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Building Horizons/Afford Housing 012001/2002 AFFORDABLE HOUSING AGREEMENT BY AND BETWEEN LA QUINTA REDEVELOPMENT AGENCY, AND BUILDING HORIZONS, G:\WPDOCS\AHA Building Horizons.wpd AGENCY DEVELOPER Table of Contents I. [100] SUBJECT OF AGREEMENT ........................................ 1 A. [101] Purpose of Agreement ........................................ 1 B. [102] The Redevelopment Plan ...................................... 1 C. [103] The Site...................................................I D. [104] Parties to the Agreement ...................................... 2 1. [105] The Agency..........................................2 2. [106] The Developer........................................2 3. [107] Prohibition Against Change in Ownership, Management and Control of Developer and Prohibition Against Transfer ofthe Site............................................2 E. [108] Representations by the Developer ............................... 3 II. [200] AGENCY ASSISTANCE ........................................... 4 A. [201] Acquisition and Construction Financing .......................... 4 B. [202] Conditions Precedent to the Funding of Acquisition Financing ........ 4 C. [203] Home Buyer Loan and Second Trust Deed ........................ 5 D. [204] Acquisition of the Site ........................................ 5 E. [205] Escrow....................................................6 7 F. [206] Conveyance to Eligible Persons and Families ...................... III. [300] DEVELOPMENT OF THE SITE ...................................... 7 A. [301] Development of the Site ....................................... 7 1. [302] Scope of Development .................................. 7 2. [303] Site Plan.............................................8 3. [304] Review and Approval of Plans, Drawings, and Related Documents 4. .................................................. [305] Cost of Development ................................... 9 5. [306] Construction Schedule .................................. 9 6. [307] Indemnity, Bodily Injury and Property Damage Insurance ...... 9 7. [308] City and Other Governmental Agency Permits .............. 10 8. [309] Rights of Access ..................................... 10 9. [310] Local, State and Federal Laws ........................... 10 10. [311] Anti -Discrimination ................................... 10 11. [312] Taxes and Assessments ................................ 11 B. [313] Prohibition Against Transfer of the Site, the Buildings or Structures Thereon and Assignment of Agreement ......................... 11 C. [314] Right of the Agency to Satisfy Other Liens on the Site(s) After Title Passes....................................................11 11 D. [315] Certificate of Completion .................................... G:\WPDOCS\AHA Building Horizonsmlod IV. [400] USE OF THE SITE ............................................... 12 A. [401] Affordable Housing .................•.•.......••••..12 B. [402] Uses In Accordance with Redevelopment Plan; Nondiscrimination .... 19 C. [403] Effect of Violation of the Terms and Provisions of this Agreement After Completion of Construction ................................... 20 D. [404] Maintenance of the Site ...................................... 21 V. [500] DEFAULTS AND REMEDIES ...................................... 21 A. [501 ] Defaults -- General .......................................... 21 B. [502] Legal Actions..............................................21 1. [503] Institution of Legal Actions ............................. 21 2. [504] Applicable Law......................................22 3. [505] Acceptance of Service of Process ........................ 22 C. [506] Rights and Remedies Are Cumulative ........................... 22 D. [507] Inaction Not a Waiver of Default ............................... 22 E. [508] Remedies and Rights of Termination ........................... 22 1. [509] Damages............................................22 2. [510] Specific Performance .................................. 23 3. [511] Right of Termination by the Developer .................... 23 4. [512] Termination by the Agency .............................23 F. [513] Remedies of the Parties for Default After Closing of the Acquisition Escrow...................................................24 24 1. [514] Termination and Damages .............................. VI. [600] GENERAL PROVISIONS .......................................... 24 A [601] Notices, Demands and Communications Between Parties ........... 24 B. [602] Conflicts of Interest ......................................... 24 C. [603] Enforced Delay; Extension of Times of Performance ............... 24 D. [604] Non -Liability of Officials and Employees of the Agency and the Developer.................................................25 E. [605] Entire Agreement, Waivers ................................... 25 VII. [700] TIME FOR ACCEPTANCE OF AGREEMENT BY AGENCY 26 G:\WPDOCS\AHA Building Horizons.wpd Attachment No. 1 Attachment No. 2 Attachment No. 3 Attachment No. 4 Attachment No. 5 Attachment No. 6 Attachment No. 7 Attachment No. 8 Attachment No. 9 Attachment No. 10 Attachment No. I I ATTACHMENTS Scope of Development Schedule of Performance Developer Promissory Note Developer Deed of Trust Declaration of Conditions, Covenants and Restrictions Certificate of Completion Maximum Sales Price Example Certificate of Proposed Transferee Notice of Intent to Transfer Request for Approval of Proposed Transferee Assumption Agreement G:\WPDOCS\AHA Building Horizons.wpd AFFORDABLE HOUSING AGREEMENT This Affordable Housing Agreement ("Agreement") is entered into by and between LA QUINTA REDEVELOPMENT AGENCY, a public body corporate and politic (the "Agency") and BUILDING HORIZONS, a California nonprofit public benefit corporation (the "Developer"). The Agency and the Developer (collectively referred to as the "Parties") hereby agree as follows: [100] SUBJECT OF AGREEMENT A. [101] Purpose of Agreement The purpose of this Agreement is to effectuate the Redevelopment Plan (as hereinafter defined) for the La Quinta Redevelopment Project (the "Project") by providing for the improvement of certain property situated within the Project Area of the Project (the "Project Area"), by assisting in the financing of the acquisition and development of two parcels (the "Site") situated within the Project Area, including the completion of a single-family home on each parcel and the long-term maintenance of such housing at an affordable housing cost for persons and households of low and moderate -income, all as more fully described in this Agreement. The Agency financial assistance in this Agreement shall be utilized to effectuate a portion of the Agency's overall affordable housing program pursuant to the requirements of California Health and Safety Code Section 33334.2 to expend twenty percent (20%) of its increment funds to improve, increase and preserve the community's supply of low- and moderate housing. The acquisition and development of the Site and the occupancy of the units as developed by households of limited incomes all as provided in this Agreement are in the vital and best interests of the City of La Quinta (the "City") and the health, safety and welfare of its residents, and in accord with the public purposes and provisions of applicable state and local laws and requirements under which the Project has been undertaken. B. [102] The Redevelopment Plan The Redevelopment Plan for Project Area No. 1 (the "Redevelopment Plan") was approved and adopted by Ordinance No. 43 of the City Council of the City of La Quinta on November 29, 1983 and amended by Ordinance No. 258 on December 20, 1994 and Ordinance No. 264 on March 7, 1995; said ordinance as amended and the Amended Redevelopment Plan are incorporated herein by reference. C. [103] The Site The "Site" shall consist of two parcels of real property within the Project Area in the City of La Quinta, County of Riverside. The Site shall be acquired by the Developer. A maximum of two (2) detached, single-family homes will be developed on the Site (one on each parcel) in accordance with the "Scope of Development" and by the times set forth in the "Schedule of Performance," which are attached hereto as Attachment Nos. 1 and 2, respectively, and incorporated herein by reference. G:\WPDOCS\AHA Building Horizons.wpd Any material change, as reasonably determined by the Agency, in the Scope of Development (Attachment No. 1) or in the approved site plan which affects the size, quality, or type of development proposed for one or more of the parcels shall require the written approval of the Agency, which approval may be contingent upon the review and renegotiation of all of the economic and financial terms of this Agreement and such other matters as the Agency shall deem appropriate. D. [104] Parties to the Agreement [105] The Agency The 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, Division 24 of the California Health and Safety Code, the principal office of the Agency is located at 78-495 Calle Tampico, La Quinta, California 92253, or such other address as Agency shall hereafter designate in writing to Developer. "Agency", as used in this Agreement, includes the La Quinta Redevelopment Agency and any and all assignees of or successors to its rights, powers and responsibilities. 2. [106] The Developer The Developer, Building Horizons, is a California nonprofit public benefit corporation. The principal office and mailing addresses of the Developer for purposes of this Agreement is 42-600 Cook Street, Suite 120, Palm Desert, California 92211. By executing this Agreement, each person signing on behalf of the Developer warrants and represents to the Agency that the Developer has the full power and authority to enter into this Agreement, that all authorizations required to make this Agreement binding upon the Developer have been obtained, and that the person or persons executing this Agreement on behalf of the Developer are fully authorized to do so. Whenever the term "Developer" is used in this Agreement, such term shall include any and all nominees, assignees, or successors in interests as herein provided. 3. [107] Prohibition Against Change in Ownership, Management and Control of Developer and Prohibition Against Transfer of the Site The qualifications and identity of the Developer are of particular interest to the Agency. It is because of these qualifications and identity that the Agency has entered into this Agreement with the Developer. Consequently, no person, whether a voluntary or involuntary successor of Developer shall acquire any rights or powers under this Agreement nor shall the Developer assign all or any part of this Agreement or the Site without the prior written approval of the Agency. A voluntary or involuntary sale or transfer of any interest in the Developer of the Site prior to the issuance of a Certificate of Completion for the Improvements with respect to such Site G:\WPDOCS\AHA Building Horizons.wpd 2 shall be deemed to constitute an assignment or transfer for the purposes of this Section 107, and the written approval of the Agency shall be required prior to effecting such an assignment or transfer. Any purported transfer, voluntarily or by operation of law, except with the prior written consent of the Agency, shall render this Agreement absolutely null and void and shall confer no rights whatsoever upon any purported assignee or transferee. Prior to the issuance of a Certificate of Completion for the Improvements, the Developer shall not, except as permitted by this Agreement, assign or attempt to assign this Agreement or any rights or duties herein, nor make any total or partial sale, transfer, conveyance, or assignment of the whole or any part of the Site or the Developer Improvements thereon, without the prior written approval of the Agency. Notwithstanding any other provision of this Agreement to the contrary, Agency approval of an assignment or this Agreement or transfer of the Site or any interest therein shall not be required in connection with the conveyance or dedication of any portion of the Site to the City of La Quinta or other appropriate governmental agency, including public utilities, where the granting of such easements permits or facilitates the development of the Site. This Section 107 shall become inapplicable for each Site as to which the Agency has issued a Certificate of Completion pursuant to Section 316 of this Agreement. E. [108] Representations by the Developer The Developer represents and warrants to the Agency as follows: 1. The Developer is duly established and in good standing under the laws of the State of California and has duly authorized, executed and delivered this Agreement and any and all other agreements and documents required to be executed and delivered by the Developer in order to carry out, give effect to, and consummate the transactions contemplated by this Agreement. This Agreement is enforceable against the Developer in accordance with its terms. 2. The Developer does not have any contingent obligations or contractual agreements which could adversely affect the ability of the Developer to carry out its obligations hereunder. 3. There are no pending or, so far as is known to the Developer, threatened, legal proceedings to which the Developer is or may be made a party or to which it or any of its property is or may become subject, which have not been fully disclosed in the material submitted to the Agency, which could adversely affect the ability of the Developer to carry out its obligations hereunder. 4. There is no action or proceeding pending or, to the Developer's best knowledge, threatened, looking toward the dissolution or liquidation of the Developer and there is no action or proceeding pending or, to the Developer's best knowledge, threatened by or against the Developer which could affect the validity and enforceability of the terms of this Agreement, or adversely affect the ability of the Developer to carry out its obligations hereunder. G:\WPDOCS\AHA Building Horizons.wpd 3 5. The Developer has, and will as required by its obligations hereunder, dedicate, allocate and otherwise make available, sufficient financial and other resources to perform its obligations under this Agreement. Each of the foregoing items 1 to 5, inclusive, shall be deemed to be an ongoing representation and warranty and shall survive the close of escrow for the Site(s). The Developer shall advise the Agency in writing if there is any change pertaining to any matters set forth or referenced in the foregoing items 1 to 5, inclusive. II. [200] AGENCY ASSISTANCE The "Agency Assistance" shall be comprised of two components: (1) acquisition and construction financing, and (2) second trust deed assistance for the low or moderate income buyer. A. [201] Acquisition and Construction Financing (I) Agency shall provide financing in a total amount not to exceed of Two Hundred and Ten Thousand Dollars ($210,000) for the acquisition of both parcels of the Site and the complete construction of both housing units by Developer pursuant to the terms of the Scope of Development (Attachment No. 1), the Schedule of Performance (Attachment No. 2) and the Developer Promissory Notes and Developer Deed of Trusts (Attachments Nos. 3 and 4, attached hereto and incorporated herein by this reference); (ii) Each parcel shall have a separate Developer Promissory Note and Developer Deed of Trust; (iii) Agency Funds for each Developer Promissory Note in an amount not to exceed $105,000 for each of the housing units shall be dispersed directly to escrow for the acquisition costs portion and the remaining amount shall be disbursed according to a combination of a construction schedule and invoice documentation to be approved by the Agency Executive Director; (iii) The Developer Promissory Note for each property of the Site shall bear no interest and shall be due and payable upon the sale of the corresponding lot to an Eligible Person or Family as defined in Section 401. B. [202] Conditions Precedent to the Fundingof f Acquisition Financing Prior to and as conditions to funding any portion of the Developer Promissory Note, the Developer shall complete each of the following by the respective times established therefor in the Schedule of Performance (Attachment No. 2): the Developer shall not be in default of this Agreement; 2. the Developer provides to the Executive Director insurance certificates conforming to Section 308 of this Agreement; G:\WPDOCS\AHA Building Horizonsmpd 4 3. the Developer shall have executed and deposited with escrow for delivery to the Agency the Developer Promissory Note for each lot (Attachment No. 3); 4. the Developer shall have executed and deposited with escrow for recordation and delivery to the Agency the Declaration of Conditions, Covenants and Restrictions concerning the use of and maintenance of the Site for each lot (Attachment No. 5) and the Developer Deed of Trust for each lot; and The foregoing items numbered 1 to 5, inclusive, together constitute the "Conditions Precedent to the Agency funding of the acquisition portion of the Developer Promissory Note." C. [203] Home Buyer Loan and Second Trust Deed Home Buyer Assistance funds shall be in the form of a promissory note ("Buyer Promissory Note") secured by a second trust deed ("Buyer Second Trust Deed") to assure the affordability of the housing unit to low and moderate income buyers as defined in Section 401 hereof. The amount of second trust deed funds available shall be determined at the time of qualifying the proposed low or moderate income buyer of the unit. The final amount shall be approved by the Executive Director in compliance with the Agency Board's goals and policies for its affordable housing program. The basic form of the Buyer Promissory Note and the Buyer Second Trust Deed shall be that form currently approved for use by the Agency for its affordable housing program at the time of the sale of the units to the buyers. The form may need revision at a staff level to be current with Fannie Mae, HUD or other government or lender requirements. Basic terms of the Buyer Promissory Note shall include: (I) zero percent interest; (ii) 30-year term; (iii) no payments due unless sale to a nonqualified buyer triggers payment under equity share provision; (iv) assumability to a qualified buyer, and (v) full credit of all payments at end of term if all conditions, covenants and restrictions have been followed. The Agency Assistance has been funded from the Agency's Low and Moderate Income Housing Fund. Accordingly, Developer acknowledges and agrees that the use of the Site shall be subject to all of the income and affordability restrictions set forth in this Agreement, and the Declaration of Covenants, Conditions and Restrictions (Attachment No. 5). D. [204] Acquisition of the Site The Developer will acquire a fee simple marketable interest to the Site. The cost of the Developer to acquire each parcel, including consideration payable to owners, relocation benefits or assistance, escrow charges, premiums for title insurance and other closing costs, appraisal fees, preliminary title reports, reasonable attorneys fees, and other related charges shall be approved in advance by the Executive Director and included in the site cost calculation as allowable costs to be advanced under the Developer Promissory Note dispersement schedule as approved by the Executive Director. G:\WPDOCS\AHA Building Horizons.wpd 5 E. [2051 Escrow The Developer agrees to open an escrow or escrows (the "Acquisition Escrow(s)") with Dixie Escrow Co., or with another mutually agreeable escrow company (the "Escrow Agent"), by the time established therefor in the Schedule of Performance (Attachment No. 2). This Agreement constitutes the lenders escrow instructions for the financing of the Site acquisition and a duplicate original of this Agreement shall be delivered to the Escrow Agent upon the opening of the Acquisition Escrow. The Escrow Agent is hereby empowered to act under this Agreement, and the Escrow Agent, upon indicating within five (5) days after the opening of the Acquisition Escrow its acceptance of the provisions of this Section 205, in writing, delivered to the Agency and the Developer, shall carry out its duties as Escrow Agent hereunder. The Agency shall pay into the Acquisition Escrow the total amount of the purchase price for each lot in the Site and the following fees, charges and costs for each lot promptly after the Escrow Agent has notified the Agency of the total amount of such purchase price, fees, charges and costs, but not earlier than ten (10) days prior to the scheduled date for closing the Acquisition Escrow: The Escrow fee; and 2. Cost of drawing the grant deed; 3. Recording fees; 4. Notary fees; 5. The title insurance policy; and 6. Any transfer tax and any state, county or city documentary stamps. The Escrow Officer shall notify the Agency when all outstanding documents including the grant deed to the Developer, the Developer Trust Deed and the Declaration of Conditions Covenants and Restrictions have executed and submitted to Escrow by the applicable party. The Agency shall provide the funds pursuant to the Developer Promissory Note directly to Escrow within three (3) business days of the notice by Escrow that all other contingencies to the closing have been met and the above documents are ready to record. The Escrow Agent is authorized to utilize the Agency funds provided pursuant to the Developer's Promissory Note for the above acquisition costs on the condition of the immediate recording of the Developer's Deed of Trust (Attachment No. 4) and the Conditions, Covenants and Restrictions (Attachment No. 5) after recording of the grant deed vesting title in the Developer's name. G:\WPDOCS\AHA Building Horizonsmpd 6 All funds received in this Acquisition Escrow shall be deposited by the Escrow Agent, with other escrow funds of the Escrow Agent in an interest -earning general escrow account or accounts with any state or national bank doing business in the State of California. Such funds may be transferred to any other general escrow account or accounts. All disbursements shall be made by check of the Escrow Agent. If this Acquisition Escrow has not closed within three working days of the receipt by Escrow of the Agency funds then said funds shall be returned to the Agency unless written authorization to retain the funds is provided by the Agency Executive Director. Any amendment to these lender's escrow instructions shall be in writing and signed by the Agency. At the time of any amendment, the Escrow Agent shall agree to carry out its duties as Escrow Agent under such amendment. The liability of the Escrow Agent in the capacity of escrow holder with respect to the Agency is limited to performance of the obligations imposed under it under this Section 205 of this Agreement. F. [206] Conveyance to Eligible Persons and Families At such time as the Developer conveys each parcel of the Site to Eligible Persons and Families, it shall assure that the Conditions, Covenants and Restrictions (Attachment No. 5) remain of second seniority to the lien of any financing, and that the Second Deed of Trust is recorded in a second lien position, behind the lien securing purchase money financing. The conveyances of lots shall be accomplished by grant deed which sets forth the affordability and nondiscrimination provisions in the form to be approved by the Agency Executive Director and Agency Counsel prior to transfer of -property to Eligible Person or Family. III. [300] DEVELOPMENT OF THE SITE A. [301] Development of the Site [302] Scope of Development Each parcel of the Site shall be developed as a detached, single-family housing unit as provided in the Scope of Development (Attachment No. 1). The development of the Site shall include both public improvements and private improvements on the Site and public improvements off -site required in the normal course of City review by the City associated with the development of the Site (collectively, the "Improvements"). Upon close of the Acquisition Escrow, the Developer shall commence and complete construction of the Improvements for each individual lot of the Site by the respective times established therefor in the Schedule of Performance (Attachment No. 2). G:\WPDOCS\AHA Building Horizonsmpd 7 The Scope of Development (Attachment No. 1) shall include any plans and specifications submitted to the City and/or Agency for approval, and shall incorporate or show compliance with all mitigation measures. 2. [303] Site Plan By the time set forth therefor in the Schedule of Performance (Attachment No. 2), the Developer shall prepare and submit to the City for its approval a Site Plan and related documents which conform to requirements of the City and which contain the overall plan for development of the Site in sufficient detail to enable the City to evaluate the proposal for conformity to the requirements of the La Quinta Municipal Code and this Agreement. The Site shall be developed as established in this Agreement and such documents, except as changes may be mutually agreed upon between the Developer and the Agency. Any such changes shall be within the limitations of the Scope of Development (Attachment No. 1). The landscaping and finish grading plans shall be prepared by a professional landscape architect or registered civil engineer who may be the same firm as the Developer's architect or civil engineer. During the preparation of all drawings and plans, staff of the City and the Agency and the Developer shall hold regular progress meetings to coordinate the preparation of, submission to, and review of drawings, plans and related documents by the City. The staff of City and the Agency and the Developer shall communicate and consult informally as frequently as is necessary to insure that the formal submittal of any documents to the Agency can receive prompt and speeding consideration. 3. [304] Review and Approval of Plans Drawings and Related Documents The Agency and the City shall have the right of planning, including plan check, review of all plans and submissions, including any changes therein. During each stage of the processing of plans for the Improvements, the Agency and the City shall have the right to require additional information and shall advise the Developer if any submittal of plans or drawings is not complete or not in accordance with City/Agency procedures. If the Agency or the City determines that such a submittal is not complete or not in accordance with procedures, such tender shall not be deemed to constitute a submittal for purposes of satisfying the Schedule of Performance (Attachment No.2). If the Developer desires to make any substantial changes in the construction plans after their approval by the Agency and the City, the Developer shall submit the proposed change to the Agency and the City for their approval. If the construction plans, as modified by the proposed change, conform to the requirements of this Section 305 and the Scope of Development (Attachment No. 1), the Agency and the City will approve the proposed change and notify the Developer in writing within thirty (30) days after submission to the Agency and the City. G:\WPDOCS\AHA Building Horizonsmpd 8 4. [305] Cost of Development All costs for planning, designing, and constructing the Improvements shall be bome exclusively by the Developer. The Developer shall also bear all costs related to discharging the duties of the Developer set forth in this Agreement. The Developer assumes the responsibility to construct, and shall let contracts for or cause to be constructed, all off -site public improvements developed pursuant to this Agreement, substantially in conformity with procedures used by the Agency when competitive bidding is deemed to be required. The Developer shall be responsible for all fees associated with development of the Improvement, including, but not limited to, school facilities fees and impact fees. 5. [306] Construction Schedule The Developer shall commence and complete the Improvements by the respective times established therefor in the Schedule of Performance (Attachment No. 2). 6. [307] Indemnity. Bodily Injury and Property Damage Insurance The Developer shall defend, assume all responsibility for and hold the Agency and the City, and their respective officers, agents and employees, harmless from all claims or suits for, and damages to, property and injuries to persons, including accidental death (including attorneys fees and costs), which may be caused by any of the Developer's activities under this Agreement, whether such activities or performance thereof be by the Developer or damage shall accrue or be discovered before or after termination of this Agreement. The Developer shall take out and maintain during the life of this Agreement a comprehensive liability policy in the amount of One Million Dollars ($1,000,000) combined single limit policy, including contractual liability, as shall protect the Developer, the City, and the Agency from claims for such damages. Coverage shall be primary and not contributing with any policy or coverage maintained by or obtained by the Agency, and an appropriate endorsement shall so state. The policy shall contain a waiver of subrogation. Insurance coverage furnished by the Developer pursuant to this Section 308 shall conform to this Section 308 and shall pertain to all activities on the Site and adjacent public rights -of -way surrounding the Site and all work on off -site public improvements. Developer shall furnish or cause to be furnished to the Agency a certificate of insurance from the insurer evidencing compliance with this Section 308 and providing that the insurer shall not change or modify the policy without thirty (30) days' prior written notice to Agency. In the alternative, Developer may show proof of a certificate of consent to self -insure issued by the Director of Industrial Relations according to California Labor Code Section 3800. The Developer additionally agrees to and shall save the Agency and the City and their officers, employees and agents harmless from and assume all responsibility for any and all liability or responsibility for damage, costs losses, or suit arising in any manner from the approval of this Agreement or the development and activities conducted pursuant to this Agreement. This obligation and indemnification shall constitute a covenant running with the land throughout the life of the Redevelopment Plan. G:\WPDOCS\AHA Building Horizonsmpd 9 7. [308] City and Other Governmental Agency Permits Before commencement of construction or development of any buildings, structures or other works of improvement upon the Site or in connection with any off -site improvement, the Developer shall, at its own expense, secure or cause to be secured any and all permits which may be required by the City or any other governmental agent affected by such construction, development or work. It is understood that the Developer's obligation is to pay all necessary fees and to timely submit to the City final drawings with final corrections to obtain building permit; the Agency will, without obligation to incur liability or expense therefor, use its best efforts to expedite issuance of building permits and certificates of occupancy for construction that meet the requirements of the City Code. 8. [309] Rights of Access For purpose of assuring compliance with this Agreement, representatives of the Agency and the City shall have the right of access to the Site without charges or fees, at normal business hours during the period of this Agreement for the purposes of this Agreement, including, but not limited to, the inspection of the work being performed in constructing the Improvements, so long as they comply with all safety rules. Such representatives of the Agency or of the City shall be those who are so identified in writing by the Executive Director of the Agency. The Agency shall hold the Developer harmless from any bodily injury or related damages arising out of the activities of the Agency and the City as referred to in this Section 310. 9. [310] Local. State and Federal Laws The Developer shall perform under this Agreement and carry out its performance under this Agreement, including without limitation the construction of the Improvements, in conformity with all applicable federal and state laws and local ordinances, including all applicable federal and state labor standards, as to the Site, provided, however, Developer and its contractors, successors, assigns, transferees, and lessees are not waiving their rights to contest any such laws, rules or standards. 10. [311] Anti -Discrimination Pursuant to Section 33435 and 33050 of the California Community Redevelopment Law, the Developer for itself and its successors and assigns, agrees, that in the construction of Improvements on the Site or other performance under this Agreement, the Developer will not discriminate against any employee or applicant for employment because of sex, marital status, race, color, religion, ancestry, or national origin. 11. [312] Taxes and Assessments After the Agency Conveyance the Developer shall pay prior to delinquency all real estate taxes and assessments on the Site so long as the Developer retains any interest thereon. Prior to the Developer Conveyance, the Developer shall remove or have removed any levy or attachment made on any of the Site or any part thereof, or assure the satisfaction thereof within a G:\WPDOCS\AHA Building Horizons.wpd 10 reasonable time but in any event prior to said sale or transfer. Notwithstanding the above, the Developer shall have the right to contest the validity or amounts of any tax, assessment, or encumbrance available to the Developer in respect thereto. B. [313] Prohibition Against Transfer of the Site, the Buildings or Structures Thereon and Assignment of Agreement Except as to the sale of any home to an owner -occupant in accordance with this Agreement, the Developer shall not, except as may be expressly permitted by this Agreement, without prior approval of the Agency, make any total or partial sale, transfer, conveyance of, or enter into any assignment or ground lease of or refinance the whole or any part of the Site or of the buildings or structures on the Site. This prohibition shall not be deemed to prevent the granting of temporary or permanent easements or permits to facilitate the development of the Site or to prohibit or restrict the sale of "Restricted Units" to "Eligible Persons or Families" (as defined in Section 401) in conformity with Section 401 of this Agreement. C. [314] Right of the Agency to Satisfy Other Liens on the Site(s) After Title Passes After the Agency Conveyance and prior to the completion of construction, and after the Developer has had written notice and has failed after a reasonable time, but in any event not less than forty-five (45) days, to challenge, cure, adequately bond against, or satisfy any liens or encumbrances on the Site which are not otherwise permitted under this Agreement, the Agency shall have the right but no obligation to satisfy any such liens or encumbrances. Notwithstanding the above, the Developer shall have the right to contest the validity or amounts of any tax, assessment, or encumbrance available to the Developer in respect thereto. D. [315] Certificate of Completion Promptly after the completion of all of the Improvements and their sale to Eligible Persons or Families (as defined in Section 401 hereof) in conformity with this Agreement (as determined by the Executive Director of the Agency), upon the written request of the Developer relating only to those Site as to which construction has been completed in accordance with this Agreement the Agency shall furnish the Developer with the Certificate of Completion (in the form attached hereto as Attachment No. 6) which evidences and determines the satisfactory completion of the construction, development and sale to an Eligible Person or Family, as to any single-family home, pursuant to the provisions and covenants specified in this Agreement, the Redevelopment Plan and the California Community Redevelopment Law. The issuance and recordation of a Certificate of Completion (Attachment No. 6) with respect to the Improvements shall not supersede, cancel, amend or limit the continued effectiveness of any obligations relating to the maintenance, or uses, or payment of monies, or any other obligations, except for the obligation to complete construction of the Improvements as of the time of the issuance of such applicable certificate. If the Agency refuses or fails to furnish a Certificate of Completion after written request from the Developer, the Agency shall, within forty-five (45) days of the written request, provide the Developer with a written statement of the reasons the Agency refused or failed to furnish such Certificate of Completion. G:\WPDOCS\AHA Building Horizons.wpd I I Upon issuance of a Certificate of Completion (Attachment No. 6) for the Improvements, construction of such Improvements as to any single-family home shall be deemed to have been completed in conformity with this Agreement. The Certificate of Completion (Attachment No. 6) is not a notice of completion as referred to in Section 3093 of the California Civil Code. The issuance of a Certificate of Completion shall not affect the continued effectiveness of the Developer Deed of Trust (Attachment No. 4) and the Declaration of Conditions, Covenants and Restrictions (Attachment No. 5) recorded pursuant to this Agreement. IV. [400] USE OF THE SITE A. [401 ] Affordable Housing Number of Units. Developer shall develop two (2) detached, single-family homes (the "Restricted Units") within the Project Area and shall develop all on -site and off -site public improvements connected therewith, all as described and set forth in the Scope of Development (Attachment No. 1). Developer shall restrict each of the units for sale to a Low or Moderate Income Household pursuant to the applicable income and affordability provisions contained herein. The Developer further covenants and agrees that the above -referenced occupancy, ownership and affordability requirements shall bind and be enforceable against the Site for the period of thirty (30) years commencing with the acquisition of each respective parcel by the Developer with the simultaneous recording of the Conditions, Covenants and Restrictions (Attachment No. 5). 2. Definitions. (a) "Affordable Housing Cost" shall be that purchase price which would result in maximum monthly housing payments for a thirty (30) year mortgage for that portion of the purchase price which is to be paid in the form of loan proceeds under currently prevailing mortgage loan rates or the interest rate of any below -market mortgage program for which such purchaser has obtained a first trust deed loan, for the low or moderate income group calculated pursuant to Health and Safety Code Section 50052.5, which sets forth the following formula: Lower Income Households - whose gross incomes exceed the maximum income for very low income households and do not exceed seventy percent (70%) of the area median income adjusted for family size, the product of thirty percent (30%) times seventy percent (70%) of the area median income adjusted for family size appropriate for the unit. In addition, for any lower income household that has a gross income that equals or exceeds seventy percent (70%) of the area median income adjusted for family size, it shall be optional for any state or local funding agency to require that affordable housing cost not exceed thirty percent (30%) of the gross income of the household. Moderate Income Households - not less than twenty-eight percent (28%) of the gross income of the household, nor more than the product of thirty-five percent (35%) times the greater of one hundred ten percent (110%) of area median income adjusted for family size G:\WPDOCS\AHA Building Horizonsmpd 12 appropriate for the Affordable Unit, or the gross income of the household for households earning greater than one hundred percent (110%) and not more than one hundred twenty percent (120%) of the area median income adjusted for family size. (b) "Affordability Period" shall be thirty (30) years from the date of transfer to an Eligible Person or Family. (c) "Eligible Person or Family" shall mean any person or family who meets the income qualifications for Moderate Income Households. (d) "Lower Income Household" shall mean a household earning not greater than eighty percent (80%) of Riverside County median income, as determined by the United States Department of Housing and Urban Development from time to time, as set forth in Health and Safety Code Section 50093. (e) "Moderate Income Household" shall mean a household earning not greater than one hundred twenty percent (120%) of Riverside County median income, as determined by the United States Department of Housing and Urban Development from time to time, as set forth in Health and Safety Code Section 50093. (f) "Owner" shall mean Developer and any successor in interest of Developer to any lot of the Site except where a provision of this Agreement expressly excludes Developer from the definition of owner. (g) "Proposed Transferee" shall mean a person or family determined to be an Eligible Person or Family to whom the Developer or any successor Owner desires and proposes to Transfer a Restricted Unit. (h) "Purchase Housing Cost" or an Eligible Person or Family purchasing a Restricted Unit shall include all of the following associated with that Restricted Unit, estimated or known as of the date of their proposed sale of the Restricted Unit: (i) Principal and interest on a mortgage loan including any rehabilitation loans, and any loan insurance fees associated therewith. property improvements. (ii) Property taxes and assessments. (iii) Fire and Casualty insurance covering replacement value of (iv) Any homeowner association fees. Monthly housing cost of a purchaser shall be an average of estimated costs for the next twelve (12) months. G:\WPDOCS\AHA Building Horizons.wpd 13 (i) "Restricted Unit" shall mean a dwelling unit, which shall be a single- family residence, subject to the restrictions of this Agreement (including, without limitation, the Declaration of Conditions, Covenants and Restrictions (Attachment No. 5)). 0) "Sales Price" shall mean all sums paid by a purchaser to a seller for, or in conjunction with, the acquisition of a Restricted Unit, including the purchase price designated in any purchase agreement, consideration for personal property and all other costs and fees paid by the purchaser to or for the benefit of the seller. (k) "Transfer" shall mean any sale, assignment, conveyance, lease or transfer, voluntary or involuntary, of any interest in a Restricted Unit. Without limiting the generality of the foregoing, Transfer shall include (i) a transfer by devise, inheritance or intestacy to a party who does not meet the definition of Eligible Person or Family; (ii) a life estate; (iii) creation of a joint tenancy interest; (iv) a gift of all or any portion of a Restricted Unit; or (v) any voluntary conveyance of a Restricted Unit. Transfer shall not include transfer to a spouse in a dissolution proceeding; however any subsequent Transfer shall be subject to this restriction. (1) "Transferee" shall mean any natural person or entity who obtains ownership or possessory rights in a Restricted Unit pursuant to a Transfer. 3. Sales of Restricted Units. Developer agrees that Developer shall sell each Restricted Unit to an Eligible Person or Family at an Affordable Housing Cost (the 'Developer Conveyance") and that during the Affordability Period each subsequent resale of a Restricted Unit by the then -Owner thereof shall be to an Eligible Person or Family at an Affordable Housing Cost. Developer agrees that the Conditions, Covenants and Restrictions (Attachment No. 5) giving effect to the foregoing restriction shall be recorded against each lot of the Site concurrently with the Acquisition Escrow. Developer agrees to commence to market each Restricted Unit not later than the completion of construction of each Restricted Unit; each Restricted Unit shall be sold to an Eligible Person or Family prior to issuance of a Certificate of Completion as to any such Restricted Unit for purposes of Section 322 hereof. For purposes of satisfying the requirement that all of the Restricted Units shall be occupied by Eligible Persons or Families: (a) an individual or family who qualifies as an Eligible Person or Family at the time he or she first takes title to a Restricted Unit will be deemed an Eligible Person or Family as long as he or she continues to hold title to such Restricted Unit even though the Eligible Person or Family subsequently ceases to meet the income or other requirements of an Eligible Person or Family, and (b) when an Owner releases title to a Restricted Unit, such unit will be considered as occupied by an Eligible Person or Family if it is held vacant and available for such occupancy until title is transferred to another Eligible Person or Family, at which time the status of the new Owner as an Eligible Person or Family is to be determined. 4. Restrictions on Transfer by Sale of the Restricted Property or Any Restricted Unit. G:\WPDOCS\AHA Building Horizonsmpd 14 (a) For the duration of the Affordability Period, Developer, for itself and any subsequent Owner, hereby subjects the Site to certain restrictions and limits the price at which Developer or any other Owner may sell and/or resell the Site and the persons to whom Developer or any other Owner may sell the Site. (b) DEVELOPER AND ANY OTHER OWNER UNDERSTANDS THAT THE DETERMINATION OF THE SALES PRICE CAN BE MADE ONLY AT THE TIME OF THE PROPOSED TRANSFER, TAKING INTO CONSIDERATION INTEREST RATES, PROPERTY TAXES AND OTHER FACTORS THAT CANNOT BE ACCURATELY PREDICTED AND THAT THE SALE PRICE PERMITTED HEREUNDER MAY NOT INCREASE OR DECREASE IN THE SAME MANNER AS OTHER SIMILAR REAL PROPERTY WHICH IS NOT ENCUMBERED BY THIS RESTRICTION. DEVELOPER AND ANY OTHER OWNER FURTHER ACKNOWLEDGE THAT, AT ALL TIMES IN SETTING THE SALES PRICE, THE PRIMARY OBJECTIVE OF THE AGENCY AND THIS AGREEMENT IS TO PROVIDE HOUSING TO ELIGIBLE PERSONS OR FAMILIES AT AFFORDABLE HOUSING COST. THE SALES PRICE MAY BE LESS THAN OTHER SIMILAR PROPERTIES WHICH HAVE NO RESTRICTIONS. Developer's Initials (c) Transfer of a Restricted Unit. Developer and any successor Owner may transfer a Restricted Unit only in strict accordance with the provisions of this Agreement. Specifically, during the Affordability Period, Owner may transfer a Restricted Unit (i) only to an Eligible Person or Family and (ii) only if the Purchase Housing Cost does not exceed Affordable Housing Cost for the Eligible Person or Family; and (iii) only if the Transfer has previously been approved in writing by the Agency. In order to comply with this Subsection 4(c), Developer and any successor Owner must calculate the Affordable Housing Cost for the Proposed Transferee of the Restricted Unit in accordance with the definition set forth in Subsection 2(a) of this Section 401. After calculating the Affordable Housing Cost for the Proposed Transferee, the Owner must ensure that the sum of the Sales Price and all costs listed in the definition of Purchase Housing Cost set forth in Subsection 2 of Section 401 does not exceed that Affordable Housing Cost. The Calculation of the Sales Price under this Subsection 4(c) is illustrated by example in Attachment No. _ attached hereto. (d) In the event that after a good faith effort as defined in the Buyer Promissory Note, the successor Owner is unable to obtain an Eligible Person or Family to transfer the Restricted Unit, then after the required notice to and approval by the Agency Executive Director the owner may sell the Restricted Unit to a noneligible party subject to the equity share provisions of the Buyer Promissory Note and the Covenants, Conditions and Restrictions would be released. (e) Notwithstanding anything to the contrary in this Section 401, at close of the Developer Conveyance Escrow transferring the Restricted Unit from the Developer to the G:\WPDOCS\AHA Building Honzons.wpd 15 Proposed Transferee (the "Initial Owner"), the Initial Owner shall execute a Buyer's Promissory Note as approved by the Executive and Agency Counsel which Promissory Note shall be secured by a Second Deed of Trust. The Buyer's Promissory Note shall be non -interest bearing. The principal amount shall be equal to the amount of the Agency Assistance necessary for the Individual or Family to qualify for the Lender's loan and ensure the affordability requirements are met as approved by the Executive Director in accordance with the Agency's affordable housing program policies. The Note Amount shall be due and payable according to its terms including any applicable equity sharing provision. However, should the Initial Owner transfer the Restricted Unit to an Eligible Person, Family at Affordable Housing Cost, the Transferee shall assume the Developer Promissory Note (Attachment No. 3) and Agency shall extend the due date of the Note Amount until the next Transfer of the Restricted Unit. The foregoing provisions will apply to every successive Transfer during the Affordability Period. 5. Process to Complete Transfer by Sale of Restricted Units. Upon the Transfer by sale of a Restricted Unit, the following procedures shall apply: (a) Notice to City: Owner shall send to the Agency in care of the La Quinta Housing Department (or its successor), at P.O. Box 1504, La Quinta, California 92253, the forms attached hereto as Attachment Nos. 9 and 10 fully completed and executed by the Owner and the Proposed Transferee (the "Notice of Intent to Transfer" and "Approval Request"). (b) Qualification of Proposed Transferee. No Transfer shall occur unless and until determination is made based on the Certificate in the form of Attachment No. 8 attached hereto ("Certificate") and attachments thereto, that the Proposed Transferee (i) intends to occupy the Restricted Unit as the Proposed Transferee's principal residence and (ii) is an Eligible Person or Family. Each Proposed Transferee shall submit a Certificate to the Developer certifying its intent with regard to the occupancy of the Restricted Unit and as to the truth and accuracy of all information supplied as to the Gross Income (calculated as set forth in 25 Cal. Code of Regs., Section 6914) of the Proposed Transferee ("Proposed Transferee's Certificate"). Developer or subsequent owner shall certify pursuant to Attachment No. 8 hereof the information provided on the Proposed Transferee's Certificate pursuant to direction on that Certificate. Developer or subsequent owner shall be entitled to rely on the information on the Proposed Transferee's Certificate and attachments thereto in making the determination required by this subsection 5(b) unless the Developer or subsequent owner has knowledge of, or a reasonable basis for belief as to the inaccuracy or falsehood of the Proposed Transferee's Certificate. (c) The Sales Price for the Restricted Unit shall not exceed the maximum price at which the Purchase Housing Cost to be paid by the Proposed Transferee would not exceed Affordable Housing Cost. The calculation of the Sales Price under this subsection is illustrated by example in Attachment No. 7 attached hereto. However, in determining Affordable Housing Cost, the family size of the Proposed Transferee shall be deemed to be persons in the case of a 1 bedroom, 3 persons for a 2 bedroom, 4 persons for a 3 bedroom, or 5 persons for a 4 bedroom Restricted Unit. If the actual family size of the Proposed Transferee is larger, then the actual family size shall be used. G:\WPDOCS\AHA Building Horizons.wpd 16 (d) Certificates from Parties. With respect to each sale of a Restricted Unit, Developer or subsequent owner shall submit to the Agency, not later than four (4) weeks prior to close of escrow on the sale of a Restricted Unit, a certificate that (I) the Developer or subsequent owner has made the affirmative determinations required by Section 4(a) above and (ii) the Sales Price conforms with Section 4(b) above. The Developer or subsequent owner shall concurrently submit to the Agency the Proposed Transferee's Certificate and all attachments thereto and all other documents or material with regard to information required by Sections 4(a) and/or (b) above, whether or not relied on by the Developer. Further, the Developer or subsequent owner and Proposed Transferee each shall certify in writing, in a form acceptable to the Agency, that the Transfer shall be closed in accordance with, and only with, the terms of the sales contract and other documents submitted to and approved by the Agency and that all consideration delivered by the Proposed Transferee to Developer or subsequent owner has been fully disclosed to the Agency. The written certificate shall also include a provision that, in the event a Transfer is made in violation of the terms of this Agreement or false or misleading statements are made in any documents or certificate submitted to the Agency for its approval of the Transfer, the Agency shall have the right to file an action at law or in equity to seek termination and/or rescission of the sales contract and/or declare the sale void, notwithstanding the fact that the Transfer may have closed and become final as between Developer or subsequent owner and its Transferee. In the event Developer for the initial transfer or subsequent owner for each following transfer fails to comply with Sections 4(a) or 4(b) above, any costs, liabilities or obligations incurred by the Developer or subsequent owner and its Transferee for the return of any monies paid or received or for any costs and legal expenses, shall be borne Jointly and severally by the Developer and its transferee and such parties shall hold the City and Agency harmless and reimburse their expenses, legal fees and costs for any action and City and/or Agency take in enforcing the terms of this Section 401. (e) Execution of Promissory Note and Second Deed of Trust. Notwithstanding anything to the contrary in this Agreement, at close of Escrow of the sale of the Housing Unit from the Developer to the Buyer, the Buyer shall execute a Buyer Promissory Note which shall be secured by a Second Deed of Trust. Said Second Deed of Trust shall be subordinate to any mortgage(s) obtained by the Owner for the purpose of securing funds to be applied to the Sales Price of the Housing Unit. The Buyer Promissory Note shall be non -interest bearing. The principal amount of the Promissory Note shall be an amount equal to the amount actually given as cash plus an Agency Equity Share Amount which becomes applicable only in the event that the Buyer is unable after good faith efforts to find an Eligible Person or Family to transfer the home at Affordable Housing Cost. In the event that the Buyer has provided the Agency with evidence of their good faith efforts then Agency may approve the sale to a nonqualified buyer and release the covenants by receiving in addition to the cash amount originally provided the additional Agency Equity Amount as provided under the terms of the Buyer Promissory Note. So long as the Transferee purchasing the Housing Unit from the Owner is an Eligible Person or Family and the Sale of the Housing Unit is made at a price which is not in excess of Affordable Housing Cost, the Transferee shall assume the obligations of the Owner under the Promissory Note and Second Deed of Trust to repay the Agency Equity pursuant to the Promissory G:\WPDOCS\AHA Building Horizonsmpd 17 Note by execution of an assumption agreement in the form set forth as Attachment No. 11 of this Agreement, together with other written documentation satisfactory to the Agency, and Agency shall extend the due date of the Agency Equity pursuant to the Note Amount until the next Transfer of the Housing Unit by said Transferee. At such next Transfer, the Agency will again extend the due date of the Agency Equity pursuant to the Note Amount if the Sale or Transfer complies with the requirements of this Section. So long as each Transferee from the Owner and each subsequent Owner: (1) is an Eligible Person or Family, (2) acquires the Housing Unit at an Affordable Housing Cost, and (3) assumes the obligations of the predecessor Owner as aforesaid; then the Agency agrees to extend the due date of the Agency Equity pursuant to the Note Amount and the transferring Owner shall not be required to pay the Agency Equity potion of the Note Amount upon transfer of the Housing Unit. The Agency Equity payment requirement is intended as a penalty against the Owner, to capture a portion of the equity in the Restricted Property for the benefit of the Agency/Holder, in the event that the Owner makes a sale of the Restricted Property to a Buyer that is not an Eligible Person or Family. This equity recapture requirement is intended to be a cumulative remedy, together with all other remedies available to the Agency/Holder to compensate for the removal of the affordable housing covenants of the Grant Deed and this Agreement on the Housing Unit, to compensate the Agency for the administrative costs of operating the housing program of the Agency and to provide funds to the Agency to further assist low and moderate income persons in the provision of housing. In the event the equity recapture provisions of the Promissory Note are found by a court or administrative agency of competent jurisdiction to be in contravention of law or administrative regulation, the Applicable Percentage shall be reduced to the maximum percentage allowable by applicable law or administrative regulation, or may be otherwise modified by judicial decree or order so as to comply with applicable law. (f) Written Consent of Agency Required Before Transfer. During the Affordability Period the Restricted Property or the Restricted Unit, as the case may be, and any interest therein, shall not be conveyed by any Transfer except with the express written consent of the Agency, which consent shall be given only if the Transfer is consistent with the Agency's goal of creating, preserving, maintaining and protecting housing in the City of La Quinta for Eligible Persons and Families and shall be in accordance with the provisions of this subsection 5. This provision shall not prohibit the encumbering of title for the sole purpose of securing financing of the purchase price of the Restricted Unit. (g) Delivery of Documents. Upon the close of the proposed Transfer, the Owner and Transferee, as applicable, shall provide the Agency with a certified copy of the recorded Assumption Agreement, a copy of the final sales contract, settlement statement, escrow instructions, all certificates required by this subsection 5 and any other documents which the Agency may request. 6. Covenants of Owner. The Owner of each Restricted Unit by acceptance of a deed to the Restricted Unit covenants and agrees that, at all times during the Affordability Period, its Restricted Unit will be continuously occupied by Owner as its principal residence, and shall not be rented, subleased, or subject to any other business arrangement, whereby consideration shall be paid by any occupant of a Restricted Unit to the Owner of the Restricted Unit; provided, if the G:\WPDOCS\AHA Building Horizons.wpd 18 Restricted Unit is occupied by an Eligible Person or Family, the family members whose income was considered in determining the eligibility of that family may make monetary contributions toward the Purchase Housing Costs of the Restricted Unit. Owner agrees that it shall not record or cause the recordation of any deed of trust (a "Further Encumbrance") securing a note having an original principal sum which, when added to the sum of the principal amount(s) of any notes secured by any deeds of trust against the Restricted Property as of the date of recordation of the Further Encumbrance, exceeds the fair market value of the Restricted Property. B. [402] Uses In Accordance with Redevelopment Plan.• Nondiscrimination The Developer covenants and agrees for itself, its successors, its assigns, and every successor in interest to the Site or any part thereof that the Developer and such successors and assignees, shall devote the Site to the uses specified in the Redevelopment Plan, the Grant Deed (Attachment No. __), the Declaration of Conditions, Covenants and Restrictions (Attachment No. 5) and this Agreement for the periods of time specified therein. The foregoing covenants shall run with the land. The Developer covenants by and for itself and any successors in interest that there shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Site, nor shall the Developer itself or any person claiming under or though it establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the Site. The foregoing covenants shall run with the land. The Developer shall refrain from restricting the rental, sale or lease of the property on the basis of race, color, creed, religion, sex, marital status, national origin or ancestry of any person. All such deeds, leases or contracts shall contain or be subject to substantially the following nondiscrimination or nonsegregation clauses: 1. 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 his or her heirs, executors, administrators and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of, any person or group of persons on account of race, color, creed, religion, sex, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land herein conveyed, nor shall the grantee himself or herself or any person claiming under or though him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees in the land herein conveyed. The foregoing covenants shall run with the land." 2. In leases: "The lessee herein covenants by and for himself or herself, his or her heirs, executors, administrators and assigns, and all persons claiming under or through him or her, and this lease is made and accepted upon and subject to the following conditions: G:\WPDOCS\AHA Building Honzons.wpd 19 "There shall be no discrimination against or segregation or any person or group of persons on account of race, color, creed, religion, sex, marital status, 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." 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, 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 covenants established in this Agreement and the deeds of conveyance for the Site shall, without regard to technical classification and designation, be binding for the benefit and in favor of the Agency, its successors and assigns, the City and any successor in interest to the Sites, together with any property acquired by the Developer pursuant to this Agreement, or any part thereof. The covenants against racial discrimination shall remain in effect in perpetuity. C. [403] Effect of Violation of the Terms and Provisions of this Agreement After Completion of Construction The Agency is deemed the beneficiary of the terms and provisions of this Agreement and of the covenants running with the land, for and in its own rights 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 the Agency, without regard to whether the Agency has been, remains or is an owner of any land or interest therein in the Site or in the Project Area. The Agency shall have the right, if this 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 property proceedings to enforce the curing of such breaches to which it or any other beneficiaries of this Agreement and covenants may be entitled. D. [404] Maintenance of the Site The Developer shall maintain the improvements on the Site in conformity with the La Quinta Municipal Code and the requirements of the Declaration of Conditions, Covenants and Restrictions (Attachment No. 5), and shall keep the Site free from any accumulation of debris or waste materials. The Developer shall also maintain the landscaping required to be planted under the Scope of Development (Attachment No. 1) in a healthy and attractive condition. If, at any time, Developer fails to maintain the Site or any portion thereof, and said condition is not corrected as G:\WPDOCS\AHA Building Horizonsmpd 20 soon as reasonably possible after written notice from the Agency, either the Agency or the City may perform the necessary maintenance and Developer shall pay such costs as are reasonably incurred for such maintenance. Upon the close of each Developer Conveyance, the Developer's obligations under this Section 404 with respect to such Site shall be assumed by the Transferee of such Site. This covenant shall run with the land and shall remain in effect for the term of the Redevelopment Plan. V. [500] DEFAULTS AND REMEDIES A. [501] Defaults -- General Subject to the extensions of time set forth in Section 603, failure or delay by either party to perform any term or provision of this Agreement constitutes a default under this Agreement. A party claiming a default shall give written notice of default to the other party, specifying the default complained of and the actions required to correct such default. Except as otherwise expressly provided in Sections 508 and 509 of this Agreement, the claimant shall not institute proceedings against the other party if the other parry within thirty (30) days from receipt of such notice immediately, with due diligence, commences to cure, correct or remedy such failure or delay and shall complete such cure, correction or remedy as soon as reasonably practicable after receipt of such notice. B. [502] Legal Actions [503] Institution of Legal Actions In addition to any other rights or remedies and subject to the restrictions in Section 501, either parry may institute legal action to seek specific performance of the terms of this Agreement, or to cure, correct or remedy any default, to recover damages for any default, or to obtain any other legal or equitable remedy consistent with the purpose of this Agreement. Such legal actions must be instituted in the Superior Court of the County of Riverside, State of California, in an appropriate municipal court in that county, or in the Federal District Court in the Central District of California. 2. [504] Applicable Law The laws of the State of California shall govern the interpretation and enforcement of this Agreement. 3. [505] Acceptance of Service of Process In the event that any legal action is commenced by the Developer against the Agency, service of process on the Agency shall be made by person service upon the Executive Director or in such other manner as may be provided by law. G:\WPDOCS\AHA Building Horizons.wpd 21 In the event that any legal action is commenced by the Agency against the Developer, service of process on the Developer shall be made by personal service upon any officer or director of the Developer and shall be valid whether made within or without the State of California or in such other manner as may be provided by law. C. [506] Rights and Remedies Are Cumulative Except as otherwise expressly stated in this Agreement, the rights and remedies of the parties are cumulative, and the exercise by either party of one or more of such rights or remedies shall not preclude the exercise by it, at the same or different times, of any other rights or remedies for the same default or any other default by the other party. D. [507] Inaction Not a Waiver of Default Any failures or delays by either parry in asserting any of its rights and remedies as to any default shall not operate as a waiver of any default or of any such rights or remedies, or deprive either such party of its right to institute and maintain any actions or proceedings which it may deem necessary to protect, assert or enforce any such rights or remedies. E. [508] Remedies and Rights of Termination [509] Damages If either parry defaults with regard to any of the provisions of this Agreement, the non -defaulting parry shall serve written notice of such default upon the defaulting party. If the default is not cured or commenced to be cured by the defaulting party within forty-five (45) days after service of the notice of default (or within such other period as is set forth herein), the defaulting party shall be liable to the other party for any damages caused by such default. 2. [510] Specific Performance If either party defaults under any of the provisions of this Agreement, the non - defaulting party shall serve written notice of such default upon the defaulting party. If the default is not cured and/or commenced to be cured by the defaulting party within forty-five (45) days of service of the notice of default, or such other time limit as may be set forth herein with respect to such default, the non -defaulting party as its option may thereafter (but not before) commence an action for specific performance of terms of this Agreement. 3. [511 ] Right of Termination by the Developer In the event that the Agency does not fund the portion of the Developer Promissory Note for the acquisition costs in the manner and condition, and by the date established in this Agreement and the Schedule of Performance (Attachment No. 2), and any such failure shall not be cured within thirty (30) days after written demand by the Developer then, at the option of the Developer, upon written notice thereof to the Agency, all provisions of this Agreement shall terminate and be of no further force and effect; thereafter, neither the Agency nor the Developer shall G:\WPDOCS\AHA Building Horizonsmpd 22 have any further rights against or liability to the other with respect to this Agreement. Notwithstanding the above, developer would be entitled to the return of any Acquisition Deposit for a site not transferred pursuant to Section 202 herein. Note: 4. [512] Termination by the Agency In the event that prior to the Agency funding of the Developer Promissory (a) The Developer (or any successor in interest) assigns or attempts to assign the Agreement or any rights therein or in the Site(s) in violation of this Agreement; or (b) There is a charge in the ownership of the Developer contrary to the provisions of Section 107(a) hereof-, or (c) The Developer does not submit certificates of insurance, construction plans, drawings and related documents as required by this Agreement, in the manner and by the dates respectively provided in this Agreement therefor, and such default or failure shall not be cured or commenced to be cured within forty-five (45) days after the date of written demand therefor by the Agency; or (d) The Developer fails to satisfy the Conditions Precedent to the Conveyance by the time established therefor in the Schedule of Performance (Attachment No. 2); or (e) The Developer is otherwise in default under this Agreement and such failure is not cured or commenced to be cured within thirty (30) days of demand therefor by the Agency; then, at the option of the Agency, upon such written notice thereof to the Developer as may be set forth above, this Agreement shall be terminated, and thereafter neither parry shall have any further rights or liability against the other under this Agreement. F. [513] Remedies of the Parties for Default After Closing of the Acquisition Escrow [514] Termination and Damages After the Close of the Acquisition Escrow, if the Developer or the Agency defaults with regard to any of the provisions of this Agreement, the nondefaulting party shall serve written notice of such default upon the defaulting parry. If the default is not cured or commenced to be cured (and diligent efforts toward curing the default) by the defaulting party within thirty (30) days after service of the notice of default, the defaulting parry shall be liable to the other party for any damages caused by such default. G:\WPDOCS\AHA Building Horizonsmpd 23 VI. [600] GENERAL PROVISIONS A [601] Notices. Demands and Communications Between Parties Written notices, demands and communications between the Agency and the Developer shall be sufficiently given if delivered by hand or dispatched by registered or certified mail, postage prepaid, return receipt requested, to the principal offices of the Agency and the Developer at the addresses specified in Section 105 and 106, respectively. 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 i this Section 601. Any written notice, demand or communication shall be deemed received immediately if delivered by hand and shall be deemed received on the tenth (loth) day from the date it is postmarked if delivered by registered or certified mail. B. [602] Conflicts of Interest No member, official or employee of the Agency shall have any personal interest, direct or indirect, in this Agreement, nor shall any 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. No member, official or employee of the Agency shall be personally liable to the Developer, or any successor in interest, in the event of any default or breach by the Agency, or for any amount which may become due to the Developer or successor or on any obligations under the terms of this Agreement. C. [603] Enforced Delay Extension of Times of Performance In addition to specific provisions of this Agreement, performance by either party hereunder shall not be deemed to be in default, and al performance and other date specified in this Agreement shall be extended, where delays or defaults are due to: war; insurrection; strikes; lockouts; riots; floods; earthquakes; fires; casualties; acts of God; acts of the public enemy; epidemics; quarantine restrictions; freight embargoes; lack of transportation; governmental restrictions or priority; litigation; unusually severe weather; inability to secure necessary labor, materials or tools; delays of any contractor; subcontractor or supplier; acts or omissions of the other party; acts or failures to act of the City of La Quinta or any other public or governmental agency or entity (other than the acts or failures to act of the Agency which shall not excuse performance by the Agency); or any other causes beyond the control or without the default of the party claiming an extension of time to perform. Notwithstanding anything to the contrary in this Agreement, an extension of time for any such cause shall be for the period of the enforced delay and shall commence to run from the time of the commencement of the cause, if notice by the party claiming such extension is sent to the other party within thirty (30) days of the commencement of the cause. Times of performance under this Agreement may also be extended in writing by the mutual agreement of Agency and Developer. Notwithstanding the foregoing portion of this Sectiop 603, the Developer is not entitled pursuant to this Section 603 to an extension of time to perform because of past, present, or G:\WPDOCS\AHA Building Horizons.wpd 24 future difficulty in obtaining suitable construction financing for the development of the Site or because of the physical condition or suitability of the Site for the purposes of this Agreement. D. [604] Non -Liability of Officials and Employees of the Agency and the Developer No member, official or employee of the Agency or the City shall be personally liable to the Developer, or any successor in interest, in the event of any default or breach by the Agency or the City or for any amount which may become due to the Developer or its successors, or on any obligations under the terms of this Agreement. No officer, director or employee of the Developer shall be personally liable to the Agency or the City, or any successor in interest, in the event or breach by the Developer. E. [605] Entire Agreement. Waivers This Agreement is executed in three (3) duplicate originals, each of which is deemed to be an original. This Agreement includes pages 1 through 27 and Attachment Nos. 1 through 11, which constitutes the entire understanding and agreement of the parties. Each of the foregoing Attachments are incorporated herein by reference. 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 the Agency and the Developer, and all amendments hereto must be in writing by the appropriate authorities of the Agency and the Developer. In any circumstance where under this Agreement either party is required to approve or disapprove any matter, approval shall not be unreasonably withheld. VII. [700] TIME FOR ACCEPTANCE OF AGREEMENT BY AGENCY IN WITNESS WHEREOF, the Agency and the Developer have signed this Agreement on the respective dates set forth below. LA QUINTA REDEVELOPMENT AGENCY, a public body corporate and politic Dated: 4-9-0 / By: 'tic z TERRY eNDERSON, Chairman ATTEST: mew-W-1-t M-, G:\WPDOCS\AHA Building Horizons.wpd 25 APPROVED AS TO FORM: nA M. KATHE • NE JENSO , Agency o sel BUILDING HORIZONS, a California nonprofit public benefit corporation Dated: By: Its: G:\WPDOCS\AHA Building Horizons.wpd 26 ATTACHMENT NO. 1 SCOPE OF DEVELOPMENT DEVELOPMENT Development shall cause the construction and installation of a single family home on each lot of the Site. The homes shall be approximately 1,400 square feet in size. The homes shall be developed in accordance with four bedroom floor plans and site elevations which have been or which shall have been approved by the City and the Agency. Unit amenities include front landscaped/irrigated yards; interior laundries with sink and cabinets; kitchens that feature tile countertops, dishwashers, built-in ranges, oak cabinetry, and nooks/pantries; tile roofs; and concrete block perimeter fencing. The Developer shall complete all of the improvements set forth in this Scope of Development (Attachment No. 1) to be constructed on each lot. All of the improvements to be described in part IV of this Scope of Development, constitute the "Improvements." The developer shall commence and complete the Improvements by the respective times established therefor in the Schedule of Performance (Attachment No. 2). II. DEVELOPMENT STANDARDS The following development standards shall apply to the Developer Improvements: A. Building Setbacks. Minimum building setbacks for building and parking areas shall be as required by the Redevelopment Plan and approved by the Agency, and shall conform to the La Quinta City Code (the "City Code"). B. Building Coverage. The amount of land within the Site covered by buildings shall be as required by the Redevelopment Plan and local zoning. C. Building Height. Buildings shall not exceed the height as may be limited by the Redevelopment Plan and local zoning. D. Landscaping. The Developer shall provide and, pending the sale of the Site, maintain landscaping on the Site. Landscaping shall be subject to approval by the City's Planning Department prior to planting. E. Utilities. Sewer drainage and utility lines, conduits or systems shall not be constructed or maintained above the ground level of the Site. Storm drainage for all hard surfaced areas shall be drained or may be sheet flowed to storm sewers. All non -polluted waste water, such as waste air conditioning water, shall be drained to the storm or sanitary drainage systems as permitted by local codes. G:\WPDOCS\AHA Building Horizons.wpd F. Building Materials. All exterior walls shall be painted or covered by the Developer with color(s) and materials subject to approval by the City's Community Development Department. In satisfaction of this requirement, the Developer shall submit a color and materials board for approval by the Agency. G. Building Desien. Buildings shall be constructed such that the Developer Improvements shall conform to the City Code, and shall be effectively and aesthetically designed. III. PUBLIC IMPROVEMENTS AND UTILITIES The Developer, at its own cost and expense, with the exception of the Agency Assistance as provided in Section 201 of the Agreement, shall provide or cause to be provided the public improvements as required by the City pursuant to the usual City building permit requirements for off -site improvements to residential development within the time set forth for the completion of the Developer Improvements in the Schedule of Performance (Attachment No. 4). Those of the improvements required to be provided pursuant to this part III of this Scope of Development (Attachment No. 1) constitute the "Off -Site Improvements." IV. DEMOLITION AND SOILS In accordance with Section 211 of the Agreement, the Developer shall at its cost take all actions necessary to render the Site entirely suitable for such development, including any demolition and soils work. V. AMENDMENTS Any material change, as reasonably determined by the Agency, in the Scope of Development (Attachment No. 1) or in the approved site plan which affects the size, quality, or type of development proposed for one or more of the Site shall require the written approval of the Agency, which approval may be contingent upon the review and renegotiation of all of the economic and financial terms of this Agreement and such other matters as the Agency shall deem appropriate. It shall be up to the discretion of the Agency Executive Director whether a proposed material change to this Scope of Development requires approval by the Agency Board or whether such change may be approved in writing by the Agency Executive Director. G:\WPDOCS\AHA Building Horizons.wpd 2 ATTACHMENT NO. 2 SCHEDULE OF PERFORMANCE GENERAL PROVISIONS Execution of Agreement byAgencv. The Agency shall approve and execute this Agreement, and shall 'deliver one (1) copy thereof to the Developer. II. CONSTRUCTION DOCUMENTS AND BUILDING PERMITS 2. Submittal of Site Plan. Developer shall prepare and submit to the Agency the Site Plan for the two units. 3. Submission of Complete Construction Drawings and Landscaping Plan. Developer shall submit to the Agency complete Construction (working) Drawings for the two units. 4. Obtaining of Building Permits. Developer shall satisfy all requirements necessary to obtain al building and other permits needed to commence construction of the Improvements for each unit. III. ACQUISITION OF SITE 5. Conditions Precedent. All Conditions Precedent to funding the acquisition are satisfied. 6. Acquisition of Site. The acquiring of the Site is effected. Not later than thirty (30) days after the date of execution and submission of three (3) copies of this Agreement by the Developer. Within thirty (30) days after the execution of this Agreement by the Agency. Not later than thirty (30) days after Agency approval of Site Plan. Not later than thirty (30) days after Agency approval of Complete Construction (working) Drawings and Landscaping Plan. Not later than sixty (60) days after execution of this Agreement by the Agency. As soon as reasonably possible after satisfactory fulfillment of the Conditions Precedent to the Agency Assistance and funding of the Developer loan. G:\WPDOCS\AHA Building Horizonsmpd IV. CONSTRUCTION PHASE 7. Commencement of Construction. Developer shall commence construction of the Improvements for each Site. 8. Completion of Construction. Developer shall complete construction of all of the Improvements for each lot. V. TRANSFER STAGE 9. Sales of Residences. Each Residence shall be sold to an Eligible Person or Family. 10. Partial Certificates of Completion. Certificates of Completion for each lot shall be recorded simultaneous with the transfer to an Eligible Person or Family. Not later than thirty (30) days after Developer acquisition of each lot. Within two hundred seventy (270) days after the commencement of construction for each lot. Within six (6) months from issuance of certificate of occupancy. Minor revisions to this Schedule of Performance may be approved in writing by the Agency Executive Director. G:\WPDOCS\AHA Building Horizons.wpd 2 ATTACHMENT NO. 3 DEVELOPER PROMISSORY NOTE $105,000 La Quinta, California FOR VALUE RECEIVED, BUILDING HORIZONS, INC., collectively, "Maker" promise to pay to LA QUINTA REDEVELOPMENT AGENCY, a public body corporate and politic ("Holder") at La Quinta, California, or at such other address as Holder may direct from time to time in writing, the sum of $105,000 (the "Note Amount"), together with interest thereon at the rate set forth herein. All sums payable hereunder shall be payable in lawful money of the United States of America. This Developer Promissory Note ("Note") is made in connection with the provision by the Holder of funds equal to the approved Acquisition Costs and Construction Costs pursuant to that certain Affordable Housing Agreement by and among Maker and the Holder, dated as of , 2001 (the "Agreement"). 1. Disbursements. The Note Amount shall be disbursed pursuant to Sections 201 and 205 of the Agreement. The record of such disbursements shall be recorded from time to time by the Agency Executive Director or his designee on Exhibit A to this Developer Promissory Note. 2. Obligation to Pay. The Note Amount shall be due and payable in full upon the Developer conveyance of the property. 3. Prepayment of Note Amount. Maker may prepay to Holder the full Note Amount at any time prior to the due date of the Note Amount without penalty. 4. Security. This Note is secured by a Developer Deed of Trust by and between Maker, as trustor, and Holder, as beneficiary (the "Developer Deed of Trust"). 5. Holder May Assign. Holder may, at its option, assign its right to receive payment under this Note without necessity of obtaining the consent of the Maker. 6. Makers Assignment Prohibited. In no event shall Maker assign or transfer any portion of this Note without the prior express written consent of the Holder, which consent may be given or withheld in the Holder's sole discretion. 7. Attorneys' Fees and Costs. In the event that any action is instituted with respect to this Note, the prevailing party promises to pay such sums as a court may fix for court costs and reasonable attorneys' fees. Holder's right to such fees shall not be limited to or by its representation by staff counsel and such representation shall be valued at customary and reasonable rates for private sector legal services. 8. Time of the Essence. Time is of the essence of the performance of all obligations under this Promissory Note. G:\WPDOCS\AHA Building Horizons.wpd 9. Non -Waiver. Failure or delay in giving any notice required hereunder shall not constitute a waiver of any default or late payment, nor shall it change the time for any default or payment. 10. Successors Bound. This Note shall be binding upon the parties hereto and their respective heirs, successors and assigns. BUILDING HORIZONS, a California nonprofit public benefit corporation Dated: Its: "MAKER" LA QUINTA REDEVELOPMENT AGENCY, a public body corporate and politic Dated: THOMAS P. GENOVESE, Executive Director ATTEST: JUNE S. GREEK, Agency Secretary "HOLDER" G:\WPDOCS\AHA Building Horizonsmpd 2 EXHIBIT "A" TO ATTACHMENT NO. 6 DISBURSEMENT RECORD Disbursement Amount Date Acknowledgment of Receipt of Maker 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. II. 12. G:\WPDOCS\AHA Building Horizons.wpd ATTACHMENT NO. 4 CONSTRUCTION DEED OF TRUST [To be approved by Agency Counsel and Executive Director for recording prior to funding under the Developer Promissory Note] G:\WPDOCS\AHA Building Horizons.wpd ATTACHMENT NO. 5 RECORDING REQUESTED BY ) AND WHEN RECORDED MAIL TO: ) LA QUINTA REDEVELOPMENT AGENCY ) 78-495 Calle Tampico ) La Quinta, California 92253 ) Space above for recorder. This Agreement is recorded at the request and for the benefit of the Agency and is exempt from the payment of a recording fee pursuant to Government Code Section 6103. LA QUINTA REDEVELOPMENT AGENCY By: Its: Dated: 2001 DECLARATION OF CONDITIONS, COVENANTS AND RESTRICTIONS THIS DECLARATION OF CONDITIONS, COVENANTS AND RESTRICTIONS is made this day of , 2001, by BUILDING HORIZONS, a California nonprofit public benefit corporation, as declarant (the "Developer"), with reference to the following: A. The Developer is fee owner of record of that certain real property located in the City of La Quinta, County of Riverside, State of California legally described in the attached Exhibit "A" (the "Property"),which is comprised of (_) parcels ("Parcels"). The Property comprises the Site which is the subject of an agreement, further described herein, for the development, operation and maintenance of the Property for moderate -income housing. The Property is to be used for the development of single-family housing units and subsequent occupancy as a primary residence by households meeting certain income qualifications, all in conformity with this Declaration and an Affordable Housing Agreement between the Developer and the Agency dated as of a copy of which is on file with the Agency as a public record (the "Agreement"). B. The Property is within the Redevelopment Project (the "Project") in the City of La Quinta and is subject to the provisions of the Redevelopment Plan for the Project adopted by Ordinance No. 43 on November 29, 1995, and amended by Ordinance No. on 199 by the City Council of the City of La Quinta. G:\WPDOCS\AHA Building Horizons.wpd 2 C. The La Quinta Redevelopment Agency ("Agency") and the Developer have entered into an Affordable Housing Agreement dated as of , 2001 concerning the development and use of the Property (the "Agreement") which Agreement is on file with the Agency as a public record and is incorporated herein by reference and which Agreement provides for the execution and recordation of this document. D. Developer deems it desirable to impose a general plan for the use and maintenance of the Property, and to adopt and establish covenants, conditions and restrictions upon the Property for the purpose of enforcing and protecting the value, desirability and attractiveness thereof. E. Developer will convey title to all portions of said Property (including each Parcel) subject to certain protective covenants, conditions, and restrictions hereinafter set forth. NOW, THEREFORE, Declarant hereby covenants, agrees and declares that all of the Property shall be held, sold, conveyed, hypothecated, encumbered, used, occupied and improved, subject to the following covenants, conditions, restrictions and easements which are hereby declared to be for the benefit of the whole Property. These covenants, conditions, restrictions and easement shall run with the Property and shall be binding on all parties having or acquiring any right, title or interest in the Property or any part thereof (including each Parcel) and shall inure to the benefit of each owner thereof and their successors and assigns, and are imposed upon the Property and every part thereof (including each Parcel) as a servitude in favor of each and every Parcel as the dominant tenement or tenements. NOW, THEREFORE, THE DEVELOPER AGREES AND COVENANTS AS FOLLOWS: A. Low or Moderate Income Restrictions Number of Units. Developer shall develop two (2) detached, single-family homes (the "Restricted Units") within the Project Area and shall develop all on -site and off -site public improvements connected therewith, all as described and set forth in the Scope of Development (Attachment No. 1). Developer shall restrict each of the units for sale to a Low or Moderate Income Household pursuant to the applicable income and affordability provisions contained herein. The Developer further covenants and agrees that the above -referenced occupancy, ownership and affordability requirements shall bind and be enforceable against the Site for the period of thirty (30) years commencing with the acquisition of each respective parcel by the Developer with the simultaneous recording of this document. 2. Definitions. (a) "Affordable Housing Cost" shall be that purchase price which would result in maximum monthly housing payments for a thirty (30) year mortgage for that portion of the purchase price which is to be paid in the form of loan proceeds under currently prevailing mortgage loan rates or the interest rate of any below -market mortgage program for which such purchaser has obtained a first trust deed loan, for the low or moderate income group calculated pursuant to Health and Safety Code Section 50052.5, which sets forth the following formula: G:\WPDOCS\AHA Building Horizons.wpd 3 Lower Income Households - whose gross incomes exceed the maximum income for very low income households and do not exceed seventy percent (70%) of the area median income adjusted for family size, the product of thirty percent (30%) times seventy percent (70%) of the area median income adjusted for family size appropriate for the unit. In addition, for any lower income household that has a gross income that equals or exceeds severity percent (70%) of the area median income adjusted for family size, it shall be optional for any state or local funding agency to require that affordable housing cost not exceed thirty percent (30%) of the gross income of the household. Moderate Income Households - not less than twenty-eight percent (28%) of the gross income of the household, nor more than the product of thirty -five percent (35%) times the greater of one hundred ten percent (110%) of area median income adjusted for family size appropriate for the Affordable Unit, or the gross income of the household for households earning greater than one hundred percent (110%) and not more than one hundred twenty percent (120%) of the area median income adjusted for family size. (b) "Affordability Period" shall be thirty (30) years from the date of transfer to an Eligible Person or Family. (c) "Eligible Person or Family" shall mean any person or family who meets the income qualifications for Moderate Income Households. (d) "Lower Income Household" shall mean a household earning not greater than eighty percent (80%) of Riverside County median income, as determined by the United States Department of Housing and Urban Development from time to time, as set forth in Health and Safety Code Section 50093. (e) "Moderate Income Household" shall mean a household earning not greater than one hundred twenty percent (120%) of Riverside County median income, as determined by the United States Department of Housing and Urban Development from time to time, as set forth in Health and Safety Code Section 50093. (f) "Owner" shall mean Developer and any successor in interest of Developer to any lot of the Site except where a provision of this Agreement expressly excludes Developer from the definition of owner. (g) "Proposed Transferee" shall mean a person or family determined to be an Eligible Person or Family to whom the Developer or any successor Owner desires and proposes to Transfer a Restricted Unit. (h) "Purchase Housing Cost" or an Eligible Person or Family purchasing a Restricted Unit shall include all of the following associated with that Restricted Unit, estimated or known s of the date of their proposed sale of the Restricted Unit: (I) Principal and interest on a mortgage loan including any rehabilitation loans, and any loan insurance fees associated therewith. (ii) Property taxes and assessments. G:\WPDOCS\AHA Building Horizons.wpd 4 property improvements. (iii) Fire and Casualty insurance covering replacement value of (iv) Any homeowner association fees. Monthly housing cost of a purchaser shall be an average of estimated costs for the next twelve (12) months (I) "Restricted Unit" shall mean a dwelling unit, which shall be a single- family residence, subject to the restrictions of this Agreement (including, without limitation, this document). (j) "Sales Price" shall mean all sums paid by a purchaser to a seller for, or in conjunction with, the acquisition of a Restricted Unit, including the purchase price designated in any purchase agreement, consideration for personal property and all other costs and fees paid by the purchaser to or for the benefit of the seller. (k) "Transfer" shall mean any sale, assignment, conveyance, lease or transfer, voluntary or involuntary, of any interest in a Restricted Unit. Without limiting the generality of the foregoing, Transfer shall include (I) a transfer by devise, inheritance or intestacy to a party who does not meet the definition of Eligible Person or Family; (ii) a life estate; (iii) creation of a joint tenancy interest; (iv) a gift of all or any portion of a Restricted Unit; or (v) any voluntary conveyance of a Restricted Unit. Transfer shall not include transfer to a spouse in a dissolution proceeding; however any subsequent Transfer shall be subject to this restriction. (1) "Transferee" shall mean any natural person or entity who obtains ownership or possessory rights in a Restricted Unit pursuant to a Transfer. 3. Sales of Restricted Units. Developer agrees that Developer shall sell each Restricted Unit to an Eligible Person or Family at an Affordable Housing Cost (the "Developer Conveyance) and that during the Affordability Period each subsequent resale of a Restricted Unit by the then -Owner thereof shall be to an Eligible Person or Family at an Affordable Housing Cost. Developer agrees that these Conditions, Covenants and Restrictions giving effect to the foregoing restriction shall be recorded against each lot of the Site concurrently with the Acquisition Escrow. Developer agrees to commence to market each Restricted Unit not later than the completion of construction of each Restricted Unit; each Restricted Unit shall be sold to an Eligible Person or Family prior to issuance of a Certificate of Completion as to any such Restricted Unit for purposes of Section 322 of the Agreement. For purposes of satisfying the requirement that all of the Restricted Units shall be occupied by Eligible Persons or Families: (a) an individual or family who qualifies as an Eligible Person or Family at the time he or she first takes title to a Restricted Unit will be deemed an Eligible Person or Family as long as he or she continues to hold title to such Restricted Unit even though the Eligible Person or Family subsequently ceases to meet the income or other requirements of an Eligible Person or Family subsequently ceases to meet the income or other requirements of an Eligible Person or Family, and (b) when an Owner releases title to a Restricted Unit, such unit will G:\WPDOCS\AHA Building Horizons.wpd 5 be considered as occupied by an Eligible Person or Family if it is held vacant and available for such occupancy until title is transferred to another Eligible Person or Family, at which time the status of the new Owner as an Eligible Person or Family is to be determined. 4. Restrictions on Transfer by Sale of the Restricted Property or Any Restricted Unit. (a) For the duration of the Affordability Period, Developer, for itself and any subsequent Owner, hereby subjects the Site to certain restrictions and limits the price at which Developer or any other Owner may sell and/or resell the Site and the persons to whom Developer or any other Owner may sell the Site. (b) DEVELOPER AND ANY OTHER OWNER UNDERSTANDS THAT THE DETERMINATION OF THE SALES PRICE CAN BE MADE ONLY AT THE TIME OF THE PROPOSED TRANSFER, TAKING INTO CONSIDERATION INTEREST RATES, PROPERTY TAXES AND OTHER FACTORS THAT CANNOT BE ACCURATELY PREDICTED AND THAT THE SALE PRICE PERMITTED HEREUNDER MAY NOT INCREASE OR DECREASE IN THE SAME MANNER AS OTHER SIMILAR REAL PROPERTY WHICH IS NOT ENCUMBERED BY THIS RESTRICTION. DEVELOPER AND ANY OTHER OWNER FURTHER ACKNOWLEDGE THAT, AT ALL TIMES IN SETTING THE SALES PRICE, THE PRIMARY OBJECTIVE OF THE AGENCY AND THIS AGREEMENT IS TO PROVIDE HOUSING TO ELIGIBLE PERSONS OR FAMILIES AT AFFORDABLE HOUSING COST. THE SALES PRICE MAY BE LESS THAN OTHER SIMILAR PROPERTIES WHICH HAVE NO RESTRICTIONS. Developer's Initials (c) Transfer of a Restricted Unit. Developer and any successor Owner may transfer a Restricted Unit only in strict accordance with the provisions of this Agreement. Specifically, during the Affordability Period, Owner may transfer a Restricted Unit (I) only to an Eligible Person or Family and (ii) only if the Purchase Housing Cost does not exceed Affordable Housing Cost for the Eligible Person or Family; and (iii) only if the Transfer has previously been approved in writing by the Agency. In order to comply with this Subsection 4(c), Developer and any successor Owner must calculate the Affordable Housing Cost for the Proposed Transferee of the Restricted Unit in accordance with the definition set forth in Subsection 2(a) of this Section _. After calculating the Affordable Housing Cost for the Proposed Transferee, the Owner must ensure that the sum of the Sales Price and all costs listed in the definition of Purchase Housing Cost set forth in Subsection 2 of Section 401 does not exceed that Affordable Housing Cost. The Calculation of the Sales Price under this Subsection 4(c) is illustrated by example in Attachment No. _ of the Agreement. G:\WPDOCS\AHA Building Horizons.wpd 6 (d) In the event that after a good faith effort as defined in the Buyer Promissory Note, the successor Owner is unable to obtain an Eligible Person or Family to transfer the Restricted Unit, then after the required notice to and approval by the Agency Executive Director the owner may sell the Restricted Unit to a noneligible party subject to the equity share provisions of the Buyer Promissory Note and the Covenants, Conditions and Restrictions would be released. (e) Notwithstanding anything to the contrary in this Section _, at close of the Developer Conveyance Escrow transferring the Restricted Unit from the Developer to the Proposed Transferee (the "Initial Owner"), the Initial Owner shall execute a Buyer's Promissory Note as approved by the Executive and Agency Counsel which Promissory Note shall be secured by a Second Deed of Trust. The Buyer's Promissory Note shall be non -interest bearing. The principal amount shall be equal to the amount of the Agency Assistance necessary for the Individual or Family to qualify for the Lender's loan and ensure the affordability requirements are met as approved by the Executive Director in accordance with the Agency's affordable housing program policies. The Note Amount shall be due and payable according to its terms including any applicable equity sharing provision. However, should the Initial Owner transfer the Restricted Unit to an Eligible Person, Family at Affordable Housing Cost, the Transferee shall assume the Promissory Note (Attachment No. 8 to the Agreement) and Agency shall extend the due date of the Note Amount until the next Transfer of the Restricted Unit. The foregoing provisions will apply to every successive Transfer during the Affordability Period. 5. Process to Complete Transfer by Sale of Restricted Units. Upon the Transfer by sale of a Restricted Unit, the following procedures shall apply: (a) Notice to City: Owner shall send to the Agency in care of the La Quinta Housing Department (or its successor), at P.O. Box 1504, La Quinta, California 92253, the form attached hereto as Attachment No. _ fully completed and executed by the Owner and the Proposed Transferee (the "Approval Request"). (b) Qualification of Proposed Transferee. No Transfer shall occur unless and until determination is made based o the Certificate in the form of Attachment No. _ attached hereto ("Certificate") and attachments thereto, that the Proposed Transferee (1) intends to occupy the Restricted Unit as the Proposed Transferee's principal residence and (ii) is an Eligible Person or Family. Each Proposed Transferee shall submit a Certificate to the Developer certifying its intent with regard to the occupancy of the Restricted Unit and as to the truth and accuracy of all information supplied as to the Gross Income (calculated as set forth in 25 Cal. Code of Regs., Section 6914) of the Proposed Transferee ("Proposed Transferee's Certificate"). Developer or subsequent owner shall certify pursuant to Attachment No. 13 hereof the information provided on the Proposed Transferee's Certificate pursuant to direction on that Certificate. Developer or subsequent owner shall be entitled to rely on the information on the Proposed Transferee's Certificate and attachments thereto in making the determination required by this subsection 5(b) unless the Developer or subsequent owner has knowledge of, or a reasonable basis for belief as to the inaccuracy or falsehood of the Proposed Transferee's Certificate. G:\WPDOCS\AHA Building Horizons.wpd 7 (c) The Sales Price for the Restricted Unit shall not exceed the maximum price at which the Purchase Housing Cost to be paid by the Proposed Transferee would not exceed Affordable Housing Cost. The calculation of the Sales Price under this subsection is illustrated by example in Attachment No. 13 attached hereto. However, in determining Affordable Housing Cost, the family size of the Proposed Transferee shall be deemed to be persons in the case of a 1 bedroom, 3 persons for a 2 bedroom, 4 persons for a 3 bedroom, or 5 persons for a 4 bedroom Restricted Unit. If the actual family size of the Proposed Transferee is larger, then the actual family size shall be used. (d) Certificates from Parties. With respect to each sale of a Restricted Unit, Developer or subsequent owner shall submit to the Agency, not later than four (4) weeks prior to close of escrow on the sale of a Restricted Unit, a certificate that (I) the Developer or subsequent owner has made the affirmative determinations required by Section 4(a) above and (ii) the Sales Price conforms with Section 4(b) above. The Developer or subsequent owner shall concurrently submit to the Agency the Proposed Transferee's Certificate and all attachments thereto and all other documents or material with regard to information required by Sections 4(a) and/or (b) above, whether or not relied on by the Developer. Further, the Developer or subsequent owner and Proposed Transferee each shall certify in writing, in a form acceptable to the Agency, that the Transfer shall be closed in accordance with, and only with, the terms of the sales contract and other documents submitted to and approved by the Agency and that all consideration delivered by the Proposed Transferee to Developer or subsequent owner has been fully disclosed to the Agency. The written certificate shall also include a provision that, in the event a Transfer is made in violation of the terms of this Agreement or false or misleading statements are made in any documents or certificate submitted to the Agency for its approval of the Transfer, the Agency shall have the right to file an action at law or in equity to seek termination and/or rescission of the sales contract and/or declare the sale void, notwithstanding the fact that the Transfer may have closed and become final as between Developer or subsequent owner and its Transferee. In the event Developer for the initial transfer or subsequent owner for each following transfer fails to comply with Sections 4(a) or 4(b) above, any costs, liabilities or obligations incurred by the Developer or subsequent owner and its Transferee for the return of any monies paid or received or for any costs and legal expenses, shall be borne Jointly and severally by the Developer and its transferee and such parties shall hold the City and Agency harmless and reimburse their expenses, legal fees and costs for any action and City and/or Agency take in enforcing the terms of this Section (e) Execution of Promissoly Note and Second Deed of Trust. Notwithstanding anything to the contrary in this Agreement, at close of Escrow of the sale of the Housing Unit from the Developer to the Buyer, the Buyer shall execute a Buyer Promissory Note which shall be secured by a Second Deed of Trust. Said Second Deed of Trust shall be subordinate to any mortgage(s) obtained by the Owner for the purpose of securing funds to be applied to the Sales Price of the Housing Unit. the Buyer Promissory Note shall be non -interest bearing. The principal amount of the Promissory Note shall be an amount equal to the amount actually given as cash plus an Agency Equity Share Amount which becomes applicable only in the event that the Buyer is unable after good faith efforts to find an Eligible Person or Family to transfer the home at Affordable Housing Cost. In the event that the Buyer has provided the Agency with evidence of their good faith efforts then Agency may approve the sale to a nonqualified buyer and release the covenants by receiving in addition to the cash amount originally provided the additional Agency Equity Amount as provided under the terms of the Buyer Promissory Note. G:\WPDOCS\AHA Building Horizonsmpd 8 So long as the Transferee purchasing the Housing Unit from the Owner is an Eligible Person or Family and the Sale of the Housing Unit is made at a price which is not in excess of Affordable Housing Cost, the Transferee shall assume the obligations of the Owner under the Promissory Note and Second Deed of Trust to repay the Agency Equity pursuant to the Promissory Note by execution of an assumption agreement in the form set forth as Attachment No. _ of this Agreement, together with other written documentation satisfactory to the Agency, and Agency shall extend the due date of the Agency Equity pursuant to the Note Amount until the next Transfer of the Housing Unit by said Transferee. At such next Transfer, the Agency will again extend the due date of the Agency Equity pursuant to the Note Amount if the Sale or Transfer complies with the requirements of this Section. So long as each Transferee from the Owner and each subsequent Owner: (1) is an Eligible Person or Family, (2) acquires the Housing Unit at an Affordable Housing Cost, and (3) assumes the obligations of the predecessor Owner as aforesaid; then the Agency agrees to extend the due date of the Agency Equity pursuant to the Note Amount and the transferring Owner shall not be required to pay the Agency Equity potion of the Note Amount upon transfer of the Housing Unit. The Agency Equity payment requirement is intended as a penalty against the Owner, to capture a portion of the equity in the Restricted Property for the benefit of the Agency/Holder, in the event that the Owner makes a ale of the Restricted Property to a Buyer that is not an Eligible Person or Family. This equity recapture requirement is intended to be a cumulative remedy, together with all other remedies available to the Agency/Holder to compensate for the removal of the affordable housing covenants of the Grant Deed and this Agreement on the Housing Unit, to compensate the Agency for the administrative costs of operating the housing program of the Agency and to provide funds to the Agency to further assist low and moderate income persons in the provision of housing. In the event the equity recapture provisions of the Promissory Note are found by a court or administrative agency of competent jurisdiction to be in contravention of law or administrative regulation, the Applicable Percentage shall be reduced to the maximum percentage allowable by applicable law or administrative regulation, or may be otherwise modified by judicial decree or order so as to comply with applicable law. (f) Written Consent of Agency Required Before Transfer. During the Affordability Period the Restricted Property or the Restricted Unit, as the case may be, and any interest therein, shall not be conveyed by any Transfer except with the express written consent of the Agency, which consent shall be given only if the Transfer is consistent with the Agency's goal of creating, preserving, maintaining and protecting housing in the City of La Quinta for Eligible Persons and Families and shall be in accordance with the provisions of this subsection 5. This provision shall not prohibit the encumbering of title for the sole purpose of securing financing of the purchase price of the Restricted Unit. (g) Delivery of Documents. Upon the close of the proposed Transfer, the Owner and Transferee, as applicable, shall provide the Agency with a certified copy of the recorded Assumption Agreement, a copy of the final sales contract, settlement statement, escrow instructions, all certificates required by this subsection 5 and any other documents which the Agency may request. G:\WPDOCS\AHA Building Horizonsmpd 9 6. Covenants of Owner. The Owner of each Restricted Unit by acceptance of a deed to the Restricted Unit covenants and agrees that, at all times during the Affordability Period, its Restricted Unit will be continuously occupied by Owner as its principal residence, and shall not be rented, subleased, or subject to any other business arrangement, whereby consideration shall be paid by any occupant of a Restricted Unit to the Owner of the Restricted Unit; provided, if the Restricted Unit is occupied by an Eligible Person or Family, the family members whose income was considered in determining the eligibility of that family may make monetary contributions toward the Purchase Housing Costs of the Restricted Unit. Owner agrees that it shall not record or cause the recordation of any deed of trust (a "Further Encumbrance") securing a note having an original principal sum which, when added to the sum of the principal amount(s) of any notes secured by any deeds of trust against the Restricted Property as of the date of recordation of the Further Encumbrance, exceeds the fair market value of the Restricted Property. B. Use Restrictions. The Property shall be occupied and used as follows: 1. The single-family home on each Parcel ("Unit") shall be used only for private dwelling purposes and for no other purposes. The Units shall not be leased, subleased, rented or otherwise; rather, each Unit shall be the principal dwelling of the owner thereof and his family. 2. There shall be no structural alternation, construction or removal of any structure on any Parcel (other than repairs or rebuilding permitted herein) without the approval of the appropriate City departments or the Agency and in conformance with the City Code. C. Maintenance. The exterior areas of each Parcel shall be kept free of rubbish, debris and other unsightly or unsanitary materials. Each Owner shall have the affirmative obligation to prevent the occurrence on the Parcel owned by such Owner of what might be considered a fire hazard or a condition dangerous to the public health, safety and general welfare; or constitute an unsightly appearance or otherwise detract from the aesthetic and property values of neighboring properties. The following minimum performance standards for the maintenance of the Unit and landscaping on each Parcel shall be adhered to by each Owner. (1) Landscaping on the Property shall be absent of the following: (a) Lawns with grasses in excess of six (6) inches in height. (b) Untrimmed hedges. (c) Dying trees, shrubbery, lawns and other plant lift from lack of water or other necessary maintenance. (d) Trees and shrubbery grown uncontrolled without proper pruning. (e) Vegetation so overgrown as to be likely to harbor rats or vermin. G:\WPDOCS\AHA Building Horizons.wpd 10 (f) Dead, decayed or diseased trees, weeds and other vegetation. (g) Inoperative irrigation system(s). (2) Yard areas shall be maintained so as to be absent of the following: (a) Broken or discarded furniture, appliances and other household equipment stored in yard areas for periods exceeding one (1) week. (b) Packing boxes, lumber, trash, dirt and other debris stored in yards for unreasonable periods in areas visible from public property or neighboring properties. (3) No building, wall or fence may be left in an unmaintained condition so that any of the following exist: (a) Buildings abandoned, boarded up, partially destroyed or left unreasonably in a state or partial construction. (b) Unpainted buildings or buildings with peeling paint in such a condition as to i. Cause dry rot, warping and termite infestation; or ii. Constitute an unsightly appearance that detracts form the aesthetic or property values of neighboring properties. (c) Broken windows, constituting hazardous conditions and/or inviting trespassers and malicious mischief. (d) Damaged garage doors that may become inoperative or unsafe to operate. (e) Graffiti remaining on any portion of the property for a period exceeding ten (10) days. (f) Building interiors and exteriors shall be maintained to meet standards of similar residential property in the City of La Quinta. D. City's Right of Review and Enforcement. The City of La Quinta (the "City") and the Agency shall be made a party to this Declaration for the limited purpose as specified herein as follows: 1. Changes or amendments to this Declaration must be submitted for City/Agency review and approval. G:\WPDOCS\AHA Building Horizons.wpd I I 2. In the event of inaction by any Owner, the City and Agency are hereby granted expedient power to enforce all provisions of this Declaration including, but not limited to, the maintenance of the Improvements and all yards, buildings and landscaping areas within the Site. E. Miscellaneous Provisions. I . If any provision of this Declaration or portion thereof, or the application to any person or circumstances, shall to any extent be held invalid, inoperative or unenforceable, the remainder of this Declaration, or the application of such provision or portion thereof to any other persons or circumstances, shall not be affected thereby; it shall not be deemed that any such invalid provision affects the consideration for this Declaration; and each provision of this Declaration shall be valid and enforceable to the fullest extent permitted by law. 2. This Declaration shall be construed in accordance with the laws of the State of California. 3. This Declaration shall be binding upon and inure to the benefit of the successors and assigns of the Developer. 4. In the event action is instituted to enforce any o the provisions of this Declaration, the prevailing party in such action shall be entitled to recover fro the other party thereto as part of the judgment, reasonable attorney's fees and costs. F. The covenants and agreements established in this Declaration shall, without regard to technical classification and designation, be binding on each Owner and any successor in interest to the Property, or any part thereof (including each Parcel) for the benefit of and in favor of the Agency, its successor and assigns, and the City of la Quinta, and shall remain in effect for thirty (30) days from the date of the recording of this document). IN WITNESS WHEREOF, Owner has executed this instrument the day and year first hereinabove written. Dated: BUILDING HORIZONS, INC., a California corporation By: Its: "OWNER" G:\WPDOCS\AHA Building Horizons.wpd 12 EXHIBIT "A" TO ATTACHMENT NO. 5 THE PROPERTY (To Be Inserted) G:\WPDOCS\AHA Building Horizons.wpd 13 ATTACHMENT NO. 6 CERTIFICATE OF COMPLETION RECORDING REQUESTED BY ) AND WHEN RECORDED MAIL TO: ) LA QUINTA REDEVELOPMENT AGENCY ) 78-495 Calle Tampico ) La Quinta, California 92253 ) Attn: Executive Director ) Space above for Recorder's use. CERTIFICATE OF COMPLETION OF CONSTRUCTION AND DEVELOPMENT WHEREAS, by an Affordable Housing Agreement dated , 2001, by and between the LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic (hereinafter referred to as the "Agency") and BUILDING HORIZONS, INC. (collectively referred to as the "Developer"), the Developer has constructed improvements upon the real property (the "Site"), legally described on the attached Exhibit A, by constructing or causing to be constructed the improvements thereon according to the terms and conditions of said Affordable Housing Agreement (the "Agreement"); and WHEREAS, pursuant to Section 314 of the Agreement, promptly after completion of the Improvements the Agency shall furnish the Developer with a Certificate of Completion upon written request therefor by the Developer; and WHEREAS, the issuance by the Agency of the Certificate of Completion shall be conclusive evidence that the construction of the Improvements conforms to the Agreement; and WHEREAS, the Developer has requested that the Agency furnish the Developer with the Certificate of Completion; and WHEREAS, the Agency has conclusively determined that the construction of the Improvements conforms to the Agreement; NOW, THEREFORE: 1. As provided in the Agreement, the Agency does hereby certify that the construction of the Improvements required to be constructed on the Site described in Exhibit "A" hereto has been satisfactorily performed and completed, and that such development an construction work complies with the Agreement. G:\WPDOCS\AHA Building Horizons.wpd 2. This Certificate of Completion does not constitute evidence of compliance with or satisfaction of any obligation of the Developer to any holder of a mortgage or any insurer of a mortgage security money loaned to finance the work of construction if improvements and development of the Site, or any part hereof. This Certificate of Completion is not a notice of completion as referred to in Section 3093 of the California Civil Code. 3. This Certificate of Completion does not denote completion of any work required to be completed, other than on the Site. 4. The Deed of Trust recorded as document no. among the official land records of the County of Riverside and those Conditions, Covenants and Restrictions recorded as Document No. among the official land records of the County of Riverside shall remain in full force and effect. IN WITNESS WHEREOF, the Agency has executed this Certificate as of this day of , 2001. LA QUINTA REDEVELOPMENT AGENCY go THOMAS P. GENEVESE, Executive Director ATTEST: DUNE S. GREEK, Agency Secretary NOTARY G:\WPDOCS\AHA Building Horizons.wpd 2 ATTACHMENT NO. 7 MAXIMUM SALES PRICE ILLUSTRATION [This shall be prepared when Developer ready to start sales of units] G:\WPDOCS\AHA Building Horizons.wpd ATTACHMENT NO. 8 CERTIFICATE OF PROPOSED TRANSFEREE THIS FORM MUST BE DELIVERED TO THE OWNER BEFORE PROCEEDING WITH ANY TRANSFER OF THE PROPERTY. , 2001 The Proposed Transferee is Names: Current Address: Telephone Number: 2. The address of the property which the proposed transferee desires to purchase is (the "Property"), which was built in the La Quinta Redevelopment Project Area No. 1. 3. The proposed transferee represents, warrants and covenants the following: (a) The proposed transferee has never previously owned a single-family home. (b) The Property will be the principal residence of the proposed transferee. (c) The combined maximum annual income in the current year for all household members of the proposed transferee is $ (This figure must reflect income form all sources.) (d) The proposed transferee will deliver to the Agency a signed financial statement on a form acceptable to the Agency. 4. The proposed transferee's household consists of the following persons who will reside in the Property: G:\WPDOCS\AHA Building Horizonsmpd Adults (19 or over) - [name of each]: Minors (under IS) [name of each]: 5. The proposed transferee must submit to the Owner, on a form available from the Owner, an income certification so the Owner may determine if the proposed transferee is an Eligible Person or Family. 6. A true and correct copy of the proposed transferee's most recent tax return to the U.S. Internal Revenue Service is attached hereto. 7. The terms of the proposed transfer are: (a) Sales price of $ . This sales price is based on the maximum price at which the Purchase Housing Cost of the Proposed Transferee would not exceed Affordable Housing Cost. The calculation of the Sales Price under this section is illustrated in Attachment No. _ to the Agreement. IN ORDER TO ANSWER QUESTION 2(b) YOU MUST CALCULATE THE PROPOSED SALES PRICE BASED ON AFFORDABLE HOUSING COST, TAKING INTO CONSIDERATION ALL ITEMS LISTED IN THE DEFINITION OF PURCHASE HOUSING COST. (b) Price of any personal property being sold by the Owner to the proposed transferee: (if none, so state) (c) The price of $ to be paid by the proposed transferee for any services of Owner. (If no, so state). (d) All other amounts of money or other consideration, if any, concerning the Property or any other matter to be paid by the proposed transferee to the Owner: $ (if none, so state). (e) Sources of payment of sales price: Sales price $. Cash down payment $ G:\WPDOCS\AHA Building Horizons.wpd 2 I st loan $ 2nd loan $ Other (describe) $ Total $ (f) The financing obtained by the proposed transferee to purchase the Property is as follows: 1st Loan: Loan amount: $ Monthly payments: $ Interest rate If variable interest, describe adjustment mechanism: Due date: Balloon payment amount: Points and fees: Lender: Lender's address: 2nd Loan: Loan amount: $ Monthly payments: $ Interest rate If variable interest, describe adjustment mechanism: G:\WPDOCS\AHA Building Horizons.wpd 3 Due date: Balloon payment amount: Points and fees: Lender: Lender's address: Other Loans: (describe, if none, so state) (g) The monthly Purchase Housing Cost to be paid by the proposed transferee: 1 st loan monthly payment: 2nd loan monthly payment: Other loans monthly payment: Taxes and assessments (1/12 of yearly taxes and assessments): Insurance (1/12 of yearly premium): Homeowner's dues: Total: 8. A true and correct copy of the purchase and sale or other agreement between the owner and the proposed transferee is attached hereto. I declare under penalty of perjury under the laws of the State of California that the foregoing is true and correct. PROPOSED TRANSFEREE: Date Signature Print Name Street Address Telephone City State Zip Code G:\WPDOCS\AHA Building Horizons.wpd 4 Signature Print Name Developer's Certification Based on the Proposed Transferee's Certificate above, and all documents attached hereto, Developer hereby certifies that: (1) Proposed Transferee is an Eligible Person or Family; and (2) The monthly Purchase Housing Cost to be paid by the Proposed Transferee shall not exceed the monthly Affordable Housing Cost. [Capitalized terms used above are defined in the Agreement to which this certificate is attached.] OWNER: [Name] Date: G:\WPDOCS\AHA Building Horizons.wpd 5 ATTACHMENT NO. 9 NOTICE OF INTENT TO TRANSFER NOTICE OF INTENT TO TRANSFER MUST BE DELIVERED TO THE LA QUINTA REDEVELOPMENT AGENCY PRIOR TO PROCEEDING WITH ANY TRANSFER OF THE PROPERTY. From: To: La Quinta Redevelopment Agency c/o City of La Quinta Housing Department La Quinta, CA 92253 Attn: Development Officer Redevelopment Project Area [NO La Quinta, CA (the "Property") (street address) ("Owner") Owner desires to [sell, convey, transfer by inheritance or devise, lease, gift, otherwise transfer] (circle appropriate words) the Property. If the Agency has a program to help locate an Eligible Family, does the Owner want the Agency to help look for an Eligible Person or Family to buy the Property? Yes No Date: Date: Signature of Owner Day time telephone of Owner Signature of Owner L-) Day time telephone of Owner G:\WPDOCS\AHA Building Horizons.wpd ATTACHMENT NO. 10 REQUEST FOR APPROVAL OF PROPOSED TRANSFEREE THIS FORM MUST BE DELIVERED TO THE LA QUINTA REDEVELOPMENT AGENCY BEFORE PROCEEDING WITH ANY TRANSFER OF THE PROPERTY 2001 La Quinta Redevelopment Agency c/o City of La Quinta 78-495 Calle Tampico La Quinta, CA 92253 Attn: Development Officer Redevelopment Project Area Re: Request for Approval of Proposed Transferee To Whom It May Concern: The undersigned is the owner of real property in La Quinta, located at _(the "Property"), which was built within the Redevelopment Project Area. The Owner now desires to transfer the Property and by this letter is requesting the City of La Quinta to approve the proposed transferee. The Proposed Transferee is Names: Current Address: Telephone Number: G:\WPDOCS\AHA Building Horizons.wpd 2. The terms of the proposed transfer are (a) Sales price of $ . This sales price is based on the lesser of (i) Fair market value; or The maximum price at which the Purchase Housing Cost of the Proposed Transferee would not exceed Affordable Housing Cost. The calculation of the Sales Price under this subsection (ii) is illustrated in Attachment No. to the Agreement. IN ORDER TO ANSWER QUESTION 2(b) YOU MUST CALCULATE THE PROPOSED SALES PRICE BASED ON AFFORDABLE HOUSING COST, TAKING INTO CONSIDERATION ALL ITEMS LISTED IN THE DEFINITION OF PURCHASE HOUSING COST. (b) ill Price of any personal property being sold by the Owner to the proposed transferee: (If none, so state) (c) The price of $ to be paid by the proposed transferee for any services of Owner. (If none, so state). (d) All other amounts of money or other consideration, if any, concerning the Property or any other matter to be paid by the proposed transferee to the Owner: $ (if none, so state). (e) Sources of payment of sales price: Sales price $ Cash down payment $ 1 st loan $ 2nd loan $ Other (describe) $ Total $ (f) The financing obtained by the proposed transferee to purchase the Property is as follows: G:\WPDOCS\AHA Building Horizonsmpd 2 I st Loan: Loan amount: $ Monthly payments: $ Interest rate If variable interest, describe adjustment mechanism: Due date: Balloon payment amount: Points and fees: Lender: Lender's address: 2nd Loan: Loan amount: $ Monthly payments: $. Interest rate If variable interest, describe adjustment mechanism: Due date: Balloon payment amount: Points and fees: Lender: Lender's address: G:\WPDOCS\AHA Building Horizons.wpd 3 Other Loans: (describe, if none, so state) (g) 3 The monthly Purchase Housing Cost to be paid by the proposed transferee: I st loan monthly payment: $ 2nd loan monthly payment: $ Other loans monthly payment: $ Taxes and assessments (1/12 of yearly taxes and assessments): $ Insurance (1/12 of yearly premium): $ Homeowner's dues: $ Total: $ The proposed transferee represents, warrants and covenants the following: (a) The Property will be the principal residence of the proposed transferee. (b) The combined maximum annual income for all household members of the proposed transferee is $ . (This figure must include al sources of income). (c) The proposed transferee will deliver to the Agency a signed financial statement on a form acceptable to the Agency. 4. The proposed transferee's household consists of the following persons who will reside in the Property: Adults (18 or over) - [name of each]: G:\WPDOCS\AHA Building Horizons.wpd 4 Minors (under 18) [name of each]: 5. The proposed transferee must submit to the Owner, on a form available from the Owner, an income certification so the Owner may determine if the proposed transferee is an Eligible Person or Family. 6. A true and correct copy of the proposed transferee's most recent tax return to the U.S. Internal Revenue Service is attached hereto. 7. A true and correct copy of the purchase and sale or other agreement between the owner and the proposed transferee is attached hereto. I declare under penalty of perjury under the laws of the State of California that the foregoing is true and correct. OWNER: Date Signature Print Name Street Address Telephone City State Zip Code Signature Print Name G:\WPDOCS\AHA Building Horizons.wpd 5 PROPOSED TRANSFEREE: Date Signature Print Name Street Address Telephone City State Zip Code Signature Print Name G:\WPDOCS\AHA Building Horizons.wpd ATTACHMENT NO. 11 RECORDING REQUESTED BY ) AND WHEN RECORDED MAIL TO: ) LA QUINTA REDEVELOPMENT AGENCY ) 78-495 Calle Tampico ) La Quinta, California 92253 ) Space above for recorder. ASSUMPTION AGREEMENT This Assumption Agreement is entered into by: The La Quinta Redevelopment Agency ("Agency") Date of Agreement: FACTS ("Selling Owners") "Buying Owners") A. Selling Owners are all of the owners of property commonly known as , La Quinta, California (the "Property") and more particularly described in Exhibit A attached hereto and incorporated herein by reference. B. The Property is subject to the Affordable Housing Agreement between the Agency and Building Horizons, Inc., a California nonprofit public benefit corporation, dated as of (the "Agreement", a copy of which is on file with the Agency as a public record and is incorporated herein by reference, the Grant Deed recorded at Book , Page Series M of the official land records of Riverside County (the "Grant Deed"), and that certain Second Deed of Trust recorded at Book , Page _, Series No. of the official land records of Riverside County (the "Deed of Trust", and those Conditions, Covenants and Restrictions, recorded at Book , Page , Series No. _ of the Official Records of Riverside County (the "Restriction"). The Agreement, the Deed of Trust, and the Restriction restricts the sales price that can be charged for the Property and the persons to whom the Property can be sold. O:\WPDOCS\AHA Building Horizons.wpd C. Buying Owners desire to purchase the Property. Buying Owners understand that the Restriction will limit the purchase price they can receive when they sell the Property and will limit the people to whom they can sell the Property. D. Buying Owners are able to purchase the Property because the purchase price of the Property may be less than other similar property without Restrictions. For this reason Buying Owners desire to purchase the Property. E. In order to purchase the Property, Buying Owners must assume all obligations of the Owner under the Agreement, the Deed of Trust, and the Restriction and must agree to bound by at provisions in the Restriction. NOW, THEREFORE, Buying Owners agree as follows: I. Acknowledgment of Limitation on Future Price. BUYING OWNERS UNDERSTAND THAT WHEN BUYING OWNERS DESIRE TO SELL OR TRANSFER THE PROPERTY THAT THE ALE PRICE CAN BE DETERMINED ONLY AT THE TIME OF THE PROPOSED TRANSFER TAKING INTO CONSIDERATION INTEREST RATES, PROPERTY TAXES AND OTHER FACTS THAT CANNOT BE PREDICTED ACCURATELY AND THAT THE SALES PRICE MAY NOT INCREASE OR DECREASE IN THE SAME MANNER AS OTHER SIMILAR PROPERTY THAT IS NOT ENCUMBERED WITH THE AGREEMENT, THE DEED OF TRUST, AND THE RESTRICTION, BUYING OWNERS ALSO ACKNOWLEDGE THAT ALL TIMES IN SETTING THE SALES PRICE THE PRIMARY OBJECTIVE OF THE AGENCY AND THE RESTRICTION IS TO PROVIDE HOUSING TO ELIGIBLE PERSONS OR FAMILIES AT AFFORDABLE HOUSING COST. THE SALE PRICE, WHEN BUYING OWNERS DECIDE TO SELL THE PROPERTY, WILL LIKELY BE LESS THAN OTHER SIMILAR PROPERTIES WHICH HAVE NO RESTRICTIONS. Buyer's Initials 2. Understand the Agreement the Deed of Trust, and the Restriction. Buying Owners represent that they have read the Restriction and fully understand the Agreement, the Deed of Trust, and the Restriction. 3. Owner Occupancy. Buying Owners agree that they will occupy the Property as their primary residence and that they will comply with all provisions of the Agreement, the Deed of Trust and the Restriction relating to the occupancy of the Property. 4. Assumption of Obligations Under the Agreement the Deed of Trust. and the Restriction. As a material consideration to the Agency in approving Buying Owners, Buying Owners hereby assume al obligations of the Owner (as defined in the Agreement, the Deed of Trust, and the Restriction), related to the Property set forth in the Agreement, the Deed of Trust, and the Restriction. Buying Owners agree to be bound by all duties and obligations of the Owner in the Agreement, the Deed of Trust, and the Restriction and agree to comply with all provisions thereof for the term of the Agreement, the Deed of Trust and the Restriction. Buying Owners agree as set forth above in order to have the benefit of the restricted purchase price for which the Property is offered. G:\WPDOCS\AHA Building Horizonsmpd 2 5. Remedies. Upon the occurrence of an Event of Default, the Agency shall have the following remedies: (a) Specific Performance. The Agency shall have the right to bring an action for specific performance of this Agreement to require the Developer to comply whit the terms and provisions of this Agreement. Developer acknowledges that it is the intention of Developer and the Agency that these provisions be specifically enforceable to maintain the supply of affordable housing for Eligible Persons and Families. (b) Application to Court. The Agency may apply to a court of competent jurisdiction for an injunction prohibiting a proposed Transfer in violation of this Agreement, for a declaration that a Transfer is void or for any other such relief as may be appropriate. (c) All Remedies Available and Cumulative. Upon the occurrence of an Event of Default, the Agency shall have the right to exercise all the rights and remedies, and to maintain any action at law or suits in equity or other real property proceedings, to enforce the provisions of this Assumption Agreement, the Agreement, the Restriction and the Deed of Trust, and to cure any Event of Default or violation hereof. No delay in enforcing the provisions thereof as to any Event of Default or violation shall impair, damage or waive the right of the Agency to enforce the provisions of this Agreement in the future or any continuing or new breach or violation of any of the covenants or restrictions contained in this Assumption Agreement, the Agreement, the Restrictions, and the Deed of Trust. All rights and remedies, including without limitation those set forth in Section (a) above, of any party legally entitled to enforce this Assumption Agreement, the Agreement, the Restrictions, and the Deed of Trust, shall be cumulative and the exercise of any such right or remedy shall not impair or prejudice and shall not be a waiver of the right to exercise any other such right and remedy. IN WITNESS WHEREOF, the parties have executed this Assumption Agreement to be effective on the date of recordation of a deed conveying the Property to Buying Owners. Date Date Buying Owner Buying Owner Based on information provided by Selling Owners and Buying Owners and on Buying Owners execution hereof, the La Quinta Redevelopment Agency hereby approves Buying Owners to purchase the Property subject to this Agreement. Date LA QUINTA REDEVELOPMENT AGENCY C Name: Title: G:\WPDOCS\AHA Building Horizonsmpd 3 RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: La Quinta Redevelopment Agency 78-495 Calle Tampico La Quinta, California 92253 Attention: Executive Director DOC # 2001--543915 12/27/2001 08:00A Fee:NC Page 1 of 13 Recorded in Official Records County of Riverside Gary L. Orso Assessor, County Clerk & Recorder M S U PAGE SIZE DA PCOR NOCOR SMF MISC. i3 I 1 A R L COPY LONG REFUND NCHG EXAM This document is exempt from payment of a recording fee pursuant to Government Code Section 6103. LA DEVELOPMENT G AS y� Exe tive Director �. e� ove.s z Dated: Dyt A, � ) q , 2001 DEED OF TRUST AND ASSIGNMENT OF RENTS (Riverside County) THIS DEED OF TRUST AND ASSIGNMENT OF RENTS ("Deed of Trust") is made as of the)cya— day of JV(', WbW , 2001 by and between Building Horizons, Inc., a California nonprofit public benefit corporation, (the "Trustor"), whose address is P.O. Drawer 10320, Indio, California 92002, First American Title Insurance Company (the "Trustee"), whose address is 3625 14th Street, Riverside, California 92501, and the La Quinta Redevelopment Agency (the "Beneficiary"), whose address is 78- 495 Calle Tampico, La Quinta, California 92253. FOR GOOD AND VALUABLE CONSIDERATION, including the trust herein created, the receipt of which is hereby acknowledged, Trustor hereby irrevocably grants, transfers, conveys and assigns to Trustee, IN TRUST, WITH POWER OF SALE, for the benefit and security of Beneficiary, under and subject to the terms and conditions hereinafter set forth, the property located in the County of Riverside, State of California, that is described in Exhibit "A", attached hereto and by this reference incorporated herein (the "Property"). TOGETHER WITH all rents, issues, profits, royalties, income and other benefits derived from the Property (collectively, the "rents"), provided that so long as Trustor is not in default hereunder, it shall be permitted to collect rents and operate the Project (as defined in the Agreement), in accordance with the requirements of that certain 2001/2002 Affordable Housing Agreement entered into between Building Horizons, Inc., (the "Developer") and the Beneficiary as of April 9, 1998 (the "Agreement"), which Agreement is on file with the Beneficiary as a public record and is incorporated by reference herein; TOGETHER WITH all interests, estates or other claims, both in law and in equity which Trustor now has or may hereafter acquire in the Property and the rents; TOGETHER WITH all easements, rights -of -way and rights used in connection therewith or as a means of access thereto, including, without limiting the generality of the foregoing, all tenements, hereditaments and appurtenances thereof and thereto; laquinta/badW 1 11 / 15/2001 TOGETHER WITH any and all buildings and improvements now or hereafter erected upon the Property (including, in each instance, improvements, restorations, replacements, repairs, additions, accessions or substitutions thereto or therefor); but exclusive of all fixtures, attachments, appliances, furnishings, equipment and the machinery (whether fixed or movable); TOGETHER WITH all leasehold estate, right, title and interest of Trustor in and to all leases or subleases covering the Property or any portion thereof now or hereafter existing or entered into, and all right, title and interest of Trustor thereunder, including, without limitation, all cash or security deposits, advance rentals, and deposits or payments of similar nature; TOGETHER WITH all right, title and interest of Trustor in and to all options to purchase or lease the Property or any portion thereof or interest therein, and any greater estate in the Property owned or hereafter acquired; TOGETHER WITH all right, title and interest of Trustor, now owned or hereafter acquired, in and to any land lying within the right-of-way of any street, open or proposed, adjoining the Property, and any and all sidewalks, alleys and strips and gores of land adjacent to or used in connection with the Property; TOGETHER WITH all the estate, interest, right, title, other claim or demand, of every nature, in and to such property, including the Property, both in law and in equity, including, but not limited to, all deposits made with or other security given by Trustor to utility companies, the proceeds from any or all of such property, including the Property, claims or demands with respect to the proceeds of insurance in effect with respect thereto, which Trustor now has or may hereafter acquire, any and all awards made for the taking by eminent domain or by any proceeding or purchase in lieu thereof of the whole or any part of such property, including without limitation, any awards resulting from a change of grade of streets and awards for severance damages; All of the foregoing, together with the Property, is herein referred to as the "Security". FOR THE PURPOSE OF SECURING: (a) Payment of the sum of the "Note Amount" according to the "Developer Promissory Note" and "Construction Promissory Note" or as set forth in the "Agreement" as defined herein; (b) Payment of any sums advanced by Beneficiary to protect the Security pursuant to the terms and provisions of this Deed of Trust following a breach of Trustor's obligation to advance said sums and the expiration of any applicable cure period and upon five (5) business days notice to the Trustor, with interest thereon as provided herein; (c) Payment of such additional sums and interest thereon which may hereafter be loaned to Trustor, or its successors or assignees, by Beneficiary, when evidenced by a promissory note or notes or other documents reciting that they are secured by this Deed of Trust; and (d) Performance of every obligation, covenant or agreement of Trustor contained herein or the Agreement (and any amendments thereto). 111111111111111111111111111111111111111111111111111111 �Y��'=a;'�,'eBP laquinta/badot2 2 11/15/2001 ARTICLE 1 DEFINITIONS 1. "Agreement" means that certain Affordable Housing Agreement entered into by the Developer and the Beneficiary hereof, dated April 9, 2001; said Agreement (a copy of which is on file with the Beneficiary at the address stated above, and including all of its attachments) is incorporated herein by reference. 2. "Developer" and "Improvements" are defined in the Agreement. 3. "Expiration Date" means the expiration date of the Redevelopment Plan. 4. "Mortgage" means any permanent or long-term loan, or any other financing device (including without limitation deeds of trust) the proceeds of which are used in the purchase of Improvements, which loan is secured by a security financing interest in the Trustor's interest in the Improvements; 5. "Property" means the site together with all additions, improvements, restorations and replacements thereof. 6. "Standards" means those standards of construction and operation characteristic of single family residential housing of size, character, and quality similar to the Property. 7. "Trustor" means Building Horizons, Inc., a California nonprofit public benefit corporation, and each of its transferees and successors in interest. Where an obligation is created herein binding upon Trustor, the obligation shall also apply to and bind any transferees or successors in interest. Where the terms of this Deed of Trust have the effect of creating an obligation of the Trustor and a transferee, such obligation shall be deemed to be a joint and several obligation of the Trustor and such transferee. Unless the context clearly otherwise requires, any capitalized term used herein and not defined herein shall have the meaning given to it under the Agreement (and any amendments thereto). ARTICLE II CERTIFICATE OF COMPLETION UPON PAYMENT; GRANTING OF EASEMENTS Section 2.1 Maintenance and Modification of the Property by Trustor. The Trustor agrees that at all times prior to the Expiration Date, the Trustor will, at the Trustor's own expense, maintain, preserve and keep the Property or cause the Property to be maintained, preserved, kept in a condition substantially similar to other single family housing projects similar in size, character, and quality to the Property consisting only of those uses allowed by the Agreement. The Trustor will from time to time make or cause to be made all repairs, replacements and renewals deemed proper and necessary by it. The Beneficiary shall have no responsibility in any of these matters or for the making of improvements or additions to the Property. Section 2.2 Granting of Easements. Trustor may grant easements, licenses, rights -of -way or other similar rights or privileges in the nature of easements with respect to any property or rights included in the Security with the prior written approval of the Beneficiary, which approval shall not be unreasonably withheld. 2001-643915 i r 7r2e191 es ee8 32 of1� laquinta/badoO 3 11 / 15/2001 F.MWOMAH TAXES AND INSURANCE; ADVANCES Section 3.1 Taxes, Other Governmental Charges and Utility Charges. Trustor shall pay, or cause to be paid, prior to delinquency, all taxes, assessments, charges and levies imposed by any public authority or utility company which are or may become a lien affecting the Security or any part thereof; provided, however, that Trustor shall not be required to pay and discharge any such tax, assessment, charge or levy so long as the legality thereof shall be promptly and actively contested in good faith and by appropriate proceedings. With respect to special assessments or other similar governmental charges, Trustor shall pay such amount in whole or in installments over a period of years. In the event that Trustor shall fail to pay any of the foregoing items required by this Section to be paid by Trustor, Beneficiary may (but shall be under no obligation to) pay the same, after the Beneficiary has notified the Trustor of such failure to pay and the Trustor fails to fully pay any such item within seven (7) business days of the earlier of the receipt or mailing of such notice. Any amount so advanced therefor by Beneficiary, together with interest thereon from the date of such advance at the maximum rate permitted under Section 1(2) of Article XV of the California Constitution, shall become an additional obligation of Trustor to the Beneficiary and shall be secured hereby, and Trustor hereby agrees to pay all such amounts. Section 3.2 Provisions Respecting Insurance. (a) Trustor agrees to provide insurance covering one hundred percent (100%) of the replacement cost of all insurable items within the Property in the event of fire, lightning, debris removal, windstorm, flood, vandalism, malicious mischief, theft, mysterious disappearance and hazards, casualties and contingencies as are normally and usually covered by all-risk policies in effect in the locality where the Property is situated. (b) Trustor agrees to carry or cause to be carried: (i) comprehensive general liability insurance with respect to the Property with limits of not less than $100,000 for each occurrence combined single - limit bodily injury and property damage. 0 (c) All such insurance policies and coverage's (i) shall be maintained at Trustor's sole cost ODM and expense so long as any part of the amounts secured by this Deed of Trust have not been paid, (ii) 4 shall be with insurers of recognized responsibility, and in form and substance satisfactory to the C Beneficiary, (iii) shall name Beneficiary as additional insured, and (iv) shall contain a provision to the % effect that the insured shall not cancel the policy or modify it materially and adversely to the interests of Beneficiary without first giving at least thirty (30) days' prior written notice thereof. Certificates of insurance for all of the above insurance policies, showing the same to be in full force and effect, shall be delivered to the Beneficiary upon demand therefor at any time prior to the Expiration Date. Section 3.3 Advances. In the event the Trustor shall fail to maintain the full insurance coverage required by this Deed of Trust or shall fail to keep the Property in good repair and operating condition, the Beneficiary may (but shall be under no obligation to) take out the required policies of insurance and pay the premium on the same or may make repairs or replacements as are necessary and provide for payment thereof; and, provided that the Beneficiary provides five (5) business days' notice to the Trustor all amounts so advanced therefor by the Beneficiary shall become an additional obligation of the Trustor to the Beneficiary (together with interest as set forth below) and shall be secured thereby, which amounts the Trustor agrees to pay on demand of the Beneficiary, and if not so paid, shall bear interest from the date of the advance at the maximum rate permitted by Section 1(2) of Article XV of the California Constitution. laquinta/badoO 4 11 / 15/2001 ARTICLE IV DAMAGE, DESTRUCTION OR CONDEMNATION Section 4.1 Damage and Destruction. If, prior to the Expiration Date, the Property or any portion thereof is destroyed (in whole or in part) or is damaged by fire or other casualty, the Trustor shall (a) cause any insurance proceeds arising from insurance referred to in Section 3.2 hereof and any other coverage acquired by the Trustor to be used to promptly rebuild and replace the Property, and (b) repair and replace the Property as necessary to bring the Property into conformity with the Standards; provided that such covenants shall be subordinated to the provisions of all senior obligations to which this Deed of Trust is subordinate. Section 4.2 Condemnation. Subject to the provisions of senior obligations to which this Deed of Trust is subordinate, if title to or any interest in or the temporary use of the Property or any part thereof shall be taken under the exercise of the power of eminent domain by any governmental body or by any persons, firm or corporation acting under governmental authority, including any proceeding or purchase in lieu thereof, the proceeds as a result of such taking shall be paid as provided by the law of the State of California to all persons or entities as their interests appear of record. ARTICLE V REPRESENTATIONS, COVENANTS AND WARRANTIES OF THE TRUSTOR Section 5.1 Defense of Title. The Trustor covenants that it is lawfully seized and possessed of title in fee simple interest to the Property, that it has good right to sell, convey or otherwise transfer or encumber the same, and that the Trustor, for itself and its successors and assigns, warrants and will forever defend the right and title to the foregoing described and conveyed property unto the Beneficiary, its successors and assigns, against the claims of all persons whomsoever, excepting only encumbrances approved by the Beneficiary. Section 5.2 Inspection of Property. The Trustor covenants and agrees that at any and all reasonable times and upon reasonable notice, the Beneficiary and its duly authorized agents, attorneys, experts, engineers, accountants and representatives, shall have the right, without payment of charges or U-, 0 fees, to inspect the Property. OCn 0— 0 ARTICLE VI iy CU un CUCU CU AGREEMENTS AFFECTING THE PROPERTY; FURTHER ASSURANCES Section 6.1 Other Agreements Affecting Property. The Trustor shall duly and punctually perform all terms, covenants, conditions and agreements binding on it under the Agreement or any other agreement of any nature whatsoever now or hereafter involving or affecting the Property or any part thereof. Section 6.2 Acceleration of Maturity. If Trustor shall sell, or alienate the Property, or any part thereof, or any interest therein, or shall be divested of Trustor's title or any interest therein in any manner, whether voluntarily or involuntarily, without the prior written consent of Beneficiary, or if default is made in the payment of any principal payable under the secured Note or in the performance of the covenants or agreements hereof, or any of them, Beneficiary shall have the right at its option to declare any indebtedness or obligations secured hereby, irrespective of the maturity date specified in the Note evidencing the same, immediately due and payable. laquinta/badW 5 11/15/2001 Section 6.3 Further Assurances; After Acquired Property. At any time, and from time to time, upon request by the Beneficiary, the Trustor shall make, execute and deliver, or cause to be made, executed and delivered, to the Beneficiary and, where appropriate, cause to be recorded and/or filed, and from time to time thereafter to be recorded and/or filed, and from time to time thereafter to be re- recorded and/or re -filed, and in such offices and places as shall be deemed desirable by the Beneficiary, any and all such other and further deeds of trust, security agreements, financing statements respecting personal property, instruments of further assurance, certificates and other documents as may, in the opinion of the Beneficiary, be necessary or desirable in order to effectuate, complete or perfect, or to continue and preserve, (a) the obligations of the Trustor under this Deed of Trust, and (b) the lien of this Deed of Trust as a lien prior to all liens except those obligations which shall be senior obligations pursuant to the provisions of this Deed of Trust. Upon any failure by the Trustor to do so, the Beneficiary may make, execute, record, file, re-record and/or re -file any and all such deeds of trust, security agreements, instruments, certificates and documents for and in the name of the Trustor, and the Trustor hereby irrevocable appoints the Beneficiary the agent and attorney -in -fact of the Trustor to do so. The lien hereof shall automatically attach, without further act, to all after -acquired property deemed to be part of the Security as defined herein. Section 6.4 Agreement to Pay Attorney's Fees and Expenses. In the event of an Event of Default hereunder, and if the Beneficiary should employ attorneys or incur other expenses for the collection of amounts due or the enforcement of performance or observance of an obligation or agreement on the part of the Trustor in this Deed of Trust, the Trustor agrees that it will, on demand therefor, pay to the Beneficiary the reasonable fees of such attorneys and such other reasonable expenses so incurred by the Beneficiary; and any such amounts paid by the Beneficiary shall bear interest from the date such expenses are incurred at the maximum rate permitted by Section 1(2) of Article XV of the California Constitution. Section 6.5 Subrogation; Payment of Claims. Provided that the Beneficiary gives notice of at least five (5) business days to the Trustor, the Beneficiary shall be subrogated to the claims and liens of all parties whose claims or liens are discharged or paid by the Beneficiary pursuant to the provisions hereof. If permitted in the Mortgage, the Beneficiary shall have the right to pay and discharge the obligations secured by the Mortgage. Section 6.6 Transfer. No sale, transfer, lease, pledge, encumbrance, creation of a security interest in or other hypothecation of the Security shall relieve or release the Trustor from primary liability under this Deed of Trust or the Agreement. ARTICLE VII EVENTS OF DEFAULT AND REMEDIES Section 7.1 Events of Default Defined. The occurrence of any failure of the Trustor to perform any act or promise of the Trustor made under this Deed of Trust and the continuation of said failure for a period of sixty (60) business days after written notice specifying such failure and requesting that it be remedied shall have been given to Trustor from the Beneficiary, and shall be an Event of Default under this Deed of Trust. ul 11 11 11 1l�l 11 l�l� lulll� 11 i„OBsae eaA laquinta/badoO 6 11 / 15/2001 Section 7.2 The Beneficiary's Right to Enter and Take Possession. If an Event of Default shall have occurred and be continuing, the Beneficiary may: (a) Either in person or by agent, with or without bringing any action or proceeding, or by a receiver appointed by a court, and without regard to the adequacy of its security, enter upon the Property and take possession thereof (or any part thereof) and of any of the Security, in its own name or in the name of Trustee, and do any acts which it deems necessary or desirable to preserve the value, marketability or rentability of the Property, or part thereof or interest therein, increase the income therefrom or protect the Security hereof and, with or without taking possession of the Property, sue for or otherwise collect the rents, issues and profits thereof, including those past due and unpaid, and apply the same, less costs and expenses of operation and collection, including attorneys' fees, upon any amounts owed to Beneficiary, all in such order as Beneficiary may determine. The entering upon and taking possession of the 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 in response to such Default or pursuant to such notice of Default and, notwithstanding the continuance in possession of the Property or the collection, receipt and application of rents, issues or profits, Beneficiary shall be entitled to exercise every right provided for in this Deed of Trust, the Agreement or by law upon occurrence of any Event of Default, including the right to exercise the power of sale. A copy of any Notice of Default and a copy of any Notice of Sale hereunder be mailed to Trustor at its address herein given; (b) Commence an action to foreclose this Deed of Trust as a mortgage, appoint a receiver, or specifically enforce any of the covenants hereof; (c) Deliver to Trustee a written declaration of default and demand for sale, and a written notice of default and election to cause Trustor's interest in the Property to be sold, which notice Trustee or Beneficiary shall cause to be duly filed for record in the Official Records of the County in which the Property is located; or (d) Exercise all other rights and remedies provided herein, in the instruments by which the Trustor acquires title to the Property, including any Security, or in any other document or agreement now or hereafter evidencing, creating or securing all or any portion of the obligations secured hereby, or provided by law. 0 0 ay 0- Section 7.4 Foreclosure by Power of Sale. Should the Beneficiary elect to foreclose by ICE 8 o exercise of the power of sale herein contained, the Beneficiary shall notify Trustee and shall deposit with IMCU % Trustee this Deed of Trust which is secured hereby and such receipts and evidence of any expenditures CUCU made that are additionally secured hereby as Trustee may require. CU C. (a) Upon receipt of such notice from the Beneficiary, Trustee shall cause to be recorded, published and delivered to Trustor such Notice of Default and Election to Sell as then required by law and by this Deed of Trust. Trustee shall, without demand on Trustor, after lapse of such time as may then be required by law and after recordation of such Notice of Default and after Notice of Sale having been given as required by law, sell the Property, at the time and place of sale fixed by it in said Notice of Sale, either as a whole or in separate lots or parcels or items as Trustee shall deem expedient 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 the time of sale. Trustee shall deliver to such purchaser or purchasers thereof its good and sufficient deed or deeds conveying the Property so sold, but without any covenant or warranty, expressed or implied. The recitals in such deed of any matters or facts shall be conclusive proof of the truthfulness thereof. Any person, including, without limitation, Trustor, Trustee or Beneficiary, may purchase at such sale, and Trustor hereby covenants to warrant and defend the title of such purchaser or purchasers. laquinta/badoO 7 11/15/2001 (b) After deducting all reasonable costs, fees and expenses of Trustee, including costs of evidence of title in connection with such sale, Trustee shall apply the proceeds of sale to payment of all sums then secured hereby and the remainder, if any, to the person or persons legally entitled thereto. (c) Trustee may postpone sale of all or any portion of the Property by public announcement at such time and place of sale, and from time to time thereafter, and without further notice make such sale at the time fixed by the last postponement, or may, in its discretion, give a new notice of sale. Section 7.5 Receiver. If an Event of Default shall have occurred and be continuing, Beneficiary, as a matter of right and without further notice of Trustor or anyone claiming under Security, and without regard to the then value of the Property or the interest of Trustor therein, shall have the right to apply to any court having jurisdiction to appoint a receiver or receivers of the Security (or a part thereof), and Trustor hereby irrevocably consents to such appointment and waives further notice of any application therefor. Any such receiver or receivers shall have all the powers and duties of receivers in like or similar cases, and all the powers and duties of Beneficiary in case of entry as provided herein, and shall continue as such and exercise all such powers until the date of confirmation of sale of the Property, unless such receivership is sooner terminated. Section 7.6 Remedies Cumulative. No right, power or remedy conferred upon or reserved to the Beneficiary by this Deed of Trust is intended to be exclusive of any other right, power or remedy, but each and every such right, power and remedy shall be cumulative and concurrent and shall be in addition to any other right, power and remedy given hereunder or now or hereafter existing at law or in equity. Section 7.7 No Waiver. (a) No delay or omission of the Beneficiary to exercise any right, power or remedy accruing upon any Default shall exhaust or impair any such right, power or remedy, or shall be construed to be a waiver of any such Default or acquiescence therein; and every right, power and remedy given by this Deed of Trust to the Beneficiary may be exercised from time to time and as often as may be deemed expeditious by the Beneficiary. No consent or waiver, expressed or implied, by the Beneficiary to or of any breach by the Trustor in the performance of the obligations hereunder shall be deemed or construed to be a consent to or waiver of obligations of the Trustor hereunder. Failure on the part of the Beneficiary to complain of any act or failure to act or to declare an Event of Default, irrespective of how long such 0 failure continues, shall not constitute a waiver by the Beneficiary of its right hereunder or impair any ODC9 rights, powers or remedies consequent on any breach or Default by the Trustor. {O0 4 % qp Zo N (b) If the Beneficiary (i) takes other or additional security, (ii) waives or does not exercise any "' CU right granted herein or in the Agreement, (iii) certifies completion of any part of the Security from the lien of this Deed of Trust, or otherwise changes any of the terms, covenants, conditions or agreements of this Deed of Trust or the Agreement, (iv) consents to the filing of any map, plat or replat affecting the Security, (v) consents to the granting of any easement or other right affecting the Security, or (vi) makes or consents to any agreement subordinating the lien hereof, any such act or omission shall not discharge, modify, change or affect the original liability under this Deed of Trust, or any other obligation of the Trustor or any subsequent purchaser of the Security or any part thereof, or any maker, co-signer, endorser, surety or guarantor; nor shall any such act or omission preclude the Beneficiary from exercising any right, power or privilege herein granted or intended to be granted in the event of any Default, nor, except as otherwise expressly provided in an instrument or instruments executed by the Beneficiary shall the lien of this Deed of Trust be altered thereby. In the event of the sale or transfer by operation of law or otherwise of all or any part of the Property, the Beneficiary, without notice, is hereby authorized and empowered to deal with any such vendee or transferee with reference to the Security (or a part thereof) or the indebtedness secured hereby, or with reference to any of the terms, covenants, conditions or agreement hereof, as fully laquinta/badot2 8 11/15/2001 and to the same extent as it might deal with the Trustor and without in any way releasing or discharging any liabilities, obligations or undertakings of the Trustor. Section 7.8 Suits to Protect the Security. The Beneficiary shall have power (upon ninety (90) days notice to the Trustor) to (a) institute and maintain such suits and proceedings as it may deem expedient to prevent any impairment of the Security (and the rights of the Beneficiary as secured by this Deed of Trust ) by any acts which may be unlawful or any violation of this Deed of Trust, (b) preserve or protect its interest (as described in this Deed of Trust) in the Security and in the rents, issues, profits and revenues arising therefrom, and (c) restrain the enforcement of or compliance with any legislation or other governmental enactment, rule or order that may be unconstitutional or otherwise invalid, if the enforcement for compliance with such enactment, rule or order would impair the Security thereunder or be prejudicial to the interests of the Beneficiary. Section 7.9 Trustee May File Proofs of Claim. In the case of any receivership, insolvency, bankruptcy, reorganization, arrangement, adjustment, composition or other proceedings affecting the Trustor, its creditors or its property, the Beneficiary, to the extent permitted by law, shall be entitled to file such proofs of claim and other documents as may be necessary or advisable in order to have the claims of the Beneficiary allowed in such proceedings for any amount which may become due and payable by the Trustor hereunder after such date. ARTICLE Vill SUBORDINATION Section 8.1 Subordination. The Beneficiary agrees to execute documents reasonably satisfactory to its counsel to subordinate the lien of this Deed of Trust, provided no Notice of Default under its terms appears of record, to the following: Easements in favor of public agencies or public utilities typically conveyed in connection with similar developments. ARTICLE IX MISCELLANEOUS 0 In Section 9.1 Amendments. This instrument cannot be waived, changed, discharged or 1 (Ua) terminated orally, but only by an instrument in writing signed by the party against whom enforcement of CD CU any waiver, change, discharge or termination is sought. N Section 9.2 Trustor Waiver of Rights. Trustor hereby acknowledges that it is aware of and has the advice of counsel of its choice with respect to its rights under the Constitution of the United States, including, but not limited to, its rights arising under the Fourth, Fifth, Sixth and Fourteenth Amendments thereto, and the Constitution of the State of California. Trustor agrees that Beneficiary may exercise its rights hereunder in accordance with the provisions hereof, including, but not limited to, the exercise of the power of sale pursuant to Section 7.4 hereof, and Trustor expressly waives its rights under such Constitutions with respect thereto, including, but not limited to, its rights, if any, to notice and a hearing upon the occurrence of an Event of Default hereunder; provided, however, nothing contained herein shall be deemed to be a waiver of Trustor's rights to reinstate or redeem this Deed of Trust in accordance with applicable law. Trustor further waives to the extent permitted by law, (a) the benefit if all laws now existing or that may hereafter be enacted providing for any appraisement before sale of any portion of the Security, (b) all rights of valuation, appraisement, stay of execution, and marshaling in the event of foreclosure of the liens hereby created, and (c) all rights and remedies which Trustor may have laquinta/badot2 9 11 / 15/2001 or be able to assert by reason of the laws of the State of California pertaining to the rights and remedies of sureties. Section 9.3 Reconveyance by Trustee. Upon surrender of this Deed of Trust to Trustee for cancellation and retention, and upon payment by Trustor of Trustee's reasonable fees, Trustee shall reconvey to Trustor, or to the person or persons legally entitled thereto, without warranty, any portion of 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 any reconveyance may be described as "the person or persons legally entitled thereto." Section 9.4 Notices. Whenever Beneficiary, Trustor or Trustee shall desire to give or serve any notice, demand, request or other communication with respect to this Deed of Trust, each such notice, demand, request, or other communication shall be in writing and shall be effective only if the same is delivered by personal service or mailed by registered or certified mail, postage prepaid, return receipt requested, or by telegram, addressed to the address set forth in the first paragraph of this Deed of Trust. Any party may at any time change its address for such notices by delivering or mailing to the other parties hereto, as aforesaid, a notice of such change. Section 9.5 Acceptance by Trustee. Trustee accepts this Trust when this Deed of Trust, duly executed and acknowledged, is made a public record as provided by law. Section 9.6 Captions. The captions or heading at the beginning of each Section hereof are for the convenience of the parties and are not a part of this Deed of Trust. Section 9.7 Invalidity of Certain Provisions. Every provision of this Deed of Trust is intended to be severable. In the event any term of provision hereof is declared to be illegal or invalid for any reason whatsoever by a court of competent jurisdiction, such illegality or invalidity shall not affect the balance of the terms and provisions hereof, which terms and provisions shall remain binding and enforceable. Section 9.8 No Merger. If title to the Property shall become vested in the Beneficiary, this Deed of Trust and the lien created hereby shall not be destroyed or terminated by application of the doctrine of merger and, in such event, Beneficiary shall continue to have and enjoy all of the rights and privileges of Beneficiary under this Deed of Trust. In addition, upon foreclosure under this Deed of Trust pursuant to the provisions hereof, any leases or subleases then existing and affecting all or any portion of the Security shall not be destroyed or terminated by application of the law of merger or as a matter of law or as a result of such foreclosure unless Beneficiary or any purchaser at any such foreclosure shall so elect. No act by or on behalf of Beneficiary or any such purchaser shall constitute a termination of any lease or sublease unless Beneficiary or such purchaser shall give written notice of termination to such tenant or subtenant. Section 9.9 Governing Law. This Deed of Trust shall be governed by and construed in accordance with the laws of the State of California. Section 9.10 Gender and Number. In this Deed of Trust the singular shall include the plural and the masculine shall include the feminine and neuter and vice versa, if the context so requires. 2001-643915 laquinta/badW 10 11/15/2001 IN WITNESS WHEREOF, Trustor has executed this Deed of Trust as of the date first written above. (Zcn 51 Dated: T R < <a �--► BY: r By: P�eS�den-� 2001-643915 laquinta/badW 11 11 / 15/2001 EXHIBIT "A" LEGAL DESCRIPTION OF PROPERTY That certain real property located in the State of California, County of Riverside City Quinta and described as follows: of La Lot 21 of Block 113 of Santa Carmelita at Vale La Quinta, Unit No. 12, as per ma rec Page 79 of Maps, records of the County Recorder of Riverside County, p p orded in Book 18, II IIIII II III II II III III IIII III II �z 2@01-643915 re13e� laquinta/badoQ 12 11/15/2001 State of California) County of On ' 0 , be re me, S le yl personally appeared M personally known to me or ❑ e to be the person(e) whose name(y) isl4W subscribed to the within instrument and acknowledged to me that he/Ore/tWy executed the same in his/ber/tlir authorized capacity(} K), and that by his/betWr signature(2) on the instrument the person(, or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS m d official seal. SEAL) Signature: coolNVCcnvl giv Z Print Name Commission Expires State of California) County of ��►�� ) On 1,4-1 t 2-� �01 , before me, personally appeared roved to me on the basis of satisfactory evidence Wwwa to fA&-@jrto 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. (SEAL) Signature: .,yam rry �%` _ •. � • CAPACITY CLAIMED BY SIGNER ❑ INDIVIDUALS ❑ CORPORATE OFFICER(S) ❑ PARTNERS ❑ ATTORNEY -IN -FACT ❑ TRUSTEE(S) ❑ SUBSCRIBING WITNESS ❑ GUARDIAN/CONSERVATOR ❑ OTHER: SIGNER IS REPRESENTING: (Name Of Person(s) Or Entities) ENIA HENS - cantamic _ Riverside C Jr" [ Print Name Commission Expires ' CAPACITY CLAIMED BY SIGNER ❑ INDIVIDUALS ❑ CORPORATE OFFICER(S) ❑ PARTNERS ❑ ATTORNEY -IN -FACT ❑ TRUSTEE(S) ❑ SUBSCRIBING WITNESS ❑ GUARDIAN/CONSERVATOR ❑ OTHER: SIGNER IS REPRESENTING: (Name Of Person(s) Or Entities) III IIII III IIIIII IIII III III III II ivz001 e�e3ee15of 13 eeA laquinta/badot2 13 1 visi?ooi DEVELOPER PROMISSORY NOTE $1051000 La Quinta, California FOR VALUE RECEIVED, Building Horizons, Inc., collectively, "Maker" promise to pay to La Quinta Redevelopment Agency, a public body, corporate and politic, ("Holder"), at 78-495 Calle Tampico, La Quinta, California, 92253 or such other address as Holder may direct from time to time in writing, the sum of $105,000 (the "Note Amount"), together with interest thereon at the rate set forth herein. All sums payable hereunder shall be payable in lawful money of the United States of America. This Developer Promissory Note ("Note") is made in connection with the provision by the Holder of funds equal to the approved Acquisition Costs and Construction Costs pursuant to that certain 2001/2002 Affordable Housing Agreement by and among Maker and the Holder dated as of April 9, 2001 (the "Agreement"). 1. Disbursements. The Note Amount shall be disbursed pursuant to Section 201 and 205 of the Agreement. The record of such disbursements shall be recorded from time to time by the Agency Executive Director or his designee on Exhibit A to this Developer Promissory Note. 2. Obligation to Pay. The Note Amount shall be due and payable in full upon the Developer conveyance of the property. 3. Prepayment of Note Amount. Maker may prepay to Holder the full Note Amount at any time prior to the due date of the Note Amount without penalty. 4. Security. This Note is secured by a Developer Deed of Trust by and between Maker, as trustor, and Holder, as beneficiary (the "Developer Deed of Trust"). 5. Holder May Assign. Holder may, at its option, assign its right to receive payment under this Note without necessity of obtaining the consent of the Maker. 6. Makers Assignment Prohibited. In no event shall Maker assign or transfer any portion of this Note without the prior express written consent of the Holder, which consent may be given or withheld in the Holder's sole discretion. 7. Attorneys' Fees and Costs. In the event that any action is instituted with respect to this Note, the prevailing party promises to pay such sums as a court may fix for court costs and reasonable attorneys' fees. Holder's right to such fees shall not be limited to or by its representation by staff counsel and such representation shall be valued at customary and reasonable rates for private sector legal services. 8. Time of the Essence. Time is of the essence of the performance of all obligations under this Promissory Note. 9. Non -Waiver. Failure to delay in giving any notice required hereunder shall not constitute a waiver of any default or late payment, nor shall it change the time for any default or payment. laquinta%&g\2001-02 Dev Note 2.DOC 1 1 vi 5/2001 t r 10. Successors Bound. This Note shall be binding upon the parties hereto and their respective heirs, successors and assigns. DATED: / f DATED: ATTEST: (:4 1L.) �'� a),, c" O. JUN S. GREEK, genc S Greta BUILDING HORIZONS, a California nonprofit public benefit corporation BY. d (_ . T- "MAKER" LA QUINTA REDEVELOPMENT AGENCY, a public body corporate and politic Y: THOMA�P. ENOVE E. Executive Director "HOLDER" laquinta\b&g\2001-02 Dev Note 2.DOC 2 11 /15/2001 DISBURSEMENT AMOUNT z. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. EXHIBIT DISBURSEMENT RECORD ACKNOWLEDGMENT OF RECEIPT DATE OF MAKER laquinta\b&g\2001-02 Dev Note 2.DOC 11 /15/2001 RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: La Quinta Redevelopment Agency 78-495 Calle Tampico La Quinta, California 92253 Attention: Executive Director DOC # 2001-643914 12/27/2001 08:00A Fee:NC Page 1 of 13 Recorded in Official Records p County of Riverside Gary L. Orso Assessor, County Clerk & Recorder M S U PAGE SIZE DA PCOR NOCOR SMF MISC. Y/ A I R I L COPY LONG I REFUND I NCHG I EXAM This document is exempt from payment of a recording fee pursuant to Government Code Section 6103. � 0 C LA QUINTA REDEVELOP ME AG CY AS By� -rh, Q. Ce wese Executive Director Dated; ` L q 12001 DEED OF TRUST AND ASSIGNMENT OF RENTS (Riverside County) T IS DEED OF TRUST AND ASSIGNMENT OF RENTS ("Deed of Trust") is made as of the lQo` y da of 1 , 2001 by and between Building Horizons, Inc., a California nonprofit public benefit corporation, (the "Trustor"), whose address is P.O. Drawer 10320, Indio, California 92002, First American Title Insurance Company (the "Trustee"), whose address is 3625 14th Street, Riverside, California 92501, and the La Quinta Redevelopment Agency (the "Beneficiary"), whose address is 78- 495 Calle Tampico, La Quinta, California 92253. FOR GOOD AND VALUABLE CONSIDERATION, including the trust herein created, the receipt of which is hereby acknowledged, Trustor hereby irrevocably grants, transfers, conveys and assigns to Trustee, IN TRUST, WITH POWER OF SALE, for the benefit and security of Beneficiary, under and subject to the terms and conditions hereinafter set forth, the property located in the County of Riverside, State of California, that is described in Exhibit "A", attached hereto and by this reference incorporated herein (the "Property"). TOGETHER WITH all rents, issues, profits, royalties, income and other benefits derived from the Property (collectively, the "rents"), provided that so long as Trustor is not in default hereunder, it shall be permitted to collect rents and operate the Project (as defined in the Agreement), in accordance with the requirements of that certain 2001/2002 Affordable Housing Agreement entered into between Building Horizons, Inc., (the "Developer") and the Beneficiary as of April 9, 1998 (the "Agreement"), which Agreement is on file with the Beneficiary as a public record and is incorporated by reference herein; TOGETHER WITH all interests, estates or other claims, both in law and in equity which Trustor now has or may hereafter acquire in the Property and the rents; TOGETHER WITH all easements, rights -of -way and rights used in connection therewith or as a means of access thereto, including, without limiting the generality of the foregoing, all tenements, hereditaments and appurtenances thereof and thereto; laquinta/badot2 f 1 11/15/2001 TOGETHER WITH any and all buildings and improvements now or hereafter erected upon the Property (including, in each instance, improvements, restorations, replacements, repairs, additions, accessions or substitutions thereto or therefor); but exclusive of all fixtures, attachments, appliances, furnishings, equipment and the machinery (whether fixed or movable); TOGETHER WITH all leasehold estate, right, title and interest of Trustor in and to all leases or subleases covering the Property or any portion thereof now or hereafter existing or entered into, and all right, title and interest of Trustor thereunder, including, without limitation, all cash or security deposits, advance rentals, and deposits or payments of similar nature; TOGETHER WITH all right, title and interest of Trustor in and to all options to purchase or lease the Property or any portion thereof or interest therein, and any greater estate in the Property owned or hereafter acquired; TOGETHER WITH all right, title and interest of Trustor, now owned or hereafter acquired, in and to any land lying within the right-of-way of any street, open or proposed, adjoining the Property, and any and all sidewalks, alleys and strips and gores of land adjacent to or used in connection with the Property; TOGETHER WITH all the estate, interest, right, title, other claim or demand, of every nature, in and to such property, including the Property, both in law and in equity, including, but not limited to, all deposits made with or other security given by Trustor to utility companies, the proceeds from any or all of such property, including the Property, claims or demands with respect to the proceeds of insurance in effect with respect thereto, which Trustor now has or may hereafter acquire, any and all awards made for the taking by eminent domain or by any proceeding or purchase in lieu thereof of the whole or any part of such property, including without limitation, any awards resulting from a change of grade of streets and awards for severance damages; All of the foregoing, together with the Property, is herein referred to as the "Security". FOR THE PURPOSE OF SECURING: (a) Payment of the sum of the "Note Amount" according to the "Developer Promissory Note" and "Construction Promissory Note" or as set forth in the "Agreement" as defined herein; (b) Payment of any sums advanced by Beneficiary to protect the Security pursuant to the terms and provisions of this Deed of Trust following a breach of Trustor's obligation to advance said sums and the expiration of any applicable cure period and upon five (5) business days notice to the Trustor, with interest thereon as provided herein; (c) Payment of such additional sums and interest thereon which may hereafter be loaned to Trustor, or its successors or assignees, by Beneficiary, when evidenced by a promissory note or notes or other documents reciting that they are secured by this Deed of Trust; and (d) Performance of every obligation, covenant or agreement of Trustor contained herein or the Agreement (and any amendments thereto). IIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIII �==aa:01 of 'a,°a� laquinta/badoO 2 11 / 15/2001 ARTICLE 1 DEFINITIONS 1. "Agreement" means that certain Affordable Housing Agreement entered into by the Developer and the Beneficiary hereof, dated April 9, 2001; said Agreement (a copy of which is on file with the Beneficiary at the address stated above, and including all of its attachments) is incorporated herein by reference. 2. "Developer" and "Improvements" are defined in the Agreement. 3. "Expiration Date" means the expiration date of the Redevelopment Plan. 4. "Mortgage" means any permanent or long-term loan, or any other financing device (including without limitation deeds of trust) the proceeds of which are used in the purchase of Improvements, which loan is secured by a security financing interest in the Trustor's interest in the Improvements; 5. "Property" means the site together with all additions, improvements, restorations and replacements thereof. 6. "Standards" means those standards of construction and operation characteristic of single family residential housing of size, character, and quality similar to the Property. 7. "Trustor" means Building Horizons, Inc., a California nonprofit public benefit corporation, and each of its transferees and successors in interest. Where an obligation is created herein binding upon Trustor, the obligation shall also apply to and bind any transferees or successors in interest. Where the terms of this Deed of Trust have the effect of creating an obligation of the Trustor and a transferee, such obligation shall be deemed to be a joint and several obligation of the Trustor and such transferee. Unless the context clearly otherwise requires, any capitalized term used herein and not defined herein shall have the meaning given to it under the Agreement (and any amendments thereto). ARTICLE II CERTIFICATE OF COMPLETION UPON PAYMENT; GRANTING OF EASEMENTS Section 2.1 Maintenance and Modification of the Property by Trustor. The Trustor agrees that at all times prior to the Expiration Date, the Trustor will, at the Trustor's own expense, maintain, preserve and keep the Property or cause the Property to be maintained, preserved, kept in a condition substantially similar to other single family housing projects similar in size, character, and quality to the Property consisting only of those uses allowed by the Agreement. The Trustor will from time to time make or cause to be made all repairs, replacements and renewals deemed proper and necessary by it. The Beneficiary shall have no responsibility in any of these matters or for the making of improvements or additions to the Property. Section 2.2 Granting of Easements. Trustor may grant easements, licenses, rights -of -way or other similar rights or privileges in the nature of easements with respect to any property or rights included in the Security with the prior written approval of the Beneficiary, which approval shall not be unreasonably withheld. 2001-643914 1227f2001 08 00R 3 of 13 laquintalbadoQ 3 11 / 15/2001 ARTICLE III TAXES AND INSURANCE; ADVANCES Section 3.1 Taxes, Other Governmental Charges and Utility Charges. Trustor shall pay, or cause to be paid, prior to delinquency, all taxes, assessments, charges and levies imposed by any public authority or utility company which are or may become a lien affecting the Security or any part thereof; provided, however, that Trustor shall not be required to pay and discharge any such tax, assessment, charge or levy so long as the legality thereof shall be promptly and actively contested in good faith and by appropriate proceedings. With respect to special assessments or other similar governmental charges, Trustor shall pay such amount in whole or in installments over a period of years. In the event that Trustor shall fail to pay any of the foregoing items required by this Section to be paid by Trustor, Beneficiary may (but shall be under no obligation to) pay the same, after the Beneficiary has notified the Trustor of such failure to pay and the Trustor fails to fully pay any such item within seven (7) business days of the earlier of the receipt or mailing of such notice. Any amount so advanced therefor by Beneficiary, together with interest thereon from the date of such advance at the maximum rate permitted under Section 1(2) of Article XV of the California Constitution, shall become an additional obligation of Trustor to the Beneficiary and shall be secured hereby, and Trustor hereby agrees to pay all such amounts. Section 3.2 Provisions Respecting Insurance. (a) Trustor agrees to provide insurance covering one hundred percent (100%) of the replacement cost of all insurable items within the Property in the event of fire, lightning, debris removal, windstorm, flood, vandalism, malicious mischief, theft, mysterious disappearance and hazards, casualties and contingencies as are normally and usually covered by all-risk policies in effect in the locality where the Property is situated. (b) Trustor agrees to carry or cause to be carried: (i) comprehensive general liability insurance with respect to the Property with limits of not less than $100,000 for each occurrence combined single - limit bodily injury and property damage. (c) All such insurance policies and coverage's (i) shall be maintained at Trustor's sole cost and expense so long as any part of the amounts secured by this Deed of Trust have not been paid, (ii) shall be with insurers of recognized responsibility, and in form and substance satisfactory to the Beneficiary, (iii) shall name Beneficiary as additional insured, and (iv) shall contain a provision to the effect that the insured shall not cancel the policy or modify it materially and adversely to the interests of Beneficiary without first giving at least thirty (30) days' prior written notice thereof. Certificates of insurance for all of the above insurance policies, showing the same to be in full force and effect, shall be delivered to the Beneficiary upon demand therefor at any time prior to the Expiration Date. Section 3.3 Advances. In the event the Trustor shall fail to maintain the full insurance coverage required by this Deed of Trust or shall fail to keep the Property in good repair and operating condition, the Beneficiary may (but shall be under no obligation to) take out the required policies of insurance and pay the premium on the same or may make repairs or replacements as are necessary and provide for payment thereof; and, provided that the Beneficiary provides five (5) business days' notice to the Trustor all amounts so advanced therefor by the Beneficiary shall become an additional obligation of the Trustor to the Beneficiary (together with interest as set forth below) and shall be secured thereby, which amounts the Trustor agrees to pay on demand of the Beneficiary, and if not so paid, shall bear interest from the date of the advance at the maximum rate permitted by Section 1(2) of Article XV of the California Constitution. 20@1-643614 1227I200108 NA4 of 13 laquintaftdot2 4 11/15/2001 ARTICLE IV DAMAGE, DESTRUCTION OR CONDEMNATION Section 4.1 Damage and Destruction. If, prior to the Expiration Date, the Property or any portion thereof is destroyed (in whole or in part) or is damaged by fire or other casualty, the Trustor shall (a) cause any insurance proceeds arising from insurance referred to in Section 3.2 hereof and any other coverage acquired by the Trustor to be used to promptly rebuild and replace the Property, and (b) repair and replace the Property as necessary to bring the Property into conformity with the Standards; provided that such covenants shall be subordinated to the provisions of all senior obligations to which this Deed of Trust is subordinate. Section 4.2 Condemnation. Subject to the provisions of senior obligations to which this Deed of Trust is subordinate, if title to or any interest in or the temporary use of the Property or any part thereof shall be taken under the exercise of the power of eminent domain by any governmental body or by any persons, firm or corporation acting under governmental authority, including any proceeding or purchase in lieu thereof, the proceeds as a result of such taking shall be paid as provided by the law of the State of California to all persons or entities as their interests appear of record. ARTICLE V REPRESENTATIONS, COVENANTS AND WARRANTIES OF THE TRUSTOR Section 5.1 Defense of Title. The Trustor covenants that it is lawfully seized and possessed of title in fee simple interest to the Property, that it has good right to sell, convey or otherwise transfer or encumber the same, and that the Trustor, for itself and its successors and assigns, warrants and will forever defend the right and title to the foregoing described and conveyed property unto the Beneficiary, its successors and assigns, against the claims of all persons whomsoever, excepting only encumbrances approved by the Beneficiary. Section 5.2 Inspection of Property. The Trustor covenants and agrees that at any and all reasonable times and upon reasonable notice, the Beneficiary and its duly authorized agents, attorneys, experts, engineers, accountants and representatives, shall have the right, without payment of charges or 0 fees, to inspect the Property. COM �0� 0� ARTICLE VI !. v� Gn a % CUCU % AGREEMENTS AFFECTING THE PROPERTY; (U FURTHER ASSURANCES Section 6.1 Other Agreements Affecting Property. The Trustor shall duly and punctually perform all terms, covenants, conditions and agreements binding on it under the Agreement or any other agreement of any nature whatsoever now or hereafter involving or affecting the Property or any part thereof. Section 6.2 Acceleration of Maturity. If Trustor shall sell, or alienate the Property, or any part thereof, or any interest therein, or shall be divested of Trustor's title or any interest therein in any manner, whether voluntarily or involuntarily, without the prior written consent of Beneficiary, or if default is made in the payment of any principal payable under the secured Note or in the performance of the covenants or agreements hereof, or any of them, Beneficiary shall have the right at its option to declare any indebtedness or obligations secured hereby, irrespective of the maturity date specified in the Note evidencing the same, immediately due and payable. laquinta/badoO 5 11 / 15/2001 Section 6.3 Further Assurances; After Acquired Property. At any time, and from time to time, upon request by the Beneficiary, the Trustor shall make, execute and deliver, or cause to be made, executed and delivered, to the Beneficiary and, where appropriate, cause to be recorded and/or filed, and _ from time to time thereafter to be recorded and/or filed, and from time to time thereafter to be re- recorded and/or re -filed, and in such offices and places as shall be deemed desirable by the Beneficiary, any and all such other and further deeds of trust, security agreements, financing statements respecting personal property, instruments of further assurance, certificates and other documents as may, in the opinion of the Beneficiary, be necessary or desirable in order to effectuate, complete or perfect, or to continue and preserve, (a) the obligations of the Trustor under this Deed of Trust, and (b) the lien of this Deed of Trust as a lien prior to all liens except those obligations which shall be senior obligations pursuant to the provisions of this Deed of Trust. Upon any failure by the Trustor to do so, the Beneficiary may make, execute, record, file, re-record and/or re -file any and all such deeds of trust, security agreements, instruments, certificates and documents for and in the name of the Trustor, and the Trustor hereby irrevocable appoints the Beneficiary the agent and attorney -in -fact of the Trustor to do so. The lien hereof shall automatically attach, without further act, to all after -acquired property deemed to be part of the Security as defined herein. Section 6.4 Agreement to Pay Attorney's Fees and Expenses. In the event of an Event of Default hereunder, and if the Beneficiary should employ attorneys or incur other expenses for the collection of amounts due or the enforcement of performance or observance of an obligation or agreement on the part of the Trustor in this Deed of Trust, the Trustor agrees that it will, on demand therefor, pay to the Beneficiary the reasonable fees of such attorneys and such other reasonable expenses so incurred by the Beneficiary; and any such amounts paid by the Beneficiary shall bear interest from the date such expenses are incurred at the maximum rate permitted by Section 1(2) of Article XV of the California Constitution. Section 6.5 Subrogation; Payment of Claims. Provided that the Beneficiary gives notice of at least five (5) business days to the Trustor, the Beneficiary shall be subrogated to the claims and liens of all parties whose claims or liens are discharged or paid by the Beneficiary pursuant to the provisions hereof. If permitted in the Mortgage, the Beneficiary shall have the right to pay and discharge the obligations secured by the Mortgage. Section 6.6 Transfer. No sale, transfer, lease, pledge, encumbrance, creation of a security interest in or other hypothecation of the Security shall relieve or release the Trustor from primary liability under this Deed of Trust or the Agreement. ARTICLE VII EVENTS OF DEFAULT AND REMEDIES Section 7.1 Events of Default Defined. The occurrence of any failure of the Trustor to perform any act or promise of the Trustor made under this Deed of Trust and the continuation of said failure for a period of sixty (60) business days after written notice specifying such failure and requesting that it be remedied shall have been given to Trustor from the Beneficiary, and shall be an Event of Default under this Deed of Trust. 1-643III II IIIIIII IIIII IIIII III IIII 1 z001e of 13 914 eeA laquinta/badoO 6 11 / 15/2001 Section 7.2 The Beneficiary's Right to Enter and Take Possession. If an Event of Default shall have occurred and be continuing, the Beneficiary may: (a) Either in person or by agent, with or without bringing any action or proceeding, or by a receiver appointed by a court, and without regard to the adequacy of its security, enter upon the Property and take possession thereof (or any part thereof) and of any of the Security, in its own name or in the name of Trustee, and do any acts which it deems necessary or desirable to preserve the value, marketability or rentability of the Property, or part thereof or interest therein, increase the income therefrom or protect the Security hereof and, with or without taking possession of the Property, sue for or otherwise collect the rents, issues and profits thereof, including those past due and unpaid, and apply the same, less costs and expenses of operation and collection, including attorneys' fees, upon any amounts owed to Beneficiary, all in such order as Beneficiary may determine. The entering upon and taking possession of the 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 in response to such Default or pursuant to such notice of Default and, notwithstanding the continuance in possession of the Property or the collection, receipt and application of rents, issues or profits, Beneficiary shall be entitled to exercise every right provided for in this Deed of Trust, the Agreement or by law upon occurrence of any Event of Default, including the right to exercise the power of sale. A copy of any Notice of Default and a copy of any Notice of Sale hereunder be mailed to Trustor at its address herein given; (b) Commence an action to foreclose this Deed of Trust as a mortgage, appoint a receiver, or specifically enforce any of the covenants hereof; (c) Deliver to Trustee a written declaration of default and demand for sale, and a written notice of default and election to cause Trustor's interest in the Property to be sold, which notice Trustee or Beneficiary shall cause to be duly filed for record in the Official Records of the County in which the Property is located; or (d) Exercise all other rights and remedies provided herein, in the instruments by which the Trustor acquires title to the Property, including any Security, or in any other document or agreement now or hereafter evidencing, creating or securing all or any portion of the obligations secured hereby, or provided by law. m ODC9 Section 7.4 Foreclosure by Power of Sale. Should the Beneficiary elect to foreclose by exercise of the power of sale herein contained, the Beneficiary shall notify Trustee and shall deposit with CTrustee this Deed of Trust which is secured hereby and such receipts and evidence of any expenditures CU CU made that are additionally secured hereby as Trustee may require. CU (a) Upon receipt of such notice from the Beneficiary, Trustee shall cause to be recorded, published and delivered to Trustor such Notice of Default and Election to Sell as then required by law and by this Deed of Trust. Trustee shall, without demand on Trustor, after lapse of such time as may then be required by law and after recordation of such Notice of Default and after Notice of Sale having been given as required b law, sell the Property,at the time and lace of sale fixed b it in said Notice of Sale g q Y p Y� , either as a whole or in separate lots or parcels or items as Trustee shall deem expedient 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 the time of sale. Trustee shall deliver to such purchaser or purchasers thereof its good and sufficient deed or deeds conveying the Property so sold, but without any covenant or warranty, expressed or implied. The recitals in such deed of any matters or facts shall be conclusive proof of the truthfulness thereof. Any person, including, without limitation, Trustor, Trustee or Beneficiary, may purchase at such sale, and Trustor hereby covenants to warrant and defend the title of such purchaser or purchasers. laquinta/badW 7 11 / 15/2001 (b) After deducting all reasonable costs, fees and expenses of Trustee, including costs of evidence of title in connection with such sale, Trustee shall apply the proceeds of sale to payment of all sums then secured hereby and the remainder, if any, to the person or persons legally entitled thereto. (c) Trustee may postpone sale of all or any portion of the Property by public announcement at such time and place of sale, and from time to time thereafter, and without further notice make such sale at the time fixed by the last postponement, or may, in its discretion, give a new notice of sale. Section 7.5 Receiver. If an Event of Default shall have occurred and be continuing, Beneficiary, as a matter of right and without further notice of Trustor or anyone claiming under Security, and without regard to the then value of the Property or the interest of Trustor therein, shall have the right to apply to any court having jurisdiction to appoint a receiver or receivers of the Security (or a part thereof), and Trustor hereby irrevocably consents to such appointment and waives further notice of any application therefor. Any such receiver or receivers shall have all the powers and duties of receivers in like or similar cases, and all the powers and duties of Beneficiary in case of entry as provided herein, and shall continue as such and exercise all such powers until the date of confirmation of sale of the Property, unless such receivership is sooner terminated. Section 7.6 Remedies Cumulative. No right, power or remedy conferred upon or reserved to the Beneficiary by this Deed of Trust is intended to be exclusive of any other right, power or remedy, but each and every such right, power and remedy shall be cumulative and concurrent and shall be in addition to any other right, power and remedy given hereunder or now or hereafter existing at law or in equity. Section 7.7 No Waiver. (a) No delay or omission of the Beneficiary to exercise any right, power or remedy accruing upon any Default shall exhaust or impair any such right, power or remedy, or shall be construed to be a waiver of any such Default or acquiescence therein; and every right, power and remedy given by this Deed of Trust to the Beneficiary may be exercised from time to time and as often as may be deemed expeditious by the Beneficiary. No consent or waiver, expressed or implied, by the Beneficiary to or of any breach by the Trustor in the performance of the obligations hereunder shall be deemed or construed to be a consent to or waiver of obligations of the Trustor hereunder. Failure on the part of the Beneficiary to complain of any act or failure to act or to declare an Event of Default, irrespective of how long such failure continues, shall not constitute a waiver by the Beneficiary of its right hereunder or impair any arights, powers or remedies consequent on any breach or Default by the Trustor. G� (b) If the Beneficiary (i) takes other or additional security, (ii) waives or does not exercise any CU right granted herein or in the Agreement, (iii) certifies completion of any part of the Security from the lien of this Deed of Trust, or otherwise changes any of the terms, covenants, conditions or agreements of this Deed of Trust or the Agreement, (iv) consents to the filing of any map, plat or replat affecting the Security, (v) consents to the granting of any easement or other right affecting the Security, or (vi) makes or consents to any agreement subordinating the lien hereof, any such act or omission shall not discharge, modify, change or affect the original liability under this Deed of Trust, or any other obligation of the Trustor or any subsequent purchaser of the Security or any part thereof, or any maker, co-signer, endorser, surety or guarantor; nor shall any such act or omission preclude the Beneficiary from exercising any right, power or privilege herein granted or intended to be granted in the event of any Default, nor, except as otherwise expressly provided in an instrument or instruments executed by the Beneficiary shall the lien of this Deed of Trust be altered thereby. In the event of the sale or transfer by operation of law or otherwise of all or any part of the Property, the Beneficiary, without notice, is hereby authorized and empowered to deal with any such vendee or transferee with reference to the Security (or a part thereof) or the indebtedness secured hereby, or with reference to any of the terms, covenants, conditions or agreement hereof, as fully laquinta/badot2 8 11 / 15/2001 and to the same extent as it might deal with the Trustor and without in any way releasing or discharging any liabilities, obligations or undertakings of the Trustor. Section 7.8 Suits to Protect the Security. The Beneficiary shall have power (upon ninety (90) days notice to the Trustor) to (a) institute and maintain such suits and proceedings as it may deem expedient to prevent any impairment of the Security (and the rights of the Beneficiary as secured by this Deed of Trust ) by any acts which may be unlawful or any violation of this Deed of Trust, (b) preserve or protect its interest (as described in this Deed of Trust) in the Security and in the rents, issues, profits and revenues arising therefrom, and (c) restrain the enforcement of or compliance with any legislation or other governmental enactment, rule or order that may be unconstitutional or otherwise invalid, if the enforcement for compliance with such enactment, rule or order would impair the Security thereunder or be prejudicial to the interests of the Beneficiary. Section 7.9 Trustee May File Proofs of Claim. In the case of any receivership, insolvency, bankruptcy, reorganization, arrangement, adjustment, composition or other proceedings affecting the Trustor, its creditors or its property, the Beneficiary, to the extent permitted by law, shall be entitled to file such proofs of claim and other documents as may be necessary or advisable in order to have the claims of the Beneficiary allowed in such proceedings for any amount which may become due and payable by the Trustor hereunder after such date. ARTICLE Vill SUBORDINATION Section 8.1 Subordination. The Beneficiary agrees to execute documents reasonably satisfactory to its counsel to subordinate the lien of this Deed of Trust, provided no Notice of Default under its terms appears of record, to the following: Easements in favor of public agencies or public utilities typically conveyed in connection with similar developments. ARTICLE IX MISCELLANEOUS CDm 0� a Section 9.1 Amendments. This instrument cannot be waived, changed, discharged or n terminated orally, but only by an instrument in writing signed by the party against whom enforcement of CU CU any waiver, change, discharge or termination is sought. CU Section 9.2 Trustor Waiver of Rights. Trustor hereby acknowledges that it is aware of and has the advice of counsel of its choice with respect to its rights under the Constitution of the United States, including, but not limited to, its rights arising under the Fourth, Fifth, Sixth and Fourteenth C Amendments thereto, and the Constitution of the State of California. Trustor agrees that Beneficiary may exercise its rights hereunder in accordance with the provisions hereof, including, but not limited to, the exercise of the power of sale pursuant to Section 7.4 hereof, and Trustor expressly waives its rights under such Constitutions with respect thereto, including, but not limited to, its rights, if any, to notice and a hearing upon the occurrence of an Event of Default hereunder; provided, however, nothing contained herein shall be deemed to be a waiver of Trustor's rights to reinstate or redeem this Deed of Trust in accordance with applicable law. Trustor further waives to the extent permitted by law, (a) the benefit if all laws now existing or that may hereafter be enacted providing for any appraisement before sale of any portion of the Security, (b) all rights of valuation, appraisement, stay of execution, and marshaling in the event of foreclosure of the liens hereby created, and (c) all rights and remedies which Trustor may have laquinta/badot2 9 11 / 15/2001 or be able to assert by reason of the laws of the State of California pertaining to the rights and remedies of sureties. Section 9.3 Reconveyance by Trustee. Upon surrender of this Deed of Trust to Trustee for cancellation and retention, and upon payment by Trustor of Trustee's reasonable fees, Trustee shall reconvey to Trustor, or to the person or persons legally entitled thereto, without warranty, any portion of 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 any reconveyance may be described as "the person or persons legally entitled thereto." Section 9.4 Notices. Whenever Beneficiary, Trustor or Trustee shall desire to give or serve any notice, demand, request or other communication with respect to this Deed of Trust, each such notice, demand, request, or other communication shall be in writing and shall be effective only if the same is delivered by personal service or mailed by registered or certified mail, postage prepaid, return receipt requested, or by telegram, addressed to the address set forth in the first paragraph of this Deed of Trust. Any party may at any time change its address for such notices by delivering or mailing to the other parties hereto, as aforesaid, a notice of such change. Section 9.5 Acceptance by Trustee. Trustee accepts this Trust when this Deed of Trust, duly executed and acknowledged, is made a public record as provided by law. Section 9.6 Captions. The captions or heading at the beginning of each Section hereof are for the convenience of the parties and are not a part of this Deed of Trust. Section 9.7 Invalidity of Certain Provisions. Every provision of this Deed of Trust is intended to be severable. In the event any term of provision hereof is declared to be illegal or invalid for any reason whatsoever by a court of competent jurisdiction, such illegality or invalidity shall not affect the balance of the terms and provisions hereof, which terms and provisions shall remain binding and enforceable. Section 9.8 No Merger. If title to the Property shall become vested in the Beneficiary, this Deed of Trust and the lien created hereby shall not be destroyed or terminated by application of the doctrine of merger and, in such event, Beneficiary shall continue to have and enjoy all of the rights and privileges of Beneficiary under this Deed of Trust. In addition, upon foreclosure under this Deed of Trust pursuant to the provisions hereof, any leases or subleases then existing and affecting all or any portion of the Security shall not be destroyed or terminated by application of the law of merger or as a matter of law or as a result of such foreclosure unless Beneficiary or any purchaser at any such foreclosure shall so elect. No act by or on behalf of Beneficiary or any such purchaser shall constitute a termination of any lease or sublease unless Beneficiary or such purchaser shall give written notice of termination to such tenant or subtenant. Section 9.9 Governing Law. This Deed of Trust shall be governed by and construed in accordance with the laws of the State of California. Section 9.10 Gender and Number. In this Deed of Trust the singular shall include the plural and the masculine shall include the feminine and neuter and vice versa, if the context so requires. IIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIII �==aa.�'.a.a19A laquinta/badot2 10 11 / 15/2001 - IN WITNESS WHEREOF, Trustor has executed this Deed of Trust as of the date first written above. Dated: Su 1 idi n� ! -40 y zorls� art c . By: t.1, By: -�- IIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIII je2002eo�a;��a laquintaftdot2 11 11/15/2001 EXHIBIT "A" LEGAL DESCRIPTION OF PROPERTY That certain real property located in the State of California, County of Riverside, City of La Quinta and described as follows: Lot 22 of Block 113 of Santa Carmelita at Vale La Quinta, Unit No. 12, as per map recorded in Book 18, Page 79 of Maps, records of the County Recorder of Riverside County. 2001-643914 laquinta/hhdoO 12 11 / 15/2001 State of California) County of y/ L6�.s/d e-' ) On c!�wy bef9fe me, personally appeared personally known to me or ❑ ce to be the person(A) whose name(g) is/rite subscribed to the within instrument and acknowledged to me that he/Ae/they executed the same in his/hef/thrit authorized capacity(io), and that by his/der/tWr signature(g) on the instrument the person('8�, or the entity upon behalf of which the person) acted, executed the instrument. WITNESS mid official seal. Signature: REGENIA HENSLEY _ Commission # 1274456 • Notary Public - Colifornic Riverside County My Comm. Bphn Aug 19, 2004 Print Name Commission State of California) County of eVI-kA.0", ) On rl l �-'I a� t , before me, personally appeared a p it 40 or,W 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. (SEAL) Signature: Print Name Commission Expires CAPACITY CLAIMED BY SIGNER ❑ INDIVIDUALS ❑ CORPORATE OFFICER(S) ❑ PARTNERS ❑ ATTORNEY -IN -FACT ❑ TRUSTEE(S) ❑ SUBSCRIBING WITNESS ❑ GUARDIAN/CONSERVATOR ❑ OTHER: SIGNER IS REPRESENTING: (Name Of Person(s) Or Entities) CAPACITY CLAIMED BY SIGNER ❑ INDIVIDUALS ❑ CORPORATE OFFICER(S) ❑ PARTNERS ❑ ATTORNEY -IN -FACT ❑ TRUSTEE(S) ❑ SUBSCRIBING WITNESS ❑ GUARDIAN/CONSERVATOR ❑ OTHER: SIGNER IS REPRESENTING: (Name Of Person(s) Or Entities) 2001-643914 laquinta/hhdoQ 13 11 / 15/2001 DEVELOPER PROMISSORY NOTE $105/000 La Quinta, California FOR VALUE RECEIVED, Building Horizons, Inc., collectively, "Maker" promise to pay to La Quinta Redevelopment Agency, a public body, corporate and politic, ("Holder"), at 78495 Calle Tampico, La Quinta, California, 92253 or such other address as Holder may direct from time to time in writing, the sum of $105,000 (the "Note Amount"), together with interest thereon at the rate set forth herein. All sums payable hereunder shall be payable in lawful money of the United States of America. This Developer Promissory Note ("Note") is made in connection with the provision by the Holder of funds equal to the approved Acquisition Costs and Construction Costs pursuant to that certain 2001/2002 Affordable Housing Agreement by and among Maker and the Holder dated as of April 9, 2001 (the "Agreement"). 1. Disbursements. The Note Amount shall be disbursed pursuant to Section 201 and 205 of the Agreement. The record of such disbursements shall be recorded from time to time by the Agency Executive Director or his designee on Exhibit A to this Developer Promissory Note. 2. Obligation to Pay. The Note Amount shall be due and payable in full upon the Developer conveyance of the property. 3. Prepayment of Note Amount. Maker may prepay to Holder the full Note Amount at any time prior to the due date of the Note Amount without penalty. 4. Secu rity. This Note is secured by a Developer Deed of Trust by and between Maker, as trustor, and Holder, as beneficiary (the "Developer Deed of Trust"). 5. Holder May Assign. Holder may, at its option, assign its right to receive payment under this Note without necessity of obtaining the consent of the Maker. 6. Makers Assignment Prohibited. In no event shall Maker assign or transfer any portion of this Note without the prior express written consent of the Holder, which consent may be given or withheld in the Holder's sole discretion. 7. Attorneys' Fees and Costs. In the event that any action is instituted with respect to this Note, the prevailing party promises to pay such sums as a court may fix for court costs and reasonable attorneys' fees. Holder's right to such fees shall not be limited to or by its representation by staff counsel and such representation shall be valued at customary and reasonable rates for private sector legal services. 8. Time of the Essence. Time is of the essence of the performance of all obligations under this Promissory Note. 9. Non -Waiver. Failure to delay in giving any notice required hereunder shall not constitute a waiver of any default or late payment, nor shall it change the time for any default or payment. laquinta\b&g\2001-02 Dev Note LDOC 1 1 vi 5/2001 10. Successors Bound. This Note shall be binding upon the parties hereto and their respective heirs, successors and assigns. DATED: DATED: ATTEST: 1L.z. 1�� 't�. JUNE . GREEK, A enc Greta BUILDING HORIZONS, a California nonprofit public benefit corporation BY: IT "MAKER" LA QUINTA REDEVELOPMENT AGENCY, a public body corporate and politic Yr. 4oOo&. THOMAS P. GENOVESE, Executive Director "HOLDER" laquinta\b&g\2001-02 Dev Note 1.DOC 2 1 vi s/2001 DISBURSEMENT AMOUNT 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. EXHIBIT A DISBURSEMENT RECORD ACKNOWLEDGMENT OF RECEIPT DATE OF MAKER laquinta\b&g\2001-02 Dev Note LDOC 3 11 /15/2001