By Recorder) CERTIFICATE OF COMPLETION I, ' the Secretary of the Redevelopment Agency of the City of San Bernardino (the "Agency") hereby certify as follows: Section I. The improvements required to be constructed in accordance with that certain Disposition and Development Agreement (the "Agreement") dated November _, 2006, by and among the Agency and La Placita on 2nd Street, LLC, a California limited liability company (the "Developer"); on Assessor Parcel Number 0138-301-01, Assessor Parcel Number 0138-301-03, Assessor Parcel Number 0138-301-04, Assessor Parcel Number 0138-301-05, Assessor Parcel Number 0138-301-06, Assessor Parcel Number 0138-301-07, Assessor Parcel Number 0138-301-08, Assessor Parcel Number 0138-301-10 and Assessor Parcel Number 0138- 263-02 (the "Project") more fully described in Exhibit "A" attached hereto and incorporated herein by this reference, have been completed in accordance with the provisions of said Agreement. Section 2. This Certificate of Completion shall constitute a conclusive determination of satisfaction of the agreements and covenants contained in the Agreement with respect to the obligations of the Developer, and its successors and assigns, to construct and develop the Project, excluding any normal and customary tenant improvements and minor building "punch-list" items, and including any and all buildings and any and all parking, landscaping and related improvements necessary to support or which meet the requirements applicable to the Project and its use and occupancy on the Project, whether or not said improvements are on the Project or on other property subject to the Agreement, all as described in the Agreement, and to otherwise comply with the Developer's obligations under the Agreement with respect to the Project and the dates for the beginning and completion of construction of improvements thereon under the Agreement; provided, however, that the Agency may enforce any covenant surviving this Certificate of Completion in accordance with the terms and conditions of the Agreement and the Agency Grant Deed pursuant to which the Property was conveyed under the Agreement. Said Agreement is an official record of the Agency and a copy of said Agreement may be inspected in the office of the Secretary of the Redevelopment Agency 4812-3945-3441.1 11114106 jrnm E - I of the City of San Bernardino located at 201 North "E" Street, Suite 301, San Bernardino, California, during regular business hours. Section 3. The Project to which this Certificate of Completion pertains is more fully described in Exhibit "A" attached hereto. DATED AND ISSUED this day of ,200_. By: Maggie Pacheco, Executive Director Redevelopment Agency of the City of San Bernardino 4812.3945.3441.1 11114106 jrnm E-2 EXHIBIT "A" THAT PORTION OF LOT 14 IN BLOCK 15 OF RANCHO SAN BERNARDINO, IN THE CITY OF SAN BERNARDINO, COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 7 OF MAPS, PAGE 2, RECORDS OF SAID COUNTY, DESCRffiED AS FOLLOWS: APN: 0138-301-03 BEGINNING AT THE INTERSECTION OF THE WEST LINE OF uK" STREET, WITH THE SOUTH LINE OF THIRD STREET, AS SAID LINE IS DEFINED BY DEED FROM SANTA FE LAND IMPROVEMENT COMPANY, IN THE CITY OF SAN BERNARDINO, DATED OCTOBER 15, 1917, THENCE SOUTH ALONG SAID WEST LINE OF UK" STREET, 54.5 FEET, THENCE WEST AND PARALLEL WITH THE SOUTH LINE OF THIRD STREET, 155 FEET, THENCE NORTH 54.5 FEET, MORE OR LESS, TO THE SOUTH LINE OF THIRD STREET, THENCE EAST ALONG THE SOUTH LINE OF THIRD STREET, 155 FEET TO THE POINT OF BEGINNING. APN: 0138-301-04 COMMENCING AT THE SOUTHWEST CORNER OF THIRD AND UK" STREETS, THE SOUTH LINE OF SAID THIRD STREET, BEING DESIGNATED BY DEED FROM SANTA FE LAND AND IMPROVEMENT COMPANY, TO THE CITY OF SAN BERNARDINO, DATED OCTOBER 15, 1917 AND RECORDED NOVEMBER 14, 1917 IN BOOK 622, PAGE 157, OF DEEDS, SAID POINT BEING 262.5 FEET SOUTH AND 20 FEET WEST OF THE NORTHEAST CORNER OF SAID LOT 14; THENCE SOUTH ALONG THE WEST LINE OF UK" STREET, 54.5 FEET TO THE POINT OF BEGINNING; THENCE CONTINUING SOUTH ALONG THE WEST LINE OF SAID UK" STREET, 50 FEET TO A POINT 367 FEET SOUTH AND 20 FEET WEST OF THE NORTHWEST CORNER OF SAID LOT 14; THENCE WEST 155 FEET TO THE WEST LINE OF THE EAST ONE-HALF OF SAID LOT 14; THENCE NORTH ALONG THE WEST LINE OF SAID EAST ONE-HALF, 50 FEET TO A POINT 54.5 FEET SOUTH OF THE SOUTH LINE OF THIRD STREET; THENCE EAST PARALLEL TO THE SOUTH LINE OF SAID THIRD STREET, 155 FEET TO THE POINT OF BEGINNING. APN: 0138-301-05 BEGINNING 367 FEET SOUTH AND 20 FEET WEST OF THE NORTHEAST CORNER OR SAID LOT; THENCE SOUTH 50 FEET; THENCE WEST 146 Y2 FEET; THENCE NORTH 50 FEET; THENCE EAST 146 Y2 FEET TO THE POINT OF BEGINNING. 4812-3945.3441.1 1I/14I06jrnm E- 3 THAT PORTION OF LOT 14 IN BLOCK 15 OF SAN BERNARDINO RANCHO, IN THE CITY OF SAN BERNARDINO, AS PER PLAT RECORDED IN BOOK 7 OF MAPS, PAGE 2, RECORDS OF SAID COUNTY, DESCRIBED AS FOLLOWS: COMMENCING AT THE NORTHWEST CORNER OF uK" STREET AND 2ND STREET, SAID PORTION BEING 21.5 FEET NORTH AND 20 FEET WEST OF THE SOUTHEAST CORNER OF SAID LOT 14; THENCE NORTH 120 FEET; THENCE WEST 75 FEET; THENCE SOUTH 120 FEET; THENCE EAST 75 FEET TO THE POINT OF BEGINNING. EXCEPTING: BEGINNING AT A POINT WHICH IS 20 FEET WEST AND 21.5 FEET NORTH OF THE SOUTHEAST CORNER OF SAID LOT 14, SAID POINT BEING IN THE WEST LINE OF uK" STREET; THENCE NORTH ALONG THE WEST LINE OF uK" STREET, 24 FEET; THENCE WEST AND PARALLEL WITH THE NORTH LINE OF SECOND STREET, 75 FEET; THENCE SOUTHERLY AND PARALLEL WITH THE WEST LINE OF uK" STREET, 24 FEET TO THE NORTH LINE OF SECOND STREET; THENCE EAST ALONG THE NORTH LINE OF SECOND STREET, 75 FEET TO THE POINT OF BEGINNING. APN: 0138-301-07 4812-3945-3441.1 11/14106jmm E-4 THAT PORTION OF LOT 14, BLOCK 15 OF THE SAN BERNARDINO RANCHO, IN THE CITY OF SAN BERNARDINO, COUNTY OF SAN BERNARDINO, STATE OF CALiFORNIA, AS PER PLAT RECORDED IN BOOK 7 OF MAPS, PAGE 2, RECORDS OF SAID COUNTY, DESCRffiED AS FOLLOWS: PARCEL A: BEGINNING AT A POINT IN THE WEST LINE OF "K" STREET, WHICH IS 20 FEET WEST AND 141.5 FEET NORTH OF THE SOUTHEAST CORNER OF SAID LOT 14; THENCE NORTH 75 FEET, MORE OR LESS, TO A POINT 417 FEET SOUTH OF THE NORTH LINE OF SAID LOT 14; THENCE WEST 155 FEET MORE OR LESS, TO THE WEST LINE OF THE EAST ONE-HALF OF SAID LOT 14; THENCE SOUTH 75 FEET MORE OR LESS, TO A POINT 141.5 FEET NORTH OF THE SOUTH LINE OF SAID LOT 14; THENCE EAST 155 FEET, MORE OR LESS, TO THE PLACE OF BEGINNING. PARCEL B: BEGINNING AT THE NORTH LINE OF SECOND STREET, DISTANT THEREON 75 FEET WEST OF THE NORTHWEST CORNER OF "K" AND SECOND STREETS, WHICH CORNER IS 21.5 FEET NORTH AND 20 FEET WEST OF THE SOUTHEAST CORNER OF SAID LOT 14; THENCE NORTH 120 FEET; THENCE WEST 89 FEET, MORE OR LESS, TO THE WEST LINE OF THE EAST HALF OF SAID LOT 14; THENCE SOUTH 120 FEET; THENCE EAST 80 FEET TO THE POINT OF BEGINNING. PARCEL C: THAT PORTION OF LOTS 11,12,13 AND 14, BLOCK 15, OF THE RANCHO SAN BERNARDINO, IN THE COUNTY OF SAN BERNARDINO, STATE OF CALiFORNIA, AS PER PLAT RECORDED IN BOOK 7 OF MAPS, PAGE 2, RECORDS OF SAID COUNTY, MORE PARTICULARLY DESCRffiED AS FOLLOWS: BEGINNING AT THE INTERSECTION OF THE EAST LINE OF SAID LOT 13; WITH A LINE WHICH IS PARALLEL WITH AND DISTANT 21.5 FEET NORTHERLY OF THE SOUTHERLY LINE OF SAID LOT 13; THENCE SOUTH 89 DEG. 55' 20' WEST ALONG SAID PARALLEL LINE AND ALONG A LINE WHICH IS PARALLEL AND DISTANT 21.5 FEET NORTHERLY FROM THE SOUTHERLY LINE OF SAID LOT 11 AND 12, A DISTANCE OF 985.94 FEET TO A POINT WHICH LIES NORTH 89 DEG. 55' 20" EAST ALONG SAID PARALLEL LINE, 429.21 FEET FROM THE EAST LINE OF MOUNT VERNON AVENUE (82.5 FEET IN WIDTH); THENCE NORTHWESTERLY AND NORTHEASTERLY ALONG THE EASTERLY LINE OF THAT CERTAIN PARCEL OF LAND DESCRffiED IN DEED OF EASEMENT FOR HIGHWAY PURPOSES RECORDED JUNE 29, 1933, IN BOOK 720 OF OFFICIAL RECORDS, PAGE 306, AS FOLLOWS: 4812-3945-3441.1 11/14106 jmm E- 5 ALONG THE ARC OF A CURVE TANGENT TO LAST COURSE CONCAVE NORTHEASTERLY AND HAVING A RADIUS OF 14.23 FEET, A DISTANCE OF 31.89 FEET; THENCE NORTH 38 DEG. 19' 50" EAST TANGENT OF SAID CURVE 231.42 FEET; THENCE NORTHEASTERLY ALONG THE ARC OF A CURVE TANGENT TO LAST COURSE CONCAVE SOUTHEASTERLY AND HAVING A RADIUS OF 170.09 FEET, A DISTANCE OF 224.46 FEET TO A POINT IN THE SOUTHERLY LINE OF THIRD STREET, AS CONVEYED TO THE CITY OF SAN BERNARDINO BY DEED RECORDED IN BOOK 622 OF DEEDS, PAGE 157; THENCE LEAVING THE EASTERLY LINE OF SAID EASEMENT PARCEL (BOOK 720 OF OFFICIAL RECORDS, PAGE 306) NORTH 85 DEG. 56' 50" EAST ALONG SAID SOUTHERLY LINE OF THIRS STREET, A DISTANCE OF 663.10 FEET TO THE EASTERLY LINE OF SAID LOT 13; THENCE CONTINUING EAST ALONG THE SOUTH LINE OF SAID THIRD STREET, 172.50 FEET; THENCE SOUTH 14.5 FEET PARALLEL WITH THE WEST LINE OF "K" STREET, SO-CALLED; THENCE EAST TO THE EAST LINE OF THE WEST 'Iz OF LOT 14; THENCE SOUTH ALONG THE EAST LINE OF THE WEST Y2 OF SAID LOT 14, 213 FEET; THENCE WEST PARALLEL WITH THE SOUTH LINE OF THIRD STREET TO A POINT WHICH IS SOUTH, BEARING ALONG A LINE PARALLEL TO THE WEST LINE OF SAID LOT 14 FROM THE NORTHEAST CORNER OF THE PARCEL HEREIN DESCRIBED WHICH IS LOCATED ON THE SOUTH LINE OF THIRD STREET; THENCE SOUTH 103.90 FEET, MORE OR LESS, TO A POINT 45.5 FEET NORTH OF THE SOUTH LINE OF SAID LOT 14; THENCE WEST PARALLEL TO AND 45.5 FEET NORTH OF SAID LOT 14; THENCE WEST PARALLEL TO AND 45.5 FEET NORTH OF THE SOUTH LINE OF SAID LOT 14; 172.50 FEET, MORE OR LESS, TO THE EAST LINE OF SAID LOT 13; THENCE SOUTH ALONG THE EAST LINE OF SAID LOT 13, 24 FEET TO THE POINT OF BEGINNING. APN: 0138-301-06 (All of Parcel A), APN: 0138-301-08 (All of Parcel B) and APN's: 0138- 263-02 and 0138-301-01 and 0138-301-10 (Portions of Parcel C) 4812-3945.3441.1 11114/06 jmm E-6 EXHIBIT "F' LEGAL DESCRIPTION OF KOVATS PROPERTY Kovats Property APN's: 0138-293-03.04.05.07 and 08 THE WEST 45 FEET OF LOT 13, THE EAST 3 FEET OF LOT 13 AND ALL OF LOT 14, LOT 15, LOT 17 AND LOT 18, BLOCK 8, INSURANCE LOAN AND LAND COMPANY SUBDIVISION, IN THE CITY OF SAN BERNARDINO, COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA, AS PER PLAT RECORDED IN BOOK 16 OF MAPS, PAGE 37, RECORDS OF SAID COUNTY. APN's: 0138-291-02, 03, 04. 05 AND 19 LOTS 14, 15, 16, 17, 18, 19 AND 20, BLOCK 5, INSURANCE LOAN AND LAND COMPANY SUBDIVISION, IN THE CITY OF SAN BERNARDINO, COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA, AS PER PLAT RECORDED IN BOOK 16 OF MAPS, PAGE 37, RECORDS OF SAID COUNTY. APN: 0138-302-26 LOTS 3 TO 9, INCLUSIVE, BLOCK 1, WRIGHT'S SUBDIVISION OF LOTS 5 AND 6, BLOCK 15, RANCHO SAN BERNARDINO. IN THE CITY OF SAN BERNARDINO, COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 18 OF MAPS, PAGE 36, RECORDS OF SAID COUNTY. 4812-3945-3441.1 11114106 jrnm F-1 EXHffiIT "GOO LEGAL DESCRIPTION OF ADDITIONAL PROPERTY Additional Property APN's: 0138-293-01. 02, 06. 09 and 10 LOTS 11, 12, 16, 19 AND 20, BLOCK 8, INSURANCE LOAN AND LAND COMPANY SUBDIVISION, IN THE CITY OF SAN BERNARDINO, COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA, AS PER PLAT RECORDED IN BOOK 16 OF MAPS, PAGE 37, RECORDS OF SAID COUNTY. APN: 0138-302-03 and 27 LOTS 10, 11 AND 12, BLOCK I, WRIGHT'S SUBDIVISION OF LOTS 5 AND 6, BLOCK IS, RANCHO SAN BERNARDINO, IN THE CITY OF SAN BERNARDINO, COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 18 OF MAPS, PAGE 36, RECORDS OF SAID COUNTY. APN: 0138-302-13 THE SOUTH 40 FEET OF LOT 1 AND LOT 2, BLOCK I, WRIGHT'S SUBDIVISION OF LOTS 5 AND 6, BLOCK IS, RANCHO SAN BERNARDINO, IN THE CITY OF SAN BERNARDINO, COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 18 OF MAPS, PAGE 36, RECORDS OF SAID COUNTY. APN: 0138-302-28 LOT 1 AND LOT 2, BLOCK I, WRIGHT'S SUBDIVISION OF LOTS 5 AND 6, BLOCK 15, RANCHO SAN BERNARDINO, IN THE CITY OF SAN BERNARDINO, COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 18 OF MAPS, PAGE 36, RECORDS OF SAID COUNTY. EXCEJYfING: SOUTH 40 FEET OF LOT 1 AND LOT 2. 4812-3945.3441.1 11/14106 jrnm G-l EXHIBIT "H" OFF-SITE PUBLIC IMPROVEMENTS Off-site improvements included the installation and construction of the following: New street lights; trees and landscaping; three (3) fire hydrants; curbs and cutters; sidewalks; driveway approaches; utilities; traffic signals; catch basin; handicap access ramps; street resurfacing; street median 4812-3945-3441.1 1lI14106 jmm H-l EXHIBIT "I" NOTICE OF AGREEMENT 4812-3945-3441.1 1lI14106 jmm 1- 1 Recording Requested by and When Recorded Return to: The Redevelopment Agency of the City of San Bernardino 201 North "E" Street, Suite 301 San Bernardino, CA 92401 Exempt from Recording Fee per Government Code Section 27383 (Space above for Recorder's Use) NOTICE OF AGREEMENT The undersigned, the REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO, a public body, corporate and politic (the "Agency"), and La Placita on 2nd Street, LLC, a California limited liability company (the "Developer") are parties to that certain DISPOSITION AND DEVELOPMENT AGREEMENT (the "Agreement") dated as of November _, 2006, for reference purposes only, by and between the Agency and Developer. Said Agreement contains obligations, covenants and restrictions affecting certain property ("Site") which is legally described on the attached Attachment No. I. The Agreement is a public record of the Agency and is available for inspection and copying at the Agency's offices located at 201 North "E" Street, Suite 301, San Bernardino, California. REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO, a public body, corporate and politic By: Maggie Pacheco, Executive Director ATTEST: Agency Secretary APPROVED AS TO LEGAL FORM: Agency Counsel 4812-3945-3441.1 11114/06 jrnm 1-2 NOTARY ACKNOWLEDGMENT STATE OF CALIFORNIA J J ss. COUNTY OF SAN BERNARDINO J On before me, notary public, personally appeared , 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{ies) upon behalf of which the person acted, executed the instrument. WITNESS my hand and official seal. Signature of Notary Public 4812-3945-3441.1 11/14106 jrnm 1-3 ATIACHMENTNO.l TO NOTICE OF AGREEMENT Legal Description of Site THAT PORTION OF LOT 14 IN BLOCK 15 OF RANCHO SAN BERNARDINO, IN THE CITY OF SAN BERNARDINO, COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 7 OF MAPS, PAGE 2, RECORDS OF SAID COUNTY, DESCRlliED AS FOLLOWS: APN: 0138-301-03 BEGINNING AT THE INTERSECTION OF THE WEST LINE OF "K" STREET, WITH THE SOUTH LINE OF THIRD STREET, AS SAID LINE IS DEFINED BY DEED FROM SANTA FE LAND IMPROVEMENT COMPANY, IN THE CITY OF SAN BERNARDINO, DATED OCTOBER 15, 1917, THENCE SOUTH ALONG SAID WEST LINE OF "K" STREET, 54.5 FEET, THENCE WEST AND PARALLEL WITH THE SOUTH LINE OF THIRD STREET, 155 FEET, THENCE NORTH 54.5 FEET, MORE OR LESS, TO THE SOUTH LINE OF THIRD STREET, THENCE EAST ALONG THE SOUTH LINE OF THIRD STREET, 155 FEET TO THE POINT OF BEGINNING. APN: 0138-301-04 COMMENCING AT THE SOUTHWEST CORNER OF THIRD AND "K" STREETS, THE SOUTH LINE OF SAID THIRD STREET, BEING DESIGNATED BY DEED FROM SANTA FE LAND AND IMPROVEMENT COMPANY, TO THE CITY OF SAN BERNARDINO, DATED OCTOBER 15, 1917 AND RECORDED NOVEMBER 14, 1917 IN BOOK 622, PAGE 157, OF DEEDS, SAID POINT BEING 262.5 FEET SOUTH AND 20 FEET WEST OF THE NORTHEAST CORNER OF SAID LOT 14; THENCE SOUTH ALONG THE WEST LINE OF "K" STREET, 54.5 FEET TO THE POINT OF BEGINNING; THENCE CONTINUING SOUTH ALONG THE WEST LINE OF SAID "K" STREET, 50 FEET TO A POINT 367 FEET SOUTH AND 20 FEET WEST OF THE NORTHWEST CORNER OF SAID LOT 14; THENCE WEST 155 FEET TO THE WEST LINE OF THE EAST ONE-HALF OF SAID LOT 14; THENCE NORTH ALONG THE WEST LINE OF SAID EAST ONE-HALF, 50 FEET TO A POINT 54.5 FEET SOUTH OF THE SOUTH LINE OF THIRD STREET; THENCE EAST PARALLEL TO THE SOUTH LINE OF SAID THIRD STREET, 155 FEET TO THE POINT OF BEGINNING. 4812-3945-3441.1 11/14106 jrnm 1-4 APN: 0138-301-05 BEGINNING 367 FEET SOUTH AND 20 FEET WEST OF THE NORTHEAST CORNER OR SAID LOT; THENCE SOUTH 50 FEET; THENCE WEST 1461;2 FEET; THENCE NORTH 50 FEET; THENCE EAST 1461;2 FEET TO THE POINT OF BEGINNING. THAT PORTION OF LOT 14 IN BLOCK 15 OF SAN BERNARDINO RANCHO, IN THE CITY OF SAN BERNARDINO, AS PER PLAT RECORDED IN BOOK 7 OF MAPS, PAGE 2, RECORDS OF SAID COUNTY, DESCRffiED AS FOLLOWS: COMMENCING AT THE NORTHWEST CORNER OF "K" STREET AND 2ND STREET, SAID PORTION BEING 21.5 FEET NORTH AND 20 FEET WEST OF THE SOUTHEAST CORNER OF SAID LOT 14; THENCE NORTH 120 FEET; THENCE WEST 75 FEET; THENCE SOUTH 120 FEET; THENCE EAST 75 FEET TO THE POINT OF BEGINNING. EXCEPTING: BEGINNING AT A POINT WHICH IS 20 FEET WEST AND 21.5 FEET NORTH OF THE SOUTHEAST CORNER OF SAID LOT 14, SAID POINT BEING IN THE WEST LINE OF "K" STREET; THENCE NORTH ALONG THE WEST LINE OF "K" STREET, 24 FEET; THENCE WEST AND PARALLEL WITH THE NORTH LINE OF SECOND STREET, 75 FEET; THENCE SOUTHERLY AND PARALLEL WITH THE WEST LINE OF "K" STREET, 24 FEET TO THE NORTH LINE OF SECOND STREET; THENCE EAST ALONG THE NORTH LINE OF SECOND STREET, 75 FEET TO THE POINT OF BEGINNING. APN: 0138-301-07 THAT PORTION OF LOT 14, BLOCK 15 OF THE SAN BERNARDINO RANCHO, IN THE CITY OF SAN BERNARDINO, COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA, AS PER PLAT RECORDED IN BOOK 7 OF MAPS, PAGE 2, RECORDS OF SAID COUNTY, DESCRffiED AS FOLLOWS: PARCEL A: BEGINNING AT A POINT IN THE WEST LINE OF "K" STREET, WHICH IS 20 FEET WEST AND 141.5 FEET NORTH OF THE SOUTHEAST CORNER OF SAID LOT 14; THENCE NORTH 75 FEET, MORE OR LESS, TO A POINT 417 FEET SOUTH OF THE NORTH LINE OF SAID LOT 14; THENCE WEST 155 FEET MORE OR LESS, TO THE WEST LINE OF THE EAST ONE-HALF OF SAID LOT 14; THENCE SOUTH 75 FEET MORE OR LESS, TO A POINT 141.5 FEET NORTH OF THE SOUTH LINE OF SAID LOT 14; THENCE EAST 155 FEET, MORE OR LESS, TO THE PLACE OF BEGINNING. PARCEL B: BEGINNING AT THE NORTH LINE OF SECOND STREET, DISTANT THEREON 75 FEET WEST OF THE NORTHWEST CORNER OF "K" AND SECOND STREETS, WHICH CORNER IS 21.5 FEET NORTH AND 20 FEET WEST OF THE SOUTHEAST CORNER OF 4812.3945-3441.1 11I14106 jmm 1-5 SAID LOT 14; THENCE NORTH 120 FEET; THENCE WEST 89 FEET, MORE OR LESS, TO THE WEST LINE OF THE EAST HALF OF SAID LOT 14; THENCE SOUTH 120 FEET; THENCE EAST 80 FEET TO THE POINT OF BEGINNING. PARCEL C: THAT PORTION OF LOTS 11,12,13 AND 14, BLOCK 15, OF THE RANCHO SAN BERNARDINO, IN THE COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA, AS PER PLAT RECORDED IN BOOK 7 OF MAPS, PAGE 2, RECORDS OF SAID COUNTY, MORE PARTICULARLY DESCRIDED AS FOLLOWS: BEGINNING AT THE INTERSECTION OF THE EAST LINE OF SAID LOT 13; WITH A LINE WHICH IS PARALLEL WITH AND DISTANT 21.5 FEET NORTHERLY OF THE SOUTHERLY LINE OF SAID LOT 13; THENCE SOUTH 89 DEG. 55' 20' WEST ALONG SAID PARALLEL LINE AND ALONG A LINE WHICH IS PARALLEL AND DISTANT 21.5 FEET NORTHERLY FROM THE SOUTHERLY LINE OF SAID LOT 11 AND 12, A DISTANCE OF 985.94 FEET TO A POINT WHICH LIES NORTH 89 DEG. 55' 20" EAST ALONG SAID PARALLEL LINE, 429.21 FEET FROM THE EAST LINE OF MOUNT VERNON A VENUE (82.5 FEET IN WIDTH); THENCE NORTHWESTERLY AND NORTHEASTERLY ALONG THE EASTERLY LINE OF THAT CERTAIN PARCEL OF LAND DESCRIDED IN DEED OF EASEMENT FOR HIGHWAY PURPOSES RECORDED JUNE 29, 1933, IN BOOK 720 OF OFFICIAL RECORDS, PAGE 306, AS FOLLOWS: ALONG THE ARC OF A CURVE TANGENT TO LAST COURSE CONCAVE NORTHEASTERLY AND HAVING A RADIUS OF 14.23 FEET, A DISTANCE OF 31.89 FEET; THENCE NORTH 38 DEG. 19' 50" EAST TANGENT OF SAID CURVE 231.42 FEET; THENCE NORTHEASTERLY ALONG THE ARC OF A CURVE TANGENT TO LAST COURSE CONCAVE SOUTHEASTERLY AND HAVING A RADIUS OF 170.09 FEET, A DISTANCE OF 224.46 FEET TO A POINT IN THE SOUTHERLY LINE OF THIRD STREET, AS CONVEYED TO THE CITY OF SAN BERNARDINO BY DEED RECORDED IN BOOK 622 OF DEEDS, PAGE 157; THENCE LEAVING THE EASTERLY LINE OF SAID EASEMENT PARCEL (BOOK 720 OF OFFICIAL RECORDS, PAGE 306) NORTH 85 DEG. 56' 50" EAST ALONG SAID SOUTHERLY LINE OF THIRS STREET, A DISTANCE OF 663.10 FEET TO THE EASTERLY LINE OF SAID LOT 13; THENCE CONTINUING EAST ALONG THE SOUTH LINE OF SAID THIRD STREET, 172.50 FEET; THENCE SOUTH 14.5 FEET PARALLEL WITH THE WEST LINE OF "K" STREET, SO-CALLED; THENCE EAST TO THE EAST LINE OF THE WEST Y2 OF LOT 14; THENCE SOUTH ALONG THE EAST LINE OF THE WEST '12 OF SAID LOT 14,213 FEET; THENCE WEST PARALLEL WITH THE SOUTH LINE OF THIRD STREET TO A POINT WHICH IS SOUTH, BEARING ALONG A LINE PARALLEL TO THE WEST LINE OF SAID LOT 14 FROM THE NORTHEAST CORNER OF THE PARCEL HEREIN DESCRIDED WHICH IS LOCATED ON THE SOUTH LINE OF THIRD STREET; THENCE SOUTH 103.90 FEET, MORE OR LESS, TO A POINT 45.5 FEET NORTH OF THE SOUTH LINE OF SAID LOT 14; THENCE WEST PARALLEL TO AND 45.5 FEET NORTH OF SAID LOT 14; THENCE 4812-3945-344L1 1lI14/06jmm 1-6 WEST PARALLEL TO AND 45.5 FEET NORTH OF THE SOUTH LINE OF SAID LOT 14; 172.50 FEET, MORE OR LESS, TO THE EAST LINE OF SAID LOT 13; THENCE SOUTH ALONG THE EAST LINE OF SAID LOT 13, 24 FEET TO THE POINT OF BEGINNING. APN: 0138-301-06 (All of Parcel A), APN: 0138-301-08 (All of Parcel B) and APN's: 0138- 263-02 and 0138-301-01 and 0138-301-10 (Portions of Parcel C). 4812.3945.3441.1 1lI14106jrnm 1-7 , CITY OF SAN BERNARDINO Interoffice Memorandum CITY CLERK'S OFFICE Records and Information Management (RIM) Program DATE: November 28, 2006 RE: Wasana Chantha, Secretary Economic Development Agency Sandra Medina, Assistant to the City Clerk~U Transmitting Documents for Signature - Resolution No. CDC/2006-49 TO: FROM: At the Mayor and Common Council meeting of November 20,2006, the City of San Bernardino adopted Resolution No. CDC/2006-49 - Resolution of the Community Development Commission of the City of San Bernardino (1) approving the 2006 Disposition and Development Agreement ("DDA ") by and between the Redevelopment Agency of the City of San Bernardino ("Agency") and La Placita on ;td Street, a California Limited Liability Corporation; (2) authorizing the Executive Director of the Agency to execute said DDA relating to the sale of certain property in the City of San Bernardino; and (3) making certain findings thereto related to the development of the project and the funding of certain public improvements. Attached are one (1) original agreement and two (2) duplicate original agreements. Please obtain signatures in the appropriate locations and return the original agreement as soon as possible to Margaret Fedor in the City Clerk's Office. Please retain one duplicate agreement for your records and forward the other duplicate agreement to the other party. If you have any questions, please do not hesitate to contact Margaret Fedor at ext. 3206. Thank you. Sandra Medina Assistant to the City Clerk Signed: I hereby ac 0 ledge receipt of the above mentioned documents. , i Date: II. -z.q.C(o Please sign and return City of San Bernardino ECONOMIC DEVELOPMENT AGENCY Redevelopment. Community Development. Housing. Business: Recruitment, Retention, Revitalizatiof) . Main Street, Inc. w November 30, 2006 Merona Enterprises, Inc. c/o La Placita on 2nd Street, LLC Attn.: Alex Meruelo 9550 Firestone Boulevard, Suite 105 Downey, California 90241 Re: 2006 Disposition and Development Agreement (La Placita on 2nd Street, LLC) Dear Mr. Meruelo: Enclosed for your records is the fully executed Agreement as referenced above that was approved by the Community Development Commission of the City of San Bernardino on November 20, 2006 (Resolution CDC/2006-49). Should you have any questions regarding this matter, please feel free to call me at (909) 663- 1044. Wasana A. Chantha Executive Secretary Enclosure: 2006 Disposition and Development Agreement (La Placita on 2nd Street, LLC) cc: Barbara Lindseth (with Original Executed Agreement) ~ie Otterbein (with Original Executed Agreement) Mike Trout (with Copy of Original Executed Agreement) Timothy J. Sabo, Lewis Brisbois Bisgaard & Smith (with Copy of Original Executed Agreement) File (with Copy of Original Executed Agreement) 201 North E Street, Suite 301 . San Bernardino, California 92401-1507. (909) 663-1044 . Fax (909) 888-9413 www.sanbemardino-eda.org.