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b. Undeveloped Property. With respect to the Agency Property that has not been redeveloped: (i) Begin or cause to begin the redevelopment of the Agency Property or portion thereof as applicable within five (5) years following conveyance of the Agency Property, or portion thereof, to City, which time period Agency has determined is reasonable or such lesser time period as may otherwise be required by applicable law. (ii) Impose upon the Agency Property or portion thereof, prior to or in connection with any sale by City to a third party, such covenants, conditions, or restrictions as are necessary to prevent speculation or excess profit taking in undeveloped land, which may include a right of reverter or option to repurchase in favor of City. Covenants, conditions, and restrictions imposed by City may provide for the reasonable protection of lenders. c. Housing Fund Property. With respect to any Agency Property parcels that were purchased by the Agency with Housing Fund monies, as indicated in Exhibit A, City agrees that it will abide by the requirements of Health and Safety Code section 33334.2. In the event City desires to use such parcels or any portion thereof for other than Affordable Housing Purposes, City shall reimburse the Housing Fund or, in the event Agency is no longer in existence, such other City affordable housing fund as may be established by City for affordable housing purposes, on a pro rata basis based on the cost to Agency of that portion of the Agency Property which is required to be used, but is not used for Affordable Housing Purposes. In all events, however, City shall use, develop or cause the development of the Agency Property in a manner consistent with the Redevelopment Plan as in effect on the Effective Date. 11. Automatic Termination. If City fails to exercise the Option in accordance with the terms of this Agreement, then this Agreement and the Option will automatically and immediately terminate without notice. In that event, City agrees to execute, acknowledge and deliver to Agency, within five (5) days of request, a release, quitclaim deed or such other document reasonably required by Agency or a title insurance company to verify or confirm the termination of this Agreement. 12. Default and Remedies. In the event of a default by Agency of any of its obligations hereunder, City shall be entitled to specific performance of this Agreement. In the event of a default by City, Agency shall be entitled to retain the Option Price, and if applicable the Extension Price, and to terminate this Agreement. 13. Assignment. Except as otherwise provided below, this Agreement and the Option granted under it are personal to City. City may not assign, convey or in any other manner transfer or encumber all or any part of this Agreement, the rights and duties of City under this Agreement or the Option granted hereunder, without prior written permission from Agency; provided, however, if City forms a local housing authority pursuant to Health & Safety Code section 34240 et seq. or an economic development corporation pursuant to Government Code section 13997 et seq., City shall be permitted 4 ATTY /AGR/2011.019 /REDWOOD CITY OPTION AGREEMENT BETWEEN AGENCY 030411