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HomeMy WebLinkAboutAGENDA REPORT 2009 1202 CC ADJ ITEM 08A ITEM 8.A. CITY OF MOORPARK,CALIFORNIA City Council Meeting of ACTION: MOORPARK CITY COUNCIL _ _ AGENDA REPORT aY: TO: Honorable City Council FROM: David C. Moe II, Redevelopment Manager L DATE: November 18, 2009 (CC Meeting of 12/2/2009) SUBJECT: Consider Resolution Revising Approval of Sale of Property Owned by the Redevelopment Agency of the City of Moorpark, Located at 192 High Street, to Aszkenazy Development, Inc. BACKGROUND AND DISCUSSION The Redevelopment Agency of the City of Moorpark ("Agency") acquired a 2.34 acre site, located at 192 High Street ("Property"), from the Ventura County Transportation Commission on August 8, 1993, at a cost of $393,451.34. An aerial of the Property is attached as EXHIBIT A. This Property was part of a 4.77 acre purchase for $800,000.00. Since the acquisition, the Property has been leased to a variety of commercial tenants. The Agency has negotiated a Disposition and Development Agreement with Aszkenazy Development, Inc. ("Developer") to construct two, two-story, commercial buildings totaling 71,656 square feet. The proposed project would be built in two phases under separate Disposition and Development Agreements. The first phase of the project would be sold under this Disposition and Development Agreement and include the land from between the Metrolink parking lot and the east boundary of the Maria's Restaurant lease site. The Developer would construct a 49,140 square foot building to include office and retail uses. The second phase would include the property west of the first phase to the east edge of the property currently leased to the Chamber of Commerce. The Developer proposes to construct the 22,516 square foot building in the second phase, which would also include office and retail uses. The Agency will subdivide the Property into three parcels. Parcel one would be the property leased by the Chamber of Commerce and is not included in this project. Parcel two would be the second phase of this project, and parcel three would be the first phase of the proposed development. Developer will have a two year option (from after 2 Honorable City Council December 2, 2009 Page 2 commencement of construction for phase 1) to purchase parcel two at fair market price; however, the Developer must have the building in phase 190% leased to bona fide third parties in order to exercise the option. The sale price of parcel three (phase 1) is reduced from $1,121,330.00 to $881,045.00 (approximately 20%) to reflect the current fair market value of the property. The sale price is less than the previous Section 33433 Summary Reports dated October 30, 2008 due to the declining real estate market. The Section 33433 Summary Report (EXHIBIT B) summarizes the Agency's cost associated with the acquisition, holding and sale of the Property; states that the Property is being sold for the fair market value; and describes how the sale of the Property will assist with the elimination of blight and is consistent with the 2005-2009 Five Year Implementation Plan. The City Council originally held a public hearing and approved the sale of Agency owned property on December 5, 2007. The City Council held a subsequent public hearing on March 19, 2008, to revise the sale price of the property from $1,123,414.00 to $920,854.00 to reflect the land value established by an appraisal conducted on February 4, 2008 by DMD Appraisals, Inc. At the request of the Developer, the Agency allowed a redesign of the proposed project. The Developer now plans to utilize a larger parcel of land in the first phase than proposed on March 19, 2008. This increased the sale price of the land and increased the amount of the Agency's loan to the Developer. These changes require the City Council to conduct another public hearing and approve the revised sale of the property. On September 17, 2008, the City Council opened the public hearing to take public comment on the proposed sale of Agency owned property and continued it open until November 5, 2008. The City Council continued the public hearing open from November 5, 2008, to November 19, 2008. The City Council continued the public hearing open from November 19, 2008, to December 3, 2008. At the December 3, 2008, City Council Meeting, the public hearing was closed and this item was removed from calendar. FISCAL IMPACT The Agency would receive a cash payment of $224,683.00 at the close of escrow. The Agency would make a loan for the balance of the purchase price to the Developer for $656,362.00 for 10 years. Monthly interest only payments would be an estimated $4,512.49 or $54,149.87 per year the loan is outstanding. Interest payments may be deferred until phase I is 90% leased. The Agency would receive $656,362.00 upon repayment of the loan. If the Developer makes interest only payments for the term of 3 Honorable City Council December 2, 2009 Page 3 the loan, the Agency would receive a total of $541,498.65 in interest payments. In addition, the project is estimated to generate over $500,000.00 in net tax increment for the Agency over the first ten years and create 50 new jobs. STAFF RECOMMENDATION 1) Open the public hearing, accept public testimony, and close the public hearing; and 2) Adopt Resolution No. 2009 - revising the approval of the sale of Property between the Agency and Developer, subject to Disposition and Development Agreement approval by the Agency, and rescinding Resolution No. 2007-2661 and Resolution No. 2008-2692. 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A ') -: `5• I• � r �E( t ( I rr 1-- 73 i A Mn o R• - tt_ 0 EXHIBIT B Finance Redevelopment • Implementation • Planning Bond Administration Continuing Disclosure INFORMATION SUMMARY FOR PROPOSED DISPOSITION AND DEVELOPMENT AGREEMENT WITH ASZKENAZY DEVELOPMENT, INC., A CALIFORNIA CORPORATION "33433 REPORT" This summary was prepared for the Moorpark Redevelopment Agency (the "Agency's pursuant to Section 33433 of the California Community Redevelopment Law (Part 1 of Division 24 of the Health and Safety Code, the "CCRU) with respect to the Disposition and Development Agreement (the "DDA'D between the Agency and Aszkenazy Development Inc., a California Corporation (the "Developer'l. The DDA pertains to the development of a multi-tenant commercial building of approximately 49,100 square feet of gross building area (the "Project' on an approximately 80,095 square foot parcel (i.e., approximately 1.84 acres of land) located near the southeast corner of Moorpark Avenue and High Street (the"Site'D within the Moorpark Redevelopment Project Area. The DDA also provides the Developer a conditional two-year purchase option on an adjacent parcel that could result in the development of a second project phase for which the applicable purchase and sale terms would be determined based on the then existing market conditions. Given these uncertainties, this 33433 Report pertains only to the Project's initial phase. In addition, this report supersedes the 33433 Reports prepared by Urban Futures, Inc. for the Project dated November 21, 2007, March 7, 2008, August 28, 2008 and October 30, 2008. 1. Cost of Project to Agency: The overall Project is not anticipated to produce a net cost to the Agency. On the contrary, Urban Futures, Inc. projects that the Agency's overall net revenues, interest earnings and land sale proceeds resulting from its property management, purchase money financing and Site disposition, as contemplated in the DDA, are anticipated to be approximately $902,526. This conclusion is based upon the following data: a. Land Acquisition Cost: On August 17, 1993, the Agency acquired approximately 4.7 acres of land (approximately 204,732 square feet)(the "Acquisition Property's from the Ventura County Transportation Commission ("VCTC'� for $800,000. Agency records reflect that the Agency incurred $39,140.93 of acquisition-related costs. Further, during 2007, the Agency incurred $50,000 of additional costs to rectify certain property boundary discrepancies with the VCTC with respect to adding approximately 14,000 square feet of additional area to the Acquisition Property and incurred $11,600 of additional costs for the preparation of a current environmental assessment of the Site. As a result, the Acquisition Property currently consists of an area of approximately 218,732 square feet or approximately 5.02 acres. Therefore, in total, the Agency has incurred $900,740.93 of costs related to purchasing the Crestview Corporate Center-3111 N.Tustin Street,Suite 230,Orange,CA 92865-1753 Tel:(714)283-9334 www.urbanruturesinc.com Fax:(714)283-5465 6 Page 2 Acquisition Property. The Site consists of approximately 37.7% of the Acquisition Property. Therefore, on a prorated basis the Agency has incurred approximately $339,579.33 (rounded to $339,600) of costs reasonably related to acquiring the Site. b. Clearance Costs: The proposed DDA obligates the Agency to demolish and clear the structures currently located on the Site. Agency staff and its construction experts have inspected the improvements on the Site and have determined that the Agency requires approximate $313,000 to carryout this work. C. Relocation Costs: All of the current tenants on the Site have post acquisition month-to-month rental agreements. As such, the tenants are not eligible for relocation benefits. Notwithstanding this, one particular sub-tenant (i.e., Carlos and Mayra Perez, DBA Maria's Family Restaurant [the "Maria's Restaurant"]) has requested assistance from the Agency to remain as a tenant within the Project. In addition, the Developer has indicated a desire to include Maria's Restaurant within the Project. As a result, the Agency has committed to assist Maria's Restaurant as may be required consistent with the Agency's Owner Participation Rules. In addition, the level of such assistance is unknown as of the date of this 33433 Report. Therefore, for the purposes of this 33433 Report it is assumed that any of the Agency's expenses with respect to assisting Maria's Restaurant remain as a tenant within the Project will be characterized as economic development expenses rather than relocation expenses. Notwithstanding the manner in which the assistance to Maria's Restaurant is classified, it would be received in a seamless fashion by the participant. Therefore and only for the purposes of this analysis, it is assumed that the Agency will not incur any relocation costs. d. Improvement Costs: The Agency has not incurred any improvement costs. e. Finance Costs: None f. Other Costs: None g. Offsetting Revenue: The sum of the above costs (i.e., items "a"through "F is $652,600, which represents the Agency's current total investment in the Site. These costs are offset by the $1,555,126 in revenue, which represents the sales price of the Site, the prorated rental income received by Agency during the term of its ownership of the Acquisition Property and the interest income anticipated to be earned from the Agency's purchase money loan to the Developer over the next ten years. With respect to the rental income, it has been projected that throughout the term of the Agency's ownership of the Acquisition Property, the Agency received at least $353,000 of rental income from this property. On a prorated basis (i.e., 37.7%), $133,081 may be reasonably attributed to the Site. Aszkenazy DDA 33433 Report v11-20-09 Final.2 7 Page 3 It is also important to note that the DDA calls for approximately 74.5% of the purchase price (i.e., $656,362) to be funded with an Agency purchase money 10- year interest only subordinate loan (the "Agency Loan'J. The $224,683 balance will be paid in cash at escrow closing. Agency staff and the Developer have determined that a fair interest rate for the Agency Loan is 8.25%. By way of comparison and as of the date of this report, the interest rate proposed for the Agency Loan is 5.0% above the Prime Rate and 4.875% above the SBA 504 Program rate. Given these parameters, Urban Futures, Inc. concurs that the interest rate proposed for the Agency Loan is fair and reasonable. Based on the proposed rate, the Agency Loan will generate approximately $54,150 of interest income per year for each year that it remains outstanding or $541,500 over its full ten year term, if it remains outstanding for a full ten-year period. The sum of the above noted sources is $1,555,126 (i.e., $881,045 + $133,081 + $541,500 = $1,555,126). Therefore, Urban Futures, Inc. projects on a net basis that the Agency's overall revenues, interest earnings and land sale proceeds resulting from its property management, purchase money financing and Site disposition, as contemplated in the DDA, are anticipated to be approximately $902,526 (i.e., $1,555,126 - $652,600 = $902,526). 2. Estimated value of interest to be conveyed or leased, determined at highest and best use permitted by the Redevelopment Plan: In order to determine the estimated value of the interest to be conveyed, staff engaged the services of Dale Donerkiel, SRPA, SRA and California Certified General Real Estate Appraiser ("Appraiser') as an expert, third party real estate appraiser. On August 25, 2009, the Appraiser completed an updated real estate appraisal on an approximately 2.48-acre (approximately 108,080 square feet) portion of the Acquisition Property, from which the Site will be created (the "Appraised Property'). The appraisal is on file with the Agency. Based upon their value analysis, it is the Appraiser's opinion that the estimated value of the Appraised Property at its highest and best use permitted by the Redevelopment Plan equals a total of$1,189,000 or $11.00 on a square foot basis. It is important to state that in determining this value, the Appraiser assumed that the Agency would cause the improvements on the Site to be demolished; in other words, that the Site was vacant. The Appraiser also assumed that the Site is free from environmental contamination. With respect to this issue, Agency staff recently engaged the services of an environmental engineer (i.e., AGI Geotechnical, Inc.) who has also confirmed that the Site is free from environmental contamination. AGI Geotechnical, Inc. indicated that they did not detect any substance that exceeded the detection limit threshold established by the appropriately responsible government agency. Their findings are on file with the Agency. Therefore, by using the Appraiser's above noted per square foot value, the imputed value of the Site is $881,045 (i.e., $11.00 x 80,095 sq. ft. _ $881,045). Pursuant to the DDA, the Developer will purchase the Site for $881,045 which is equal to its full fair market value. Aszkenazy DDA 33433 Report v11-20-09 Final.2 8 Page 4 3. Estimated value of the interest to be conveyed or leased, determined at the use and with the conditions, covenants and development costs required by the sale or lease: Pursuant to the DDA, the Developer will purchase the Site for $881,045 which is equal to its full fair market value. 4. The purchase price or sum of the lease payments which the lessor will be required to pay during the term of the lease: Pursuant to the DDA, the Developer will purchase the Site for $881,045 which is equal to its full fair market value. S. Explanation of the reason (if applicable) why the sales price or lease rate paid to the Agency may be less than market value of the property as determined at its highest and best use: Not applicable. The sale price of the Agency parcels is at fair-market value. 6. Explanation of why the sale or lease of the property will assist in the elimination of blight: This DDA is part of a project designed in part to eliminate blight in the Moorpark Redevelopment Project Area. The greater portion of the Site (i.e., the Acquisition Property) has been used for non-operating railroad related purposes for many years in the past. In recent times it has been used for multi-tenant small-scale commercial purposes. The current improvements on the Site are both economically obsolete and exhibit conditions of physical degradation. Pursuant to the DDA, the Agency is obligated to remove the improvements which will eliminate the existing blighting conditions. The proposed DDA will facilitate the development of a multi-tenant commercial building of approximately 50,000 square feet of gross building area conservatively estimated by Urban Futures, Inc. to provide approximately 50 employment opportunities (i.e., approximately one job per 1,000 square feet of gross building area). Therefore, the Project will result in eliminating blight that exists in a portion of the Moorpark Redevelopment Project Area, specifically on the Site, and will cause new economic development activity, including job creation. 7. Economic benefits of the Project: At a conservative value of $200 per square foot of finished building area, the completed Project is anticipated to add approximately $8 million of assessed value to the redevelopment project. Based on this additional assessed value estimate, it is anticipated that the Project will generate approximately $80,000 of additional gross tax increment (i.e., prior to tax sharing) revenue during its first taxable year. Utilizing a 2% per year growth factor, over its first ten years it is anticipated that the Project will generate approximately $876,000 of gross tax increment revenue. Inclusive of the Low- to Moderate-Income Housing Fund, the Agency currently receives approximately 58% of the gross tax increment revenue. With respect to the current illustration, the Project could generate over $500,000 of net tax increment revenues to the Agency over its first Aszkenazy DDA 33433 Report v11-20-09 Final.2 9 Page 5 ten years of operation. These additional tax increment revenues will assist the Agency in removing blight within the Moorpark Redevelopment Area as well as promoting economic development,job creation and affordable housing projects and programs. Certification: I certify that this report complies with the reporting requirements of Section 33433 of the CCRL. Further, I do not have a present or perspective interest in the Site, the Project or the parties to the DDA. My engagement to prepare this report was not contingent upon developing or reporting predetermined results. The statements of fact contained herein and the substance of this report are based on public records, data provided by the Agency, reports provided by its consultants or as otherwise noted herein. This report reflects my personal, unbiased professional analyses, opinions and conclusions. If any of the underlying assumptions related to the DDA change after the date provided below, then the undersigned reserves the professional privilege to modify the contents and/or conclusions of this report. In addition, this report supersedes the 33433 Reports prepared by Urban Futures, Inc. for the Project dated November 21, 2007, March 7, 2008, August 28, 2008 and October 30, 2008. Respectfully Submitted, URBAN FUTURES, INC. STEVEN H. DUKETT Managing Principal Dated: November 20, 2009 Aszkenazy DDA 33433 Report v11-20-09 Finall 10 Exhibit C RESOLUTION NO. 2009- A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF MOORPARK, CALIFORNIA, REVISING APPROVAL OF THE SALE OF PROPERTY OWNED BY THE MOORPARK REDEVELOPMENT AGENCY TO ASZKENAZY DEVELOPMENT, INC. RESCINDING RESOLUTIONS NO. 2007-2661 AND 2008-2692 AND FINDING SALE CONSISTENT WITH CALIFORNIA REDEVELOPMENT LAW SECTION 33433 WHEREAS, the City Council of the City of Moorpark, adopted the Redevelopment Plan for the Moorpark Redevelopment Project on July 5, 1989, by Ordinance No. 110, in accordance with the California Community Redevelopment Law (Health and Safety Code Section 33000 et seq.); and WHEREAS, the Moorpark Redevelopment Agency ("Agency") purchased the east 800 feet of APN 512-0-090-100 ("Property") for redevelopment purposes; and WHEREAS, California Community Redevelopment Law ("CCRL") Section 33433 requires that the City Council approve, by resolution and after a public hearing, any Agency sale or lease of property which was acquired with tax increment funds; and WHEREAS, Section 33433 of CCRL requires that the City Council include the following findings in the resolution approving the sale or lease of Agency property purchased with tax increment: 1. The sale of Property will assist in the elimination of blight in the Moorpark Redevelopment Project Area. 2. The sale of Property is consistent with the goals and objectives in the 2005-2009 Implementation Plan for the Moorpark Redevelopment Project pursuant to Section 33490 of the CCRL. 3. The Property is being sold to the Developer at the fair market price at the highest and best use in accordance with the Moorpark Redevelopment Plan; and WHEREAS, on December 5, 2007, the City Council opened the public hearing to take public comment and approved the sale of Property; and WHEREAS, on March 19, 2008, the City Council opened the public hearing to take public comment and approved the revised sale of Property; and 11 Resolution No December 2, 2009 Page 2 WHEREAS, on September 17, 2008, the City Council opened the public hearing to take public comment on the revised sale of Property and continued it until November 5, 2008; and WHEREAS, on November 5, 2008, the City Council opened the public hearing to take public comment on the revised sale of Property and continued it open until November 19, 2008; and WHEREAS, on November 19, 2008, the City Council opened the public hearing to take public comment on the revised sale of Property and continued it open until December 3, 2008; and WHEREAS, on December 3, 2008, the City Council opened the public hearing to take public comment on the revised sale of Property, closed the hearing and removed the item from calendar; and WHEREAS, notice was published in the Ventura Star once a week for two weeks prior to the public hearing scheduled for December 2, 2009, to consider revised terms of sale for the Property; and WHEREAS, the proposed sale will assist with the elimination of blight in the Moorpark Redevelopment Project Area; and WHEREAS, the proposed sale is consistent with the adopted 2005-2009 Implementation Plan for the Moorpark Redevelopment Project pursuant to Section 33490 of the CCRL; and WHEREAS, the Property has been appraised at the fair market price at the highest and best use in accordance with the Moorpark Redevelopment Plan, has been established; and WHEREAS, on November 25, 2009, the City Council was provided with a draft copy of the Disposition and Development Agreement for the subject Property which is scheduled to be considered by the Moorpark Redevelopment Agency Board on December 16, 2009; and WHEREAS, on December 2, 2009, the City Council reviewed the proposed sale and determined that it is consistent with Section 33433 of the CCRL. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF MOORPARK DOES HEREBY RESOLVE AS FOLLOWS: 12 Resolution No December 2, 2009 Page 3 SECTION 1. The City Council determines the proposed sale is consistent with Section 33433 of the CCRL and the following findings are made: 1. The sale of Property will assist in the elimination of blight in the Moorpark Redevelopment Project. 2. The sale of Property is consistent with the goals and objectives in the 2005-2009 Implementation Plan for the Moorpark Redevelopment Project pursuant to Section 33490 of the CCRL. 3. The Property is being sold at the fair market price at the highest and best use in accordance with the Moorpark Redevelopment Plan. SECTION 2. The City Council approves the revised sale of Property to Aszkenazy Development, Inc. for $881,045.00 subject to approval of the Disposition and Development Agreement by the Agency. SECTION 3. Resolutions No. 2007-2661 and 2008-2692 are hereby rescinded. SECTION 4. The City Clerk shall certify to the adoption of this resolution and shall cause a certified resolution to be filed in the book of original resolutions. PASSED AND ADOPTED this 2nd day of December, 2009. Janice S. Parvin, Mayor ATTEST: Maureen Benson, Assistant City Clerk 13 ITEM 8.A. OFFICIAL BUSINESS Document entitled to free Recording per Government Code Sections 6103 and 27383 Recording Requested by, and When Recorded Mail to: REDEVELOPMENT AGENCY of the CITY OF MOORPARK 799 Moorpark Avenue Moorpark, California 93021 Attn: Steven Kueny Executive Director SPACE ABOVE THIS LINE FOR RECORDER'S USE DISPOSITION AND DEVELOPMENT AGREEMENT By and Between the REDEVELOPMENT AGENCY of the CITY OF MOORPARK and ASZKENAZY DEVELOPMENT, Inc. DATED December 2, 2009 A MOORPARK REDEVELOPMENT PROJECT ATTACHMENTS Attachment No. 1 Site Map Attachment No. 2 Site Legal Description Attachment No. 3 Grant Deed Attachment No. 4 Schedule of Performance Attachment No. 5 Scope of Development Attachment No. 6 Release of Construction Covenants Attachment No. 7 Loan Agreement Attachment No. 8 Deed of Trust DISPOSITION AND DEVELOPMENT AGREEMENT THIS DISPOSITION AND DEVELOPMENT AGREEMENT (this "Agreement") is entered into as of , 200_, by and between the REDEVELOPMENT AGENCY of the CITY OF MOORPARK, a public body, corporate and politic (the "Agency"), and ASZKENAZY DEVELOPMENT, INC., a California corporation (the "Developer"). RECITALS The following recitals are a substantive part of this Agreement: A. In furtherance of the objectives of the California Community Redevelopment Law, the Agency desires to redevelop a 1.838 acre portion (the "Site") of a larger parcel 2.45 acre (see Attachment No. 2) located on the south side of High Street generally between 200 feet east of Moorpark Avenue and the north Metrolink parking lot in the City of Moorpark, and from five hundred (500) feet below grade up to thirty-five (35) feet above street level (the "Upper Limit"). The air space within the exterior boundaries, or footprint of the Site located above the Upper Limit will be reserved by the Agency and is referred to herein as the "Air Space". B. The Site is currently owned by the Agency and is partially improved. C. The Agency and the Developer desire by this Agreement for the Agency to agree to convey the Site to the Developer, and for the Developer to agree to construct one new commercial building totaling approximately 50,000 square feet of Gross Leasable Area ("GLA") of retail and office space on the Site including supporting parking, a green space area and other on-site or off-site improvements (collectively, the "Improvements") consistent with the adopted City General Plan, zoning and development standards. D. The Agency's disposition of the Site to the Developer, and the Developer's acquisition of the Site and construction of the Improvements pursuant to the terms of this Agreement, are in the vital and best interest of the Redevelopment Agency of the City of Moorpark, 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 Project has been undertaken. NOW, THEREFORE, the Agency and the Developer hereby agree as follows: 100. DEFINITIONS "Actual Knowledge" is defined in Section 208.1 hereof. "Agency" means the Redevelopment Agency of the City of Moorpark, 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, and any assignee of or successor to its rights, powers and responsibilities. "Agency's Conditions Precedent" means the conditions precedent to the Closing to the benefit of the Agency, as set forth in Section 205.1 hereof. 3 "Agreement" means this Disposition and Development Agreement between the Agency and the Developer. "City" means the City of Moorpark, a California municipal corporation. "Closing" means the close of Escrow for the conveyance of the Site from the Agency to the Developer, as set forth in Section 202 hereof. "Closing Date" means the date of the Closing, as set forth in Section 202.4 hereof "Condition of Title" is defined in Section 203 hereof. "Aszkenazy Development" means Aszkenazy Development, Inc., a California corporation. As of the date of this Agreement, Martha Diaz Aszkenazy and Severyn I. Aszkenazy are the sole shareholders of Aszkenazy Development. "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. "Design Development Drawings" means those plans and drawings to be submitted to the City for its approval, pursuant to Section 302 hereof. "Developer" means solely Aszkenazy Development, Inc., a California corporation; no development partners are party to this Agreement without the expressed written approval from the Executive Director of the Agency. "Development Approval Process" means the process the Developer shall undertake to secure all necessary entitlements and other City approvals to construct the Improvements, including without limitation, the approvals listed in the following clauses a and b. The Developer shall apply for and use its reasonable good faith efforts to secure the following: a. Commercial Planned Development Permit. b. All permits required by the City, County of Ventura, and other governmental agencies with jurisdiction over the Improvements, including the State General Construction Storm Water Permit's Storm Water Pollution Prevention Plan requirements and any other requirements therein. The Developer shall pay all costs, charges and fees associated with the foregoing that are reasonably allocable to the Project. "Developer's Conditions Precedent" means the conditions precedent to the Closing to the benefit of the Developer, as set forth in Section 205.2. "Environmental Laws" means any federal, state or local law, statute, ordinance or regulation pertaining to environmental regulation, contamination or cleanup of any Hazardous Materials, including, without limitation, (i) Sections 25115, 25117, 25122.7 or 25140 of the California Health and Safety Code, Division 20, Chapter 6.5 (Hazardous Waste Control Law)), (ii) Section 25316 of the California Health and Safety Code, Division 20, Chapter 6.8 (Carpenter-Presley-Tanner Hazardous Substance Account 4 Act), (iii) Section 25501 of the California Health and Safety Code, Division 20, Chapter 6.95 (Hazardous Materials Release Response Plans and Inventory), (iv) Section 25281 of the California Health and Safety Code, Division 20, Chapter 6.7 (Underground Storage of Hazardous Substances), (v) Article 9 or Article 11 of Title 22 of the California Administrative Code, Division 4, Chapter 20, (vi) Section 311 of the Clean Water Act (33 U.S.C.§ 1317), (vii) Section 1004 of the Resource Conservation and Recovery Act, 42 U.S.C. §6901 et seq.(42 U.S.C. §6903), (viii) Section 101 of the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. §9601 et seq. "Escrow" is defined in Section 202 hereof. "Escrow Agent" is defined in Section 202 hereof. "Exceptions" is defined in Section 203 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, agency or instrumentality exercising jurisdiction over the Agency, the Developer or the Site. "Grant Deed" means the grant deed for the conveyance of the Site from the Agency 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 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 waste," "extremely hazardous waste," or "restricted hazardous waste" under Section 25115, 25117 or 25122.7, or listed pursuant to Section 25140 of the California Health and Safety Code, Division 20, Chapter 6.5 (Hazardous Waste Control Law)), (ii) defined as a "hazardous substance" under Section 25316 of the California Health and Safety Code, Division 20, Chapter 6.8 (Carpenter-Presley-Tanner Hazardous Substance Account Act), (iii) defined as a "hazardous material," "hazardous substance," or "hazardous waste" under Section 25501 of the California Health and Safety Code, Division 20, Chapter 6.95 (Hazardous Materials Release Response Plans and Inventory), (iv) defined as a "hazardous substance" under Section 25281 of the California Health and Safety Code, Division 20, Chapter 6.7 (Underground Storage of Hazardous Substances), (v) petroleum, (vi) friable asbestos, (vii) polychlorinated byphenyls, (viii) listed under Article 9 or defined as "hazardous" or "extremely hazardous" pursuant to Article 11 of Title 22 of the California Administrative Code, Division 4, Chapter 20, (ix) designated as "hazardous substances" pursuant to Section 311 of the Clean Water Act (33 U.S.C. § 1317), (x) defined as a "hazardous waste" pursuant to Section 1004 of the Resource Conservation and Recovery Act, 42 U.S.C. §6901 et seq. (42 U.S.C. §6903) or (xi) defined as "hazardous substances" pursuant to Section 101 of the Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C. §9601 et seq. "Improvements" means the improvements to be constructed by the Developer either on or off the Site. The improvements include but are not limited to the construction of one, two story, commercial building constructed with concrete, concrete 5 block or other material acceptable to the City Planning Department, of approximately 50,000 square feet of GLA and supporting parking, landscaping and off site improvements all more particularly described herein and in the Scope of Development. "Lender" is defined in Section 311.2 hereof. "Notice" shall mean a notice in the form prescribed by Section 601 hereof. "Outside Date" shall mean the last date the Closing may occur, as set forth in Section 202.4 hereof. "Property" means a 1.838 acre portion of a 2.45 acre parcel owned by the Agency. "Project" shall mean the removal of the existing improvements on the Site; the construction of one, two story, commercial building constructed with concrete, concrete block or other material acceptable to the City Community Development Department, of approximately 50,000 square feet of Gross Leasable Area ("GLA") and supporting parking at levels approved by the City and landscape improvements all more particularly described herein and in the Scope of Development; and any other improvements required as conditions of approval under the Development Approval Process. "Purchase Price" means the price to be paid by the Developer to the Agency in consideration for the conveyance of fee title to the Site. "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. "Report" means the preliminary title report, as described in Section 203 hereof. "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: (a) subject to revision from time to time as mutually agreed upon in writing between the Developer and the Agency's Executive Director, and the Agency's Executive Director is authorized to make such revisions as he or she deems reasonably necessary; and (b) subject to the provisions of Section 602. "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" generally is defined in Recital Paragraph A. "Site Legal Description" means the description of the Site which is attached hereto as Attachment No. 2 and incorporated herein. "Site Map" means the map of the Site which is attached hereto as Attachment No. 1 and incorporated herein. "Stabilization" means the point in time when the Developer has leased 90% of the leasable square footage in the Project . "Title Company" is defined in Section 203 hereof. 6 "Title Policy" is defined in Section 204 hereof. 200. CONVEYANCE OF THE SITE 201. Purchase and Sale of Site. The Agency has fee title to the entire Site as defined in Site Legal Description in Section 100 hereof. Subject to all of the terms and conditions of this Agreement, Agency shall sell the Site to Developer, and Developer shall purchase the Site from Agency, for the purchase price of Eight Hundred Eighty One Thousand and Forty Five dollars ($881,045.00) payable in legal tender of the United States of America, unless provisions to the contrary are provided herein. The Purchase Price has been established as the fair market value of the Site, based on the appraised value of the Property (of which the Site is a part) in an unimproved condition, as set forth in an independent MAI appraisal obtained by the Agency. The Developer will give the Agency a down payment of Two Hundred Twenty Four Thousand Six Hundred and Eighty Three dollars ($224,683.00). The Agency shall make a loan to the Developer for the remainder of the Purchase Price ("Agency Loan"). The terms and conditions of the Agency Loan are further described in Section 312. Developer agrees that it shall not purchase the Site for speculation in undeveloped land. Developer further agrees to resell the Site to the Agency at the Purchase Price plus any interest paid by Developer under the Agency Loan Note if development does not commence in accordance with the Schedule of Performance (Attachment 4), subject to force majeure pursuant to Section 602. Agency will subdivide, under governmental exemption from the California Subdivision Map Act, the Property into three parcels. The Agency intends to lease Parcel 1 to the Chamber of Commerce, which lease and use is not included in the Project. Parcel 3 (sometimes referred to as the "East Lot") is the Site to be purchased and developed with the project, consisting of the portion of the Property from Bard Street to the north Metrolink parking lot. The remaining Parcel 2 is between Parcel 1 and the Site. The Agency will sell Parcel 2 to the Developer under a second Disposition and Development Agreement after the Project has achieved Stabilization. If Stabilization has not occurred within two years after commencement of construction of the Project, then the right hereunder to acquire the Parcel 2 shall expire. It is understood and agreed that the above-referenced Purchase Price for the Site is or exceeds the "fair market price" for such parcels, as that term is used in California Labor Code Section 1720(b)(3), based upon an appraisal completed by a state-certified appraiser, and accordingly the Project is not subject to the prevailing wage laws (California Labor Code Section 1720 et seq.) (the "Prevailing Wage Laws"). Notwithstanding the foregoing, should any portion of the Project be deemed to be subject to the requirements of California Labor Code Section 1771 and related sections, the Developer agrees to comply with the requirements therein. The Developer, for itself and its contractors, hereby expressly agrees that the Agency has satisfied its obligations under the Prevailing Wage Laws to identify projects as being subject to the Prevailing Wage Laws and any other obligations imposed upon the Agency under California Labor Code Sections 1726 and/or 1781 that are owed to or may be actionable by the Developer and its contractors. The Developer, for itself and its contractors, hereby expressly waives any right of action against the Agency created 7 under California Labor Code Sections 1726 and/or 1781, whether known or unknown, foreseen or unforeseen relating to the Project and/or any public improvement. Furthermore, the Developer agrees to defend and indemnify the Agency and the City, and their respective agents, employees and assigns, against any and all claims, fines, suits or penalties arising out of any failure of the Developer to comply with the requirements of California Labor Code Section 1771 and related sections or out of the failure by City or Agency to require compliance by the Developer with such sections, including, without limitation, suits brought by subcontractors. Real property taxes and assessments, if any, on the Site, and taxes upon this Agreement or any rights hereunder levied, assessed, or imposed as to any period prior to conveyance of title, shall be borne by Agency. All real property taxes and assessments levied or imposed on the Site as to any period after the transfer of title shall be paid by Developer. 202. Escrow. Within thirty (30) days after the full execution and delivery of this Agreement, the parties shall open escrow ("Escrow") with Chicago Title Insurance Company, or another escrow company mutually satisfactory to both parties (the "Escrow Agent") for the purchase and sale of the Site. 202.1 Costs of Escrow. Agency and Developer shall pay their respective portions of the premium for the Title Policy as set forth in Section 204 hereof, the Agency shall pay for the documentary transfer taxes, if any, due with respect to the conveyance of the Site, and Developer and Agency each agree to pay one-half of all other usual fees, charges, and costs which arise from each Escrow. 202.2 Escrow Instructions. This Agreement constitutes the joint escrow instructions of Developer and Agency, 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 Agency will cancel coverage of the Site from its own policies upon sale. All funds received in 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 two (2) business days from deposit of the funds by the Agency and Developer, the funds shall be deposited into an interest bearing account with such interest accruing to the benefit of each party. If in the opinion of either party 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; 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 when both the Agency's Conditions Precedent and the Developer's Conditions Precedent as set forth in Section 205 have been 8 satisfied. Escrow Agent is instructed to release Agency's escrow closing and Developer's escrow closing statements to the respective parties. 202.3 Authority of Escrow Agent. Escrow Agent is authorized to and shall: a. Pay and charge Agency for the premium of the Title Policy and any amount necessary to place title in the condition necessary to satisfy Section 203 of this Agreement. b. Pay and charge Developer and Agency for their respective shares of any escrow fees, charges, and costs payable under Section 202.1 of this Agreement. c. Pay and charge Developer for any endorsements to the Title Policy which are requested by the Developer. d. Disburse funds, and deliver and record the Grant Deed when both the Developer's Conditions Precedent and the Agency's Conditions Precedent have been fulfilled or waived by Developer and Agency. e. Do such other actions as necessary, including obtaining the Title Policy, to fulfill its obligations under this Agreement. f. Within the discretion of Escrow Agent, direct Agency and Developer to execute and deliver any instrument, affidavit, and statement, and to perform any act reasonably necessary to comply with the provisions of Foreign Investment Real Property Tax Act (FIRPTA) and any similar state act and regulation promulgated there under. Agency 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. g. 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. 202.4 Closing. This transaction will close within fifteen (15) days of the parties' satisfaction of all of Agency's and Developer's Conditions Precedent to Closing as set forth in Section 205 hereof, but in no event later than December 30, 2010 (the "Outside Date"). The Closing shall occur at a location within Ventura County at a time and place reasonably agreed on by the parties. The "Closing" shall mean the Grant Deed is filed for recording with the Ventura County Recorder. The "Closing Date" shall mean the day on which the Closing occurs. 202.5 Termination. If (except for deposit of money by Developer, which shall be made by Developer before the Closing) Escrow is not in condition to close by the Outside Date, then either party which has fully performed under this Agreement may, in writing, demand the return of money or property and terminate this Agreement. If either party makes a written demand for return of documents or properties, this 9 Agreement 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 for the acquisition of the Site less Developer's share of costs of Escrow. Termination of this Agreement shall be without prejudice as to whatever legal rights either party may 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. 202.6 Closing Procedure. Escrow Agent shall close Escrow for the Site as follows: a. Record the Grant Deed with instructions for the Recorder of Ventura 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; d. Deliver the FIRPTA Certificate, if any, to Developer; and e. Forward to both Developer and Agency 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. 203. Review of Title. The Agency shall cause Chicago Title Insurance Company, or another title company mutually agreeable to both parties (the "Title Company"), to deliver to Developer a standard preliminary title report (the "Report") with respect to the title to the Site, together with legible copies of the documents underlying the exceptions ("Exceptions") set forth in the Report, within thirty (30) days from the date of this Agreement. The Developer shall have the right to reasonably approve or disapprove the Exceptions. Developer shall have thirty (30) days from the date of its receipt of the Report to give written notice to Agency and Escrow Holder of Developer's approval or disapproval of any of such Exceptions. Developer's failure to give written disapproval of the Report within such time limit shall be deemed approval of the Report. If Developer notifies Agency of its disapproval of any Exceptions in the Report, Agency shall have the right, but not the obligation to notify Developer within ten (10) business days after receiving written notice of Developer's disapproval that such Exception(s) will be removed on or before the Closing. If Agency cannot or does not elect to remove any of the disapproved Exceptions within that period, Developer shall have ten (10) business days after the expiration of such ten (10) business day period to either give the Agency written notice that Developer elects to proceed with the purchase of the Site subject to the disapproved Exceptions or to give the Agency written notice that the Developer elects to terminate this Agreement. The Exceptions approved by Developer as provided herein shall hereinafter be referred to as the "Condition of Title." Developer shall have the right to approve or disapprove any Exceptions reported by the Title Company after Developer 10 has approved the Condition of Title for the Site (which are not created by Developer). Agency shall not voluntarily create any new exceptions to title following the date of this Agreement. 204. Title Insurance. Concurrently with recordation of the Grant Deed conveying title to the Site, there shall be issued to Developer an owner's extended coverage policy of title insurance (the "Title Policy"), which shall be in ALTA form unless the Developer has failed to deliver to the Title Company any requisite survey, in which case it shall be in CLTA form, together with such endorsements as are reasonably requested by the Developer, issued by the Title Company insuring that the title to the Site is vested in Developer in the condition required by Section 203 of this Agreement. The Title Company shall provide the Agency with a copy of the Title Policy. The Title Policy shall be for the amount of the Purchase Price. The Agency agrees to remove on or before the Closing any deeds of trust or other monetary liens against the Site. The Agency shall pay that portion of the premium for the Title Policy equal to the cost of a CLTA standard coverage title policy in the amount of the Purchase Price. Any additional costs, including the cost of an ALTA policy or any endorsements requested by the Developer, shall be borne by the Developer. 205. Conditions of Closing. The Closing is conditioned upon the satisfaction of the following terms and conditions within the times designated below: 205.1 Agency's Conditions of Closing. Agency's obligation to proceed with the Closing of the sale of the Site is subject to the fulfillment or waiver by Agency of each and all of the conditions precedent (a) through (g), inclusive, described below ("Agency's Conditions Precedent"), which are solely for the benefit of Agency, and which shall be fulfilled or waived by the time periods provided for herein: a. No Default. Prior to the Closing, Developer is not 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 the Grant Deed and executed any other documents required hereunder and delivered such documents into Escrow. c. Payment of Closing Costs. Prior to the Closing, Developer has paid all required costs of Closing into Escrow in accordance with Section 202 hereof. d. Design Approvals. The Developer shall have obtained approval by the Agency of the Design Development Drawings as set forth in Section 302 hereof. e. Land Use Approvals. The Developer shall have received all land use approvals and permits required pursuant to Section 303 hereof. f. Insurance. The Developer shall have provided proof of insurance as required by Section 306 hereof. g. Financing. The Agency shall have approved financing of the Improvements as provided in Section 311.1 hereof. 11 205.2 Developer's Conditions of Closing. Developer's obligation to proceed with the purchase of the Site is subject to the fulfillment or waiver by Developer of each and all of the conditions precedent (a) through (k), inclusive, described below ("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 Closing, Agency is not in default in any of its obligations under the terms of this Agreement and all representations and warranties of Agency contained herein shall be true and correct in all material respects. b. Execution of Documents. The Agency shall have executed the Grant Deed and any other documents required hereunder, and delivered such documents into Escrow. c. Payment of Closing Costs. Prior to the Closing, Agency shall have paid all required costs of Closing into Escrow in accordance with Section 202 hereof. d. Review and Approval of Title. Developer shall have reviewed and approved the condition of title of the Site, as provided in Section 203 hereof. e. Title Policy. The Title Company shall, upon payment of Title Company's regularly scheduled premium, have agreed to provide to the Developer the Title Policy, including ALTA coverage for the Site upon the Closing, in accordance with Section 204 hereof. f. Environmental. The Developer shall have approved the environmental condition of the Site and shall not have elected to cancel Escrow and terminate this Agreement pursuant to Section 208 hereof, and the Remediation (if required pursuant to that Section) shall have been completed as provided therein. g. Design Approvals. The Developer shall have obtained approval of the Design Development Drawings as set forth in Section 302 hereof. h. Land Use Approvals. The Developer shall have received all land use approvals and permits required pursuant to Section 303 hereof. i. Site Condition. Developer shall have determined, in its sole and absolute discretion, and advised Agency in writing that the Site Condition is satisfactory as set forth in Section 208 hereof. j. Parking Easement. The Developer shall secure a 20 foot parking easement on the south side of the Site from the Ventura County Transportation Commission ("VCTC"). The easement shall be recorded against VCTC's property and shall be in effect for a period no less than forty (40) years. The terms and conditions of the easement shall be approved by the City and Agency within thirty (30) days of receipt, and include a condition allowing the easement to be assigned to the City and/or Agency if the Site is reconveyed to the Agency. Cost of the parking 12 easement, if any, shall be borne by the Developer. The amount of the easement must be acceptable to the developer. k. First Right of Refusal. The Agency shall execute and submit to escrow, in the name of the Developer, a First Right of Refusal to purchase and develop Parcel 1 in a form reasonably acceptable to the Developer. 206. Representations and Warranties. 206.1 Agency Representations. Agency represents and warrants to Developer as follows: a. Authority. Agency 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. Agency has full right, power and lawful authority to grant, sell and convey the Site as provided herein and the execution, performance and delivery of this Agreement by Agency has been fully authorized by all requisite actions on the part of Agency. b. FIRPTA. Agency is not a "foreign person" within the parameters FIRPTA or any similar state statute, or is exempt from the provisions of FIRPTA or any similar state statute, or that Agency has complied and will comply with all the requirements under FIRPTA or any similar state statute. c. No Conflict. To the best of Agency's knowledge, Agency'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 Agency is a party or by which it is bound. d. Lawsuits. There are no claims, actions, suits or proceedings, nor any order, decree or judgment, in law or in equity in effect against or affecting the Site. e. Violations of Law. No outstanding notices of the violation of laws, ordinances, orders, requirements or regulations of any government agency related to the Site have been received by the Agency. f. Leases and Contracts. The Agency will terminate any leases, rental agreements or similar instruments creating an ownership interest in the Site and no agreements relating to the upkeep, repair, maintenance and operation of the Site prior to the Closing. g. Special Assessments. Agency shall pay all assessments due on the property on a prorated basis up to Closing. h. Purchase Rights. No person, firm, corporation or other entity (other than Developer by reason of this Agreement) has any right or option to acquire the Site or any portion thereof as of the date of this Agreement. 13 Until the Closing, Agency shall, upon learning 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 fact or condition to Developer. Such exception(s) to a representation shall not be deemed a breach by Agency 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, Agency'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. 206.2 Developer's Representations. Developer represents and warrants to Agency as follows: a. Authority. Developer is a California corporation organized within and in good standing under the laws of the State of California. The copies of the documents evidencing the organization of the Developer which have been delivered to the Agency are true and complete copies of the originals, as amended to the date of this Agreement. 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. 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 thirty (30) days prior to the Closing of Escrow, Developer shall, upon learning 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 fact or condition to Agency. Such exception(s) to a representation shall not be deemed a breach by Developer hereunder, but shall constitute an exception which Agency 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 Agency 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, Agency 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. 14 207. Studies and Reports. Within thirty (30) days prior to the Closing, representatives of Developer shall have the right of access to all portions of the Site owned by the Agency 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 Agency. Any preliminary work shall be undertaken only after securing any necessary permits from the appropriate governmental agencies. The Site shall be returned to its original condition after the preliminary work has been completed. 208. Condition of the Site 208.1 Disclosure. Prior to the execution of this Agreement, Agency has determined there is no visible evidence to indicate the presence of Hazardous Materials on the Site. The Agency hereby represents and warrants that it has no Actual Knowledge, and has not received any notice or communication from any government agency having jurisdiction over the Site, notifying Agency 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, shall not impose a duty of investigation, and shall be limited to the actual knowledge of the Agency employees and agents who have participated in the preparation of this Agreement. 208.2 Investigation of Site. Prior to execution of this Agreement, Agency shall provide Developer with Phase 1 and Phase 2 (if recommended in Phase 1) environmental assessments of the Site. The Developer's approval of the environmental condition of the Site shall be a Developer's Condition Precedent to the Closing, as set forth in Section 205 hereof. If the Developer, based upon the above environmental reports, reasonably disapproves the environmental condition of the Site, then the Developer may terminate this Agreement by written Notice to the Agency. Agency shall also provide Developer with all copies of environmental documents (including traffic studies), soil studies and surveys for this site. 208.3 Remediation of Site. If the Developer does not elect to terminate this Agreement pursuant to Section 208.2, based upon the environmental assessments of the Site, the following provisions shall apply to the remediation of any Hazardous Materials in, on or under the Site that are discovered in connection with the environmental assessments of the Site. If Developer determines that there are hazardous materials in, on, under or about the Site, including the groundwater, or that the Site is or may be in violation of any Environmental Law, or that the condition of the Site is otherwise unacceptable to Developer, then the Developer shall notify the Agency and Escrow within thirty (30) days of receipt of the Agency's Phase I and Phase II. Agency and Developer shall thereafter have thirty (30) days to negotiate an agreement with respect to remediation of the Site, pursuant to which Agency shall commit to expend up to Fifty Thousand Dollars ($50,000) for Site remediation. If, at the end of such thirty (30) day period, Developer and Agency have not come to an agreement with respect to remediation of the Site, Developer shall, within three (3) days thereafter notify Agency of whether it elects to go forward with the acquisition of the Site and pay all remediation costs in excess of Fifty 15 Thousand Dollars ($50,000), or whether it elects to terminate this Agreement, in which event the Developer and Agency shall each be responsible for one-half of any Escrow cancellation charges. 208.4 No Further Warranties as to Site. Except as otherwise provided herein, the physical condition, possession or title of the Site is and shall be delivered from Agency to Developer in an "as-is" condition, with no warranty expressed or implied by Agency, including without limitation, its geology, the presence of known or unknown seismic faults, or the suitability of the Site for the development purposes intended hereunder. 208.5 Developer Precautions after Closing. Upon the Closing, the Developer shall take all necessary precautions to prevent the release into the environment of any Hazardous Materials which are located in, on or under the Site. Such precautions shall include compliance with all Governmental Requirements with respect to Hazardous Materials. In addition, the Developer shall install and utilize such equipment and implement and adhere to such procedures as are consistent with commercially reasonable standards as respects the disclosure, storage, use, removal and disposal of Hazardous Materials. 208.6 Required Disclosures after Closing. After the Closing, the Developer shall notify the Agency, and provide to the Agency a copy or copies, of all environmental permits, disclosures, applications, entitlements or inquiries relating to the Site, including notices of violation, notices to comply, citations, inquiries, clean-up or abatement orders, cease and desist orders, reports filed pursuant to self-reporting requirements and reports filed or applications made pursuant to any Governmental Requirement relating to Hazardous Materials and underground tanks. The Developer shall report to the Agency, as soon as possible after each incident, any unusual or potentially important incidents with respect to the environmental condition of the Site. In the event of a release of any Hazardous Materials into the environment after the Closing, the Developer shall, as soon as possible after the release, furnish to the Agency a copy of any and all reports relating thereto and copies of all correspondence with governmental agencies relating to the release. Upon request, the Developer shall furnish to the Agency a copy or copies of any and all other environmental entitlements or inquiries relating to or affecting the Site including, but not limited to, all permit applications, permits and reports including, without limitation, those reports and other matters which may be characterized as confidential. 208.7 Developer Indemnity. Upon the Closing, Developer agrees to indemnify, defend and hold Agency harmless from and against any claim, action, suit, proceeding, loss, cost, damage, liability, deficiency, fine, penalty, punitive damage, or expense (including, without limitation, reasonable attorneys' fees) (collectively, "Losses"), resulting from, arising out of, or based upon (i) the presence, release, use, generation, discharge, storage or disposal of any Hazardous Materials on, under, in or about, or the transportation of any such Hazardous Materials to or from, the Site after the Closing, or (ii) the violation, or alleged violation, of any statute, ordinance, order, rule, regulation, permit, judgment or license relating to the use, generation, release, discharge, storage, disposal or transportation of Hazardous Materials on, under, in or about, to or from, the Site after the Closing. This indemnity shall include, without 16 limitation, any Losses arising from or out of any claim, action, suit or proceeding for personal injury (including sickness, disease or death), tangible or intangible property damage, compensation for lost wages, business income, profits or other economic loss, damage to the natural resource or the environment, nuisance, contamination, leak, spill, release or other adverse effect on the environment. This indemnity shall exclude (a) Losses resulting from migration of Hazardous Materials from any property owned by the City or Agency including Lot 1 or, prior to the conveyance thereof to Developer, the East Parcel; (b) Losses arising out of any Hazardous Materials existing on the Site prior to the Closing; and (c) Losses arising out the acts or negligent omissions of the City, Agency or their respective employees or agents. 300. DEVELOPMENT OF THE SITE 301. Scope of Development. The Developer shall develop the Improvements in accordance with the Scope of Development, all applicable City development standards and requirements, and the plans, drawings and documents submitted by the Developer and approved by the Agency as set forth herein. The Improvements shall generally consist of the construction of one, two story, commercial building constructed with concrete, concrete block or other material acceptable to the City, of approximately 50,000 square feet of retail and office space, supporting parking, landscape improvements and any other onsite and offsite improvements as required by the Development Approval Process. The premises shall be leased for retail and office uses in accordance with the Scope of Development included as Attachment 5 to this Agreement. 302. Design Review. 302.1 Developer Submissions. Before commencement of construction of the Improvements or other works of improvement upon the Site, and at or prior to the times set forth herein, the Developer shall submit to the City any plans and drawings (collectively, the "Design Development Drawings") which may be required by the City with respect to any entitlements and permits which are required to be obtained to approve and develop the Improvements, and such plans for the Improvements as required by the City in order for the Developer to obtain building and grading permits for the Improvements. Within thirty (30) days after the City's disapproval or conditional approval of such plans, the Developer shall revise the portions of such plans identified by the City as requiring revisions and resubmit the revised plans to the City. In the event that Developer objects to any of the proposed revisions, Developer and the City shall meet and discuss the revisions. Developer shall complete Improvements within one year from start of construction, subject to the provisions of Section 602. 302.2 City Review and Approval. The City shall have all rights to review and approve or disapprove all Design Development Drawings and other required submittals in accordance with the City Municipal Code, and nothing set forth in this Agreement shall be construed as the City's approval of any or all of the Design Development Drawings. 302.3 Revisions. 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 Design 17 Development Drawings and other required submittals and shall be completed during the construction of the Improvements. 302.4 Defects in Plans. The Agency and the City shall not be responsible either to the Developer or to third parties in any way for any defects in the Design Development Drawings, nor for any structural or other defects in any work done according to the approved Design Development Drawings, nor for any delays reasonably caused by the review and approval processes established by this Section 302. 303. 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 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 those which are the responsibility of the Agency as set forth herein. The Developer shall, without limitation, apply for and use its reasonable good faith efforts to secure the following: a. Commercial Planned Development Permit. b. All permits by the City, County of Ventura, and other governmental agencies with jurisdiction over the Improvements, including the State General Construction Storm Water Permit's Storm Water Pollution Prevention Plan requirements and any other requirements therein. The Developer shall pay all costs, charges and fees associated with the foregoing that are reasonably allocable to the Project. However, the execution of this Agreement does not constitute the granting of or a commitment to obtain any required land use permits, entitlements or approvals required by the Agency or the City Community Development Department. 304. Schedule of Performance. Subject to the provisions of Section 602, the Developer shall submit all Design Development Drawings, commence and complete all construction of the Improvements, and satisfy all other obligations and conditions of this Agreement within the times established therefore in the Schedule of Performance which is attached hereto as Attachment No. 4 and incorporated herein. 305. Cost of Construction. Except to the extent otherwise expressly set forth in this Agreement, all of the cost of planning, designing, developing and constructing all of the Improvements shall be borne solely by the Developer. 306. Insurance Requirements. The Developer shall take out and maintain until the issuance of the Release of Construction Covenants pursuant to Section 310 of this Agreement, a comprehensive general liability policy in the amount of Two Million Dollars ($2,000,000) combined single limit policy, and a comprehensive automobile liability policy in the amount of One Million Dollars ($1,000,000), combined single limit, or such other policy limits as the Agency may approve at its discretion, including contractual liability, as shall protect the Developer, City and Agency from claims for such damages. Such policy or policies shall be written on an occurrence basis. The Developer shall also furnish or cause to be furnished to the Agency evidence satisfactory to the Agency that Developer and any contractor with whom it has contracted for the performance of 18 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 approved by the Agency setting forth the general provisions of the insurance coverage. This countersigned certificate shall name the City and the Agency 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 a statement of obligation on the part of the carrier to notify City and the Agency 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 Agency 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 Agency. The required insurance shall be obtained and the required certificate shall be furnished by the Developer at the time set forth therefore in the Schedule of Performance. 307. Developer's Indemnity. The Developer shall defend (with counsel reasonably acceptable to Agency), indemnify, assume all responsibility for, and hold the Agency and the City, and their representatives, volunteers, officers, employees and agents, harmless from, all claims, demands, damages, defense costs or liability of any kind or nature relating to the subject matter of this Agreement or the implementation hereof or any entitlements for or environmental review of the Improvements and for any damages to property or injuries to persons, including accidental death (including attorneys fees and costs) which may be caused by any acts or omissions of the Developer under this Agreement, whether such activities or performance thereof be by the Developer or by anyone directly or indirectly employed or contracted with by the Developer and whether such damage shall accrue or be discovered before or after termination of this Agreement. The Developer shall not be liable for property damage or bodily injury occasioned by the negligence of the City, the Agency or their designated agents or employees. 308. Rights of Access. Prior to the issuance of a Release of Construction Covenants (as specified in Section 310 of this Agreement), for purposes of assuring compliance with this Agreement, representatives of the Agency 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 Agency representatives comply with all safety rules. Until the Release of Construction Covenants, Agency shall defend, indemnify, assume all responsibility for and hold the Developer harmless from and against any and all third party liabilities, suits, actions, claims, demands, penalties, damages, losses, costs or expenses which result from the exercise of such entry. The Agency (or its representatives) shall, except in emergency situations, notify the Developer prior to exercising its rights pursuant to this Section 308. 309. Compliance with Laws. The Developer shall carry out the design and construction of the Improvements in conformity with all applicable laws, including all applicable state labor standards, the City zoning and development standards, building, 19 plumbing, mechanical and electrical codes, and all other provisions of the City of Moorpark 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. 309.1 Taxes and Assessments. Commencing on the Closing and continuing throughout Developer's ownership of 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 shall remove or have removed any levy or attachment made on the Site or any part thereof, or assure the satisfaction thereof within a reasonable time. The Developer shall not apply for or receive any exemption from the payment of property taxes or assessments on any interest in or to the Site or the Improvements. 309.2 Liens and Stop Notices. The Developer shall not allow to be placed on the Site or any part thereof any lien or stop notice which are caused by any acts or omissions of Developer or anyone directly or indirectly employed by or contracted with the Developer. If such a claim of a lien or stop notice is given or recorded affecting the Improvements the Developer shall within thirty (30) days of such recording or service or within five (5) days of the Agency's demand whichever last occurs: a. Pay and discharge the same; or b. Affect the release thereof by recording and delivering to the Agency a surety bond in sufficient form and amount, or otherwise; or c. Provide the Agency with other assurance which the Agency deems, in its sole discretion, to be satisfactory for the payment of such lien or bonded stop notice and for the full and continuous protection of Agency from the effect of such lien or bonded stop notice. 310. Release of Construction Covenants. Promptly after completion of the Improvements in conformity with this Agreement, the Agency shall furnish the Developer with a "Release of Construction Covenants," substantially in the form of Attachment No. 6 hereto which is incorporated herein by reference. The Agency 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 set forth in Section 400 of this Agreement. If the Agency refuses or fails to furnish the Release of Construction Covenants, after written request from the Developer, the Agency shall, within thirty (30) days of written request therefore, provide the Developer with a written statement of the reasons the Agency refused or failed to furnish the Release of Construction Covenants. The statement shall also contain the Agency's opinion of the actions the Developer must take to obtain the Release of Construction Covenants. The Release of Construction 20 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. 311. Financing of the Improvements. 311.1 Approval of Financing. As required herein and as an Agency Condition Precedent to the Closing, Developer shall submit to Agency evidence that Developer has obtained sufficient equity capital or has obtained firm and binding commitments for construction financing necessary to undertake the development of the Site and the construction of the Improvements in accordance with this Agreement. Agency shall approve or disapprove such evidence of financing commitments within fifteen (15) business days of receipt of a complete submission. Approval shall not be unreasonably withheld or conditioned. If Agency approves such financing plan, it shall execute commercially reasonable subordination documentation evidencing the subordination of the Agency Loan Note and Deed of Trust to the lien of any construction loan deed of trust. If Agency shall disapprove any such evidence of financing, Agency shall do so by Notice to Developer stating the reasons for such disapproval and Developer shall promptly obtain and submit to Agency new evidence of financing. Agency shall approve or disapprove such new evidence of financing in the same manner and within the same times established in this Section 311.1 for the approval or disapproval of the evidence of financing as initially submitted to Agency. Developer shall close the approved financing concurrently with the Closing. Such evidence of financing shall include the following: (a) a copy of a legally binding, firm and enforceable loan commitment(s) obtained by Developer from unrelated financial institutions for the mortgage loan or loans for financing to fund the purchase, construction, completion, operation and maintenance of the Improvements, subject to such lenders' reasonable, customary and normal conditions and terms, and/or (b) a certification from the chief financial officer or chief executive officer of Developer that Developer has sufficient funds for such purchase, construction, completion, operation and maintenance of the Improvements, and that such funds have been committed to such purchase, construction, completion, operation and maintenance of the Improvements, and/or other documentation reasonably satisfactory to the Agency 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 acquisition of the Site, and construction and completion of the Improvements, less financing authorized by those loans set forth in subparagraph (a) above. Following completion of construction, within 30 days after written request by Developer, the Agency shall execute commercially reasonable subordination documentation evidencing the subordination of the Agency Loan Note and Deed of Trust to the lien of any deed of trust securing a permanent loan provided that such loan is being obtained from unrelated financial institutions to fund the completion, operation and/or maintenance of the Site and Improvements and the Developer delivers the certificate required under clause (b) in the preceding paragraph. 21 311.2 No Encumbrances Except Mortgages, Deeds of Trust, or Sale and Lease-Back for Development. Mortgages, deeds of trust and sales and leases- back are to be permitted before completion of the construction of the Improvements with the Agency's prior written approval, which shall not be unreasonably withheld or delayed, but only for the purpose of securing loans of funds to be used for financing the acquisition of the Site, 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 Agency in advance of any mortgage, deed of trust or sale and lease-back financing, if the Developer proposes to enter into the same before completion of the construction of the Improvements. The words "mortgage" and "trust deed" as used hereinafter shall include sale and lease-back. The Developer shall not enter into any such conveyance for financing without the prior written approval of the Agency, which approval Agency agrees to give if any such conveyance for financing is given to a responsible financial lending institution or person or entity ("Lender"). The Agency will subordinate to the Developer's construction and/or permanent financing provided that the Agency's Deed of Trust is secured by the Site pursuant to a commercially reasonable form of subordination agreement. 311.3 Holder Not Obligated to Construct Improvements. The holder of any mortgage or deed of trust authorized by this 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. 311.4 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 Agency 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 Agency 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 Agency are concerned) have the right, at its option, within thirty (30) 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 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 Agency by written agreement reasonably satisfactory to the Agency. The holder, in that event, must agree to complete, in the manner provided in this Agreement, the Improvements to which the lien or title of such holder relates. Any such holder properly completing such improvement shall be entitled, upon compliance with the requirements of Section 310 of 22 this Agreement, to a Release of Construction Covenants. It is understood that a holder shall be deemed to have satisfied the thirty (30) 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 thirty (30) 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. 311.5 Failure of Holder to Complete Improvements. In any case where, thirty (30) days after the holder of any mortgage or deed of trust creating a lien or encumbrance upon the Site or any part thereof receives a notice from Agency of a default by the Developer in completion of construction of any of the Improvements under this Agreement, and such holder has not exercised the option to construct as set forth in Section 311, or if it has exercised the option but has defaulted hereunder and failed to timely cure such default, the Agency may purchase the mortgage or deed of trust by payment to the holder of the amount of the unpaid mortgage or deed of trust debt, including principal and interest and all other sums secured by the mortgage or deed of trust. If the ownership of the Site or any part thereof has vested in the holder, the Agency, if it so desires, shall be entitled to a conveyance from the holder to the Agency upon payment to the holder of an amount equal to the sum of the following: a. The unpaid mortgage or deed of trust debt at the time title became vested in the holder (less all appropriate credits, including those resulting from collection and application of rentals and other income received during foreclosure proceedings); b. All expenses with respect to foreclosure including reasonable attorneys' fees; c. The net expense, if any (exclusive of general overhead), incurred by the holder as a direct result of the subsequent management of the Site or part thereof; d. The costs of any improvements made by such holder; e. An amount equivalent to the interest that would have accrued on the aggregate of such amounts had all such amounts become part of the mortgage or deed of trust debt and such debt had continued in existence to the date of payment by the Agency; and f. Any customary prepayment charges imposed by the lender pursuant to its loan documents and agreed to by the Developer. 311.6 Right of the Agency to Cure Mortgage or Deed of Trust Default. In the event of a mortgage or deed of trust default or breach by the Developer prior to the completion of the construction of any of the Improvements or any part thereof, Developer shall immediately deliver to Agency a copy of any mortgage holder's notice of default. If the holder of any mortgage or deed of trust has not exercised its option to construct, the Agency shall have the right but no obligation to cure the default. In such event, the Agency shall be entitled to reimbursement from the Developer of all costs and expenses incurred by the Agency in curing such default. The Agency shall also be entitled to a lien upon the Site to the extent of such costs and disbursements. Any such 23 lien shall be junior and subordinate to the mortgages or deeds of trust pursuant to this Section 311. 312. Agency Loan to Developer. The Agency will make a loan to the Developer to assist with the purchase of the Site. The terms and conditions of the Agency Loan are as follows: a. Developer provides the Agency with a cash payment of Two Hundred Twenty Four Thousand Six Hundred and Eighty Three dollars ($224,683.00). b. Monthly interest will be deferred, but will accrue, until Stabilization. Developer may choose to make interest payments before Stabilization without any prepayment penalty; after Stabilization monthly interest only payments will be required. c. The Agency Loan will be subordinate to the construction loan and permanent financing for a period of ten (10) years. d. The term of the loan will be ten (10) years. Upon loan maturity, a balloon payment for the principal amount and all accrued interest will be due to the Agency. e. The interest rate of the loan will be a fixed rate of 8.25%. The Loan Agreement and Deed of Trust are included as Attachment 7 and Attachment 8, respectively. f. Agency shall subordinate the Agency Loan and Deed of Trust as provided in Section 3.11 above. 400. COVENANTS AND RESTRICTIONS 401. Business Improvement District Covenant. Developer agrees to support the exploration of the feasibility of the formation of a Business Improvement District ("BID") and to explore one or more assessments, for the maintenance of parkway and median landscaping, and street lighting, including but not limited to all water and electricity costs, and if requested by the City Council, a park for the provision of special benefits conferred by same upon properties within the Project. In addition to any fees specifically mentioned in this Agreement, Developer agrees to pay all City capital improvement, development, and processing fees at the rate and amount in effect at the time the fee is required to be paid that are related to and or required of said Project. Said fees include but are not limited to Library Facilities Fees, Fire Facilities Fees, drainage, entitlement processing fees, and plan check and permit fees for buildings and public improvements. Developer further agrees that unless specifically exempted by this Agreement, it is subject to all fees imposed by City at the operative date of this Agreement and such future fees imposed as determined by City in its sole discretion so long as said fee is imposed on similarly situated properties. Developer agrees that any fees and payments pursuant to the Agreement shall be made without reservation, and Developer expressly waives the right to payment of any such fees under protest pursuant to California Government Code Section 66020 and 24 statutes amendatory or supplementary thereto. 402. Use and Operation Covenants. Subject to the provisions of Section 602, the Developer hereby covenants and agrees that the Improvements shall be used and operated as described in Section 301 or for such other use as then permitted in the C- OT zone under the City's zoning ordinance with the prior approval of the Executive Director of the Agency, which approval shall not be unreasonably withheld or delayed provided all applicable City requirements have been met. Developer further covenants and agrees that the Improvements shall not be used by any bail bond, pawn shops or adult businesses for perpetuity. 403. Maintenance Covenants. The Developer shall maintain the Site and all improvements thereon, including all landscaping, in compliance with all applicable provisions of the City of Moorpark Municipal Code and all conditions of approval of the Project. If a default under this Section is not fully cured by Developer as provided in Section 501, Agency shall have the right to enter the Site at all reasonable times, complete the maintenance or repair, and invoice Developer for the direct costs and expenses of said work plus fifteen percent (15%) of said costs and expenses for administration. Developer shall pay the invoice in full within fifteen (15) days after receipt thereof. 404. Nondiscrimination Covenants. The Developer covenants by and for itself and any successors in interest that there shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Site, nor shall the Developer itself or any person claiming under or through it establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the Site. The foregoing covenants shall run with the land. The Developer shall refrain from restricting the rental, sale or lease of the Site on the basis of race, color, religion, sex, marital status, ancestry or national origin of any person. All such deeds, leases or contracts shall contain or be subject to substantially the following nondiscrimination or nonsegregation clauses: a. In deeds: "The grantee herein covenants by and for himself or herself, his or her heirs, executors, administrators and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of, any person or group of persons on account of race, color, creed, religion, sex, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land herein conveyed, nor shall the grantee 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, sublessees or vendees in the land herein conveyed. The foregoing covenants shall run with the land." 25 b. In leases: "The lessee herein covenants by and for himself or herself, his or her heirs, executors, administrators, and assigns, and all persons claiming under or through him or her, and this lease is made and accepted upon and subject to the following conditions: "That there shall be no discrimination against or segregation of any person or group of persons, on account of race, color, creed, religion, sex, marital status, national origin, or ancestry in the leasing, subleasing, transferring, use, occupancy, tenure, or enjoyment of the premises herein leased nor shall the lessee 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, sublessees, 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, 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, sublessees or vendees of the premises." 405. Effect of Violation of the Terms and Provisions of this Agreement after Completion of Construction. The Agency 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 Agency has been, remains or is an owner of any land or interest therein in the Site or in the Project. The Agency 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 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 until the issuance of the Release of Construction Covenants for the completion of the Improvements, except for the following: a. The environmental covenants set forth in Sections 208.5, 208.6 and 208.7 shall remain in effect in perpetuity. b. Intentionally deleted. c. The covenants pertaining to the use and operation of the Site set forth in Section 402 shall remain in effect for the term of the Agency Loan. d. The covenants pertaining to maintenance of the Site and all improvements thereon, as set forth in Section 403, shall remain in effect for the term of the Agency Loan. 26 e. The covenants against discrimination, as set forth in Section 404, shall remain in effect in perpetuity. 500. DEFAULTS AND REMEDIES 501. Default Remedies. Subject to the extensions of time set forth in Section 602 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. 502. Institution of Legal Actions. In addition to any other rights or remedies, including those set forth in Sections 503 and 504, respectively, 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 consistent with the purpose of this Agreement. Such legal actions must be instituted in the Superior Court of the County of Ventura, State of California, or if federal jurisdiction exists, in the District of the United States District Court for the Central District of California. 503. Termination by the Developer. In the event that the Developer is not in Default under this Agreement and the Agency 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; or 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 in the event of any default of the Agency prior to the Closing which is not cured within the time set forth in Section 501 hereof, and any such failure is not cured within the applicable time period after written demand by the Developer, then this Agreement may, at the option of the Developer, be terminated by written notice thereof to the Agency. From the date of the written notice of termination of this Agreement by the Developer to the Agency and thereafter this Agreement shall be deemed terminated and there shall be no further rights or obligations between the parties, except that the parties may pursue any other remedies they may have hereunder. 504. Termination by the Agency. In the event that the Agency is not in Default under this Agreement and prior to the issuance of the Release of Construction Covenants: 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 one or more of the Agency'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 Agency or City Planning Department; or 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 27 respect to or arising out of the Agreement or the Site, shall, at the option of the Agency, be terminated by the Agency by written notice thereof to the Developer. Three days from the date of the written notice of termination of this Agreement by the Agency to the Developer and thereafter this Agreement shall be deemed terminated and there shall be no further rights or obligations between the parties, except that the parties may pursue any and all other remedies they may have hereunder, including, but not limited to rights to revesting of title. 505. Termination Prior to Conveyance. If, prior to the Closing on the Site, a default under this Agreement is not fully cured by the defaulting party as provided in Section 501 hereof, Claimant shall have the right thereafter, but not before, to terminate this Agreement by giving written notice thereof to the defaulting party. The termination shall be effective three days after the date on the notice, and thereafter neither party shall have any further rights of obligation with respect to the Site. Upon the termination (i) all documents and all monies deposited by either party into escrow shall be returned to the party that made the deposit, and (ii) any escrow cancellation fee shall be paid by the defaulting party. 506. Reentry and Revesting of Title in the Agency After the Closing and Prior to Completion of Construction. The Agency has the right, at its election, to seek and obtain a judicial order on an expedited basis authorizing it to reenter and take possession of the Site, with all improvements thereon, and terminate and revest in the Agency 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 and to complete Improvements within one year as required by this Agreement and for a period of thirty (30) days after written notice thereof from the Agency, subject to the provisions of Section 602; or b. Abandon or substantially suspend construction of the Improvements required by this Agreement for a period of thirty (30) days after written notice thereof from the Agency subject to the provisions of Section 602; or c. Contrary to the provisions of Section 603 transfer or suffer any involuntary transfer of the Site or any part thereof in violation of this Agreement. Such right to reenter, terminate and revest shall be subject to and be limited by and shall not defeat, render invalid or limit: a. Any mortgage or deed of trust permitted by this Agreement; or b. Any rights or interests provided in this Agreement for the protection of the holders of such mortgages or deeds of trust. The Grant Deed shall contain appropriate reference and provision to give effect to the Agency's right as set forth in this Section 506, 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 Agency the estate conveyed to the Developer. Upon the revesting in the Agency of title to the Site as provided in this Section 506, the Agency shall, pursuant to its 28 responsibilities under state law, use its reasonable efforts to resell the Site as soon and in such manner as the Agency shall find feasible and consistent with the objectives of such law, as it exists or may be amended, to a qualified and responsible party or parties (as determined by the Agency) who will assume the obligation of making or completing the Improvements, or such improvements in their stead as shall be satisfactory to the Agency and in accordance with the uses specified for such Site or part thereof in the C- OT zone in the City's zoning ordinance or Commercial Planned Development (CPD). 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 to reimburse the Agency, on its own behalf or on behalf of the City, all costs and expenses incurred by the Agency, excluding City and Agency staff costs, but specifically, including, but not limited to, any expenditures by the Agency or the City in connection with the recapture, management and resale of the Site or part thereof (but less any income derived by the Agency 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 Agency, 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 Agency, 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 Agency 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 Agency, and in the event additional proceeds are thereafter available, then Any balance remaining after such reimbursements shall be retained by the Agency as its property. The rights established in this Section 506 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 Agency will have conveyed the Site to the Developer for redevelopment purposes, particularly for development of a commercial/retail facility, and not for speculation in undeveloped land. 507. Acceptance of Service of Process. In the event that any legal action is commenced by the Developer against the Agency, service of process on the Agency shall be made by personal service upon the Executive Director of the Agency or in such other manner as may be provided by law. In the event that any legal action is commenced by the Agency against the Developer, service of process on the Developer shall be made by personal service upon the President of the Developer or in such other manner as may be provided by law. 508. 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 29 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. 509. 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. 510. Applicable Law. The laws of the State of California shall govern the interpretation and enforcement of this Agreement. 600. GENERAL PROVISIONS 601. 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 Agency: Moorpark Redevelopment Agency 799 Moorpark Avenue Moorpark, California 93021 Attention: Executive Director To Developer: Aszkenazy Development, Inc 601 South Brand Boulevard, 3rd Floor San Fernando, CA 91340 Attention: Severyn I. Aszkenazy, President 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. 602. 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 control or without the fault of the party claiming an extension of time to perform, which may include: 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; unusually severe weather; inability to secure necessary labor, materials or tools; acts or omissions of 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 Agency which 30 shall not excuse performance by the Agency). 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 writing by the mutual agreement of Executive Director of the Agency 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. 603. Transfers of Interest in Site or Agreement. 603.1 Prohibition. The qualifications and identity of the Developer are of particular concern to the Agency. It is because of those qualifications and identity that the Agency has entered into this Agreement with the Developer. For the period commencing upon the date of this Agreement and until the expiration of the Agency Loan, no voluntary or involuntary successor in interest of the Developer shall acquire any rights or powers under this Agreement, nor shall the Developer make any total or partial sale, transfer, conveyance, assignment, subdivision, refinancing or lease of the whole or any part of the Site or the Improvements thereon without prior written approval of the Agency, except as expressly set forth herein. 603.2 Permitted Transfers. Notwithstanding any other provision of this Agreement to the contrary, Agency approval of an assignment of this Agreement or conveyance of the Site or Improvements, or any part thereof, shall not be required in connection with any of the following: a. Any transfers to an entity or entities in which either Marta Diaz Aszkenazy or Severyn I. Aszkenazy 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 (as defined herein). c. Any requested assignment for financing purposes (subject to any approvals by the Agency that are necessary for any construction financing pursuant to Section 311 herein), including the grant of a deed of trust to secure the funds necessary for land acquisition, construction and permanent financing or re-financing of the Improvements. In the event of an assignment by Developer under subparagraphs (a) through (c), inclusive, above not requiring the Agency's prior approval, Developer nevertheless agrees that at least thirty (30) days prior to such assignment it shall give written notice to Agency of such assignment and satisfactory evidence that the assignee has assumed jointly with Developer the obligations of this Agreement. 603.3 Agency Consideration of Requested Transfer. The Agency Board will not unreasonably withhold approval of a request made pursuant to this Section 603.3, provided the Developer delivers written notice to the Agency requesting such approval. Such notice shall be accompanied by sufficient evidence regarding the proposed assignee's or purchaser's development (in the event that the Improvements 31 have not been completed) and/or operational qualifications and experience, and its financial commitments and resources, in sufficient detail to enable the Agency to evaluate the proposed assignee or purchaser pursuant to the criteria set forth in this Section 603.3 and as reasonably determined by the Agency. The Agency shall evaluate each proposed transferee or assignee on the basis of its development (in the event that the Improvements have not been completed) and/or qualifications and experience in the operation of facilities similar to the Improvements, and its financial commitments and resources, and may reasonably disapprove any proposed transferee or assignee, during the term of the Agency Loan, which the Agency determines does not possess qualifications satisfactory for performing the obligations of Developer. An assignment and assumption agreement in form satisfactory to the Agency's legal counsel shall also be required for all proposed assignments for which Agency consent is required hereunder. Within thirty (30) days after the receipt of the Developer's written notice requesting Agency approval of an assignment or transfer pursuant to this Section 603.3, the Agency shall either approve or disapprove such proposed assignment or shall respond in writing by stating what further information, if any, the Agency reasonably requires in order to determine the request complete and determine whether or not to grant the requested approval. Upon receipt of such a response, the Developer shall promptly furnish to the Agency such further information as may be reasonably requested. Developer shall pay all Agency out-of-pocket costs plus 15% for review of assumption agreement including, but limited to, legal and financial reviews. Developer shall provide a deposit of$2,500 upon submittal of request for transfer. 603.4 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. 603.5 Assignment by Agency. The Agency may assign or transfer any of its rights or obligations under this Agreement with the approval of the Developer, which approval shall not be unreasonably withheld; provided, however, that the Agency may assign or transfer any of its interests hereunder to the City at any time without the consent of the Developer. 604. Non-Liability of Officials and Employees of the Agency and the Developer. No member, official or employee of the Agency 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 Agency (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. 605. Relationship Between Agency and Developer. It is hereby acknowledged that the relationship between the Agency and the Developer is not that of a partnership or joint venture and that the Agency 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 Agency shall have no rights, powers, duties or obligations with respect to the development, operation, maintenance or management of the Improvements. 32 606. Agency Approvals and Actions. The Agency shall maintain authority of this Agreement and the authority to implement this Agreement through the Agency Executive Director (or his duly authorized representative). The Agency Executive Director shall have the authority to make approvals, issue interpretations, waive provisions, and/or enter into amendments of this Agreement on behalf of the Agency so long as such actions do not materially or substantially change the uses or development permitted on the Site, or materially or substantially add to the costs incurred or to be incurred by the Agency 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 substantial interpretations, waivers, or amendments shall require the consideration, action and written consent of the Agency Board. 607. 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. 608. Integration. This Agreement contains the entire understanding between the parties relating to the transaction contemplated by this Agreement. 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 deems material. This Agreement includes pages 1 through 32 and Attachment Nos. 1 through 8, which constitute the entire understanding and agreement of the parties, 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. 609. Real Estate Brokerage Commission. The Agency 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 the Site from the Agency. The parties agree to defend and hold harmless the other party from any claim to any such commission or fee from any broker, agent or finder with respect to this Agreement which is payable by such party. 610. 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. 611. 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. 612. 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 33 followed by the words "without limitation." This Agreement shall be interpreted as though prepared jointly by both parties. 613. 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. 614. 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. 615. 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. 616. Calendar 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 Pack Time Zone time. 617. 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. 618. Time of Essence. Time is expressly made of the essence with respect to the performance by the Agency, the Developer of each and every obligation and condition of this Agreement. 619. 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. 620. Inspection of Books and Records. Agency shall have the right to inspect, during normal business hours, the books and records of Developer pertaining to the performance of this Agreement, upon not less than twenty-four (24) hours prior notice, which notice may be given orally notwithstanding any other provision of this Agreement to the contrary. 34 621. Conflicts of Interest. No member, official or employee of the Agency 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. 622. Time for Acceptance of Agreement by Agency. This Agreement, when executed by the Developer and delivered to the Agency, must be authorized, executed and delivered by the Agency 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. 623. Date of Agreement. The date of this Agreement shall be the date set forth in the first paragraph hereof. Signatures Blocks on next page 35 IN WITNESS WHEREOF, the Agency and the Developer have signed this Agreement. AGENCY: REDEVELOPMENT AGENCY of the CITY OF MOORPARK, a public body, corporate and politic By: Janice S. Parvin, Chair ATTEST: By: Deborah S. Traffenstedt, Agency Secretary DEVELOPER: Aszkenazy Development, Inc. a California corporation By: Severyn I. Aszkenazy 36 STATE OF CALIFORNIA ) ) ss. COUNTY OF ) On , before me, , Notary Public, (Print Name of Notary Public) personally appeared ❑ personally known to me -or ❑ proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. Signature of Notary 37 ATTACHMENT NO. 1 SITE MAP 38 ATTACHMENT NO. 2 SITE LEGAL DESCRIPTION 39 ATTACHMENT NO.3 OFFICIAL BUSINESS Document entitled to free Recording per Government Code Sections 6103 and 27383 Recording Requested by, Mail Tax Statements to, and When Recorded Mail to: ASZKENAZY DEVELOPMENT, INC. 601 South Brand Boulevard, 3`d Floor San Fernando, CA 93021 Attn: Severyn I. Aszkenazy SPACE ABOV THIS LINE FOR RECORDER'S USE Documentary Transfer Tax: $ Based on full value of property conveyed GRANT DEED For valuable consideration, receipt of which is hereby acknowledged, The REDEVELOPMENT AGENCY of the CITY OF MOORPARK, a public body, corporate and politic (the "Agency"), acting to carry out the Redevelopment Plan ("Redevelopment Plan") for the Moorpark Redevelopment Project (the "Project"), under the Community Redevelopment Law of California, as of , 200 , hereby grants to , a ("Developer"), the real property hereinafter referred to as the "Site", described in Exhibit A attached hereto and incorporated herein, subject to the existing easements, restrictions and covenants of record described there. 1. Agency excepts and reserves from the conveyance herein described all interest of the Agency in oil, gas, hydrocarbon substances and minerals of every kind and character lying more than five hundred (500) feet below the surface, together with the right to drill into, through, and to use and occupy all parts of the Site lying more than five hundred (500) feet below the surface thereof for any and all purposes incidental to the exploration for and production of oil, gas, hydrocarbon substances or minerals from said Site or other lands, but without, however, any right to use either the surface of the Site or any portion thereof within five hundred (500) feet of the surface for any purpose or purposes whatsoever, or to use the Site in such a manner as to create a disturbance to the use or enjoyment of the Site. 2. Agency excepts and reserves from the conveyance herein described all interest of the Agency in air space above Thirty-Five (35) feet above the surface (the "Air Space"). 3. The Site is conveyed in accordance with and subject to the Redevelopment Plan which was approved and adopted by Ordinance No. 110 of the City Council of the City of Moorpark, and a Disposition and Development Agreement entered into between 40 Agency and Developer dated 200 (the "DDA"), a copy of which is on file with the Agency at its offices as a public record and which is incorporated herein by reference. The DDA generally requires the Developer to construct improvements on the Site including one commercial building of approximately 40,000 square feet of Gross Leasable Area of retail and office space, supporting parking and landscape improvements, and other requirements as set forth therein or required by Project Conditions of Approval (the "Improvements"). All terms used herein shall have the same meaning as those used in the DDA. 4. The Developer covenants and agrees for itself, its successors, its assigns, and every successor in interest to the Site or any part thereof, that upon the date of this Grant Deed and during construction and thereafter, the Developer shall devote the Site to the uses specified in the Commercial Planned Development Permit No. and the DDA 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 Commercial Planned Development Permit No. , the DDA and all applicable provisions of the Moorpark Municipal Code. The foregoing covenants shall run with the land. 5. The Developer herein covenants by and for himself or herself, his or her heirs, executors, administrators and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of, any person or group of persons on account of race, color, creed, religion, sex, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land herein conveyed, nor shall the Developer 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, sublessees or vendees in the land herein conveyed. The foregoing covenants shall run with the land. 6. The Agency has the right, at its election, to reenter and take possession of the Site, with all improvements thereon, and terminate and revest in the Agency the estate conveyed to the Developer if after the Closing and prior to the issuance of the Release of Construction Covenants, if the Developer (or its successors in interest) shall: a. abandon or substantially suspend construction of the Improvements required by the DDA for a period of thirty (30) days after written notice thereof from the Agency subject to the provisions of Section 602 of the DDA; or b. contrary to the provisions of Section 603 of the DDA transfer or suffer any involuntary transfer of the Site or any part thereof in violation of the DDA. Such right to reenter, terminate and revest shall be subject to and be limited by and shall not defeat, render invalid or limit: a. Any mortgage or deed of trust permitted by the DDA; or b. Any rights or interests provided in the DDA for the protection of the holders of such mortgages or deeds of trust. Upon the revesting in the Agency of title to the Site as provided in Section 506 of 41 the DDA, the Agency shall, pursuant to its responsibilities under state law, use its reasonable efforts to resell the Site as soon and in such manner as the Agency shall find feasible and consistent with the objectives of such law, as it exists or may be amended, to a qualified and responsible party or parties (as determined by the Agency) who will assume the obligation of making or completing the Improvements, or such improvements in their stead as shall be satisfactory to the Agency and in accordance with the uses specified for such Site as provided in the City's zoning ordinance. 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 to reimburse the Agency, on its own behalf or on behalf of the City, all costs and expenses incurred by the Agency, excluding City and Agency staff costs, but specifically, including, but not limited to, any expenditures by the Agency or the City in connection with the recapture, management and resale of the Site or part thereof (but less any income derived by the Agency 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 Agency, 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 Agency, 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 Agency, and in the event additional proceeds are thereafter available, then any balance remaining after such reimbursements shall be retained by the Agency as its property. The rights established in this Paragraph 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 Agency will have conveyed the Site to the Developer for redevelopment purposes, particularly for development of the Improvements, and not for speculation in undeveloped land. 7. 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 5 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. 8. All covenants contained in this Grant Deed shall be covenants running with the land for the periods set forth therefore in the DDA. Every covenant contained in this Grant Deed against discrimination contained in paragraph 5 of this Grant Deed shall remain in effect in perpetuity. 9. All covenants without regard to technical classification or designation shall be 42 binding for the benefit of the Agency, and such covenants shall run in favor of the Agency for the entire period during which such covenants shall be in force and effect, without regard to whether the Agency is or remains an owner of any land or interest therein to which such covenants relate. The Agency, 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. 10. Both Agency, 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 Agency 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 Agency 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, or any person or entity having any interest in any other such realty. Any amendment to the Moorpark Municipal Code which proposes to change the uses or development permitted on the Site, or otherwise proposes a change of any of the restrictions or controls that apply to the Site, shall require the written consent of the first mortgagee and the Developer or the successors and assigns of Developer in and to all or any part of the fee title to the Site, but any such amendment which proposes a change affecting the Site shall not require the consent of any tenant, lessee, easement holder, licensee, mortgagee (other than the first mortgagee), trustee, beneficiary under a deed of trust or any other person or entity having any interest less than a fee in the Site. AGENCY: REDEVELOPMENT AGENCY of the CITY OF MOORPARK, a public body, corporate and politic By: Janice S. Parvin, Chair ATTEST: By: Deborah S. Traffenstedt, Agency Secretary 43 EXHIBIT "A" LEGAL DESCRIPTION OF SITE 44 ATTACHMENT NO. 4 SCHEDULE OF PERFORMANCE 1. Submission of Disposition and On or before , 20_ Development Agreement. Developer shall submit to the Agency a copy of the Disposition and Development Agreement duly executed by the Developer. 2. Agency Approval of Disposition and Within 30 days after Developer's Development Agreement. Agency shall submission to the Agency of an executed approve or disapprove the Disposition and Disposition and Development Agreement. Development Agreement. 3. Submission of Required Within 90 days of Agency Approval of Development Application. Developer DDA. shall submit the Design Development Application to the City. 4. Developer and City Response. Developer will respond to any request Developer shall respond to all requests by within 30 days. City will respond to any the City for additional information and/or submission within 30 days. revisions to plans. 5. City Council Hearing on Design Within 60 days of a determination by City Development Drawings. The City Community Development Department of a Council will consider the proposed Design complete application. Development Application. 6. Submission of Construction Within 120 days after City Council Drawings for Improvements. Developer approval of the proposed Design shall submit to the City complete Development Application. Construction Drawings for the Improvements. 7. Development Services Review of Within 30 days after submittal. Construction Drawings. The City Community Development Department shall review the Construction Drawings for the improvements. 8. Revisions of Construction Drawings Within 30 days after receipt of Community by Developer. Developer shall prepare Development Department comments. revised Drawings for the Construction Improvements as necessary, and resubmit them to the Community Development Department for review. 45 9. Final Review of Complete Within 10 days after submittal by Construction Drawings. The City Developer. Community Development Department shall approve or disapprove the revisions submitted by Developer for the improvements, and the Developer shall be ready to obtain grading and building permits, provided that the revisions necessary to accommodate the Department's comments have been made. 10. Opening of Escrow for Site. The Within 30 days after execution of Agency shall open Escrow with Escrow Agreement. Agent. 11. Conditions Precedent to Closing. Not later than 30 days prior to scheduled Developer and Agency shall satisfy (or date of escrow closing. waive) all of their respective Conditions Precedent to Closing. 12. Close of Escrow. Agency shall As soon as possible after the Satisfaction convey Site to the Developer. of all Conditions Precedent to the Closing has occurred (within 30 days thereafter), not later than December 30, 20—. 13. Commencement of Construction of Within 30 days following Closing. Improvements. Developer shall commence grading of the Site and construction of the Improvements. 14. Completion of Construction of Within 12 months following Improvements. Developer shall complete commencement of construction of the construction of the Improvements. Improvements. NOTE: All days are calendar days in this Schedule of Performance. All days falling on a weekend or day on which the City offices are not open shall be extended to the next day on which City offices are open. This Schedule of Performance may be amended written by mutual consent of the parties to the Agreement. 46 ATTACHMENT NO. 5 SCOPE OF DEVELOPMENT Developer shall construct improvements on the Site including one commercial building of approximately 50,000 square feet of Gross Leasable Area of retail and office space, supporting parking as required by the City of Moorpark's Parking Ordinance and landscape improvements, and other requirements as set forth therein or required by Project Conditions of Approval (the" Improvements"). All terms used herein shall have the same meaning as those used in the DDA. All development shall be in accordance with approved City of Moorpark Commercial Planned Development Permit No. and all permits and fees required by the City, County of Ventura and other governmental agencies with jurisdiction over the Improvements, including the State General Construction Storm Water Permit's Storm Water Pollution Prevention Plan requirements and any other requirements therein. 47 ATTACHMENT NOX OFFICIAL BUSINESS Document entitled to free Recording per Government Code Sections 6103 and 27383 Recording Requested by, Mail Tax Statements to, and When Recorded Mail to: ASZKENAZY DEVELOPMENT, INC. 387 N. Zachary St., Ste 101 Moorpark, California 93021 FOR RECORDER'S USE RELEASE OF CONSTRUCTION COVENANTS THIS RELEASE OF CONSTRUCTION COVENANTS (the "Release") is made as of 200_ by the REDEVELOPMENT AGENCY of the CITY OF MOORPARK, a public body corporate and politic (the "Agency"), in favor of ASZKENAZY DEVELOPMENT , INC., a CALIFORNIA CORPORATION (the "Developer"), as of the date set forth below. RECITALS A. The Agency and the Developer have entered into that certain Disposition and Development Agreement (the "DDA") dated , 200_, concerning the redevelopment of certain real property situated in the City of Moorpark, California as more fully described in Exhibit "A" attached hereto and made a part hereof. B. As referenced in Section 310 of the DDA, the Agency 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 Ventura County. This Release is conclusive determination of satisfactory completion of the construction and development required by the DDA. C. The Agency has conclusively determined that such construction and development has been satisfactorily completed. NOW, THEREFORE, the Agency hereby certifies as follows: 1. The Improvements to be constructed by the Developer have been fully and 48 satisfactorily completed in conformance with the DDA. Any operating requirements and all use, maintenance or nondiscrimination covenants contained in 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. 3. This Release of Construction Covenants is not a notice of completion as referred to in Section 3093 of the California Civil Code. 4. This Release of Construction Covenants shall inure to the benefit of Developer, its successors and assigns. IN WITNESS WHEREOF, the Agency has executed this Release as of the date set forth above. AGENCY: REDEVELOPMENT AGENCY of the CITY OF MOORPARK, a public body, corporate and politic By: Janice S. Parvin, Chair ATTEST: By: Deborah S. Traffenstedt, Agency Secretary 49 STATE OF CALIFORNIA ) ) ss. COUNTY OF ) On , before me, , Notary Public, (Print Name of Notary Public) personally appeared ❑ personally known to me -or ❑ proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. Signature of Notary (REPLACE WITH STANDARD PUBLIC AGENCY ACKNOWLEDGMENT) 50 EXHIBIT "A" LEGAL DESCRIPTION 51 Attachment No. 7 LOAN AGREEMENT THIS LOAN AGREEMENT (the "Agreement") is entered into as of , 20 , by and between the REDEVELOPMENT AGENCY OF THE CITY OF MOORPARK, a public body, corporate and politic (hereinafter the "Agency"), and (hereinafter the "Developer"), with reference to the following facts: RECITALS: A. The Agency and the Developer are parties to that certain Disposition and Development Agreement (the "DDA"), dated as of , 20 , under which the Agency has agreed to convey to the Developer certain partially improved real property (the "Property") consisting of approximately 1.84 acres located on the south side of High Street generally between Moorpark Avenue and the north Metrolink parking lot in the City of Moorpark; B. Pursuant to the DDA, the Agency has agreed to make a loan to the Developer to assist the Developer in the acquisition of the Property; and C. The Agency and the Developer are entering into this Agreement for the purpose of setting forth the terms and conditions on which the Agency will make the loan to the Developer. AGREEMENT NOW, THEREFORE, in consideration of the mutual covenants, representations and provisions contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows: 1. Loan. The Agency agrees to make the loan to the Developer on and subject to the terms and conditions set forth in this Agreement. A. Amount of the Loan. The loan will be in the principal amount of $ (the "Loan"), and, subject to the terms and conditions set forth in this Agreement and the DDA, will be made on , 20 or such earlier of later date as shall be mutually agreed upon by the parties (the "Closing Date"). B. Terms of Loan. The Loan will be for a term of ten (10) years and will be evidenced by a Promissory Note Secured by Deed of Trust (the "Note") in the form attached to this Agreement as Exhibit "A", will bear interest at the rate of percent (_%) per annum, and will be subject to prepayment, in whole or in part, at any time without any penalty or additional fees, and shall have the other terms and provisions, all as more particularly set forth in the Note. 52 2. Loan Documents. The Loan will be secured by a Deed of Trust With Assignment of Rents encumbering the Property (the "Deed of Trust") in a form acceptable to the Agency in its sole discretion. This Agreement, the Note and the Deed of Trust are collectively referred to as the "Loan Documents". 3. Closing Conditions. The funding and release of the Loan proceeds to the Developer shall, unless waived by the Agency, be subject to the satisfaction by the Developer of each of the following conditions: 3.1 Performance of Agreements. On the Closing Date, Developer shall not be in default under this Agreement or the DDA and shall have performed all of its obligations theretofore to be performed under this Agreement and the DDA. 3.2 Accuracy of Representations. The representations and warranties of the Developer contained in this Agreement and in the DDA shall be true and correct in all material respects as of the Closing Date. 3.3 Proceedings Satisfactory. All proceedings to be taken in connection with the transactions contemplated by this Agreement and the DDA and all documents incident to this Agreement and the DDA shall be satisfactory in form and substance to the Agency. 3.4 Execution and Delivery. The original of the Note, duly executed by the Developer, shall have been delivered to the escrow holder, Chicago Title Insurance Company (the "Escrow Holder'), under the escrow (the "Escrow") established pursuant to the DDA for the purchase of the Property by Developer, and the original Deed of Trust, duly executed and notarized, shall have been delivered to the Escrow Holder for recording in the Official Records of Ventura County, California on the closing of the purchase of the Property by Developer and pursuant to authority given to the Escrow Holder in separate, written escrow instructions from the Agency. 3.5 Title Insurance. Chicago Title Company issues a CLTA Standard Coverage Policy in the full amount of the Loan, with coverage and in form and substance acceptable to the Agency in all respects, insuring the Agency's interest under the Deed of Trust. 4. Representations and Warranties. Developer represents and warrants to the Agency that: 4.1 Organization and Authority. Developer is a corporation duly organized, validly existing and in good standing under the laws of the State of California, and has all requisite right, power and authority to execute and deliver the Loan Documents and to perform all of its obligations under the Loan Documents. 4.2 Due Execution; Enforceability. This Agreement has been duly authorized, executed and delivered by Developer and constitutes the legal, valid and 53 binding obligation of Developer enforceable against it in accordance with its terms; and, on the Closing Date, the Note and the Deed of Trust will each have been duly authorized, executed and delivered by of Developer and will each constitute the legal, valid and binding obligation of Developer enforceable against it in accordance with its terms. 4.3 No Conflict. Neither the execution and delivery of the Loan Documents, nor the performance by it of its obligations thereunder, will conflict with or result in a breach of or a default under its articles of incorporation or bylaws or any law, rule, regulation, judgment, order or decree or any mortgage, deed of trust, loan agreement or other agreement or instrument to which it is a party or by which it or its properties are bound. 4.4 Pending Litigation. There are no actions, suits, investigations or proceedings pending or, to the knowledge of Developer, threatened against Developer, or its business or properties, before or by any court or governmental board or body which if determined adversely to Developer would have a material and adverse effect upon its business or properties or its ability to perform its obligations under any of the Loan Documents. 4.5 Accuracy of Information. All financial and other information supplied by or on behalf of Developer to the Agency is accurate in all material respects and does not omit to state any facts necessary to make the information contained therein not materially misleading. 5. Use of Loan Proceeds. Developer agrees that the Loan proceeds are to be used solely to defray costs and expenses in connection with its acquisition of the Property. 6. Events of Default. An "Event of Default" shall exist if any one or more of the following occurs: 6.1 Failure to Pay. The Developer fails to pay the principal of or interest on the Note, or any other amount payable by the Developer under the Note, as and when the same is due and payable. 6.2 Failure to Perform. The Developer fails to fully perform and discharge any of its obligations under any of the Loan Documents (other than as provided in Section 6.1), and such failure continues for a period of ten (10) days after receipt of written notice from the Agency to cure such failure; provided, that if the nature of the failure is such that more than ten (10) days are reasonably required for its cure, then no Event of Default will be deemed to have occurred so long as the Developer commences to cure such failure within such ten (10) day period and thereafter diligently pursues such cure to completion. 54 6.3 Breach of Representation or Warranty. Any representation or warranty by Developer contained in any of the Loan Documents or in any document furnished by it in compliance with or in reference to any of such Loan Documents shall be false or misleading in a material respect at the time made. 6.4 Insolvency; Attachments. Developer is or becomes bankrupt or insolvent, makes an assignment for the benefit of creditors, or commences or has commenced against it a proceeding under the Federal Bankruptcy Code; or, a writ of attachment or execution is levied on the Property; or, in any proceeding or action to which the Developer is a party, a receiver is appointed with authority to take possession of the Property. 6.5 Other Obligations. Developer is in default (beyond any applicable cure period) under any other indebtedness or obligation owing to the Agency whether now existing or hereafter created or incurred, including, without limitation, the DDA. 6.6 Other Secured Indebtedness. The holder of any indebtedness of the Developer which is secured by a mortgage or deed of trust on the Property, which mortgage or deed of trust is senior in priority to the Deed of Trust, declares a default by the Developer with respect to such indebtedness and accelerates the maturity of such indebtedness. 7. Remedies. If an Event of Default occurs, then the Agency may proceed to protect and enforce its rights either by suit in equity and/or by action at law, or by any other appropriate proceedings, whether for the specific performance of any covenant or agreement contained in this Agreement or any of the other Loan Documents, or in aid of the exercise of any power granted in this Agreement or in any of the other Loan Documents, or may proceed to enforce the payment of the Note or to enforce any other legal or equitable right it may have as holder of the Note. In particular, without limiting the generality of the foregoing, the Agency shall have the right, at its option, to declare the entire principal of, and all interest accrued on, the Loan then outstanding to be, and such Loan and the Note evidencing the Loan shall thereupon become, forthwith due and payable, without any presentment, demand, protest or other notice of any kind, all of which are hereby expressly waived by Developer. All rights and remedies of the Agency under this Agreement, the other Loan Documents, the DDA and at law and in equity are cumulative and not alternative. 8. Waiver. No delay or omission by the Agency in exercising its rights under any of the Loan Documents shall constitute a waiver of such rights. 9. Notices. All notices, requests, demands and other communications required or permitted to be given under the terms of this Agreement or the Note by one party to the other shall be in writing addressed to the recipient party's Notice Address set forth below and shall be deemed to have been duly given or made (a) if delivered personally (including by commercial courier or delivery service) to the party's Notice 55 Address, then as of the date delivered (or if delivery is refused, on presentation), or (b) if mailed by certified mail to the party's Notice Address, postage prepaid and return receipt requested, then at the time received at the party's Notice Address as evidenced by the return receipt, or (c) if mailed by first class mail to the party's Notice address, postage prepaid, then on the third (3rd) day following deposit in the United States Mail. Any party may change its Notice Address by a notice given in the foregoing form and manner. The Notice Addresses of the parties are: If to Agency: Redevelopment Agency of the City of Moorpark 799 Moorpark Avenue Moorpark, California 93021 Attn.: Executive Director If to Developer: Aszkenazy Development, Inc. 601 South Brand Boulevard, 3rd Floor San Fernando, California 91340 Attn.: Severyn I. Aszkenazy, President 10. Full Payment and Reconveyance. Upon receipt of all sums owing and outstanding under the Note, Lender shall issue a full reconveyance of the Deed of Trust encumbering the Property. 11. Transfer of Interest In or Other Encumbrances Against the Property. The Developer may not sell, convey, lease, transfer, or dispose of all or any part of the Property or any interest of the Developer therein, nor further hypothecate or encumber the Property or any part thereof, or enter into any agreement to do any of the foregoing, except as expressly permitted under the terms of the DDA. 12. Relationship of Parties. The relationship of the Developer and the Agency under the Loan Documents is, and shall at all times remain, solely that of borrower and lender, and the Agency neither undertakes nor assumes any responsibility or duty to the Developer or to any third party with respect to the Property, except as expressly provided in this Agreement and the other Loan Documents. 13. Applicable Law; Venue. This Agreement shall be governed by and interpreted under the laws of the State of California. This Agreement is made, entered into, and executed in Ventura County, California, and any action filed in any court for the interpretation, enforcement or other action arising from any term, covenant or condition herein shall be filed in Ventura County, California. 56 14. Attorneys' Fees. Should it become necessary for either party to commence legal action to enforce the provisions of this Agreement, then the prevailing party in such action shall be entitled to recover all such costs and attorneys' fees as a court may adjudge reasonable. 15. Time. Time is of the essence of this Agreement. 16. Entire Agreements; Amendments. This Agreement and the other Loan Documents are the entire agreement of the parties hereto with respect to the subject matter hereof and supersede all prior negotiations or agreements, written or oral, with respect to that subject matter. To be enforceable, any amendment, alteration, waiver, extension or modification of this Agreement or the other Loan Documents must be in writing signed by the party to be bound. 17. Counterparts. This Agreement may be executed in counterparts, each of which is an original but all of which together constitute but one and the same instrument. Any signature page of this Agreement may be detached from any counterpart and re-attached to any other counterpart of this Agreement which is identical in form hereto but having attached to it one or more additional signature pages. IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date first set forth above. ASZKENAZY DEVELOPMENT, INC. REDEVELOPMENT AGENCY OF THE CITY OF MOORPARK, a public body corporate and politic By: By: Severyn I. Aszkenazy, President Janice S. Parvin, Chair ATTEST: By: By: Secretary Deborah S. Traffenstedt (Print Name) Agency Secretary 57 EXHIBIT "A" PROMISSORY NOTE SECURED BY DEED OF TRUST $ MOORPARK, California , 20 For value received, (the "Developer"), does hereby covenant and promise to pay to the REDEVELOPMENT AGENCY OF THE CITY OF MOORPARK (the "Agency"), or order, the principal sum of dollars ($ ), together with interest thereon at the rate of percent (_%) per annum. Principal and interest are payable in lawful money of the United States of America without setoff, deduction or counterclaim and shall be paid to the Agency, as provided in Section 2 below, at 799 Moorpark Avenue, Moorpark, California, or at such other place as the Agency may from time to time designate by written notice to the Developer, 1. Loan Agreement. This Promissory Note (the "Note") is issued pursuant to, and subject to, that certain Loan Agreement dated , 20 , by and between the Developer and the Agency (the "Agreement"), to which Agreement reference is made for a more complete statement of the Agency's rights. Capitalized terms not defined in this Note shall have the same meanings which are given to them in the Agreement. The indebtedness evidenced by this Note is secured by a Deed of Trust as described in the Agreement. 2. Terms of the Loan. (a) Subject to the following sentence, interest only shall be payable in monthly installments, commencing on , 20 , and continuing thereafter on the same date of each succeeding month until , 20 (the "Maturity Date"), at which time all outstanding principal, together with all accrued interest thereon, shall be fully due and payable. Notwithstanding the preceding sentence to the contrary, the Developer may, at its option, choose not to pay one or more or all of the monthly installments of interest coming due prior to the date when the Project (as defined below) is first 90% leased, and any such installments of interest not paid by Developer shall be added to the principal amount of this Note and thereupon bear interest as provided in this Note. As used in this Note, the term "Project" has the meaning given to it in that certain Disposition and Development Agreement (the "DDA"), dated as of , 20 , by and between the Agency and the Developer. (b) To the extent that the Developer makes any payment or the 58 Agency receives any payment or proceeds for the Developer's benefit, which are subsequently invalidated, declared to be fraudulent or preferential, or are required to be set aside or to be repaid to a trustee, debtor-in-possession, receiver, custodian or any other party under any bankruptcy law, common law or equitable cause, then, to such extent, the obligations of the Developer hereunder intended to be satisfied shall be revived and continue as if such payment or proceeds had not been received by the Agency. (c) In addition to any interest which may be charged hereunder, the Developer shall pay to the Agency a charge ("Late Charge") for the collection of late payments in an amount equal to five percent (5%) of any payment required hereunder which is not paid within ten (10) days after the date such payment is due, as liquidated damages and not as a penalty. Without limiting the foregoing, the Developer agrees that the Late Charge shall be due and payable upon the entire unpaid principal amount if not paid when due upon the Maturity Date. The Developer recognizes that its default in making any payment as provided herein or in the Loan Agreement as agreed to be paid when due, or the occurrence of any other Event of Default hereunder or under any other loan document, will require the Agency to incur additional expense in servicing and administering the Loan, will result in loss to the Agency of the use of the money due and in frustration to the Agency in meeting its other financial and loan commitments and that the damages caused thereby would be extremely difficult and impractical to ascertain. Nothing in this Note shall be construed as an obligation on the part of the Agency to accept, at any time, less than the full amount then due hereunder or as a waiver or limitation of the Agency's right to compel prompt performance. (d) All payments on this Note will be applied first to the payment of any costs, fees, Late Charges, or other charges incurred in connection with the indebtedness evidenced by this Note; next, to the payment of accrued interest; then to the reduction of the principal balance. The Developer may prepay this Note, in whole or in part, at any time without any penalty or additional fees. (e) The Deed of Trust which secures the indebtedness evidence by this Note provides as follows: "In the event of any Transfer (as defined below) of said property, Beneficiary shall have the absolute right at its option, without prior demand or notice, to declare all sums secured hereby immediately due and payable. As used herein, 'Transfer' means any sale, conveyance, lease, transfer or disposition of all or any part of said property or any interest of Trustor therein, or the further hypothecation or encumbering of said property or any part thereof or any interest of Trustor therein, or the entry into any agreement to do any of the foregoing; provided, however, that 'Transfer' shall not mean any of the foregoing which are approved by the Beneficiary in accordance with the terms of the Disposition and 59 Development Agreement (the "DDA"), dated as of , 20 , by and between the Beneficiary and the Trustor or are otherwise expressly permitted under the terms of the DDA without the approval of Beneficiary." (f) The parties hereto intend to conform strictly to the applicable usury laws. In no event shall the Agency be entitled to interest exceeding the maximum rate permitted by law. If fulfillment of any provision of this Note, or of any other document pertaining to the indebtedness evidenced hereby, at the time performance of such provisions shall be due, would involve exceeding the maximum rate of interest prescribed by law, then the obligation to be fulfilled shall be reduced automatically so as to equal such maximum rate. If the Agency shall ever receive anything of value deemed interest under applicable law which would exceed interest at the highest lawful rate, an amount equal to any amount which would have been excessive interest shall be applied to the reduction of principal payable with respect to this Note and not to the payment of interest, or if such amount which would have been excessive interest exceeds the unpaid balance of principal hereof, such excess shall be refunded to Developer. All sums paid or agreed to be paid to the Agency for the use, forbearance or detention of the indebtedness of the Developer to the Agency hereunder shall, to the extent permitted by applicable law, be amortized, prorated, allocated, and spread throughout the full stated term of such indebtedness so that the amount of interest on account of such indebtedness does not exceed the maximum permitted by applicable law. 3. Acceleration on Default. If the Developer fails to pay the principal of or interest on this Note, or any other amount payable by the Developer under this Note, as and when the same is due and payable, or if an Event of Default occurs under the Agreement, then, in addition to all rights and remedies of the Agency under the Agreement, the Deed of Trust, applicable law or otherwise, all such rights and remedies being cumulative, the Agency may, at its option, declare all amounts owing under this Note to be due and payable, whereupon the then unpaid principal balance hereof together with all interest accrued thereon shall forthwith become due and payable. 4. Cost of Collection. The Developer agrees to pay the following costs, expenses and attorneys' fees paid or incurred by the Agency: (i) costs and expenses of collection or enforcement of, and attorneys' fees paid or incurred in connection with the collection or enforcement of, this Note, whether or not suit is filed; and (ii) costs of suit and such sum as the Court may adjudge as attorneys' fees in an action to enforce payment of this Note or any part of it. 5. Forbearance Not a Waiver. No delay or omission on the part of the Agency in exercising any rights under this Note, the Agreement or the Deed of Trust on breach or default by the Developer shall operate as a waiver of such right or any other right under this Note or the Deed of Trust for the same breach or default or any other breach or default. 60 6. Assignment. The Agency shall have the right to sell, assign or otherwise transfer, in whole or in part, this Note, the Deed of Trust, and any other instrument evidencing or securing the indebtedness of this Note without the consent of the Developer. The Developer shall not sell, assign or otherwise transfer this Note, in whole or in part, without the prior written consent of the Agency which consent the Agency is under no obligation to give. 7. No Oral Modifications. Neither this Note nor any of the terms or provisions hereof can be altered, modified, amended, waived, extended, changed, discharged or terminated orally or by a course of conduct, but only by an agreement in writing signed by the party against whom enforcement of any alteration, modification, amendment, waiver, extension, change, discharge or termination is sought. 8. Time is of the Essence. Time is of the essence for each and every obligation under this Note. ASZKENAZY DEVELOPMENT, INC. By: Severyn I. Aszkenazy, Authorized Signatory By: Secretary (Print Name) 61 Attachment No. 8 RECORDING REQUESTED BY AND WHEN RECORDED RETURN TO: Redevelopment Agency of the City of Moorpark 799 Moorpark Avenue Moorpark, California 93021 Attn.: Executive Director Space Above This Line For Recorder's Use DEED OF TRUST WITH ASSIGNMENT OF RENTS AS ADDITIONAL SECURITY This DEED OF TRUST, made as of , 20 , between , herein called TRUSTOR, whose address is 601 South Brand Boulevard, 3rd Floor, San Fernando, California 91340, CHICAGO TITLE COMPANY, a California corporation, herein called TRUSTEE, and the REDEVELOPMENT AGENCY OF THE CITY OF MOORPARK, a public body, corporate and politic, herein called BENEFICIARY. Trustor irrevocably grants, transfers and assigns to Trustee in trust, with power of sale, that property in the County of Ventura, State of California, described as: See Attached Exhibit A Together with the rents, issues and profits thereof, subject, however, to the right, power and authority hereinafter given to and conferred upon Beneficiary to collect and apply such rents, issues and profits. For the purpose of securing (1) payment of the sum of $ with interest thereon according to the terms of a promissory note of even date herewith made by Trustor, payable to the order of Beneficiary, and extensions or renewals thereof; (2) the performance of each agreement of Trustor incorporated by reference or contained herein or reciting it is so secured; (3) payment of additional sums and interest thereon which may hereafter be loaned to Trustor, or it successors or assigns, when evidenced by a promissory note or notes reciting that they are secured by this Deed of Trust. A. To protect the security of this Deed of Trust, Trustor agrees: (1) To keep said property in good condition and repair; not to remove or 62 demolish any building thereon; to complete or restore promptly and in good and workmanlike manner any building which may be constructed, damaged or destroyed thereon and to pay when due all claims for labor performed and materials furnished therefor; to comply with all laws affecting said property or requiring any alterations or improvements to be made thereon; not to commit or permit waste thereof; not to commit, suffer, or permit any act upon said property in violation of law; to cultivate, irrigate, fertilize, fumigate, prune and do all other acts which from the character or use of said property may be reasonably necessary, the specific enumerations herein not excluding the general. (2) To provide, maintain and deliver to Beneficiary fire insurance satisfactory to and with loss payable to Beneficiary. The amount collected under any fire or other insurance policy may be applied by Beneficiary upon any indebtedness secured hereby and in such order as Beneficiary may determine, or at option of Beneficiary the entire amount so collected or any part thereof may be released to Trustor. Such application or release shall not cure or waive any default or notice of default hereunder or invalidate any act done pursuant to such notice. Without limiting the foregoing, said insurance shall consist of a policy or policies of fire and extended coverage insurance in the amount of the full replacement cost of all buildings and other improvements on said property and with such deductibles and having such endorsements as are satisfactory to Beneficiary, including, without limitation, endorsements for vandalism, malicious mischief, earthquake and flood coverages. (3) To appear in and defend any action or proceeding purporting to affect the security hereof or the rights or powers of Beneficiary or Trustee; and to pay all costs and expenses, including cost of evidence of title and attorney's fees in a reasonable sum, in any action or proceeding in which Beneficiary or Trustee may appear, and in any suit brought by Beneficiary to foreclose this Deed of Trust. (4) To pay: at least ten days before delinquency all taxes and assessments affecting said property, including assessments on appurtenant water stock; when due, all encumbrances, charges and liens, with interest, on said property or any part thereof, which appear to be prior or superior hereto; all costs, fees and expenses of this Trust. 63 Should Trustor fail to make any payment or to do any act as herein provided, then Beneficiary or Trustee, but without obligation so to do and without notice to or demand upon Trustor and without releasing Trustor from any obligation hereof, may, make or do the same in such manner and to such extent as either may deem necessary to protect the security hereof, Beneficiary or Trustee being authorized to enter upon said property for such purposes; appear in and defend any action or proceeding purporting to affect the security hereof or the rights or powers of Beneficiary or Trustee; pay, purchase, contest or compromise any encumbrance, charge, or lien which in the judgment of either appears to be prior or superior hereto; and, in exercising any such powers, pay necessary expenses, employ counsel and pay his or her reasonable fees. (5) To pay immediately and without demand all sums so expanded by Beneficiary or Trustee, with interest from date of expenditure at the amount allowed by law in effect at the date hereof, and to pay for any statement provided for by law in effect at the date hereof regarding the obligation secured hereby, any amount demanded by the Beneficiary not to exceed the maximum allowed by law at the time when said statement is demanded. B. It is mutually agreed: (1) That any award of damages in connection with any condemnation for public use of or injury to said property or any part thereof is hereby assigned and shall be paid to Beneficiary who may apply or release such moneys received by him or her in the same manner and with the same effect as provided above in paragraph A(2) regarding disposition of proceeds of fire or other insurance. (2) That by accepting payment of any sum secured hereby after its due date, Beneficiary does not waive his or her right either to require prompt payment when due of all other sums so secured or to declare default for failure so to pay. (3) That at any time or from time to time, without liability therefor and without notice, upon written request of Beneficiary and presentation of this Deed of Trust and said note for endorsement, and without affecting the personal liability of any person for payment of the indebtedness secured hereby, Trustee may: reconvey any part of said property; consent to the making of any map or plat thereof; join in granting any easement thereon; or join in any extension agreement or any agreement subordinating the lien or charge hereof. 64 (4) That upon written request of Beneficiary stating that all sums secured hereby have been paid, and upon surrender of this Deed of Trust and said note to Trustee for cancellation and retention or other disposition as Trustee in its sole discretion may choose and upon payment of its fees, Trustee shall reconvey, without warranty, the property then held hereunder. The recitals in such reconveyance of any matters or facts shall be conclusive proof of the truthfulness thereof. The Grantee in such reconveyance may be described as "the person or persons legally entitled thereto." (5) That as additional security, Trustor hereby gives to and confers upon Beneficiary the right, power and authority, during the continuance of these Trusts, to collect the rents, issues and profits of said property, reserving unto Trustor the right, prior to any default by Trustor in payment of any indebtedness secured hereby or in performance of any agreement hereunder, to collect and retain such rents, issues and profits as they become due and payable. Upon any such default, Beneficiary may at any time without notice, either in person, by agent, or by a receiver to be appointed by a court, and without regard to the adequacy of any security for the indebtedness hereby secured, enter upon and take possession of said property or any part thereof, in his or her own name sue for or otherwise collect such rents, issues, and profits, including those past due and unpaid, and apply the same, less costs and expenses of operation and collection, including reasonable attorney's fees, upon any indebtedness secured hereby, and in such order as Beneficiary may determine. The entering upon and taking possession of said property , the collection of such rents, issues and profits and the application thereof as aforesaid, shall not cure or waive any default or notice of default hereunder or invalidate any act done pursuant to such notice. (6) That upon default by Trustor in payment of any indebtedness secured hereby or in performance of any agreement hereunder, Beneficiary may declare all sums secured hereby immediately due and payable by delivery to Trustee of written declaration of default and demand for sale and of written notice of default and of election to cause to be sold said property, which notice Trustee shall cause to be filed for record. Beneficiary also shall deposit with Trustee this Deed of Trust, said note and all documents evidencing expenditures secured hereby. 65 After the lapse of such time as may then be required by law following the recordation of said notice of default, and notice of sale having been given as then required by law, Trustee, without demand on Trustor, shall sell said property at the time and place fixed by it in said notice of sale, either as a whole or in separate parcels, and in such order as it may determine, at public auction to the highest bidder for cash in lawful money of the United States, payable at time of sale. Trustee may postpone sale of all or any portion of said property by public announcement at such time and place of sale, and from time to time thereafter may postpone such sale by public announcement at the time fixed by the preceding postponement. Trustee shall deliver to such purchaser its deed conveying the property so sold, but without any covenant or warranty, express or implied. The recitals in such deed of any matters or facts shall be conclusive proof of the truthfulness thereof. Any person, including Trustor, Trustee, or Beneficiary as hereinafter defined, may purchase at such sale. After deducting all costs, fees and expenses of Trustee and of this Trust, including cost of evidence of title in connection with sale, Trustee shall apply the proceeds of sale to payment of: all sums expended under the terms hereof, not then repaid, with accrued interest at the amount allowed by law in effect at the date hereof; all other sums then secured hereby; and the remainder, if any, to the person or persons legally entitled thereto. (7) Beneficiary, or any successor in ownership of any indebtedness secured hereby, may from time to time, by instrument in writing, substitute a successor or successors to any Trustee named herein or acting hereunder, which instrument, executed by the Beneficiary and duly acknowledged and recorded in the office of the recorder of the county or counties where said property is situated, shall be conclusive proof of proper substitution of such successor Trustee or Trustees, who shall, without conveyance from the Trustee predecessor, succeed to all its title, estate, rights, powers and duties. Said instrument must contain the name of the original Trustor, Trustee and Beneficiary hereunder, the book and page where this Deed of Trust is recorded and the name and address of the new Trustee. (8) That this Deed of Trust applies to, inures to the benefit of, and binds all parties hereto, their heirs, legatees, devisees, administrators, executors, successors, and assigns. The term Beneficiary shall mean the owner and holder, including pledgees of the note secured hereby, whether or not named as Beneficiary herein. In this Deed of Trust, whenever the context so requires, the masculine gender includes the feminine and/or the neuter, and the singular number includes the plural. 66 (9) The Trustee accepts this Trust when this Deed of Trust, duty executed and acknowledged, is made a public record as provided by law. Trustee is not obligated to notify any party hereto of pending sale under any other Deed of Trust or of any action or proceeding in which Trustor, Beneficiary or Trustee shall be a party unless brought by Trustee. (10) In the event of any Transfer (as defined below) of said property, Beneficiary shall have the absolute right at its option, without prior demand or notice, to declare all sums secured hereby immediately due and payable. As used herein, 'Transfer' means any sale, conveyance, lease, transfer or disposition of all or any part of said property or any interest of Trustor therein, or the further hypothecation or encumbering of said property or any part thereof or any interest of Trustor therein, or the entry into any agreement to do any of the foregoing; provided, however, that `Transfer' shall not mean any of the foregoing which are approved by the Beneficiary in accordance with the terms of the Disposition and Development Agreement (the "DDA"), dated as of , 20 , by and between the Beneficiary and the Trustor or are otherwise expressly permitted under the terms of the DDA without the approval of Beneficiary. Beneficiary may charge for a statement regarding the obligation secured hereby, provided the charge thereof does not exceed the maximum allowed by laws. (11) Beneficiary has agreed to subordinate this Deed of Trust to other deeds of trust upon the terms set forth in Section 3.11 of the DDA. The undersigned Trustor, requests that a copy of any notice of default and any notice of sale hereunder be mailed to him at his address hereinbefore set forth. a By: Severyn I. Aszkenazy Authorized Signatory 67 ALL-PURPOSE ACKNOWLEDGMENT State of California ) )ss County of Ventura ) On , 20 , before me, personally appeared [ ] personally known to me -OR- [ ] proved to me on the basis of satisfactory evidence to be the person whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his authorized capacity, and that by his signature on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument. Witness my hand and official seal. SIGNATURE OF NOTARY CAPACITY CLAIMED BY SIGNER(S) [ ] INDIVIDUAL(S) [ ] OFFICER(S) (TITLE[S]): [ ] PARTNER(S) [ ] ATTORNEY-IN-FACT [ ] TRUSTEE(S) [ ] SUBSCRIBING WITNESS 68 ( ] GUARDIAN/CONSERVATOR [ ] CHAIRPERSON/MAYOR [ ] OTHER: SIGNER(S) IS/ARE REPRESENTING: Aszkenazy Development, Inc. DO NOT RECORD REQUEST FOR FULL RECONVEYANCE TO CHICAGO TITLE COMPANY The undersigned is the legal owner and holder of the note or notes and of all other indebtedness secured by the foregoing Deed of Trust. Said note or notes, together with all other indebtedness secured by said Deed of Trust, have been fully paid and satisfied; and you are hereby requested and directed, on payment to you of any sums owing to you under the terms of said Deed of Trust, to cancel said note or notes above mentioned, and all other evidence of indebtedness secured by said Deed of Trust delivered to you herewith, together with the said Deed of Trust, and to reconvey, without warranty, to the parties designated by the terms of said Deed of Trust, all the estate now held by you under the same. Dated: Please mail Deed of Trust, Note and Reconveyance to Do not lose or destroy this Dead of Trust OR THE NOTE which it secures. Both must be delivered to the Trustee for cancellation before reconveyance will be made. 69