FIRST AMENDMENT TO DISPOSITION AND DEVELOPMENT AGREEMENT
THIS FIRST AMENDMENT TO DISPOSITION AND DEVELOPMENT
AGREEMENT ("Amendment") is entered into as of theM day of February, 2004 by and between the REDEVELOPMENT AGENCY OF THE CITY OF RICHMOND, a public body corporate and politic (the "Agency") and ORTON DEVELOPMENT, INC., a California corporation (the "Developer").
RECITALS
A. The Agency and the Developer are parties to that certain Disposition and Development Agreement dated November 18, 2003 (the "Agreement") concerning the sale, lease and redevelopment of certain real property more particularly described therein.
B. The pariies desire to arnend the Agreement upon the terms and conditions set forth herein.
AGREEMENT
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Agency and Developer hereby agree as follows:
1. Defined Terms. All capitalized terms not otherwise defmed in this Amendment shall have tl1e meanings set forth in the Agreement.
2. Purchase Price. Subsection (b) of Section 4.3 of the Agreement rs hereby =ended to read in its entirety as follows:
"(b) The Pmchase Price for the Property shall be Five Million Fom Hm1dred Thousand Dollars ($5,400,000.00). Any unexpended portion of tire Deposit shall be credited against the Purchase Price, all of which shall serve to reimbmse the Agency for a poriion of the qualified rehabilitation expenditures previously incurred by tire Agency to rehabilitate ar1d improve the Building prior to November 18, 2003. The Developer acknowledges that tire Agency has retained consultants and others to assist in tl1e determination of compliar1ce with the requirements of Health ar1d Safety Code Section 33433 and that appropriate findings in compliance witl1 said provisions are required for tire approval of this Agreement. Developer shall pay Two Million Dollars ($2,000,000) in U.S. currency of the Purchase Price by deposit into escrow on or before Closing as set forth in Section 4.3 of this Agreement. The balar1ce of the Purchase Price in the 3111ount of Three Million Four Hundred Thousand Dollars ($3,400,000) (the "Deferred Portion") shall be paid by Developer in accordance witl1 Section 4.3A below."
3. Deferred Portion of Purchase Price. New Section 4.3A is hereby added to tire Agreement to read as follows:
"4.3A Pavment of Deferred Portion of Purchase Price. The Deferred Portion of the Purchase Price shall be payable as follows: tire sum of One Million Do liars ($1 ,000,000) shall be paid not later tiran the tl1ird (3'd) anniversary of tire Closing, and tire remaining balar1ce of the Deferred Portion and all accrued unpaid interest thereon shall be paid in full on or before but not later than 51 6J30/270343v2 I
the fifth (5th) anniversary of the Closing (the "Maturity Date"). Developer hereby wmves demm1d, notice of non-payment, protests md presentment for payment The Developer shall pay the Defened Portion of the Purchase Price subject to the following:
(a) Interest shall accme on all of the unpaid balmce of the Deferred Portion outstmding at the sallle tenns required by Developer's constmction lender. However in no event shall the interest to be paid on the unpaid balm1ce of the Deferred Portion be less thm simple interest of five md one-half percent (5.5%) per 8llllum. Interest shall be payable quarterly on the first day of each calendar quarter until the Deferred Pmiion is paid in full. Developer shall also pay to the Agency "points", if any, on the Deferred Portion at the same tem1s required by Developer's construction lender.
(b) In the event of sale(s) of all of the Property by the Developer at mytime prior to the fifth (5'11) amliversmy of the Closing, Developer shall pay to the Agency, as additional interest, a sum equal to fifty (50%) percent of Developer's "Profit" (as hereafter defined) realized from my such sale trmsaction(s), payable upon the closing of such trm1saction. (c) Developer's "Profit" means Developer's net profit realized from any such sale as determined for Federal income tax purposes, but excluding any portion of such profit representing recaptnre of depreciation or other losses previously recognized by Developer in connection with the Project.
(d) In the event of Developer's default as outlined in Section 11.4 of the Agreement, Developer's Deposit, md all funds expended by Developer under the Progr= Management Agreement of October 28, 2003 and/or this Agreement are non-refundable to Developer. N otwithstmding the foregoing, a termination of this Agreement as a result of the occunence of my event outlined in Section 11.2 (b) and/or (c) of this Agreement shall not constitute a default by Developer for purposes of this provision. (e) In the event of the sale(s) of all or a portion of the Property (excluding the sale of condominium units), the mnount of the Deferred Portion that shall be paid by the Developer shall be a sum equal to all of the Developer's "Net Cash Proceeds" realized by the Developer from my such sale trmsaction(s), payable upon the closing of such trmsaction. Any such prepayments of the Deferred Portion shall be applied first towmd the $1,000,000 principal reduction payment due on the third alllliversary of the Closing 1111less and until such principal reduction is paid in full; then toward the principal balmce of the Defened Pmiion due on the Matnrity Date; then to my accrued unpaid interest, until the Deferred Pmiion has been paid in full.
(f) For purposes of this Agreement, the term "Net Cash Proceeds" shall mem the excess (if a11y) of (1) the gross cash proceeds of a11y sale of the Property or a11y portion thereof, other tha11 condominium unit(s), over (2) all selling costs including, without limitation, brokerage commissions, closing costs md prorations. In no event shall Net Cash Proceeds of a11y sale of the Property include a11y sum paid to the Agency pursua11t to subsection 8.2(b) below.
In no event shall a11y proceeds from the sale of condominiwn units be required to be applied toward the prepayment of the Defe1Ted Portion.
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(g) Developer shall provide as security for its performance under Sections 2 and 4.3 of this Agreement a deed of trust on the Property to the Agency ("Agency's Deed of Trust"). The Agency's Deed of Trust shall be junior and subordinate to the lien of Developer's constrnctionlender(s) and original takeout lender(s).
(h) In the event of default in the payment of the Defened Portion as due and as provided for in tllis Section 4.3, Developer shall pay Agency a penalty of one (1 %) percent of the remaining outstanding balance of the Deferred Portion for each calendar quarter that Developer remains in default. Should default be made in payment of any installment when due the whole sum of principal and interest shall become immediately due at the Agency's option.
Interest after default shall continue at the rate stated above. Any payment of interest and/or principal dne and not paid by Developer witllin fifteen (15) days of written notice fi·om the Agency to Developer that such payment(s) is past due shall constitute a material breach of this Agreement.
If suit is brought as a result of Developer's default under this Section, Agency shall be entitled to collect in such proceeding all actual costs and expenses of suit, including but not limited to actual attorney's fees.
4. Sepaxate Certificates of Completion. Subsection (c) of Section 6.11 of the Agreement is hereby amended to read in its entirety as follows:
"(c) If requested by Developer, a separate Certificate of Completion for the residential live-work or otl1er portions of the Project shall be issued separately from the balance of the Project."
5. Completion of Construction. Section 6.4 of the Agreement and Item 46 of the Schedule of Performance (attached as Exllibit E to the Agreement) are both hereby amended as follows: (a) the references to "eighteen (18) months" and "18 months" are hereby changed to read "twenty-four (24) months"; a11d (b) the references to "three (3) years" and "3 years" are hereby changed to "forty-two ( 42) montl1s."
6. Effect of Amendment. In the event of any conflict or inconsistency between this Amendment and the Agreement, the terms and provisions of this Amendment shall be controlling. Except as expressly set fmih herein, the Agreement shall remain in full force and effect according to the terms thereof.
IN WITNESS WHEREOF, the parties have executed this Amendment as of the date and yea1· fn·st set forth above.
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REVIEWED:
BY:
ATTEST:
cz/2¢~0~~
AGENCY SECRETARY
BY:
516130/270343v2
REDEVELOPMENT AGENCY OF THE
CITY OF RICHMOND (the "AGENCY")
Community & Economic Development Director
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ORTON DEVE .ENT, INC.,
a California cor·j>plfl#<pjh (the "DEVELOPER")
President
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