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Home My Public Portal About2007-03-06LRA LYNWOOD REDEVELOPMENT AGENCY 11330 BULLIS ROAD LYNWOOD. CALIFORNIA 90262-3845 (310) 603-0220 Louis Byrd, CHAIR Fernando Pedroza, VICE CHAIRMAN Reverend Alfreddie Johnson Jr., MEMBER Maria T. Santillan, MEMBER Leticia Vasquez, MEMBER This Agenda contains a brief general description of each item to be considered. Copies of the Staff reports or other written documentation relating to each item of business referred to on the Agenda are on file in the Office of the City Clerk and are available for public inspection. A person who has a question concerning any of the agenda items may call the City Manager at (310) 603-OQ20, ex/. 200. . '" .L0t-fJ~ kt.Cdll!.:.u CITY OF m:WOOD CITI' (;1 rrvc ~rr'('E v ~. I AGENDA L YNWOOD REDEVELOPMENT AGENCY MARCH 6, 2007 REGULAR MEETING 5:00 P.M. LYNWOOD CITY HALL, 11330 BULLIS R<;iAD MAR ,( 2007 Alii PM 71819ImIUl~ll,213141516 ~.A'~ OJ-/;;- ~ j "'I t LOUIS BYRD CHAIR FERNANDO PEDROZA VICE CHAIRMAN LETICIA VASQUEZ MEMBER REV. ALFREDDIE JOHNSON JR. MEMBER MARIA T. SANTILLAN MEMBER EXECUTIVE DIRECTOR N. ENRIQUE MARTINEZ DEPUTY EXECUTIVE DIRECTOR AGENCY COUNSEL RONALD N. WILSON OPENING CEREMONIES: A. Call Meeting to Order B. Roll Call (BYRD-JOHNSON-PEDROZA-SANTILLAN-VASQUEZ) C. Certification of Agenda Posting by Secretary PUBLIC ORAL COMMUNICATIONS (Regarding Agenda Items Only) PUBLIC ORAL COMMUNICATIONS CONSENT CALENDAR All matters listed under the Consent Calendar will be acted upon by one motion affirming the action recommended on the agenda. There will be no separate discussion on these items prior to voting unless members of the Agency or staff request specific items be removed from the consent calendar for separate action. 1. MINUTES OF PREVIOUS MEETING Special Meeting of February 13, 2007 Regular Meeting of February 20, 2007 2. RESOLUTION OF THE L YNWOOD REDEVELOPMENT AGENCY OF L YNWOOD, CALIFORNIA, ALLOWING AND APPROVING THE DEMANDS AND WARRANTS. 3. TREASURER'S QUARTERLY INVESTMENT REPORT Comments: The purpose of this item is to have the Honorable Chairperson and the Lynwood Redevelopment Agency Board Members review the Treasurer's Quarterly Investment Report as required by State Statutes. 2 Recommendation: The City Treasurer recommends that the Honorable Chairperson and the Lynwood Redevelopment Agency Board Members receive and file the attached quarterly Investment Report for the quarter ending September 30, 2006. 4. RESTATED DISPOSITION AND DEVELOPMENT AGREEMENT BETWEEN THE L YNWOOD REDEVELOPMENT AGENCY AND HERMILlO FRANCO Comments: The purpose of this item is to seek the Agency's approval of a Restated Disposition and Development Agreement with Hermilio Franco and a subordination agreement with Banco Popular. The Restated Disposition and Development Agreement is consistent with the proposed subordination agreement and the building of forty three single family houses in four phases. Recommendation: Staff recommends that the Agency consider and adopt the attached resolution entitled "A RESOLUTION OF THE L YNWOOD REDEVELOPMENT AGENCY AUTHORIZING THE EXECUTIVE DIRECTOR TO EXECUTE A RESTATED DISPOSITION AND DEVELOPMENT AGREEMENT WITH HERMILlO FRANCO AND A SUBORDINATION AGREEMENT WITH BANCO POPULAR." DISCUSSION ITEM 5. CONTRACT PROJECT MANAGERS FOR AGENCY PROJECTS Comments: The Lynwood Redevelopment Agency has had under consideration a variety of projects. At this time, staffing level at the Redevelopment is insufficient to meet the demands in a timely manner of the redevelopment and housing projects that are currently at different stages in the development process. Recommendation: Staff recommends that the Agency consider retaining the services of one or more consulting firms to serve in the capacity of "Project Managers" for current projects under consideration by the Redevelopment Agency. 3 CLOSED SESSION 6. WITH RESPECT TO EVERY ITEM OF BUSINESS TO BE DISCUSSED IN CLOSED SESSION PURSUANT TO SECTION 54956.8 CONFERENCE WITH REAL PROPERTY NEGOTIATORS: Property: Fernwood Estates Said Real Property is located in the City of Lynwood Along the Southerly portion of Fernwood Avenue generally Between Bullis Road & Atlantic Avenue; Parcels# DD583- 55-01-01, 00583-55-02-01 and DO 584-63-01-01 Agency Negotiator: Agency, Agency staff and Agency counsel including, but not limited to Olivia Segura and Ron Wilson Negotiating Parties: Hermilio Franco Under Negotiation: Consideration of Restated DDA Terms and Consideration ADJOURNMENT THE NEXT REGULAR MEETING WILL BE HELD ON MARCH 20, 2007 AT 5:00 P.M. IN THE COUNCIL CHAMBERS OF CITY HALL, 11330 BULLIS ROAD, LYNWOOD, CALIFORNIA. 4 DATE: TO: APPROVED BY: PREPARED BY: SUBJECT: AGENDA STAFF REPORT March 6, 2007 Lynwood Redevelopment Agency Chairman & Members Bruce Arnoldussen, Interim ~jT~utive Director Andrea L. Hooper, Secreta~ Albert Espinoza, Deputy City Clerk Lynwood Redevelopment Agency Minutes Recommendation: Staff recommends the Lynwood Redevelopment Agency approve following minutes: · Special Meeting, February 13, 2007 . Regular Meeting, February 20,2007 Background: N/A Fiscal Impact: N/A Coordinated With: N/A - , .~lA 11'1:1I I '"1 .~ ~ , I I L YNWOOD REDEVELOPMENT AGENCY SPECIAL MEETING FEBRUARY 13, 2007 The Lynwood Redevelopment Agency of the City of Lynwood met in a special meeting in the Council Chambers, 11330 Bullis Road on the above date at 5:15 p.m. Chairman Byrd presiding. Members Johnson, Pedroza, Santillan, Vasquez, and Byrd were present. Also present were Assistant City Manager-Finance Arnoldussen, City Attorney Beltran, Secretary Hooper, and City Treasurer Pygatt. Secretary Hooper announced that the Agenda had been duly posted in accordance with the Brown Act. PUBLIC ORAL COMMUNICATIONS (Regarding Agenda Items Only) NONE DISCUSSION ITEMS Item #6 AUDIT REPORT DATED 6/30/06 AND FY 2007/08 BUDGET DEVELOPMENT The City's Auditors, Derek Rampone and David Yang, from Moss, Levy, and Hartzheim, discussed the June 30, 2006 financial audit results for the City of Lynwood, the Lynwood Redevelopment Agency, and the Lynwood Information Incorporated. Bruce Arnoldussen, Assistant City Manager-Finance presented a PowerPoint presentation on the status of the City's finances. ADJOURNMENT Having no further discussion, it was moved by Member Santillan, seconded by Member Vasquez, and carried to adjourn the special Lynwood Redevelopment Agency meeting at 7:25 p.m. Louis Byrd, Chairman Andrea L. Hooper, City Clerk ! . L YNWOOD REDEVELOPMENT AGENCY REGULAR MEETING FEBRUARY 20, 2007 The Lynwood Redevelopment Agency of the City of Lynwood met in a regular meeting at 11330 Bullis Road on the above date at 6:01 p.m. Chairman Byrd presiding. Members Pedroza, Santillan, Vasquez, and Byrd were present. Member Johnson arrived at 6:05 p.m. Also present were Assistant City Manager-Finance Arnoldussen, City Attorney Beltran, Secretary Hooper, and City Treasurer Pygatt. Secretary Hooper announced that the Agenda had been posted in accordance with the Brown Act. PUBLIC ORAL COMMUNICATIONS (Regarding Agenda Items Only) Irene Garcia spoke on item #4 - Closed Session - regarding Fernwood Estates. She requested an independent study on the property. PUBLIC ORAL COMMUNICATIONS NONE CONSENT CALENDAR All matters listed under the Consent Calendar will be acted upon by one motion affirming the action recommended on the agenda. There will be no separate discussion on these items prior to voting unless members of the Agency or staff request specific items be removed from the consent calendar for separate action. Member Santillan pulled item #3 - REQUEST APPROVAL OF A DEVELOPMENT AGREEMENT ($75,000) BETWEEN THE L YNWOOD REDEVELOPMENT AGENCY AND HABITAT FOR HUMANITY (HFH) FOR THE DEVELOPMENT OF A THREE BEDROOM HOME AT 3927 LOUISE STREET. It was moved by Member Vasquez, seconded by Vice Chairman Pedroza, to approve the minutes and Warrant Register Resolution. Item #1 MINUTES OF PREVIOUS MEETING Regular Meeting of February 6, 2007 Item #2 RESOLUTION OF THE L YNWOOD REDEVELOPMENT AGENCY OF L YNWOOD, CALIFORNIA, ALLOWING AND APPROVING THE DEMANDS AND WARRANTS. RESOLUTION NO. 2007.006 ENTITLED: RESOLUTION OF THE L YNWOOD REDEVELOPMENT AGENCY OF L YNWOOD, CALIFORNIA, ALLOWING AND APPROVING THE DEMANDS AND WARRANTS THEREFORE ROLL CALL: AYES: MEMBERS JOHNSON, PEDROZA, SANTILLAN, VASQUEZ, AND BYRD NOES: NONE ABSTAIN: NONE ABSENT: NONE Item #3 REQUEST APPROVAL OF A DEVELOPMENT AGREEMENT ($75,000) BETWEEN THE L YNWOOD REDEVELOPMENT AGENCY AND HABITAT FOR HUMANITY (HFH) FOR THE DEVELOPMENT OF A THREE BEDROOM HOME AT 3927 LOUISE STREET This item was pulled by Member Santillan. After discussion, it was moved by Member Santillan, seconded by Vice Chairman Pedroza, to adopt the Resolution. RESOLUTION NO. 2007.007 ENTITLED: A RESOLUTION OF THE L YNWOOD REDEVELOPMENT AGENCY APPROVING A DEVELOPMENT AGREEMENT FOR A $75,000 LOAN TO HABITAT FOR HUMANITY (HFH) FOR THE DEVELOPMENT OF A THREE BEDROOM HOME AT 3927 LOUISE STREET. ROLL CALL: AYES: MEMBERS JOHNSON, PEDROZA, SANTILLAN, VASQUEZ, AND BYRD NOES: NONE ABSTAIN: NONE ABSENT: NONE CLOSED SESSION Item #4 WITH RESPECT TO EVERY ITEM OF BUSINESS TO BE DISCUSSED IN CLOSED SESSION PURSUANT TO SECTION 54956.8 CONFERENCE WITH REAL PROPERTY NEGOTIATORS: Property: Fernwood Estates Said Real Property is located in the City of Lynwood Along the Southerly portion of Fernwood Avenue generally Between Bullis Road & Atlantic Avenue; Parcels# DD583-55-01-01, DD583-55-02-01 and DD 584-63-01-01 Agency Negotiator: Agency, Agency staff and Agency counsel including, but not limited to William Rawlings, Olivia Segura and Ron Wilson Negotiating Parties: Hermilio Franco Under Negotiation: Consideration of Restated DDA Item #5 WITH RESPECT TO EVERY ITEM OF BUSINESS TO BE DISCUSSED IN CLOSED SESSION PURSUANT TO SECTION 54956.8 CONFERENCE WITH REAL PROPERTY NEGOTIATOR Property: 5400 through 5500 Martin Luther King Jr. Blvd., the east Side of Wright Road, 11350 through 11700, 5400 through 5600 Cortland Avenue and 11600 through 11700 Louise Street Agency Negotiator: Agency, Agency staff and Agency Counsel including, but not limited to William Rawlings, Olivia Segura and Ron Wilson Negotiating Parties: Lynwood Auto CenterNic Boyd and Kai Giffin Under Negotiation: Consideration of terms and conditions for possible Disposition and Development Agreement (DDA) It was moved by Member Vasquez, seconded by Member Johnson, and carried to recess to closed session at 8:15 p.m. Agency reconvened at 10:45 p.m. City Attorney Beltran stated that the Council met on the aforementioned matters and with respect to the following: Item #4 WITH RESPECT TO EVERY ITEM OF BUSINESS TO BE DISCUSSED IN CLOSED SESSION PURSUANT TO SECTION 54956.8 CONFERENCE WITH REAL PROPERTY NEGOTIATORS: Property: Fernwood Estates Said Real Property is located in the City of Lynwood Along the Southerly portion of Fernwood Avenue generally Between Bullis Road & Atlantic Avenue; Parcels# DD583-55-01-01, DD583-55-02-01 and DD 584-63-01-01 Agency Negotiator: Agency, Agency staff and Agency counsel including, but not limited to William Rawlings, Olivia Segura and Ron Wilson Negotiating Parties: Hermilio Franco Under Negotiation: Consideration of Restated DDA Council Members reached consensus (5-0) and provided further instructions to staff regarding the possible disposition of the matter. Item #5 WITH RESPECT TO EVERY ITEM OF BUSINESS TO BE DISCUSSED IN CLOSED SESSION PURSUANT TO SECTION 54956.8 CONFERENCE WITH REAL PROPERTY NEGOTIATOR Property: 5400 through 5500 Martin Luther King Jr. Blvd., the east Side of Wright Road, 11350 through 11700, 5400 through 5600 Cortland Avenue and 11600 through 11700 Louise Street Agency Negotiator: Agency, Agency staff and Agency Counsel including, but not limited to William Rawlings, Olivia Segura and Ron Wilson Negotiating Parties: Lynwood Auto CenterNic Boyd and Kai Giffin Under Negotiation: Consideration of terms and conditions for possible Disposition and Development Agreement (DDA) Agency discussed this item. No decision was made. ADJOURNMENT Having no further discussion, it was moved by Chairman Byrd, seconded by Vice Chairman Pedroza, and carried to adjourn the regular Lynwood Redevelopment Agency meeting at 10:50 p.m. Louis Byrd, Chairman Andrea L. Hooper, Secretary AGENDA STAFF REPORT DATE: TO: March 6, 2007 Honorable Chairperson and Members of the Lynwood Redevelopment Agency Bruce Arnoldussen, Interim Executive Director~' Christy Valencia, Deputy Director of Finance Monica Castellanos, Accounting Technician APPROVED BY: PREPARED BY: SUBJECT: Approval of the Warrant Register Recommendation: Staff respectfully recommends that the Agency Chairperson and Board Members approve the warrant register for F.Y. 2006-07. --------------------- Attached Warrant Register dated March 6, 2007--------------- "'-~ .... ~A :!.:rEM. .~~ .~ .... -_.~- I ~<: (. _.__~__':' i"~_7._,S'_~L i... .'. . -- "" ______"_U_ >. ,:, ':;' w ~ W ~ w .. w G ~ N ~ ~ ~--~i~~-!--"---~--:~'----~-~-- ,! I ImJ> ,"2 1'''')1;' ,"'''' In'" ....:1> l> ;..r r , I , 0 i 0 "U '" '" ~ F , ~ '" ~ " "U "U >> o < '" p ~ ~ .... g] 5! ill " ~ '" 0. .. , I " o e "- ~ I- ~. ~ ~ " ~ n ~ " .. ~. f1> r'" ~~ , .. 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" :I> r :I> 3: m " :I> ~ DATE: TO: APPROVED BY: PREPARED BY: AGENDA STAFF REPORT March 6, 2007 Honorable Chairperson and Agency Board Members Bruce Amoldussen, Interim CjtYJManager ~ Iris Pygatt, City Treasurer /,1:' Sheila Harding, Deputy City Treasurer SUBJECT: Treasurer's Quarter1y Investment Report Recommendation: The City Treasurer respectfully recommends that the Lynwood Redevelopment Agency receive and file the attached Quarter1y Investment Report for the quarter ending September 30, 2006. Background: In response to the crisis caused by the Orange County investment pool, the State Legislature in 1995 enacted SB564 and SB866. These laws were enacted as State Statutes to impose certain mandates regarding investment with public funds. The statutes have imposed the following mandates: 1. Annual adoption of an Investment Policy that incorporates changes mandated by the State. 2. Quarter1y Investment Reports presented to the Legislative Body or Board Members. 3. 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AGENDA STAFF REPORT DATE: TO: APPROVED BY: PREPARED BY: March 6, 2007 Honorable Chairman & Members of the Agency Bruce Arnoldussen, Interim Executive Director ~ /2/J/ Olivia Segura, Deputy Director of Redevelopment~ SUBJECT: Restated Disposition and Development Agreement between the Lynwood Redevelopment Agency and Hermilio Franco. Recommendation: Staff recommends that the Agency consider and adopt the attached resolution entitled "A RESOLUTION OF THE L YNWOOD REDEVELOPMENT AGENCY AUTHORIZING THE EXECUTIVE DIRECTOR TO EXECUTE A RESTATED DISPOSITION AND DEVELOPMENT AGREEMENT WITH HERMILlO FRANCO AND A SUBORDINATION AGREEMENT WITH BANCO POPULAR" Background: On August 22, 2003 the Agency approved a resolution providing authority to enter into a Disposition and Development Agreement ("DDA") with Hermilio Franco ("Developer"). The DDA required the Agency to sell the Developer property located on Fernwood Street for $36,000 per lot (to be paid when the homes were developed) and the Developer was to have build 30 homes including five lots which were for low income housing. Subsequent amendments to the DDA were approved to provide additional time and additional homes to be built on the property. To date the Developer has built two model homes, graded the property, and is currently acquiring a construction loan to build the project in four separate phases. In order to acquire a construction loan to build the project the Developer has asked the Agency to subordinate its deed of trust on the property (pursuant to the terms of the DDA). The Restated DDA reflects the phased development and additional terms as set forth below in the discussion and analysis. Discussion & Analysis: The differences between the DDA and the Restated DDA are as follows: 1. The Restated DDA provides for forty three lots (43). The Developer will construct single family homes on 38 lots and a CHDO selected by the Agency will construct 5 homes to be restricted to low income households. AGENDA ITEM 4 ~ ~ 'l';;;" '., 2. The Restated DDA provides specific contingencies regarding the financing of the construction of the homes. The first contingency requires the developer to acquire $1,274,713 in financing to build four new complete homes and seven (7) separate and new foundations. The Restated DDA requires the developer to acquire financing for each phase in a particular minimum dollar amount. 3. The Restated DDA eliminates the requirement of a homeowner's association and the creation of five new parks. As there is no common facility (park), staff determined that a homeowner's association was not necessary for the development. 4. The Restated DDA permits three lots (too small for houses) to remain undeveloped with the probability of merging the lots with larger lots. 5. The Restated DDA provides that the Developer is to sell the low income lots for $36,000 plus the proportional cost of certain off-site improvements. 6. The legal description has been changed to simply refer to Exhibit A. 7. The Developer's persona/liability to repay the promissory note has been eliminated. The Agency's recourse is limited to the real property, any improvements constructed thereon, his $25,000 security deposit and the standard damages permitted by law in the event of a default or breach. 8. The construction time limits in the Restated DDA have been modified to coincide with the construction loan. The Developer is permitted approximately 12 months to complete each phase of the project. The completion of construction is tied to the recordation of the final tract map which is set for March 31, 2007. The final home is to be completed no later than March 31,2011. 9. Developer is required to present a construction budget on or before March 31,2007 for the completion of the First Phase. 10. The Restated DDA provides that the Developer is required to designate the specific low income lots on the Site Map. 11. The Restated DDA provides that fees will be deferred except plan check fees and all out of pocket expenses. 12. The Restated DDA includes the Art in Public Places contribution in section 304 and 312. 13. The Restated DDA requires the Developer to pay the Agency for the lot and deferred fees and contributions when each individual house is sold. Fiscal Impact: The fiscal impact of entering into the Restated DDA providing for additional lots and approving a Subordination Agreement is an increase in revenue from $1,404,000 to $1,548,000. (net income $144,000) No financial assistance is requested from the Agency. Coordinated With: Redevelopment Counsel Attachments: . . Restated Disposition and Development Agreement Subordination Agreement RESOLUTION NO. A RESOLUTION OF THE L YNWOOD REDEVELOPMENT AGENCY AUTHORIZING THE EXECUTIVE DIRECTOR TO EXECUTE A RESTATED DISPOSITION AND DEVELOPMENT AGREEMENT WITH HERMILlO FRANCO AND A SUBORDINATION AGREEMENT WITH BANCO POPULAR WHEREAS, on August 22, 2003, the Lynwood Redevelopment Agency ("Agency") approved a Disposition and Development Agreement ("DDA") with Hermilio Franco ("Developer") which provided that the Agency was to sell that certain property described in Exhibit A to the Restated Disposition and Development Agreement to Hermilio Franco for the development of 30 homes ("Exhibit A"), five lots of which were to be sold to Access Community Housing for low income households ("Fernwood Estates Project"); WHEREAS, the Agency approved two amendments to the DDA providing the Developer more time and permitting additional homes to be built on the property described in Exhibit A; WHEREAS, the Developer has requested the Agency to subordinate its Reimbursement Trust Deed to a construction loan, increase the amount of homes that are permitted on the site from 42 to 43 homes, and extend the time in which construction must be completed; WHEREAS, the property is of sufficient size such that 43 homes can be built on the property without materially compromising the quality of the project; WHEREAS, the DDA requires the Agency to subordinate its Reimbursement Trust Deed to a construction loan; WHEREAS, the construction loan from Banco Popular to Hermilio Franco calls for the development of the Fernwood Estates Project in four phases. NOW, THEREFORE, IT IS RESOLVED by the Lynwood Redevelopment Agency as follows: Section 1. The Agency hereby finds that the Restated Disposition and Development Agreement between the Lynwood Redevelopment Agency and Hermilio Franco provides for fair and adequate terms for the building of 43 homes on the property described in Exhibit A in a reasonable time frame. Section 2. The Executive Director of the Agency, or his designee, is hereby authorized, on behalf of the Agency, to execute the Restated Disposition and Development Agreement by and between Hermilio Franco and the Lynwood Redevelopment Agency. Page 1 of 3 Section 3. The Executive Director of the Agency, or his designee, is hereby authorized, on behalf of the Agency, to execute the Subordination Agreement with Banco Popular as set forth in the Restated Disposition and Development Agreement. Section 4. The Executive Director of the Agency, or his designee, is hereby authorized, on behalf of the Agency, to execute additional documents or take further steps to effectuate the purposes of this Resolution in accordance with the terms and conditions of the Restated Disposition and Development Agreement and Subordination Agreement. Section 5. The Resolution shall take effect upon its adoption. APPROVED AND ADOPTED this 6th day of March, 2007. LOUIS BYRD, CHAIRPERSON BRUCEARNOLDUSSEN Interim Executive Director APPROVED AS TO FORM: Ronald N. Wilson Agency Counsel ATTEST: Andrea L. Hooper, Secretary Page 2 of 3 STATE OF CALIFORNIA ) ) SS. COUNTY OF LOS ANGELES ) I, the undersigned, Secretary of the Lynwood Redevelopment Agency, do hereby certify that the foregoing Resolution was passed and adopted by the Lynwood Redevelopment Agency at a regular meeting held on the_day of ,2007. AYES: NOES: ABSENT: ABSTAIN: Secretary, Lynwood Redevelopment Agency Page 3 of 3 RESTATED DISPOSITION AND DEVELOPMENT AGREEMENT BETWEEN THE L YNWOOD REDEVELOPMENT AGENCY AND HERMILO FRANCO February 19, 2007 TABLE OF CONTENTS I. SECTION 100 SUBJECT OF RESTATED AGREEMENT.............................................. 5 Sec. 101 Purpose of Agreement.............................................................................. 5 Sec. 102 The Redevelopment Plan .........................................................................5 Sec. 103 Contingencies. ... ... ... ... ... ... ... ... ... ... ... ... ....... ... ... .......... ... ... ...... ... '" ... ... .... ... 6 Sec. 104 The Site ....................................................................................................8 Sec. 105 Parties to the Agreement ..........................................................................8 Sec. 106 The Agency ..............................................................................................8 Sec. 107 The Developer ..........................................................................................8 II. SECTION 200 DISPOSITION OF THE SITE ................................................................... 8 Sec. 201 Developer's Security ................................................................................ 8 Sec. 202 Sale and Purchase.....................................................................................9 Sec. 203 Escrow......... ... ... ... ... ... ... ... ............ .... '" ... ... ... ....... ... ... ...... ... ... .......... ... .... 10 Sec. 204 Conveyance of Title ............................................................................... 10 Sec. 205 Form of Deed... ... ... ... ... ... ... ... ... .......... ...... ...... .... ... ... ... ............... .... ... ... ... 10 Sec. 206 Condition of Title ................................................................................... 11 Sec. 207 Time and Place of Delivery of Deed ......................................................11 Sec. 208 Payment of the Compensation Amounts; Recordation of Deeds ...........11 Sec. 209 Title Insurance ........................................................................................ 11 Sec. 210 Taxes and Assessments ..........................................................................12 Sec. 211 Occupants of the Site.............................................................................. 12 Sec. 212 Due Diligence.. ... ............. ... ... ... ... ... ... ... ... .... ... ...... ... .... ... ... ... ... ... ... ...... ... 12 Sec. 213 Environmental Condition of the Site...................................................... 12 Sec. 214 Superseded....... .......... ... ...... ... ...... ... ... ... .... ... ... ...... ....... ... ... ... ... ... ...... ..... 12 III. SECTION 300 DEVELOPMENT OF THE SITE ............................................................ 13 Sec. 301 Development of the Site by Developer and Obligations of Developer. 13 Sec. 302 Scope of Development ...........................................................................13 Sec. 303 Affordable Ownership Housing ............................................................ 13 Sec. 304 Obligations of Developer ....................................................................... 15 Sec. 305 Obligations of Agency............................................................................ 16 Sec. 306 Preliminary Drawings for Development ................................................ 16 Sec. 307 Superseded ............................................................................................. 17 Sec. 308 Final Drawings and Related Documents ............................................... 17 Sec. 309 Cost of Construction ............................................................................. 18 Sec. 310 Schedule of Performance............................................... ........................18 Sec. 311 Insurance, Hold Harmless, Prevailing Wage, Independent Contractor.. 19 Sec. 312 Permits from City and Other Governmental Agency............................. 20 Sec. 313 Rights of Access..................................................................................... 21 Sec. 314 Rights of Access - Public Improvements and Facilities.................. 21 Sec. 315 Local, State and Federal Laws................................................................22 Sec. 316 Anti-Discrimination During Construction ............................................22 Sec. 317 Taxes, Assessments, Encumbrances and Liens...................................... 22 Sec. 318 Prohibition Against Transfer of the Site, and Improvements, and Against 11 Assignment of Agreement ... ......... ......... ... ......... ... ......... ......22 Sec. 319 Security Financing; Right of Holders....................................... .23 Sec.320 Encumbrances Prohibited Except Mortgages, Deeds of Trust, or Other Financing for Development .......................................................23 Sec. 321 Hold Not Obligated To Construct Improvements .................................. 23 Sec. 322 Notice of Default to Holders of Mortgages, Deeds of Trust, or Other Security Interest; Right to Cure....................................................... 24 Sec. 323 Failure of Holder to Complete Improvements........................................ 24 Sec. 324 Right of Agency to Cure Default Pertinent To a Mortgage, Deed of Trust or Other Security Interest................................................... 25 Sec. 325 Right of Agency to SatisfY Other Liens on the Site After Title Passes .......................................................................................~ Sec. 326 Release of Construction Covenants........................................................ 25 IV. SECTION 400 USE OF THE SITE ..................................................................................27 Sec. 401 Uses ........................................................................................................27 Sec. 402 Obligation to Refrain From Discrimination ...........................................27 Sec. 403 Form of Nondiscrimination and Non-Segregation Clauses.................... 27 Sec. 404 Effect and Duration of Covenants ..........................................................29 V. SECTION 500 DEFAULTS, REMEDIES, AND TERMINATION ................................ 29 Sec. 501 Defaults - General.................................................................................. 29 Sec. 502 Legal Actions ......................................................................................... 30 Sec. 503 Institution of Legal Actions.................................................................... 30 Sec. 504 Applicable Law ......................................................................................31 Sec. 505 Acceptance of Service of Process........................................................... 31 Sec. 506 Rights and Remedies Are Cumulative ................................................... 31 Sec. 507 Damages ................................................................................................. 31 Sec. 508 Superseded ............................................................................................. 32 Sec. 509 Remedies and Rights of Termination Prior to Conveyance ................... 32 Sec. 510 Termination by Developer ......... ................................ ...........32 Sec. 511 Termination by Agency.......................................................... 32 Sec. 512 Unchanged ............................................................................32 Sec. 513 Superseded ............................................................................................. 32 Sec. 514 Superseded ..........................................................................................32 Sec. 515 Right of Reverter .................................................................................. 33 Sec. 516 Plans ..................................................................................................... 34 VI. SECTION 600 GENERAL PROVISIONS....................................................................... 34 Sec. 601 Notices, Demands, and Communications Between the Parties.............. 34 Sec. 602 Conflict of Inter est...................................................................... ............35 Sec. 603 Non liability of Agency Officials and Employees.................................. 35 Sec. 604 Enforced Delays; Extension of Times of Performance .......................... 35 Sec. 605 Inspection of Books and Records ........................................................... 36 Sec. 606 Approval of Agency............................................................................... 36 VII. SECTION 700 SPECIAL PROVISIONS ........................................................................ 36 Sec. 701 Submission of Documents to Agency for ApprovaL............................ 36 111 Sec. 702 Amendments to This Agreement............................................................36 Sec. 703 Operating Memoranda............................................................................37 Sec. 704 Real Estate Commissions ....................................................................... 37 VIII. SECTION 800 ENTIRE AGREEMENT, SEVERABILITy........................................... 37 Sec. 801 Entire Agreement ...................................................................................37 Sec. 802 Severability................ ... ... ... ... ... ... ......... ... .... ... ... .......... ... ...... ... ... ... ... ...... 37 IX. SECTION 900 TIME FOR ACCEPTANCE OF AGREEMENT BY AGENCy............ 38 Sec. 901 Agency Approval....................................................................................38 LIST OF EXHIBITS EXHIBIT A EXHIBIT B EXHIBIT C EXHIBIT D EXHIBIT E EXHIBIT F EXHIBIT G EXHIBIT H EXHIBIT I Legal Description Site Map Preliminary Drawings Reimbursement Note Reimbursement Trust Deed Scope of Development Schedule of Performance Release of Construction Covenants Assignment of Plans iv REST A TED DISPOSITION AND DEVELOPMENT AGREEMENT This Restated Disposition and Development Agreement (hereinafter referred to as the "Restated DDA" and/or "Agreement") is dated March 6, 2007 and is entered into by and between the Lynwood Redevelopment Agency (hereinafter referred to as the "Agency") 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 created by the authority vested in the City of Lynwood ("hereinafter referred to as the "City") and Hermilo Franco (hereinafter referred to as "Franco" and/or "Developer"), an individual residing in Los Angeles County, California with reference to the following facts: Recitals A. On or about November 10 and II, 2003, Franco and the Agency, respectively, signed a Disposition and Development Agreement (hereinafter referred to as the "Original DDA") for the development of certain vacant land located in the City into 30 single-family homes, 5 of which were to be sold to a qualified Community Housing Development Organization selected by the Agency as part of the Agency/City affordable housing program. This project is commonly referred to as the Fernwood Estates project. The real property upon which the Fernwood Estates project was to be developed and constructed is located in the City of Lynwood along the southerly portion of Fernwood Avenue generally between Bullis Road and Atlantic Avenue and is more particularly described in Exhibit A attached hereto and incorporated herein by this reference. Pursuant to the terms of the Original DDA, the Developer agreed to pay the Agency nine hundred thousand dollars ($900,000.00; i.e., $36,000.00 times 25 lots equals $900,000.00) as the purchase price for said property in the form of a promissory note secured by a first deed of trust on the property. Pursuant to the terms ofthe Original DDA, the Developer agreed to pay the promissory note from the proceeds of the sale of the houses after construction thereof. Section 310 of the Original DDA required the Fernwood Estates project to be completely constructed within 18 months of the signing of the Original DDA. The parties hereto acknowledge and agree that as of the date of this Restated DDA the Fernwood Estates project has not been completed. B. (i) The Original DDA was amended on or about November 3, 2004 (hereinafter referred to as the "First Amendment"). The primary purpose for the First Amendment was to increase the number of houses to be built on the same property from 30 to 42 single-family homes (averaging 2000 ft.' in size) with the same 5 houses designated for sale to a qualified Community Housing Development Organization selected by the Agency. The First Amendment increased the purchase price from $900,000.00 to $1,512,000.00 ($36,000.00 times 42 lots equals I $1,512,000.00). The purchase price in the First Amendment was also to be evidenced by a promissory note in the amount of $1 ,512,000.00 and was to be secured by first deed of trust on the property. Some time after the execution of the First Amendment, the Developer represented to the Agency that pursuant to applicable City building codes and zoning and planning regulations, he was only able to construct 39 houses instead of the 42 houses originally agreed upon. In consideration of the reduction in the number of houses, the Agency agreed to reduce the sales price from $1,512,000.00 to $1,404,000.00 (i.e., $36,000.00 times 39 lots equals $1,404,000.00) with the same 5 houses designated for sale to a qualified Community Housing Development Organization selected by the Agency. (ii) The First Amendment obligates the Developer to pay the promissory note from the proceeds of the sale of the houses after construction thereof. Pursuant to the terms of the First Amendment, the Agency conveyed title to the property described in Exhibit A to the Developer on or about January 27, 2005 and the Developer tendered payment for the property to the Agency in the form of a promissory note dated January 27, 2005 in the amount of one million four hundred four thousand dollars ($1,404,000.00) which was secured by a first deed of trust on the property and any improvements constructed thereon. (iii) Section 3 B. of the First Amendment provides that the Developer's promissory note is an absolute obligation of the Developer and is not simply limited to the proceeds from the sale of the houses. Section 3 B. of the First Amendment requires the project to be completed within 18 months of the signing ofthe First Amendment. Section 3 B. of the First Amendment provides that the entire $1,404,000.00 purchase price is due and payable 18 months after the execution date of the First Amendment (i.e., May 2, 2006). (iv) Section 3 D. of the First Amendment provides that the Developer shall pay to the City a park land impact fee of$126,000.00 ($3,000.00 per lot). Section 3 D. of the First Amendment requires the Developer to dedicate five lots of 2,500 ft.2 each for open park space and the City is granted a permanent easement in connection therewith. C. A Second Amendment to the Original DDA approved by the Agency on or about November 15, 2005, granted the Developer additional time to complete the Fernwood Estates project to and including May 2,2007. D. As of the date of this Restated DDA, the Developer represents and warrants to the Agency that the final configuration of the Site contains seven (7) lots in addition to the 39 lots upon which Residential Units are to be constructed. Pursuant to the terms of the First Amendment, 5 ofthe7 additional lots were to be used for open park space. The Developer represents and warrants that four (4) of said additional 7 lots are large enough and suitable for the development and construction of additional Residential Units. The Developer has requested 2 permission from the Agency to construct an additional 4 Residential Units on 4 of said additional 7 lots that are large enough for the development and construction of additional Residential Units. Additionally, the Developer has requested permission from the Agency to exclude from the Project the development of510ts as open park space as required by Section 3 D. of the First Amendment. In place and instead thereof, the Developer proposes to use the additional 7 lots to construct 4 additional Residential Units and 3 of said lots shall remain undeveloped and maintained in a decent, safe and sanitary condition at the expense ofthe Developer. Therefore, the Developer requests permission from the Agency for the final configuration ofthe Site to contain 43 residential lots (i.e., 39 as represented heretofore and an additional 4 as described in this sub paragraph D.), 38 of which will be developed by the Developer and 5 of which shall be designated for sale to a qualified Community Housing Development Organization which shall be selected by the Agency. E. Developer represents and warrants that he expended his own funds to complete the development and construction of2 houses for the Femwood Estates project. The Developer has represented to the Agency that as of the date of execution of this Restated DDA he has only obtained a construction financing commitment sufficient to develop, construct and build (i) 4 additional houses and (ii) 7 new foundations for the Femwood Estates project. The Developer represents and warrants to the Agency that his construction lender, Banco Popular, is only willing to commit construction financing for the Femwood Estates project in phases. In particular, the Developer represents and warrants to the Agency that Banco Popular has agreed to provide construction financing in the amount of approximately one million two hundred seventy-four thousand seven hundred thirteen dollars ($1,274,713.00) which sum the Developer represents and warrants is sufficient to develop, build and construct the next 4 new houses and to further develop, build and construct 7 new foundations for the Project. F. The Developer further represents and warrants to the Agency that upon the successful completion and sale of said initial 6 houses (the 2 houses already constructed and an additional 4 houses to be constructed) and upon the completion of7 new complete foundations (which are hereinafter collectively referred to as the "First Phase") and subject to Banco Popular credit approval, Banco Popular has proposed additional construction financing in the amount of approximately two million dollars ($2,000,000.00) which sum the Developer represents and warrants is sufficient to develop, build, construct and complete the 7 houses on the 7 foundations completed during the First Phase (the completion of the 7 houses on the 7 foundations is hereinafter referred to as the "Second Phase") of the Project. G. The Developer further represents and warrants to the Agency that upon the successful completion and sale of said additional 7 houses ("Second Phase") and subject to Banco Popular 3 credit approval, Banco Popular has proposed construction financing in the amount of approximately three million eight hundred thousand dollars ($3,800,000.00) which sum the Developer represents and warrants is sufficient to develop, build and construct thirteen (13) houses (hereinafter referred to as the "Third Phase") of the Project. H. The Developer further represents and warrants to the Agency that upon the successful completion and sale of said additional 13 houses ("Third Phase"), and subject to Banco Popular credit approval, Banco Popular has proposed provide additional construction financing in the amount of approximately three million twenty-five thousand dollars ($3,025,000.00) which sum the Developer represents and warrants is sufficient to develop, build and construct the final twelve (12) houses (hereinafter referred to as the "Fourth Phase") of the Project. The Developer has requested that the Agency consent to the plan to provide construction financing in four (4) phases as described herein above. \. The Developer has represented to the Agency that due to several unforeseen delays in the Fernwood Estates project including, but not limited to, certain discrepancies in the legal description of the Site and associated delays in obtaining approval for the final tract map and because of certain requirements imposed upon him by his proposed construction lender, he is unable to complete the Fernwood Estates project as agreed in accordance with the Original DDA, the First Amendment and the Second Amendment. The Developer has therefore requested certain changes to the Original DDA, the First Amendment and the Second Amendment. The purpose for this Restated DDA is to reaffirm and restate the terms and conditions, as of the date of this Restated DDA, under which the Agency and the Developer are willing to continue with the construction and development of the Fernwood Estates project. J. It is intended by the parties hereto that this Restated DDA is a supplement to the Original DDA, the First Amendment and the Second Amendment. The parties hereto agree that to the extent that this Restated DDA does not specifically amend all or portions of the Original DDA, the First Amendment and the Second Amendment, said Original DDA, the First Amendment and the Second Amendment remain in full force and effect. The parties hereto agree that to the extent that there are inconsistencies between the Original DDA, the First Amendment and the Second Amendment and this Restated DDA, the Restated DDA shall govern. In consideration of the mutual promises, covenants, terms and conditions hereinafter set forth, Agency and Developer do hereby agree as follows: 4 I. SECTION 100 SUBJECT OF RESTATED AGREEMENT Sec. 101 Purpose of Agreement Section 101 is hereby amended in its entirety to read as follows: The purpose of this Restated DDA is to effectuate the redevelopment plan for the Lynwood Redevelopment Agency by providing for the disposition and development of certain vacant real property located in the City of Lynwood, California. Pursuant to this Restated DDA, the real property hereinafter legally described in Exhibit A attached hereto and also identified on the site map which is attached hereto as Exhibit B (hereinafter referred to as the "Site"), both of which are incorporated herein by this reference, shall be developed and improved by the Developer in accordance with the terms of this Restated Agreement. This development shall include the subdivision of said property into forty-three (43) residential lots for the development offorty-three (43) single family detached residential housing units (hereinafter referred to as the "Residential Units"), landscaping, open space, and onsite and off site public improvements (all hereinafter collectively referred to as the "Project"). The Developer hereby agrees to sell five (5) of the residential lots to a qualified Community Housing Development Organization selected by the Agency at a price not exceeding $36,000.00 (plus Off Site Reimbursements as defined herein) per lot to be developed in conjunction with the Agency/City affordable housing program. All of the residential lots designated for a qualified Community Housing Development Organization selected by the Agency shall be hereinafter referred as "Income Restricted Units". Developer hereby agrees to specifically identifY by distinctive marking on the Map the 5 residential lots designated for a qualified Community Housing Development Organization selected by the Agency. The development of the Site pursuant to this Restated Agreement, and the fulfillment generally of the terms and conditions of the Restated DDA, are in the vital and best interests of the City, will eliminate blight within the City and will otherwise promote the City's health, safety, morals, and the provisions of applicable federal, state and local laws. Sec. 102 The Redevelopment Plan Section 102 is hereby amended in its entirety to read as follows: The City Council approved and adopted the Redevelopment Plan for Area "A" by Ordinance No. 945 on July 3, 1973. The plan was subsequently amended December 27, 1973 by Ordinance No. 960, on August 19, 1975 by Ordinance No. 990, on June I, 1976 by Ordinance No. 1000, on December 7,1976 by 5 Ordinance No. 1010, on December 16, 1980 by Ordinance No. 1111, on July 19, 1988 by Ordinance No. 88-1308, and on March 20,2001 by Ordinance No. 1504. This Agreement is subject to the provisions of the plan and its subsequent amendments which are incorporated herein by reference and made a part hereof as though fully set forth herein and referred to collectively as the "Redevelopment Plan". This Restated DDA is subject to the provisions of the Redevelopment Plan which is incorporated herein by reference and made a part hereof as though fully set forth herein. The Redevelopment Plan, in accordance with California Health & Safety Code Section 33000, provides for and encourages the participation of property owners in the redevelopment of the project area. In order to participate and develop, such owners and developers must agree to develop such property in conformity with the Redevelopment Plan by entering into an agreement with the Agency to effectuate such participation and development. Sec. 103 Contingencies [new section] In addition to the rights hereinafter described, and without limitation, the Agency shall have the power and absolute right, within its sole discretion, to renegotiate or cancel this Restated DDA prior to consenting to the subordination of any interest it has in the Site to the interests of a Developer construction loan or at any other time and thereafter the Developer agrees to reconvey the Site to the Agency upon demand if anyone of the following contingencies occur: I. Developer does not obtain approval and recording of his final tract map for the Site on or before March 31, 2007. 2. Developer does not secure adequate construction financing from Banco Popular or another reliable lender or provide other written proof of his financial ability to fulfill his obligations under this Restated DDA to complete all four (4) phases of the Project within the time limits specified below: First Phase a) Developer shall prove to the satisfaction of Agency that he has sufficient funds in the amount of approximately one million two hundred seventy-four thousand seven hundred thirteen dollars ($1,274,713.00) (such as a commitment letter for funding from Banco Popular or another recognized lending institution), to reasonably accomplish the development, building and completion of the First Phase (the initial 6 houses [the 2 houses already constructed and an additional 4 houses to be constructed] and the completion of 7 new complete foundations) of the Project in accordance with this Restated DDA on or before March 31, 2007; Second Phase 6 b) Developer shall prove to the satisfaction of Agency that he has sufficient funds in the amount of approximately two million dollars ($2,000,000.00) (such as a commitment letter for funding from Banco Popular or another recognized lending institution), to reasonably accomplish the development, building and completion of the Second Phase (develop, build, construct and complete the 7 houses on the 7 foundations completed during the First Phase) of the Project in accordance with this Restated DDA on or before September 30, 2007; Third Phase c) Developer shall prove to the satisfaction of Agency that he has sufficient funds in the amount of approximately three million eight hundred thousand dollars ($3,800,000.00) (such as a commitment letter for funding from Banco Popular or another recognized lending institution), to to develop, build and construct thirteen (13) houses (the "Third Phase") ofthe Project in accordance with this Restated DDA on or before February 28, 2008; and Fourth Phase d) Developer shall prove to the satisfaction of Agency that he has sufficient funds in the amount of approximately three million three hundred thousand dollars ($3,300,000.00) (such as a commitment letter for funding from Banco Popular or another recognized lending institution) to develop, build and construct the final twelve (12) houses (hereinafter referred to as the "Fourth Phase") of the Project in accordance with this Restated DDA on or before August 31, 2008. 3. Developer does not convey fee title for 5 residential lots on the Site to a qualified Community Housing Development Organization selected by the Agency for a price that does not exceed $36,000 per lot (plus "Off Site Reimbursements" as defined herein) and present to the Agency written documentation, satisfactory to the Agency, evidencing the same on or before February 28,2008. This contingency shall be deemed waived if the Developer fully complies with the requirements of section 303 (Affordable Ownership Housing) of this Agreement; 4. Developer does not provide to the Agency a construction budget, satisfactory to the Agency, for the completion of the First Phase of the Project on or before March 31, 2007. To the extent that said construction budget exceeds the sum that is provided by the construction lender, the Developer shall provide sufficient proof of other funds of monies or method of financing to complete the development, building and construction of the entire First Phase. In the event of any such contingencies occur, the Agency shall have the option of declaring a default under the terms of this Restated DDA and may exercise any and all of the remedies granted to it herein, including the right of reverter to have the entire Site reconveyed from the Developer to the Agency. 7 Sec. 104 The Site Section 104 is hereby amended in its entirety to read as follows: The subject Site is generally located on the southerly portion of Fernwood Avenue between Bullis Road and Atlantic Avenue in the City of Lynwood. The Site is identified by legal description in Exhibit "A", attached hereto and incorporated herein by this reference as fully set forth. Sec. 105 Parties to the Agreement Sec. 106 The Agency Agency is a public body, corporate and politic, exercising governmental functions and powers and organized and existing under the Community Redevelopment Law of the State of California (Health and Safety Code Section 33000 et seq.). The principal office of Agency is located at 11330 Bullis Road, Lynwood, California 90262. The Agency as used in this Restated DDA includes the Agency and any assignee or successor in interest to its rights, powers and responsibilities. Sec. 107 The Developer Section 107 is hereby amended in its entirety to read as follows: The Developer of the Site is Hermilo Franco. Franco's principal address is 9369 Gainford Street, Downey California 90240. Developer shall not assign all or any part of his interest in this Restated DDA or any properties conveyed to him hereunder prior to the issuance of a release of construction covenants (the "Release of Construction Covenants") for the Site as hereinafter provided, without the prior written approval of Agency, which approval shall not be unreasonably withheld. The release of construction covenants shall be substantially in the form attached hereto as Exhibit H and incorporated herein by this reference. II. SECTION 200 DISPOSITION OF THE SITE Sec. 201 Developer's Security Section 20 I is hereby amended in its entirety to read as follows: Developer represents and warrants to the Agency that on or about April 27, 2004 he paid to the Agency a Performance Security deposit in the amount of $25,000. Developer's Performance Security shall be released at the time Developer has received a Release of Construction Covenants from the Agency for the completion of all 4 phases of the Project on the Site developed under the terms of this Restated DDA, provided no funds otherwise remain due from Developer to Agency. Should this 8 Restated DDA be terminated by Developer in accordance with Section 510 herein, Agency shall release Developer's Performance Security within thirty (30) days of the effective date of such termination, provided that Developer has first paid any amounts owing to Agency and any other amounts owed under this Restated DDA for any property previously transferred to, and acquired by Developer. Sec. 202 Sale and Purchase Section 202 is hereby amended in its entirety to read as follows: The Agency has heretofore conveyed the Site to the Developer on or about January 27, 2005 in exchange for the consideration identified in the Original DDA and the First Amendment and in exchange for a promissory note in the amount of one million four hundred four thousand dollars ($1,404,000.00), representing 39 lots at $36,000.00 per lot for a total purchase price of $1,404,000.00. The Developer agrees to execute a new promissory note, concurrently with the execution of the Restated DDA, in the amount of one million five hundred forty-eight thousand dollars ($1,548,000.00) in place and instead of the original promissory note. Said new promissory note shall represent the purchase price of $1 ,548,000.00 representing 43 lots at $36,000.00 per lot and reflect terms and a maturity date that is consistent with the terms of this Restated DDA. The Purchase Price shall by paid by delivering to the Agency said new promissory note in the amount of one million five hundred forty-eight thousand dollars ($1,548,000.00) (hereinafter "Reimbursement Note"). The Reimbursement Note shall be payable in the following manner: Developer shall reimburse Agency the amount of thirty six thousand dollars ($36,000.00) at the time ofthe close of escrow for the sale of each of the Residential Units contained in the Project. Payments on the Reimbursement Note by Developer shall be credited first towards any other sums owing and due by Developer to Agency pursuant to this Restated DOA, and then towards principal. The Reimbursement Note shall be secured by a new first trust deed (hereinafter "Reimbursement Trust Deed") on the Site heretofore conveyed from Agency to Developer legally described on Exhibit "A". The Developer hereby agrees to execute a new first trust deed, concurrently with the execution of the Restated DDA, to secure payment of the Reimbursement Note. The Reimbursement Trust Deed may be subordinated to a construction loan with the prior written consent ofthe Agency, which consent shall not be unreasonably withheld. NOTWITHSTANDING THE FOREGOING, AGENCY AND DEVELOPER HEREBY AGREE THAT THE AGENCY'S CONSENT TO THE SUBORDINATION 9 OF THE AGENCY'S REIMBURSEMENT DEED OF TRUST TO A CONSTRUCTION LOAN IS CONTINGENT UPON AND SUBJECT TO ANY SUCH SUBORDINATION CONTAINING PROVISIONS FOR THE PAYMENT TO THE AGENCY OF $36,000.00 FROM THE ESCROW AFTER THE SALE OF EACH OF THE RESIDENTIAL UNITS BEFORE PAYMENT TO THE CONSTRUCTION LENDER FOR ANY MONIES ADVANCED PURSUANT TO A CONSTRUCTION LOAN. ANY SUCH SUBORDINATION IS FURTHER SUBJECT TO AND CONTINGENT UPON SAID CONSTRUCTION LENDER REDUCING THE NUMBER OF LOTS TO WHICH ITS SECURITY APPLIES SUCH THAT SAID SECURITY IS COMMENSURATE WITH AND PROPORTIONAL TO THE AMOUNT OF THE CONSTRUCTION LOAN ONLY. The Reimbursement Note and Reimbursement Trust Deed shall be in the form and content as shown on Exhibits "D" and "E", respectively, attached hereto and incorporated by this reference. Both the Reimbursement Note and Reimbursement Trust Deed shall contain provisions, mutually acceptable to Agency and Developer, for the release from the Reimbursement Trust Deed for each Residential Unit as it is sold to a third party. Agency and Developer shall cooperate in providing adequate documentation to provide clear title to third party buyers. Sec. 203 Escrow The parties hereto agree that the provisions of this section remain unchanged. Sec. 204 Conveyance of Title The parties hereto agree that the provisions of this section remain unchanged, except to the extent that there were previous errors or mistakes in the legal description as contained in the Original DDA or changes are necessary to provide conformity with the final tract map for the Site. The parties agree to cooperate with each other to correct said previous errors or mistakes or to provide conformity with the final tract map for the Site including, but not limited to, executing documents reasonably necessary to accomplish those purposes. Sec. 205 Form of Deed The parties hereto agree that the provisions of this section remain unchanged, except to the extent that there were previous errors or mistakes in the legal description as contained in the Original DDA or changes are necessary to provide conformity with the final tract map for the Site. The parties agree to cooperate with each other to correct said previous errors or mistakes or 10 to provide conformity with the final tract map for the Site including, but not limited to, executing documents reasonably necessary to accomplish those purposes. Sec. 206 Condition of Title The parties hereto agree that the provisions of this section remain unchanged, except to the extent that there were previous errors or mistakes in the legal description as contained in the Original DDA or changes are necessary to provide conformity with the final tract map for the Site. The parties agree to cooperate with each other to correct said previous errors or mistakes or to provide conformity with the final tract map for the Site including, but not limited to, executing documents reasonably necessary to accomplish those purposes. Sec. 207 Time and Place of Delivery of Deed The parties hereto agree that the provisions of this section remain unchanged, except to the extent that there were previous errors or mistakes in the legal description as contained in the Original DDA or changes are necessary to provide conformity with the final tract map for the Site. The parties agree to cooperate with each other to correct said previous errors or mistakes or to provide conformity with the final tract map for the Site including, but not limited to, executing documents reasonably necessary to accomplish those purposes. Sec. 208 Payment of the Compensation Amounts; Recordation of Deeds The parties hereto agree that the provisions of this section remain unchanged, except to the extent that there were previous errors or mistakes in the legal description as contained in the Original DDA or changes are necessary to provide conformity with the final tract map for the Site. The parties agree to cooperate with each other to correct said previous errors or mistakes or to provide conformity with the final tract map for the Site including, but not limited to, executing documents reasonably necessary to accomplish those purposes. Sec. 209 Title Insurance Concurrently with the recordation of all deeds conveying title to Site, a title insurance company, ("Title Company") satisfactory to Agency and Developer, shall provide and deliver to Developer title insurance policies issued by the Title Company insuring that title to the Site is 11 vested to Developer in the condition required by Section 206 hereof, and in accordance with the approved preliminary title reports. The Title Company shall provide to Agency and Developer copies of the title insurance policy as soon as possible following transfer to Developer. The title insurance policies shall provide coverage against claims on the Site in an amount to be no less than the Purchase Price set forth in Section 202. Concurrently with the recordation of the grant deed conveying title to the Site, the Title Company shall, if required by Developer, provide to Developer an endorsement to insure the amount of Developer's estimated construction costs of the improvements required by the construction lender or financing in place at the time of closing. Developer shall pay the entire premium for any such increase in coverage requested by it. Agency shall pay only for that portion of the title insurance premium attributable to a CL T A standard form policy of title insurance in the amount of the purchase price for the Site. Developer shall pay for all premiums in excess of the costs of the CL T A standard form policy. Sec. 210 Taxes and Assessments Ad valorem taxes and assessments, if any, on the Site and taxes resulting from this Agreement or any rights hereunder - any or all of which are levied, assessed, or imposed for any period commencing prior to the conveyance of title to the Site to the Developer - shall be paid, or bonded for, by Agency. All ad valorem taxes and assessments levied or imposed for any period commencing after the close of the escrow of the Site shall not be the responsibility of the Agency and shall be paid by the respective title holder. Sec. 211 Occupants of the Site The parties hereto agree that the provisions of this section remain unchanged. Sec. 212 Due Diligence The parties hereto agree that the provisions of this section remain unchanged. Sec. 213 Environmental Condition of the Site The parties hereto agree that the provisions of this section remain unchanged. Sec. 214 The parties hereby agree that section 214 shall be superseded by the provisions of section 312 of the Restated DDA. 12 III. SECTION 300 DEVELOPMENT OF THE SITE Sec. 301 Development of the Site by Developer and obligations of Developer Sec. 302 Scope of Development Section 302 is hereby amended in its entirety to read as follows: Developer hereby agrees that the Project shall be constructed and developed in accordance with the standards set forth in the Scope of Development attached hereto as Exhibit F and incorporated herein by this reference and within the time limits specified in the Schedule of Performance which is attached hereto as Exhibit G and is incorporated herein by this reference. The Scope of Development shall include the transfer of the Site from Agency to Developer and development of 43 residential lots and the construction of 38 single-family homes in Four Phases as provided for herein and in accordance with the Schedule of Performance and the Scope of Development and the conveyance by the Developer of 5 of said residential lots to a qualified Community Housing Development Organization selected by the Agency for a price not to exceed $36,000.00 per lot (plus "Off Site Reimbursements" as defined herein) as a part ofthe Agency/City Affordable Housing program. Said 5 residential lots shall be restricted and sold to families meeting the 80% of Los Angeles County median income standard for affordable housing. Notwithstanding any requirement or provision heretofore contained in the Original DDA, the First Amendment or the Second Amendment, the Developer shall not be obligated to create nor maintain a homeowner's association or other similar entity for the future maintenance and preservation of the Project nor shall Developer be obligated to create open park space. Sec. 303 Affordable Ownership Housing 1. Section 303 is hereby amended in its entirety to read as follows: Developer hereby agrees to submit for Agency approval on or before December 31, 2007, a copy of the proposed contract with a qualified Community Housing Development Organization selected by the Agency for the sale, transfer and development of 5 of the residential lots to said entity as required by this Agreement. The sales price of said residential lots shall not exceed the sum of $36,000 per lot. Notwithstanding the foregoing, to the extent that Developer incurs costs (excluding any markup or profit) that are directly attributable to the construction of required off site improvements that are necessary and beneficial to the development of said 5 residential lots (herein referred to as "Off Site Reimbursements"), the Developer shall be permitted to increase the sales price to a 13 qualified Community Housing Development Organization selected by the Agency to recoup said Off Site Reimbursements. Before executing any agreement for the sale of said 5 residential lots for a price that exceeds $36,000.00 per lot, Developer is hereby required to obtain written consent from the Executive Director of the Agency for the approval of such excess sales price. The Executive Director of the Agency shall not unreasonably withhold consent to the portion of the sales price in excess of $36,000.00 if said excess is directly attributable to Off Site Reimbursements for said 5 residential lots. 2. The proposed contract shall require the purchaser to develop and build 5 Income Restricted Units as provided by this Agreement and sell them only to that class of homeowners authorized by this Agreement. The Agency shall have the right to disapprove of said contract by giving written notice to Developer of said disapproval within twenty-one (21) days after the Agency receives a copy of the proposed contract. Said notice of disapproval shall specity the Agency's reasons for disapproval. Developer hereby agrees to modity, change or otherwise amend said proposed contract to bring it into conformity with the Agency's notice of disapproval. 3. If the Developer fails and/or refuses to deliver to the Agency a revised contract which adheres to the changes requested by the Agency as reflected in the notice of disapproval within 15 days after receipt of said notice of disapproval, Developer hereby agrees to sell said residential lots to the entity or entities selected by the Agency under the terms and conditions determined by the Agency, in its sole discretion, so long as said terms and conditions are consistent with the intent of this Agreement. Developer hereby agrees to work in good faith (including the execution of documents reasonably necessary to complete the transfer of title) with the Agency to complete the transfer of said 5 residential lots to an entity selected by the Agency within 30 days of notice to Developer of the Agency's demand therefor. 4. In the event the Agency does not deliver a notice of disapproval of the proposed contract to the Developer as provided herein within the time limits specified herein, said proposed contract shall be deemed approved and the Developer shall be free to execute said contract and convey and transfer said 5 residential lots in accordance with the terms thereof. 5. The Income Restricted Units shall be required to be occupied by a Low Income Household as the householders' principal residence; and every subsequent purchaser shall be a Low Income Household and shall be obligated to occupy the unit as the householders' principal residence. This restriction shall be evidenced by a recorded covenant in the deed of conveyance that runs with the land, a recorded promissory note, and recorded covenants, conditions, and restrictions; all of these documents shall apply for 45 years commencing from the sale of the Income Restricted Units from the Developer to a Low Income Household. The Developer shall 14 take all necessary and reasonable actions and execute any and all necessary and reasonable documents to ensure the purposes of this section are fulfilled. In particular, Developer hereby agrees to deliver a copy of the deed containing the appropriate restrictive covenants to the Agency for its approval at least 10 days prior to the close of any escrow for the transfer of any such Income Restricted Unit or residential lot. For the purpose of this Agreement, the income restriction definitions are based on the Los Angeles County median income levels as determined by the State of California Department of Housing and Community Development. Sec. 304 Obligations of Developer Section 304 is hereby amended in its entirety to read as follows: Immediately following the effective date of this Restated DDA, Developer will commence development of the Site and will diligently pursue completion. Developer shall develop the Site by constructing the Project, in accordance with the Scope of Development and Schedule of Performance set forth in this Agreement and the construction drawings, plans and related documents all as approved by the Agency. In addition to any other obligations of Developer as set forth in this Restated DDA, Developer shall also have the following specific obligations: 1. Developer shall deliver to the Agency the fully executed Reimbursement Promissory Note no later than March 9, 2007. 2. Developer shall deliver to the Agency the fully executed, notarized and recordable Reimbursement Trust Deed no later than March 9, 2007. 3. Developer shall deliver to the Agency a conformed stamped copy of the final tract map as recorded in the public records no later than March 31, 2007. 4. Developer shall deliver to the Agency the written commitments evidencing adequate financing within the time limits and in the manner as described in Section 103 (Contingencies) of this Agreement. 5. The Developer shall comply with the Federal Clean Water Act and the National Pollutant Discharge System (NPDES) requirements to reduce the amount of pollutants in storm water 15 runoff to the maximum extent practicable. 6. Developer shall prepare and obtain approval of Storm Water Management Plans prior to planning or building permit issuance. 7. Developer shall sell and convey 5 residential lots to a qualified Community Housing Development Organization selected by the Agency for a price not exceeding $36,000.00 plus any applicable and approved Off Site Reimbursements on or before February 28, 2008 or otherwise comply with the provisions of section 303 (Affordable Ownership Housing) of this Agreement. 8. Developer shall pay a Developer Impact Fee in the amount of $4,925 per lot or $75,000 whichever is greater. Developer shall also make an art in public places contribution. Sec. 305 Obligations of Agency Section 305 is hereby amended in its entirety to read as follows: In addition to any other obligations of Agency set forth in this Restated DDA Agency shall have the following specific obligations: I. Defer all City imposed permit costs (except plan check fee and out of pocket costs) until the homes are sold. Developer shall pay 100% of the fees due for each home at the time each home is sold. Said fees and costs shall be paid in addition to the $36,000 sales price per house. 2. Waiver of street dedication requirement along Femwood Avenue. 3. Acceptance of an 8 inch water line instead of a 12 inch water line. Sec. 306 Preliminary Drawings for Development Section 306 is hereby amended in its entirety to read as follows: Prior to construction, Developer shall prepare and submit to Agency, for the Agency's written approval, a preliminary site development plan and related drawings. Agency shall have the right to review and approve or disapprove these documents. The Agency shall not unreasonably withhold its approval of these documents. The development of the Site shall generally be in conformance with the preliminary 16 drawings and related documents set forth in Exhibit C and further set forth by subsequent submissions by the Developer. Changes to preliminary drawings shall be mutually agreed-upon by Developer and Agency in writing. Sec. 307 The parties hereby agree that section 307 shall be superseded by the provisions of section 306 of the Restated DDA. Sec. 308 Final Construction Drawings and Related Documents I. Section 308 is hereby amended in its entirety to read as follows: Developer shall prepare and submit to Agency, for architectural review and written approval by Agency, final construction drawings and related documents for development ofthe Site. Final construction drawings shall be prepared by Developer in sufficient detail to permit the issuance of the necessary City building permits and other entitlements. Agency shall have the right of architectural review and approval, which approval shall not be unreasonably withheld, of all plans and submissions for the development of the Site by Developer. There may be items that are approved by Agency which are subsequently disapproved by the Planning Commission, City Council, or Planning Division. Any disapproval of such plans or submissions by Agency shall include written reasons for disapproval. Following receipt of any notice of disapproval from Agency, Developer shall revise any such plans or submissions and resubmit them to Agency for written approval by Agency within a reasonable time period. 2. If any revision or correction of plans or submissions for the development of the Site shall be required by the City, by any agency, department or bureau of the City, by the County of Los Angeles, or by the State of California having jurisdiction, Developer and Agency shall cooperate in efforts to obtain the approval of such plans or submissions which have otherwise received the approval of Agency, or else to obtain the waiver of any such requirement. If no such approval or waiver is obtained, Agency and Developer shall be bound by any revision or correction required by any such public entity. 3. If Developer desires to make any change in the final construction drawings and related documents for development of the Site after their approval by Agency, Developer shall submit the proposed change to Agency for its written approval. Said approval shall not be unreasonably withheld so long as such changes do not differ significantly from the Scope of Development defined in this Agreement. Agency shall notifY Developer of approval or disapproval in writing within thirty (30) days after submission of the proposed change by Developer to Agency. A proposed change in the final construction drawings for development of the Site shall be deemed 17 to be approved by Agency unless Agency submits written notice of disapproval thereof to Developer setting forth the reasons for disapproval within said thirty (30) day period. Following receipt of written disapproval from Agency, Developer may revise any such proposed change and resubmit it to Agency for written approval by Agency, in accordance with the provisions pertaining to the submission of proposed changes set forth in this Agreement. Agency shall thereafter approve or disapprove any such proposed change in accordance with the procedures otherwise set forth in this Section 308. Sec. 309 Cost of Construction Section 309 is hereby amended in its entirety to read as follows: Developer shall construct all temporary and permanent, public and private, on site and off site improvements (for example, including, but not limited to, curbs, gutters, drains, streetlights, sidewalks, driveways, sewers, parkways, utility services, etc.), required for the complete and final construction, development, sale and occupancy of the Site and Project, all at Developer's sole cost and expense and all within the time limits permitted by the Schedule of Performance and in accordance with the standards set forth in the Scope of Development. Sec. 310 Schedule of Performance Section 3 I 0 is hereby amended in its entirety to read as follows: I. The Project shall be developed and constructed in accordance within the time limits set forth in the Schedule of Performance attached hereto as Exhibit G and incorporated herein by this reference. Subject to extensions of time for causes specified in Section 604 hereof, Developer shall begin and complete all construction on and development of the First Phase within twelve (12) months from the completion and recording of the final tract map. Completion of the First Phase shall be defined by and evidenced by the Developer acquiring a City of Lynwood Certificate of Occupancy for the first 6 houses and the completion of the foundation for 7 other houses as provided herein. The Agency will not issue a Release of Construction Covenants until all Residential Units have individually received a Certificate of Occupancy by a City of Lynwood approved building inspector. 2. Subject to extensions of time for causes specified in Section 604 hereof, Developer shall begin and complete all construction on and development of the Second Phase within twenty-four (24) months from the completion and recording of the final tract map. Completion 18 of the Second Phase shall be defined by and evidenced by the Developer acquiring a City of Lynwood Certificate of Occupancy for thirteen (13) houses. The Agency will not issue a Release of Construction Covenants until all Residential Units have individually received a Certificate of Occupancy by a City of Lynwood approved building inspector. 3. Subject to extensions of time for causes specified in Section 604 hereof, Developer shall begin and complete all construction on and development of the Third Phase within thirty- six (36) months from the completion and recording of the final tract map. Completion of the Third Phase shall be defined by and evidenced by the Developer acquiring a City of Lynwood Certificate of Occupancy for twenty-six (26) houses within thirty-six (36) months from the completion and recording of the final tract map. The Agency will not issue a Release of Construction Covenants until all Residential Units have individually received a Certificate of Occupancy by a City of Lynwood approved building inspector. 4. Subject to extensions of time for causes specified in Section 604 hereof, Developer shall begin and complete all construction on and development of the Fourth Phase within forty- eight (48) months from the completion and recording of the final tract map. Completion of the Fourth Phase shall be defined by and evidenced by the Developer acquiring a City of Lynwood Certificate of Occupancy for thirty-eight (38) houses within forty-eight (48) months from the completion and recording of the final tract map. The Agency will not issue a Release of Construction Covenants until all Residential Units have individually received a Certificate of Occupancy by a City of Lynwood approved building inspector. Sec. 311 Insurance, Hold Harmless, Prevailing Wage, Independent Contractor At the time of the execution of this Agreement, Developer shall, at its own expense, procure, and at all times during the term of this Agreement, maintain in full force and effect, workers compensation insurance and public liability insurance as follows: I. A policy covering the full liability of Developer to any and all persons employed by them directly or indirectly, in accordance with the provisions of the Labor Code, State of California, relating to Workers Compensation Insurance. 2. A policy of public liability insurance in which the City of Lynwood and the Lynwood Redevelopment Agency, its respective officers, employees and agents, shall be named as additional insured, insuring, indemnifYing, saving harmless, and agreeing to defend, including costs of defense, said additional insureds against all suits, loss, damage, liability, claims or actions of any persons arising out of the conduct of the authorized activities and operations 19 provided in this Agreement or related to this Agreement, or any consequence thereof whether directly or indirectly or whether for personal injury, property damage or other matters. Said public liability insurance shall provide for a single limit for liability covered in the amount of at least One Million Dollars ($1,000,000) covering any period of time that Developer is in possession of the premises or conducting any activities on the premises pursuant to this Agreement, whether or not the activity occurred within the periods stated in this Agreement. Said policy, or policies, of insurance shall require that named additional insureds be given thirty (30) days notice prior to cancellation or change in any policy or policies. 3. The policies aforementioned shall be issued by an insurance carrier reasonably satisfactory to Agency and shall be delivered to Agency, prior to the commencement of the term of this Agreement. In lieu of actual delivery of such policies, a certificate issued by the insurance carrier showing such policies to be in force for the period covered by this Agreement may be delivered to Agency. Such policies and such certificates shall be in a form reasonably approved by the Agency attorney. Developer shall hold harmless, indemnifY and defend the City and the Lynwood Redevelopment Agency, its respective officers, employees and agents, against all suits, loss, damage, liability, claims or actions of any persons arising out of Developer's performance of this Agreement or any of its activities pursuant to this Agreement and the consequences thereof whether directly or indirectly. This hold harmless agreement shall be interpreted as broadly as possible to provide the maximum coverage and security to the City and Agency. Developer understands, and the parties hereby agree, that Developer is an independent contractor and that nether it nor its agents, servants and employees are servants or employees of the City or Agency for any purpose whatever. The employees of Developer are the responsibility of Developer and are not employees or agents of the City or Agency. Developer shall provide such personnel as may be required to perform the terms of this Agreement. 4. Developer shall hold harmless, indemnifY and defend the City and the Agency, its respective officers, employees and agents, against all suits, loss, damage, liability, claims or actions of any persons arising out of any prevailing wage issues that may arise directly or indirectly as a result of Developer's performance of this Agreement, the Project, or any of its activities pursuant to this Agreement and the consequences thereof. Sec. 312 Permits/Entitlements from City and Other Governmental Agency Section 312 is hereby amended in its entirety to read as follows: Before commencement of construction or development of any buildings, structures, or other work of improvement upon the Site, Developer shall, at its sole cost and expense, secure or cause to be secured, any and all 20 permits and/or entitlements which may be required by the City or any other governmental agency (e.g., building permits, conditional use permits, special use permits, variances, zone changes, final tract map, art in public places contribution, etc.) having jurisdiction over such construction, development or work. To the extent permitted by law, the Agency agrees to use its best faith efforts to facilitate cooperation with the City to obtain the required permits and/or entitlements. If after using his best good faith efforts and due diligence to obtain the required permits and/or entitlements for the development of the Site as required by this Agreement, the Developer is unsuccessful in doing so, for reasons beyond the Developer's control which are not otherwise events of default under this Agreement, this Restated DDA may be terminated by Developer as provided in Section 510 below. Developer shall pay all costs of any permits and fees issued or required by City or other regulating agencies. Sec. 313 Rights of Access Officers, employees, agents and representatives of Agency and the City shall have the right of access to the Site, without the payment of any charge or fee, during normal construction hours. This right shall commence with the conveyance to Developer of possession of the Site and terminate with the issuance by Agency to Developer of the Release of Construction Covenants. Access will be for the purpose of monitoring Developer's obligations and responsibilities under this Agreement, including, but not limited to, the inspection of the work being performed in constructing improvements on the Site. Such officers, employees, agents and representatives of Agency and the City shall be those persons who are identified in writing by the Executive Director of Agency. Notwithstanding any rights of access by Agency, Agency agrees that any inspections and rights of access shall not interfere with any ongoing construction activities of Developer. Any damage or injury resulting from such entry shall be promptly repaired or remediated at the sole expense of the entity responsible for such entry. Sec. 314 Rights of Access - Public Improvements and Facilities Agency for itself, and for the City and other public agencies, reserves the right to enter the Site or any part thereof at all reasonable times and without interference, for the purpose of construction, reconstruction, maintenance, repair or service of any public improvements or public facilities located on the Site. 21 Sec. 315 Local, State and Federal Laws Developer shall perform its obligations and responsibilities under this Agreement in conformity with all applicable federal, state and local laws and regulations, including all applicable federal and state labor requirements. Sec. 316 Antidiscrimination During Construction Section 316 is hereby amended in its entirety to read as follows: Developer agrees for itself and its successors or assignees that, in the construction and installation of the improvements provided for in this Agreement, Developer will not discriminate against any employee or applicant for employment based on any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (I) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code. Sec. 317 Taxes, Assessments, Encumbrances and Liens Developer shall pay when due all real estate taxes and assessments assessed and levied for any period subsequent to the conveyance of title to the Site by Agency to Developer. Developer shall not place or allow to be placed on the Site any mortgage, trust deed, encumbrance or lien which is not specifically otherwise authorized by this Agreement. Developer shall remove or have removed any levy or attachment made on the Site, or assure the satisfaction thereof within as reasonable time, but in any event prior to any sale thereunder. Nothing herein contained shall be deemed to prohibit Developer from contesting the validity or amounts of any tax assessment, encumbrance or lien, nor to limit the remedies available to Developer in respect thereto. Sec. 318 Prohibition Against Transfer of the Site, and Improvements, and Against Assignment of Agreement Prior to the issuance and recordation by Agency of a Release of Construction Covenants as provided hereinafter, Developer shall not, except as permitted by this Restated DDA, sell, transfer, convey, assign or lease any portion of the Site or the buildings or structures thereon, to 22 which the Release of Construction Covenants pertains without the prior written approval of Agency. Sec.319 Security Financing; Right of Holders Sec. 320 Encumbrances Prohibited Except Mortgages, Deeds of Trust, or Other Financing for Development Notwithstanding Section 318 hereof, mortgages, deeds oftrust, or as any other part of reasonable method of financing is permitted before completion of the construction of the improvements on the Site, but only for the purpose of securing loans offunds to be used solely and exclusively for the construction of improvements on the Site and any other expenditures necessary and appropriate to develop the Site pursuant to this Agreement. Developer shall give prior written notice to Agency of any such proposed mortgage, deed of trust, into which Developer proposes to enter into before executing said documents. Developer shall not enter into any such mortgage, deed of trust without the prior written approval of Agency. Agency shall not unreasonably withhold approval of such mortgage, deed of trust, or any other reasonable method of financing if entered into with a responsible financial or lending institution, or other person or entity approved by Agency. However, the parties hereto agree that any such subordination must ensure the Agency's right to receive no less than thirty-six thousand dollars ($36,000.00) from the escrow for the sale of each Residential Unit before any payment to the construction lender. Developer shall promptly notify Agency of any mortgage, deed of trust, encumbrance or lien that has been created or attached to the Site prior to completion of the construction of the improvements on the Site whether such encumbrances or liens have been established by voluntary act of Developer or otherwise. The terms mortgage and deed of trust, as used herein, shall be deemed to include all means of financing real estate acquisition and construction and development. Sec. 321 Holder Not Obligated to Construct Improvements The holder of any mortgage, deed of trust or other security interest authorized by this Agreement shall no way be obligated by the provisions hereof to construct or complete the improvements on the Site set forth herein, or to guarantee such construction or completion; nor shall any covenant or any other provision in the deed for any Site be construed so to obligate each such holder. Nothing in this Agreement shall be deemed to construe, permit or authorize any 23 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. Sec. 322 Notice of Default to Holders of Mortgages, Deeds of Trust, or other Security Interest; Right to Cure Whenever Agency delivers any notice or demand to Developer with respect to any breach or default by Developer concerning the completion of construction of the improvements set forth herein, Agency shall at the same time deliver to each holder of record of any mortgage, deed of trust or other security interest authorized by this Agreement a copy of such notice or demand. With respect to the rights of Agency hereunder, each such holder shall, at its option, have the right within thirty (30) days after the receipt of the notice, to cure or commence to cure any such default and to add the cost hereof to the security interest debt and the lien pertaining to its security interest. Nothing contained in this Agreement shall be deemed to permit or authorize such holder to undertake or continue the construction or completion of the improvements, beyond the extent necessary to conserve or protect the improvements or construction already completed, without first having expressly assumed Developer's obligations hereunder by written agreement in a form and substance approved by Agency. The holder in that event must agree to complete, in the manner set forth in this Agreement, the improvements to which the lien or title of such holder relates, and must submit evidence satisfactory to Agency that the holder has the qualifications and financial responsibility necessary to perform such obligations. Any such holder properly completing such improvements shall be entitled, upon written request made by the holder to Agency, to be issued a Release of Construction Covenants from Agency, and such holder shall succeed to all other rights ofthe Developer. Agency agrees to provide such other notices as may be reasonably required by any construction lender of Developer. Sec. 323 Failure of Holder to Complete Improvements Section 323 is hereby amended in its entirety to read as follows: In any case where the holder of any mortgage, deed of trust or other security interest creating a lien or encumbrance upon the Site has not entered into an agreement pursuant to Section 322 to construct improvements within six (6) months after the default by Developer in the completion of construction of improvements, but has not proceeded diligently with construction, Agency may, at its option, purchase the mortgage, deed oftrust, or other security interest by making to the holder payment of the amount of the unpaid debt, plus any accrued and unpaid interest thereon. 24 If title to the Site has vested in the holder, Agency shall be entitled to conveyance of the Site from the holder, and the holder shall, at the option of Agency convey the Site to Agency, upon payment by Agency to the holder of the amounts to which that holder is legally entitled. Sec. 324 Right of Agency to Cure Default Pertinent To a Mortgage, Deed of Trust or Other Security Interest In the event of a default or breach by Developer pursuant to a mortgage, deed of trust, or other security interest related to the Site prior to the completion of development of each applicable property constituting the Site, if the holder has not exercised its option to complete the development of the Site, Agency may cure the default or breach prior to completion of any foreclosure thereon. In such event, Agency shall be entitled to compensation from Developer for all costs and expenses incurred by Agency in curing the default, together with interest thereon computed at the maximum rate then allowed by law. Agency shall also be entitled to a lien upon the phases or sub-phases constituting portions of the Site, or any portion thereof, to secure any and all such costs and expenses incurred by Agency. Any such lien to which Agency is entitled shall be subject to mortgages, deeds of trust or other security instruments executed for the sole purpose of obtaining funds to purchase and develop the Site, as authorized herein. Sec. 325 Right of Agency to SatisfY Other Liens on the Site After Title Passes After the conveyance of title to the Site to Developer, and prior to the recordation of a Release of Construction Covenants for construction and development for the Site, and after Developer has had a reasonable time to challenge, cure, or satisfY any liens or encumbrances on the Site, Agency shall have the right to satisfY any such liens or encumbrances; provided, however, that nothing in this Agreement shall require Developer to payor make provision for the payment of any tax, assessment, lien or charge so long as Developer in good faith contests the validity or amount thereof, and so long as such delay in payment shall not subject a Site to forfeiture or foreclosure sale. Sec. 326 Release of Construction Covenants 1. Promptly after completion of all construction and development by Developer of the Site, issuance of a certificate of occupancy on all Residential Units, and when in complete 25 compliance with this Agreement, Agency shall issue to Developer and record a Release of Construction Covenants for the Site, upon written request therefore submitted by Developer to Agency. Agency shall not unreasonably withhold the issuance of the Release of Construction Covenants. Such Release of Construction Covenants shall constitute, and shall so state, the conclusive determination of satisfactory completion of construction required by this Agreement upon the Site, and offull compliance with the terms of this Agreement. After issuance of such a Release of Construction Covenants, any party then owning or thereafter purchasing, leasing or otherwise acquiring any interest in the Site, shall not because of the ownership, purchase lease or acquisition, incur any obligation or liability under this Agreement, except insofar as such party shall be bound by any covenants contained in the deed, lease, mortgage, deed of trust, contract or other interest of transfer in accordance with any of the provisions of this Agreement. Following the issuance of a Release of Construction Covenants, neither Agency nor any other person, shall have any rights or remedies that it would otherwise have or be entitled to exercise under this Agreement as a result of a default in or breach of any provisions of this Agreement, and the respective rights and obligations of the parties with reference to those matters shall be as set forth in the deed, lease, mortgage, deed of trust, contract, or other instrument oftransfer. 2. The Release of Construction Covenants pertinent to the Site shall generally be consistent with a form and format to permit it to be recorded in the Recorder's Office of Los Angeles County. The general form of such Release of Construction Covenants is attached hereto as Exhibit H. If Agency refuses or fails to issue a Release of Construction Covenants for the Site after written request is made therefore by Developer, Agency shall, within thirty (30) days following receipt of the written request, provide to Developer a written statement of the reasons Agency refuses to issue a Release of Construction Covenants. If Agency fails to provide such written statement to Developer within said thirty (30) day period, Developer shall be deemed entitled to issuance of the Release of Construction Covenants. Such Release of Construction Covenants shall not constitute evidence of compliance with, or satisfaction of, any obligation of Developer to any holder of a mortgage, or an insurer of a mortgage securing money lent to finance the improvements on the Site or any part thereof. Such Release of Construction Covenants shall not be deemed to be notice of completion, as referred to in California Civil Code, Section 3093. 26 IV. 400 USE OF THE SITE Sec. 401 Uses Developer covenants and agrees for itself, its successors, its assigns and every successor in interest that during construction on the Site and thereafter, Developer, such successors and such assignees shall use and devote the Site to the uses approved by the City and as provided for in this Agreement. Sec. 402 Obligation to Refrain From Discrimination Section 402 is hereby amended in its entirety to read as follows: There shall be no discrimination against or segregation of any person, or group of persons, on account of race, color, religion, sex, marital status, ancestry, or national origin in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Site; nor shall Developer or any person or party claiming under or through Developer establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sub lessees, or vendees of the Site or any portion thereof. Sec. 403 Form of Non-Discrimination and Non-Segregation Clauses Section 403 is hereby amended in its entirety to read as follows: Developer shall refrain from restricting the rental, sale or lease of the Site, or any portion thereof, on the basis of race, color, religion, sex, marital status, ancestry or national origin of any person. All deeds, leases, or contracts shall contain and be subject to substantially the following non-discrimination or non- segregation clauses: I. 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 any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (I) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the premises herein conveyed, nor shall the grantee or any person claiming under or through him or her, establish or permit any practice or practices of discrimination or segregation with reference to the selection, location, number, use 27 or occupancy of tenants, lessees, subtenants, sublessees, or vendees in the premises herein conveyed. The foregoing covenants shall run with the land. Notwithstanding the foregoing, with respect to familial status, the foregoing shall not be construed to apply to housing for older persons, as defined in Section 12955.9 of the Government Code. With respect to familial status, nothing in the foregoing shall be construed to affect Sections 51.2, 51.3, 51.4, 51.10, 51.11, and 799.5 of the Civil Code, relating to housing for senior citizens. Subdivision (d) of Section 51 and Section 1360 of the Civil Code and subdivisions (n), (0), and (p) of Section 12955 ofthe Government Code shall apply to the foregoing. 2. 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 any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (I) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the leasing, subleasing, transferring, use, occupancy, tenure, or enjoyment of the 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, oftenants, lessees, sublessees, subtenants, or vendees in the premises herein leased. Notwithstanding the foregoing, with respect to familial status, the foregoing shall not be construed to apply to housing for older persons, as defined in Section 12955.9 of the Government Code. With respect to familial status, nothing in the foregoing shall be construed to affect Sections 51.2, 51.3, 51.4, 51.10, 51.11, and 799.5 of the Civil Code, relating to housing for senior citizens. Subdivision (d) of Section 51 and Section 1360 of the Civil Code and subdivisions (n), (0), and (p) of Section 12955 of the Government Code shall apply to the foregoing. 3. In Contracts: There shall be no discrimination against, or segregation of, any person or group of persons on account of any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (I) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code in any contract to which the Developer or his agents are parties and which in any way are related to the Developer's performance of the terms of this Restated DDA. 28 Sec. 404 Effect and Duration of Covenants Except as otherwise provided herein, the covenants and deeds contained in this Agreement relating to Section 303 or the Income Restricted Units shall remain in effect until the earlier of: (a) expiration offorty-five (45) years from the issuance ofa Release of Construction Covenants for the Site or (b) the date the state law requiring such covenants changes that such covenants are not to remain in effect. The covenants against discrimination set forth herein shall remain in effect in perpetuity. v. SECTION 500 DEFAULTS, REMEDIES, AND TERMINATION Sec. 501 Defaults - General Section 501 is hereby amended in its entirety to read as follows: I. The failure or delay by either party to perform any term or provision of this Agreement constitutes a default under this Agreement. Events of Developer defaults under this Agreement shall include, but not be limited to, the following: A. Failure to timely and promptly provide written evidence of adequate and sufficient funds, monies, resources and/or financing from reliable financial institutions, approved by the Agency, to fulfill the Developers obligations under this Agreement and, in particular the obligation to construct the buildings, structures, infrastructure and on and off-site improvements contemplated by this Agreement; B. Failure to timely and promptly acquire at Developer's sole cost and expense all permits and/or entitlements (e.g., building permits, conditional use permits, special use permits, variances, zone changes, recordation of final tract map on or before March 31, 2007, etc.) necessary to completely develop and construct the Project in accordance with the terms of this Agreement; C. Failure to timely and promptly pay any and all sums of money when due; D. Failure to timely and promptly execute any and all documents required of Developer and to deliver executed copies thereof to the party or parties entitled thereto; E. Failure to timely and promptly respond in good faith to requests for documents or information requested by the Agency; F. Failure to timely and promptly provide adequate construction financing from Banco Popular or another reliable lender or provide other written proof of Developer's financial ability to fulfill his obligations under this Restated DDA; 29 G. Failure to timely and promptly provide written evidence of the insurance policies required by the terms of this Agreement; and H. Failure to timely and promptly convey and transfer 5 residentallots to a qualified Community Housing Development Organization selected by the Agency as required by the terms of this Agreement; 2. In the event of a default under this Agreement, the injured party shall give written notice of default to the party in default, specifYing the default complained of by the injured party. Failure or delay in giving such notice shall not constitute a waiver of any default, nor shall it change the time of default. Except as otherwise expressly provided in this Agreement, 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. Delays by either party in asserting any of its rights and remedies shall not deprive either party of its right to institute and maintain any actions or proceedings which it may deem necessary to protect, assert or enforce any such rights or remedies. The party who is claimed to be in default must immediately commence to cure, correct or remedy such default and shall complete such cure, correction or remedy any non-monetary default within 30 days. 3. If a monetary event of default occurs, prior to exercising any remedies hereunder, the injured party shall give the party in default written notice of such default. The party in default shall have a period of seven (7) days after such notice is given within which to cure the default prior to exercise of remedies by the injured party. 4. If a non-monetary event of default occurs, prior to exercising any remedies hereunder, the injured party shall give the party in default notice of such default and provide defaulting party thirty (30) days to cure prior to exercise of remedies by the injured party. Notwithstanding the above, the non-defaulting party shall have the right to request equitable relief where action or inaction by the defaulting party will cause damages for which monetary relief would be inadequate. Sec. 502 Legal Actions Sec. 503 Institution of Legal Actions Section 503 is hereby amended in its entirety to read as follows: In addition to any other rights or remedies which it may have hereunder, either party may institute legal action to cure, correct or remedy any default, to recover damages for any default, to obtain any other remedy consistent with the purposes ofthis Agreement, or to accomplish anyone or more of the 30 foregoing including, but not limited to, specific performance and any other form of equitable relief. Any such legal action must be instituted in the Superior Court of the County of Los Angeles, State of California or in the Federal District Court in the Central District of California. Sec. 504 Applicable Law The laws of the State of California shall govern the interpretation and enforcement of this Agreement. Sec. 505 Acceptance of Service of Process Section 505 is hereby amended in its entirety to read as follows: In the event that any legal action is commenced by Developer against Agency, service of process on Agency shall be made by personal service upon the Executive Director of Agency, Lynwood City Hall, 11330 Bullis Road, Lynwood, California 90262 or in such other marmer as may be provided by law. In the event that any legal action is commenced by Agency against Developer, service of process on Developer shall be made by personal service upon Hermilio Franco or in such other manner as may be provided by law. Sec. 506 Rights and Remedies Are Cumulative Except as otherwise expressly provided in this Agreement, the rights and remedies of the parties hereto are cumulative, and the exercise by either party of one or more of such rights or remedies shall not preclude the exercise by it, at the same time or different times, of any other rights or remedies for the same default or any other default by the other party. Sec. 507 Damages If Developer has failed or refused to timely perform any of its obligations under this Agreement and has failed to cure any default within the thirty days, after proper notice by Agency or within 7 days in the event of a monetary default; then, any rights of Developer or any assignee or transferee of this Agreement, or any rights of Developer arising therefrom with respect to Agency, this Agreement shall, at the option of Agency, be terminated by Agency, and the Agency shall have to right to initiate legal action to recover any and all damages and to exercise any and all remedies, both legal and equitable, permitted by law including, but not limited to, lost 31 revenues, appraisal fees, expert witness fees, escrow fees and costs, land acquisition costs, attorneys' fees, consultant fees, and relocation costs. Sec. 508 The parties hereby agree that section 508 shall be superseded by the provisions of section 503 of the Restated DDA. Sec. 509 Remedies and Rights of Termination Prior to Conveyance Sec. 510 Termination by Developer Section 510 is hereby amended in its entirety to read as follows: Developer may terminate this Agreement if Developer is unable to obtain all necessary entitlements and permits from City or Agency to permit the development of the Site in accordance with this Agreement and such inability is not caused by factors reasonably within the control of the Developer. In the event of such termination, the Developer's Performance Security shall be immediately released to Developer, provided that Developer has first paid any other sums or obligations due to Agency. Upon termination by Developer, Developer shall re-convey possession and title of the Site to Agency concurrent with the termination. Sec. 511 Termination by Agency Agency may, but shall not be required to terminate this Agreement in the event of any default under the terms of this Agreement. Sec. 512 The parties hereto agree that the provisions of this section remain unchanged. Sec. 513 The parties hereby agree that section 513 shall be superseded by the provisions of section 507 of the Restated DDA. Sec. 514 The parties hereby agree that section 514 shall be superseded by the provisions of section 503 of the Restated DDA. 32 Sec. 515 Right of Reverter Section 515 is hereby amended in its entirety to read as follows: In addition to any other rights and remedies set forth in this Agreement, the fee title to the Site owned by Developer together with all other improvements thereon shall automatically revert to Agency, if after conveyance of title and prior to recordation of the Release of Construction Covenants for the Site, Developer shall fail to cure any breach of this Agreement within the applicable cure period. At the option of Agency, title shall automatically re-vest upon notice and recordation by Agency of written notice of the exercise of this option to revert title; expressly subject to the right of any lender to cure, as provided in this Agreement or in any construction loan documents approved by the Agency. Such right of Agency to re-enter and repossess, to the extent provided in this Agreement, shall be subordinate and subject to, and shall be limited by and shall not defeat, render invalid, or limit: a. Any mortgage, deed of trust, or other security instrument permitted by this Agreement; b. Any rights or interest provided in this Agreement for the protection of the holder of such mortgages, deeds of trust or other security instruments. The deeds of conveyance of the Site from Agency to Developer shall contain appropriate reference and provisions to give effect to the Agency's right, as provided in this section under specified circumstances and prior to the recordation of the Release of Construction Covenants, to re-enter and take possession of the Site together with all improvements thereon, and terminate this Agreement and re-vest in Agency the property conveyed by Agency to Developer hereunder. Upon the re-vesting in Agency of title to the Site or any portion thereof as provided in this Agreement, Agency shall, pursuant to its responsibilities under state law, use its best efforts to resell the Site or any part thereof required by Agency, to a qualified and responsible party or parties, as determined by Agency, as soon, and in such manner, as Agency shall find feasible and consistent with the objectives of such law and of the Redevelopment Plan. In selecting such a qualified and responsible party or parties, Agency shall be required to convey the Site to a party or parties who, in the determination of Agency, has the means and qualifications to assume the obligation of making or completing the improvements set forth in this Agreement, or such other improvements in their stead as shall be satisfactory to Agency, and in accordance with the uses specified for the Site in the Redevelopment Plan. Upon such resale of the Site, the proceeds thereof shall be applied as follows: First, to reimburse Agency and the City for mortgages, construction loans, and all reasonable costs and expenses incurred by Agency and the City including, but not limited to: salaries of personnel related to the acquisition; management and resale of the Site or any portion thereof; attorneys' fees; costs and expenses related to, re-entry, or 33 repossession of the Site; all taxes, assessments, and water and sewer charges with respect to the Site or any portion thereof; and any encumbrances or liens against the Site. Agency shall reserve the right to dispute and not pay encumbrances, liens, taxes, assessments, water and sewer charges. The balance of sales proceeds after the above deductions would be paid to Developer. The rights established in this Agreement are to be interpreted in light of the intention of the parties hereto that Agency will convey the Site to Developer for development in accordance with this Agreement, and not for speculation in undeveloped land. Sec. 516 Plans Section 516 is hereby amended in its entirety to read as follows: If Developer defaults under any terms or provisions hereof, either prior to or after conveyance of title by Agency to Developer, and such default is not cured as provided herein, final construction drawings, final landscaping plans, and finish grading and parking plans, and such other plans and drawings as have been prepared for the development of the Site up to the date ofthe default, notwithstanding any contract to the contrary between Developer and its consultants, shall be obtained by Developer at its expense and shall become the property of the Agency. Developer shall promptly deliver to Agency any and all such plans upon written request therefore submitted by Agency to Developer. In such event, it is understood and agreed that Agency owns such plans and it or any other developer may use such plans to complete the development of the Site or any other development initiated by Agency. In accordance with the provisions of this section, concurrently with the execution of this Agreement, Developer hereby agrees to execute an assignment of all final construction drawings, final landscaping plans, and finish grading and parking plans, and such other plans and drawings as have been prepared for the development of the Site to the Agency (hereinafter referred to as "Assignment of Plans") in the form and manner as attached hereto as Exhibit I and incorporated herein by this reference. VI. SECTION 600 GENERAL PROVISIONS Sec. 60 I Notices, Demands, and Communications Between the Parties Any notice, demand, certificate, request or communication between Agency and Developer shall be deemed to be given and received by the parties five (5) days following the date that it is placed in the United States postal system using registered or certified mail, postage prepaid, return receipt requested, and addressed to the principal offices of Agency and Developer 34 set forth in this Agreement, or in lieu thereof, on the date that such written notice, demand, certificate, request or communication is hand delivered to the parties at the foregoing principal offices. The addresses of principal offices set forth in this Agreement may be changed from time to time by written notice by the parties. Sec. 602 Conflict of Interest No member, official or employee of 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 this Agreement which affects his or her personal interest or the interest of any corporation, partnership, or associate in which he or she is directly or indirectly interested. Developer warrants that it has not paid or given, and will not payor give, any member, official or employee of Agency or any third person any money or other consideration for obtaining this Agreement. Sec. 603 Non-Liability of Agency Officials and Employees No member, official or employee Agency shall be personally liable to Developer, or any successor in interest of Developer, in the event of any default or breach by Agency hereunder or for any amount which may become due to Developer or for any obligations under the terms hereof. Sec. 604 Enforced Delays; Extension of Times of Performance Section 604 is hereby amended in its entirety to read as follows: In addition to any other provisions pertaining to extensions of time for performance heretofore set forth in this Agreement, performance by either party hereunder shall not be deemed to be in default for so long as and where delays which prevent commercially reasonable performance are due to: invasion; local insurrection; local strikes; construction material and local labor shortages within Lynwood not resulting from fault of Developer; lock-outs; floods; earthquakes; fires; casualties; acts of God; epidemics; quarantine; construction material embargos; governmental restrictions or priority; unusually severe weather; acts or failure to act of any public or governmental agency or entity, provided that acts or failure to act of Agency shall not excuse performance by Agency; or any other causes beyond the control and without the fault of the party claiming an extension of time to perform. It is expressly understood that such delays permitted by this section shall only 35 be permitted where such delays directly impact the Site involved and the Developer has no reasonably commercial alternative to perform. An extension of time from any such cause shall only be for the period of the enforced delay, which period shall commence to run from time of the commencement of the cause and written notice of the condition causing the delay. Times of performance under this Agreement may also be extended in writing by mutual agreement of Agency and Developer. Sec. 605 Inspection of Books and Records Agency has the right, upon not less than forty-eight (48) hours notice, to inspect at all reasonable times the books and records of Developer pertaining to the Site in order to effectuate the purposes of this Agreement. Sec. 606 Approval of Agency Wherever this Agreement requires Agency to approve or consent to any contract, document, plan, specification, drawing or other matter, such approval or consent shall not be unreasonably withheld. VII. SECTION 700 SPECIAL PROVISIONS Sec. 70 I Submission of Documents to Agency for Approval Whenever this Agreement requires Developer to submit plans, drawings, or other documents to Agency for approval, which shall be deemed approved if not acted on by Agency within a specified period of time, said plans, drawings or other documents shall be accompanied by a letter stating that they are being submitted and will be deemed to be approved unless rejected by Agency within the time set forth herein. If there is no time specified herein for such Agency approval or rejection of documents, such documents shall be approved or rejected by Agency within thirty days (30), or they shall be deemed approved. Sec. 702 Amendments to This Agreement Section 702 is hereby amended in its entirety to read as follows: No amendment to this Agreement shall be effective unless and until it is in writing and approved by a duly authorized 36 vote of the Agency Members and duly executed by the person so designated by the Agency Members. Developer and Agency agree to mutually consider reasonable requests for amendments to this Agreement, which may be made by lending institutions, or Agency's bond counselor financial consultants, or Agency or Developer, provided said requests are consistent with the purposes of this Agreement. Sec. 703 Operating Memoranda The parties hereto agree that the provisions of this section remain unchanged. Sec. 704 Real Estate Commissions The Agency shall not be liable for any real estate commission, brokerage fees, or finder's fees which may arise from this Agreement or the acquisition of the Site. VIII. SECTION 800 ENTIRE AGREEMENT, SEVERABILITY Sec. 801 Entire Agreement [new section] This Agreement integrates all of the terms and conditions mentioned herein or incidental hereto, and supersedes all negotiations or previous agreements between the parties or their predecessors in interest with respect to all or any part of the subject matter hereof. All prior or contemporaneous agreements, including the Exclusive Negotiating Agreement and any amendments thereto, understandings, representations and statements, oral or written, if any, are merged into this Agreement and shall be of no further force or effect. Each party is entering into 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. Sec. 802 Severability [new section] If any portion of this Agreement is ultimately determined not to be enforceable, that portion shall be severed from the Agreement and the severability shall not affect the enforceability of the remaining terms of the Agreement. 37 IX. SECTION 900 TIME FOR ACCEPTANCE OF AGREEMENT BY AGENCY Sec. 901 Agency Approval [new section] The Agreement, when executed by the Developer and delivered to the Agency, must be authorized, executed and delivered by the Agency within thirty (30) days after the date of the signature by the Developer or the Agreement shall be deemed rejected by the Agency, except to the extent that the Developer shall consent in writing to further extensions of time for the authorization, execution and delivery of the Agreement. The effective date of the Agreement shall be the date when the Agreement has been duly executed by the person so designated by the Agency Members. IN WITNESS WHEREOF, the parties have executed this Agreement on the dates set forth below. L YNWOOD REDEVELOPMENT AGENCY HERMILlO FRANCO By By Date Date ATTEST: By Andrea Hooper Agency Secretary Date APPROVED AS TO FORM: By Ronald N. Wilson, Agency Counsel Date 38 EXHIBIT A Legal Description 39 EXHIBIT . A' PARCEL 1: ThIIt ponlon of RanohO Sen A/mInlo, In mil CllV of Lynwood, CountY ot \.ell AnglllJll, SUIte of Cllllornl., dlll;:rllI.cl as tho_ cttt,1n svIp' of lanll 100.00 tellt will', dlllCrlbed In deeds to 1M Anllllll' Intaro\Jrbon Railway CoIllPIll1)'. _rded In &ooIt 21509. PaQll240, IIf o.ld, In the offk:. of thl CoUft1'/ Recorder of uld Co\llty, .. .c:qu!tld by the 81.ta IIf Clllfomla by died 15t~ ...rol. 584112)"CQrd~ November 21,1990 II Oocumtllt No. 90.20111I85 of Officl.1 PI.COfdt In Slid offtce. lIvlollldld al follow" On tM WIl51 bV SelllT\llnt 10 of 1tl. Hi9tlway R\Gtlt of Wev fllklquMtled \0 the Chv <Of Lynwucd by Rlooludo., of 1111 ClIlfDll'1I. HlgllWaY CDmmldlon, . fllIftlfttd copy of whk>h Ro'oIutk>/I it r.~ed April 211. 1888.. DoCll1lOilt No. 9Ulloee. of OffIcI" f\8C01'c181n tho offico of lh8 Col.II'IlV Recorder of ..Id CountY, and .' lIhown on mop fOQQfdtd Marc:llll, 18911 in Btllte Hlahw,y Map lIIlok 19, ""91' 54 and 55, In nid office: on till Nattl\alln by the Notthclltlfly line of Sliel 100 foot lIttlp: an 'Iha SoIIthweat by '!h. foIlowino da06rlbed llno: BalllMlntlll'l tile SO\lthHat IlOmlf cf Hill SIIQl'IIIIlt 10; thence SoIl1tl8Z. 10'00. EU1, 801.52 fnt, thence So\l1tl 84 .03'02" Eott, 146.18 fat: 1hon... SoIIth 88GOll'1 7' EIIat, 417.98feot to II point on thl ..Id Nol1llo_1V line 01 tile loo.00ttrlp, o.ld polrrt lloIng dlttlnc. Nor'lh 62029'30", Wen,lIMI7 ~ from thI canur line of Atlantic: Av..,.... 100 feat wide and and of tl'le herlln dS-"'ld Mne. There .haP Ile 110 Ibutter'o ri;lIta of lace. IPIlu""narrt w me .bow-dllSCrlbad /Wal praper1V In .nd to me Idjacent Stitt freewaY. Tilt burlngl end IIl$tllf1ll8l und 1/1 tho IbllvlI dnerl,n1.oM III on the C,"fornie Coordinate Synom of 192'1, %0111I '1. oMlle e.ie1 dlettnCe' by 0.&18996437 to oliOln .round IlIVel I1lst.nceS. PARcEL 2; That portion of mo AlnchO San MtCnlo. 10 1he CItY of Lynwood. CountY of LOB Anglll,., SI_ Of c.llcll1le, do.otlblld 111tloR 0IftIln 1VIJll/ of land 100.00 pelnt feel wldll, deac:ribed III d..d. 10 Lo. Af\8II..lrrtlfollrblll Jl8lIwIY Comp,nv,lIoorclod In Boak 2872. PII" 1 Ind 3, III the office 01 tho COunty "'oordar of ..tel CountY, I. aoqull'eel by tht SlItl of C,llfornla bY d.,1I ISt.te P"clI 58366) recordld tkMmber 211. 1890 II Dacument NG. 90-201S95dof OfflcIall\aQOrdltln HId oft\Ce,l>oundllll. followl; On tile EBBt by a.grrtent & cf thl HlllhwlY fight ct Way ",qnqLQhod to till CIIV of L ynwacd by RMOIutlon or 1M CIllfornil HlghwIY Commllliolt. . c:entfiad I:Opy of whlc:h AItOMlol'\ is recorded AfI'1I 211. 1886 I. Pocumorrt No. 9lHl508811 of Offic;lll Rec:otdl In me offl~. of tho County R_dar of IIld County, Ind a, Shown on map IIQql'd.d MIIlCh 6, 1998, In Bock \9, Pell.. 641!lC1li15, of Stlta Hlghwav ....Jll/.ln .lId offict: on the NoM by tile NartheaflDflv Rnl 01 th. herllnabe". memtoll8d 100.00 101l11'lrlp; on the Wett by Segment 3 of e~ CQCUlT\llnt No. 88-8110685: and 01\ tho 80111h by 1ht followil1g dllllCriblll line: CalTl/flllnclng It the IntlrUCllon 01 thI centllf PlUls of BulKlllo.d 80 fe" wid. and FernWGel1 AlIOntllllNottll Roldwlyl 40 fait wide, on the Northeaotlrtv Une of 8egrrtent 3 a' the Highway Rlgll1 of W.y rerlllCluloh8cl to till CIty of Lynwood by flUOlutIon of tIl. California Highway ComITI"I\on,1I c:.~d COllY of IHIllch Is rocorded ~ 211, 19118 IS Ooc~orrt No. 88.6eOfSS5 of Offl~.l Flaacrde In "" officIO of the Countv R'l'Drder of 'lid CaurrtY. and a. Dhown an mlp r'CIIrd..d March D. 1118,In aook 19. ~.g'o 114 and 511,.., _ S~te Hlllh)'lay Maplln Slid office, theMe W'otorlyalot\O theaantorllno <Of Slid Femwaod 2 Avenlla HQrth neU'33'West, 57.71 fait; mel'1e4 $oll\tl ~7"30'44"West 30.00 f8etl thIll!le Sou1h 16"49'39' Ellt, 21.82 f"t; 1henca South 30"50'05" Waft, 21i.26 felt to the point of blglnnlng 11 the SouthWM1ll1V ComBr of Hid SlIlIm8l\t 3: menc' SoUth el"33'1 I' Ei4', 80.01 f..,l ,hence SIlIllh 62"44'liS" bit. 830.20 flell thBl'1e4 SllUth 113",S'Oli'ellt. "343.7.8".-1 1111he SQ"thwelterty comer of SllgImInt8 af.1Id Dccwnent No. 95-6501566, ..Id cema, baing the Westaflv Terminus of tIla' certain eaurn shown ell hailing a blerinll of Nortll64"09'39' W.., end a dlI1anca of 50.48 feet, ..Id COl'ner being the ,nd of th4 her,ln dltlll:flbtcl lne. ReSERVING unto melhlte of Cenfomll, I,a I\lCOOIICIi'I and aalQn!l, III easamant '0 $olllham CallfQmla idleon lor Il1Ility putllO_ III. nip of lend I\eIClIIb... aa folloWIII B.gtnnlng It the Intars.otlan at the hlt,lnaboll' men1iclned Northealt6llV pne of the 100.00foo' S1tlo and thl1 amain calli.. Honh 27"30'44' EaR of lhiI Southa_erIy boundary of ..lel h.relnebOve Ilomam 3; th.noe a1on; laid NortMastIrlY hne, sollth uon'16' Ea", 6511.17 f.1t: ,hitnce South 27 "SO'44"WNt, S.OO feelithence Nortll U"21l'IS" Walt, 47.00 taat: "1'1e4 SOUIh 27'30'44' Wast, 32.00 fen; thence NoM 1l2";UI',Il"WIll', S.OO f.1rt! thenoa Nortl\27"30'44'Ent, 32.00 feet; thence North 62":;19'IS'WMl503.17 feet to that c:ertaln coutee.of 'ilia SOutlllallerly bOundary of said Segmll'11 3; thence NOrth 27'30'44" Ellt 11.00 fait to thl point of beginning, PARCEL 3: Thlt panlon of Rancho 8111l AAtanlo. In thl City 0' Lynwaod, CDUl11V 0' l.OS Anllllea, Stall 01 c.lifvml,. dalOrlbed.. tho.. o.rtain *tIIp$ of land l00.00f", wide, ~Iitd In dllds '0 Lrll Angala' I_r-Urban "lllway Co"'..-nV. tOCGfd.d Ir1 8aa~ 2004. J>aQl 44, In the otflc:e of the COuntY Recorder of laid COllnry, .. acqultad lrI tho SUllO' C""omll lrI dIad (91a,. patOlI Sln5) rec:orded Nowrnblr 211, 1 QaO .' DClOIoIment No. 90-2019865 of Official Aacordaln .ald oflllll bmlnded .. followl: . On "'I' Welt by sa;mll/\t Ii 01 ,he HllIhwllV Right of wav rellnqWlled to the Clry af Lynwood by Reaolutlon 0' the Callfomla Hlghwav Comrnlalon, I cenI1fllClllllpy at wt1lCh RllIO\1Jt!on II recorded APtll 2&, 18ee.. DIlcumant Nil. &15-860885 of OffIcI,1 Recorda in lha offlal at thl County R,cordlr of Slid Cc>untv, and" aIlown on .nap r_rdld Merch fl. , 8116, In lIoo~ 19. P.~ 14 and 56. of 51ttl Hlgl1WIY Malll, in aid ortlrl.; on the North by 1111 NortholaterfV lln. of till hefllnabOYe m.rnlonad 100.00 fact mp; on 1M EaatbY S'llf"lnt 10 01 Slid DaCUlllllrn No. 85.-601115; and on tho South I1V tho fonowInG desribed line I Illl8i'lnlrlll at thl SOuthlrly mall comer of nld S.gl'l'llm 0, AId COI'l'lll' ~~ ., the Euullv Termlnua 01 that oerteln cQUrlllIhown I' n-vlng II bearlna of No"" 64"08 SS"We" .nd . dlste"OI of 50.48 '.It; tn-nlla SOUIh 81P159'S1" En'. f022.1Sflllltl1h8no' North . :7"30'44" &all, 46.80 tea' to. point &.00 felt at rlQht 1llO1.. from 1IIa ,aid Northeasterly Uno of the 100.00 IIIOt Ilr\PI thenc:llllIrIIIGl wlttltaid Nonh<<lIttIrIy Un. SoInh 5~ 129'IS' East. 126.00 fn,; thence SCutl1 27030''J4'Weet 411.811 feet to the Euta'~ prulongellon of 1I1a hereinbefore tMntloned _I~, Itll\lllllJ abellrlnll 01 SCuUI 61 P5S'151 EH1 and.. dinanOll of 10a2.1a fell; Ulancl contllllllng on sald prolol1Qatlon. Soqlh 610158'15 ,. East, 129.99 feet to the SOUlhwUtarly cornet of Segmen, 10 of .ald DoCument No. '15.a601lIlS..lld camar beil1Q tht WNtlIIv Tall'lllnu. of thilt cettaln ~. shown .. hlVlnQ the be.rlno of $oWl S2 0111". S" !ut and . dlllllllce of 80.71 rnt, .ald earner beiOll the end of lIIe haTeln ducrlbed line. ThalD ahan bl no IbUlllr'. rlahtl of lOoe.. .ppurtanen"o tha aboW described rell pfOpert'( In .nclto the adjaceftt State !'reewIY. .. The bnrlngl end dl,,,nc;ea ",ad In the abo.,e descriptions are an tile C.nfamla COordlnlte SV.,.m of 1827.1- 7. PMde aald dlI1IInoes by 0.818804$7 to obtain sro"",, 1....1 dltl.,enot.. A....ac'., rarca' ~o; 81S&.o1 2-$03.904,80$.1108.907. SOli. et7+-Oq,.e04.Sl07 3 EXHIBIT B Site Map to be provided by developer 40 EXHIBIT C Preliminary Drawings to be provided by developer 41 EXHIBIT D REIMBURSEMENT NOTE SECURED BY REIMBURSEMENT TRUST DEED 1. Principal. For value received, HERMILIO FRANCO (ADeveloper@), promises to pay to the order of THE L YNWOOD REDEVELOPMENT AGENCY, a public body, corporate and politic (AAgency@), 11330 Bullis Road, Lynwood, California 90262, or at such other place as the Agency may from time to time designate in writing, the principal sum of One Million Five Hundred Forty Eight Thousand Dollars ($1,548,000) (the ANote"). This Note is issued pursuant to that certain Restated Disposition and Development Agreement (the AAgreement@) between the Developer and Agency, which is fully incorporated herein by this reference. This Note, the Reimbursement Trust Deed securing this Note, and the Agreement are sometimes collectively referred to herein as the AAgency Documents.@ 2. Agencv Loan. a. Acquisition Loan/Purchase Price Pursuant to the terms and conditions set forth in the Agreement, the Agency has provided a loan to the Developer in the amount of One Million Five Hundred Forty-Eight Thousand Dollars ($1,548,000) ("Agency Loan") as payment of the Purchase Price for the acquisition of the Site suitable for the development of Forty Three (43) residential dwelling units. For purposes of this Note, the term Site shall have the same meaning as set forth in the Agreement. 3. Repayment. Developer shall make no principal or interest payments on the Agency Loan for the term of this Note except as provided for herein. a. Unless otherwise provided herein, the Agency Loan and the Purchase Price, as evidenced by this Note, shall be fully due and payable as follows: (I) Upon the sale of each of the residential dwelling units to be constructed on the Site by the Developer, the Developer shall pay to the Agency $36,000. (2) The $36,000 payment, plus other costs and fees set forth in the Agreement, shall be payable to the Agency out of the escrow proceeds from each of the dwelling unit sales. Notwithstanding Section 3(a)(l)(2) the entire principal sum of One Million Five Hundred Forty Eight Thousand Dollars ($1,548,000) shall be paid by Developer to Agency no 42 later than one year following the issuance of the Release of Construction Covenants. 4. Prepavment Developer may prepay the outstanding principal balance of the Agency Loan, in whole or in part, at any time without penalty. 5. Lawful Monev. Payments on the Agency Loan shall be payable in lawful money of the United States of America. 6. Applications ofPavments. Payments on the Agency Loan received by the Agency prior to the time such payment(s) are scheduled, shall be applied to the principal amount of the Agency Loan. 7. Securitv. This Note is secured by a first priority Reimbursement Trust Deed (ADeed ofTrust@), which Deed of Trust creates a lien on the Site (which is legally described in the Deed of Trust). 8. Acceleration bv Reason of Transfer or Financing. The Deed of Trust contains the following limitations on the right of Developer to transfer the Site: Aln order to induce Beneficiary to make the loan secured hereby Trustor agrees that in the event of any transfer of the Site without the prior written consent of Beneficiary, Beneficiary shall have the absolute right at its option, without prior demand or notice, to declare all sums secured hereby immediately due and payable. Consent to one such transaction shall not be deemed to be a waiver of the right to require consent to future or successive transactions. Beneficiary may grant or deny such consent in its sole discretion and, if consent should be given, any such transfer shall be subject to this Deed of Trust, and any such transferee shall assume all obligations hereunder and agree to be bound by all provisions contained herein. Such assumption shall not, however, release Trustor or any maker or guarantor of the Note from any liability thereunder without the prior written consent of Beneficiary. As used herein, Atransfer@ includes the sale, agreement to sell, transfer or conveyance of the Site, or any portion thereof or interest therein, whether voluntary, involuntary, by operation of law or otherwise, the execution of any installment land sale contract or similar instrument affecting all or a portion of the Site, or the lease of all or substantially all of the Site. A Transfer@ shall also include the transfer, assignment, hypothecation or conveyance of legal or beneficial ownership of any partnership interest in Trustor 43 or any conversion of Trustor to a business entity form other than that of a public benefit nonprofit corporation. In the event of any financing, refinancing or partial refinancing (including any additional financing) not contemplated by the Agreement, the Agency Loan shall be immediately due and payable.@ 9. Event of Default. The occurrence of any of the following shall be deemed to be an event of default (AEvent of Default@) hereunder: a. Default in the repayment of the principal balance of the Agency Loan andlor the Purchase Price when and as due pursuant to the terms hereof; or b. The occurrence of an Event of Default under the Deed of Trust securing this Note (including any amendment, modification or extension thereof. c. Failure to perform pursuant to the Agreement. 10. Remedies and Interest in Default. Upon the occurrence of an Event of Default and the expiration of any applicable cure period therefor, then at the option of the Agency, the entire Agency Loan balance together with all accrued interest provided herein, shall, without demand or notice, immediately become due and payable. However, notwithstanding the foregoing, should there be an Event of Default not involving the payment of the Purchase Price where all of the dwelling units have not been sold, the Developer shall, to the extent set forth in the Reimbursement Trust Deed and the Agreement, remain fully responsible for the payment of the Purchase Price upon the sale of any such dwelling unites). Upon the occurrence of an Event of Default, the entire balance of the Agency Loan and/or the Purchase Price, to the extent applicable, together with accrued interest bearing interest at the then prevailing Bank of America prime rate plus four percent (4%) from the due date of the delinquent payment shall be payable to the Agency by Developer. No delay or omission on the part of the Agency in exercising any right under this Note or under any of the Agency Documents shall operate as a waiver of such right. 11. Waiver. Developer hereby waives diligence, presentment, protest and demand, notice of protest, dishonor and nonpayment ofthe Note, and expressly agrees that, without in any way affecting the liability of Developer hereunder, the Agency may extend any maturity date or the time for payment of any installment due hereunder, accept additional security, release any party liable hereunder and release any security now or hereafter securing this Note. Developer further waives, to the fullest extent permitted by law, the right to plead any and all statutes of limitations as a defense to any demand on this Note, or on any deed of trust, security, agreement, guaranty or other agreement now or hereafter securing this Note. 44 12. Attorneys= Fees. If this Note is not paid when due or if any Event of Default occurs, Developer promises to pay all costs of acquisition, enforcement and collection, including but not limited to, attorneys= fees, costs and expert's fees whether or not any action or proceeding is brought to enforce the provisions of this Note hereof. 13. Severability. Every provision of this Note is intended to be severable. In the event any term or provision hereof is declared by a court of competent jurisdiction, to be illegal or invalid for any reason whatsoever, such illegality or invalidity shall not affect the balance of the terms and provisions hereof, which terms and provisions shall remain binding and enforceable. 14. Interest Rate Limitation. It is the intent of Developer and the Agency in the execution of this Note and all other instruments securing this Note that the loan evidenced hereby be exempt from the restrictions of the usury laws of the State of California. The Agency and Developer stipulate and agree that none of the terms and provisions contained herein or in any of the loan instruments shall ever be construed to create a contract for the use, forbearance or detention of money, requiring payment of interest at a rate in excess of the maximum interest rate permitted to be charged by the laws of the State of California. In such event, if the Agency shall collect monies which are deemed to constitute interest which would otherwise increase the effective interest rate on this Note to a rate in excess of such maximum rate the monies shall, at the option of the Agency, be credited to the payment of the sums due hereunder or returned to Developer. Dated: ,2007 Developer, Hermilio Franco 45 OFFICIAL BUSINESS Document entitled to free recording per Government Code Section 6103. Recording Requested by and When Recorded Mail to: The Lynwood Redevelopment Agency 11330 Bullis Avenue Lynwood, California 90262 Attn: Louis Morales SPACE ABOVE THIS LINE FOR RECORDING USE EXHIBIT E REIMBURSEMENT TRUST DEED Securing Agency Loan with Assignment of Rents This Reimbursement Trust Deed ("Deed of Trust") is made this day of ,2007, by and between Hermilio Franco, (ATrustor@), Chicago Title (ATrustee@), and the Lynwood Redevelopment Agency a public body, corporate and politic (ABeneficiary@). Trustor grants, transfers and assigns to Trustee in trust, upon the trusts, covenants, conditions and agreements and for the uses and purposes hereinafter contained, with power of sale, and right of entry and possession, all of its title and interest in that real property (the ASite@) in the City of Lynwood, County of Los Angeles, State of California, described in Exhibit AA@ attached hereto and incorporated herein by this reference; together with Beneficiary=s interest in all buildings, structures and improvements of every nature whatsoever now or hereafter situated on the Site; and together with the rents, issues and profits thereof; and together with all buildings and improvements of every kind and description now or hereafter erected or placed thereon, and all fixtures, including but not limited to all gas and electric fixtures, engines and machinery, radiators, heaters, furnaces, heating equipment, laundry equipment, steam and hot-water boilers, stoves, ranges, elevators and motors, bathtubs, sinks, water closets, basins, pipes, faucets and other plumbing and heating fixtures, mantles, cabinets, refrigerating plant and refrigerators, whether mechanical or otherwise, cooking apparatus and appurtenances, and all shades, awnings, screens, blinds and other furnishings shall to the extent permitted by law be deemed to be 46 permanently affixed to and a part of the realty; and together with all building materials and equipment now or hereafter delivered to said premises and intended to be installed therein; and together with all plans, drawings, specifications, etc., and articles of personal property now or hereafter attached to or used in and about the building or buildings now erected or hereafter to be erected on the Site which are necessary to the completion and comfortable use and occupancy of such building or buildings for the purposes for which they were or are to be erected, including all other goods and chattels and personal property as are ever used or furnished in operating a building, or the activities conducted therein, similar to the one herein described and referred to, and all renewals or replacements thereof or articles in substitution therefor, whether or not the same are, or shall be attached to said building or buildings in any manner; to have and to hold the property hereinbefore described (including the Site and all appurtenances), to Trustee, its successors and assigns for the purposes of securing Trustor performance under that certain Restated Disposition and Development Agreement ("Agreement") and amendments thereto. FOR THE PURPOSE of securing (1) payment of indebtedness of Trustor to the Beneficiary in the principal sum of not less than One Million Five Hundred Forty Eight Thousand Dollars ($1,548,000) (the "Agency Loan@) as set forth in and evidenced by a Reimbursement Note (the "Note") of same date herewith between Trustor and Beneficiary, together with all sums due thereunder including interest and other charges; (2) the performance of each agreement of Trustor in this Deed of Trust and the Note; (3) the performance of each agreement of Trustor under that certain Restated Disposition and Development Agreement (the "Agreement") by and between Trustor (ADeveloper@ therein) and Beneficiary (AAgency@ therein), on file in the Office of Beneficiary; (4) the performance of each agreement and covenant of Trustor under that certain AGrant Deed@ recorded previously by and between Trustor (AGrantee@ therein) and Beneficiary (AGrantor@ therein); and (5) all extensions, amendments, modifications or renewals of the Note, however evidenced, and additional advances evidenced by any note reciting that it is secured hereby; AND TO PROTECT THE SECURlTY OF THIS DEED OF TRUST, TRUSTOR COVENANTS AND AGREES: 1. That it will pay all sums due and payable set forth in the Note at the time and in the manner provided therein; 2. That it will not permit or suffer the use of any of the Site for any purpose other than the use for which the same was intended at the time this Deed of Trust was executed; 3. That the Note, the Agreement and the Grant Deed (collectively the AAgency Documents@) are incorporated herein and made a part of this Deed of Trust. Upon default under the Note, or this Deed of Trust, or this Agreement, or upon violation of the covenants contained in the Grant Deed, Beneficiary, as its option, may declare the whole of the indebtedness secured hereby to be due and payable; 4. That all rents, profits and income from the Site covered by this Deed of Trust are hereby assigned to Beneficiary for the purpose of discharging the debt hereby secured. Permission is hereby given to Trustor so long as no default exists hereunder, to collect such rents, profits and income; 5. That upon default hereunder or under the Agency Documents, Beneficiary shall be entitled to the appointment of receiver by any court having jurisdiction, without notice, to take possession and protect the property described herein and operate same and collect the rents, profits and income therefrom; 6. That Trustor will keep the improvements now existing or hereafter erected on the Site insured against loss by fire and such other hazards, casualties and contingencies as may be required in writing from time to time by Beneficiary, and all such insurance shall be evidenced by standard fire and extended coverage insurance policy or policies. In no event shall the amounts of coverage be less than one hundred percent (100%) of the insurable value or not less than the unpaid balance of the first deed of trust on the Site and this Deed of Trust, whichever is more. Such policies shall be endorsed with standard mortgage clause with loss payable to Beneficiary and certificates thereof together with copies of original policies shall be deposited with Beneficiary; 7. To pay, at least ten (10) days before delinquency, any taxes and assessments affecting said Site when due, all encumbrances, charges and liens, with interest, on said Site or any part thereof which appear to be prior or superior hereto, all costs, fees and expenses of this Deed of Trust; 8. To keep said Site in good condition and repair, including maintenance of said Site. To pay when due all claims for labor performed and materials furnished therefor (unless contested in good faith if Trustor provides security satisfactory to Beneficiary that any amounts found to be due will be paid and no sale of the Site or other impairment of the security hereunder will occur); to comply with all laws affecting said Site 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 Site in violation of law an/or covenants, conditions and/or restrictions affecting said Site (including, but not limited to, the Grant Deed); not to permit or suffer any alteration of or addition to the improvements hereafter constructed in or upon said Site without the consent of Beneficiary; 9. 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 attomeys= fees; in any such action or proceeding in which Beneficiary or Trustee may appear; 10. Should Trustor fail to make any payment or 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 Site for such purposes, may commence, appear in and/or defend any action or proceeding purporting to affect the security hereof or the rights or powers of Beneficiary or Trustee; may 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, may pay necessary expenses, employ counsel, and pay his reasonable fees; II. Beneficiary shall have the right to pay fire and other Site insurance premiums when due should Trustor fail to make any required premium payments. All such payments made by Beneficiary shall be added to the principal sum secured hereby; 12. To pay immediately and without demand all sums so expended by Beneficiary or Trustee, under permission given under this Deed of Trust, with interest from date of expenditure at the rate specified in the Note; 13. That the Agency Loan advanced hereunder is to be used for the acquisition of the Site in accordance with the requirements of the Agreement; and upon the failure of Trustor to keep and perform all the covenants, conditions and restrictions of the Agency Documents, the principal sum and all arrears of interest, and the other charges provided for in the Note shall at the option of Beneficiary become due and payable, anything contained herein to the contrary notwithstanding. 14. Trustor further covenants that it will not voluntarily create, suffer or permit to be created against the Site, subject to this Deed of Trust, any lien or liens except as authorized by Beneficiary and further that it will keep and maintain the Site free from the claims of all persons supplying labor or materials which will enter into the construction of any and all buildings now being erected or to be erected on the Site; 15. That any and all improvements made or about to be made upon the Site, and all plans and specifications, comply with all applicable municipal ordinances and regulations and all other regulations made or promulgated, now or hereafter, by lawful authority, and that the same will upon completion comply with all such municipal ordinances and regulations and with the rules of the applicable fire rating or inspection organization, bureau, association or office; 16. Trustor herein agrees to pay to Beneficiary or to the authorized loan servicing representative of Beneficiary a charge not to exceed $15.00 for providing a statement regarding the obligation secured by this Deed of Trust as provided by Section 2954, Article 2, Chapter 2, Title 14, Division 3 of the California Civil Code. IT IS MUTUALLY AGREED THAT: 17. If the development of the improvements as set forth in the Agreement shall not be carried out with reasonable diligence, or shall be discontinued at any time for any reason other than strikes or lockouts, Beneficiary, after due notice to Trustor or any subsequent owner, is hereby invested with full and complete authority to, but not obligated to: enter upon the Site, employ watchmen to protect such improvements from depredation or injury and to preserve and protect the personal property therein, and to continue or discontinue any and all outstanding contracts for the erection and completion of said building or buildings, to make and enter into any contracts and obligations wherever necessary, either in its own name or in the name of Trustor, and to pay and discharge all debts, obligations and liabilities incurred thereby. All such sums so advanced by Beneficiary (exclusive of the indebtedness secured hereby) shall be added to the principal of the indebtedness secured hereby and shall be secured by this Deed of Trust and shall be due and payable on demand with interest at the rate specified in the Note; 18. Should the Site or any part thereof be taken or damaged by reason of any public improvement or condemnation proceeding, or damaged by fire, or earthquake, or in any other manner, Beneficiary shall be entitled to all compensation, awards, and other payments or relief therefor, and shall be entitled at its option to commence, appear in and prosecute an its own name, any action or proceedings, or to make any compromise or settlement, in connection with such taking or damage. All such compensation, awards, damages, rights of action and proceeds, including the proceeds of any policies of fire and other insurance affecting said Site, are hereby assigned to Beneficiary. After deducting therefrom all its expenses, including attomey=s fees, the balance of the proceeds shall be applied to the amount due under the Note secured hereby. No amount applied to the reduction of the principal shall relieve Trustor from making additional payments as required by the Note; 19. Upon default by Trustor in making any payments provided for herein or in the Note secured hereby, and if such default is not made good pursuant to the Agreement, or if Trustor shall fail to perform any non-monetary covenant or agreement in this Deed of Trust, or Agency Documents within thirty (30) days after written demand therefor by Beneficiary, (or seven (7) days in the event of a monetary default) 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 the Site to be sold, which notice Trustee shall cause to be duly filed for record and Beneficiary may foreclose on this Deed of Trust. Beneficiary shall also deposit with Trustee this Deed of Trust, the Note and all documents evidencing expenditures secured hereby. 20. 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 Site 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 Site by public announcement at the time and place of sale, and from time to time thereafter may postpone the sale by public announcement at the time fixed by the preceding postponement. Trustee shall deliver to the purchaser its deed conveying the property so sold, but without any covenant or warranty, express or implied. The recitals in the deed of any matters or facts shall be conclusive proof of the truthfulness thereof. Any person, including Trustor, Trustee or Beneficiary, may purchase at the sale. Purchaser shall be required to seek an Agreement with the Agency for any development on the Site. Trustee shall apply the proceeds of sale to payment of (I) the expenses of such sale, together with the reasonable expenses of this trust including therein reasonable Trustee=s fees or attorneys= fees for conducting the sale, and the actual cost of publishing, recording, mailing and posting notice of the sale; (2) the cost of any search and/or other evidence of title procured in connection with such sale and revenue stamps on Trustee=s deed; (3) all sums expended under the terms hereof, not then repaid, with accrued interest at the rate specified in the Note; (4) all other sums then secured hereby including but not limited to construction loans; and (5) the remainder, if any, to the person or persons legally entitled thereto; 21. Beneficiary may from time to time substitute a successor or successors to any Trustee named herein or acting hereunder to execute this Deed of Trust. Upon such appointment, and without conveyance to the successor trustee, the latter shall be vested with all title, powers, and duties conferred upon any Trustee herein named or acting hereunder. Each such appointment and substitution shall be made by written instrument executed by Beneficiary, containing reference to this Deed of Trust and its place of record, which, when duly recorded in the proper office of the county in which the Site is situated, shall be conclusive proof of proper appointment of the successor trustee; 22. The pleading of any statute of limitations as a defense to any and all obligations secured by this Deed of Trust is hereby waived to the full extent permissible by law; 23. Upon written request of Beneficiary stating that all sums secured hereby have been paid for the specific Unit, Developer has completed all Improvements for that Unit, that the City has issued a Certificate of Occupancy for that Unit, all liens against that Unit have been satisfied or otherwise paid for, and upon payment to the Trustee of its pro-rata fee, Trustee shall reconvey, without warranty, the Deed of Trust for that particular Unit then held hereunder. The recitals in such reconveyance of any matters of fact shall be conclusive proof of the truthfulness thereof. The grantee in such reconveyance may be described as Athe person or persons legally entitled thereto;@ 24. The trust created hereby is irrevocable by Trustor; 25. 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 ABeneficiary@ shall include not only the original Beneficiary hereunder but also any future owner and holder including pledgees, of the Note secured hereby. In this Deed of Trust, whenever the context so requires, the masculine gender includes the feminine and/or neuter, and the singular number includes the plural. All obligations of each Trustor hereunder are joint and several; 26. Trustee accepts this trust when this Deed of Trust, duly executed and acknowledged, is made public record as provided by law. Except as otherwise provided by law Trustee is not obligated to notifY any party hereto of pending sale under this Deed of Trust or of any action or proceeding in which Trustor, Beneficiary or Trustee shall be a party unless brought by Trustee; 27. The undersigned Trustor requests that copies of any notice of default and of any notice of sale hereunder be mailed to it at 9369 Gainford St., Downey, California 90240, Attention Hermilo Franco. 28. This Deed of Trust contains the following limitations on the right of Trustor to transfer the Site (as defined in the Deed of Trust); In order to induce Beneficiary to make the loan secured hereby Trustor agrees that in the event of any transfer of the Site without the prior written consent of Beneficiary, Beneficiary shall have the absolute right at its option, without prior demand or notice, to declare all sums secured hereby immediately due and payable. Consent to one such transaction shall not be deemed to be a waiver of the right to require consent to future or successive transactions. Beneficiary may grant or deny such consent in its sole discretion and, if consent should be given, any such transfer shall be subject to this Deed of Trust, and any such transferee shall assume all obligations hereunder and agree to be bound by all provisions contained herein. Such assumption shall not, however, release Trustor or any maker or guarantor of the Note from any liability thereunder without the prior written consent of Beneficiary. As used herein, Atransfer@ includes the sale, agreement to sell, transfer or conveyance of the Site, or any portion thereof or interest therein, whether voluntary, involuntary, by operation oflaw or otherwise, the execution of any installment land sale contract or similar instrument affecting all or a portion of the Site, or the lease of all or substantially all of the Site. A Transfer@ shall also include the transfer, assignment, hypothecation or conveyance oflegal or beneficial ownership of any partnership interest in Trustor or any conversion of Trustor to a business entity form other than that of a public benefit nonprofit corporation. In the event of any financing, refinancing or partial refinancing (including any additional financing) not contemplated by the Agreement, the Note shall be immediately due and payable. 29. Trustor shall permit Beneficiary and its agents or representatives, to inspect the Site at any and all reasonable times, with or without advance notice. 30. Trustor shall be subject to and comply with all of the restrictions set forth in the Agreement and Trustor hereby consents to such restrictions and agrees to be bound thereby. Such restrictions shall be in addition to and not in limitation of the rights of Beneficiary expressly set forth in this Deed of Trust. 31. For purposes of this Deed of Trust, AHazardous Materials@ mean and include any hazardous, toxic or dangerous waste, substance or material including, without limitation, flammable explosives, radioactive materials, asbestos, hazardous wastes, toxic substances and any materials or substances defined as hazardous materials, hazardous substances or toxic substances in (or for purposes of) the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (ACERCLA@),asamended(42 V.S.C. ' '9601, et. seq.), the Resource Conservation and Recovery Act (42 V.S.C. ' '6901, et. seq.) and those substances defined as hazardous wastes in '25117 of the California Health and Safety Code or as hazardous substances , 25316 of the California Health and Safety Code or in any regulations promulgated under either such law, any so-called ASuperfund@ or ASuperlien@ law, or any other federal, state or local statute, law, ordinance, code, rule, regulation, order or decree regulating, relating to, or imposing liability or standards of conduct concerning, any hazardous, toxic or dangerous waste, substance or material, as now or at any time hereafter in effect. 32. In addition to the general and specific representations, covenants and warranties set forth in the Deed of Trust or otherwise, Trustor represents, covenants and warrants, with respect to Hazardous Materials, as follows: (a) Neither Trustor nor, to the best knowledge of Trustor, any other person, has ever caused or permitted any Hazardous Materials to be manufactured, placed, held, located or disposed of on, under or at the Site or any part thereof, and neither the Site nor any part thereof, or any property adjacent thereto, has ever been used (whether by the Trustor or, to the best knowledge of the Trustor, by any other person) as a manufacturing site, dump site or storage site (whether permanent or temporary) for any Hazardous Materials; (b) Trustor hereby agrees to indemniry Beneficiary, its officers, employees, contractors and agents, and hold Beneficiary, its officers, employees, contractors and agents (collectively the AAgency@) harmless from and against any and all losses, liabilities, damages, injuries, costs, expenses and claims of any and every kind whatsoever paid, incurred or suffered by, or asserted against Beneficiary, its officers, employees, contractors or agents for, with respect to, or as a direct or indirect result of, the presence or use, generation, storage, release, threatened release or disposal of Hazardous Materials on or under the Site or the escape, seepage, leakage, spillage, discharge, emission or release of any Hazardous Materials from the Site (including, without limitation, any losses, liabilities, damages, injuries, costs, expenses or claims asserted or arising under CERCLA, any so-called ASuperfund@ or ASuperlien@ law, or any other federal, state or local statute, law, ordinance, code, rule regulation, order or decree regulating, relating to or imposing liability or standards of conduct concerning any Hazardous Materials), regardless of whether or not caused by, or within the control of Trustor. However, notwithstanding the foregoing, in no event shall the above indemnification be construed by any of the parties hereto to apply to any party other than the Agency nor shall it preclude the Trustor from asserting any rights or claims it may have against any other parties relative to such escape, seepage, leakage, spillage, discharge, emission or release of any Hazardous Materials from the Site as set forth herein above. (c) Trustor has not received any notice of: (i) the happening of any event involving the use, spillage, discharge or cleanup of any Hazardous Materials (AHazardous Discharge@) affecting Trustor or the Site or (ii) any complaint, order, citation or notice with regard to air emissions, water discharges, noise emissions or any other environmental, health or safety matter affecting Trustor or the Site (AEnvironmental Complaint@) from any person or entity, including, without limitation, the United States Environmental Protection Agency (AEPA@). If Trustor receives any such notice after the date hereof, then Trustor will give, within seven (7) business days thereafter, oral and written notice of same to Beneficiary. (d) Without limitation of Beneficiary=s rights under this Deed of Trust, Beneficiary shall have the right, but not the obligation, to enter onto the Site or to take such other actions as it deems necessary or advisable to clean up, remove, resolve or minimize the impact of, or otherwise deal with, any such Hazardous Materials or Environmental Complaint upon its receipt of any notice from any person or entity, including without limitation, the EP A, asserting the existence of any Hazardous Materials or an Environmental Complaint on or pertaining to the Site which, if true, could result in an order, suit or other action against Trustor affecting any part of the Site by any governmental agency or otherwise which, in the sole opinion of Beneficiary, could jeopardize its security under this Deed of Trust. All reasonable costs and expenses incurred by Beneficiary in the exercise of any such rights shall be secured by this Deed of Trust and shall be payable by Trustor upon demand together with interest thereon at a rate equal to the rate payable under the Note secured hereby. (e) The foregoing representations, covenants, indemnities and warranties shall be continuing and shall be true and correct for the period from the date hereof to the release of this Deed of Trust (whether by payment of the indebtedness secured hereby or foreclosure or action in lieu thereof), and these representations, covenants, indemnities and warranties shall survive such release. 33. The following shall be an Event of Default: (a) Failure of Trustor to pay, when due, principal and interest and any other sums or charges on the Note, in accordance with the provisions set forth in the Note; (b) A violation of the terms, conditions or covenants of the Agreement or this Deed of Trust prior to the Release of Construction Covenants; or (c) A default under any senior deed of trust. 34. Upon the occurrence of an Event of Default as described in Section 33, Trustor shall be obligated to repay the Note and Beneficiary may, by action, suit or proceeding at law or in equity, sue for, and enforce payment of any and all amounts due by Trustor pursuant to the terms of the Note and/or sue to enforce the performance of the obligations of Trustor under the Agency Documents, subject to the terms and conditions of the Agreement. 35. The Note secured by this Deed of Trust evidences and non-recourse only obligation of Trustor. 36. All expenses (including reasonable attorneys= fees and costs and allowances) incurred in connection with an action to foreclose, or the exercise of any other remedy provided by this Deed of Trust, including the curing of any Event of Default, shall be the responsibility of Trustor. 37. Each such successor owner of an interest in the Site other than through foreclosure, shall take its interest subject to this Deed of Trust. ATRUSTOR@ Dated: By: I EXHIBIT F SCOPE OF DEVELOPMENT ARTICLE I. GENERAL DESCRIPTION The Site shall be developed as an integrated residential neighborhood in which the improvements will have architectural excellence, both individually as well as in the context of a total neighborhood. The improvements to be constructed on the Site shall be of high architectural quality, well landscaped, and effectively and aesthetically designed. The shape, scale of volume, exterior design, and exterior finish of each of the detached single family homes ("Units") must be consonant with, visually related to, physically related, and an enhancement to each other and to adjacent improvements within the Project area. The Developer's plans, drawings and proposals submitted to the Agency for approval shall describe in reasonable detail the architectural character intended for the Units. The total development of the Site shall be in conformity with the Redevelopment Plan. The provisions, design criteria, and Site development standards set forth in this Scope of Development apply to the Site except where specifically indicated otherwise. ARTICLE 2. DEVELOPER IMPROVEMENTS Section 2.1 General The Development shall consist of forty three (43) detached single family homes, five of which are to be marketed, restricted, and sold to low income households as that term is defined and determined on an annual basis by the Department of Housing and Urban Development. The Developer shall use its diligent and good faith efforts to construct on the Site a total of38 single family detached residential structures for primary occupancy (the "Units"). Excluding condition 21 the development shall include all related Off and On-Site Improvements as set forth and required by the Planning Commission Resolution number 3041 approved September 11, 2004. . The Units shall also be of high architectural quality with landscaped areas effectively and aesthetically designed and developed in accordance with all applicable zoning and other land use regulations. Section 2.2 Urban Design Standards, Controls and Restrictions Standards, controls and restrictions regarding construction and development, including, 2 but not limited to, maximum land coverage, setbacks and building construction shall be as required by the City Codes or approved City Council resolutions. All On-Site and Off-Site elements shall be subject to design review by the Agency in accordance with the procedures set forth in the Agreement and Schedule of Performance. Section 2.3 Architectural Standards The architecture of all Units shall maintain a high quality of architectural design and establish visual continuity with existing and proposed developments surrounding the Site. a. Form and Scale The Units on the Site shall be of a form and scale which are compatible with the adjoining land uses and the street environment. b. Street Level Design The facades as seen from the street shall be such that the shape, exterior design and exterior finish of the structures are consonant with, and visually related to, each other and surrounding developments. c. Building Materials Building materials shall be of a quality which expresses the character of Lynwood's physical environment. Exterior walls of all buildings and structures facing on any streets or future streets shall be concrete, masonite or equivalent, masonry stucco, wood, glass, exposed aggregate or terrazzo construction as approved by the Agency. Other materials may be considered, excluding corrugated aluminum and iron. d. Energy Considerations Energy efficient features shall be incorporated into the design of the development including passive energy conservation methods. The Developer will be required to demonstrate consideration of energy features as a part of the design review process. e. Refuse Containers Provision for refuse containers shall be contained within the Unit property boundaries. f. Signs All public signs on the exteriors of buildings and structures are of special concern to the Agency. No sign which is inconsistent with the overall project theme will be permitted. All signs must be approved by the Agency and must comply with applicable City Codes. Section 2.4 Siting and Land Use Standards The location of the structures shall relate to and take advantage of developments and attractions surrounding the Site. The height of all structures developed on the Site shall be in accordance with the City Zoning Ordinance. Section 2.5 Streetscaoe Design Standards 3 a. Landscaping To the extent applicable, the Developer shall provide and maintain landscaping within public rights-of-way between the Site line of a Unit and the curb line of adjacent streets. All landscaping shall be integrated with the existing or approved landscaping for adjacent properties in the redevelopment project area. Landscaping includes such materials as paving, trees, shrubs, and other plant materials, landscape containers, top soil, soil preparation, automatic irrigation, and landscape and pedestrian lighting. Landscaping shall carry out the objectives and principles of the Agency's desire to accomplish an aesthetically superior environment. Developer, or its successors and assigns, shall maintain the landscaping free from debris and accumulation of rubble and shall maintain all plant materials in a healthy and manicured condition. b. Utilities The Developer shall be responsible for all on-Site utility installations and connections necessary or appropriate to develop the Site. Such utilities shall include but not be limited to the bringing of sanitary sewers, curb inlets, Channel connections, headwall, sewer mains, water mains, manholes, sewer laterals, water laterals, gate valves, fire hydrants, sewer pump stations, sewer pump main, electrical power, water supply, telephone, and gas facilities, all as required by the City and for the development of the Site by the Developer. All utility services shall be underground or concealed within buildings to the extent permitted by appropriate utility companies and utility districts. No mechanical equipment or meters shall be left exposed in yard areas or on roofs. c. Building Coverage Minimum building setbacks shall be in conformance with the City Zoning Ordinance and Basic Concept Drawings approved by the Agency. d. Rooftops On all structures whose roof area is visible from surrounding structures or proposed structures, pedestrian ways, streets, etc., exposed duct work for heating and cooling, mechanical equipment and other roof structures shall be screened from the direct view of adjacent property or buildings in a manner approved by the Agency. Nothing contained in this paragraph or the Agreement shall be construed to require Developer to install any air conditioning units, evaporative coolers or other cooling equipment. e. Parking Location All parking for the development on the Site shall be located within the boundaries of the Site, except as approved by the Agency. Each of the Units shall have attached two car garages. f. Handicap Access Developer shall design and construct all of the improvements on the Site with respect to ingress and egress to streets in compliance with all laws for handicapped persons. g. Public Improvements The Developer shall make any street repairs for damage caused by the Developer's construction. These repairs shall be at the Developer's expense and shall be constructed in accordance with the technical specifications, standards, and practices of the City. The Developer shall also provide all on-Site public improvements on the Site. h. Construction During construction of the improvements by the Developer, 4 the Developer shall take all reasonable precautions to minimize dust and disturbance to adjacent properties caused by construction. The Developer shall work normal working hours in accordance with applicable City codes and regulations. Section 2.6 Removal and/or Remedv of Soil and/or Water Contamination The Developer shall (at its own cost and expense) remove and/or otherwise remedy as provided by law and implementing rules and regulations, and sufficiently to adequately protect the public health and safety (including the health and safety of occupants of the Site and adjacent properties), any contaminated or hazardous soil and/or water conditions on the Site. Such work shall include without limitation the following: a. Remove (and dispose of) and/or treat any contaminated soil and/or water on the Site (and adjacent public rights of way which the Developer is required to improve) as necessary to comply with applicable governmental standards and requirements. b. Design and construct all improvements on the Site in a manner which will assure protection of occupants and all improvements from any contamination, whether in vapor or other form, and/or from the direct and indirect effects thereof. c. Prepare a Site safety plan and submit it to the appropriate governmental and other authorities for approval in connection with obtaining a building permit for the construction of improvements on the Site. Such Site safety plan shall assure workers and other visitors to the Site of protection from any health and safety hazards during development and construction of the improvements. Such Site safety plan shall include monitoring and appropriate protective action against vapors and/or the effect thereof. Such Site safety plan shall be updated and resubmitted for approval thirty (30) days prior to conveyance of the Site to the Developer. d. Obtain from the County of Los Angeles and/or California Regional Water Quality Control Board and/or any other authorities required by law any permits or other approvals required in connection with the removal and/or remedy of soil and/or water contamination, in connection with the development and construction on the Site. The Developer agrees that the Agency, and its consultants and agents, shall have the right (but not the obligation) to enter upon the Site at any time to monitor the excavation and ARTICLE 3. PUBLIC IMPROVEMENTS Except as set forth in Condition 21 of the Conditions of Approval dated September 11, 2004 and subsequent City Council Resolutions, Developer is to construct all public improvements as set forth in Planning Commission Resolution Number 3041 dated September 11, 2004. 5 ARTICLE 4. EASEMENTS The Developer shall grant and permit all necessary and appropriate easements and rights for the development of the Site and each parcel thereof, including, but not limited to, easements and rights of vehicular access, pedestrian access and all utility services on such terms and conditions as Agency and Developer may agree. ARTICLE 5. ENVIRONMENTAL REVIEW The Developer shall be responsible for preparing any supplemental environmental documents required to carry out the Agreement. The Developer agrees to cooperate with the Agency in the preparation of any such documents and shall fully comply with all mitigation measures set forth therein. 6 EXHIBIT G SCHEDULE OF PERFORMANCE I. Developer to present executed Restated DDA, Reimbursement Note, Reimbursement Trust Deed to Agency. Sect. 202, 304 2. Developer to provide evidence ofworker's compensation insurance and public liability insurance. Sect. 311 3. Present conformed stamped copy of approved final tract map. Sect. 304 4. Developer shall prove to the satisfaction of the Agency that he has sufficient funds in the amount of $1,274,713, to reasonably accomplish the development, building and completion of the First Phase. Sect. 103 5. Developer to present Construction Budget for approval of First Phase. Sect. 101 (4) 6. Developer to acquire permits and/or entitlements. Sect. 312 7. Developer shall prove to the satisfaction of the Agency that he has sufficient funds in the amount of approximately $2,000,000, to reasonably accomplish the development, building and completion of the Second Phase. Sect. 103. 8. Developer to provide Agency copy of proposed contract for the sale, transfer and development of residential lots. Sect. 303 7 March 9, 2007. Prior to March 9, 2007 March 31, 2007 March 31, 2007 March 31, 2007 Prior to commencement of construction. September 30, 2007 December 31, 2007 9. Developer shall prove to the satisfaction of the Agency that he has sufficient funds in the amount of approximately $3,800,000, to reasonably accomplish the development, building and completion of the Third Phase. Sect. 103. 10. Developer to have conveyed fee title to 5 lots to Access Community Housing or other qualified CHDO. Sect. 103 (3), 304 II. Completion of First Phase of Construction. Sect. 310 (A). 12. Developer shall prove to the satisfaction of the Agency that he has sufficient funds in the amount of approximately $3,300,000, to reasonably accomplish the development, building and completion of the Fourth Phase Sect. 103. 13. Completion of Second Phase of Construction. Sect. 310(8). 14. Completion of Third Phase of Construction. Sect. 31O( C) IS. Completion of Fourth Phase of Construction. Sect. 31 OeD) 16. Developer Submission of Final Construction Drawings, Plans and Specifications. Sect. 308. 17. After Agency Approval of Final Plans and Resubmission of changes by Developer Agency time to review. Sect. 308. 8 February 28, 2008 February 28, 2008 No later than March 31, 2008 August 31, 2008 No later than March 31, 2009 No later than March 31, 2010 No later than March 31, 2011 Thirty (30) days following Agency's receipt of Developer's changes to Final Construction Drawings, Plans, and 18. Submission of Landscaping Plan. Developer Shall prepare and submit to Agency for review and approval the Landscaping Plan. 19. Agency Review of Landscaping Plan. Agency shall review the Landscaping Plan submitted by Developer and shall approve or disapprove. 9 Specifications. Within 10 days of Agency's receipt of the Landscaping Plan from Developer. OFFICIAL BUSINESS Document entitled to free recording per Government Code Section 6103. Recording Requested by and When Recorded Mail to: THE L YNWOOD REDEVELOPMENT AGENCY 11330 Bullis Road Lynwood, California 90262 Attn: Executive Director SPACE ABOVE THIS LINE FOR RECORDING USE EXHIBIT H RELEASE OF CONSTRUCTION COVENANTS WHEREAS, Hermilio Franco, an individual (the "Developer") is the owner of certain real property situated in the City of Lynwood, California (The "Site"), as more specifically and legally described in Exhibit A, attached hereto and made a part hereof, and has agreed to construct certain improvements on the Site; and WHEREAS, pursuant to a Restated Disposition and Development Agreement, dated March 6, 2007, ("Agreement") the Lynwood Redevelopment Agency, a public entity corporate and politic (the "Agency"), has agreed to issue the Developer a Release of Construction Covenants (the "Release") upon completion and development of the improvements on the Site, as set forth in the Exhibit F of the Agreement, Scope of Development ("Improvements") and that such Release shall be in such form as to permit it to be recorded in the County Recorder's Office of Los Angeles County; and WHEREAS, this Release shall be a conclusive determination of the satisfactory completion of the construction and development of the Improvements on the Site, as required by Section 326 of the Agreement; and WHEREAS, the Agency has determined that the construction and development of the Improvements on the Site as required by the Agreement have been fully and satisfactorily completed; and 10 Site; Date: WHEREAS, the City has issued a Certificate of Occupancy for all of the homes built on the NOW THEREFORE, the Agency hereby certifies as follows: 1. Development of the Improvements on the Site has been fully and satisfactorily completed as required by the Agreement and all Exhibits to the Agreement and Developer has fully complied with the terms of the Agreement; and 2. Except as specifically and otherwise provided in the Agreement, nothing contained in this Release shall modifY in any way the provisions of the Agreement, and all such provisions which shall survive the issuance of this Release. IN WITNESS THEREOF, the Agency has executed this Release the _ day of ,2008. L YNWOOD REDEVELOPMENT AGENCY A public body, corporate and politic By: Executive Director 11 EXHIBIT I ASSIGNMENT Developer, Hermilio Franco hereby irrevocably assigns, conveys, transfers, and delivers to the Lynwood Redevelopment Agency ("Agency") ownership and all rights, title and interest of any and all architectural plans, final landscaping plans, Final Tract Maps, finish grading and parking plans, engineering plans, storm water management plans, construction drawings, construction contracts, receipts, approvals, permits, warranties, or other documents (collectively "Documents") in his possession or control pertaining to the development described in attached Exhibit 1 to this assignment (the "Site"). On or before September 30, 2007, or as soon as such documents exist or are assignable (whichever is earlier), Hermilio Franco shall convey, transfer, and deliver to the Lynwood Redevelopment Agency ("Agency") ownership of any and all architectural plans, final landscaping plans, finish grading and parking plans, engineering plans, storm water management plans, construction drawings, construction contracts, receipts, approvals, permits, warranties, or other documents (collectively "Documents") in his possession or control pertaining to Phase Two of the development as set forth in Section 103 of the Restated Disposition and Development Agreement between Hermilio Franco and the Agency. On or before February 28, 2008, or as soon as such documents exist or are assignable (whichever is earlier), Hermilio Franco shall convey, transfer, and deliver to the Lynwood Redevelopment Agency ("Agency") ownership of any and all architectural plans, final landscaping plans, finish grading and parking plans, engineering plans, storm water management plans, construction drawings, construction contracts, receipts, approvals, permits, warranties, or other documents (collectively "Documents") in his possession or control pertaining to Phase Three of the development as set forth in Section 103 of the Restated Disposition and Development Agreement between Hermilio Franco and the Agency. On or before August 31, 2008, or as soon as such documents exist or are assignable (whichever is earlier), Hermilio Franco shall convey, transfer, and deliver to the Lynwood Redevelopment Agency ("Agency") ownership of any and all architectural plans, final landscaping plans, finish grading and parking plans, engineering plans, storm water management plans, construction drawings, construction contracts, receipts, approvals, permits, warranties, or other documents (collectively "Documents") in his possession or control pertaining to Phase Four of the development as set forth in Section 103 of the Restated Disposition and Development Agreement between Hermilio Franco and the Agency. Hermilio Franco further agrees to execute any and all further documents necessary to enable the Agency to have beneficial use of Documents to develop the Site. Dated Hermilio Franco 1 II AGENDA STAFF REPORT DATE: TO: APPROVED BY: PREPARED BY: SUBJECT: March 6, 2007 Honorable Chair and Members of the Agency Bruce Arnoldussen, Interim Executive Director ~ Lorry Hempe, Assistant City Manager W\. Arnoldo Beltran, City Attorney y Contract Project Managers for Agency Projects Recommendation: Staff recommends that the Agency consider retaining the services of one or more consulting firms to serve in the capacity of "Project Managers" for current projects under consideration by the Redevelopment Agency. Background: The Lynwood Redevelopment Agency has had under consideration a variety of projects. Some of the projects have been under review and discussion for more than five years. At various times the projects under consideration have been treated as "approved" and ready to proceed. Nonetheless, as a result, in part, to shortage of necessary staffing these projects have not moved beyond negotiated agreements such as Disposition and Development Agreements. In the absence of the necessary support staff, timely responses to the needs of specific projects to assure their success (or conversely to reach a determination of, perhaps, that the projects are no longer feasible) may be difficult to attain There is ample precedent for the use of this type of assistance. The Agency has previously retained a variety of firms to provide services including director of the department, financial analysts, and support personnel. Discussion: The Agency staff is currently working with the Redevelopment Subcommittee along with the Agency Counsel and the City Attorney. At this time, staffing level at the Redevelopment is insufficient to meet the demands in a timely manner of the redevelopment and housing projects that are currently at different stages in the development process. By availing itself of the services of firms that can serve in the role of "Project Managers" the staff can insure that timely responses to Agenc~ concerns are ---~-,.~_........._,....._. . AGENDA r ,::c. ~ provided. Further, the support from the firm or firms selected will make it possible to provide a quick assessment of individual projects. Staff will also regain the ability to make a determination of the critical elements to the success of the project that remain to be performed, and will guarantee that the duties, responsibilities or legal obligations of the Agency are carried out on a timely basis. Proper support from the selected firm or firms will also permit the Agency to regain control of specific projects, and to demand performance on the part of the project sponsors where they may have failed to perform on the obligations undertaken and required for the success of the projects. The selected firm or firms will be given the responsibility for managing specific projects and reporting directly to the Redevelopment Agency staff on the viability of the projects and the necessary steps to bring the assigned projects to fruition, amend the same where necessary or close out the projects that do not survive financial scrutiny. The consultants, on as needed basis, would be reporting to the Redevelopment Subcommittee on the status of the projects. At this time, it would be prudent at the very least if the RFP Process is not selected, to solicit interests from various firms, interview these firms and provide a recommendation to the Agency on a "short list of firms" to select from. Staff recommends the Agency direct staff to consider the following alternatives and direct staff accordingly: 1. Interview each of the firms and make recommendations to the Agency for selection of the firm or firms at the next regularly scheduled meeting; or 2. Schedule interviews for the Ad Hoc Committee on Redevelopment Matters to interview the firms and make appropriate recommendations to the Agency at the next regularly scheduled meeting. 3. Enhance the list of firms through an RFP process; 4. Explore other alternatives to address the staffing needs of the Agency. Fiscal Impact: The fiscal impact is uncertain as it will depend on the tasks assigned and the duration of the engagements. Staff believes, however, that the cost will be consistent with the alternative of permanently adding support personnel on a full time basis. Coordinated with: City Manager's Office City Attorney Finance Department . 02/28/2007 16:02 01 W1L PAGE 01 RECORDING REQUESTED BY AND WHEN RECORDED, MAIL TO: BANCO POPULAR NORTH AMERICA Construction Loan Department 888 Disneyland Drive Anaheim, CA 92802 Attention: Assessor's Parcel No. SUBORDINATION AGREEMENT NOTICE: THIS SUBORDINATION AGREEMENT RESULTS IN YOUR SECURITY INTEREST IN THE PROPERTY BECOMING PARTIALLY SUBJECT TO A LOWER PRIORITY THAN THE LIEN OF SOME OTHER OR LATER SECURITY INSTRUMENT. This Subordination Agreement (this "Agreement"), dated for reference purposes as of December ""'=' 2006, is among HERMILIO FRANCO, an individual ("Borrower"), L YNWOOD REDEVELOPMENT AGENCY, a public body corporate and politic ("Subordinate Lender"), and BANCO POPULAR NORTH AMERICA ("Senior Lender"). REelT ALS A. Senior Lender has agreed to make a loan to Borrower in the original principal amount of $1,274,713,00 (the "Senior Loan"). The Senior Loan is evidenced by, among other things, a Construction Loan Agreement ("Loan Agreement") and a Promissory Note ("Promissory Note"), and is secured by, among other things, a Construction Deed of Trust, Assignment of Rents, Security Agreement and Fixture Filing (the "Senior Deed of Trust"), executed by Borrower in favor of Senior Lender and dated December 2006, to be recorded concurrently herewith in the Official Records of Los, Angeles County, California. The real property encumbered by the Senior Deed of Trust is legally described in Exhibit A attached hereto ("Property"). The Loan Agreement, Promissory Note, Senior Deed of Trust and other documents evidencing, securing, or otherwise relating to the Senior Loan, are collectively referred to as the "Senior Loan Documents". B. Subordinate Lender has made a loan to Borrower in the original principal amount of [$I,404,000.00J (the "Subordinate Loan"). The Subordinate Loan is evidenced by, among other documents, a promissory note dated as of January 27, 2005 (the "Subordinate Note"), and is secured by, among other interests, a deed of trust dated as of January 27, 2005 (the "Subordinate Deed of Trust"), previously recorded in the Official Records of Los Angeles County, California. _The Subordinate Deed of Trust encumbers the real property legally described in Exhibit B hereto (the "Subordinate Lender's Security"). The Property is included as part of the Subordinate Lender's Security, as it is referenced as Parcel I in Exhibit B. The Subordinate Note, Subordinate Deed of Trust and aU other documents evidencing Or securing the Subordinate Loan, are referred to herein collectively as the "Subordinate Loan Documents." C. As a condi.tion precedent to the making of the Senior Loan, Senior Lender has required Subordinate Lender to subordinate the portion of the lien of the Subordinate Deed of Trust which encumbers the Property to the lien of the Senior Deed of Trust, and to subordinate Subordinate Lender's right to receive any payment under the Subordinate Loan Documents to Senior Lender's right 02/28/2007 16:02 01 W1L PAGE 02 to receive payment of the indebtedness secured by the Senior Loan Documents on the terms and conditions set forth below. It is understood and agreed upon by the parties hereto that Subordinate Lender is only granting a superior interest in the specific property identified in Exhibit A attached hereto and to no other property or security that is subject to the Subordinate Loan Documents. NOW, THEREFORE, FOR VALUABLE CONSIDERATION, the receipt and sufficiency of which is hereby acknowlcdged, the parties hereto agree as follows: AGREEMENTS Subordination. 1.1 Lien Subordination. Subordinate Lender hercby agrees to subordinate the portion of the lien of the Subordinate Deed of Trust which encumbers the Property and to subordinate its rights, remedies, and privileges thereunder and under the Subordinate Loan Documents to thc Senior Deed of Trust and the Senior Lender's rights, remedies and privileges thereunder and undcr the Senior Loan Documents. In the event of a default by Borrower under the terms of the Senior Loan Documents, the Senior Lender's right to exercise any of its rights and remedies under the Senior Loan Documents shall be limited to the recovery of the amounts owed to it under the terms of the Senior Loan Documents. The Subordinate Lender shall retain its right to exercise any of its rights and remedies under the Subordinate Loan Documents with respect to any other real or personal properties or parcels ofland which are not subject to the tenns ofthis Agreement. 1.2 Payment Subordination. Subordinate Lender agrees that its right to receive payments from Borrower or any guarantor of any amount due under the Subordinate Loan Documents ("Subordinate Indebtedness") shall be subordinated to Senior Lender's right to receive the sums owed to it under the terms of the Senior Loan Documents. Thereafter, the Subordinate Lender shall have the right to exercise any of its rights and remedies under the Subordinate Loan Documents to the same extent and in the same amount as though there were no Senior Loan. (a) Except as provided in this Section 1.2(a) herein, subsequent to the date hereof, Borrower shall not pay and Subordinate Lender will not demand Or accept payment of any interest, prinCipal or any other amounts (however characterized) in respect of the Subordinate Loan or receive any prepayments of the Subordinate Loan that interfere with Senior Lender's remedies with respect to the Property. Notwithstanding the foregoing, as long as Subordinate Lender has not received any written notice of dcfault under the Scnior Loan Documents, or, in the event there has been a written notice of default at any time after the cure of such default and so long as Subordinate Lender does not receive my other written notice of default, Subordinate Lender shall be entitled to receive and collect. upon each sale of a Unit (as defined in the .Loan Agreement), the amount, if any, to which Subordinate Lender is entitled under the Subordinate Loan Documents for paydown of the Subordinate Loan (provided, however, that the amount of any such payment to Subordinate Lender shall not, with respect to an.y sale of a Unit, exceed the sum of $36,000.00 plus any deferred permit or entitlement fees owed by BOlTOwer). During the pllndency of an event of default under the Senior Loan Documents and upon delivery of written notice thereof by Senior Lender to Subordinate Lender of such default, and subject to the express provisions in this Section, Borrower shall not pay and Subordinate Lender will not demand or accept payment of any interest, principal or any other amounts that interfere with Senior Lender's remedies with respect to the Property. Subordinate Lender shall be entitled, but not obligated, to cure any event of default of Borrower under the Sellior Loan Documents 484661.1 02/28/2007 15:02 01 W1L PAGE 03 that is curable in order to protect Subordinate Lcnder's security or for any other purpose, as more particularly set forth in Section 1.2(c) below. (b) Subsequent to any event of default by Borrower W1der the Subordinate Loan Documents, Subordinate Lender shall not take any of the fOllowing actions with respect to the Property without Senior Lender's prior written consent, which consent shall not be unreasonably withheld: (i) the exercise of any of its rights or remedies under the Subordinate Loan Documents (except advising Borrower it is in default W1der the Subordinate Loan Documents, and, in emergency situations, making advances or taking other actions reasonably necessary to preserve and protect the Property), including without limitation, (1) any action or proceeding for the appointment of a receiver or other action to divest Borrower of possession, management and/or control of the Property or any portion thereof or any interest therein, including without limitation, any rents, issues, profits, revenues or proceeds (incl.uding without limitation, insurance proceeds and/or condemnation proceeds) of the Property or any improvements thereon, (2) the commencement of a court action to foreclose the Subordinate Deed of Trust with respect to the Property or to enforce any of the provisions thereof, (3) the commencement of proceedings for sale of the Property or any portion thereof under the power of sale granted by the Subordinate Deed of Trust, or(4) the acceptance ofa deed in lieu offoreclosure from Borrower or any of Borrower's succesSOts or assigns with respect to the Property; or (ii) the exercise of any other rights or remedies available at law or in equity, with respect to the Property, including without limitation any rights of subrogation to the rights of Borrower with respect to the Senior Deed of Trust or the other Senior Loan Documents and/or with respect to the Property, except as otherwise provided herein. (c) Subordinate Lender shall have the following rights upon an event of default under the Senior Loan Documents ("Senior Loan Default"): (i) Subordinate Lender shall have the right to cure any Senior Loan Default 'which is a monetary default (a) by payment of the amounts due to cure such default within twenty- one (21) days after notice from Senior Lender to Subordinate Lender of thc existence of the default or (b) if Senior Lender has recorded a Notice of Default and Election to Sell, by paying the amount necessary under law to reinstate the Senior Loan within the time provided by law. (ii) Subordinate Lender shall have the right to cure any Senior Loan Default which is a non-monetary default within thirty (30) days after written notice from Senior Lender of the cxistence of the dcfault. The provisions of this subparagraph 1.2(c)(ii) shall not modify or abrogate the provisions of Section 1.2(b), above; provided, however, in the event such non-monetary default is of such a nature that it cannot reasonably be cured within such thirty (30) day period, and during such period of time, Subordinate Lender has commenced the cure of such non-monetary default and is diligently prosecuting the cure of the non-monetary default to completion, Subordinate Lender shall have up to an additional twenty (20) days to complete the cure. (d) Subordinate Lender shall from time to time, upon not more than ten (10) days prior written request, execute and deIiver in recordable form, such additional documents or instruments as Senior Lender may rcquire in order to further evidence and eonfIrm the subordination provided for in this Agreemcnt. Subordinate Lender shaH also make a notation to the Subordinate Note stating that it is subject to the terms of this Agreement. 43466U 02/28/2007 16:02 01 W1L PAGE 04 (e) Subordinate Lender shall provide Senior Lender notice of any default under the Subordinate Loan Documents contemporaneously with the providing of notice by Subordinate Lender to Borrower of such default, if required to so provide such notice to Borrower. Additionally, if Subordinate Lender is not required to provide such notice to Borrower, Subordinate Lender shall provide notice to Senior Lender in the event Subordinate Lender has declared a default in writing under the Subordinate Loan Documents at or about the time Subordinate Lender does so. (f) Senior Lender shall provide Subordinate Lender notice of any default under the Senior Loan Documents contemporaneously with the providing of notice by Senior Lender to Borrower of such default, if required to so provide such notice to Borrower. Additionally, if Senior Lender is not required to provide such notice to Borrower, Senior Lender shall provide notice to Subordinate Lender in the event Senior Lender has declared a default under the Senior Loan Documents at or about the time Senior Lender does so. (g) Subordinate Lender shall have the right (but not the obligation) to cure any default by Borrower under the Senior Loan Documents, and Senior Lender shall (a) accept performance by Subordinate Lender as if such performance were tendered by Borrower, and (b) not accelerate the Senior Loan by reason thereof, so long as Subordinate Lender cures such default in the time periods specified above. Notwithstanding the foregoing, and anything else in this Agreement to the contrary, Senior Lender shall not be required to give prior written notice to Subordinate Lender or an opportunity to cure any monetary or non-monetary default under the Senior Loan Documents in the event, and then only to the extent that Senior Lender believes that an emergency exists and action is required to be taken on the part of Senior Lender in order to preserve or protect the security of the Senior Loan from immediate damage. However, Senior Lender shall provide written notice of said default and opportunity to cure at the earliest practicable time. 1.3 Modifications of Senior Loan. Subordinate Lender's agteement to subordinate the Subordinate Loan Documents and the liens created thereunder shall automatically apply to any and all additional advances, extensions, amendments or other modifications of the Senior Loan Documents or Senior Deed of Trust, but only with respect to the Property. Furthermore, without limiting the generality of the foregoing, Subordinate Lender specifically acknowledges that its promise and agteement of partial and proportionate subordination shall automatically apply, but only with respect to the Property, to any and all additional advances, extensions, amendments, or other modifications of the Senior Loan Documents or Senior Deed of Trust arising in any of the following situations, if and only if Subordinate Lender has received prior written notice thereof: (i) regardless of whether a default has occurred under the Senior Loan Documents, the advance by Senior Lender of additional funds pursuant to the provisions of the Loan Agreement or any of the other Senior Loan Documents; 484661.1 (ii) regardless of whether a default has occurred under the Senior Loan Documents, Senior Lender's election to advance additional funds to preserve or protect the Property and its security in the Property, inclUding but not limited to advances to prevent waste or destruction, to payor prevent liens, to pay taxes, insurance premiums, or other assessments or charges against the Property, to defend Borrower's title Or Senior Lender's lien priority, to pay collection costs or other expenses reimbursable by 02/28/2007 16:02 01 W1L PAGE 05 Borrower under the Senior Loan Documents, or to address any other risks reasonably perceived by Senior Lender as jeopardizing its security; (iii) regardless of whether a default has occurred under the Senior Loan Documents, the extension of the maturity date of the Senior Loan; and (iv) regardless of whether a default has occurred under the Senior Loan Documents, Senior Lender's election to modifY any other terms and provisions of its loan. 2. Dealings With Borrower. 2.1 Senior Lender, in making disbursements pursuant to any of the Senior Loan Documents, has no obligation or duty to, nor has Senior Lender represented that it will, see to the application of any proceeds by the person or persons to whom Senior Lender disburses such proceeds, and any application or use of such proceeds for pwposes other than those,J'rovided for in the Senior Loan Documents shall not defeat the subordination herein in whole or in part. 2.2 Senior Lender, in making disbursements pursuant to any of the Senior Loan Documents, may waive any and all conditions to a disbursement contained in thc Senior Loan Documents. Any such waiver shall not defeat the subordination herein in whole or in part. 3. Partial Releases. Until the Senior Indebtedness is paid in full, Subordinate Lender will, on each occasion that a Unit (as defined in the Loan Agreement) is sold, cause the lien created under the Subordinate Loan Documents to be promptly released and reconveyed from such Unit upon the closing of such sale, provided that the Subordinate Lender receives the amount, if any, to which it is entitled under the Subordinate Loan Documents for paydown of the Subordinate Loan (provided, however, that the amount of any such payment to Subordinate Lender shall not, with respect to any sale of a Unit, exceed the sum of $36,000.00 plus any deferred permit or entitlement fees owed by Borrower). Notwithstanding the foregoing, if the amount of the paydown to Subordinate Lender is less than the amount required, if any, under the Subordinate Loan Documents, Subordinate Lender shall still release the lien of the Subordinate Deed of Trust on such Unit, but without waiving any rights or remedies afforded Subordinate Lender against Borrower under the Subordinate Loan Documents. Additionally, Subordinate Lender's obligation to release the lien of the SUbordinate Deed of Teust upon the sale of any Unit shall not be affected by any default under the Senior Loan Documents or the Subordinate Loan Documents. Senior Lender would not make the Senior Loan to Borrower without these provisions, and these provisions shall be specifically enforceable by Senior Lender. Subordinate Lender agrees to execute and deliver Requests for Partial Reconveyance for the release of Units from the lien of the Subordinate Deed of Trust in accordance with the requirements of this Section within ten (10) business days after written request from Senior Lender or any escrow agent for the sale of any such Unit. 4. Other Provision~. 4.1 Subordinate Lender acknowledges and agrees that Senior Lender would not make the Senior Loan without this Agreement. 484661. , 02/28/2007 1&:02 01 W1L PAGE 0& 4.2 Subordinate Lender aCknowledges having received and reviewed copies of all of the Senior Loan Documents and consents to and approves all of the provisions of each of the Senior Loan Documents and all other agreements delivered to Subordinate Lender, including, without limitation, any escrow or disbursement agreements, between Borrower and Senior Lender for the disbursement of the proceeds of the Senior Loan. Senior Lender shall deliver to Subordinate Lender true and correct copies of the fully executed Senior Loan Documents and copies of any future modifications or amendments to the Senior Loan Documents. Subordinate Lender shall deliver to Senior Lender true and correct copies of the fully executed Subordinate. Loan Documents and copies of any future modifications or amendments to the Subordinate Loan Documents. 4.3 This Agreement constitutes the entire agreement between the parties, and shall supersede and cancel any prior agreements regarding the subordination of the Subordinate Loan Documents and any liens or rights. created thereunder. This Agreement may be executed in counterparts, but shall not be binding on any party hereto until executed by all of the parties hereto. 4.4 If any provision of this Agreement is invalid, illegal, or unenforceable, such provision shall be considered severed from the rest of this Agreement and the remaining provisions shall continue in full force and effect as if the invalid provision had not been included. 4.5 This Agreement inures to the benefit of and is binding upon the parties hereto and their respective heirs, successors and assigns. 4.6 This Agreement shall be construed by and governed in accordance with the laws of the State of California. 4.7 This Agreement is not intended to create any joint venture, partnership or similar arrangement between Senior Lender and Subordinate Lender. 4.8 Nothing contained in this Agreement is intended to affect or limit, in any way, the rights that any of the parties hereto may have against any person or entity not a party to this Agreement or, except as expressly provided herein, the rights that any of the parties hereto may have under the Subordinate Loan Documents or the Senior Loan Documents. 4.9 Any notice, request, demand, consent, approval or other communication provided or permitted hereunder, or that any party shall otherwise desire to give to another party in connection herewith, shall be in writing and be given by personal delivery, sent by nationally recognized private courier service or United States first class mail, postage prepaid, or transmitted by telecopy, delivered or addressed to the party for whom it is intended at its address set forth be/ow. If to Senior Lender: BANCO POPULAR NORTH AMERICA Construction Loan Department 888 Disneyland Drive Anaheim, CA 92802 Attention: Facsimile No.: If to Subordinate Lender: 484661.1 02/28/2007 16:02 01 W1L PAGE 07 Executive Director Lynwood Redevelopment Agency 11330 Bullis Road Lynwood, California 90262 4.10 In the event of any action or any suit with respect to this Agreement, or any documents executed pursuant hereto, whether or not suit is filed whether in federal court, state court, administrative proceedings, arbitration proceedings (if agreed upon by the parties hereto), insolvency proceedings, the prevailing party, in addition to all other sums to which it may be entitled by law, shall be entitled to a reasonable sum for attorncys' fees and costs incurred. 4.11 JURY TRIAL WAIVER. IN ANY ACTION BROUGHT BY SENIOR LENDER, SUBORDINATE LENDER, BORROWER, OR ANY THIRD PARTY ARISING UNDER THIS AGREEMENT OR ANY DOCUMENT OR INSTRUMENT EXECUTED IN CONNECTION HEREWITH, INCLUDING, WITHOUT LIMITATION, ANY ACTION BASED UPON FRAUD, NEGLIGENCE, BREACH OF CONTRACT, WASTE, INTENTIONAL TORT OR NEGLIGENT TORT, EACH OF SUBORDINATE LENDER AND BORROWER HEREBY WANES ANY RIGHT TO TRIAL BY JURY AND AGREES THAT SUCH ACTION SHALL BE TRIED BY THE COURT ONLY. EACH OF SUBORDINATE LENDER AND BORROWER FlJRTHER AGREES TO EXECUTE AND TO FILE WITH ANY COURT IN WHICH ANY SUCH ACTION IS COMMENCED, ANY DOCUMENTS OR INSTRUMENTS NECESSARY TO EVIDENCE OR TO EFFECTUATE THIS WAIVER OF TRIAL BY JURY. Each of Borrower and Subordinated Lender has initialed this Section 4.1] to further indicate its awareness and acceptance of each and every provision hereof. Borrowers Initials Subordinate Lcnder's Initials 484661.1 02/28/2007 16:02 01 W1L PAGE 08 4.12 Senior Lender hereby agrees that after Borrower has fully satisfied all of his obligations and promises pursuant to the terms of the Senior Loan Documents, Senior Lender shall forgive, give up and release any and all claims, liens or interest it has in the Property. In such event, Senior Lender hereby agrees to take all reasonable and necessary steps and execute all reasonable and necessary documents including, but not limited to, a request for reconveyance and appropriate release forms, to establish and document the relinquishment of its interest in the Property under the Senior Loan Documents. [Signature Page Follows] 484661.1 02/28/2007 16:02 01 W1L IN WITNESS WHEREOF, Subordinate Lender and Senior Lender have executed this Subordination Agreement as ofthe._day of March 2007. SUBORDINATE LENDER: L VNWOOD REDEVELOPMENT AGENCY By: Name: Title: SENIOR LENDER: BANCO POPULAR NORTH AMERICA By: Name: Title: BORROWER: HERMILIO FRANCO, an individual 484661.1 PAGE 09 II AGENDA STAFF REPORT DATE: TO: APPROVED BY: PREPARED BY: March 6, 2007 Honorable Chair and Members of the Agency Bruce Arnoldussen, Interim Executive Director ~ Lorry Hempe, Assistant City Manager ~ Arnoldo Beltran, City Attorney )J" SUBJECT: Contract Project Managers for Agency Projects Recommendation: Staff recommends that the Agency consider retaining the services of one or more consulting firms to serve in the capacity of "Project Managers" for current projects under consideration by the Redevelopment Agency. Background: The Lynwood Redevelopment Agency has had under consideration a variety of projects. Some of the projects have been under review and discussion for more than five years. At various times the projects under consideration have been treated as "approved" and ready to proceed. Nonetheless, as a result, in part, to shortage of necessary staffing these projects have not moved beyond negotiated agreements such as Disposition and Development Agreements. In the absence of the necessary support staff, timely responses to the needs of specific projects to assure their success (or conversely to reach a determination of, perhaps, that the projects are no longer feasible) may be difficult to attain There is ample precedent for the use of this type of assistance. The Agency has previously retained a variety of firms to provide services including director of the department, financial analysts, and support personnel. Discussion: The Agency staff is currently working with the Redevelopment Subcommittee along with the Agency Counsel and the City Attorney. At this time, staffing level at the Redevelopment is insufficient to meet the demands in a timely manner of the redevelopment and housing projects that are currently at different stages in the development process. By availing itself of the services of firms that can serve in the role of "Project Managers" the staff can insure that timely responses to Agency concerns are ---..._--~-" .,~-, ..,. ..'~' AGENDA r :"i..; ~ 1 t:; provided. Further, the support from the firm or firms selected will make it possible to provide a quick assessment of individual projects. Staff will also regain the ability to make a determination of the critical elements to the success of the project that remain to be performed, and will guarantee that the duties, responsibilities or legal obligations of the Agency are carried out on a timely basis. Proper support from the selected firm or firms will also permit the Agency to regain control of specific projects, and to demand performance on the part of the project sponsors where they may have failed to perform on the obligations undertaken and required for the success of the projects. The selected firm or firms will be given the responsibility for managing specific projects and reporting directly to the Redevelopment Agency staff on the viability of the projects and the necessary steps to bring the assigned projects to fruition, amend the same where necessary or close out the projects that do not survive financial scrutiny. The consultants, on as needed basis, would be reporting to the Redevelopment Subcommittee on the status of the projects. At this time, it would be prudent at the very least if the RFP Process is not selected, to solicit interests from various firms, interview these firms and provide a recommendation to the Agency on a "short list of firms" to select from. Staff recommends the Agency direct staff to consider the following alternatives and direct staff accordingly: 1. Interview each of the firms and make recommendations to the Agency for selection of the firm or firms at the next regularly scheduled meeting; or 2. Schedule interviews for the Ad Hoc Committee on Redevelopment Matters to interview the firms and make appropriate recommendations to the Agency at the next regularly scheduled meeting. 3. Enhance the list of firms through an RFP process; 4. Explore other alternatives to address the staffing needs of the Agency. Fiscal Impact: The fiscal impact is uncertain as it will depend on the tasks assigned and the duration of the engagements. Staff believes, however, that the cost will be consistent with the alternative of permanently adding support personnel on a full time basis. Coordinated with: City Manager's Office City Attorney Finance Department "