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Home My WebLink About2005 CON Community Development Commission and Parking Authority of the City of National City and ARE Holdings6/27/05 Version DISPOSITION AND DEVELOPMENT AGREEMENT By and Between the COMMUNITY DEVELOPMENT COMMISSION AND PARKING AUTHORITY OF THE CITY OF NATIONAL CITY and ARE HOLDINGS, LLC LA-FS I1ViIIaF'31 I599v05172826.010100 Table of Contents 100. DEFINITIONS 6 200. SITE ACQUISITION ASSISTANCE 6 201. Developer Request for Site Acquisition Assistance 6 202. Undertaking Site Acquisition Assistance and Transfer of the Remaining Parcels to the Developer 6 203. The CDC's/Parking Authority's Negotiated Acquisition of the Remaining Parcels 6 204. Acquisition by Eminent Domain 6 205. Relocation of Occupants of Remaining Parcels 6 206. Costs and Fees of the Site Acquisition Program and Purchase Price of the Remaining Parcels Acquired by the CDC 6 207. Developer's Election Regarding CDC Financial Assistance 6 208. CDC Financial Assistance 6 209. Disbursement of Financial Assistance Funds 6 210. Reimbursement to CDC 6 211. Developer Reimbursement for Off -Site Improvements 6 300. CONVEYANCE OF THE REMAINING PARCELS 6 301. Disposition of Remaining Parcels 6 302. Escrow 6 302.1. Costs of Escrow 6 302.2. Escrow Instructions 6 302.3. Authority of Escrow Agent 6 302.4. Closing 6 302.5. Termination 6 302.6. Closing Procedure 6 303. Title and Survey Review 6 304. Title Insurance 6 305. Conditions of Closing 6 305.1. CDC's/Parking Authority's Conditions of Closing 6 305.2. Developer's Conditions of Closing 6 306. Representations and Warranties. 6 306.1. CDC and Parking Authority Representations 6 306.2. Developer's Representations 6 307. Studies and Reports 6 308. Condition of the Site 6 308.1. Disclosure 6 308.2. Investigation of Site 6 308.3. CDC's Performance of Remedial Work 6 308.4. Financial Responsibility for Remedial Work 6 308.5. CDC Responsibilities for Hazardous Materials and Remedial Work 6 308.6. Warranties and Indemnities As To Site 6 308.7. Mutual Representations 6 400. DEVELOPMENT OF THE SITE 6 401. Scope of Development. 6 LA-FS 1 \V i 11aF\3115 99 v05\72825.010100 -1- 401.1. Developer's Obligation to Construct Improvements 6 401.2. CDC's Obligation to Construct Infrastructure 6 402. Design Review. 6 402.1. Basic Concept Drawings 6 402.2. Site Plan Drawings 6 402.3. CDC Review and Approval 6 402.4. Standards for Disapproval 6 402.5. Consultation and Coordination 6 402.6. Revisions 6 402.7. Defects in Plans 6 403. Land Use Approvals 6 404. Schedule of Performance 6 405. Cost of Construction 6 406. Insurance Requirements 6 407. Rights of Access 6 408. Compliance with Laws 6 408.1. Nondiscrimination in Employment 6 408.2. Prevailing Wages 6 408.3. Taxes and Assessments 6 409. Release of Construction Covenants 6 410. Financing of the Improvements 6 410.1. Approval of Financing 6 410.2. No Encumbrances Except Mortgages and Deeds of Trust 6 410.3. Holder Not Obligated to Construct Improvements 6 410.4. Notice of Default to Mortgagee or Deed of Trust Holders; Right to Cure 6 500. COVENANTS AND RESTRICTIONS 6 501. Use in Accordance with Redevelopment Plan 6 502. Use Covenants 6 503. Maintenance Covenants and CC&Rs 6 504. Nondiscrimination Covenants 6 505. Effect of Violation of the Terms and Provisions of this Agreement After Completion of Construction 6 600. DEFAULTS AND REMEDIES 6 601. Default Remedies 6 602. Institution of Legal Actions 6 603. Termination by the Developer Prior to the Conveyance 6 604. Termination by the CDC Prior to the Conveyance 6 605. Reentry and Revesting of Title in the CDC After the Closing and Prior to Completion of Construction. 6 606. Acceptance of Service of Process 6 607. Rights and Remedies Are Cumulative 6 608. Inaction Not a Waiver of Default 6 609. Applicable Law 6 610. Non -Liability of Officials and Employees of the CDC 6 611. Attorneys' Fees 6 700. GENERAL PROVISIONS 6 LA-FS 1 \V i11aF\311599 v05\72826.010100 -11- 701. Notices, Demands and Communications Between the Parties 6 702. Extended Delay; Extension of Times of Performance 6 703. Transfers of Interest in Site or Agreement 6 703.1. Permitted Transfers 6 703.2. CDC Consideration of Requested Transfer 6 703.3. Successors and Assigns 6 703.4. Assignment by CDC 6 704. Relationship Between CDC and Developer 6 705. CDC Approvals and Actions 6 706. Counterparts 6 707. Integration 6 708. Real Estate Brokerage Commission 6 709. Titles and Captions 6 710. Interpretation 6 711. No Waiver 6 712. Modifications 6 713. Severability 6 714. Computation of Time 6 715. Legal Advice 6 716. Time of Essence 6 717. Cooperation 6 718. Conflicts of Interest 6 719. Time for Acceptance of Agreement by CDC 6 Attachment No. 1 Site Map A-1 Attachment No. 2 Site Legal Description A-2 Attachment No. 3 Grant Deed A-3 Attachment No. 4 Schedule of Performance A-4 Attachment No. 5 Scope of Development A-5 Attachment No. 6 Release of Construction Covenants A-6 Attachment No. 7 CDC Environmental Reports A-7 LA-FS 1 \V i 11 aF' 3115 99 v05 \72826.010100 DISPOSITION AND DEVELOPMENT AGREEMENT THIS DISPOSITION AND DEVELOPMENT AGREEMENT (this "Agreement") is entered into as of June _, 2005, by and between the COMMUNITY DEVELOPMENT ' COMMISSION OF NATIONAL CITY, a public body, corporate and politic (the "CDC"), the PARKING AUTHORITY OF NATIONAL CITY, a public body, corporate and politic (the "Parking Authority") and ARE HOLDINGS, LLC, a Delaware limited liability company (the ' "Developer"). RECITALS The following recitals are a substantive part of this Agreement: 1. In furtherance of the objectives of the California Community Redevelopment Law, the CDC desires the redevelopment of certain real property within the Project Area, bordering National City Boulevard on the East and Roosevelt Avenue on the West between 11th and 12th (the "Site") for a residential and retail mixed -use project consistent with the terms of this Agreement. 2. As of the date of this Agreement, the Developer owns in fee certain of the parcels which comprise the Site (the "Developer Parcels"). The parties contemplate the possibility that the Developer may need the assistance of the CDC and/or the Parking Authority to acquire the remaining parcels which form the Site (the "Remaining Parcels"). The Parking Authority may acquire property under California law through eminent domain -and otherwise for the purpose of constructing and maintaining parking facilities for the use and convenience of the public when it is deemed necessary or convenient to provide such facilities. The Parking Authority and the CDC find it necessary and convenient to require that the Project provide public parking for the Project's retail use, as more particularly describedherein, and that the Parking Authority may use its power of eminent domain to acquire property for the purpose of providing such public parking. In the event the Developer needs such assistance to acquire the Remaining Parcels, the CDC and/or the Parking Authority shall. provide such assistance in accordance with the terms hereof and to the extent permitted by law. 3. The CDC and the Developer desire by this Agreement for the Developer to purchase the Remaining Parcels from the CDC and/or the Parking Authority if the CDC and/or the Parking Authority acquire the Remaining Parcels pursuant to this Agreement, and for the Developer to construct on the Site- of at least approximately 209 and up to 300 condominium residential units (the "Residential Units"), commercial and retail facilities, as well as associated parking therefor (the "Project"). Parking for the Project shall consist of approximately 320 parking spaces of which 40 spaces shall be reserved for public use to access the Project's retail use. Additional development on the Site may occur pursuant to the terms of this Agreement. 4. On January _, 2005 The City of National City (the "City") adopted the City's Downtown Specific Plan, an amendment to its General Plan and an amendment to its Zoning Code, and certified an Environmental Impact Report (the "EIR") in connection with these actions, which entitle the owner of the Site to construct and operate on the Site multi -family residential units up to a floor area ratio of 6:1, commercial retail space of up to fifteen thousand (15,000) square feet and associated onsite parking. 5. The City Council for the City (the "City Council") and the CDC have duly adopted the Downtown Redevelopment Plan (the "Redevelopment Plan") which permits and encourages each LA-FS 1\Vi11aF\311599v05\72826.010100 of the proposed uses and the construction of the Improvements (as hereinafter defined) which the Developer will undertake under this Agreement. 6. The Developer's acquisition of the Remaining Parcels and its development of the Site as a mixed -use, condominium and retail center in accordance with this Agreement will promote the City's goals of revitalizing its downtown core, expanding housing opportunities for its residents, providing much -needed retail services and public parking, and catalyzing investment in and the redevelopment of this area, all as set forth in the Downtown Redevelopment Plan and the Downtown Specific Plan. 7. The arties have determined that Hazardous Materials, defined below, are present at the Site. 8. As of the Date of this Agreement, the CDC intends to submit a Property Mitigation Plan ("PMP") for the Site to the regulatory agencies asserting jurisdiction over the Site in connection with mitigating and/or eliminating the environmental contamination identified in the CDC Environmental Reports (as defined below). The PMP is intended to assure the suitability of the Site for the development, occupancy and operation of the Project. The CDC shall perform the Remedial Work in accordance with applicable Governmental Requirements and Environmental Laws and in a manner that is intended to qualify for the immunity under the Polanco Act (set forth at. California Health and Safety Code §33459 et seq.) subject to the parties' respective obligations concerning the costs of the Remedial Work as set forth herein. 9. The parties believe that neither the CDC nor the Developer caused the environmental contamination on the Site. However, completion of the Remedial Work is in the best interests of the CDC, the City and the health, safety and welfare of the residents and taxpayers of the Redevelopment Project and the City, and is in accord with the public purposes and provisions ofapplicable state and local laws. The CDC desires to see the Remedial Work completed under the Polanco Act to effectuate reuse of the Site in accordance with the Redevelopment Plan as well as to provide the CDC, Developer and any subsequent purchasers of all or a portion of the Site with immunity pursuant to Health and Safety Code §33459.3. 10. The CDC's and/or the Parking Authority's acquisition of the Remaining Parcels and disposition thereof to the Developer, and the Developer's acquisition of the Remaining Parcels and construction and completion of the Improvements pursuant to the terms of this Agreement, are in the vital and best interest of the City and the health, safety, morals and welfare of its residents, and in accord with the public purposes and provisions of applicable state and local laws and requirements under which the redevelopment of the Redevelopment Project Area has been undertaken and public parking may be afforded. NOW, THEREFORE, the CDC and the Developer hereby agree as follows: 100. DEFINITIONS "Actual Knowledge" means the actual knowledge of the CDC and Developer and their respective officers, managers, employees and agents. "Agreement" means this Disposition and Development Agreement between the CDC and the Developer. LA-FS 1 \V i11aP 311599v05\72826.010100 -2- "Association" means the property owner's association for the Residential Units, as set forth in Section 403 hereof. "Association CC&Rs" means the Declaration of Covenants, Conditions and Restrictions for the Residential Units, as set forth in Section 403 hereof. "Basic Concept Drawings" means the plans and drawings to be submitted by the Developer and approved by the CDC, as set forth in Section 302.1 hereof. "CDC" means the Community Development Commission of The City of National City,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., and any assignee of or successor to its rights, powers and responsibilities. "CDC's Conditions Precedent" means the conditions precedent to the Closing to the benefit of the CDC, as set forth in Section 305.1 hereof. "City" means the City of City of National City, a California municipal corporation. "Closing" means the close of Escrow for the Conveyance of any Remaining Parcels from the CDC and/or the Parking Authority to the Developer, as set forth in Section 302.4 hereof. "Closing Date" means the date of the Closing, as set forth in Section 302.4 hereof. "Completion Letter" means the issuance by the DEH or other applicable governmental agency of a letter, certificate or other official writing in a form reasonably acceptable to Developer which provides that the PMP has been completed and that no further investigation, remediation, response or removal with respect to Hazardous Materials is necessary considering the development, occupancy and operation of the Project and confirming, without limitation, that the immunity available under Health and Safety Code Section 33459.3 applies. "Condition of Title" is defined in Section 203 hereof. "Construction Drawings" means the detailed construction drawings and plans to be prepared and used with respect to constructing the Improvements, which are stamped by a licensed and/or registered engineer as set forth in Section 302.3 hereof. [This Section does not refer to Construction Drawings, which are nowhere defined.] "Conveyance" means the conveyance of any of the Remaining Parcels by the CDC and/or the Parking Authority to the Developer on the Closing Date. "Date of Agreement" means the date set forth in the first paragraph hereof. "Default" means the failure of a party to perform any action or covenant required by this Agreement within the time periods provided herein following notice and opportunity to cure, as set forth in Section 501 hereof. "DEH" means the County of San Diego, Department of Environmental Health. LA-FS 1 \V i llaF\3115 99 v05\72 826.010100 -3- "Developer" means ARE Holdings, LLC, a Delaware limited liability company, and its successors and assigns. "Developer Parcels" are defined in Recital 2 hereof. "Developer's Conditions Precedent" means the conditions precedent to the Closing to the benefit of the Developer, as set forth in Section 205.2. "Developer's Environmental Consultant" means the environmental consultant that may be employed by the Developer pursuant to Section 208.2 hereof. "Developer's Environmental Report" means the environmental investigation of the Site, which may be conducted for the Developer by Developer's Environmental Consultant, as set forth in Section 308.2 hereof. "Eligible Persons" means any individual, partnership, corporation or association which qualifies as a "displaced person" pursuant to the definition provided in Government Code Section 7260(c) of the California Relocation Assistance Act of 1970, as amended, and any other applicable federal, state, or local regulations or laws. "Environmental insurance" is defined in. Section 308.5 hereof. "Environmental Laws" shall mean any and all federal, state and local statutes, ordinances, orders, rules, regulations, guidance documents, judgments, governmental, authorizations, or any other requirements of governmental authorities presently relating to the release, generation, use, handling, treatment, storage, transportation or disposal of Hazardous Materials, or the protection of the environment or human, plant or animal health. "Environmental Laws" include, without limitation, (i) the Comprehensive Environmental Response, Compensation, and Liability Act (42 U.S.C. § 9601 et seq.), (ii) the. Hazardous Materials Transportation Act (94 U.S.C. § 1801 et seq.), (iii) the Resource Conservation and Recovery Act (42 U.S.C. § 6901 et seq.), (iv) the Federal Water Pollution Control Act (33 U.S.C. § 1251 et seq.), (v) the Clean Air Act (42 U.S.C. § 7401 et seq.), (vi) the Toxic Substances Control Act (15 U.S.C. § 2601 et seq.), (vii) the Oil Pollution Act (33 U.S.C. § 2701 et seq.), (viii) the Emergency Planning and Community Right -To -Know Act (U.S.C..§ 11001 et seq.), (ix) the Porter -Cologne Water Quality Control Act (Cal. Water Code § 13020 et seq.), (x) the Safe Drinking Water and Toxic Enforcement Act of 1986 (Cal. Health & Safety Code § 25300 et seq.), (xi) the Hazardous Waste Control Act (Cal. Health &Safety Code § 25100 et seq.), (xii) the Carpenter -Presley -Tanner Hazardous Substance Account Act (Cal. Health and Safety Code § 25316 et seq.), (xiii) the Hazardous Materials Release Response Plans and Inventory (Cal. Health & Safety Code § 25501 et seq.), (xiv) Cal. Health and Safety Code § 25281 (Underground Storage of Hazardous Substances), (xv) Article 9 or Article 11 of Title 22 of the California Administrative Code, Division 4, Chapter 20, and other applicable provisions of the California Health and Safety Code, Water Code,, and Government Code as amended or supplemented and any analogous present federal, state or local statutes, ordinances or laws, and any regulations promulgated pursuant to any of the foregoing. "Environmental Reports" means the collective environmental investigations of the Site as reported in the Developer's Environmental Report and any investigations conducted by or for the CDC or the Developer performed pursuant to Section 308 hereof. LA-FSl\VillaF\311599v05\72826.010100 4 "Escrow" is defined in Section 302 hereof. "Escrow Agent" is defined in Section 302 hereof. "Escrow Costs" are defined in Section 302.1 hereof. "Exceptions" is defined in Section 303 hereof. "Extended Delay" is defined in Section 702 hereof. "Governmental Requirements" means all laws, ordinances, statutes, codes, rules, regulations, orders and decrees of the United States, the state, the county, the City, or any other political subdivision in which the Site is located, and of any other political subdivision, CDC or instrumentality exercising jurisdictionover the CDC, the Developer or the Site. "Grant Deed" means any grant deed for the conveyance of any of the Remaining Parcels from the CDC and/or the Parking Authority to the Developer, in the form of Attachment No. 3 hereto which is incorporated herein. "Hazardous Materials" means any substance, material, or waste which is or becomes, regulated by any local governmental authority, the State of California, or the United States Government, including, but not limited to, any material or substance which is (i) defined as a "hazardous substance," "hazardous waste," "extremely hazardous waste," or "restricted hazardous waste" under Environmental Laws, (ii) petroleum, (iii) friable asbestos, (iv) polychlorinated byphenyls, (v) methyl tertiary butyl ether, or (vi) any other substance, whether in the form of a solid, liquid, gas or any other form whatsoever, which by any Governmental Requirements either requires special handling in its use, transportation, generation, collection, storage, handling, treatment or disposal, or is defined as "hazardous" or harmful to human health or the environment. "HRA"shall mean the Health Risk Assessment for the Site prepared by Developer's Environmental Consultant. "Lender" is defined in Section 410 hereof. "Improvements" means the new improvements to be constructed by the Developer upon the Site, all more particularly described in Section 401.1 hereof and in the Scope of Development. hereof. "Mortgage" is described in Section 410.1 hereof. "Notice" shall mean a notice -in -the form prescribed by Section 701 hereof. "Outside Date" shall mean the last date the Closing shall occur, as set forth in Section 302.4 "Phase 1 Report" is defined in Section 308.2 hereof. "Property Mitigation Plan" or "PMP" referenced in Recital 8 hereof, is a plan designed to combine the investigation and mitigation of environmental conditions at the Site to the extent necessary to use the Site for its intended use after redevelopment. LA-FS 1\VillaF\311599v05\72826.010100 "Polanco Act" shall be defined as California Health and Safety Code §33459, et seq. "Purchase Price" means the price to be paid by the Developer to the CDC and/or the Parking Authority in consideration for the Conveyance of fee title to the Remaining Parcels, as set forth in Section 301 hereof. "Redevelopment Plan" means the Redevelopment Plan for the Redevelopment Project, adopted by Ordinance No. 95 - 2095 of the City Council of the City of National City, and incorporated herein by reference. "Redevelopment Project" means the National City Redevelopment Project, adopted by the City pursuant to the Redevelopment Plan.. "Release of Construction Covenants" means the document, which evidences the Developer's satisfactory completion of the Improvements, as set forth in Section 310 hereof, in the form of Attachment No. '6 hereto which is incorporated herein. "Remaining Parcels" 'are defined in Recital 2 hereof. "Remedial Work" means all actions necessary to investigate the Site for environmental conditions, engage and obtain the approval of appropriate regulatory agency or agencies for a PMP, and implement the PMP to the satisfaction of the environmental oversight agency. Remedial Work also includes the legal and consulting costs incurred by the CDC while seeking cost recovery for Polanco related expenditures. "Report" means the preliminary title report, as described in Section 303 hereof. "Residential Units" means the condominium residential units to be constructed on the Site. "Schedule of Performance" means the Schedule of Performance attached hereto as Attachment No. 4 and incorporated herein, setting out the dates and/or time periods by which certain obligations set forth in this Agreement must be accomplished. The Schedule of Performance is subject to revision from time to time as mutually agreed upon in writing between the Developer and the CDC's Director. Unless otherwise specified herein, the CDC's Director is authorized to make such revisions, as he or she deems reasonably necessary._ - "Scope of Development" means the Scope of Development attached hereto as Attachment No. 5 and incorporated herein, which describes the scope, amount and quality of development of the Improvements to be constructed by the Developer pursuant to the terms and conditions of this Agreement. - "Site" means that certain area within the Project Area, bordering National City Boulevard on the East and Roosevelt Avenue on the West between 11th and 12th in the City of National City, which has previously been developed for urban and commercial use. The Site is legally described in the Site Legal Description and depicted in the Site Map. "Site Acquisition. Program" is defined in Section 201 hereof. "Site Legal Description" means the description of the Site, which is attached hereto as Attachment No. 2 and incorporated herein. LA-FS 1\Vi11aF,311599v05\72826.010100 6 "Site Map" means the map of the Site, which is attached hereto as Attachment No. 1 and incorporated herein. "Site Plan Drawings" means the plans and drawings to be submitted by the Developer and approved by the CDC, as set forth in Section 402.2 hereof. "Survey" means a current, as -built survey of the Site by a California registered surveyor made in accordance with the "Minimum Standard Detail Requirements for ALTA/ACSM Land Title Surveys," jointly established and adopted by ALTA, ACSM and NSPS in 1999, and includes items 1 through 4, 6 through 11, and 14 through 16 (all inclusive) of Table A thereof. "Threshold Amount" is defined in Section 308.2 hereof [not defined in DDA]. "Title Company" is defined in Section 303 hereof. "Title Policy" is defined in Section 304 hereof. "Transfer" is described in Section 703 hereof. 200. SITE ACQUISITION ASSISTANCE 201. Developer Request for Site Acquisition Assistance. The Developer may request the CDC and/or the Parking Authority to provide assistance in connection with the acquisition of any of the Remaining Parcels in accordance with this Section 201. If the Developer does not succeed in purchasing, or in entering into escrow to purchase, any of the Remaining Parcels after diligent effort on a negotiated basis, or if an owner of any of the Remaining Parcels cancels or breaches an escrow for the sale thereof to the Developer, the Developer may at its option submit a written request to the CDC and/or the Parking Authority for the CDC and/or the Parking Authority promptly to initiate the site acquisition program described below (the "Site Acquisition Program") as to any of such Remaining Parcels. 202. Undertaking Site Acquisition Assistance and Transfer of the Remaining Parcels to the Developer. As of the date of this Agreement the CDC and/or the Parking Authority does not own any of the Remaining Parcels. If the Developer requests the CDC and/or the Parking Authority and/or the Parking Authority to initiate the Site Acquisition Program in accordance with Section 201 hereof, the CDC shall use best efforts diligently to acquire each of the Remaining Parcels which are the subject of such a request by a negotiated purchase, as described below. Immediately upon, but in no event later than five (5) business days after, the CDC's and/or the Parking Authority's acquisition of any of the Remaining Parcels, the CDC and/or the Parking Authority shall convey fee ownership to such Remaining Parcels to the Developer in accordance with the terms hereof. 203. The CDC's/Parking Authority's Negotiated Acquisition of the Remaining Parcels. Within five (5) business days of the completion of the appraisal of any Remaining Parcel for which the Developer has requested site acquisition assistance, but in no event later than forty-five (45) days following the CDC's and/or the Parking Authority's receipt of the Developer's written request for such assistance, the CDC and/or the Parking Authority shall deliver a written offer to purchase any such Remaining Parcel to the owner thereof. The CDC and/or the Parking Authority shall base each such written offer upon a real property appraisal report, and shall provide a copy of each such report.to the Developer prior to delivering each offer to the owner. The CDC and/or the LA=FS 1 \V i11aF\3115 99v05\72826.010100 - 7 - Parking Authority shall negotiate the purchase of any such Remaining Parcel in good faith in accordance with applicable law. If an owner accepts the CDC's and/or the Parking Authority's offer to purchase, the CDC and/or the Parking Authority shall immediately, butin no event later than five (5) business days of such an acceptance, open escrow to purchase the Remaining Parcel and thereafter convey it to the Developer in accordance with -the terms hereof. 204. Acquisition by Eminent Domain. If an owner of a Remaining Parcel rejects or fails to respond to an offer to purchase submitted by the CDC and/or the Parking Authority in accordance with Section 203 hereof within thirty (30) days of the owner's receipt of the offer, or if within this 30-day period the CDC's and/or the Parking Authority's Executive Director determines that further negotiation, discussion or modification of such an offer willnot likely result in the owner's acceptance of the offer, the Executive Director shall request the governing board of the CDC and/or the Parking Authority to consider initiating an action in eminent domain to acquire the Remaining Parcel. The CDC and/or the Parking Authority Board shall notice and hold a hearing on a proposed resolution of necessity to consider acquiring a Remaining Parcel within. twenty (20) days of the Executive Director's request therefor.. The parties acknowledge the CDC's and/or the. Parking Authority's power and discretion to approve the acquisition of any Remaining. Parcel by eminent domain and to make the findings required under Code of Civil Procedure Sections 1240.030 and 1245.230. The CDC and/or the Parking Authority shall consider acquiring any Remaining Parcel under this Section and shall provide site acquisition assistance in a manner consistent with terms and spirit of this Agreement, and to the extent permitted by law. If the CDC and/or the Parking Authority adopts a resolution of necessity to acquire any Remaining Parcel, the CDC and/or the Parking Authority shall cause an action in eminent domain to be filed within five (5) days of such an adoption, and to seek and obtain an order of possession as soon aspermitted by law to enable the Developer timely to commence all investigations, grading and construction on the Remaining Parcel necessary to construct the improvements contemplated by this Agreement. Immediately upon, but in no event later than five:(5) business days of, its acquisitionof any Remaining Parcel in such a proceeding, the CDC and/or the Parking Authority shall convey all of its right, title and interest in such a Remaining Parcel to the Developer pursuant to the terms of this Agreement. 205. Relocation of Occupants of Remaining Parcels. The CDC and/or'the Parking Authority shall take all necessary and appropriate steps to provide for the relocation of all occupants, __whether-_ owners,-lenants_or. operators, ofeaclr_Remaining-Parcel the.: CDC _,and/_or:the=Parking Authority acquires under the Site Acquisition Program. The CDC and/or the Parking Authority shall undertake such relocation in. accordance with the California Relocation Assistance Act under Government Code Sections 7260 et seq. and other applicable law. Prior to the close of escrow for each such Remaining Parcel, the CDC and/or the Parking Authority shall provide each such occupant a written notice of displacement by the CDC which instructs' the occupant to vacate the premises and -_surrender_possession_thereof to the. CDC and/or the Parking Authority or the Developer, if applicable, within ninety (90) d'ays following the date of such a notice or the close of such escrow. 206. Costs and Fees of the Site. Acquisition Program and Purchase Price of the Remaining Parcels Acquired by the CDC. Subject to the terms of and the reimbursement under Sections 207, 208, 209, 210 and 211 hereof, the Developer shall bear the following costs and fees associated with undertaking the Site Acquisition Program: the costs arising out of the acquisition of the Remaining Parcels or any interest in real property (including, without limitation, any public or private easement) necessary to convey title to the Site to the Developer in accordance with this Agreement, including, but not limited to, purchase price payments to third party owners (including all interests of the owners, 'tenants, vendors, suppliers, and any and all other claimants as to the LA-FS 1 \Vi11aF\i 11599v05\72826.010100 purchase price); costs incurred by the CDC by eminent domain including, but notlimitedto, the purchase price, just compensation for the taking of property interests in the Remaining Parcels (land, building, fixtures, equipment, loss of goodwill and improvements); costs for payment of goodwill as provided under California law in eminent domain actions; appraisal fees; costs of environmental studies performed by the ,CDC on the Remaining Parcels (including, but not limited to, all investigations, reports and mitigation measures done on•Hazardous Substances); court costs; witness fees; expert witness fees; prorated taxes; reasonable attorney fees; deposits to obtain an order of prejudgment possession, if incurred; amounts to satisfy judgments of condemnation; any unrecovered costs the CDC incurs in reliance on the Polanco Redevelopment Act (Health & Safety Code § 33459 et seq.) in investigating, testing and/or remediating Hazardous Substances on the Remaining Parcels and Developer Parcels including reasonable attorneys' fees the CDC incurs in connection with such efforts; costs for relocation assistance and benefits pursuant to the California Relocation Assistance Law (Government Code § 7260 et seq.), the implementing regulations thereto (California Code of Regulations, Title 24 § 6000 et seq.) and the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970 (42 U.S.C. § 4201 4655, and 49 CFR part 24. 207. Developer's Election Regarding CDC Financial Assistance. Within sixty (60) days of completing any acquisition and relocation of the Project parcels by the Developer either with or without the assistance of the CDC and/or the Parking Authority under the Site Acquisition Program, the Developer may elect either to: (a) Receive the assistance from the CDC described in Section 208 hereof. If the Developer so elects, it shall: (i) construct the Improvements utilizing prevailing wage rates as set forth under California; and (ii) be responsible for maintaining adequate accounting and records concerning such wages for all contractors and subcontractors used to construct the Improvements. (b) Not receive the assistance from the CDC described in Section 208 hereof. If the Developer so elects, the CDC shall provide the Developer assistance to construct the off -site improvements, and the Developer shall construct such improvements, described in Section 211. (c) Terminate this DDA, in which case each party shall be released from all obligations hereunder. If the Developer so elects, it may, in its sole discretion, elect to convey any or all of the Developer Parcels or Remaining Parcels to the CDC at the price at which the Developer acquired these parcels. 208. CDC Financial Assistance If the Developer elects to receive the assistance described in this Section 208 ("CDC Financial Assistance"), the CDC shall provide the Developer one of the two following forms of assistance based on the form of assistance the Developer elects to receive, subject to the CDC's right to reimbursement for providing such assistance as described in Section 210: (a) The amount equal to the total acquisition and relocation costs the Developer incurs in acquiring the Developer Parcels and the Remaining Parcels which exceed $80 per square foot up to a maximum of $1,875,000 ("Election A Assistance"). LA-FS I \V i11aR3l ] 599v05\72826.0] 0] 00 9 (b) The amount equal to the total acquisition and relocation costs the Developer incurs in acquiring the Developer Parcels and the Remaining Parcels which exceed $80 per square foot up to a maximum of $1,300,000 ("Election B Assistance"). 209. Disbursement of Financial Assistance Funds If the Developer elects to receive CDC Financial Assistance, the CDC shall deliver: (i) one half of the funds of such assistance upon the City's issuance of a building permit to construct the Improvements, and (ii) the balance of such funds upon the City's initial issuance of a certificate of occupancy for any of the Project's residential units. 210. Reimbursement to CDC (a)' . If the Developer elects to receive, and the CDC provides, Election A Assistance, the CDC shall be reimbursed for providing such assistance by a receipt of: (i) An amount equal to one percent of the total proceeds of: (1) the initial sale of the Project's retail space, and (2) the sales of all the Project's residential units which occur after the original sale of each of such units. The CDC shall be entitled to reimbursement under this Section 210(a)(i) for a period of thirty (30) years following the date of the issuance of the final Certificate of Occupancy for, the Project, and the terms of this entitlement shall be recorded upon the title of all affected property interests. (ii) An amount equal to twenty-five percent (25 %) of the total gross sale proceeds from the original sale of all the Project's residential units which exceed $100,800,000 in total gross sales revenue, or twenty percent (20%) greater than the projected, approximate $85,000,000 in such gross revenues ("Enhanced Participation"). The CDC shall not be entitled to any Enhanced Participation if the total gross sale proceeds from the original sale of all the Project's residential units do not exceed $100,800,000 in total gross revenue. Enhanced Participation will be calculated and paid to the CDC in one payment within sixty (60) days of the closing and release of the sale proceeds of all of the residential unit sales. (b) If the Developer elects to receive, and the CDC provides, Election B Assistance, the CDC-ilall eerreimbursed forproviding such assistance by a receipt cif:- (i) An amount equal to one percent of the total proceeds of: (1) the initial sale of the Project's retail space, and (2) the sales of all the Project's residential units which occur after the original sale of each of such units. The CDC shall be entitled to reimbursement under this Section 210(b)(i) for a period of thirty (30) years following the date of the issuance of the first —Certificate-of Occupancy -for theProject,—and-the terms of this entitleinefirshall be -recorded -upon the title of all affected property interests. 211. Developer Reimbursement for Off -Site Improvements The CDC shall reimburse the Developer, up to $365,000, for the costs of constructing the "enhanced" National City Boulevard streetscape improvements and the improvements located on or adjacent to 12th and 11th Streets and Roosevelt Boulevard which border the Project and which improvements are deemed necessary or appropriate in connection with the construction of the Improvements. The Developer shall cause the construction of such off-siteimprovements consistent LA-FS 1\Vi]1aF\311599v05\72826.010100 -10- with utilizing "public works" bidding procedures and applicable prevailing wages, and shall be ' responsible for all Project management, accounting and record -keeping associated with such work. 300. CONVEYANCE OF THE REMAINING PARCELS 301. Disposition of Remaining Parcels. The Developer agrees to purchase, and the CDC and/or the Parking Authority agrees to sell, any of the Remaining Parcels the CDC and/or the Parking Authority acquires under the Site Acquisition Program at a price equal to the price at which the CDC and/or the Parking Authority acquires the Remaining Parcels. 302. Escrow. Immediately upon, but in no event later than ten (10) calendar days of, the CDC's and/or the Parking Authority's acquisition of any Remaining Parcels under the Site Acquisition Program, the parties shall open escrow ("Escrow") with the escrow division of Chicago Title Company in its San Diego County office, or another escrow company mutually satisfactory to both parties (the "Escrow Agent"). 302.1. Costs of Escrow. The Developer shall pay the premium for the Title Policy as set forth in Section 204 hereof and the documentary transfer taxes, if any, due with respect to the conveyance of the Site. The Developer and CDC and/or the Parking Authority shall each pay one- half of all other usual fees, charges, and costs that arise from Escrow (the "Escrow Costs"). 302.2. Escrow Instructions. This Agreement constitutes the joint escrow instructions of Developer and CDC and/or the Parking Authority, and the Escrow Agent to whom these instructions are delivered is hereby empowered to act under this Agreement; The parties hereto agree to do all acts, reasonably necessary to close this Escrow in the shortest possible time. Insurance policies for fire or casualty are not to be transferred, and CDC and/or the Parking Authority will cancel its own policies after the Closing. All funds received in the Escrow shall be deposited with other escrow funds in a general escrow account(s) and may be transferred to any other such escrow trust account in any State or National Bank doing business in the State of California. All disbursements shall be made by check from such account. However, if Escrow does not close within one (1) business day from deposit of the Purchase Price, the funds shall be deposited into an interest bearing account with such interest accruing to the benefit of the Developer. If in the -opinion of either party or the Escrow Agent it is necessary or convenient in order to accomplish the Closing of this transaction, such party may require that the parties sign supplemental escrow instructions within fifteen (15) days of notice thereof; provided that if there is any inconsistency between this Agreement and the supplemental escrow instructions, then the provisions of this Agreement shall control. The parties agree to execute such other and further documents as may be reasonably necessary, helpful or appropriate to effectuate the provisions of this Agreement. • The Closing shall take place within thirty (30) days after the date when both the CDC's and/or the Parking Authority's Conditions Precedent and the Developer's Conditions Precedent as set forth in Section 305 have been satisfied or waived by the respective parties. Escrow Agent is instructed to release the CDC's and/or, the Parking Authority's escrow closing statement and the Developer's escrow closing statement to the respective parties. 302.3. Authority of Escrow Agent. Escrow Agent is authorized to, and shall: (a) Pay and charge Developer and CDC and/or the Parking Authority for their respective shares of the Escrow Costs payable under Section 302.1 of this Agreement, any LA-FS 1 \V i11aF\3 ] ] 599v05\72826.01 0100 -11- endorsements to the premium of the Title Policy thereto as set forth in Section 304, and any amount necessary to place title in the condition necessary to satisfy Section 303 of this Agreement. (b) Pay and charge Developer and CDC and/or the Parking Authority for their respective shares of any escrow fees, charges, and costs. (c) Disburse funds and deliver and record the Grant Deed when both the Developer's Conditions Precedent and the CDC's Conditions Precedent have been fulfilled or waived by Developer and CDC and/or the Parking Authority. (d) Do such other actions as necessary, including obtaining the Title Policy, to fulfill its obligations under this Agreement. (e) Within the discretion of Escrow Agent, direct CDC and/or the Parking Authority and Developer to execute and deliver any instrument, affidavit, and statement, and to perform any act reasonably necessary to comply with the provisions of FIRPTA and any similar state act and regulation promulgated hereunder. CDC and/or the Parking Authority agrees to execute a Certificate of Non -Foreign Status by individual transferor and/or a Certification of Compliance with Real Estate Reporting Requirement of the 1986 Tax Reform Act as may be required by Escrow Agent, on the form to be supplied by Escrow Agent. (f) Prepare and file with all appropriate governmental or taxing authorities a uniform settlement statement, closing statement, tax withholding forms including an IRS 1099-S form, and be responsible for withholding taxes, if any such forms are provided for or required by law. 302.4. Closing. The transaction for each Remaining Parcel shall close ("Closing") within thirty (30) days of the parties' satisfaction of all of CDC's and/or the Parking Authority's and Developer's Conditions Precedent to Closing as set forth in Section 305 hereof, but in no event later than November 30, 2005 (the "Outside Date"). The Outside Date shall be extended on a day -for -day basis for every day completion of actions required to be undertaken by the CDC and/or the Parking Authority prior to Closing is delayed beyond the deadlines set forth herein and in the Schedule of Performance, including without limitation the CDC's and/or the. Parking Authority's obligations pursuant to Section 303 to obtain a Local Coastal Plan approval, City zone change and City General Plan land use amendments. The Closing shall occur at a location within San Diego County at a time and place reasonably agreed on by the parties. The "Closing" shall mean the time and day the Grant Deed is filed for record with the San Diego County Recorder. The "Closing Date" shall mean the day on which the Closing occurs. 302.5. Termination. If Escrow is not in condition to close by the Outside Date, then either party that has fully performed under this Agreement may, in writing, demand the return of money or property and terminate the Escrow. If either party makes a written demand for return of documents or properties, the Escrow shall not terminate until five (5) days after Escrow Agent shall have delivered copies of such demand to all other parties at the respective addresses shown in this Agreement. If any objections are raised within said five (5) day period, Escrow Agent is authorized to hold all papers and documents until instructed by a court of competent jurisdiction or by mutual written instructions of the parties. Developer, however, shall have the sole option to withdraw any money deposited by it with respect to the Closing less Developer's share of costs of Escrow, if any. Termination of the Escrow shall be without prejudice as to whatever legal rights either party may LA-FSl\VillaF 3l 1599v05\72826.010100 - 12 - have against the other arising from this Agreement. If no demands are made, the Escrow Agent shall proceed with the Closing as soon as possible. 302.6. Closing Procedure. Escrow Agent shall close Escrow for the Remaining Parcels as follows: (a) Record the Grant Deed with instructions for the Recorder of San Diego County, California to deliver the Grant Deed to Developer; (b) Instruct the Title Company to deliver the Title Policy to Developer; (c) File any informational reports required by Internal Revenue Code Section 6045(e), as amended, and any other applicable requirements; and (d) Deliver the FIRPTA Certificate, if any, to Developer; and (e) Forward to both Developer and CDC and/or the Parking Authority a separate accounting of all funds received and disbursed for each party and copies of all executed and recorded or filed documents deposited into Escrow, with such recording and filing date and information endorsed thereon. 303. Title and Survey Review. The CDC and/or the Parking Authority shall cause Chicago Title Company, or another title company mutually agreeable to both parties (the "Title Company"), to deliver to Developer a standard preliminary consolidated title report (the "Report") with respect to the title to the each of the Remaining Parcels, together with best available copies of the documents (the "Documents") underlying the exceptions ("Exceptions") set forth in the Report, within sixty (60) days from the date of this Agreement. The Developer shall have the right to approve or disapprove the Exceptions in its sole and absolute discretion; provided, however, that the Developer hereby approves the following Exceptions: (a) The Redevelopment Plan. (b) prorated at close of Escrow). Developer shall have thirty (30) days from the date of its latest receipt of the Report, the Documents and the Survey to give written notice to CDC and/or the Parking Authority and Escrow Holder of Developer's approval or disapproval of any of such Exceptions. If Developer notifies CDC and/or the Parking Authority of its disapproval of any Exceptions in the Report, CDC and/or -the Parking -Authority shall have the right, but not the obligation, to remove any disapproved Exceptions within thirty (30) days after receiving written notice of Developer's disapproval or provide assurances satisfactory to Developer in Developer's sole and absolute discretion that such Exception(s) will be removed on or before the Closing. If CDC and/or the Parking Authority cannot or does not elect to remove any of the disapproved Exceptions within that period, Developer shall have fifteen (15) days after the expiration of such thirty (30) day period to either give the CDC and/or the Parking Authority written notice that Developer elects to proceed with the purchase of the Remaining Parcels subject to the disapproved Exceptions or to give the CDC and/or the Parking Authority written notice that the Developer elects to terminate this Agreement. The Exceptions to title approved by Developer as provided herein shall hereinafter be referred to as the "Condition of The lien of any non -delinquent prpperty taxes and assessments (to be LA-FS ]\villaF\3 ] ] 599v05\72826.010] 00 - 13 - Title." Developer shall have the right to approve or disapprove in its sole and absolute discretion any further Exceptions reported by the Title Company after Developer has approved the Condition of Title for the Remaining Parcels (which are not created by Developer). CDC and/or the Parking Authority shall not voluntarily create any new exceptions to title following the date of this Agreement. 304. Title Insurance. Concurrently with recordation of the Grant Deed conveying title to each Remaining Parcels, there shall be issued to Developer an ALTA Form B (1970, amended 10/17/70, or if the 1970, amended 10/17/70, form is not available, the 1970 form with 1984 amendment and, if that is not available, 1992 form with no creditors' rights exclusion) extended coverage owner's title insurance policy ("Title Policy"), or equivalent form acceptable to Developer, without a creditor's rights exclusion or arbitration provision, as applicable,or including an endorsement eliminating the creditor's rights -exclusion and arbitration provision, with coverage in the amount of the Purchase Price (or such greater amount, up to the total anticipated cost of acquisition, development and construction of the Property, as Developer may elect) and dated as of the date and time the Grant Deed is recorded, indicating title to the Remaining Parcel (including any easements for the benefit of the Site) and Improvements to be vested of record in Developer, subject solely to the Exceptions to Title and including such title endorsements as Developer may have requested during the review period providing in Section 203.1 hereof. The Title Company shall provide the CDC and/or the Parking Authority with a copy of the Title Policy. The CDC and/or the Parking Authority agrees to remove on or before the Closing any deeds of trust or other monetary liens against the Site. The Escrow Costs shall include the cost of any surveys necessary to issue the Title Policy and that portion of the premium for the Title Policy equal to the cost of an ALTA Standard Coverage Owner's Policy of Title Insurance in the amount of the Purchase Price. 305. Conditions of Closing. The Closing is conditioned upon the satisfaction of the following terms and conditions within the times designated below: 305.1. CDC's/Parking Authority's Conditions of Closing. CDC's and/or the Parking Authority's obligation to proceed with the Closing of the sale of the Remaining Parcels is subject to the fulfillment or waiver by CDC and/or the Parking Authority of each and all of the conditions precedent (a) through (j), inclusive, described below ("CDC's Conditions Precedent"), which are solely for the benefit of CDC and/or the Parking Authority, and which shall be fulfilled or waived by the time periods provided for herein: (a) No Default. Prior to the Close of Escrow, Developer shall not be in default in any of its obligations under the terms of this Agreement and all representations and warranties of Developer contained herein shall be true and correct in all material respects. (b) Execution of Documents. The Developer shall have executed any other documents required hereunder and delivered such documents into Escrow. (c) Payment of Funds. Prior to the Close of Escrow, Developer shall have paid the Purchase Price and all required costs of Closing into Escrow in accordance with Section 301 and 302 hereof. (d) Insurance. The Developer shall have provided proof of insurance as required by Section 306 hereof. LA-FS 1 \Vi11aF\311599v05\72826.010I00 -14- (e) Design Approvals. The Developer shall have obtained approval by the CDC of the Basic Concept Drawings. (f) Consistency Review. The Developer shall have obtained approval from the CDC of an Application for Consistency Review of the Improvements under the National City Downtown Specific Plan Consistency Review Application Requirements and Procedures. (g) Financing. The CDC shall have approved construction and acquisition financing as provided in Section 310.1 hereof, and such financing shall have closed and funded or be ready to close and fund upon the Closing. (h) General Contractor Contract. Developer shall have provided to CDC and/or the Parking Authority a copy of a valid and binding contract between the. Developer and McCormick Construction or another duly licensed general contractor reasonably acceptable to the CDC for the construction of the Improvements, certified by the Developer to be a true and correct copy thereof. 305.2. Developer's Conditions of Closing. Developer's obligation to proceed with the purchase of any of the Remaining Parcels is subject to the fulfillment or waiver by the Developer of each and all of the conditions precedent (a) through (k), inclusive, described below (the "Developer's Conditions Precedent"), which are solely for the benefit of Developer, and which shall be fulfilled or waived by the time periods provided for herein: (a) No Default. Prior to the Close of Escrow, the CDC and/or the Parking Authority shall not be in default in any of its obligations under the terms of this Agreement and all representations and warranties of the CDC and/or the Parking Authority contained herein shall be true and correct in all material respects. (b) Execution of Documents. The CDC and/or the Parking Authority shall have executed the Grant Deed and any other documents required hereunder, and delivered such documents into Escrow. (c) Review and Approval of Title. The Developer shall have_reviewed --and-approved-the condition of title of the Remaining Parcel, as provided in Section 303 hereof. (d) Title Policy. The Title Company shall, upon payment of Title Company's regularly scheduled premium, have irrevocably and unconditionally agreed to provide to the Developer the Title Policy for the Remaining Parcel upon the Close of Escrow, in accordance with Section 304 hereof. (e) Environmental. The Developer shall have approved the environmental condition of the Remaining Parcel after the completion of any required Remediation Work by the CDC and/or the Parking Authority and receipt of the Completion Letter, the Developer's review of the Remaining Parcel and its approval of the Remaining Parcel's conditions, and the Developer's procurement of the Environmental Insurance as provided in Section 308.5 hereof. LA-FS 1 \V i11aF\311599v05\72826.010100 - 15 - (0 Design Approvals. The Developer shall have obtained approval by the CDC and/or the Parking Authority and City of the Basic Concept Drawings, Site Plan application drawings, Site Plan application, and Construction Drawings as set forth in Section 402 hereof. (g) Land Use Approvals: The Developer and the CDC and/or the Parking Authority shall have received all land use approvals required pursuant to Section 403 hereof. (h) Building and Grading Permits. All grading permits required for the construction of the Improvements shall be available for issuance upon the payment of applicable fees, posting of required security, and similar items, and all plans necessary for the issuance of building permits for the improvements shall have been submitted to the City and accepted as complete. (i) Quitclaim of Rail Lines. The CDC and/or the Parking Authority shall have obtained quitclaims for all property rights associated with rail lines located on the Remaining Parcels, as provided in Section 403 hereof. 306. Representations and Warranties. 306.1. CDC and Parking Authority Representations. The CDC and/or the Parking Authority represents and warrants to Developer as follows: (a) Authority. The CDC and/or the Parking Authority is a public body, corporate and politic, existing pursuant to the California Community Redevelopment Law (California Health and Safety Code Section 33000), which has been authorized to transact business pursuant to action of the City. This Agreement and all agreements, instruments and documents herein provided to be executed or to be caused to be executed by the CDC and/or the Parking Authority are and on the Closing Date will be duly authorized, executed and delivered by and are binding upon the CDC and/or the Parking Authority. The CDC and/or the Parking Authority has the capacity and authority to enter into this Agreement and consummate the transactions herein provided without the consent or joinder of any other party. (b) FIRPTA. The. CDC and/or the Parking Authority is not a "foreign "person' within the parameters of FIRPTA or any sirriilar state statute; or is exempt from the provisions of FIRPTA or any similar state statute, or that the CDC and/or the Parking Authority has complied and will comply with all the requirements under FIRPTA or any similar state statute. (c) No Conflict. To the best of the CDC's and/or the Parking Authority's knowledge; the CDC's and/or the Parking Authority's execution, delivery and performance of its obligations under this Agreementwillnot constitute a default or a breach under any contract, agreement or order to which the CDC and/or the Parking Authority is a party orby which it is bound. (d) Litigation. There are no claims, causes of action or other litigation. or proceedings, including condemnation, pending or, to the Actual Knowledge of the CDC and/or the Parking Authority, threatened with respect to the ownership, operation or environmental condition of the Site or any part thereof or the Developer's intended use of the Site (including disputes with mortgagees, governmental authorities, utility companies, contractors, adjoining landowners or suppliers of goods and services). LA-FS l \V illaF\311599 v05\72826.010100 -16- (e) Violation. To the Actual Knowledge of the CDC and/or the Parking Authority, there are no violations of any health, safety, pollution, zoning or other laws, ordinances, rules or regulations with respect to the Site, which have not heretofore been entirely corrected, and the CDC and/or the Parking Authority has received no notices of any such violations. In the event the CDC and/or the Parking Authority becomes aware of any such violations, CDC and/or the Parking Authority shall (i) immediately provide Developer with copies of all documents evidencing such violation, and (ii) cure any -such violation prior to Closing unless the Developer causes the _ violation. (f) No CDC/Parking Authority Bankruptcy. The CDC and/or the Parking Authority is not the subject of a bankruptcy proceeding. (g) Leases and Service Agreements. There are no leases of space at the Site which will be in force on the Closing Date. The CDC and/or the Parking Authority has not entered into any service agreements, equipment leasing contracts or other contracts relating to the Site that will be in force after the Closing Date. (h) Consents; No Conflict. The CDC and/or the Parking Authority has obtained all consents and permissions related to the transactions herein contemplated and required under any covenant, agreement, encumbrance, or applicable laws. Neither this Agreement nor any agreement, document or instrument executed or to be executed in connection with the same, nor anything provided in or contemplated by this Agreement or any such other agreement, document or instrument, does now or shall hereafter breach, invalidate, cancel, make inoperative or interfere with, or result in the acceleration or maturity of, any agreement, document, instrument, right or interest, affecting or relating to the CDC and/or the Parking Authority or the Site. Until the Closing, the CDC and/or the Parking Authority shall, upon the change of any fact or condition which would cause any of the warranties and representations in this Section 206.1 not to be true as of Closing, immediately give written notice of such changed fact or condition to Developer. Such exception(s) to a representation shall not be deemed a breach by the CDC and/or the Parking Authority hereunder, but shall constitute an exception which Developer shall have a right to approve or disapprove if such exception would have an effect on the value and/or operation of the Site. If Developer elects to close Escrow following disclosure of such information, the CDC's and/or the Parking Authority's representations and warranties contained herein shall be deemed to have been made as of the Closing, subject to such exception(s). If, following the disclosure of such information, Developer elects to not close Escrow, then this Agreement and the Escrow shall automatically terminate, and neither party shall have any further rights, obligations or liabilities hereunder. The representations and warranties set forth in this Section 206.1 shall survive the Closing. 306.2. Developer's Representations. Developer represents and warrants to CDC and/or the Parking Authority as follows: (a) Authority. Developer is a limited liability company formed in and in good standing under the laws of the State of Delaware, and is qualified to do business within the State of California. Developer has full right, power and lawful authority to purchase and accept the conveyance of the Site and undertake all obligations as provided herein and the execution, performance and delivery of this Agreement by Developer has been fully authorized by all requisite actions on the part of the Developer. LA-FS 1 \V i11aF1311599v05\72826.010100 - 17 - (b) No Conflict. To the best of Developer's knowledge, Developer's execution, delivery and performance of its obligations under this Agreement will not constitute a default or a breach under any contract, agreement or order to which the Developer is a party or by which it is bound. (c) No Developer Bankruptcy. Developer is not the subject of a bankruptcy proceeding. Until the Closing, Developer shall, upon the change of any fact or condition which would cause any of the warranties and representations in this Section 206.2 not to be true as of Closing, immediately give written notice of such changed fact or condition to CDC and/or the Parking Authority. Such exception(s) to a representation shall not be deemed a breach by Developer hereunder, but shall constitute an exception which CDC and/or the Parking Authority shall have a right to approve or disapprove if such exception would have an effect on the value and/or operation of the Site. If CDC and/or the Parking Authority elects to close Escrow following disclosure of such information, Developer's representations and warranties contained herein shall be deemed to have been made as of the Closing, subject to such exception(s). If, following the disclosure of such information, CDC and/or the Parking Authority elects to not close Escrow, then this Agreement and the Escrow shall automatically terminate, and neither party shall have any further rights, obligations or liabilities hereunder. The representations and. warranties set forth in this Section 206.2 shall survive the Closing. (d) Not Subject of an Investigation. Neither the Developer nor any of its principals is the subject or target of any investigation by any municipal, state or local agency. 307. Studies and, Reports. Prior to the Closing, representatives of Developer shall have the right of access to all portions of the Site for the purpose of obtaining data and making surveys and tests necessary to carry out this Agreement, including the investigation of the environmental condition of the Site pursuant to Section 208 hereof. Any preliminary work undertaken on the Site by Developer prior to the Closing shall be done at the sole expense of the Developer, and the Developer's execution of a right of entry agreement to be provided by the CDC and/or the Parking Authority. Any preliminary work shall be undertaken only after securing any necessary permits from - the appropriate governmental -agencies. 308i-- Condition of the -Site:=` 308.1. Disclosure. Prior to the execution of this Agreement, the CDC also has caused a Limited Phase I investigation of the environmental condition of the Site, and the land adjacent to or near the Site (the "Phase I Report"). Developer acknowledges that Developer has been provided a copy of the Phase I Report. The Phase I Report suggests that there may be a release of Hazardous Materials at the Site, and that further investigation is required, and mitigation of property conditions to comply with Environmental Laws may also be required. Except as may be set forth in the Phase I Report, the CDC and the Developer hereby represent and warrant to the other that they have no actual knowledge, and have not received any notice or communication from any government agency having jurisdiction over the Site, notifying such party of, the presence of surface or subsurface zone Hazardous Materials in, on, or under the Site, or any portion thereof. "Actual knowledge," as used herein, means the actual knowledge of the LA-FS 1 \Vi11aF'31 1599v05\72826.010100 -18- CDC and the Developer and their respective Board members, officers, managers, employees and agents. 308.2. Investigation of Site. In addition to conducting a physical assessment of the Site, Developer shall have the right, at its sole cost and expense, to,engage its own environmental consultant ("Developer's Environmental Consultant") to conduct an environmental assessment and make such investigations as Developer deems necessary, including "Phase I" and/or "Phase II" investigations of the Site (including soil, vapor, and groundwater sampling and monitoring), and shall promptly provide CDC a copy of all final reports and test results (not including drafts) provided by Developer's Environmental Consultant ("Developer's Environmental Reports"). Developer shall also timely provide proposed plans for the Improvements at the Site, indicating where construction excavation is planned, and showing all final grades, paving and other site hardscape, in order for the CDC to develop and propose a PMP satisfactory for the proposed end use of the Site and the protection of the health of construction workers during the development phase. CDC will coordinate with the Developer to ensure the suitability of the PMP for the proposed development. 308.3. CDC's Performance of Remedial Work The CDC shall be responsible for identifying and contracting with the appropriate environmental regulatory agency for approval of plans to investigate and remediate, as necessary, any conditions at the Site in order to obtain a Completion Letter which will provide Polanco Act immunities, as allowable by law, by illustrating compliance with the PMP and all Governmental Requirements at the Site. If possible, the CDC will attempt to obtain the Completion Letter prior to the Closing. The Developer and the Developer's Environmental Consultant shall have the right to be present and oversee the Remedial Work at their sole cost and expense. Promptly upon completion of the Remedial Work, the CDC shall submit all necessary documentation to the governmental agency with oversight authority to obtain the Completion Letter. 308.4. Financial Responsibility for Remedial Work In order to underwrite the CDC's expenses the Developer shall initially advance the sum of $10,000 to the CDC for Remedial Work, and shall submit additional incremental amounts, pursuant to discussions and agreement between the Developer and CDC, as necessary to fund the activity. The CDC shall use its best efforts to recover all costs and attorneys' fees it incurs in undertaking and completing the Remedial Work—from--responsible-parties;-including, but not limited to, past and present owners and operators of the Remaining Parcels and the Developer Parcels, as authorized under the Polanco Act and other applicable law:-T-he-CDC shall reimburse the Developer for all such recovered costs and fees within ten (10) calendar days of the CDC's receipt thereof. 308.5. CDC Responsibilities for Hazardous Materials and Remedial Work. CDC shall use its best efforts to secure a regulatory approval for the PMP for the Site, and, to the extent provided by law, will endeavor to secure a determination from the DEH so that Polanco Act immunities can attach, to the benefit of the Developer. However, the Developer accepts that not all contamination may be removed from the Site following completion of activities described in the PMP, even after the issuance of the Completion Letter. The Developer understands that although the Site will be prepared to a condition in which impacts have been mitigated to a level where the Site meets human health risk criteria, and construction -related nuisance impacts have been abated (or will be abated simultaneously with construction activities), that some substances may remain at the Site, at or below concentrations consistent with regulatory guidelines for residential development. As a result of the Polanco Act,: the Developer, its lender, successors and assigns should have certain immunities from liability for future remediation of these substances by operation of state law. LA-FS 1 \Vi11aR311599v05\72826.010100 -19- However, should Developer, its successors or assigns determine or desire to undertake future constructionror additional remediation activities at the Site, any increased costs related to the redevelopment by reason of residual impacts shall be borne by the Developer, its successor and assigns, and the CDC will have no responsibility therefor. In addition, the Developer, and its successors and assigns, accept that the immunities described in the Polanco Act do not shield or protect against liability as a result of new releases of Hazardous Materials that may occur during or after the redevelopment process. The CDC shall have no responsibility for any such new releases unrelated to the conditions existing at the Site on or prior to the date the Site or any portion thereof is conveyed to the Developer (a "New Release"), and the Developer waives and abandons any such claims for liability against the CDC for New Releases. r • 308.6. Warranties and Indemnities As To Site. To the extent authorized by contract or law, the CDC and/or the Parking Authority shall assign to the Developer all warranties, indemnities, and guaranties with respect to the environmental condition of the Site or any portion thereof, if any, that the CDC and/or the Parking Authority may have received from prior owners of any of the parcels comprising the Site. 308.7. Mutual Representations The Parties recognize that redevelopment of the Site is dependent upon many factors, one of which is receipt of the immunities upon completion of the Remedial Work as provided in the Polanco Act. To that end, the Parties hereto agree that each have and will continue to exercise best efforts to fulfill the obligations and duties,required under the Polanco Act, including without limitation, providing notices as required, completing the Remedial Work in accordance with the approved PMP, and requesting closure and the Completion Letter. 400. DEVELOPMENT OF THE SITE 401. Scope of Development. 401.1. Developer's Obligation to Construct Improvements. Following -the Closing on all Remaining Parcels, the Developer shall develop or cause the development of the Improvements in two or more phases in accordance with the Scope of Development, the City Municipal Code, and the plans, drawings and documents submitted by the Developer and approved by the CDC as set forth herein. The Project's improvements shall generally comprise of at least approximately two hundred nine (209) and up to three hundred (300) condominium residential units (the "Residential Units"), ten thousand (10,000) square feet of retail space and approximately three hundred twenty (320) parking spaces, of which 40 spaces shall be reserved for the public to access the Project's retail use (collectively, the "Improvements"). The CDC shall construct or cause the construction of all public improvementsrequired as conditions of project approval which are located outside of the face of the curbs surrounding the Improvements. The Developer shall also construct the curbs and all other on- site improvements located inside of the face of the curbs surrounding the Improvements, as required through the City's Design Review process described herein. 401.2. CDC's Obligation to Construct Infrastructure. Prior to the Closing on all the Remaining Parcels, the CDC shall demolish and clear from the Site all existing above -ground and subsurface improvements located on the Site. The CDC, at the CDC's sole cost and expense, shall further arrange for standard utilities to be brought to the Site including, without limitation, gas, water, electric, telephone, and cable television with sufficient capacity to allow the Developer to develop the Site for the Improvements and the uses contemplated by this Agreement, together with consent of the applicable utility company for the Developer to connect into such utilities. The CDC shall also at LA-FS]\Vi11aF'3] 1599v05\72826.010100 -20- its sole cost and expense cause the construction of all offsite improvements needed for the Project, including, but not limited to, improvements related to sidewalks, utility lines, streets and traffic signals 402. Design Review. 402.1. Basic Concept Drawings. Within the time set forth in the Schedule of Performance, the Developer shall submit to the CDC's Executive Director or his/her designee conceptual drawings for the Improvements, including materials, color board, elevations of all four sides of the Improvements, preliminary landscape plans, the traffic and circulation plans, and a rendered perspective (collectively, the "Basic Concept Drawings"). Within the time set forth in the Schedule of Performance, but subject to the standards stated in Section 402.4 hereof, the CDC shall either approve the Basic Concept Drawings or set forth the reasons for its disapproval in writing. In the event that the CDC fails to act within the time set forth in the Schedule of Performance, the Basic Concept Drawings shall be deemed to have been approved by the CDC. 402.2. Site Plan Drawings. After the CDC's approval (or deemed approval) of the Basic Concept Drawings, and within the time set forth in the Schedule of Performance, the Developer shall submit to the CDC and City plans and drawings with respect to the Improvements (the "Site Plan Drawings"), which shall include all documents, plans and drawings, including any application materials required by the City Planning Services Division, which are necessary to obtain all City approvals for the construction of the Improvements. Within the time set forth in the Schedule of Performance, but subject to the standards stated in Section 402.4 hereof, the CDC shall either approve the Site Plan Drawings or set forth the reasons for its disapproval in writing. Inthe event that the CDC fails to act within the time set forth in the Schedule of Performance, the Site Plan Drawings shall be deemed to have been approved by the CDC. 402.3. CDC Review and Approval. The CDC shall have the right to review and reasonably approve Basic Concept Drawings and Site Plan Drawings. The CDC shall reasonably approve logical evolutions and/or extensions of drawings that it has previously 'approved. The CDC may review any and all aspects of the Basic Concept Drawings and Site Plan Drawings. The Developer acknowledges and agrees that the CDC is entitled to approve or disapprove the Basic __Concept Drawings_and_Site-Plan Dra_-wings in-or-der-to-satisfy_the-CDC—'s-obligation-to-promote-the sound development and redevelopment of land within the Redevelopment Project, to promote a high ._level_of design_which will impact_the-surrounding.development, and to provide an environment for the social, economic and psychological growth and well-being of the citizens of the City, and the Redevelopment Project. 402.4. Standards for Disapproval. The CDC shall have the right to disapprove the Basic Concept Drawings in its reasonable discretion. The CDC shall have the right to disapprove in its reasonable discretion any of the Site Plan Drawings if (a) the Site Plan Drawings do not conform to the approved Basic Concept Drawings, or (b) the Site Plan Drawings do not conform to the Scope of Development or this Agreement, or (c) the Site Plan Drawings are incomplete; provided, however, that the CDC shall reasonably approve logical evolutions and/or extensions of drawings which it has previously approved. The CDC shall state in writing the reasons for disapproval within fifteen (15) days of such disapproval as stated herein, and in the event that the CDC fails to do so, the drawings shall be deemed approved. The Developer, upon receipt of a disapproval based upon powers reserved by the CDC hereunder, shall revise such portions and resubmit to the CDC by the time established therefor in the Schedule of Performance. LA-FS 7 \V]11aF\311599v05\72826.010100 - 21 - 402.5. Consultation and Coordination. During the preparation of the Basic Concept Drawings, Site Plan Drawings and Construction Drawings, staff of the CDC and the Developer shall hold regular progress meetings twice each month or as agreed upon by the parties from time to time to coordinate the preparation of, submission to, and review of the Basic Concept Drawings, Site Plan Drawings and Construction Drawings by the CDC. The staff of the CDC and the Developer shall communicate and consult as frequently as is necessary to ensure that the formal submittal of any documents to the CDC can receive prompt and thorough consideration. The CDC shall designate a CDC employee to serve as the project manager who is responsible for the coordination of the CDC's activities under this Agreement and for expediting the land use approval and permitting process. 402.6. Revisions. If the Developer desires to propose any material revisions to the CDC -approved Basic Concept Drawings, Site Plan Drawings or Construction Drawings, it shall submit such proposed changes to the CDC, and shall also proceed in accordance with any and all State and local laws and regulations regarding such revisions, within the time frame set forth in the Schedule of Performance. At the sole discretion of the CDC, if any material change in the basic uses of the Site is proposed in the Basic Concept Drawings, Site Plan Drawings or Construction Drawings from the basic uses of the Site as provided for in this Agreement, then this Agreement is subject to re -negotiation of all terms and conditions, including without limitation, the economic terms of the Agreement. If the Basic Concept Drawings, Site Plan Drawings or Construction Drawings, as modified by the proposed change, generally and substantially conform to the requirements of this Section 302 of this Agreement and the. Scope of Development, the CDC Director shall review the proposed change and notify the Developer in writing within fifteen (15) days after submission to the CDC as to whether the proposed change is approved or disapproved. 'In the event that the CDC fails to act within the fifteen (15) day time period set forth above, the proposed change or changes shall be deemed approved by the CDC. The CDC's Director is authorized to approve changes to the CDC - approved Basic Concept Drawings, Site Plan Drawings and Construction Drawings provided such changes: 1) do not materially reduce the quality of materials to be used; and 2) do not reduce the imaginative and unique qualities of the project design. Any and all change orders or revisions required by the City and its inspectors which are required under the Municipal Code and all other applicable Uniform Codes (e.g. Building, Plumbing, Fire, Electrical, etc.) and under other applicable laws and regulations shall be included by the Developer in its Basic Concept Drawings, Site Plan —Drawings and -Construction Draw-ings,shall be deemed approved by t1 CDC, and shalibe completed during the construction of the Improvements. 402.7. Defects in Plans. The CDC shall not be responsible either to the Developer or to third parties in any way for any defects in the Basic Concept Drawings, the Site Plan Drawings or the Construction Drawings, nor for any structural or other defects in any work done according to the approved Basic Concept Drawings, Site Plan Drawings or Construction Drawings, nor for any delays reasonably caused by the review and approval processes established by this Section 302. 403. Land Use Approvals. Before commencement of construction of the Improvements or other works of improvement upon the Site, the Developer shall, at its own expense, secure or cause to be secured any and all required land use and other entitlements, permits and approvals which may be required for the Improvements by the City or any other governmental agency affected by such construction or work, except for obtaining a Local Coastal Plan approval, any City zone change, City General Plan land use amendments and City adoption of a specific plan which affects the Site. Obtaining those approvals shall be the responsibility of the CDC, who willapply for and process such approvals in accordance with the time period set for in the Schedule of Performance. The CDC LA-FS7\VillaF 311599v05\72826.010100 -22- warrants and represents that the proposed uses and Improvements under this Agreement are allowed "as of right" under the City's ordinances and regulations, including, but not limited to, the City's Zoning Code, General Plan, Downtown Specific Plan and Redevelopment Plan, provided the Project substantially conforms to all such ordinances and regulations. The Developer shall apply for and secure the following, and pay all costs, charges and fees associated therewith: (a) Site. Plan. (b) All other permits and fees required by the City, County of San Diego, and other governmental agencies with jurisdiction over the Improvements, except any permits or approvals relating to the City's Downtown Specific Plan, Redevelopment Plan, General Plan, zoning code and all other of the City's local ordinances, codes and regulations which ,now permit the construction of the Improvements and all the uses described in the Scope of Development "as of right". The CDC shall cooperate diligently and good faith with the Developer in connection with the Developer's efforts to seek and obtain permits and approvals. (c) Any environmental studies and documents required pursuant to the California Environmental Quality Act ("CEQA"), except the Environmental Impact Report (the - "E R") for the Downtown Specific Plan and General Plan Amendment, which EIR the City recently certified and which Plans the City recently adopted, as set forth in Recital hereof, and all other EIRs and other documents considered and certified by the City under CEQA which may pertain to the Site in any manner. The execution of this Agreement does not constitute the granting of any required land use permits, entitlements or approvals required by the CDC or the City except as otherwise provided in this Agreement. 404. Schedule of Performance. Subject to extension due to Extended Delays (as defined in Section 702 hereof), any failure of the CDC timely to perform its obligations hereunder or delays caused by any failure by third parties timely to respond to Developer's timely submissions, the Developer shall submit all Basic Concept Drawings, Site Plan Drawings and Construction Drawings, commence and complete construction of all of the Improvements, and satisfy all other obligations and conditions of the Developer under this Agreement, within the times established in the Schedule of Performance. 405. Cost of Construction. Except to the extent otherwise expressly set forth in this Agreement, all of the cost of planning, designing, developing and constructing the Improvements, site preparation and grading shall be borne solely by the Developer. 406. Insurance Requirements. The Developer shall take out and maintain or shall cause its contractor, tenant, or another third party to take out and maintain until the issuance of the Release of Construction Covenants pursuant to Section 410 of this Agreement, a comprehensive general liability policy in the amount of Two Million Dollars ($2,000,000.00) combined single limit policy, which policy shall be issued by a "B+" rated insurance carrier. Such policy or policies shall be written on an occurrence form. The Developer shall also furnish or cause to be furnished to the CDC evidence satisfactory to the CDC that any contractor with whom it has contracted for the performance of work on the Site or otherwise pursuant to this Agreement carries workers' compensation insurance as required by law. The Developer shall furnish a certificate of insurance countersigned by an authorized agent of the insurance carrier on a form reasonably approved by the LA-FS1\Vi]laF\3] 1599v05\72826.010100 -23- CDC setting forth the general provisions of the insurance coverage. This countersigned certificate shall name the City and the CDC and their respective officers, agents, and employees as additionally insured parties under the policy, and the certificate shall be accompanied by a duly executed endorsement evidencing such additional insured status. The certificate and endorsement by the insurance carrier shall contain, if commercially available at no material additional cost, a statement of obligation on the part of the carrier to notify City and the CDC of any material change, cancellation or termination of the coverage at least thirty (30) days in advance of the effective date of any such material change, cancellation or termination. Coverage provided hereunder by the Developer shall be primary insurance and not be contributing with any insurance maintained by the CDC or City, and the policy shall contain such an endorsement. The insurance policy or the endorsement shall contain a waiver of subrogation for the benefit of the City and the CDC. The Developer shall furnish the required certificate prior to the Closing as a CDC Condition Precedent to the Closing. 407. Rights of Access. Prior to the issuance of a Release of Construction Covenants (as specified in Section 410 of this Agreement), for purposes of assuring compliance with this Agreement, representatives of the CDC shall have the right of access to the Site, without charges or fees, at normal construction hours during the period of construction for the purposes of this Agreement, including but not limited to, the inspection of the work being performed in constructing the Improvements so long as CDC representatives comply with all safety rules. The CDC (or its representatives) shall, except in emergency situations, notify the Developer at least forty-eight (48) hours prior, to exercising its rights pursuant to this Section 308. 408. Compliance with Laws. The Developer shall carry out the design, construction and operation of the Improvements in conformity with all applicable laws, including all applicable state labor standards, the City zoning and development standards, building, plumbing, mechanical and electrical codes, and all other provisions of the City Municipal Code, and all applicable disabled and handicapped access requirements, including without limitation the. Americans With Disabilities Act, 42 U.S.C. Section 12101, et seq., Government Code Section 4450, et seq., Government Code Section 11135, et seq., and the Unruh Civil Rights Act, Civil Code Section 51, et seq. 408.1. Nondiscrimination in Employment. Developer agrees that all persons employed -or -applying -for -employment by-itrits-affiliates; subsidiaries -or -holding -companies; and all subcontractors, bidders and vendors, are and will be treated equally by it without regard to, or because of race, color, religion, ancestry, national origin, sex, sexual orientation, age, pregnancy, childbirth or related medical condition, medical condition (cancer related) or physical or mental disability, and in compliance with Title VII of the Civil Rights Act of 1964, 42 U.S.C. Section 2000, et seq., the Federal Equal Pay Act of 1963, 29 U.S.C. Section 206(d), the Age Discrimination in Employment Act of 1967, 29 U.S.C. Section 621, et seq., the Immigration Reform and Control Act of 1986, 8 U.S.C. Section 1324b, et seq., 42 U.S.C. Section 1981, the California Fair Employment ,and Housing Act, Cal. Government Code Section 12900, et seq., the California Equal Pay Law, Cal. Labor Code Section 1197.5, Cal. Government Code Section 11135, the Americans with Disabilities Act, 42 U.S.C. Section 12101, et seq., and all other anti -discrimination laws and regulations of the United States and the State of California as they now exist or may hereafter be amended. 408.2. Prevailing Wages. If the Developer elects to receive CDC Financial Assistance under Sections 207 through 211 hereof, the Developer shall cause all work to which such assistance applies to be done in accordance with all applicable federal and state labor standards. Developer is aware of Sections 33423 - 33426 of the California Health and Safety Code and Sections LA-FS l \V i11aF\311599v05\72826.010100 - 24 - 1770 — 1780 of the California Labor Code and is aware of the requirements of California Labor Code Sections 1720 et. seq. and 1770 et seq. as well as California Code of Regulations, Title 8, §16000 et. seq. ("Prevailing Wage Laws"), which require the payment of prevailing wage rates and the performance of other requirements on certain "public works" and "maintenance" projects. It is the belief and understanding of the CDC and Developer that this Agreement does involve a "public work" or "maintenance" project, as defined by the Prevailing Wage Laws. The Developer agrees to fully comply with such Prevailing Wage Laws. Developer shall defend, indemnify and hold the CDC, its elected officials, officers, employees and agents free and harmless from any and all claims, liabilities, costs, penalties or interest arising out of any failure or allege failure of Developer to comply with the Prevailing. Wage Laws in connection with this Agreement. If the CDC or any of the indemnified parties are named as a party in any dispute arising from the failure of Developer or its subcontractors to pay prevailing wages, the CDC and the other indemnified parties may appoint their own independent counsel to monitor such proceedings at their own cost and expense; provided, however, Developer will be responsible, in addition to all other damages, fines, penalties and losses incurred by the CDC and the other indemnified parties as a result of the action for which indemnification is provided, to pay the reasonable attorneys' fees and defense costs of the CDC and the other indemnified parties' independent counsel in the event (i) Developer fails to undertake to defend the CDC and the other indemnified parties against an indemnified claim, (ii) such counsel becomes necessary due to a conflict of interest, or (iii) the Developer agrees to pay such costs. 408.3. Taxes and Assessments. Upon and after the Closing, at all times during which the Developer owns the Site, the Developer shall pay prior to delinquency all ad valorem real estate taxes and assessments on the Site, subject to the Developer's right to contest in good faith any such taxes. The Developer agrees that during all times that the CDC is permitted to receive property tax increment from the Redevelopment Project pursuant to Health and Safety Code Section 33670 (as it may be amended or substituted) [Incomplete sentence here]. 409. Release of Construction Covenants. Promptly after completion of the Improvements in conformity with this Agreement, the CDC shall furnish the Developer with a "Release of Construction Covenants," in the form of Attachment No. 6 hereto which is incorporated herein by reference. The CDC shall not unreasonably withhold such Release of Construction Covenants. The Release of Construction Covenants shall be a conclusive determination of satisfactory completion of the Improvements and the Release of Construction Covenants shall so state. Any party then owning or thereafter purchasing, leasing or otherwise acquiring any interest in the Site shall not (because of such ownership, purchase, lease or acquisition) incur any obligation or liability under this Agreement except for those continuing covenants as described in the Grant Deed.. If the CDC refuses or fails to furnish the Release of Construction Covenants, after written request from the Developer, the CDC shall, within fifteen (15) days of written request thereof, provide the Developer with a written statement of the reasons the CDC refused or failed to furnish the Release of Construction Covenants. The statement shall also contain the CDC's opinion of the actions the Developer must take to obtain the Release of Construction Covenants. The Release of Construction Covenants shall not constitute evidence of compliance with or satisfaction of any obligation of the Developer to any holder of any mortgage, or any insurer of a mortgage securing money loaned to finance the Improvements, or any part thereof. The Release of Construction Covenants is not a notice of completion as referred to in Section 3093.of the California Civil Code. LA-FS 1 \V i llaF\311599v05\72826.010100 -25-. 410. Financing of the. Improvements. 410.1. Approval of Financing. As required herein and as a CDC Condition Precedent to the Closing, Developer shall submit to CDC evidence that Developer has obtained sufficient commitments for construction financing necessary to undertake the development of the Site and the construction of the Improvements in accordance with this Agreement. The CDC shall approve or disapprove such evidence of financing commitments within fifteen (15) days of receipt of a complete submission. Approval shall not be unreasonably withheld or conditioned. If the CDC disapproves of the evidence of financing, CDC shall do so by a notice to Developer stating the reasons for such disapproval and Developer shall promptly obtain and submit to CDC new evidence of financing: CDC shall approve or disapprove such new evidence of financing in the same manner and within the same times established in this Section 310.1 for the approval or disapproval of the evidence of financing as initially submitted to CDC. Such evidence of financing shall include the following: (a) a copy of letter of interest(s) obtained by Developer from one or more financial institutions for the mortgage loan or loans for financing to fund the construction and completion of the Improvements, subject to such lenders' reasonable, customary and normal conditions and terms, and/or (b) evidence that Developer has sufficient funds for such construction, and that such funds have been committed to such construction, and/or other documentation reasonably satisfactory to the CDC as evidence of other sources of capital sufficient to demonstrate that Developer has adequate funds to cover the difference between the total cost of the construction and completion of the Improvements, less financing authorized by those loans set forth in subparagraph (a) above. 410.2. No' Encumbrances Except Mortgages and Deeds of Trust. Mortgages and deeds of trust shall be permitted for the purpose of securing loans of funds to be used for financing the construction of the Improvements (including architecture, engineering, legal, and related direct costs as well as indirect costs) on or in connection with the Site, permanent financing, and any other purposes necessary and appropriate in connection with development under this -Agreement. The Developer shall notify the CDC' in advance of any mortgage or deed of trust financing, if the Developer proposes to enter into the same before completion of the construction of the Improvements. 410.3. Holder Not Obligated to Construct Improvements. The holder of any mortgage or deed of trust authorized _by Agreement shall not be obligated by the provisions of this Agreement to construct or complete the Improvements or any portion thereof, or to guarantee such construction or completion; nor shall any covenant or any other provision in this Agreement be construed so to obligate such holder. Nothing in this Agreement shall be deemed to construe, permit or authorize any such holder to devote the Site to any uses or to construct any improvements thereon, other than those uses or improvements -provided for or authorized by this Agreement. 410.4. Notice of Default to Mortgagee or Deed of Trust Holders; Right to Cure. With respect to any mortgage or deed of trust granted by Developer as provided herein, whenever the CDC may deliver any notice or demand to Developer with respect to any breach or default by the Developer in completion of construction of the Improvements, the CDC shall at the same time deliver to each -holder of record of any mortgage or deed of trust authorized by this Agreement a copy of such notice or demand. Each such holder shall (insofar as the rights granted by the CDC are concerned) have the right, at its option, within sixty (60) days after the receipt of the notice, to cure or remedy or commence to cure or remedy and thereafter to pursue with due diligence the cure or LA-FS1\Vi11aF\311599v05\72826.01,0100 -26- remedy of any such default and to add the cost thereof to the mortgage debt and the lien of its mortgage. 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, or any portion thereof (beyond the extent necessary to conserve or protect the improvements or construction already made) without first having expressly assumed the Developer's obligations to the CDC by written agreement. reasonably satisfactory to the CDC. 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. Any such holder properly completing such improvement shall be entitled, upon compliance with the requirements of Section 310 of this Agreement, to a Release of Construction Covenants. It is understood that a holder shall be deemed to have satisfied the sixty (60) day time limit set forth above for commencing to cure or remedy a Developer default which requires title and/or possession of the Site (or portion: thereof) if and to the extent any such holder has within such sixty (60) day period commenced proceedings to obtain title and/or possession and thereafter the holder diligently pursues such proceedings to completion and cures or remedies the default. 500. COVENANTS AND RESTRICTIONS 501. Use in Accordance with Redevelopment. Plan. The. Developer covenants and agrees for itself, its successors, assigns, and every successor in interest to the Site or any part thereof, that upon the Closing and during construction and thereafter, the Developer shall devote the Site to the uses specified in this Agreement and in accordance with the Redevelopment Plan for the periods . of time specified therein. All uses conducted on the Site, including, without limitation, all activities undertaken by the Developer pursuant to this Agreement, shall conform to. the Redevelopment Plan and all applicable provisions of the City Municipal Code. The foregoing covenants shall run with the land. 502. Use Covenants. For a term commencing upon the Conveyance and ending upon the expiration of the effectiveness of the current Redevelopment Plan, excluding any extensions of the Redevelopment Plan, the Developer hereby covenants and agrees for itself, its successors, -its assigns. and all voluntary and involuntary successors in interest to the Site, or any part thereof, that the Residential Units of the Site will only be used for residential housing purposes. 503. Maintenance Covenants and CC&Rs. The Developer- shall maintain the Site and all^improvements thereon, including all landscaping, in compliance with the terms of the Redevelopment Plan and with all applicable provisions of the National City Municipal Code, during the period of the Developer's ownership of the Site or portions thereof. The Developer shall prepare and submit to the CDC's legal counsel for its reasonable approval a Declaration of Covenants, Conditions and Restrictions for the Residential Units (the "Association CC&Rs"), which establishes a property owners' association for the Residential Units (the "Association"). The Association CC&Rs shall require the owners of all Residential Units constructed on the Site to be members of the Association. The Association CC&Rs shall entitle each owner to use of the common areas and facilities to be constructed on the Site and shall set forth an equitable apportionment of the costs of maintaining and operating such common areas and facilities. The Association CC&Rs shall require the maintenance of the improvements and the Site in accordance with the standards of this Section 503 and the standards of similar residential developments within the City. The Association CC&Rs shall be enforceable by the CDC, and any substantive amendments to such Association CC&Rs shall require the consent of the CDC, which consent shall not unreasonably be withheld. The Association CC&Rs shall be recorded against those portions of the Site which shall contain Residential Units before the sale of any Residential Units. The Association CC&Rs shall specifically state that the LA-FS ] \V illaF\311599v05\72826.Ol0100 - 27 - discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the premises." 505. ' Effect of Violation of the Terms and Provisions of this Agreement After Completion of Construction. The CDC is deemed the beneficiary of the terms and provisions of this Agreement and of the covenants running with the land, for and in its own right and for the purposes of protecting the interests of the community and other parties, public or private, in whose favor and for whose benefit this Agreement and the covenants running with the land have been provided, without regard to whether the CDC has been, remains or is an owner of any land or interest therein in the Site or in the Redevelopment Project. The CDC shall have the right, if the Agreement or covenants are breached, to exercise all rights and remedies, and to maintain any actions or suits at law or in equity or other proper proceedings to enforce the curing of such breaches and to avail itself of the rights granted herein to which it or any other beneficiaries of this Agreement and covenants may be entitled. The covenants contained in this Agreement shall remain in effect for the periods described herein, specifically including, without limitation, the following: (a) The covenants pertaining to use of the Site that are set forth in Section 401 and 402 of this Agreement shall remain in effect for the term of the Redevelopment Plan. (b) The covenants against discrimination, as set forth in Section 404 of this Agreement, shall remain in effect in perpetuity. 600. DEFAULTS AND REMEDIES 601. Default Remedies. Subject to the extensions of time set forth in Section 702 of this Agreement, failure by either party to perform any action or covenant required by this Agreement within the time periods provided herein following notice and failure to cure as described hereafter, constitutes a "Default" under this Agreement. A party claiming a Default shall give written notice of Default to the other party specifying the Default complained of. Except as otherwise expressly provided in this Agreement, the claimant shall not institute any proceeding against any other party, and the other party shall not be in Default if such party within thirty (30) days from receipt of such notice immediately, with due diligence, commences to cure, correct or remedy such failure or delay and shall complete such cure, correction or remedy with diligence. 602. Institution of Legal Actions. In addition to any other rights or remedies 'and subject to the restrictions otherwise set forth in this Agreement, either party may institute an action at law or equity to seek specific performance of the terms of this Agreement, or to cure, correct or remedy. any Default, to recover damages for any Default, or to obtain any other remedy available at law or in equity. Such legal actions must be instituted in the Superior Court of the County of San Diego, State of California. 603. Termination by the Developer Prior to the Conveyance. In addition to the rights provided the Developer in Section 602 hereof, in the event that (a) the 'CDC does not tender title to the Site pursuant to the Grant Deed in the manner and condition and by the date provided in this Agreement and Developer is not then in Default under this Agreement, or (b) one or more of the Developer's Conditions Precedent to the Closing is not fulfilled on or before the time set forth in the Schedule of Performance and such failure is not caused by the Developer, or (c) any default of the CDC prior to the Closing is not cured within the time set forth in Section 501 hereof, after written LA-FS 1 \V illan311599v05\72826.010100 - 29 - demand by the Developer, or (d) the Developer timely disapproves the environmental condition of the Site pursuant to Section 208 hereof, then this Agreement may, at the option of the Developer, be terminated by written Notice thereof to the CDC (the "Notice of Termination"). From the date of the written Notice of Termination of this Agreement by the Developer to the CDC and thereafter this Agreement shall be deemed terminated and there shall be no further rights or obligations between the parties with respect to the Site by virtue of or with respect to this Agreement. 604. Termination by the CDC Prior to the Conveyance. In the event that prior to the Conveyance the CDC is not in Default under this Agreement and (a) the Developer (or any successor in interest) assigns or attempts to assign the Agreement or any rights therein or in the Site in violation of this Agreement; or (b) one or more of the CDC's Conditions Precedent to the Closing is not fulfilled on or before the time set forth in the Schedule of Performance and such failure is not caused by the CDC or City; or (c) the Developer is otherwise in Default of this Agreement and fails to cure such default within the time set forth in Section 501 hereof; then this Agreement and any rights of the Developer or any assignee or transferee with respect to or arising out of the Agreement or the Site, shall, at the option of the CDC, be terminated by the CDC by written. Notice thereof to the Developer. From the date of the written Notice of Termination of this Agreement by the CDC to the Developer and thereafter this Agreement shall be deemed terminated and there shall be no further rights or obligations between the parties. 605. Reentry and Revesting of Title in the CDC After the Closing and Prior to Completion of Construction.. The CDC has the right, at its election, to reenter and take possession of the Site, with all improvements thereon, and terminate and revest in the CDC the estate conveyed to the Developer if after the Closing and prior to the issuance of the Release of Construction Covenants, the Developer (or its successors in interest) shall unless due to an Enforced Delay as described in Section 702 hereof: (a) Fail to start the construction of the Improvements as required by this Agreement for a period of ninety (90) days after written notice thereof from the CDC; or (b) Abandon or substantially suspend construction of the Improvements required by this Agreement for a period of sixty (60) days after written notice thereof from the CDC; or -- - — (c)--- -- Contrary to the provisions of Section 703 Transferor suffer -any involuntary Transfer in violation of this Agreement, and such transfer has not been approved by the CDC or rescinded within thirty (30) days of notice thereof from CDC to Developer. Such right to reenter, terminate and revest shall be subject to and be limited by and shall not ---defeat, render invalid or limit: - - - 1. Any mortgage or deed of trust permitted by this Agreement; 2. Any rights or interests provided in this Agreement for the protection of the holders of such mortgages or deeds of trust; or 3: Any rights or interests held by a lessee in and to any portion of the Site. LA-FS ] \V i11aR3115 99 v05\72826.010100 - 30 - Notwithstanding the above, however, the CDC shall have no right to retake possession of Residential Units and portions of the Site sold to individual homebuyers in the ordinary course of business. The Grant Deed shall contain appropriate reference and provision to give effect to the CDC's right as set forth in this Section 505, under specified circumstances prior to recordation of the Release of Construction Covenants, to reenter and take possession of the Site, with all improvements thereon, and to terminate and revest in the CDC the estate conveyed to the Developer. Upon the revesting in the CDC of title to the Site as provided in this Section 505, the CDC shall, pursuant to its responsibilities under State law, use its reasonable efforts to resell the Site as soon and in such • manner as the CDC shall find feasible and consistent with the objectives of such law and of the Redevelopment Plan, as it exists or may be amended, to a qualified and responsible party or parties, (as determined by the CDC) who will assume the obligationof making or completing the Improvements, or such improvements in their stead as shall be satisfactory to the CDC and in accordance with the uses specified for such Site or part thereof in the Redevelopment Plan. Upon such resale of the Site, the net proceeds thereof after repayment of any mortgage or deed of trust encumbering the Site which is permitted by this Agreement, shall be applied: (i) First, to reimburse the CDC, on its own behalf or on behalf of the City, all costs and expenses incurred by the CDC, excluding City and CDC staff costs, but specifically, including, but not limited to, any expenditures by the CDC or the City in connection with the recapture, management and resale of the Site or part thereof (but less any income derived by the CDC from the Site or part thereof in connection with such management); all taxes, assessments and water or sewer charges with respect to the Site or part thereof which the Developer has not paid (or, in the event that Site is exempt from taxation or assessment of such charges during the period of ownership thereof by the CDC, an amount, if paid, equal to such taxes, assessments, or charges as would have been payable if the Site were not so exempt); any payments made or necessary to be made to discharge any encumbrances or liens existing on the Site or part thereof at the time or revesting of title thereto in the CDC, or to discharge or prevent from attaching or being made any subsequent encumbrances or liens due to obligations, defaults or acts of the Developer, its successors or transferees; any expenditures made or obligations incurred by the CDC with respect to the making or completion of the Improvements or any part thereof on the Site, or part thereof; and any amounts otherwise owing the CDC by the Developer, and in the event additional proceeds are thereafter available, then (ii) Second, to reimburse the Developer, its successor or transferee, up to the amount equal to the sum of the costs incurred for the acquisition and development of the Site and for the improvements existing on the Site at the time of the reentry and possession. Any balance remaining after such reimbursements shall be retained by the CDC as its property. The rights established in this Section 505 are not intended to be exclusive of any other right, power or remedy, but each and every such right, power, and remedy shall be cumulative and concurrent and shall be in addition to any other right, power and remedy authorized herein or now or LA-FS 1\vi11aF\311599v05\72826.010100 - 31 - hereafter existing at law or in equity. These rights are to be interpreted in light of the fact that the CDC will have conveyed the Site to the Developer for redevelopment purposes and not for speculation in undeveloped land. 606. Acceptance of Service of Process. In the event that the Developer commences legal action against the CDC, service of process on the CDC shall be made by personal service upon the Director of the CDC or in such other manner as may be provided by law. In the event that the CDC commences legal action against the Developer, service of process on the Developer shall be made by personal service on the Developer, whether made within or outside the State of California, or in such other manner as may be provided by law. 607. Rights and Remedies Are Cumulative. Except as otherwise expressly stated in this Agreement, the rights and remedies of the parties 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. 608. Inaction Not a Waiver of Default. Any failures 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, or deprive either such 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. 609. Applicable Law. The laws of the State of California shall govern the interpretation and enforcement of this Agreement. 610. Non -Liability of Officials and Employees of the CDC. No member, official or employee of the CDC or the City shall be personally liable to the Developer, or any successor in interest, in the event of any Default or breach by the CDC (or the City) or for any amount which may become due to the Developer or its successors, or on any obligations under the terms of this Agreement. 611. Attorneys' Fees. In any action between the parties to interpret, enforce, reform, modify, rescind, or otherwise in connection with any of the terms or provisions of this Agreement, the prevailing party in the action shall be entitled, in addition to damages, injunctive relief, or any other relief to which it might be entitled, reasonable costs and expenses including, without limitation, litigation costs and reasonable attorneys' fees. 700. GENERAL PROVISIONS 701. Notices, Demands and Communications Between the Parties. Any approval, disapproval, demand, document or other notice ("Notice") which either party may desire to give to the other party under this Agreement must be in writing and may be given by any commercially acceptable means to the party to whom the Notice is directed at the address of the party as set forth below, or at any other address as that party may later designate by Notice. To CDC: Community Development Commission of the City of National City 140 E. 12th Street, Suite B National City, CA 91950-3312 LA-FS 1 \V i 11aF\311599v05\72826.010100 -32- Attention: Executive Director To Developer: ARE Holdings, LLC 12626 Bellflower Blvd. Downey, CA 90242 Attention: Samuel P. Ynzunza Copies to: Golub & Morales LLP 525 B Street, Suite 1500 San Diego, California 92101 Attention: Tomas Morales Greenberg Traurig, LLP 2450 Colorado Ave., Suite 400E Santa Monica, California 90404 Attention: Fernando Villa Any written notice, demand or communication shall be deemed received immediately if delivered by hand and shall be deemed received on the third day from the date it is postmarked if delivered by registered or certified mail. 702. Extended Delay; Extension of Times of Performance. In addition to specific provisions of this Agreement, performance by either party hereunder shall not be deemed to be in Default, and all performance and other dates specified in this Agreement shall be extended, where delays or Defaults are due to causes beyond the reasonable control or without the fault of the party claiming an extension of time to perform (an "Extended Delay"), which may include the following: war; acts of terrorism, insurrection; strikes; lockouts; riots; floods; earthquakes; fires; casualties; acts of God; acts of the public enemy; epidemics; quarantine restrictions; freight embargoes; lack of transportation; governmental restrictions or priority; litigation; severe weather; inability to secure necessary labor, materials or tools; delays of any contractor, subcontractor or supplier; acts or _ _omissions -af-the-other,party- acts -or -failures -to -act -of -the -City -or any -other public or -governmental agency or entity (other than the acts or failures to act of the CDC which shall not excuse performance --by the CDC): --Notwithstanding anything to the -contrary in this Agreement, an extension of time for any such cause shall be for the period of the enforced delay and shall commence to run from the time of the commencement of the cause, if notice by the party claiming such extension is sent to the other party within thirty (30) days of the commencement of the cause. Times of performance under this Agreement may a lso be extended in writing by the mutual agreement of CDC and Developer. Notwithstanding any provision of this -Agreement -to the contrary, the lack of funding to complete the Improvements shall not constitute grounds of enforced delay pursuant to this Section 602. 703. Transfers 'of Interest in Site or Agreement. The qualifications and identity of the Developer as the developer of high quality residential development are of particular concern to the CDC. Furthermore, the parties acknowledge that the CDC has negotiated the terms of this Agreement in contemplation of the development of the Improvements as described in the Scope of Development of this Agreement. Nevertheless, the Developer may assign or otherwise transfer its interests and rights under this Agreement and its interests in any parcel comprising the Site, so long as the Developer's assignee or transferee agrees to comply fully with the terms and conditions of this LA-FS 1 \V i11aF\311599v05\72826.010100 - 33 - Agreement, and subject to the CDC's prior written approval, which approval shall not be unreasonably withheld. The CDC's approval, prior or otherwise, shall not be required for Permitted Transfers as defined in Section 703.1 hereof. 703.1. Permitted Transfers. Notwithstanding any other provision of this Agreement to the contrary, the CDC approval of a transfer shall not be required in connection with any of the following: (a) Any transfer to a limited liability company, partnership, corporation, or other entity or entities in "which ARE Holdings, LLC retains a portion of the ownership or beneficial interest and retains management and control of the transferee entity or entities. (b) The conveyance or dedication of any portion of the Site to the City or other appropriate governmental agency, or the granting of easements or permits to facilitate construction of the Improvements. (c) Any requested assignment for financing purposes (subject to such financing being considered and approved by the CDC pursuant to Section 411 herein), including the grant of a deed of trust to secure the funds necessary for construction of the Improvements. (d) Any conveyance of completed Residential Units to individual homebuyers in the ordinary course of business. (e) Any leaseback to the Developer of model Residential Units for the period of the marketing of the Residential Units. (f) ordinary course of business. Any lease of commercial retail space within the Site to tenants in the In the event of a transfer by the Developer under subparagraph (a) above not requiring the CDC's prior approval, Developer nevertheless agrees that at least thirty (30) days before such transfer it shall give written notice to the CDC of such assignment and satisfactory evidence that the assignee has assumed in writing through an assignment and assumption agreement of all of the obligations of this Agreement. Such an assignment shall release the assigning Developer from any obligations to the Commission hereunder. 703.2. CDC Consideration of Requested Transfer. The CDC agrees that it will not unreasonably withhold approval of a request for approval of a Transfer made pursuant to this Section 703, provided the Developer delivers written notice to the CDC requesting such approval. Such notice shall be accompanied by evidence regarding the proposed transferee's development and/or operational qualifications and experience, and its financial commitments and resources, in sufficient detail to enable the CDC to evaluate the proposed assignee or purchaser pursuant to the criteria set forth in this Section 703 and as reasonably determined by the CDC. The CDC may, in considering any such request, take into consideration such factors as (i) the quality of any new and/or .replacement operator, (ii) the transferee's past performance as an developer of residential developments, (iii) the current financial condition of the transferee, and similar factors. The CDC agrees not to unreasonably withhold itsapproval of any such requested Transfer, taking. into consideration the foregoing factors. LA-FS 1\villaFli 11599v05\72826.010100 - 34 - An assignment and assumption agreement in form satisfactory to the CDC's legal counsel shall also be required for all proposed Transfers. Within thirty (30) days after the receipt of the Developer's written notice requesting the CDC approval of a Transfer pursuant to this Section 603, the CDC shall either approve or disapprove such proposed assignment or shall respond in writing by stating what further information, if any, the CDC reasonably requires in order to complete the request and determine whether or not to grant the requested approval. In the event of a disapproval, the CDC shall state in writing each of the reasonsfor such a disapproval. Upon receipt of such a response, the Developer shall promptly furnish to the CDC such further information as may reasonably requested. 703.3. Successors and Assigns. All of the terms, covenants and conditions of this Agreement shall be binding upon the Developer and its permitted successors and assigns. Whenever the term "Developer" is used in this Agreement, such term shall include any other permitted successors and assigns as herein provided. 703.4. Assignment by CDC. The CDC may assign or transfer any of its rights or obligations under this Agreement without the approval of the Developer, provided, however, that such an assignment shall not release the CDC from any of its obligations hereunder.. 704. Relationship Between CDC and Developer. It is hereby acknowledged that the relationship between the CDC and the Developer is not that of a partnership or joint venture and that the CDC and the Developer shall not be deemed or construed for any purpose to be the agent of the other. Accordingly, except as expressly provided herein or in the Attachments hereto, the CDC shall have no rights, powers, duties or obligations with respect to the development, operation, maintenance or management of the Improvements. 705. CDC Approvals and Actions. The CDC shall maintain authority of this Agreement and the authority to implement this Agreement through the CDC Executive Director (or his duly authorized representative). The CDC Executive Director shall have the authority to make approvals, issue interpretations, waive provisions, and/or enter into certain amendments of this Agreement on behalf of the CDC so. long as such actions do not materially or substantially change the uses or development permitted on the Site, or add to the costs incurred or to be incurred by the CDC as specified herein, and such approvals, interpretations, waivers and/or amendments may include extensions of time to perform as specified in the Schedule of Performance. All other material and/or substantive interpretations, waivers, or amendments shall require the consideration, action and written consent of the CDC Board. 706. Counterparts. This Agreement may be signed in multiple counterparts which, when signed by all parties, shall constitute a binding agreement. This Agreement is executed in three (3) originals, each of which is deemed to be an original. 707. Integration. This Agreement contains the entire understanding between the parties relating to the transaction contemplated by this Agreement, notwithstanding any previous negotiations or agreements between the parties or their predecessors in interest with respect to all or any part of the subject matter hereof. All prior or contemporaneous agreements, understandings, representations and statements, oral or written, are merged in this Agreement and shall be of no further force or effect. Each party is entering this Agreement based solely upon the representations set forth herein and upon each party's own independent investigation of any and all facts such party LA-FS l \V i 11aF 3115 99 v05\72826.010100 - 35 - deems material. This Agreement includes Attachment Nos. 1 through 7, which are incorporated herein. 708. Real Estate Brokerage Commission. The CDC and the Developer each represent and warrant to the other that no broker or finder is entitled to any commission or finder's fee in connection with the Developer's acquisition of any of the Remaining Parcels from the CDC. The parties agree to defend and hold harmless the other party from any claim to any such commission or fee from any other broker, agent or finder with respect to this Agreement which is payable by such party. 709. Titles and Captions. Titles and captions are for convenience of reference only and do not define, describe or limit the scope or the intent of this Agreement or of any of its terms. Reference to section numbers is to sections in this Agreement, unless expressly stated otherwise. 710. Interpretation. As used in this Agreement, masculine, feminine or neuter gender and the singular or plural number shall each be deemed to include the others where and when the context so dictates. The word "including" shall be construed as if followed by the words "without limitation." This Agreement shall be interpreted as though prepared jointly by both parties. 711. No Waiver. A waiver by either party of a breach of any of the covenants, conditions or agreements under this Agreement to be performed by the other party shall not be construed as a waiver of any succeeding breach of the same or other covenants, agreements, restrictions or conditions of this Agreement. 712. Modifications. Any alteration, change or modification of or to this Agreement, in order to become effective, shall be made in writing and in each instance signed on behalf of each party. 713. Severability. If any term, provision, condition or covenant of this Agreement or its application to any party or circumstances shall be held, to any extent,invalid or unenforceable, the remainder of this Agreement, or the application of the term, provision, condition or covenant to persons or circumstances other than those as to whom or which it is held invalid or unenforceable, shall not be affected, and shall be valid and enforceable to the fullest extent permitted by law. 714. Computation of Time. The time in which any act is to be done under this Agreement is computed by excluding the first day (such as the day escrow opens), and including the last day, unless the last day is a holiday or Saturday or Sunday, and then that day is also excluded. The term "holiday" shall mean all holidays as specified in Section 6700 and 6701 of the California Government Code. If any act is to be done by a particular time during a day, that time shall be Pacific Time Zone time._- 715. Legal Advice. Each party represents and warrants to the other the following: they have carefully read this Agreement, and in signing this Agreement, they do so with full knowledge of any right which they may have; they have received independent legal advice from their respective legal counsel as to the matters set forth in this Agreement, or have knowingly chosen not to consult legal counsel as to the matters set forth in this Agreement; and, they have freely signed this Agreement without any reliance upon any agreement, promise, statement or representation by or on behalf of the other party, or their respective agents, employees, or attorneys, except as specifically set forth in this Agreement, and without duress or coercion, whether economic or otherwise. LA-FS I \VillaFli ] 1599v05\72826.010100 - 36 - 716. Time of Essence. Time is expressly made of the essence with respect to the performance by the CDC, the Developer of each and every obligation and condition of this Agreement. 717. Cooperation. Each party agrees to cooperate with the other in this transaction and, in that regard, to sign any and all documents which may be reasonably necessary, helpful, or appropriate to carry out the purposes and intent of this Agreement including, but not limited to, releases or additional agreements. 718. Conflicts of Interest. No member, official or employee of the CDC shall have any personal interest, direct or indirect, in this Agreement, nor shall any such member, official or employee participate in any decision relating to the Agreement which affects his personal interests or the interests of any corporation, partnership or association in which he is directly or indirectly interested. 719. Time for Acceptance of Agreement by CDC. This Agreement, when executed by the Developer and delivered to the CDC, must be authorized, executed and delivered by the CDC on or before forty-five (45) days after signing and delivery of this Agreement by the Developer or this Agreement shall be void, except to the extent that the Developer shall consent in writing to a further extension of time for the authorization, execution and delivery of this Agreement. IN WITNESS WHEREOF, the CDC and the Developer have executed this Disposition and Development' Agreement as of the date set forth above. ATTEST: , CDC Secretary CDC: COMMUNITY DEVELOPMENT COMMISSION OF THE OF THE CITY OF NATIONAL CITY, a public body, corporate and politic By: • Nick Inzunza, Chairman PARKING AUTHORITY: PARKING AUTHORITY OF THE CITY OF NATIONAL CITY, a public body, corporate and politic By: [Name], [Title] LA-FS 1 \Vi11aF1311599v05\72826.010100 - 37 - APPROVED AS TO FORM: Tomas Morales, CDC Counsel DEVELOPER: ARE HOLDINGS, LLC, a Delaware limited liability company By: , a California corporation, its Managing Member By: Its: By: Its: LA-FS 1 \V illaF\3 11599v05\72826.010100 -38- PARCEL 1: LOTS 1 AND 2 IN BLOCK 12 IN THE CITY OF NATIONAL CITY, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO MAP THEREOF NO. 348, FILED IN THE OFFICE OF THE RECORDER OF SAN DIEGO COUNTY OCTOBER 2, 1882. PARCEL 2: LOTS 3 AND 4, BLOCK 12, NATIONAL CITY, IN THE CITY OF NATIONAL CITY, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO MAP THEREOF NO. 348, FILED IN THE OFFICE OF THE RECORDER OF SAN DIEGO COUNTY OCTOBER 2, 1882. PARCEL 3: LOT 5 AND LOTS 7 AND 8 AND LOT 11 AND THE WEST 10 FEET OF LOT 12, BLOCK 12 OF NATIONAL CITY, IN THE CITY OF NATIONAL CITY, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO MAP THEREOF NO. 348, FILED IN THE OFFICE OF THE RECORDER OF SAN DIEGO COUNTY OCTOBER 2, 1882. PARCEL 4: LOT 6, BLOCK 12, NATIONAL CITY, IN THE CITY OF NATIONAL CITY, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO MAP THEREOF NO. 348, FILED IN THE OFFICE OF THE RECORDER OF SAN DIEGO COUNTY OCTOBER 2, 1882 PARCEL 5: LOTS 9 AND 10 IN BLOCK 12 OF NATIONAL CITY, IN THE CITY OF NATIONAL CITY, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO MAP THEREOF NO. 348, FILED IN THE OFFICE OF THE RECORDER OF SAN DIEGO COUNTY OCTOBER 2, 1882. PARCEL 6: THE EAST 15 FEET OF LOT 12; ALL OF LOTS 13 TO 18, INCLUSIVE, AND THE SOUTHEASTERLY HALF OF LOT 19, ALL IN BLOCK 12 OF NATIONAL CITY, IN THE CITY OF NATIONAL CITY, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO MAP THEREOF NO. 348, FILED IN THE OFFICE OF THE RECORDER OF SAN DIEGO COUNTY OCTOBER 2, 1882; THE NORTHEASTERLY LIN OF SAID SOUTHEASTERLY HALF OF LOT 19 BEING PARALLEL WITH THE DIVIDING LINE BETWEEN SAID LOTS 18 AND 19. THE NORTHEASTERLY HALF OF LOT 19, ALL OF LOTS 20, 21, 22, 23 AND 24 IN BLOCK 12 OF NATIONAL CITY, IN THE CITY OF NATIONAL CITY, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO MAP THEREOF NO. 348, FILED IN THE OFFICE OF THE RECORDER OF SAN DIEGO COUNTY OCTOBER 2, 1882. LA-FS 1\348402v01\72826.010100 Attachment 2 ,I0.00Z = „I.:ele9S L ;uewyoe;;y J s 2, r.41-1 d_ a Coolidge Avenue n Hoover Avenue C n f_ J Roosevelt Avenue VJ r National City Boulevard f0 \ / 19 3 D a B Avenue r l L :co 3 C nE 00, Li is.' u1_1 status, national origin, or ancestry in the leasing, subleasing, transferring, use, occupancy, tenure, or enjoyment of the premises herein leased nor shall the lessee himself or herself, or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy of tenants, lessees, sub lessees, subtenants, or vendees in the premises 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, sexual orientation, marital status, national origin, or ancestry, in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the premises, nor shall the transferee himself or herself or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sub lessees or vendees of the premises." 5. CDC Right of Reentry. The CDC has the right, at its election, to reenter and take possession of the Site, with all improvements thereon, and terminate and revest in the CDC the estate conveyed to the Developer if after the Closing and prior to the issuance of the Release of Construction Covenants, the Developer (or its successors in interest) shall: a. fail to start the construction of the Improvements as required by the DDA for a period of ninety (90) days after written notice thereof from the CDC; or b. abandon or substantially suspend construction of the Improvements required by the DDA for a period of sixty (60) days after written notice thereof from the CDC; or c. contrary to the provisions of Section 603 of the DDA transfer or suffer any involuntary Transfer in violation of the DDA, and such transfer has not been approved by the CDC or rescinded within thirty (30) days of notice thereof from CDC to Developer. Such right to reenter, terminate and revest shall be subject to and be limited by and shall not defeat, render invalid or limit: 1. Any mortgage or deed of trust permitted by the DDA; or 2. Any rights or interests provided in the DDA for the protection of the holders of such mortgages or deeds of trust. 3. Any rights or interests held by a lessee in and to the property. Notwithstanding the above, however, the CDC shall have no right to retake possession of Residential Units and portions of the Site sold to individual homebuyers in the ordinary course of business. Upon the revesting in the CDC of title to the Site as provided in this Section 5, the CDC shall, pursuant to its responsibilities under state law, use its reasonable efforts to resell the Site as soon and in such -manner as the CDC shall find feasible and consistent with the objectives of such law and of the Redevelopment Plan, as it exists or may be amended, to a qualified and responsible party or parties (as determined by the CDC) who will assume the obligation of making or completing LA-FS 1 \V i11an311599v05\72826.010100 Attachment No. 3-3 the Improvements, or such improvements in their stead as shall be satisfactory to the CDC and in accordance with the uses specified for the Site or part thereof in the Redevelopment Plan. Upon such resale of the Site, the net proceeds thereof after repayment of any mortgage or deed of trust encumbering the Site which is permitted by this Agreement, shall be applied:. i. First, to reimburse the CDC, on its own behalf or on behalf of the City, all costs and expensesincurred by the CDC, excluding City and CDC staff costs, but specifically, including, but not limited to, any expenditures by the CDC or the City in connection with the recapture, management and resale of the Site or part thereof (but less any income derived by the CDC from the Site or part thereof in connection with such management); all taxes, assessments and water or sewer charges with respect to the Site or part thereof which the Developer has not paid (or, in the event that Site is exempt from taxation or assessment of such charges during the period of ownership thereof by the CDC, an amount, if paid, equal to such taxes, assessments, or charges as would have been payable if the Site were not so exempt); any payments made or necessary to be made to discharge any encumbrances or liens existing on the Site or part thereof at the time or revesting of title thereto in the CDC, or to discharge or prevent from attaching or being made any subsequent encumbrances or liens due to obligations, defaults or acts of the Developer, its successors or transferees; any expenditures made or obligations incurred with respect to the making or completion of the improvements or any part thereof on the Site, or part thereof; and any amounts otherwise owing the CDC, and in the event additional proceeds are thereafter available, then ii. Second, to reimburse the Developer, its successor or transferee, up to the amount equal to the sum of (a) the costs incurred for the acquisition and development of the Site and for the improvements existing on the Site at the time of the reentry and possession. Any balance_ remaining after such reimbursements shall be retained by the CDC as its property. The rights established in this Section 6 are not intended to be exclusive of any other right, power or remedy, but each and every such right, power, and remedy shall be cumulative and concurrent and shall be in addition to any other right, power and remedy authorized herein or now or hereafter existing at law or in equity. These rights are to be interpreted in light of the fact that the CDC will have conveyed the Site to the Developer for redevelopment purposes. 6. Violations Do Not Impair Liens. No violation or breach of the covenants, __conditions, restrictions, provisions or limitations contained in_this Grant Deed shall defeat or render invalid or in any way impair the lien or charge of any mortgage or deed of trust or security interest permitted by-paragraph-4 of this -Grant -Deed;- provided, however, that any subsequent owner of the Site shall be bound by such remaining covenants, conditions, restrictions, limitations and provisions, whether such owner's title was acquired by foreclosure, deed in lieu of foreclosure, trustee's sale or otherwise. 7. - Covenants Run -With -Land: -All covenants contained in this Grant Deed Shall be covenants running with the land. All of Developer's obligations hereunder except as provided hereunder shall terminate and shall become null and void upon the expiration of the Redevelopment Plan. Every covenant contained in this Grant Deed against discrimination contained in paragraph 4 of this Grant Deed shall remain in effect in perpetuity. 8. Covenants For Benefit of CDC. All covenants without regard to technical classification or designation shall be binding for the benefit of the CDC, and such covenants shall run in favor of the CDC for the entire period during which such covenants shall be in force and effect, without regard to whether the CDC is or remains an owner of any land or interest therein to which LA-FS 1 \V illaF1311599v05\72826.010100 Attachment No. 3-4 such covenants relate. The CDC, in the event of any breach of any such covenants, shall have the right to exercise all 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. 9. Revisions to Grant Deed. Both CDC, its successors and assigns, and Developer and the successors and assigns of Developer in and to all or any part of the fee title to the Site shall have the right with the mutual consent of the CDC to consent and agree to changes in, or to eliminate in whole or in part, any of the covenants, easements or restrictions contained in this Grant Deed without the consent of any tenant, lessee, easement holder, licensee, mortgagee, trustee, beneficiary under a deed of trust or any other person or entity having any interest less than a fee in the Site. However, Developer and CDC are obligated to give written notice to and obtain the consent of any first, mortgagee prior to consent or agreement between the parties concerning such changes to this Grant Deed. The covenants contained in this Grant Deed, without regard to technical classification, shall not benefit or be enforceable by any owner of any other real property within or outside the Project Area, or any person or entity having any interest in any other such realty. No amendment to the Redevelopment Plan shall require the consent of the Developer. 10. Enforced Delay; Extension of Times of Performance. In addition to specific provisions of this Agreement, performance by either party hereunder shall not be deemed to be in Default, and all performance and other dates specified in this Agreement shall be extended, where delays or Defaults are due to causes beyond the reasonable control or without the fault of the party claiming an extension of time to perform, which may include the following: war; insurrection; strikes; lockouts; riots; floods; earthquakes; fires; casualties; acts of God; acts of the public enemy; epidemics; quarantine restrictions; freight embargoes; lack of transportation; governmental restrictions or priority; litigation; severe weather; inability to secure necessary labor, materials or tools; delays of any contractor, subcontractor or supplier; acts or omissions of the other party; acts or failures to act of the City *or any other public or governmental CDC or entity (other than the acts or failures to act of the CDC which shall not excuse performance by the CDC). Notwithstanding anything to the contrary in this Agreement, an extension of time for any such cause shall be for the period of the enforced delay and shall commence to run from the time of the commencement of the cause, if notice by the party claiming such extension is sent to the other party within thirty (30) days of the commencement of the cause. Times of performance under this Agreement may also be ---- extended -in w-riting by the mutual a-gr-eement-of-CDC-and-Developer :Notwithstanding any_provision of this Agreement to the contrary, the lack of funding to complete the Improvements shall not --- - -constitute-grounds-of-enforced delaypursuantto-this Section 10. - - CDC: COMMUNITY DEVELOPMENT COMMISSION OF THE OF THE CITY OF NATIONAL CITY, a public body, corporate and politic By: Nick Inzunza, Chairman LA-FS 1 \V i 11aF\311599v05\72826.010100 Attachment No. 3-5 ATTEST: , CDC Secretary APPROVED AS TO FORM: Tomas Morales, CDC Counsel DEVELOPER: ARE HOLDINGS, LLC, a Delaware limited liability company By: , a California corporation, its Managing. Member By: Its: By: Its: LA-FS 1 \V i11aF'311599v05\72826.010100 Attachment No. 3-6 SCHEDULE OF PERFORMANCE I. GENERAL PROVISIONS 1. Execution of DDA by the Agency. The Agency and City Council shall hold a joint public hearing on the DDA, and, subject to making the requisite findings, authorize execution and execute and deliver the DDA to the Developer. 2. Submission - Architect, Landscape Architect and Civil Engineer. The Developer shall submit to the Agency for approval the name and qualifications of its Architect, Landscape Architect and Civil Engineer. 3. Approval - Architect, Landscape Architect and Civil Engineer. The Agency shall approve or disapprove the Architect, Landscape Architect and Civil Engineer. 4. Submission - Basic Concept/Schematic Drawings. The Developer shall submit to the Agency's designee for approval the Basic Concept/Schematic Drawings and related documents. 5. Approval - Basic Concept/Schematic Drawings. The Agency shall approve or disapprove the Basic Concept/Schematic Drawings and related documents. 6. Approval - Application for Consistency Review of Improvements under the Downtown Specific Plan. II. SITE ACQUISITION ASSISTANCE 1. Developer Written Request for Site Acquisition Assistance (if needed). 2. Written Offer to Purchase any Remaining Parcel by CDC or Parking Authority. LA-FS 1 \V i11aF1346157v03\72826.010100 Within thirty (30) days after submission of executed Agreement by Developer. Not later than execution of Agreement by the Agency. Concurrently with execution of Agreement by Agency. Not later than execution of Agreement by Developer. Concurrently with execution of Agreement by Agency. At or prior to Closing on any Remaining Parcel. __ - — - --- After diligent but unsuccessful efforts to acquire any Remaining Parcel. No later than forty-five (45) days after CDC or Parking Authority's Receipt of Developer's request for Site Acquisition Assistance Schedule of Performance Page 1 of 1 Attachment 4 3. Open Escrow Upon Any Remaining Parcel Owner's Acceptance of CDC or Parking Authority's Offer to Purchase. 4. Executive Director's Request that the CDC or Parking Authority Consider Acquiring a Remaining Parcel by Eminent Domain. 5. Conduct Hearing on a Resolution of Necessity - to,Consider Acquiring a Remaining Parcel by Eminent Domain. 6. File an Action in Eminent Domain to Acquire a Remaining Parcel (only if a resolution of necessity is duly adopted for this purpose). 7. Conveyance of Any Remaining Parcel to Developer. M. FINANCING COMMITMENTS 1. Preliminary Evidence of Financing (lender commitment letter). 2. Evidence of Financing. The Developer shall submit to the Agency a commitment for construction financing for the entire project, including construction loan documents, and evidence of Developer's Equity, to the extent required. 3. Approval of Financing. The Agency shall approve or disapprove the evidence of financing described in III.1. and 2. above. IV. ELECTION OF CDC ASSISTANCE 1. Developer's Election of CDC Assistance Under Section 208 (at Developer's sole option). LA-FS I\Vi11aF'346157v03\72826.010100 Within five (5) days of Owner's acceptance of offer to purchase. Within thirty (30) days of: a) a Remaining Parcel Owner's rejection of or failure to respond to the CDC's or Parking Authority's offer to purchase, or b) the Executive Director's determination of an impasse in such negotiations. Within twenty (20) days of the Executive Director's request for such a hearing. Within five (5) days of the CDC's or the Parking Authority's adoption of a resolution of necessity therefor. Within five (5) days of the CDC's or the Parking Authority's acquisition of any Remaining Parcel by negotiation or the exercise of eminent domain. Not later than ten (10) days prior to Closing on any Remaining Parcel Not later than forty-five (45) days after Developer obtains possession of and title to all of the Site parcels. Within fifteen (15) days after Agency receives each such submission of evidence of financing. Within sixty (60) days of Developer's completion of its acquisition of the Project parcels and relocation. Schedule of Performance Page 2 of 2 2. CDC Delivery of CDC Assistance to Developer. V. CLOSING AND CONSTRUCTION 1. Submittal of Final Schematic Drawings. 2. Approval — Final Schematic Drawings. 3. Submission - 50% Complete Drawings and Specifications. The Developer shall prepare and submit to the Agency for approval the 50% Complete Drawings and Specifications. Note: These drawings will be submitted in normal increments as they are completed. 4. Approval - 50% Complete Drawings and Specifications. The Agency shall approve or disapprove the 50% Complete Drawings and Specifications. Note: These drawings will be approved in increments as theyare submitted. 5. Submission - Final Construction Drawings and Specifications. The Developer shall prepare and submit to the Agency for approval the Final Construction Drawings and Specifications. Note: These drawings will be submitted in normal increments as they are completed. 6. Approval - Final Construction Drawings and Specifications. The Agency shall approve or disapprove the Final Construction Drawings and Specifications. Note: These drawings will be .approved in increments as they are submitted. 7. Opening of Escrow. The Agency and Developer shall open an escrow for sale of any Remaining Parcel to Developer, and the Closing of construction financing. LA-FS 1 \V i11aR346157 v03\72826.010100 One-half of funds upon the City's issuance of the first building permit to build the Improvements, and the balance of funds upon the City's initial issuance of a certificate of occupancy for any of the Project's residential units. Within thirty (30) days of CDC's Approval of Basic Concept/ Schematic Drawings. Within thirty (30) days of submittal. Within one hundred eighty (180) days after CDC approval of the Basic Concept/Schematic Design Drawings. Within thirty (30) days after submittal. Within one hundred twenty (120) days after CDC approval of the 50% Complete Drawings. Within thirty (30) days after submittal. No later than five (5) calendar. days or the CDC's and/or the Parking Authority's acquisition of any Remaining Parcel. Schedule of Performance Page 3 of 3 8. Recording Final Subdivision Map. Developer shall record the final subdivision map subdividing the ownership interests for the Project's condominium units. 9. Commencement of Construction. The Developer shall commence construction of the Improvements on the Site. 10. Completion of Construction. The Developer shall complete construction of the Improvements on the Site. 11. Construction of Public Improvements. The Developer shall commence and complete the construction of public improvement work referred to in the Scope of Development to be performed by the Developer with respect to the Site. LA-FS 1\Vi11aF\346157v03\72826.010100 Not later than forty-five (45) days following the City Council's approval of the final subdivision map for the Project. Within thirty (30) days after the City Building Department's approval and issuance of valid building permits for the Improvements. Within seven hundred eighty (780) days after the commencement of construction. On a schedule which will coordinate with the construction schedule for the development of the Site by Developer but in no event later than the City's issuance of a certificate of occupancy of the portion of the Improvements bordering National City Boulevard. Schedule of Performance Page 4 of 4 ATTACHMENT NO. 5 SCOPE OF DEVELOPMENT Developer will develop the Site with approximately condominium residential units, zoned as residential dwellings. Units will range from approximately square feet to square feet in size. Developer will develop the residential units and all site work (including parking structures and common area) within the property boundaries of the Site. The CDC shall construct or cause the construction of all public improvements required as conditions of project approval which are located outside of the face of the curbs surrounding the Improvements. The Developer shall also construct the curbs and all other on -site improvements located inside of the face of the curbs surrounding the Improvements, as required through the City's Design Review process described herein. LA- Fs 1 \V i I Ia F\3 11599 v05\7 2826.010100 Attachment No. 5-1 1-1111 ❑ aC3 p I I 1 ILi i ea F"' I l S Sc t Exhibit 1, Attachment ATTACHMENT NO. 6 RECORDING REQUESTED BY, MAIL TAX STATEMENTS TO AND WHEN RECORDED MAIL TO: This document is exempt from payment of a recording fee pursuant to Government Code Section 27383 RELEASE OF CONSTRUCTION COVENANTS THIS RELEASE OF CONSTRUCTION COVENANTS (the "Release") is made by the COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF NATIONAL CITY, a public body, corporate and politic (the "CDC"), in favor of ARE HOLDINGS, LLC, a Delaware limited liability company (the "Developer"), as of the date set forth below. RECITALS A. The CDC and the Developer have entered into that certain Disposition and Development Agreement (the "DDA") dated October 2004, concerning the redevelopment of certain real property situated in the City of National City, California as more fully described in Exhibit "A" attached hereto and made a part hereof. B. As referenced in Section 309 of the DDA, the CDC is required to furnish the Developer or its successors with a Release of Construction Covenants upon completion of construction of the Improvements (as defined in Section 100 of the DDA), which Release is required to be in such form as to permit it to be recorded in the Recorder's office of San Diego County. This Release is conclusive determination of satisfactory completion of the construction and development required by the DDA. C. The CDC has conclusively determined that such construction and development has been satisfactorily completed. NOW, THEREFORE, the CDC hereby certifies as follows: 1. The Improvements to be constructed by the Developer have been fully and satisfactorily completed in conformance with the DDA. Any operating requirements and all use, maintenance or nondiscrimination covenants contained in the DDA and other documents executed and recorded pursuant to the DDA shall remain in effect and enforceable according to their terms. 2. Nothing contained in this instrument shall modify in any other way any other provisions of the DDA. LA-FS 1 \V illaR31.1599v05\72826.010100 Attachment No. 6-1 Atita:chme'nt• 6 IN WITNESS WHEREOF, the CDC has executed this Release this _ day of , 2005. ATTEST: , CDC Secretary APPROVED AS TO FORM: Tomas Morales, CDC Counsel COMMUNITY DEVELOPMENT COMMISSION OF THE OF THE CITY OF NATIONAL CITY, a public body, corporate and politic By: Nick Inzunza, Chairman DEVELOPER: ARE HOLDINGS, LLC, a Delaware limited liability company By: , a California corporation, its Managing Member By: Its: By: Its: LA-FS 1 \Vi11aF\311599v05\72826.010100 Attachment No. 6-2 ATTACHMENT NO.7 CDC ENVIRONMENTAL REPORTS CDC Environmental Reports shall mean the reports listed herein, copies of which have been provided to Developer, and the originals of which are on file at the office of the Community Development Commission of the City of National City: [To Be Inserted] LA-FS 1\Vi11aRi 11599v05\72826.010100 Attachment No. 7-1