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RDA O5 AG COMM REHAB 02-20-01
AGENDA RE RT · //,,0~..,./~. 02-20-01 I ., ~ ' :_ TO' WILLIAM A. HUSTON, EXECUTIVE DIRECTOR FROM' REDEVELOPMENT AGENCY STAFF SUBJECT: APPROVAL OF A DISPOSITION AND DEVELOPMENT AGREEMENT FOR THE COMMERCIAL REHABILITATION OF PROPERTY LOCATED IN THE VICINITY OF THIRD STREET AND EL CAMINO REAL III II III II SUMMARY Agency approval is requested for a Disposition and Development Agreements (DDA) for a Commercial Rehabilitation Project on a property in the Town Center Project Area. RECOMMENDATION Staff recommends the Redevelopment Agency take the following actions' o Subject to non-substantive modifications approved by the Executive Director and Agency Counsel, authorize the Executive Director to execute the DDA between the Tustin Community Redevelopment Agency, and Philippe Izsak, Marta Escobar, Charles C. Virzi and Patrici'a J. Virzi, as tenants in common ("Owner/Developer"), for rehabilitation of the commercial properties located at 301 - 307 El Camino Real. o Appropriate $80,000.00 out of the Town Center Redevelopment Project tax increment funds for the rehabilitation of the commercial proper[ies. FISCAL IMPACT Agency Assistance for the commercial rehabilitation project is estimated not to exceed $80,000.00 from Town Center Redevelopment Project tax increment funds. BACKGROUND AND DISCUSSION The Owner/Developer, signatures to the DDA with the Agency, proposes to construct certain rehabilitation improvements to the retail buildings located at 301-307 E! Camino Real. Concept plans for the commercial rehabilitation work includes design upgrades to four sides of the building'elevations to create a distinctive architectural quality and character, both individually and in the context of Old Town Tustin, resurfacing and improvements to the parking lot and installation of site landscaping. William A. Huston , Approval of DDA for 301-307 El Camino Real February 20, 2001 Page 2 , The Owner/Developer is required to secure all land use entitlement approvals from the Tustin Planning Commission and City Council as applicable, within the time limits established in the DDA. The site improvements will be constructed in compliance with all provisions of the DDA and with all "Conditions of Approval" stipulated by the Tustin Planning Commission, the City Council and other applicable governmental agencies having jurisdiction. The total rehabilitation budget is $116,246 with total Agency assistance to be in an amount up to $80,000. The Owner's obligation for the improvements will be an amount not less than $36,246. If actual construction cost exceed the amount of $116,246, Owner/Developer will be solely responsible for such cost overrun. Agency financial assistance will be provided as progress payments to reimburse the Owner for the construction of the Rehabilitation Improvements. The Agency assistance for the commercial rehabilitation will be in the form of a loan evidenced by a separate Promissory Note and secured by a Deed of Trust to be recorded as a lien against the commercial property. The terms of the commercial rehabilitation loan provide for the forgiveness of the principal and interest amounts by the Agency within 7 years after the Agency's issuance of a Certificate of Compliance. The commercial rehabilitation project can be expected to enhance the viability of the retail sales at the existing property, which is currently generating approximately $t2,200 in sales tax revenue to the City. The commercial rehabilitation project will also generate an approximate $1,200 annual net increase in tax increment in the Town Center Redevelopment Project Area. CEQA CATEGORICAL EXEMPTION The Commercial Rehabilitation DDA and project has been determined to be categorically Exempt pursuant to Class 3, Section 15303 of Title 14, Chapter 3 of the California Code of Regulations (Guidelines for the California Environmental Quality Act). FINDING OF BENEFIT The site is located in the Town Center Project Area. On March 6, 2000 the Tustin Community Redevelopment Agency adopted a second five-year Implementation Plan for the Town Center and South/Central Redevelopment Project areas for fiscal years 2000-2001 to 2004-2005. The Implementation Plan was composed of two parts, a five- year plan for redevelopment activities and a five-year plan for housing activities. William A. Huston Approval of DDA for 301-307 El Camino Real February 20, 2001 Page 3 · The proposed commercial rehabilitation project is consistent with the Implementation Plan's five-year plan for redevelopment activities for the Town Center Project Area. Under the Agency's Commercial Rehabilitation Grant and Loan Pro.gram assistance will be provided to rehabilitate the existing substandard and deteriorating structures to improve buildin, g conditions, increase functionality and desirability, and to integrate design characteristics with the aim of creating a cohesive commercial district in the Project Area. The project will remove a blighting influence in the Project Area due to deterioration, age and obsolescence, and stimulate expansion and retention of existing and new business in the Project Area. Senior Project Manager Attachments rda/ccreport\DDA 301-307 El Camino Real.doc OLD TOWN PLAZA COMMERCIAL REHABILITATION PROJECT DISPOSITION AND DEVELOPMENT AGREEMENT by and among THE TUSTIN COMMUNITY REDEVELOPMENT AGENCY, as Agency, and PHILIPPE IZSAK, MARTA ESCABAR, CHARLES C. VIRZI, AND PATRICIA J. VIRZI as Owner FINAL February 20, 2001 DISPOSITION AND DEVELOPMENT AGREEMENT TABLE OF CONTENTS Page Section I SUBJECT OF AGREEMENT ............................................................................. 1 1.1 Purpose of Agreement ........................................................................... 1 1.2 The Redevelopment Plan ...................................................................... 1 1.3 Description of the Site ........................................................................... 2 1.4 Pad. ies to the Agreement ....................................................................... 2 1.4.1 Agency ......................................................................................... 2 1.4.2 Owner .......................................................................................... 2 1.4.3 Relationship of Agency to Owner .......................................... 3 Section 2 DEFINITIONS .................................................................................................... 3 · Section 3 PROHIBITION AGAINST CHANGE IN OWNERSHIP, MANAGEMENT AND CONTROL OF OWNER OR CHANGE IN CONTRACTOR ................................ 3 3.1 Importance of Owner' s Qualifications ............................................ 3 3.2 Prohibition Against Transfer of Site ....................................................... 4 3.2.1 General Prohibition ...................................................................... 4 3.2.2 No Encumbrances Except Mortgages, Deeds 'of Trust, Conveyances and Leases-Back or Other Conveyances for Financing for Rehabilitation ............................................................................... 5 3.3 Prohibition Against Change in Contractor ............................................. 6 Section 4 REPRESENTATIONS AND WARRANTIES OF OWNER ............................. 6 Section 5 REHABILITATION OF THE SITE ..................................................................... 10 5.1. Description of Rehabilitation Project .................................................... 10 5.2 Plans and Drawings ............................................................................. 10 5.3 · Cost of Site Rehabilitation ................................................................... 10 5.4 Permits and Governmental Approvals · 12 5.5 Local, State and Federal Laws ............................................................ 12 FINAL i February 20, 2001 Table of Contents (continued) .Page 5.6 Schedule of Performance .................................................................... 12 5.7 Required Notifications · . ................................ 13 Section 6 FINANCIAL ASSISTANCE TO OWNER .......................................................... 14 6.1 Purpose of Agency Financial Assistance to Owner .................................................................................................. 14 6.2 Conditions Precedent to Receiving Agency Assistance ........................................................................................... 14 6.3 Agency Loan ........................................................................................ 15 6.3.1 Amount .............................................................. , ....................... 15 6.3.2 Forgiveness of Loan .................................................................. 15 6.3.3 Promissory Note and Deed of Trust .......................................... 16 6.3.4 Owner'. s Repayment ............................................................. '... 16 6.3.5 Agency Payment of Loan Proceeds ........................................... 18 6.3.6 Records ..................................................................................... 19 Section 7 CONDITIONS FOR REHABILITATION CONSTRUCTION .............................. 19 7.1 Prevailing Wages ....................... · ......................................................... 19 7.2 Time Limit for Construction .................................................................. 19 7.3 Required Licenses and Permits ........................................................... 19 7.4 One (1) Year Guarantee ...................................................................... 19 7.5 Quality of Work and Materials .............................................................. 20 7.6 Clean-up of Site and Adjacent Areas .................................................. 20 Section 8 USES OF THE SiTE ............ ' ............................................................................ 20 Section 9 MAINTENANCE OF THE SITE ......................................................................... 21 Section 10 CERTIFICATE OF COMPLIANCE ...................................................... 21 Section 11 NON-DISCRIMINATION ...................................................................... 23 11.1 Obligation to Refrain from Discrimination ............................................ 23 11.2 Form of Non-discrimination and Non-Segregation Covenants ........................................................................................... 23 FINAL ii February 20, 2001 Table of Contents (continued) .Page 11.3 Duration of Covenants ......................................................................... 24 Section 12 INSURANCE AND INDEMNIFICATION .............................................. 25 12.1 Worker's Compensation, Bodily Injury and Property Damage Insurance ................................................................ 25 12.2 Insurance Endorsements ..................................................................... 25 12.3 Provision of Insurance by Contractor .......... ~ ........................................ 26 12.4 Indemnification ..................................................................................... 27 Section 13 DEFAULTS, REMEDIES AND TERMINATION ................................... 28 13.1 Default ................................................................................................. 28 13.2 Notice .................................................................................................. 28 13.3 Cure Period ......................................................................................... 29 13.4 Rights and Remedies .......................................................................... 29 13.5 Legal Actions ....................................................................................... 30 13.5.1 Venue ...................................................................................... 30 13.5.2 Service of Process ................................................................... 30 13.5.3 Applicable Law .................. ' ...................................................... 30 13.6 13.7 Termination .......................................................................................... 30 · Rights and Remedies Are Cumulative ................................................. 31 13.8 Effect of Violation of the Terms and Provisions of this Agreement ............................................................... 32 Section 14 GENERAL PROVISIONS .................................................................... 32 · 14.1 Disputes to be Determined by Agency ................................................ 32 14.2 Local, State and Federal Laws · 32 14.3 Taxes, Assessments, Encumbrances and Liens ................................. 33 14.4 Rights of Access .................................................................................. 33 14.5 Notices, Demands and Communications Between the Parties ........................................................................................... 33 FINAL iii February 20, 2001 Table of Contents (continued) Page 14.6 14.7 14.8 14.9 Section 15 15.1 Section 16 Section 17 Conflicts of Interest .............................................................................. 34 Enforced Delay; Extension of Times of Performance ........................................................................................ 34 Nonliability of Officials and Employees of. Agency ................................................................................................. 35 Inspection of Books and Records ........................................................ 35 SPECIAL PROVISIONS ...................................................................... 36 Successors in Interest ......................................................................... 36 ENTIRE AGREEMENT, AMENDMENTS AND WAIVERS .................. 36 EFFECTIVE DATE OF THE AGREEMENT ......................................... 36 FINAL iv February 20, 2001 LIST OF ATTACHMENTS · , , Attachment 1 - Attachment 2 - Attachment 3 - Attachment 4 - Attachment 5 - Attachment 6 - Attachment 7 - Attachment 8- Attachment 9- Attachment 10 - Attachment 11 - Commercial Rehabilitation Project Parcel'Map Legal Description Scope of Rehabilitation Schedule of Performance Agency Loan Promissory Note Agency Loan Trust Deed Site Plan and Related Drawings Agreement to be Recorded Affecting Real Property Hazardous Waste Disclosure Certificate of Insurance Rehabilitation Budget FINAL February 20, 2001 COMMERCIAL REHABILITATION PROJECT .......... DISPOSITION AND DEVELOPMENT AGREEMENT THIS AGREEMENT is entered into by and among the TUSTIN COMMUNITY REDEVELOPMENT AGENCY, a public body, corporate and politic, to wit, a California community redevelopment agency ("Agency"), Philippe lzsak, Marta Escobar, Charles C. Virzi, Patricia J. Virzi, 'all as Tenants in Common (Owner). Agency and Owner hereby agree as follows' Section 1 SUBJECT OF AGREEMENT 1.1 ?urpose of Aqreement The general purpose of this Agreement is to promote the implementation and realization of the objectives of the Redevelopment Plan (the "Redevelopment Plan") for the Town Center Redevelopment Project Area (the "Project Area"), by providing for the rehabilitation of the hereinafter described commercial Site (the "Rehabilitation Project"). The rehabilitation and continued operation of the Site for such commercial uses as allowed pursuant to this Agreement and the Redevelopment Plan, and the fulfillment of this Agreement and the Plan are in the vital and best interest of the City of Tustin and the health, safety, morals and welfare of its residents, and in accord with the public purposes and provisions of applicable federal, state and local laws. The rehabilitation of the Site will help to eliminate blight in the Project Area, and will substantially improve the economic and physical conditions of the community in accordance with the purposes and goals of the Redevelopment Plan. 1.2 The Redevelopment Plan This Agreement is subject to the provisions of the Redevelopment Plan which was approved and adopted by the City Council of the City of Tustin by Ordinance No. 701 as amended by Ordinance Nos. 855, 1021, and 1141. Said ordinances and the Redevelopment FINAL 1 February 20, 2001 Plan, as amended, are incorporated herein by reference and made a part hereof. 1.3 Descripti.~n. of The. Site The "Site" is that portion of the City and the Project Area designated and illustrated as Parcel 2 on the Map of Proposed Parcels, attached hereto and incorporated herein by reference as Attachment No. 1, and having the legal description of Parcel 2 as set forth in the Legal Description of the Site, attached hereto and incorporated herein by reference as Attachment No. 2. The Site is owned by Philippe Izsak and Marta Escobar, husband and wife, as Community Property, as to an undivided sixty-five percent (65%)interest, and Charles C. Virzi and Patricia J. Virzi, husband and wife, as Joint Tenants, as to an undivided thirty-five percent (35%)interest, ali as Tenants in Common. 1.4 Parties to the Agreement 1.4.1 Aaencv Agency is a public body, corporate and politic, exercising governmental functions and powers and organized and existing under Chapter 2 of the Community Redevelopment Law of the State of California. The principal office and mailing address of Agency is' 300 Centennial Way, Tustin, CA 92780. "Agency", as used in this Agreement, includes the City of Tustin Community Redevelopment Agency, and any assignee of or successor to its rights, powers and responsibilities. 1.4.2 Owner Owner is Philippe Izsak, Marta Escobar, Charles M. Virzi and Patricia J. Virzi, as Tenants in Common. The mailing address of Owner is: 20530 Vista de ©ro Place, Woodland · Hills, California 91364. Whenever the term "Owner" is used herein, .such term shall include any permitted assignee as herein provided. FINAL 2 February 20, 2001 1.4.3 ...Relationship o.f Agency to Owner It is hereby acknowledged that the relationship of Agency to Owner, is neither that of a partnership nor that of a joint venture and that Agency shall not be deemed or construed for any purpose to be the agent of Owner. Nor shall Owner be deemed or construed to be the agent of Agency. Section 2 DEFINITIONS City",' as used in this Agreement, includes the City of Tustin, and any assignee of or successor to, its rights, powers and responsibilities. "Hazardous Substances" means substances defined as "hazardous substances", "hazardOus materials", or "toxic substances" in the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, 42 U.S.C. 9601, et seq; the Hazardous Materials Transportation Act, 49 U.S.C. 1801, et seq; the Resource Conservation and Recovery Act of 1976, as amended, 42 U.S.C. 6901 et seq; and those substances defined as "hazardous waste" in Section 25117 of the California Health and Safety Code or as "hazardous substances" in Section 25316 of the California Health and Safety Code; and substances defined in the regulations adopted in publications promulgated pursuant to such Jaws. Section 3 PROHIBITION AGAINST CHANGE IN oWNERSHIP, MANAGEMENT AND CONTROL OF OWNER 3.1 Importance of Owner's Commitment and Qualifications Owner recognizes that the commitment and qualifications of Owner is of particular concern to the community and Agency because of: (1) the importance of the redevelopment of the Site to the general welfare of the community; and FINAL 3 February 20, '2001 (2) the public assistance that has been made available by law and by the City and Agency for the purpose of making such redevelopment possible. Except as provided herein, a change in ownership or control of Owner is a breach of a material term of this Agreement. It is because of the commitment of that Agency is entering into this Agreement with Owner. 3.2 Prohibition Against Transfer of Site 3.2.1 General Prohibition , Prior to issuance of a Certificate of Compliance by Agency, Owner shall not assign or attempt to assign this Agreement or any right herein, nor make any total or partial sale, transfer, conveyance or assignment of the whole or'any part of the Site or the Site Improvements, nor shall Owner or any tenant in common partition the property or ownership therein,_except that Owner may transfer the Site to: (1) A newly created trust, of which Philippe Izsak and Marta Escabar are trustors and trustees, for the benefit of certain charitable organizations, Philippe lzsak and Marta Escabar, and/or the heirs of Philippe Izsak and/or Marta Escabar, provided that such newly created trust(s) takes title to the Site subject to the Agency's Promissory Note and Deed of Trust described in Section 6.3 and subject to Owner's ongoing obligations under this Agreement and the Agreement to Be Recorded Affecting Real Property, attached hereto as Attachment No. 8 and incorporated herein by reference, or; (2) Any heirs of Philippe lzsak and/or Marta Escabar, provided that such transferees, pursuant to (a)written agreement(s)in form and substance satisfactory to Agency, assume the obligations of Owner under the Promissory Note and Deed of Trust described in Section 6.3, this Agreement, and the Agreement to Be Recorded Affecting Real Property, and take title to the Site subject to the Promissory Note and Deed of Trust described in Section 6.3, this Agreement, and the Agreement to Be Recorded Affecting Real FINAL 4 February 20, 2001 Property; (3) A newly created trust, of which Charles C. Virzi and Patricia J. Virzi are trustors and trustees, for the benefit of certain charitable organizations, Charles C. Virzi and Patricia Jo Virzi, and/or the heirs of Charles C. Virzi and/or Patricia J. Virzi, pro.vided that such newly created trust(s) takes title to the Site subject to the Agency' s Promissory Note and Deed of Trust described in Section 6.3 and subject to Owner's ongoing obligations under this Agreement and the Agreement to Be Recorded Affecting Real Property, attached hereto as Attachment No. 8 and incorporated herein by reference, or; (4) Any heirs of Charles C. Virzi and/or Patricia J. Virzi, provided that such transferees, pursuant to a written agreement(s)in form and substance satisfactory to Agency, assume the obligations of Owner under the Promissory Note and Deed of Trust described in Section 6.3, this Agreement, and the Agreement to Be Recorded Affecting Real Property, and take title to the Site subject to the Promissory Note and Deed of Trust described in Section 6.3, this 'Agreement, and the Agreement to Be Recorded Affecting Real Property. 3.2.2 No New Encumbrances Prior to Certificate of Compliance Except Mortgages, Deeds of Tr. ust, Conveyances and Leases-Back or Other Conveyances for Financing for Rehabilitation Notwithstanding Section 3.2.1 herein, mortgages, deeds of trusts, conveyances and leaseback, or any other form of conveyance required for the financing the Rehabilitation Project (collectively Financing Conveyances) are permitted for the purposes of securing loans of funds to be used for financing the expenditures necessary and appropriate to construct the Site Improvements as required by this Agreement, except that such Financing Conveyances shall not exceed 70% of the value of the Site at the time the Financing Conveyance is entered into. Owner shall notify Agency in advance of any mortgage, deed of trust, conveyance, leaseback, or other form of Financing Conveyance if Owner proposes FINAL 5 February 20, 2001 to enter into'the same before recordation of a Certificate of Compliance, as defined in Section 10. Owner shall not enter into any such Financing Conveyance without the prior written approval of Agency, and such approval shall not be unreasonably withheld or delayed. The words "mortgage" and "deed of trust" as used herein includes ali other appropriate modes of financing real estate acquisition, construction and land development. 3.3 .prohibition Against Change in_.Contractor Owner shall not, except as expressly permitted by this Agreement, change the general contractor without the prior written approval of Agency, which approval shall not be unreasonably withheld. Any proposed substitut® general contractor shall have the qualifications necessary and adequate as may be reasonably determined by Agency to complete the Rehabilitation Project, on behalf of Owner, in accordance with the Scope of Rehabilitation, the Site Plan and Related Drawings, and within the Rehabilitation Budget attached hereto as Attachments Nos. 3, 7 and 11 attached hereto and incorporated herein by reference. There shall be submitted to Agency for review and approval all instruments and other legal documents proposed to effect any such substitution; and if approved by Agency, its approval shall be indicated to Owner in writing. In the absence of specific written approval by Agency, as provided above, a change in general contractor shall be deemed a material breach of this Agreement entitling Agency to terminate this Agreement and demand payment of all sums loaned by Agency pursuant to the terms of the Promissory Note and Deed of Trust herein. Section 4. REPRESENTATIONS AND WARRANTIES OF OWNER As an inducement to Agency to enter into this Agreement, Owner represents and warrants to Agency as to items A through N below, as follows: FINAL 6 February 20, 2001 Owner represents and warrants to Agency that Owner has the experience, qualifications and legal status necessary to perform their obligations under this Agreement. (2) Owner represents and agrees that their respective undertakings pursuant to this Agreement are for the purpose of redevelopment of the Site and not for speculation. (3) Owner has duly authorized, executed and delivered this Agreement and any and all other agreements and documents required to be executed and delivered by them in order to car'ry out, give effect to, and consummate the transactions contemplated by this Agreement. (4) Owner has the legal power, right and authority to enter into this Agreement and the instruments referenced herein, and to consummate the transactions contemplated hereby; (5) . All requisite action has been taken by Owner in connection with the entering into this Agreement, the instruments referenced herein, and the consummation of the transaction contemplated hereby. No consent of any additional partner, individual, corporation, shareholder, creditor, investor, judicial or administrative body, trustee, authority or other party is required; (6) The individuals executing this Agreement on behalf of Owner have the legal power, right and actual authority to bind Owner to the terms and conditions hereof; (7) This Agreement and all documents required hereby to be executed by Owner are and shall be valid, legally binding obligations of and enforceable against Owner in accordance with their terms, subject only to applicable bankruptcy, insolvency, reorganization, interim zoning ordinances, and similar laws or equitable principles affecting or limiting the rights of contracting parties generally; (8) Neither the execution and delivery of this Agreement and the documents referenced herein, nor the incurring of the obligations set forth herein, nor the consummation FINAL 7 February 20, 2001 of the transactionS herein contemplated, nor compliance with the terms of this Agreement and the documents referenced herein conflict with or result in the material breach of any terms, conditions, or Provisions of, or constitute a default under any bond, note, or other evidence of indebtedness or any contract, indenture, mortgage, deed of trust, loan partnership agreement, lease or other agreements or instruments to which Owner is a party, or affecting the Site; (9) No attachments, execution proceedings, assignments of benefit of creditors, bankruptcy, reorganization or other proceedings are pending or threatened against Owner. (10) Except as otherwise previously disclosed by Owner, to Agency, in writing, which writing is attached hereto and incorporated herein by reference as Attachment No. 9' (a) Owner does not use, treat, store or dispose of, and, to the best of Owner's knowledge, has not permitted anyone else to use, treat, store or dispose of Hazardous Substances at, on or beneath the Site in violation of any federal, state or local · law, regulation or ordinance; (b) Owner does not have knowledge of the presence, use, treatment, storage, release or disposal of any Hazardous Substances at, on or beneath the Site .which has created or might create any liability of owners or occupants of the Site under any federal, state or local law or regulation or which would require reporting to a governmental agency; (c) To the best of Owner's knowledge, no polychiorinated byphenyls ("PCB's") are contained in or stored on the Site; and (d) To the best of Owner's knowledge, except for a septic tank located on the site that is to be removed by Owner, there are no other underground storage tanks located in, on or under the Site; FINAL 8 February 20, 2001 (11) To the best of Owner's knowledge, all reports, documents, instruments, .. information and forms of evidence delivered by Owner, to Agency, concerning or required by this Agreement, are accurate, correct, and sufficiently complete to give Agency true and accurate knowledge of their subject matter, and do not contain any misrepresentation or omission; and (12) Owner has, and shall maintain throughout the term of this Agreement, sufficient equity, capital and, firm and binding commitments to (i) pay through completion, ali costs of the Rehabilitation Project, except those costs to be paid by Agency; and (ii) enable Owner to perform and satisfy all of the covenants contained in this Agreement. Owner shall not undertake such additional projects as could reasonably be expected to jeopardize the sufficiency of such equity, capital and firm and binding commitments for the purposes expressed in the preceding sentence. (13) Owner does not have any contingent obligations or any other contracts which could materially and adversely affect their abilities to carry out their obligations hereunder. (14) There are no material legal proceedings either pending or, so' far'as is known to Owner, threatened, to which Owner is or may be made a party, or to which any of Owner's property, including the Site, is or may become subject, which has not been fully disclosed in the documents 'submitted to Agency and which could materially adversely affect the ability of Owner to carry out its obligations hereunder. Each of the foregoing items, (1) through (14), inclusive, is deemed to be an ongoing representation and warranty. Owner shall promptly advise Agency in writing if there is any change pertaining to any matters set forth or referenced in the foregoing items, A through N, inclusive. Ail of the terms, covenants and conditions of this Agreement shall be binding upon FINAL 9 February 20, 2001 and shall inure to the benefit of the Parties and the permitted successors and assigns of the Parties. Section 5 REHABILITATION OF THE SITE 5.1 Description of Rehabilitation Project The Site and structures thereon shall be rehabilitated by Owner pursuant to this Agreement and in accordance with and within the limitations established in the Scope of Rehabilitation, the Site Plan and Related Drawings, and the Rehabilitation Budget approved by Agency and City of Tustin. 5.2 .Plans and Drawings Owner shall prepare or cause to be prepared and submitted to Agency, for its approval, the Final Construction Drawings and Related Documents, consistent with the requirements set forth in the Scope of Rehabilitation, attached hereto as Attachment No. 3 and incorporated herein by reference, and in accordance with the times for performance set forth in the Schedule of Performance, attached hereto as Attachment No. 4 and incorporated herein by reference. Each set of plans or drawings submitted must be approved by Owner and Agency. The Site shall be rehabilitated substantially as shown on the approved Site plan and Related Drawings, attached hereto as Attachment No. 7 and incorporated herein by · reference, and the approved Final Construction Drawings and Related Documents. Changes to Agency approved plans and drawings may be approved only by a writing signed by Owner and Agency. Any such written changes shall be within the limitations of the Scope of Rehabilitation. 5.3 Cost of Site Rehabilitation , Except for the Agency Assistance described in this Paragraph C, Owner shall bear the cost of planning, designing, preparing the Site and constructing all rehabilitation improvements thereon. As shown on the Rehabilitation Budget, the estimated cost for the FINAL 1 0 February 20, 2001 Rehabilitation Project is One Hundred Sixteen Thousand Two Hundred Fifty Dollars ($116,250.00). These costs shall be borne as follows' (1) Owner shall contribute the sum of not less than Thirty Six Thousand Two Hundred Fifty Dollars ($36,250.00) (the Owner' s Contribution), which sum shall be placed in the Agency's interest-bearing escrow trust account to be used for the payment of expenses as shown on the Rehabilitation Budget; (2) Agency shall contribute an amount not to exceed Eighty Thousand Dollars ($80,000.00), on the terms as set forth in Section 6 below. Agency shall control the disbursement of the maximum Eighty Thousand Dollar ($80,000.00) Agency Loan amount and the Thirty Six Thousand Two Hundred Fifty Dollar ($36,250.00) Owner's Contribution deposited into the Agency's interest-bearing trust account. All disbursements shall be made subject to satisfaction of the requirements of Section 6C(5) below and shall be subject to the 10% Agency retention as described in Section 6C(5). Rehabilitation Project costs shall be paid in a pro rata disbursement in the following increments: an amount equal to thirty five percent (35%) of each payment request approved by the Agency to be drawn from the Owner's Contribution deposited into the Agency's interest-bearing escrow trust account (less 10% Agency retention); and an amount equal to sixty five percent (65%).of each payment request approved by the Agency to be paid from the.Agency's Loan amount (less 10%'Agency retention). Notwithstanding the forgoing, if the Rehabilitation Project work exceeds the One Hundred Sixteen Thousand Two Hundred Fifty Dollars ($116,250.00) budgeted amount, Owner shall deposit such additional budget amount (Owner's Additional Contribution)into the Agency's interest bearing escrow trust account to be used for the payment of expenses as shown on the Rehabilitation Budget, as may be revised. Notwithstanding the foregoing, however, if the Rehabilitation Project work is completed for an amount less than the One Hundred Sixteen Thousand Two Hundred Fifty FINAL 11 February 20, 2001 Dollars ($116,250.00) budgeted amount, then the cost savings shall accrue to the benefit of Agency and Agency's Loan shall be reduced accordingly.. 5.4 Permits and Governmental Approvals Owner shall process, secure or cause to be secured any and all permits, certificates and approvals which may 'be required by Agency, the City of Tustin or any other governmental agency with jurisdiction over the Site and/or over the Rehabilitation Project, including, but not limited to, necessary building permits and all approvals required under the California Environmental Quality Act, Public Resources Code 21000 et seq., as amended or re-codified from time to time. Not by way of limiting the foregoing, Owner shall ensure that the Rehabilitation Project complies with all applicable development standards in the City of Tustin Municipal Code and with ali building code, landscaping, signage and. parking requirements, except as may be permitted through approval variances and modifications. Owner shall promptly deliver copies of all governmental approvals to Agency. 5.5 Local, State and Federal Laws Owner shall carry out the Rehabilitation Project on the Site in conformity with all applicable local, state and federal laws, including all applicable federal immigration laws and federal and state labor standards. 5.6 Schedule of performance ..... Owner shall begin and complete the construction and development of the Site Improvements and shall submit all plans, drawings and other documents within the times specified in the Schedule of Performance. Agency may, at its sole discretion and upon written request from Owner, extend the times specified in the Schedule of Performance dealing with construction of the Rehabilitation Project. Any such extensions shall not be deemed as amendments to this Agreement, as defined in Section 16, hereof. Any such extensions shall be evidenced by written notice from FINAL 12 February 20, 2001 Agency's Executive Director or his/her designee. 5.7 Required N0ti.fications Owner shall promptly after obtaining knowledge thereof, notify Agency in writing of the following' Any litigation affecting Owner, the Site or the Rehabilitation Project. (2) Any communication, whether written or oral, that Owner receives from any governmental authority claiming or asserting that any aspect of work of the Rehabilitation Project fails in any respect to comply with any governmental requirements, or threatening to suspend or revoke any governmental approval. (3) Any material adverse change in the physical condition of the Site, or the financial condition or operations of Owner. (4) Any material default by the Owner's contractor, architect, engineer or by any subcontractor, vendor or supplier, having a contract in excess of $25,000, any material adverse change in the financial condition or operations of any of them, or the filing of a petition by or against any of the under any debtor relief law. (5) Any cessation in the work in excess of five (5) business days. (6) Any damage to or destruction of any portion of the Rehabilitation Project where the cost to repair and restore will exceed $25,000. (7) Any defect in design or construction where the cost to correct will require a change, or the delay that will be caused will exceed five (5) business days. (8) An'y lien, charge or encumbrance affecting the Rehabilitation Project not expressly permitted hereby. (9) The existence of any material default or failure to perform an obligation by any party under any' contract relating to the Rehabilitation Project. (10) The existence of any default by Owner, or any condition or event FINAL 13 February 20, 2001 which with the giving of notice or passage of time, or both, would constitute default, the nature thereof, and the corrective steps Owner is taking with respect thereto. Section 6 FINANCIAL ASSISTANCE TO OWNER 6.1 Purpose of Agency Financial As.s. istan....ce to Owner The purpose of Agency financial assistance to Owner is to assist Owner to rehabilitate the Site Improvements, which improvements are deemed to be a blighting influence in the Project Area. 6.2 .Co. nditions Precedent to Receiving Agency Assistance As conditions precedent to receiving the Agency Loan (as defined in Paragraph C below)for land development and construction assistance' (1) Owner shall have furnished Agency with an ALTA lender's policy showing' (1) fee simple title to the Site as vested in Owner, (2) Agency as an insured lender, and (3) no monetary liens or encumbrances, other than an existing deed of trust securing a note in the amount of Three Hundred Thousand Dollars' ($300,000) from First Federal Savings and Loan, loans approved under Section' 3.2.2, a lien for taxes not yet due and payable, and the Deed of Trust described in Paragraph C below; (2) Owner shall have furnished to Agency proof of insurance coverage as provided in Section 12; (3) Owner shall not then be in default under this Agreement, the Promissory Note or Deed of Trust described in Paragraph C below, or the Agreement to be Recorded Affecting Real Proper[y; FINAL 14 February 20, 2001 (4) Owner shall have obtained all City land use entitlements and building permits to construct the Site Improvements; (5) Owner shall have prepared or caused to be prepared all plans, drawings and specifications (the "Plans") necessary to construct and install the Site Improvements; (6) Agency shall have received an estoppel notice, in a form prescribed by Agency, from each Tenant at the Site approving the Scope of Rehabilitation and expressly releasing the Agency and the City of Tustin from any claims for relocation assistance, lost rent, constructive eviction, and loss of goodwill; (7) With respect to individual disbursements under the Agency Loan, the conditions of Paragraph C, subparagraph (5) below shall have been satisfied; (8) With respect only to the 10% completion retention described in Paragraph C, subparagraph (5).below, Owner shall have made, and Agency shall have approved, a request for final progress payment with supporting documentation as described in Paragraph C, subparagraph (5) below; and. (9) Owner shall have deposited the OWner' s Contribution, as defined .. in Section 5C above, in Agency' s interest-bearing escrow trust account to be used for the payment of Rehabilitation Project costs as shown on the Rehabilitation Budget. 6'.3 Aaencv Loan , 6.3.1 Amount: Subject to the terms and conditions herein, Agency agrees to loan Owner the amount of up to Eighty Thousand Dollars ($80,000.00) to offset construction costs for the Rehabilitation Project (the Agency Loan). FINAL 1 5 February 20, 2001 6.3.2 porgjvenes, s of Ag.ency Loan' The Agency Loan shall not bear interest. The Agency Loan shall be a seven-year loan. One-fifth of the principal amount of the Agency Loan, plus accrued interest on such amount, shall be deemed paid at the end of each of the third (3rd) through seventh (7th) calendar years, provided a Certificate of Compliance is filed by Agency and none of the events described in subparagraph (4) herein occur during the term of this Agreement and prior to the end of the calendar year in question. For purposes of this Agreement, each calendar year shall be calculated as 365 days and the first day of the first calendar year shall be the date immediately following the recording date of the Certificate of Compliance. 6.3.3 .promissory.Note and Deed of Trust: The Agency Loan shall be evidenced by a Promissory Note and secured by a Deed of Trust, both to be executed by Owner concurrently'with' this Agreement. The forms of the Promissory Note and Deed of Trust are attached hereto as Attachment Nos. 5.and 6 and incorporated herein by reference. The Deed of Trust shall be recorded as soon after the effective date of this Agreement as possible, and before Agency makes any disbursements under the Promissory Note. Notwithstanding the foregoing, however, the Deed of Trust shall be secondary to the existing deed of trust securing a note in the amount of Three Hundred Thousand Dollars ($300,000), any Financing COnveyances approved by Agency pursuant to Section 3.2.2, and any financing conveyances after the recordation of the Certificate of Compliance. 6.3.4 Owner's Repayment: Notwithstanding paragraph 6.3.2 above, in the event of a default by Owner under this Agreement, under the Promissory Note or Deed of Trust, or under the Agreement to be Recorded Affecting Real Property, or if at any time during the term of this Agreement the following circumstances occur, Owner shall repay or cause to be repaid that portion of the FINAL 16 February 20, 2001 Agency Loan that has not been forgiven by Agency pursuant to Section 6.3.2 herein. (1) Owner sells the Site; (2) Owner sells the Site without obtaining'Agency' s approval under Section 3.2.2 above; (3) Owner uses, prior to the recordation of a Certificate of Compliance as defined in Section 10 of this Agreement, all or a portion of the Site as collateral for financing; (4) Owner assigns or transfers any property interest in the Site excluding the following' (a) Tenant leases; (b) A transfer to a newly created trust, of which Philippe lzsak and Marta Escabar are trustors and trustees, for the benefit of certain charitable organizations, Philippe Izsak, Marta Escabar, and/or the heirs of Philippe Izsak and/or Marta Escabar, provided that such newly created trust takes title to the Site subject to the Agency' s Promissory Note and Deed of Trust described in Section '6.3 and subject to Owner' s ongoing obligations under this Agreement and the Agreement to Be Recorded Affecting Real Property; (c) Transfers to any heirs of Philippe lzsak and/or Marta Escabar, provided that such transferees, pursuant to (i) written agreement(s)in form and substance satisfactory to Agency, assume the obligations of Owner under the Promissory Note and Deed of Trust described in Section 6.3, this Agreement, and the Agreement to Be Recorded Affecting Real Property, and take title to the Site subject to the Promissory Note and Deed of Trust described in Section 6.3, this Agreement, and the Agreement to Be Recorded Affecting Real Property; FINAL 1 7 February 20, 2001 (d) A transfer to a newly created trust, of which Charles C. Virzi and Patricia J. Virzi are trustors and trustees, for the benefit of certain charitable organizations, Charles C. Virzi, Patricia J. Virzi, and/or the heirs of Charles C. Virzi and/or Patricia J. Virzi (v) a transfer to a newly created trust, of which Charles C. Virzi and Patricia J. Virzi, and/or the heirs of Charles C. Virzi and/or Patricia J. Virzi, pr°vided that such newly created trust takes title to the Site subject to the Agency's Promissory Note and Deed of Trust described in Section 6.3 and subject to Owner' s ongoing obligations under this Agreement and the Agreement to Be Recorded'Affecting Real Property; (e) Transfers to any heirs of Charles C. Virzi and/or Patricia J. Virzi, provided that such transferees, pursuant to (i) written agreement(s) in form and substance satisfactory to Agency, assume the obligations of Owner under the Promissory Note and Deed of Trust described in Section 6.3, this Agreement, and the Agreement to Be Recorded Affecting Real Property, and take title to the Site subject to the Promissory Note and Deed of Trust described in Section 6.3, this Agreement, and the Agreement to Be Recorded Affecting Real Property), or (5) Owner substitutes another general contractor without Agency' s approval, Owner shall repay or cause to be repaid that portion of the Agency Loan that has not been forgiven by Agency pursuant to Section 6.3.2 herein. in such.forgoing event(s), the Promissory Note shall become immediately due and payable. if Owner does not repay the amount due on the Promissory Note when demand for such is made by Agency, Agency shall, at that time, have full rights under the Promissory Note and Deed of Trust, and such other rights as may be afforded by law, to ensure repayment. FINAL 1 8 February 20, 2001 6.3.5 Agency Payment of Loan Proceeds Owner may request periodic releases of the proceeds of the Agency Loan (as well as the Owner's Contribution as described in Section 5.3 above). Each such request be made upon the written authority of OWner and shall be accompanied by invoices showing Owner's payment for the work, supplies or materials, and unconditional mechanics lien releases from the contractor, subcontractor, supplier and materialmen for the amounts covered by the request. Agency shall periodically release portions of the Agency Loan proceeds and the Owner's Contribution, as applicable, upon receipt of a request as described above. All Agency releases shall be contingent upon inspection of the work and/or materials by representatives of Agency and confirmation that the work and/or materials are satisfactory, in addition, Agency shall have the right to require additional documentation to insure that it is only paying for work that has been done and that all affected contractors, suppliers and materialmen have been paid. Inspection shall be done bY Agency within three (3) working days of a request by Owner. if the work and/or materials are. approved by Agency, payment shall be made as soon as possible and within fourteen (14) working days after the inspection. Agency shall retain 10% of the amount of each request to insure completion of the work. The retained funds shall be released pursuant a request for a final progress payment upon evidence that the work has been satisfactorily completed and contractors, .subcontractors,. suppliers and materialmen have been paid. 6.3.6 Records: Owner agrees to maintain' complete and accurate accounts, invoices, and records of all monies expended or paid for the Rehabilitation Project. Copies of such documents shall be made available to Agency at Agency's request. FINAL 19 February 20, 2001 Section 7 CONDITIONS FOR REHABILITATION CONSTRUCTION 7.1 Prevailing Wages Owner shall pay or cause Contractor to pay prevailing wages for the construction of the Rehabilitation Project, in accordance with the California Labor Code. 7.2 Time Limit for Construction ....... All improvements identified in the Scope of Rehabilitation .must be completed to the satisfaction of the City and Agency and in compliance with the City code, and applicable City - ordinances, and public works specifications, as applicable, within the time frames outlined in the Schedule of Performance. Any extensions of time must be approved in writing by Agency. 7.3 Requi,red Licen. ses and Permits Before commencement of construction, Owner shall, at their own expense (excepting fee waivers approved by the City Council), secure or cause'to be secured, any and all licenses and permits which may be required by the City or any other governmental agency affected by such construction. Owner shall, cause plans for permits to be submitted within the times specified in the Schedule of Performance. 7.4 One (1) Year ..G.. ua.r.,antee Upon the filing of Owner's Notice of Completion, Owner shall provide or cause to be provided to Agency .a one (1) year guarantee of the quality and fitness of ali materials and labor which time period shall run from the date of the filing of Owner's Notice of Completion. This guarantee is in addition to applicable warranties or guarantees available under State law and provided for the supplies or equipment. 7.5 Quality of Work and MateriaJs _ All work shall be of good quality and all workers shall be skilled in their trades. Unless otherwise specified herein, all materials shall be new, and shall be of good quality. FINAL 20 Februar7 20, 2001 7.6 Clean-up of Site and Adiacent Areas Owner, their agents, servants, employees or contractors shall keep the site and adjacent streets and sidewalks substantially free from accumulation of waste material and rubbish; and at the completion of the work, Owner shall remove from the site all waste material and rubbish, implements, surplus materials, and surplus equipment. Section 8 USES OF THE SITE Owner covenants and agrees for itself, its successors, its assigns, and every successor in interest to the Site, or any part thereof,, that during construction and thereafter until November 22, 2016, Owner, its successors and such assigns, shall develop and devote the Site to the uses specified in the Tustin General Plan and the Redevelopment Plan, the Scope of Reh'abilitation, all plans approved by Agency pursuant to this Agreement, the Agreement to be Recorded Affecting Real Property, and any covenants required by this Agreement and this Section. The covenants expressed in this Section 8 are covenants running with the land for the duration of the Redevelopment Plan, as provided in the Agreement to be Recorded Affecting Real Property, which shall be signed concurrently herewith and recorded as soon after the effective date of this Agreement as possible. Section 9 MAINTENANCE OF THE SITE Owner covenants and agrees for itself, its Successors, its assigns and every successor in interest to the Site or any part thereof, as follows: (1) Solely at Owner's expense, Owner shall maintain the Site and keep the Site reasonably free from any debris and waste materials, and; (2) Solely at Owner' s expense, Owner shall at all times keep the Site and every part thereof in good order, condition and repair, structural and non-structural (as long as such portion of the Site requiring repairs or the means of repairing the same are accessible to Owner), and; FINAL 21 February 20, 2001 (3) Owner, in keeping the Site in good order, condition and repair, shall exercise and perform good maintenance practices, and; (4) Owner's obligations shall include restorations, replacements or renewals when necessary to keep the Site and all improvements thereon or a part thereof in good order, condition and state of repair. If at any time Owner fails to maintain the Site as required by this Section 9, and said condition is not corrected after written notice from City or Agency and a reasonable period of time not to exceed thirty (30) days from the date of written notice from Agency expires, either Agency or the City may perform the necessary landscape or other maintenance and Owner shall pay ali costs incurred for such maintenance. The covenants contained in this Section 9 shall terminate upon the cancellation of the Promissory Note described in Section 6.3 above and the reconveyance of the Deed of Trust described in Section 6.3 above. Section 10 CERTIFICATE OF COMPLIANCE 10.1 After completion of all. Rehabilitation Project work to be completed by Owner upon the Site in compliance with the terms of this Agreement and upon satisfaction of the conditions set forth in Section 7 ef this Agreement, the Agency shall furnish the Owner with a Certificate of Compliance upon written request therefor by Owner. Such Certificate of Compliance shall be, and shall so state, conclusive determination of satisfactory completion of the Rehabilitation Project work required by this Agreement. After issuance, Agency shall promptly cause the Certificate to be recorded. After the recordation of the Certificate of Compliance, any party then owning or thereafter purchasing, leasing, or otherwise acquiring any interest therein shall not (because of such ownership, purchase, lease or acquisition) incur any obligation or liability under this Agreement with respect to such Site, except that such party shall be bound by the covenants contained in Section 11. Issuance of the FINAL 22 February 20, 2001 Certificate of Compliance shall not waive any rights or claim that Agency may have against any party for latent or patent defects in design, construction or similar matters under any applicable .law, nor shall it be evidence of satisfaction of Owner' s obligations to others. 10.2 Agency shall not unreasonably withhold or delay any Certificate of Compliance. if Agency refuses or fails to issue a Certificate of Compliance after written request from Owner, provided all of the Rehabilitation Project work has been completed in compliance with the terms of this Agreement and each of the conditions established in Section 7 of this Agreement has been satisfied, the Agency shall within ten (10) business days of receipt of the written request, provide a written statement which details the reasons the Agency refused or failed to issue the Certificate of Compliance. The statement shall also contain a statement of the actions that Owner must take to obtain a Cer[ificate of Compliance. Section 11 NON-DISCRIMINATION 11.1 Ob. ligation to Refrain from Discri.mination Owner, covenants by and for itself and any successors in interest that there shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex, marital status, age, disability, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Site, or any portion thereof, nor shall Owner for itself or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the Site. The foregoing covenants shall run with the land. 11.2 Form of Non-discrimination and Non-Segregation Covenants Ali deeds, leases or contracts for the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the Site or any portion thereof, shall contain and be FINAL 23 February 20, 2001 subject to the following non-discrimination or non-segregation covenants' 1. I'n deeds: '~he 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: (a) there shall be no discrimination against or segregation of, any person or group of persons on account of race, color, creed, reli§ion, sex, madtal status, a~e, disability, national od§in or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or · enjoyment of the land herein conveyed, and (2) neither the ~rantee himself or herself, nor any person claimin§ under or through him or her, shall establish or permit any such practico or practices of discrimination or segro§ation with roference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees in the land herein conveyed. The fore[loin§ covenants shall run with the land." 2. in leases' '~he lessee herein covenants by and for himself or herself, his or her heirs, executors, administrators and assi§ns, and all persons claiming under or through him or her, and this lease is made and accopted upon and subject to the foliowin§ conditions: /here shall be no discrimination a§ainst or segregation of any porson or §roup of persons on account of race, color, croed, roiigion, sox, marital status, disability, a~o, ancestry or national origin in the leasing, subleasing, transferdng, uso, occupancy, tenure or enjoyment of tho premises herein leased, nor shall the lessee himself or herself, or any person claiming under or through him or her, ostablish or permit any such practice or practices of discrimination or segre§ation with referonce to the seloction, location, number, use or occupancy of tenants, lessees, sublessees, subtenants or vendees in the premises herein leased." 3. in contracts: "There shall be no discrimination against or segregation of, any person, or group of persons on account of race, color, creed, religion, sex, marital status, age, disability, ancestry or national origin, in the sale, lease, sublease, transfer, use, FINAL 24 February 20, 2001 occupancy, tenure or enjoyment of the premises, nor shall the transferee himself or herself or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the premises. The foregoing provisions shall be binding upon and shall obligate the contracting party or parties and any subcontracting party or parties, or other transferees under this instrument and shall be covenants running with the land." 11.3 Duration of Covenants ..... The covenants in this Section 11 shall remain .in effect in perpetuity. Section 12 INSURANCE AND INDEMNIFICATION 12.1 Worker's Compensation, Bodily injury and Property Damage Insurance 12.1.1 During the period commencing with the execution of this Agreement and ending with a recordation of a Certificate of Compliance, Owner shall furnish to Agency duplicate originals of appropriate certificates of insurance for the rehabilitation work to be performed by Owner under this Agreement, as follows' i · Worker's Compensation Insurance, providing coverage as required by the California State Worker's Compensation Law. · Liability for bodily injury and death. . Liability for Property Damage, including Builder's Ail Risk Insurance for the completed value of the Site Improvements. Each policy for 2 and 3 above shall have coverage of not less than One Million Dollars · ($1,000,000) combined single limit, shall be occurrence-based. 12.1.2 Notwithstanding the foregoing in Section 12.1.1, from and after the date of recordation of the Certificate of Compliance, and thereafter until the Promissory Note described in Section 6.3 above is canceled and the Deed of Trust described in Section FINAL 25 February 20, 2001 6.3 above is reconveyed, Owner shall continue to maintain the Property Damage Liability Insurance described in subparagraph (1) above and shall furnish to Agency duplicate original certificates of insurance, in the form of Attachment No. 10 attached hereto and incorporated herein by reference, together with all endorsements required in Section 12.2. 12.2 Insurance Endorsements 12.2.1 Each such policy of liability insurance shall contain endorsements providing 'the following' ao The City of Tustin and the Tustin Community Redevelopment Agency are hereby declared to be additional 'insureds under the terms of this policy with respect to this subject property and Agreement with Agency. be This insurance policy is primary insurance and no insurance held or owned by the City or Agency shall be called upon to cover a loss under said policy. Ce Owners Loss Payable giving priority.to the'City or Agency for the proceeds and the insurance benefits, to be used to restore the damaged property. do An endorsement that provides that: 'q'his insurance policy will not be canceled, limited or non-renewed by the insurer until thirty (30) days after receipt by AgencY of a written notice of such cancellation or reduction in coverage." e. An endorsement that provides that: "A waiver of subrogation is hereby given to the City of Tustin and the TUstin Community Redevelopment Agency as pertains to the terms of all workers compensation insurance." Insurers must be Admitted Sureties in the State of California, in good standing, have an agent for service of process in California, and have a Best's Key Rating of at least A, VII. 12.2.2 As evidence of such insurance, Owner shall deliver to Agency, within ten (10) business days following the execution of this Agreement, an insurance FINAL 26 February 20, 2001 certificate in the form of Attachment No. 10. 12.3 Provision of Insurance by Contractor During the period of construction of the Rehabilitation Project work, the insurance requirements set forth in Sections 12.1, 12.1.1 and 12.2 above may be satisfied by the provision of insurance by Owner's contractor, provided that evidence of such insurance, meeting all the requirements of Sections 12.1, 12.1.1 and 12.2 above, is delivered to and approved by Agency, prior to the commencement of construction. 12.4 Indemnification Upon execution of this Agreement, notwithstanding Owner' s insurance obligations, and excepting any claims, liability, injury demands, suits, judgments, or awards based~ on Agency' s or City' s active negligence or willful misconduct, Owner shall defend, indemnify, and hold harmless the City and Agency, their offiCers and representatives, employees and agents from and against any claims, liability, injury, demands, suits, judgments or awards arising from or related in any manner to (i) the activities of Owner under this Agreement, (ii) the incurring of costs and expenses by Owner, (iii) the disposition of the Site pursuant to any future sales, leases and/or rental agreements, (iv) the rel°cation, removal, exit, or claims for loss of goodwill of any tenant from the Site or for the rehabilitation work undertaken by Owner for the redevelopment of the Site. This indemnity shall apply to economic losses, personal injuries or property damage suffered by City or Agency, their respective officers, employees or agents. This indemnity shall not apply to Agency's breach or default of any of the material terms, conditions or covenants of this Agreement. Section 13 DEFAULTS, REMEDIES AND TERMINATION 13.1 Default Each of the following shall constitute a default under this Agreement: (1) Failure or delay by a party to perform any term or provision of this FINAL 27 February 20, 2001 Agreement within the time provided herein or in the Schedule of Performance, as such times may be extended pursuant to this Agreement. (2) Failure of Owner to develop the Site substantially in accordance with the Scope of Rehabilitation plans, and construction drawings and any revisions thereto approved by Agency. (3) Breach of any covenant, warranty, or agreement contained or incorporated in this Agreement. The party who fails to perform or delays performance of any term or provision of this Agreement must immediately commence to cure, correct or remedy such failure and shall complete such cure, correction or remedy with all due diligence. 13.2 Notice If an event of default under this Agreement occurs, the injured party shall give written notice (a "Default Notice") of the default to the party in default, specifying the nature of the default. Failure or delay in giving such notice shall not constitute a waiver of any' default, nor shall it change the time of default, nor shall it operate as a waiver of any rights or remedies of the injured party; but the injured party shall have no right to exercise any remedy hereunder without delivering the Default Notice as provided herein. 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. 13.3 Cure Period With respect to defaults or events for which a specific cure period is provided elsewhere in this Agreement, the specific cure period in that Section shall be applicable in lieu of cure periods provided in this Section. in no event shall the cure period set forth in this Section be added to any other cure period set forth in this Agreement. 28 FINAL February 20, 2001 The injured party shall have no right to exercise a right or remedy hereunder unless the subject default continues uncured for a period of thirty (30) days after the delivery of the Default Notice, or, where the default is of a nature which cannot be cured within such thirty (30) day period, the defaulting party fails to commence such cure within thirty (30) day period or fails to proceed diligently t© complete the same, within a reasonable period of time, as determined by the non-defaulting party, in its reasonable discretion. A default for failure to pay a sum of money is a default Which can be cured within thirty (30) days. If the default is not cured within the time periods specified above, the non-defaulting party, at its option, may institute an action for specific performance of the terms of this Agreement or pursue such other rights and remedies as it may have. 13.4 Rights and Remedies Upon the occurrence of an event of default and the expiration of the applicable cure period provided herein or by law, the injured party shall have all rights and remedies against the defaulting party as may be available at law or in equity, to cure, correct or remedy any default, to obtain specific performance, to recover damages for any default, or to obtain any other remedy consistent with the purpose of this Agreement, and when Agency is the injured par[y, Agency shall have the right to apply any and/or all of the 10% completion retention amounts it then holds, as described in Section 6.3.5, to cure such default. Such rights and remedies are cumulative, and except with respect to rights and remedies expressly declared to be exclusive in this Agreement, the exercise of one or more of such rights and remedies shall not preclude the exercise, at the same or different times, of any other rights or remedies for the same default or any other default by the defaulting party. 13.5 Legal Actions 13.5.1 Venue , ,, All legal actions must be instituted in the Superior Court of the County of Orange, FINAL 29 February 20, 2001 State of Califomia, or in any other appropriate court of that county, or in the Federal District Court in the Central District of California, Santa Ana branch. 13.5.2 Service of Process · Service of process on Agency shall be made by personal service upon the Executive Director of Agency, or in such manner as may be provided by law. Service of process on Owner shall be made by personal service upon an officer of Owner, as applicable, or in such manner as may be provided by law, whether made within or without the State of California. 13.5.3 Applicable La.w The laws' of the State of California shall govern the interpretation and enforcement of this Agreement. 13.6 Termination __ in addition to other remedies set forth in this Agreement, Agency shall have the right to terminate this Agreement if: Agency, at its option, reasonably determines the conditions of the Site are not suitable for the development required by this Agreement; (2) Agency delivers a .Default Notice pursuant to Section 13.2, above, and any pertinent cure period applicable pursuant to Section 13.3, above, with respect thereto has expired; (3) Owner (or any successor and assigns) assign(s) or attempt(s) to assign this Agreement or any right therein or assigns or transfers the Site (or any portion thereof), contrary to the provisions of this Agreement; (4) ' Owner fails to submit plans, drawings and related documents for the Site, as required by this Agreement by the date respectively provided for in the Schedule of Performance; FINAL 30 February 20, 2001 (5) Owner and contractor have not, within thir/y (30) calendar days of the effective date of this Agreement, entered into a Construction Agreement, as described in Section 1D(4) above, for the provision of general contractor services for the Rehabilitation Project; (6) Owner substitute(s) another general contractor in place of Contractor, without Agency permission; (7) Before the first disbursement is made under either the Agency Loan described in Section 6 above or any Financing Conveyance approved by Agency under Section 3.2 above, the Residential Project DDA is terminated, pursuant to its terms; or (8) Owner fails, in violation of this Agreement, to perform any of their obligations hereunder. 13.7 Right.s a...n.d Remedies Are CUmulative Except as otherwise expressly stated in this Agreement, the rights and remedies of the parties are cumulative, and the exercise by any party of one or more of such rights or remedies shall not preclude the exercise by it, at the same or different times, of any other rights or remedies for the same default or any other default by any other party. FINAL 3 1 February 20, 2001 13.8 Effect of Violation of the Terms and Provisions of this Agreement Agency is deemed the beneficiary of the terms and provisions of this Agreement and of the covenants running with the land, for and in its own right and for the purposes of protecting the interests of the community and other parties, public or private, in whose favor and for whose benefit this Agreement and the covenants running with the land have been provided. The Agreement and the covenants shall run in favor of Agency, without regard to whether Agency has been, remains, or is owner of any land or interest there in the Site or in the Project Area. Agency shall have the right, if the Agreement or covenants are breached, to exercise all rights and remedies, and to maintain any actions or suits at law or in equity or other proper proceedings to enforce the curing of such breaches to which it or any other beneficiaries of this Agreement and covenants may be entitled. Section 14 GENERAL PROVISIONS 14.1 .Disputes to be Determined by Agency AnY disagreement arising out of this Agreement or from breach thereof, shall be submitted to Agency for determination. Agency shall make its determination within thirty (30) days .after the matter is submitted to Agency for determination, it is mutually agreed that the determination shall be a condition precedent to any right of legal action that either party may have against the other. 14.2 Local, State and Federal Laws Owner shall carry out all construction of the Site Improvements and all responsibilities under this Agreement in conformity with ali applicable local, state and federal laws, including ali applicable federal immigration laws and federal and state labor standards. FINAL 32 February 20, 2001 14.3 Taxes, A.sse..s..s. ments., Encumbrances and Liens Owner shall pay when due all real estate taxes and assessments, and other encumbrances or liens, assessed or levied on or against the Site and each portion thereof. Until such time as the Agency Loan is either repaid or forgiven, Owner agrees to refrain from contesting the validity or amounts of any ad Valorem tax assessment. 14.4 Rights of.Acc.,ess Representatives of Agency and the City shall have the reasonable right of-access to the Site or any portion thereof without charges or fees during the period of this Agreement for the purpose of determining compliance with plans approved under this Agreement or the provisions of the Redevelopment Plan, includin§ but not limited to the inspection of work being performed in constructing the Site Improvements. 14.5 N. otices,...Demands .a.n¢,Communic. atiqns Be ,tween t.h.e Parties Written notices, demands and communications among Agency, Owner shall be sufficiently given if (i) delivered by hand (and a receipt therefor is obtained or is refused to be given), (ii) dispatched by registered or certified mail, postage prepaid, return receipt requested, or (iii) delivered by private delivery service (and a receipt therefor is obtained or is refused to be given), to the principal offices of Agency, Owner as applicable. Such written notices, demands and communications may be sent in the same manner to such other addresses as either party may from time to time designate by mail as provided in this Section. FINAL 33 February 20, 2001 Any written notice, demand or communication shall be deemed received immediately if delivered by hand, shall be deemed received on the tenth day from the date it is postmarked if delivered by registered mail, shall be deemed received on date of delivery as shown on the return receipt if delivered by certified mail, and'shall be deemed received · as of the date of delivery shown in the records of the private delivery service if delivered by such private delivery service. Such notices shall be addressed and delivered to: · Agency: William A. Huston, ExecutiVe Director Tustin Community Redevelopment Agency 300 Centennial Way Tustin, CA 92780 Owner: , Attn' Philippe Izsak (acting under Power of Attorney) 20530 Vista de Oro Place Woodland Hills, CA 91364 14.6 Conflicts of Interest No member, official or employee'of Agency shall have any personal interest, direct or indirect, in this Agreement, nor shall any member, official or employee participate in any decision relating to the Agreement which affects his personal interests or the interests of any corporation, partnership or association in which he is directly or indirectly interested. Owner warrants that they have not paid or given, and will not pay or give, any third ..,' party any money or other consideration for obtaining this Agreement. 14.7 Enforced Delay, Extension of Times of Performance in addition to specific provisions of this Agreement, performance by any party hereunder shall not be deemed to be' in default, and all performance and other dates specified in this Agreement and the Attachments hereto shall be extended, where delays or defaults are due to' war; insurrection; strikes; lockouts; riots; floods; earthquakes; fires; FINAL 34 February 20, 2001 casualties; acts of God; acts of the public enemy; epidemics; quarantine restrictions; freight embargoes; lack of transportation; governmental restrictions or priority; litigation by third parties challenging the validity of this Agreement, or Owner's rights and obligations under this Agreement; unusually severe weather; inability to secure, or delay in securing, permits (if the inability to secure, or delay in securing, permits is not the fault of Owner), necessary labor, materials or tools; delays of any contractor, subcontractor or supplier; acts or omissions of the other party; acts or failures to act of the City of Tustin or any other public or governmental agency or entity (other'than the acts or failures to act of Agency which shall not excuse performance by Agency); or any other causes beyond the control or without the fault of the party claiming an extension of time to perform. Notwithstanding anything to the contrary in this Agreement, an extension of time due to any such cause shall be for the period of the enforced delay, if notice by the party claiming such extension is sent to the other party within (1). thirty (30) calendar days after the commencement of the cause, when it is then reasonably foreseeable that a delay may result (e.g., on learning of a labor strike), or (2) thirty (30) business days after the commencement of the delay, when it was not reasonably foreseeable that a delay would result (e.g., sudden flooding). Times of performance under · this Agreement may also be extended in writing by the agreement of Agency and Owner. 14.8 Nonliability of Officials and Employees of Aqency No member, official or employee of Agency shall be personally liable to Owner, or any of their successors in interest, in the event of any default or breach by Agency or for any amount which may become due to Owner, or their successors, or on any obligations under the terms of this Agreement. 14.9 Inspection of Books and Record.s. Agency has and shall have the right at all reasonable times, upon no less than ten (10) business days written notice, to inspect the books and records of Owner pertaining to FINAL 35 February 20, 2001 the Site as pertinent to the purposes of this Agreement. Owner has the right at all reasonable times, upon no less than two (2) business days written notice to inspect the books and records of Agency pertaining to the Site as pertinent to the purposes of this Agreement. Section 15 SPECIAL PROVISIONS 15.1 Successors In Interest For the term of this Agreement, the terms, covenants, conditions and restrictions of this Agreement shall extend to and shall be binding upon and inure to the benefit of the heirs, executors, administrators, successors and assigns of the parties, except as provided for in this Agreementl Section 16 ENTIRE AGREEMENT, AMENDMENTS AND WAIVERS This Agreement shall be executed in four (4) duplicate originals, each of which is deemed to be an original. This Agreement includes 38 pages and 11 Attachments, which constitutes the entire understanding and agreement of the parties. 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 waivers of the provisions of this Agreement must be in writing by the appropriate authorities of Agency and Owner, and all amendments hereto must be in writing by the appropriate authorities of Agency and Owner. In any circumstance where, under this Agreement, any party is required to approve or disapprove any matter, approval shall not be unreasonably withheld. Section 17 EFFECTIVE DATE OF THE AGREEMENT The effective date of this Agreement shall be the date when it shall have been signed by Agency. FINAL 36 February, 20, 2001 IN WITNESS WHEREOF, Agency and Owner have each signed this Agreement on the respective dates set forth below. "Agency" Dated' TUSTIN COMMUNITY REDEVELOPMENT AGENCY, a California community redevelopment agency APPROVED AS TO FORM' By: By: Lois E. Jeffrey, Agency Counsel "Owner" ATTEST: By: Philippe lzsak Recording Secretary By: Marta Escabar Dated° By: Charles C. Virzi JD\towncenter\LA Development Draft DDA. doc By: Patricia J. Virzi 37 FINAL .February 20, 2001 Attachment No. 1 Commercial Rehabilitation Project Parcel Map · ATTACHMENT NO. 1 COMMERCIAL REHABILITATION PROJECT PARCEL MAP F~T STREET SECOND STREET Attachment No. 2 Legal Description ATTACHMENT NO. 2 COMMERCIAL REHABILITATION PROJECT LEGAL DESCRIPTION OF PROPERTY California, Instrument follows: That portion of land in the City of Tustin, County of Orange, State of as described in Grant Deed recorded September 9. 1999, as No. 19990651662, Official Records of said County, described as THE WEST 140 FEET OF THE NORTH 162 1/2 FEET OF BLOCK B OF TRACT NO. 3 IN THE CITY OF TUSTIN, COUNTY OFORANGE, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 9, PAGE 4 OF MISCELLANEOUS MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY. Attachment No.3 Scope Of Rehabilitation ATTACHMENT NO. 3 SCOPE OF REHABILITATION o [OLD TOWN PLAZA COMMERCIAL REHABILITATION] NOTE: References herein to "the Agreement" and "the DDA" mean the Disposition and Development Agreement of which this Attachment No. 3 is a part; references to "Attachments" mean the Attachments to the DDA unless otherwise specified. Except as otherwise noted, all capitalized terms defined within the DDA and the Attachments shall retain the meanings as defined in the Disposition and Development Agreement. GENERAL DESCRIPTION The Site is delineated as Parcel 2 of Block B on the Parcel Map (Attachment No. 1) and is described on the Legal Description (Attachment No. 2) to the Agreement. II. DEVELOPER IMPROVEMENTS A. Definition of Site Improvements The Owner shall construct or cause to be constructed on the Site all of the Rehabilitation Improvements, including the Private Improvements and Public Improvements set forth in this Scope of Development as approved by the Agency, Planning Commission, and City Council. The Rehabilitation Improvements shall consist of the following' , Rehabilitation of an approximately 7,063 gross square feet retail commercial center more specifically comprised of a 56-seat restaurant, approximately 5,550 square feet retail shop uses and a 24-space parking lot as delineated in Exhibit "A"-Rehabilitation Plans and pursuant to Agency approval and City of Tustin approvals through the Tustin Planning Commission and Tustin City Council. Resolutions of. Agency and City of Tustin approval shall be obtained within the times established in the Schedule of Performance (Attachment No. 4). 2. Compliance with all "Conditions of Approval" stipulated by an applicable governmental agency having jurisdiction, including, but not limited to, the Planning Commission and City Council approvals identified above. 3. Compliance with all provisions of the Disposition and Development Agreement. -1- ,, Schedule of Performance The Owner shall commence and complete the Rehabilitation Improvements by the respective times established therefor in the Schedule of Performance (Attachment No.4). !11. DEVELOPMENT STANDARDS The Rehabilitation Improvements shall be designed and rehabilitated in which the commercial buildings will have a first-class architectural quality and character, both individually and in the context of the surrounding Tustin Old Town District. All public spaces and parking areas shall be designed, landscaped and developed with the same degree of quality. Particular attention shall be paid to enhancing pedestrian activities, minimizing mass, scale and bulk, and to the selection of color and materials. The Agency and the Qwner will cooperate and direct their consultants, architects and/or engineers to cooperate so as to ensure the continuity and coordination necessary for the proper and timely completion of the rehabilitation of the Site. All of the Rehabilitation Improvements shall conform to all applicable federal, state and county codes and regulations, the requirements of the Town Center Redevelopment Plan and the Tustin City Codes and the conditions of City resolutions. The Owner acknowledges the. responsibilitY to obtain any approvals required by any governmental agency, utility or other agency, including the City, which has jurisdiction over all or any portion of the Rehabilitation Improvements. All "Conditions of Approval" stipulated by an applicable jurisdiction shall be incorporated into the final design and noted in the construction documents by the architects, engineers and other consultants. The Owner or Owner's contractor shall make all necessary applications by such time(s) as will be consistent with the timely commencement and completion of various portions of the off-site and on-site improvements by the respective times established therefor by the Schedule of Performance (Attachment No. 4 of this Agreement). IV. CHANGES TO FINAL CONSTRUCTION DRAWINGS AND RELATED DOCUMENTS If the Owner desires to make any changes in the Final Construction Drawings and Related Documents approved by the Agency, Planning Commission and the City Council, the Owner shall submit the' proposed change(s) to 'the Agency and City for approval. Such changes shall be reviewed in the context of the purpose of the DDA and applicable provisions of the City of Tustin Municipal Code and shall be approved or disapproved by the Agency and City. -2- Attachment No. 4 Schedule Of Performance ATTACHMENT NO. 4 SCHEDULE OF PERFORMANCE [OLD TOWN PLAZA COMMERCIAL REHABILITATION] NOTE' References herein to "the Agreement" and "the DDA" mean the Disposition and Development Agreement of which this Attachment No. 4 is a part; references to "Attachments" mean the Attachments to the DDA unless otherwise specified. Except as otherwise noted, all capitalized terms defined within the DDA and the Attachments shall retain the meanings as defined in the Disposition and Development Agreement. Ac. ti0n Timing 1. Execution of Agreement A. Owner delivers executed DDA and Attachments to Agency. B. Agency executes DDA and' Attachments. C. Agency causes recordation of appropriate DDA Attachments. 2. Entitlement Approvals A. Owner submits complete applications with related drawings and documents to the City for all necessary entitlement approvals. B. City approves or disapproves all necessary entitlement approvals. Within 5 calendar day. s following action by Agency on the DDA. Within 5 working days following Owner's submission of executed DDA and Attachments. Within 10 working days following execution of the DDA by Agency. Within 5 calendar days following action by Agency on the DDA. Within 30 calendar days following City's notification to Owner that all necessary entitlement applications are complete. -1- 3. Buildinq Permits. A. Owner submits Final Construction Drawings and Related Documents to Community Development Department for issuance of Building Permits. B. Owner obtains building permits consistent with any approved phasing. 4..A..gency, Assistance. A. Agency inspects work and/or materials with respect to which Owner submits a payment request as described in the DDA. B. Agency approves or disapproves disbursement of Agency Commercial Rehabilitation Assistance pursuant to the DDA. 5. Construction of the Rehabilitation Improvements. A. Owner commences Demolition of appropriate building improvements. B. Owner completes Demolition work. C. Owner commences construction of the Rehabilitation Improvements. D. Owner completes construction of the Rehabilitation Improvements. 6. Submission of Request for Certificate of Compliance. Owner submits request for issuance of a Certificate of Compliance by Agency. Within 30 calendar days following the execution of the DDA. Within 7 working days following approval by Community Development Department. Within 3 working days following Owner's submission of a request for payment with respect to such work and/or materials together with submission of unconditional lien releases as described in the DDA in the form provided by the Agency. Within 5 working days following Agency's inspection of the work and/or materials with respect to which Owner has submitted a payment request. Within 10 working days following issuance of Demolition Permits by City. Within 30 calendar days following issuance of demolition permits by City. Within 60 calendar days following the execution of the DDA. Within six (6) months following the execution of the DDA. Upon completion of all Rehabilitation Improvements and satisfaction of all conditions precedent set forth in the DDA. -2- 7. Approval and Issuance of .Certificate of Compliance.. The Agency approves or disapproves the request for issuance of a Certificate of Compliance. Within 10 working days following submission of request for Certificate of Compliance and satisfaction of all conditions precedent set forth in the DDA. 8. Recordation of Certificate of Compliance. The Agency shall cause the recordation of the Certificate of Compliance in the Office of the County Recorder of Orange County. Within 5 working days following issuance of Certificate of Compliance by Agency. 9. Submission of Request for Release of Aqencv Retention. Owner shall submit a request for disbursement of Agency Retention and all supporting documentation as required by Section 6.3.5 of the DDA. Upon issuance of a Certificate of Compliance by Agency. 10. Release of Agency Retention. The Agency shall disburse the Agency Retention amounts to Owner. Within 30 working days following Owner's request for Release of Agency Retention. -3- Attachment No. 5 Agency Loan Promissory Note DO NOT DESTROY THIS NOTE' WHEN PAID, THIS NOTE MUST BE SURRENDERED TO THE TRUSTEE FOR CANCELLATION, BE'FORE RECONVEYANCE OF THE DEED OF TRUST SECURING THIS NOTE WILL BE MADE. OLD TOWN PAZA COMMERCIAL REHABILITATION PROJECT PROMISSORY NOTE Not to exceed $80,000.00 Tustin, California ,2000 !. Loan For value received, Philippe lzsak, Mata Escobar, Charles M. Virzi and Patricia J. Virzi, as Tenants in Common ("Obligor"), promise to pay to the TUSTIN COMMUNITY REDEVELOPMENT AGENCY, a California community redevelopment agency ("Agency"), or order, at 300 Centennial Way, Tustin, California 92780, Attention' Assistant Executive Director, or at such other place as the holder of this note may from time to time designate by written notice to Obligor, a principal sum equal to the total amount of all disbursements from Agency to Obligor hereunder, such sum not to exceed the amount of Eighty Thousand Dollars ($80,000.00). Such principal sum shall be due and payable, on the terms and conditions provided herein, in lawful money of the United States of America. !!. Purpose This note is made pursuant to that certain Commercial Rehabilitation Project Disposition and Development Agreement between Obligor and Agency, dated ,2000 (the "Agreement"), and pertains to the rehabilitation of the · property described on Attachment A hereto,.which is incorporated herein by this reference (the "Property"). Obligor shall rehabilitate the Property in accordance with the terms of the Agreement. The terms used herein shall have the same meanings as those defined in the Agreement. 1101-00003 106181 January 11, 2001 I!!. Disbursement . _ A. Loan AmOunt The final amount of this note shall be determined as provided in Section 6 of the Agreement. Obligor shall maintain complete and accurate accounts, invoices, and records of ali monies expended or paid for the Rehabilitation Project. Copies of such documents shall be made available to Agency at Agency's request. B. Conditions and Disbursement Schedules Agency shall disburse, to or for the benefit of Obligor, the following proceeds of this note, based on the following conditions and disbursement schedules' 1. ConditionS for Disbursement. Agency shall disburse to Obligor a total amount not to exceed Eighty Thousand Dollars ($80,000.00), subject to a 10% Agency Retention, in increments as provided in subparagraph 2 below, subject to the following conditions' (a) Obligor shall have furnished Agency with an' ALTA lender's title policy showing' (1) fee simple title to the Property as vested in Obligor, (2) Agency as an insured lender, and (3) no monetary liens or encumbrances, other than an existing deed of trust securing a note in the amount of Three Hundred Thousand Dollars ($300,000) from First Federal Savings and Loan, loans approved under Section 3B(2) of the Agreement, a lien for taxes not yet due and payable, and the deed of trust securing this note; (b). Obligor shall have furnished to Agency proof of insurance coverage as provided in Section 12 of the Agreement; (c) Obligor shall not then be in default under the Agreement, this note, or the deed of trust securing this note, or the Agreement to Be Recorded Affecting Real Property; (d) Obligor shall have obtained ali City land use entitlements and building. permits to construct the Site Improvements; (e) Obligor shall have prepared or caused to be prepared all plans, drawings and specifications (the "Plans") necessary to construct and install the Site Improvements; (f) Agency shall have received an estoppel notice i~ a form prescribed by Agency, from each Tenant on the Property approving the Scope of Rehabilitation and expressly releasing the Agency and the City of Tustin from any claims for relocation assistance, lost rent, constructive eviction, and loss of goodwill; 1101-00003 106181 January 11, 2001' (g) With respect to individual disbursements hereunder, the conditions of subparagraph 2 below shall have been satisfied; (h) With respect to the 10% completion retention described in subparagraph 2 below, Obligor shall have made, and Agency shall have approved, a request for final progress payment with supporting documentation as described in subparagraph 2 below; (i) Obligor shall have deposited the Owner's Contribution, as defined in Section 5C of the Agreement, in Agency's escrow trust account (an interest-bearing account) to be used for the payment of Rehabilitation Project costs as shown on the Rehabilitation Budget. 2. .Disbursement Schedule. Obligor may request periodic releases of the proceeds of this note. Each such request be made upon the written authority of Obligor and shall be accompanied by invoices showing Obligor's payment for the work, supplies or materials, and unconditional mechanics lien releases from the contractor, subcontractor, supplier and materialmen for the amounts covered by the request. Agency shall periodically make disbursements under this note upon receipt of a request as described above. Disbursements with respect to Obligator, s costs incurred in accordance wit the Scope of Rehabilitation, the Site Plan and Related Drawings, and the Rehabilitation Budget shall be paid by check payable to Obligor and Obligator's contractor(s) jointly. All Agency disbursements shall be contingent upon inspection of the work and/or materials by representatives of Agency and confirmation that the work and/or materials are satisfactory. In addition, Agency shall have the right to require additional documentation to insure that it is only paying for work that has been done and that'all affected contractors, suppliers and materialmen have been paid. Inspection shall be done by Agency within three (3) working days of a request by. Obligor. If the work and/or materials are approved by Agency, payment shall be made as soon as possible and within twelve (12) working days after the inspection. Agency shall retain 10% of the amount of each request to insure completion of the work. The retained funds shall be released pursuant a request for a final progress payment upon evidence that the work has been satisfactorily completed and contractors, subcontractors, suppliers'and materialmen have been paid. IV. Interest , This note shall bear no interest, except as otherwise specifically provided herein in the event of default. 1101-00003 106181 January .11, 2001 V. 'Pavment A. Forgiveness of Note This note shall be due and payable in full in seven years. One-fifth of the principal amount of this note shall be deemed paid at the end of each of the third (3rd) through seventh (7th) calendar years, provided a Certificate of Compliance is filed by Agency and none of the events described in ~ara~raph B below occur durin~ the term of this note and prior to the end of the calendar year in question. For purposes of this note, each calendar year shall be calculated as 365 days and the first day of the first calendar year shall be the date immediately following the recording date of the Certificate of Compliance. B. Default In the event of a default by Obligor under the Agreement, under this note, under the deed of trust securing this note, or under the Agreement to Be Recorded Affecting Real Property, or if at any time during the tem of this note, Obligor (1) sells the Property, (2) without obtaining Agency's approval under Section 3B(2) of the Agreement, uses prior to the recordation of a Certificate of Compliance as defined under Section 10 of the Agreement, all or a portion of the Property as collateral for financing, (3) assigns or transfers 'any interest in the Property (excluding' (i) tenant leases, .. (ii) a transfer to a newly created trust, of which Philippe lzsak and Marta Escabar are trustors and trustees, for'the benefit of certain Charitable.organizations, Philippe lzsak, Marta Escabar,. and/or' the heirs of Philippe....lZsak and/o~ Marta Escabar, provided that such newly created trust takes title to the Property subject to this note and the deed of trust securing this note and subject to Obligor's ongoing obligations under the Agreement and the Agreement to Be Recorded Affecting Real Property, (iii) transfers to any heirs of Philippe Izsak and/or Marta 'Escabar,. provided that such transferees, pursuant to (a) written agreement(s) in form and substance satisfactory t© Agency, assume the obligations of Obligor under this note, the deed of trust securing this note; the Agreement and the Agreement to Be Recorded Affecting Real Properly and take title to the Property subject to this note, the deed of trust securing this note, the Agreement and the Agreement to Be Recorded Affecting Real Property, (iv) a transfer to a newly created trust, of which Charles C. Virzi and Patricia J. Virzi are trustors and trustees, for the benefit of certain charitable organizations, . Charles · C. Virzi, Patricia J. Virzi, and/or the heirs of Charles C. Virzi and/or Patricia J. Virzi, provided that such newly created trust takes title to the Property subject to this note and the deed of trust securing this note and subject to Obligor's ongoing obligations under the Agreement and the Agreement to Be Recorded Affecting Real Property, and 1101-00003 106181 January 11, 2001 4 (v) transfers to any heirs of CharleS C. Virzi and/or Patricia J. Virzi, provided that such transferees, pursuant to (a) written agreement(s) in form and substance satisfactory to Agency, assume the obligations of Obligor under this note, the deed of trust securing this note, the Agreement and the Agreement to Be Recorded Affecting Real Property and take title to the Property subject to this note, the deed of trust securing this note, the Agreement and the Agreement to Be Recorded Affecting Real Property, or (4) substitutes another general contractor without Agency's approval, Obligor shall repay or cause to be repaid that portion of this note that has not been forgiven by Agency pursuant to Paragraph A above, in such event(s), this note shall become immediately due and payable in full, without notice, at the option of the holder of this note, and the holder shall have ali rights and remedies available to it at law or in equity with respect to such default, including, without limitation, the right to foreclose under the deed of trust securing this note. The failure to exercise such option shall not constitute a waiver of the right to exercise it in the event of any subsequent default. in addition, if Obligor defaults under the terms of the Agreement, this note, the deed of trust securing this note, or the Agreement to be Recorded Affecting Real Property, and fails to cure any such default pursuant to the provisions of Section 13 of the Agreement, Agency, at its option may apply any and/or all of the 10% Agency Retention amounts it then holds hereunder to cure such default. The failure to exercise such option shall not constitute a waiver of the right to exercise it in the event of any subsequent default. Vi, Deed of Trust This note shall be secured by a deed of trust in the form of Attachment 6 to the Agreement. Such deed of trust shall be executed by Obligor and recorded as soon after the effective date of the Agreement as possible, and before Agency makes any disbursements under this note.' Notwithstanding the foregoing, however, the deed of trust shall be secondary to any Financing Conveyances approved by Agency pursuant to Section 3.2.2 of the Agreement. VII. General Provisions 1. Interest and Late Charges. if any payment due. under this note is not paid in full on or before the date such payment is due and within thirty (30) days after written notice of such default to Obligor, Obligor shall in addition pay to the holder of this note: (a) a late chare of five percent (5%) of the amount of suCh payment then due and payable but not so received by the holder of this note, which late charge shall constitute liquidated damages under California Civil Code Section 1671(b), and (b)interest on such overdue payment at the rate of seven percent (7%) per annum simple interest until paid. The imposition of such late charge does not imply or constitute any agreement of the holder of this note to forbear collection of any delinquent amounts or to forbear the exercise of any other remedy under this note or under the deed of trust securing this note. Obligor 1101-00003 106181 January 11, 2001 5 acknowledges that this late charge is reasonable under the circumstances existing at the date of this note. . Each payment shall be credited first to any late charges and other costs and expenses of enforcement and collection as provided herein, then to accrued but unpaid interest then due, and then to principal, and interest shall thereupon cease upon the principal so credited. 2. .~eed. of Trust Proyisions. This note is secured by a deed of trust, of even date herewith, in favor of First American Title Insurance Company, a California corporation, as Trustee, which encumbers the Property. The deed of trust contains the following provision' "if Trustor shall sell, convey or alienate the real property ("Property") encumbered by this Deed of Trust, or any part thereof, or any interest therein, or shall be divested of its title or any interest therein in any manner or way, whether voluntarily or involuntarily, without the written consent of Beneficiary being first had and obtained, which consent may be withheld for any reason whatsoever, Beneficiary shall have the right, at its option, except as prohibited by law, to declare ali of the indebtedness or obligation secured hereby, irrespective of the maturity date specified in any note evidencing the same, immediately due and payable in full." The deed of trust also contains the following provision: "If a default occurs (a) in the payment of any installment of principal or interest when due under the note the performance of which is secured hereby, (b) under any other provision of such note' or this Deed of Trust, (c) under the terms of the Commercial Rehabilitation Project Disposition and Development Agreement dated ,. 20.00 between Trustor and Beneficiary (a copy of which is on file with Beneficiary as a public record and the terms of which are incorporated herein by reference), or (d) under the terms of the Agreement to Be Recorded Affecting Real' Property between Trustor and Beneficiary (a copy of which is on file with Beneficiary as a public record and the terms of which are incorporated herein by reference), and Trustor fails to cure such default pursuant to the provisions of Section 13 of the Commercial Rehabilitation Project Disposition and Development Agreement, then the entire unpaid principal balance and all unpaid accrued interest under the note shall at once become 'due and payable in full, without notice, at the option of the holder of the note, and Beneficiary shall have all rights available to it under the note and this Deed of Trust, and as otherwise provided by law or in equity, including but not limited to the right to foreclose under this Deed of Trust. 'The failure to exercise such option shall not constitute a waiver of the right to exercise it in the event of any subsequent default." 1101-00003 106181 January 11,2001 The deed of trust provisions quoted above are material provisions of this note. 3. Costs, Expenses, and Fees. Obligor agrees to pay the following costs, expenses, and attorneys' fees paid or incurred by the holder of this note, or adjudged by a court: (~) reasonable costs of collection or enforcement, including costs, expenses and attorneys' fees paid or incurred in connection with the collection or enforcement of this note, whether or not suit is filed; and (2) costs of suit and such sum as the court may adjudge as attorneys' fees in any action to enforce payment of this note or any part of it. 1101-00003 106181 January 11, 20Ol 7 OLD TOWN PLAZA COMMERCIAL REHABILITATION PROJECT PROMISSORY NOTE [signature page] · IN WITNESS WHEREOF, Obligor has executed this note. "Obligor" Philippe iZsak' Marta Escobar ACCEPTED BY: TUSTIN REDEVELOPMENT California community agency COMMUNITY AGENCY, a redevelopment By:_, Its' Chades M. Virzi Patricia J. Virzi 1101-00o03 106181 January 11, 2001 OLD TOWN PLAZA COMMERCIAL REHABILITATION PROJECT LEGAL DESCRIPTION OF PROPERTY That portion of land in the City of Tustin, County of Orange, State of California, as described in Grant Deed recorded September 9. 1999, as Instrument No. 19990651662, Official Records of said County, described as follows: THE WEST 140 FEET OF THE NORTH 162 1/2 FEET OF BLOCK B OF TRACT NO. 3 IN THE CITY OF TUSTIN, COUNTY OFORANGE, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 9, PAGE 4 OF MISCELLANEOUS MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY. 1101-00003 106181 January 11, 2001 Attachment No. 6 Agency Loan Trust Deed 'Order No. Escrow No. Loan No. WHEN RECORDED MAIL TO: Tustin Communi .ty Redevelopment Agency 300 Centennial Way Tustin, California 92780 Attention' Christine Shin~leton _ Assistant Executive Director EXEMPT FROM RECORDING FEE PER GOVERNMENT CODE § 6103 SPACE ABOVE THIS LINE FOR RECORDER'S USE DEED OF TRUST WITH ASSIGNMENT OF RENTS (SHORT FORM) (COMMERCIAL REHABILITATION AGENCY I'OAN) This DEED OF TRUST, made , between Philippe Izsak, Martha Escobar, Charles C. Virzi, Patricia J. Virzi, all as Tenants in Common, herein called TRUSTOR, whose address is 20530 Vista de Oro Place, Woodland Hills, California 91364, FIRST AMERICAN TITLE INSURANCE COMPANY, a California corporation, herein called TRUSTEE, and TUSTIN COMMUNITY 'REDEVELOPMENT AGENCY, a California community redevelopment agency, herein called BENEFICIARY, WITNESSETH' That Trustor grants to Trustee in trust, with power of sale, that property in the City of Tustin, County of Orange, State of California, described as' o See legal description set forth on Exhibit 1 attached hereto and made a part hereof by this reference; together with the rents, issues and profits thereof, subject, however, to the right, power and authority hereinafter given to and conferred upon Beneficiary to collect and apply such rents, issues and profits for the purpose of securing (1) payment of a principal sum not to exceed 880,000.00, plus interest thereon, according to the terms of a promissory note or notes of even date herewith made by Trustor, payable to order of Beneficiary, and extensions or renewals thereof, (2) the performance of each agreement of Trustor incorporated by reference or contained herein and (3) payment of additional sums and interest thereon which may hereafter be loaned to Trustor, or his successors or assigns, when evidenced by a promissory note or notes reciting that they are secured by this Deed of Trust. To protect the security of this Deed of Trust, and with respect to the property above described, Trustor expressly makes each and all of the agreements, and adopts and agrees to perform and be bound by each and all of the terms and provisions set forth in subdivision A, and it is mutually agreed that each and all of the terms and provisions set forth in subdivision B of the fictitious deed of trust recorded in Orange County August 17, 1964, and in all other counties August 18, 1964, in the book and at the page of Official Records in the office of the county recorder of the county where said property is located, noted below opposite the name of such county, namely: (CONTINUED ON NEXT PAGE) ]]58 (1/94) Page ] of 4 COUNTY BOOK PAGE ~. . ;TY BOOK PAGE COUNTY BOOK PAGE COUNTY BOOK PAGE Alameda 1288 556 Kinl~s 858 713 Pl~cer 1028 379 Sierra 38 187 Alpine 3 130-31 Lake 437 110 Plumas 166 1307 Siskivou 506 762 Amador 133 438 Lassen 192 367 Riverside 3778' 347 $olano 1287 621 Butte 1330 513 Los Anoeles T-3878 874 Sacramento 5039 124 $onoma 2067 427 Calaveras 185 338 Madera 911 136 San Benito. 300 405 Stanislaus 1970 56 Colusa 323 391 Matin 1849 122 San Bernardino 6213 768 Sutter 655 585 Contra Costa 4684 1 Mariposa 90 453 San Francisco A-804 596 Tehama 457 183 Del Norte 101 549 Mendocino 667 99 San Joaouin 2855 283 Trinity 108 595 El Dorado 704 635 Merced 1660 753 San Luis Obispo 1311 137 Tulare 2530 108 Fresno 5052 623 Modoc 191 93 San Mateo 4778 175 Tuolumne 177 160 Glenn 469 76 Mono 69 302 Santa Barbara 2065 881 Ventura 2607 237 Humboldt 801 83 Monterey 357 239 Santa Clara 6626 664 Yoio 769 16 Imperial 1189 701 Napa 704 742 Santa Cruz 1638 607 Yuba 398 693 Invo 165 672 Nevada 363 94 Shasta 800 633 Kern 3756 690 Orange 7182 18 San Diego SERIES 5 Book 1964, Pa~e 149774 shall inure to and bind the parties hereto, with respect to the property above described. Said agreements, terms and provisions contained in said subdivisions A and B, (identical in all counties, and printed on pages 3 and 4 hereof) are by the within, reference thereto, incorporated herein and made a part of this Deed of Trust for all purposes as fully as if set forth at length herein, and Beneficiary may charge for a statement regarding the obligation secured hereby, provided the charge therefor does not exceed the maximum allowed by law. The undersigned Trustor, requests that a copy of any notice of def.ault and any notice of sale hereunder be mailed to him at his address hereinbefore set forth. For additional provisions of this Deed of Trust, refer to the Rider attached hereto as Exhibit 2 and made a part hereof by this reference. Signature of Trustor Signature of Trustor Philippe Izsak Signature of Trustor Marta' Escobar 'Signature of Trustor Charles C. Virzi STATE OF CALIFORNIA COUNTY OF } }ss ,} Patrica J. Virzi On before me, , personally appeared personally known to me ( or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(les), and that by his/her/their signature(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. Signature 1 lol -0oo03 RED\CDD- (CONTINUED ON NEXT PAGE) 1158 (1/94) Page 2 of 4 (This area ~or official notarial seal) 1101-00003 RED\CDD- (CONTINUED ON NEXT PAGE) 1158 Page 3 of 4 DO NOT RECORD The following is a copy of Subdivisions A and B of the fictitious Deed of Trust recorded in each county in California as stated in the foregoing Deed of Trust and incorporated by reference in said Deed of Trust as being a part thereof as if set forth at length therein. A. To protect the security of this Deed of Trust, Trustor agrees: 1)' To keep said property in good condition and repair, not to remove or demolish any building thereon; to complete or restore promptly and in good and workmanlike manner any building which may be constructed, damaged or destroyed thereon and to pay when due ali claims for labor performed and materials furnished therefor, to comply with ali laws affecting said property or requiring any alterations or improvements to be made thereon, not to commit or permit waste thereof; not to commit, suffer or permit any act upon said property in violation of law; to cultivate, irrigate, fertilize, fumigate, prune and do all other acts which from the character or use of said property may be reasonably necessary, the specific enumerations herein not excluding the general. 2) To provide, maintain and deliver to Beneficiary fire insurance satisfactory to and with loss payable to Beneficiary. The amount collected under any.fire or other insurance policy may be applied by Beneficiary upon any indebtedness secured hereby and in such order as Beneficiary may determine, or at option of Beneficiary the entire amount so collected or any part thereof may be released to Trustor. Such application or release shall not cure or waive any default or notice of default hereunder or invalidate any act done pursuant to such notice. 3) To appear in and defend any action or proceeding purporting to affect the security hereof or the rights or powers of Beneficiary or Trustee; and to pay all costs and expenses, including cost of evidence of title and attorney's fees in a reasonable sum, in any such action or proceeding in which Beneficiary or Trustee may appear, and in any suit brought by Beneficiary to foreclose this Deed. 4) To pay; at least ten days before 'delinquency all taxes and assessments affecting said property, including assessments on appurtenant water stock; when due, all encumbrances, charges and liens, with interest, on said property or any part thereof, which appear to be prior or superior hereto; all costs, fees and expenses of this Trust. Should Trustor fail to make any payment or to do any act as herein provided, then Beneficiary or Trustee, but without obligation so to do and without notice to or demand upon Trustor and without releasing Trustor from any obligation hereof, may; make or do the same in such manner and to such extent as either may deem necessary to protect the security hereof, Beneficiary or Trustee being authorized to enter upon said property for such purposes; appear in and defend any action or proceeding purporting to affect the security hereof or the rights or powers of Beneficiary or Trustee; pay, purchase, contest or compromise any encumbrance, charge or lien which in the judgment of either appears to be prior or superior hereto; and,'in exercising any such powers, pay necessary expenses, employ counsel and pay his reasonable fees. 5) .To pay immediately and without demand all sums so expended by Beneficiary or Trustee, with interest from date of expenditure at the amount allowed by law in effect at the date hereof, and to pay for any statement provided for by law in effect at the date hereof regarding the obligation secured hereby any amount demanded by the Beneficiary not to exceed the maximum allowed by law at the time when said statement is demanded. B. It is mutually agreed: 1) That any award of damages in connection with any condemnation for public use of or injury to said property or any part thereof is hereby assigned and shall be paid to Beneficiary who may apply or release such monies received by him in the same manner and with the same effect as above provided for disposition of proceeds of fire or other insurance. 2) That by accepting payment of any sum secured hereby after its due date, Beneficiary does not waive his right either to require prompt payment when due of all other sums so secured or to declare default for failure so to pay. 3) That at any time or from time to time, without liability therefor and without notice, upon written request of Beneficiary and presentation of this Deed and said note for endorsement, and without affecting the personal liability of any person for payment of the indebtedness secured hereby, Trustee may: reconvey any part of said property; consent to the making of any map or plat thereof; join in granting any easement thereon, , or join in any extension agreement or any agreement subordinating the lien or charge hereof. 4) That upon written request of Beneficiary stating that all sums secured hereby have been paid, and upon surrender of this Deed and said note to Trustee for cancellation and retention or other disposition as Trustee in its sole discretion may choose and upon payment of its fees, Trustee shall reconvey, without warranty, the property then held hereunder. The recitals in such reconveyance of any matters or facts shall be conclusive 'proof of the truthfulness thereof. The Grantee in such reconveyance may be described as "the person or persons legally entitled thereto". 5) That as additional security, Trustor hereby gives to and confers upon Benefici. ary the right, power and authority, during the continuance of these Trusts, to collect the rents, issues and profits of said property, reserving unto Trustor the right, prior to any default by Trustor in payment of any indebtedness secured hereby or in performance of any agreement hereunder, to collect and retain such rents, issues and profits as they become due and payable. Upon any such default, Beneficiary may at any time without notice, either in person, by agent, or by a receiver to be appointed by a court, and without regard to the adequacy of any security for the indebtedness hereby secured, enter upon and take possession of said property or any part thereof, in his own name sue for or otherwise collect such rents, issues, and profits, including those past due and unpaid, and apply the same, less costs and expenses of operation and collection, including reasonable attorney's fees, upon any indebtedness secured hereby, and in such order as Beneficiary may determine. The entering upon and taking possession of said property, the collection of such rents, issues and profits and the application thereof as aforesaid, shall not cure or waive any default or notice of default hereunder or invalidate any act done pursuant to such notice. 6) That upon default by Trustor in payment of any indebtedness secured hereby or in performance of any agreement hereunder, Beneficiary may declare all sums secured hereby immediately due and payable by delivery to Trustee of written declaration of default and demand for sale and of written notice of default and of election to cause to be sold said property, which notice Trustee shall cause to be filed for record. Beneficiary also shall deposit with Trustee this Deed, said note and all documents evidencing expenditures secured hereby. After the lapse of such time as may then be required by law following the recordation of said notice of default, and notice of sale having been given as then required by law, Trustee, without demand on Trustor, shall sell said property at the time and place fixed by it in said notice of sale, either as a whole or in separate parcels, and in such order as .it may determine, at public auction to the highest bidder for cash in lawful money of the United States, payable at time of sale. Trustee may postpone sale of all or any portion of said property by public announcement at such time and place of sale, and from time to time thereafter may postpone such sale by public announcement at the time fixed by the preceding postponement. Trustee shall deliver to such purchaser its deed conveying the property so sold, but without any covenant or warranty, express or implied. The recitals in such deed of any matters or facts shall be conclusive proof of the truthfulness thereof. Any person, including Trustor, Trustee, or Beneficiary as hereinafter defined, may purchase at such sale. After deducting all costs, fees and expenses of Trustee and of this Trust, including costs of evidence of title in connection with sale, Trustee shall apply the proceeds of sale to payment of: all sums expended under the terms hereof, not then repaid, with accrued interest at the 1101-00003 RED\CDD- (CONTINUED ON NEXT PAGE) ! 158 (1/94) Page 4 of 4 amount allowed by law in effect at the date ...... =of; ali other sums then secured hereby; and t, ,~ainder, if any, to the person or'persons legally entitled thereto. 7) Beneficiary, or any successor in ownership of any indebtedness secured hereby, may from time to time, by instrument in writing, substitute a successor or successors to any Trustee named herein or acting hereunder, which instrument, executed by the Beneficiary and duly acknowledged and recorded in the office of the recorder of the county or counties where said property is situated shall be conclusive proof of proper substitution of such successor Trustee or Trustees, who shall, without conveyance from the Trustee predecessor, succeed to all its title, estate, rights, powers and duties. Said instrument must contain the name of the original Trustor, Trustee and Beneficiary hereunder, the book and page where this Deed is recorded and the name and address of the new Trustee. 8) That this Deed applies to, inures to the benefit of, and binds all parties hereto, their heirs,, legatees, devisees, administrators, executors, successors and assigns. The term Beneficiary shall mean the owner and holder, including pledgees, of the note secured hereby, whether or not named as Beneficiary herein, in this Deed, whenever the context so requires, the masculine gender includes the feminine and/or neuter,' and the singular number includes the plural. 9) That Trustee accepts this Trust when this Deed, duly executed and acknowledged, is made a public record as provided by law. Trustee is not obligated to notify any party hereto of pending sale under any other Deed of Trust or of .any action or proceeding in which Trustor, Beneficiary or Trustee shall be a party unless brought by Trustee. DO NOT RECORD REQUEST FOR FULL RECONVEYANCE TO FIRST AMERICAN TITLE INSURANCE COMPANY, TRUSTEE: The undersigned is the legal owner and holder of the note or notes, .and of ali other indebtedness secured by the foregoing Deed of Trust. Said note or notes, together with all other indebtedness secured by said Deed of Trust, have been fully paid and satisfied; and you are hereby requested and directed, on payment to you of any sums owing to. you under the terms of said Deed of Trust, to cancel said note or notes above mentioned, and ali other evidences of indebtedness secured by said Deed of Trust delivered to you herewith, together with the said Deed of Trust, and to reconvey, without warranty, to the parties designated by the terms of said Deed of Trust, all the estate now held by you under the same. Dated Please mail Deed of Trust, Note and Rec~)nveyance to Do Not lose or destroy this Deed of Trust OR THE NOTE which it secures. Both must be delivered to the Trustee for cancellation before reconveyance will be made. 1101-00003 RED\CDD- (CONTINUED ON NEXT PAGE) Page 5 of 4 DEED OF TRUST WITH POWER OF SALE 1101-00003 67269 1 ! 155 (1/94) Page 6 of 4 C,,..,,v'iMERCIAL REHABILITATION t .,gECT LEGAL DESCRIPTION OF PROPERTY That portion of [and in the City of Tustin, County of Orange, State of California, as described in Grant Deed recorded January 27, 1989, as Instrument No. 89-049195, Official Records of said County, described as follows: Beginning at the most Southerly comer of said land; thence along the Southeast boundary of said land North 40°40'18'' East 116.26 feet; thence North 47°59'01'' West 274.61 feet to the Westerly boundary of said land; thence along said Westerly boundary and the Southwesterly boundary of said land the following courses' South 0032'57'' West 7.35 feet, South 40038'26'' West 110.19 feet, South 47°45'13" East 249.80 feet, and South 49°21 '34" East 20.00 feet to the Point of Beginning. EXHIBIT 1 TO DEED OF TRUST 1101-00003 67269 1 CL,,vlMERCIAL REHABILITATION P,,¢~IECT LEGAL DESCRIPTION OF PROPERTY That portion of land in the City of Tustin, County of Orange, State of California, as described in Grant Deed recorded September 9. 1999, as Instrument No. 19990651662, Official Records of said County, described as follows: THE WEST 140 FEET OF THE NORTH 162 1/2 FEET OF BLOCK B OF TRACT NO. 3 IN THE CITY OF TUSTIN, COUNTY OFORANGE, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 9, PAGE 4 OF MISCELLANEOUS MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY. 1101-00003 67269 I EXHIBIT 1 TO DEED OF TRUST RIb_,< ATTACHED TO AND MADE ~ RT OF DEED OF TRUST WITH ASSIGNMENT OF RENTS (SHORT FORM) 1. Due on Transfer. If Trustor shall sell, convey or alienate the real property ("Property") encumbered by this Deed of Trust, or any part thereof, or any interest therein, or shall be divested of its title or any interest therein in any manner or way, whether voluntarily or involuntarily, without the written consent of Beneficiary being first had and obtained, which consent may be withheld for any reason whatsoever, Beneficiary shall have the right, at its option, except as prohibited by law, to declare ali of the indebtedness or obligation secured hereby, irrespective of the maturity date specified in any note evidencing the same, immediately due and payable in full. 2. Acceleration Clause. If a default occurs (a)in the payment of any installment of principal or interest when due under the note the performance of which is secured hereby, (b) under any other provision of such note or this Deed of Trust, (c) under the terms of the Commercial Rehabilitation Project Disposition and Development Agreement dated ,2001, between Trustor and Beneficiary (a Copy of which is on file with Beneficiary as a public record and the terms of which are incorporated herein by reference), or (d) under the terms of the Agreement to Be Recorded Affecting Real Property between Trustor and Beneficiary (a copy of which is on file with Beneficiary as a public record and the terms of which are incorporated herein by reference), and Trustor fails to cure such default pursuant to the provisions of Section 13 of the Commercial Rehabilitation Project Disposition and Development Agreement, then the entire unpaid principal balance and all unpaid accrued interest under the note shall at once become due and payable in full, without notice, at the option of the holder of the note, and Beneficiary shall have ali rights available to it under the note and this Deed of Trust, and as otherwise provided by law or in equity, including but not limited to the right to foreclose under this Deed of Trust. The failure to exercise such option shall not constitute a waiver of the right to exercise it in the event of any subsequent default. 3. Commercial Rehabilitation Project Disposition and Development Aqreement, as amended. the extent of any inconsistency between the provisions of the Commercial Rehabilitation Project Disposition and Development Agreement and the provisions of this Deed of Trust, the Commercial Rehabilitation Project Disposition and Development Agreement shall control. Trustor: Philippe lzsak Marta Escobar Charles C. Virzi Patricia J. Virzi EXHIBIT 2 TO DEED OF TRUST 1101-00003 67269 1 Attachment No. 7 Site Plan And Related Drawings i, .... ~ ATTACHMENT NO. 7 .... · ( .... ~,,! : . . . , PLAN AND RELATED DRA.V · I 'I,,G! Attachment No. 7 to DDA l_af5 C Attachment No. 7 to DDA J .! · · ~ ~ · s · , , Attachment No. 7 .to DDA 1 Attachment No. 7 to DDA -< 0 0 n,' Attachment No. 7 to DDA .,o Attachment No. 8 Agreement To Be Recorded Affecting Real Property RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO' CITY OF TUSTIN COMMUNITY REDEVELOPMENT AGENCY Attention' Christine .Shingleton 300 Centennial Way Tustin, CA 92780 (Space Above for Recorder) This Agreement is. recorded at the request and for the benefit of the City of Tustin Community Redevelopment Agency and is exempt from payment of a recording fee pursuant to Government · Code Section 6103. CITY OF TUSTIN COMMUNITY REDEVELOPMENT AGENCY By: Its' Dated' ,1998 CITY OF TUSTIN COMMUNITY REDEVELOPMENT AGENCY COMMERCIAL REHABILITATION PROJECT AGREEMENT TO BE RECORDED AFFECTING REAL PROPERTY THIS AGREEMENT is entered into this day of ,2001, by and between the TUSTIN COMMUNITY REDEVELOPMENT AGENCY, a public body, corporate and' politic ("Agency"), and Philippe lzsak and Marta Escobar; husband and wife, as Community Property, as to an undivided sixty-five percent (65%) interest, and Charles C. Virzi and Patricia J. Virzi, husband and wife, as Joint Tenants, as to an undivided thirty-five percent (35%) interest, .all as Tenants in Common, with reference to the following' A. Owner is the fee owner of record of that certain real property (the "Property") · located in the County of Orange, State of California as described in the attached Exhibit A. The Property is referred to in the "DDA" (defined in paragraph "C" hereof) as the Site. B. The Property is located in the Town Center Redevelopment Project Area (the "Project") and is subject to the provisions of the Redevelopment Plan for the Project adopted by Ordinance No. 701 and amended by Ordinances No. 855, 1021 and 1141 by the City Council of the City of Tustin. Agency has full power and jurisdiction in respect to the Property pursuant to the Redevelopment Plan. C. Agency and Owner have entered into a Commercial Rehabilitation Project Disposition and Development Agreement dated as of ,2001 concerning the development and use of the Property (the "DDA") which DDA is on file with Agency as a public record and is incorporated herein by reference and which DDA provides for the execution and recordation of this document. Except as otherwise expressly provided in this Agreement, all terms shall have the same meanings as set forth in the DDA. NOW, THEREFORE, AGENCY AND OWNER AGREE AS FOLLOWS: 1 ' Owner covenants, by and for itself and any successors in interest, that it shall be bound by the terms, conditions, covenants and restrictions as outlined and detailed in the DDA and the Redevelopment Plan. 2. Owner covenants, by and for itself and any successors in interest, that there shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex, marital status, age, disability, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Site, or any residential uses developed on the Site, nor shall Owner for itself or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of homeowners, tenants, lessees, subtenants, sublessees or vendees of the Site. The foregoing covenants shall run with the land. Owner and its successors in interest shall refrain from restricting the rental, sale or lease (including sublease) of the Site, or any residential units developed on the Site, on the basis of race, color, creed, religion, sex, marital status, age, disability, national origin or ancestry of any person. All deeds, leases or contracts for the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the Site or any por[ion thereof, including any residential units developed on the Site, shall contain or be subject to substantially the following nondiscrimination or nonsegregation clauses' a, in deeds: "The grantee herein covenants by and for himself or herself, his or her heirs, executors, administrators and assigns, and all persons claiming under or through them, that: (1) there shall be no discrimination against or segregation of, any person or group, of persons on account of race, color, creed, religion, sex, marital status, age, disability, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land herein cOnveyed, and (2) neither the grantee himself or herself, nor any person claiming under or through him or her, shall establish or' permit 1101-0o03 67251 1 August 20, 1998 Page 2 of 7 bo any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees in the land' herein conveyed. The foregoing covenants shall run with the land." In leases' 'q'he lessee herein Covenants by and for himself or herself, his or her heirs, executors, administrators and assigns, and ali persons claiming under or through him 'or her, and this lease is made and accepted upon and subject to the following conditions' There shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex, marital status, disability, age, ancestry or national origin in the leasing, subleasing, transferring, use, occupancy, tenure or enjoyment of the premises herein leased nor shall the lessee himself or herself, or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location,' number, use or occupancy of tenants, lessees, sublessees, subtenants or vendees in the premises herein leased." Co In contracts: "Them shall be no discrimination against or segregation of, any person, or group of persons on account of race, color, creed, religion, sex, marital status, age, disability, ancestry or national origin, in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the premises, nor shall the transferee himself or herself or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the premises. The foregoing provisions shall be binding upon and shall obligate the contracting par[y or parties and any subcontracting party or parties, or other transferees under this instrument and shall be covenants running with the land." 3. The Covenants established in this Agreement shall, without regard to technical classification and designation, be binding on Owner and any successor in interest to the Site or any part thereof for the benefit and in favor of Agency, its successors and assigns, and the City. Such covenants shall survive the issuance, by Agency, of the Certificate of Compliance described in the DDA. 4. The Covenants, insofar as they relate to antidiscrimination and non- segregation, shall remain in effect in perpetuity. The other Covenants shall expire on November 22, 2016. IN WITNESS WHEREOF, Agency and Owner have executed this Agreement. ~o~-oo0~ Page 3 of 7 67251 1 August 20, 1998 Dated' "Agency" TUSTIN COMMUNITY REDEVELOPMENT AGENCY, a California community redevelopment agency APPROVED AS TO FORM' By: .... By: Lois E. Jeffrey., Agency Counsel ATTEST: Recording Secretary Dated' "Owner" By' Philippe lzsak By: Marta Escabar By: Charles C. Virzi By: Patricia J. Virzi 1101-0003 67251 1 August 20, 1998 Page 4 of 7 ALL PURPOSE ACKNOWLEDGMENT .......... STATE OF CALIFORNIA COUNTY OF ) ) SS: ) On this~ day of ,19.____ , before me, , Notary Public, personally appeared Name(s) of Signer(s) personally known to me - OR proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me 'that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. Witness my hand and official seal. NOTARY SEAL Signature of Notary CAPACITY CLAIMED BY SIGNER' Individual(s) Corporate Officers Title(s) Partner(s) General Partner of a Eimited Partnership Attorney-in-Fact Trustee(s) Subscribing Witness. Guardian/Conservator Other: SIGNER IS REPRESENTING' Name of Person(s) or Entity(les) THIS CERTIFICATE MUST BE ATTACHED TO THE DOCUMENT DESCRIBED BELOW' Title or Type of Document: _ Number of Pages: Date of Document: Signer(s) Other Than Named Above: ALL PURPOSE ACKNOWLEDGMENT 1101-0003 Page 5 of 7 67251 1 August 20, 1998 STATE OF CALIFORNIA COUNTY OF ) ) ss: ) On this.____ day of , 19.___ , before me, appeared 'Notary ' Public, personally Name(s) of Signer(s) personally known to me - OR proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. Witness my hand and official seal. NOTARY SEAL SignatUre of NOtary CAPACITY CLAIMED BY SIGNER: Individual(s) Corporate Officers Title(s) Partner(s) General Partner of a Limited Partnership " Attorney-in-Fact Trustee(s) Subscribing Witness G uardian/Conservator Other: SIGNER IS REPRESENTING' Name of Person(s) or Entity(ies) THIS CERTIFICATE MUST BE ATTACHED TO THE DOCUMENT DESCRIBED BELOW: Title or Type of Document: Number of Pages: Signer(s) Other Than Named Above' Date of Document: EXHIBIT A 1101-0003 Page 6 of 7 67251 1 August 20, 1998 COMMERCIAL REHABILITATION PROJECT LEGAL DESCRIPTION That portion of land in the City of Tustin, County of Orange, State of California, as described in Grant Deed recorded September 9. 1999, as Instrument No. 19990651662, Official Records of said County, described as follows: THE WEST 140 FEET OF THE NORTH 162 1/2 FEET OF BLOCK B OF TRACT NO. 3 IN THE CITY OF TUSTIN, COUNTY OFORANGE, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 9, PAGE 4 OF MISCELLANEOUS MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY. 1101-0003 Page 7 of 7 67251 1 August 20, 1998 Attachment No. 9 Hazardous Waste Disclosure Attachment No. 10 Certificate Of Insurance CERTIFICATE OF .... '-'~-..ITY OF TUSTIN REDEVELOPMENT ..... ?:NCY 'RANCE AND DESIGNATION OF N ) ADDITIONAL INSURED NO MOD/FICA-/'IONS OR ADDITIONS MA Y BE MADE TO THIS FORM TO: CITY OF TUSTIN REDEVELOPMENT AGENCY PROJECT: P.O. Box 3539 Tustin, CA 92681-3539 COMPANIES AFFORDING COVERAGE (MUST HAVE BEST'S RATING OF AT LEAST A, VII) NAME AND ADDRESS OF INSURED CONTRACTOR: Company Letter A: .... .... Company Letter B: ..... , , Company Letter C: ........ NAME AND ADDRESS OF INSURANCE AGENCY: Company Letter D: , Company Letter E: .... Company Letter F: ....... This certifies that the policies of insurance listed below have been issued to the Insured name above, are in force at this time, that the City of Tustin and City of Tustin Redevelopment Agency are named as an additional insureds thereon as respects claims arising in connection with the Project named above and that such insurance shall be primary with respect to any other insurance in force procured by the City or the RDA. ,, , Co. policy Policy Ltr. Type of Insurance Policy Number Effective Date Expiration Date Ail Limits in Thousands ............ GENERAL LIABILITY General Aggregate $ [ ] Commercial ........ General Liability Prods-Comp/Ops Agg. $ [ ] Occurrence Basis ' [ ] Owner's & Contractors' Pers. & Advg. Injury $ . . Protective Each Occurrence $ , , [ ] Broad Form Prop. Damage [ ] Explosion, Collapse, Fire Damage Underground Hazards (Any One Fire) $ ,, , Medical Expense (Any One Person) $ , , , AUTOMOBILE LIABILITY CSL $ [ ] Any Auto , [ ] All Owned Autos Bodily Injury [ ] Scheduled Autos (Per Person) $ [ ] Hired Autos ..... [ ] Non-Owned Autos Bodily Injury [ ] Garage Liability (Per Occurrence) $' Property $ , ,, , EXCESS LIABILITY EACH OCCURRENCE AGGREGATE [ ] Umbrella Form $ $ [ ] Other than Umbrella Form WORKERS' COMPENSATION STATUTORY AND EMPLOYER'S LIABILITY $ Each Accident $ Disease-Policy Limit $. Disease-Each EmploYee ...... OTHER ....... ,, , Description of Operations/Locations/Vehicles/Special Items: ..... , , , , It is certified that a waiver of subrogation is hereby issued to the City of Tustin and City of Tustin Redevelopment Agency as pertains to the terms of all Workers Compensation insurance. The issuing company will give thirty (30) days written notice to the City and the RDA prior to 'modification or cancellation. DATE ISSUED: Authorized Representative of the above-named insurance company(les) Attachment No. 11 Rehabilitation Budget REHABILITATION BUD ........ CHARLES VIRZI CONSTR UC , , ON ~~__ 4790 lrvine Blvd., Ste.# 105-121 ~"~---~ Ir'vine, Ca. 92620 hone/F~ ~14) 832-0122 Old Town Plaza Remodel Asphalt and Re-strip .................................................... $9,160.00 Awnings .................................................................. $6,886.00 Hookup to sev¥cr ......................................................... .$4,000.00 Collapse Tanks .......................................................... $2,500.00 .o Sand Blasting ............................................................ $1,500.00 · Back door- change role-up door to regular door ................... $2,800.00 Landscaping ............................................. · ............... $3,800.00 Parapet wall ............................................................. $2,500.00 Signs & Electrical Far signs .......................................... $6,900.00 Wrought iron..' ........................ · ................................. $1,200.00 Paint Exterior ............................................................ $3,300.00 · New roof across front (40yr. Comp presidential) .................. $3,500.00 Mansard roof and side mansard roof ....... · $6,500.00. Cut out for three windows approx. 6'x 5' ........................... $1,500.00 Glass- Tempered ............ · ...............$1,500.00 Concrete and Brick border ............................................ $12,800.00 Attachment No. 11 to DDA 1 of 2 Window boxes 13 ...................................................... $2,600.00 62ft. of block wall 6ft. high .......................................... $4,650.00 Stucco and'scaffold ................................................... $9,200.00 Electrical...L~.. i.~r-~..~.. ?..t~...~.....e~..'. . .&..~...o..m. d .*. ~.~ .ct ....... $6,000.00 Supervision ............................................................ $6,400.00 Gates and lattice system ..................... ' ........................ $2,400.00 Portable toilet ......................................................... $400.00 Hauling ................................................................ $1,050.00 ............................................ ' ............... ,2,a00.00 Sheet Metal ........................ ' ................................... $1,400.00 Contingency .......................................................... $9,000.00 Total ................................................................... $116,246.00 Attachment No. 11 to DDA 2 of 2