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2001 06 05 RDAcei',, 4 4v 4" Redevelopment Agency Agendas are available on the City's Web Page @ www.la-quinta.org Redevelopment Agency Agenda CITY COUNCIL CHAMBER 78-495 Calle Tampico La Quinta, California 92253 Regular Meeting Tuesday. June 5 2001 - 2.00 P.M. Beginning Res. No. RA 2001-01 CALL TO ORDER Roll Call: Board Members: Adolph, Pena, Perkins, Sniff, Chairperson Henderson II. PUBLIC COMMENT At this time, members of the public may address the Redevelopment Agency on any matter not listed on the agenda. Please complete a "request to speak" form and limit your comments to three minutes. Please watch the timing device on the podium. Ill. CLOSED SESSION CONFERENCE WITH AGENCY'S REAL PROPERTY NEGOTIATOR, MARK WEISS, PURSUANT TO GOVERNMENT CODE SECTION 54956.8 CONCERNING POTENTIAL TERMS AND CONDITIONS OF ACQUISITION AND/OR DISPOSITION OF REAL PROPERTY LOCATED SOUTHEAST OF THE MILES AVENUE AND WASHINGTON STREET INTERSECTION AND NORTH OF THE WHITEWATER CHANNEL. PROPERTY OWNER/NEGOTIATOR: CW LA QUINTA. 2. CONFERENCE WITH AGENCY'S REAL PROPERTY NEGOTIATOR, MARK WEISS, PURSUANT TO GOVERNMENT CODE SECTION 54956.8 CONCERNING POTENTIAL TERMS AND CONDITIONS OF ACQUISITION AND/OR DISPOSITION OF REAL PROPERTY LOCATED AT THE TERMINUS OF AVENUE 62 AND WEST OF MADISON STREET. PROPERTY OWNER/NEGOTIATOR: TRAVERTINE. RDA Agenda June 5, 2001 CONFERENCE WITH AGENCY'S REAL PROPERTY NEGOTIATOR, MARK WEISS, PURSUANT TO GOVERNMENT CODE SECTION 54956.8 CONCERNING POTENTIAL TERMS AND CONDITIONS OF ACQUISITION AND/OR DISPOSITION OF REAL PROPERTY LOCATED ON THE WEST SIDE OF WASHINGTON STREET, NORTH OF AVENUE 48 (APN: 643-090-024). PROPERTY OWNER/NEGOTIATOR: LA QUINTA ARTS FOUNDATION. NOTE: Time permitting, the Redevelopment Agency Board may conduct Closed Session discussions during the dinner recess. In addition, when the Agency is considering acquisition of property, persons identified as negotiating parties are not invited into the Closed Session Meeting. I Txdr1 11V/ 4 01 =F_1% iCHdrl w u l ® F1JK1v "il At this time members of the public may address the Agency Board on items that appear within the Consent Calendar or matters that are not listed on the agenda. Please complete a "request to speak" form and limit your comments to three minutes. When you are called to speak, please come forward and state your name for the record. Please watch the timing device on the podium. For all Agency Business Session matters or Public Hearings on the agenda, a completed "request to speak" form must be filed with the City Clerk prior to the Agency beginning consideration of that item. V. CONFIRMATION OF AGENDA VI. APPROVAL OF MINUTES MINUTES OF THE MEETING OF MAY 15, 2001. VII. CONSENT CALENDAR Note: Consent Calendar items are considered to be routine in nature and will be approved by one motion. APPROVAL OF DEMAND REGISTER DATED JUNE 5, 2001. 2. AUTHORIZATION FOR OVERNIGHT TRAVEL TO NEW YORK, NY, JULY 18-22, 2001, FOR BOND TRANSACTION(S) FOR THE FOLLOWING: MAYOR, RDA CHAIRPERSON, EXECUTIVE DIRECTOR, ASSISTANT CITY MANAGER, COMMUNITY DEVELOPMENT DIRECTOR AND FINANCE DIRECTOR Vill. BUSINESS SESSION 1. CONSIDERATION OF AN AFFORDABLE HOUSING REHABILITATION AGREEMENT BY AND BETWEEN THE LA QUINTA REDEVELOPMENT AGENCY AND LAWRENCE RAEL FOR THE PROPERTY LOCATED AT THE SOUTHEAST CORNER OF EISENHOWER DRIVE AND CALLE TAMPICO. A. MINUTE ORDER ACTION RDA Agenda -2- June 5, 2001 oO IX. PRESENTATIONS - None X. STUDY SESSION - None XI. DEPARTMENT REPORTS XII. CHAIR AND BOARD MEMBERS' ITEMS XI11. PUBLIC HEARINGS - None XIV. ADJOURNMENT - Adjourn to a Regular Meeting of the Redevelopment Agency to be held on June 5, 2001, commencing with Closed Session at 2:00 P.M. in the City Council Chambers, 78-495 Calle Tampico, CA 92253. 0 \ � ' e I, June S. Greek, Secretary of the La Quinta Redevelopment Agency, do hereby declare that the foregoing agenda for the La Quinta Redevelopment Agency meeting of June 5, 2001, was posted on the outside entry to the Council Chamber, 78-495 Calle Tampico and on the bulletin board at the La Quinta Chamber of Commerce and at Stater Bros., 78-630 Highway 111, on Friday, June 1, 2001. DATED: June 1, 2001 JUNE S. GREEK, CIVIC Secretary, La Quinta Redevelopment Agency WV311101MOI 01 The La Quinta City Council Chamber is handicapped accessible. If special equipment is needed for the hearing impaired, please call the City Clerk's Office at 777-7025, 24-hours in advance of the meeting and accommodations will be made. -3- 003 `FM ors` AGENDA CATEGORY: BUSINESS SESSION COUNCIL/RDA MEETING DATE: JUNE 5, 2001 / CONSENT CALENDAR ITEM TITLE: Demand Register Dated June 5, 2001 STUDY SESSION PUBLIC HEARING RECOMMENDATION: Approve Demand Register Dated June 5, 2001 BACKGROUND: Prepaid Warrants: 45366 - 453811 690,941.93 45382 - 45384) 589.12 45385 - 454031 3,678.59 45404 - 454051 5,682.50 45406 - 45411) 6,553.43 45412 - 454201 27,210.05 Auto Mall Cks1 45,873.11 Wire Transfers) 194,139.00 P/R 6879 - 70161 177,174.72 P/R Tax Transfers) 53,093.71 CITY DEMANDS Payable Warrants: 45421 - 45559) 1,189,154.82 RDA DEMANDS $2,394,090.98 FISCAL IMPLICATIONS: Demand of Cash -RDA $409,090.53 Falconer, $1,985,000.45 409,090.53 $2,394,090.98 CITY OF LA QUINTA AUTO MALL BANK ACCOUNT TRANSACTIONS 5/1/01 - 5/30/01 CHECK# 1030 STAMKO DEVELOPMENT $45,873.11 TOTAL TRANSACTIONS $45,873.11 m 002 CITY OF LA QUINTA BANK TRANSACTIONS 5/9/01 - 5/30/01 5/11/01 WIRE TRANSFER - DEFERRED COMP $6,211.03 5/25/01 WIRE TRANSFER - DEFERRED COMP $6,211.03 5/11/01 WIRE TRANSFER - PERS $11,341.63 5/25/01 WIRE TRANSFER - PERS $10,987.31 5/11/01 WIRE TRANSFER - CREDIT UNION $5,372.00 5/25/01 WIRE TRANSFER - CREDIT UNION $5,546.00 5/09/01 WIRE TRANSFER - RDA ESCROW $50,000.00 5/09/01 WIRE TRANSFER - RDA ESCROW $23,470.00 5/24/01 WIRE TRANSFER - RDA ESCROW $25,000.00 5/30101 WIRE TRANSFER - RDA ESCROW $50 000 00 TOTAL WIRE TRANSFERS OUT $194,139.00 003' ACCOUNTS PAYABLE - AP5005 CHECK REGISTER 2:21PM 05/29/01 CITY OF LA QUINTA BANK ID: DEF PAGE 1 CHECK CHECK VENDOR PAYMENT NUMBER DATE NO. NAME AMOUNT ***NO CHECKS WERE USED FOR PRINT ALIGNMENT.*** 45421 05/29/01 &01418 GLENDA LUDWIG 34.00 45422 05/29/01 &01419 KAY RAVENEL 50.00 45423 05/29/01 &01420 VACATION POOLS 72.00 45424 05/29/01 &01421 MEG PENDERGRAPH 4.00 45425 05/29/01 &01422 DENISE BERG 20.00 45426 05/29/01 &01423 STEVE DODSON CONST 235.00 45427 05/29/01 &01424 MYRNA MANN 2.00 45428 05/29/01 &01425 LA JOLLA LOANS 260.00 45429 05/29/01 &01426 FRED CRANE 22.00 45430 05/29/01 &01427 BONNIE KODESCH 22.00 45431 05/29/01 &01428 DIANE TAYLOR 22.00 45432 05/29/01 &01429 LAVINIA YOUNG 22.00 45433 05/29/01 &01430 TD DESERT DEVELOPMENT 50.00 45434 05/29/01 AAA100 AAA SEASONS 3105.00 45435 05/29/01 ACE010 ACE HARDWARE 22.19 45436 05/29/01 AEPO10 AEP 180.00 45437 05/29/01 AGI100 AGING COMMUNITY TEAM ACT1 50.00 45438 05/29/01 AME200 AMERIPRIDE UNIFORM SVCS 116.54 45439 05/29/01 ANDO50 ANDY'S AUTO REPAIR 1849.34 45440 05/29/01 AN1050 ANIMAL CARE EQUIPMENT 150.50 45441 05/29/01 ARB100 ARBOR TECH SERVICES 150.00 45442 05/29/01 ARC100 ARCH 46.46 45443 05/29/01 ASC001 A & S COFFEE SERVICE 315.50 45444 05/29/01 AVA100 AVAYA INC 1239.80 45445 05/29/01 BEA100 BEAUMONT KAWASAKI 100.07 45446 05/29/01 BER150 BERRYMAN & HENIGAR INC 8119.57 45447 06/29/01 BIO100 BIO TOX 251.00 45448 05/29/01 BRI100 BRINKS INC 275.40 45449 05/29/01 BUN100 BUNDLE BANDS 25.50 45450 05/29/01 CADO10 CADET UNIFORM SUPPLY 116.61 45451 05/29/01 CAL015 CALIF BUILDING OFFICIALS 250.00 45452 05/29/01 CAL127 CALIF ASSOC OF MUSEUMS 340.00 45453 05/29/01 CAR300 CARQUEST 219.24 45454 05/29/01 CDW050 CDW GOVERNMENT INC 322.56 45455 05/29/01 COA081 COACHELLA VALLEY WATER 51975.00 45456 05/29/01 COM055 COMMUNICATIONS CENTER 156.86 45457 05/29/01 COO100 COOLEY CONSTRUCTION INC 148216.50 45458 05/29/01 COSO50 COSTCO BUSINESS DELIVERY 362.17 45459 05/29/01 COU350 COUNTRY CLUB OF DESERT 270.00 45460 05/29/01 CRM100 CRM TECH 3140.00 45461 05/29/01 DAN200 DANONE WATERS OF NORTH 487.07 45462 05/29/01 DES019 DESERT FIRE EXTINGUISHER 115.00 45463 05/29/01 DES040 DESERT JANITOR SERVICE 4831.71 45464 05/29/01 DES060 DESERT SUN PUBLISHING CO 926.72 45465 05/29/01 DES065 DESERT TEMPS INC 5604.20 45466 05/29/01 DII050 CHRISTINE DIIORIO 374.84 45467 05/29/01 DLO100 DLO ENTERPRISES INC DBA 2625.92 l) E �G4 ACCOUNTS PAYABLE - AP5005 CHECK REGISTER 2:21PM 05/29/01 CITY OF LA QUINTA BANK ID: DEF PAGE 2 CHECK CHECK VENDOR PAYMENT NUMBER DATE NO. NAME AMOUNT 45468 05/29/01 DOU010 DOUBLE PRINTS 1 HR PHOTO 61.26 45469 05/29/01 DRU100 DRUMMOND AMERICAN CORP 358.62 45470 05/29/01 EIS010 EISENHOWER IMMEDIATE CARE 385.00 45471 05/29/01 ELM100 ELMS EQUIPMENT RENTAL INC 1267.40 45472 05/29/01 EQUO10 DALE EQUITZ 50.00 45473 05/29/01 EXP200 EXPRESS DETAIL 790.00 45474 05/29/01 FED010 FEDERAL EXPRESS CORP 341.24 45475 05/29/01 FER200 FERRIS, JOHNSON & ASSOC 12720.00 45476 05/29/01 GAS010 GASCARD INC 78.00 45477 05/29/01 GAT020 GATEWAY BUSINESS 3323.08 45478 05/29/01 GCS010 GCS WESTERN POWER & EQUIP 1097.44 45479 05/29/01 GL0050 GLOBAL EQUIPMENT CO 150.44 45480 05/29/01 GRA010 GRANITE CONSTRUCTION CO 686195.60 45481 05/29/01 HAR010 HARRIS & ASSOCIATES 2070.00 45482 05/29/01 HEG050 JIM HEGGE 1086.00 45483 05/29/01 HIG010 HIGH TECH IRRIGATION INC 3203.53 45484 05/29/01 HIN010 HINDERLITER, DE LLAMAS 1490.55 45485 05/29/01 HOA010 HUGH HOARD INC 2368.92 45486 05/29/01 HOM030 HOME DEPOT 1702.28 45487 05/29/01 IMP100 IMPACT SCIENCES INC 9496.23 45488 05/29/01 INF030 INFORMATION RESOURCES 825.00 45489 05/29/01 INT015 INTERNATIONAL CONFERENCE 29.00 45490 05/29/01 INT018 INTERNATIONAL PERSONNEL 223.00 45491 05/29/01 JAS100 JAS PACIFIC 16614.82 45492 05/29/01 JIF100 JIFFY LUBE/AFMS 59.84 45493 05/29/01 JOB020 JOBS AVAILABLE INC 110.40 45494 05/29/01 JPRO10 JP REPROGRAPHICS 710.93 45495 05/29/01 JUD010 JUDICIAL DATA SYSTEMS COR 197.20 45496 05/29/01 KE1010 KEITH COMPANIES 1066.00 45497 05/29/01 KIN050 KINKO'S 166.01 45498 05/29/01 KIN100 KINER/GOODSELL ADVERTISNG 9856.53 45499 05/29/01 KRI100 BRUCE KRIBBS CONSTRUCTION 4231.00 45500 05/29/01 LAI030 LAIDLAW TRANSIT INC 505.55 45501 05/29/01 LAQ040 LA QUINTA CHAMBER COMMERC 50.00 45502 05/29/01 LAQ400 LA QUINTA NURSERY 2350.00 45503 05/29/01 L00010 LOCK SHOP INC 38.99 45504 05/29/01 MCDO10 MC DOWELL AWARDS 223.01 45505 05/29/01 MIR010 MIRASOFT INC 52.50 45506 05/29/01 MOM100 MOM'S GAS STATION 1084.86 45507 05/29/01 NAT015 NATIONAL COUNCIL ON AGING 125.00 45508 05/29/01 NAW010 RON NAWROCKI 4900.00 45509 05/29/01 NIC101 NICKERSON & ASSOC INC 4552.50 45510 05/29/01 OFF005 OFFICE DEPOT INC 153.24 45511 05/29/01 OLI100 OLINN MESSAGE CENTER 101.59 45512 05/29/01 OMN100 OMNI LOS ANGELES HOTEL 253.30 45513 05/29/01 OWE020 OWEN & BRADLEY 1100.83 45514 05/29/01 PCR100 PCR 21040.00 45515 05/29/01 PET005 CASH/PETTY CASH 190.50 45516 05/29/01 PIC100 PICKENS FUEL CORP 7.54 n i i � G 5 ACCOUNTS PAYABLE - AP5005 CITY OF LA QUINTA CHECK CHECK NUMBER DATE 45517 45518 45519 45520 45521 45522 45523 45524 45525 45526 45527 45528 45529 45530 45531 45532 45533 45534 45535 45536 45537 45538 45539 45540 45541 45542 45543 45544 45545 45546 45547 45548 45549 45550 45551 45552 45553 45554 45555 45556 45557 45558 45559 05/29/01 05/29/01 05/29/01 05/29/01 05/29/01 05/29/01 05/29/01 05/29/01 05/29/01 O5/29/01 05/29/01 05/29/01 05/29/01 O5/29/01 05/29/01 05/29/01 05/29/01 05/29/01 05/29/01 05/29/01 05/29/01 05/29/01 05/29/01 05/29/01 05/29/01 05/29/01 05/29/01 05/29/01 05/29/01 O5/29/01 05/29/01 05/29/01 O5/29/01 O5/29/01 05/29/01 05/29/01 05/29/01 05/29/01 O5/29/01 O5/29/01 05/29/01 05/29/01 05/29/01 CHECK REGISTER BANK ID: DEF ul POS030 PRE015 PRI016 PR1020 RAD050 RAL050 RAS020 RBF100 RESO11 RIV020 RIV080 RIV100 ROSO10 RUI100 RUT050 RZC100 SAWO10 SAX100 SEC050 SMA010 SNE100 SOCO10 SOU007 SOU100 SOU203 STA045 STA050 STA150 SUN070 SUN080 TKDO10 TOPO10 TOP100 TRI100 USO100 VOG050 WEL150 WES020 WES100 WINO10 WOR100 XERO10 YOU100 VENDOR NAME 2:21PM 05/29/01 PAGE 3 PAYMENT AMOUNT POSTAL CONNECTION OF 45.25 THE PRESS -ENTERPRISE CO 2019.73 PRIME -STRIPE INC 85.95 THE PRINTING PLACE 704.12 RADIO SHACK 21.48 RALPHS GROCERY CO 224.06 RASA - ERIC NELSON 2720.00 RBF CONSULTING 5717.96 RESOURCE DIRECTORY 46.95 RIV CNTY AUDITOR-CONTROLR 758.00 RIVERSIDE COUNTY HEALTH 935.00 RIVERSIDE COUNTY SHERIFFS 23411.20 ROSENOW SPEVACEK GROUP 26872.95 JOHN RUIZ 45.81 RUTAN & TUCKER 53362.17 R-Z COMPANY 800.00 STAN B SAWA 969.05 SAXON ENGINEERING SERVICE 1920.00 SECURITY LINK/AMERITECH 130.00 SMART & FINAL 195.46 ROGER SNELLENBERGER ASSOC 2000.00 THE SOCO GROUP INC 287.88 SOUTHWEST NETWORKS, INC 4390.00 SOUTHLAND GEOTECHNICL INC 739.00 SO CAL CITY CLERKS ASSOC 30.00 STAN'S AUTO TECH 415.39 STAPLES 857.72 STATER BROS 135.58 SUNLAND SCREEN & AWNING 927.00 SUNLINE SERVICES GROUP 1509.81 T.K.D. ASSOCIATES INC 205.72 TOPS'N BARRICADES INC 75.25 TOP OF THE LINE SIGNS 87.50 TRI STATE LAND SURVEYORS 4700.00 US OFFICE PRODUCTS 1371.61 CHRIS A VOGT 64.03 WELTY'S POSTAL CONNECTION 3.20 WEST GROUP 43.00 WEST END UNIFORMS 725.63 WINSTON TIRES 132.88 WORLDCOM 1550.00 XEROX CORPORATION 2816.48 YOUNG ENGINEERING SERVICE 8901.00 CHECK TOTAL 1,189,154.82 % i, 166 a O F z O N \ S O w F N N N N N N N N N N U a ill � N itl O � '(1 ill N ✓1 N I(1 J1 ifl ul O 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 + F O o 0 0 o O o 0 o O O o Z F W 2 r r �O Jl r P O m Ol l0 N N O N N a Fa' o O o O o 0 0 0 0 0 0 0 0 0 0 0 0 0 F H P Z z O N W P z O N N a O F N F a a M O O 0 0 ❑❑ > N O 0 a s O O Q Q a O O a a 3 3 0 V H H a U W W a s a a m W w Z Z �+ Z Z O O F F O p O a a a a o 0 1-I a m m a 0❑ o o a F a a m a a a a a a a u a m a m Z a a F U] m E E a F a F F m F F a F a O ❑❑ O t l 0 £ S O O 0 0 U O m 0 2 0 ❑ O ❑ W U U E U U E a a F F O F 0 c Q ❑ F Q F Q E U E U V H X X X X W w O % a a a a w w a w w a m a a ❑ a w a m m m m a u a a s w a w 0 0 0 0 \ o 0 0 0 0 0 > a o o ❑ ❑ ❑ ❑ ❑ ❑ o ❑ ❑ ❑ o ❑ ❑ ❑ ❑ ❑ ❑ ❑. ❑ ❑ o z u z z z z z z z z z z z z z z z z z z z z z z z z z z z F m O O W ❑❑ w O U W O W O W O❑ O O W ❑ W ❑ W ❑ W p ❑ W W W W w w W w w W W W w W W W w a s a s a s a a a a a a a a a a w U w N N Jl N ill Jl p a M M O w O O N N N N > 1 > m M rl N Jl 1 N N M Hz m r r e e ✓1 N N N N .y m m ❑ D O O O N O O O O N N N H Z O O O O 00 O rl ti ti .-� O O O p Y 00 O O O O Q z a a m w m a I O O W F a P P P O O o v O O O O O v P w Y1 �(1 ill ifl O O O ul O O O O O � ul Ifl P P P e O O O P O O O O O M e P £ z M P e F P P P P P c v P e Q e Z O O o 0 0 0 0 o O o 0 o O o O O J O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O a o o 0 0 o o O o O O O O o O o O M F F F F O m m m m O Z Z Z Z O O O O a m m a U U U U aa'' 00 0 3 3 a s U' (9 O O O O Q O p W W a p. a a m m In m W F O z Z W W ❑ p❑❑ a z a s W W Z Z ❑ m 0 0 0 0 a o a s >Q >a o o � W O p p o �+ a ❑❑ n: a F F a m W W W W u u F W W U' U Y' Y' >> E' ❑ m m m N z O > m Ol Ol O O rl N M M M M U F .y U o O O O 0 0 0 O Q U w O u w O O a O w w w O z Z a O z a a w S U m w ❑ r a a a o z n aa. a � u o a Z o 01 O 1 c N c N o O a a o a O w 007 Z ti F C z m O m N \ N S O N 0 0 0 0 0 m o o r r m m m rn o rl F Z F O O O O O O O N N W Z N N O ifl O N O O m m T �O ✓1 O m � N O O O O O Ol O O N N F N a N Z N O N O ifl F F z Z O N W ~ N ti V W a 3 W 2 m a £ £ F E a a rt z 0 z 0 ., W £ F F m Z Q F m Q a F m Q a F a Q a F W W W W a F z N Q F 0 ❑ Q F 4 F a F a Q a Q Q F W O O F '❑ O O F o 0 a 0 a a 0 O O O O w w w a 0 Iw 0 a 0 w m 0 w m 0 o m 0 W W >> a 0 F ❑ a 0 s m a 0 s m a 0 a a 0 W a W a W a W a O m > z a u ❑ z ❑ ❑ z z ❑ ❑ z z ❑ ❑ z z a a ❑ z o ❑ z a W ❑ z a W ❑ z ❑ a z u a u a u a u ❑ z M a F m W W > o W w> 7 W w> ',� W w> O O W > a W> W m £> W m £> W u F m F> W F 2 F x F S F x> W a a ❑ W W W m m W W W Q W W W W ❑ u W ❑ a h 0 O > Z H £ m m m io a r m ri M r� ri N ❑ O F Z z N O O ti Q m m p 'J m fA l0 l/I O O O O O O O O O\ Ol L1 a Z� a W m I m a o o F w £ o ❑ 2 r m r m ri .i ri N o m m m m o m 0 m m m m r� 0 E 'J O O O O O O O ifl i(1 c T O Q� O v O N O N O N 0 N 0 IP 0 Jl 0 O N !1 i(1 lO U a o rl o rl o r-I 0 0 •-� r4 N 0 H 0 •y 0 H 0 rl 0 �(1 0 N 0 N 0 Y1 0 N E F U a m U > u > F o Z £ F m a y 0 a a a a Z W o Q O 0 0 Q Q Q 4 O U' ZO > O rn m - C ,F-I 7 z m z U w 0 a 0 a 0 a 0 w W W a F a N O i1 F Z z 0 0 Q 3 £ £ 4] O❑ 4] F S F O F S F O a Q m Iz-I F Q w a s a ou w m Q Q a a u a 0 O m W❑ W W m h a x w a m m m m a q£' Q m a a O z Q IZ-I > gg �a W w H a W �d a W �d >• ❑❑❑❑ >. >. >. 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[u fu - [� w O U ii d W W W W W W W W W W H �E F F r/Hj 0 0 0 0 0 0 0 0 0 0 0 0 z a a w w ❑ 4f w w UI U) UI �] w f/1 w 2 w W W Iz-I O w (al O w z ❑ O p p p❑ O p 0 0 U 3 3 3 3 3 X% Y. F W W Z O > O o O O O O O O O O O O O O O O O O O Ofi 4 0❑ N o 0 0 0 0 0 0 0 0 0 o w N o .+ o .. .. o u H 0 0 0 0 0 0 0 0 0 0 U M v w w m w m W w. w O W W w Q U O D D p❑ -^ O O❑❑ > 3 3 3 3 3 X X 025 .. m rZ� r C O F Z O m \ N S O W F N li Q Ifl E Q m F a d 0 O N rl F O m Z F W Z � f 7 � N O N 4 Fay m � m m m 0 o .. a o a E m o E E z W E u a N > a a z m E a 0 0 W rl Y F U E V W a o x o > a o ❑ Z U Z m Z W W Q > I m a ❑ W W U W o Q ❑ a a 0 O • W o z z £ N m M ❑ N ❑ I 1 Z O ❑ o F H Y Q Z a Q m W m a I o o W E m r W v m �n Z Z o m E Z c O � O m U U Q O W U > a W m M o U o z a s Q W W I Z Q W F U a z z Q ❑ r a Q a z z a 0 0 ❑ o m z a. F W W Z O > o 0 0 o N U H ❑ Q U 0209 026 ACCOUNTS PAYABLE - AP5005 CHECK REGISTER CITY OF LA QUINTA BANK ID: DEF 10:21AM 05/24/01 PAGE 1 CHECK CHECK VENDOR NUMBER DATE NO. NAME ***NO CHECKS WERE USED FOR PRINT ALIGNMENT.*** 45412 05/24/01 COA080 COACHELLA VALLEY WATER 45413 05/24/01 DIA100 DENISE DIAMOND 45414 05/24/01 GAB050 GABRIEL'S WROUGHT IRON 45415 05/24/01 IMPO10 IMPERIAL IRRIGATION DIST 45416 05/24/01 LAQ050 LA QUINTA CITY EMPLOYEES 45417 05/24/01 RIV040 RIVERSIDE CNTY DEPT CHILD 45418 05/24/01 SUP100 SUPPORT PAYMENT CLEARING- 45419 05/24/01 UNIO05 UNITED WAY OF THE DESERT 45420 05/24/01 VER200 VERIZON CHECK TOTAL PAYMENT AMOUNT 12122.08 75.00 13425.00 317.51 312.00 426.50 150.00 179.00 202.96 27,210.05 Q30 027 �n io r m m 0 N ri n H N r� e m r 0 qZ F z N U a W W W W W w w W W W w m m m m W w O 0 0 0 m ri o o r r r 0 0 0 o m z W E Z E O rl rl ti N ul r N � N i(1 r N O� d ti m O O O O O O N N i(1 r �(1 N D N ❑ r4 ❑ O N d O 'J N N r O S i 3 w m w ❑ a U 2 Z W E Q a a U Q > Q Q a a Q a 4 Z Q Z O F O z Q F O O F U O U >>> U U F 0 a F 0 U E 0 O F 0 D F 0 Z O O F V U U U U U F Q F a F m mN F 4 F F u F H F O F O d >>>>>> a m O a s O w a a 0 u u u a . O .+ a � O N O a N O N 0 a > O h U m > z a u a a a a a ❑ a z a w ❑ z a ❑ z a F a F a ❑ F z 'H ❑ ❑ z ❑ 0 z 'N ❑ ❑ z N ❑ ❑ z w a F H m W w F w F w F w F w F w w F> > Q> w E w U1 > u w u W u w w> w a> w a> W a> a> W z O V Z W ❑ a 3 a 3 a 3 a 3 a 3 a 3 a E w a a w a w a w � d � d � d � a x d o U w w a o 0 o r� o o 0 Ol >❑ > Z 2£ w m N N o t+l r f+ ❑ O Z r o r 0 r 0 �o 0 m m o n 0 o 0 0 o o r r H y' Q z d Q m w m a i o o W F a N N N l"1 N N O O O\ 01 O O O O O m O Z i`l t`l rvl O t"1 r1 m N N N N N N N N N O F y v O c c O v v v e O O O O v m U U a o H 0 0 H 0 0 0 0 0 0 0 0 0 0 0 0 0 0 F U1 E In F UI m W a H O ry F a f+al ca.] 4a] � w w O ❑ ❑ ❑ N U a Uw1 a a a a a a z z z F o m o 3 3 3 3 3 3 F 0 0 0 d £ d w a U w O Y Y Y Y Y Y x E E F w ❑ 2 d a a a a a a a a a a a a a ❑ z O 0 C� H H (� H Y E Y F Z w W i a > a > a > a > a > a o a a a a H z £ o w H a a a a a a 4 m a w d a a z m H a a a a a a a a a a a a O a a Q a Q a Q F Z ❑ F 3 z z a m Y ax W W W W x W x W x w m w E H F m a ❑ 0 0 a d a a O u a u a u a u a u a u a z a m w d w d w d a w > d a F a s a 0 ❑ z 0 u 0 u 0 u 0 u 0 u 0 u w ❑ ¢ c� £££ H H H a a a ❑ m z > w >> w EW 2 0 w > o 0 0 0 0 0 o 0 0 0 0 0 0 0 ,n o o Q31 ❑ O Y U m O a m O a m O a m O a m O a m a o a �n m .. d .. m .. d in a a o a 0 H 0 a 0 s u N o 0 0 0 0 o a E N E a ❑ z W w 028 Z m o a O E Z 0 c N \ N 2 O W F £ £ o Q w w O ri �n o E o m P Y O N a £ a Q r N N .] O f[ N E E F Z £ w w £ O Q Q Z £ F a O O w Z E U E O U H > a >a H F O > a Q ❑ Z U U w Z E m Z w w a o > I ❑ a x W w U W Q a N N a >❑ w n > I > m N N W Z Z £ •+ E m ❑ H o r r I Z r r O ❑ r r F H Y' Q Z a Q m m m a I o o W F a N o m io 0 £ E ❑ � m U U Q O O (+1 O O N a Q I Q W F Z m H Z Z Q O O N N N a a E a o a a � ❑ W w m z > > w0 Z > o 0 o0 O N N N U E a a U H W w Q U > > 032 029 ACCOUNTS PAYABLE - AP5005 CHECK REGISTER CITY OF LA QUINTA BANK ID: DEF 09:13AM 05/22/01 PAGE 1 CHECK CHECK VENDOR NUMBER DATE NO. NAME ***NO CHECKS WERE USED FOR PRINT ALIGNMENT.*** 45406 05/22/01 CAL016 CA ASSEMBLY OF LOCAL ARTS 45407 05/22/01 COA080 COACHELLA VALLEY WATER 45408 05/22/01 LAQ330 LA QUINTA COMM MEDICAL 45409 05/22/01 LOR100 LORMAN BUSINESS CENTER 45410 05/22/01 USPO10 U S POSTMASTER 45411 05/22/01 VER200 VERIZON CHECK TOTAL PAYMENT AMOUNT 12.50 86.01 5000.00 239.00 1140.00 75.92 6,553.43 0:3111 030 zQ ti N M V ifl 1p r a o F z 0 N N _ U a w w w w W w w 0 0 0 0 0 0 o N m O Z F w Z N M M O dl O Ifl M m a O O O O N N � O Ol O ifl rl O N F Z H O E a w w a a £ Z E F O F F F O F F a O O O Z O 0 O 0 0 O W F F H W E a F H O F U U w a m U a a >> a z a a a > a O �-+ O cn W O 0O a w 0 N O > a z o L. a s (9 p z z z z z �£ w F w Z W w w> F E> > > > O> i p w a Q m w 0 2 m £ 3 3 U W U w o o Q a o o m a op w M M m > z z£ o o m m O O r i y o o m O � X a z a a m w m a o o w F a o 0 0 0 0 0 0 w o 0 o a o 0 0 m o 0 0 0 0 0 0 £ n M Z m m M m F 'J ul O O O N ✓1 N U Q O O o 0 o O O N F a m U 3 3 p w O O W U m w a £ w a a O 4 Q O Z F N > > U U w F m a s Q o s z a o h uai ni z o 0 Na a a N a a cxi cxi oa � a¢ o a s a m s OU Oa U 4 p > w0 Z O J+ o 0 o m o N uU OU a U U ri O 'J > 034 031 ACCOUNTS PAYABLE - AP5005 CHECK REGISTER CITY OF LA QUINTA BANK ID: DEF 11:18AM 05/17/01 PAGE 1 CHECK CHECK VENDOR NUMBER DATE NO. NAME ***NO CHECKS WERE USED FOR PRINT ALIGNMENT.*** 45404 05/17/01 LAQ074 LA QUINTA PALMS REALTY 45405 05/17/01 WES009 WEST COAST TRANSPORTATION CHECK TOTAL PAYMENT AMOUNT 5000.00 682.50 5,682.50 035 F a m z W > m N N .] 3 m 036 033 ACCOUNTS PAYABLE - AP5005 CHECK REGISTER 09:04AM 05/16/01 CITY OF LA QUINTA BANK ID: DEF PAGE 1 CHECK CHECK VENDOR PAYMENT NUMBER DATE NO. NAME AMOUNT ***NO CHECKS WERE USED FOR PRINT ALIGNMENT.*** 45385 05/16/01 ABE001 JACQUES ABELS 150.00 45386 05/16/01 ANDO10 ANDERSON TRAVEL SVC INC 152.50 45387 05/16/01 BOB100 BILL BOBBITT 50.00 45388 05/16/01 BUTO10 RICHARD BUTLER 150.00 45389 05/16/01 COA080 COACHELLA VALLEY WATER 83.83 45390 05/16/01 ELRO10 EL RANCHITO 256.18 45391 05/16/01 IRW020 BARBARA IRWIN 50.00 45392 05/16/01 KIRO10 TOM KIRK 150.00 45393 05/16/01 MIT150 MICHAEL MITCHELL 50.00 45394 05/16/01 NEXO10 NEXTEL COMMUNICATIONS 1577.98 45395 05/16/01 PUE050 MARIA L PUENTE 50.00 45396 05/16/01 REY055 FRANK R. REYNOLDS P.E. 50.00 45397 05/16/01 ROB150 STEVE ROBBINS 150.00 45398 05/16/01 SHA050 ARCHIE SHARP 50.00 45399 05/16/01 SPRO10 SPRINT 73.62 45400 05/16/01 TYL050 ROBERT T TYLER 150.00 45401 05/16/01 VER200 VERIZON 365.48 45402 05/16/01 VER210 VERIZON INTERNET SOLUTION 69.00 45403 05/16/01 WRI050 ROBERT S WRIGHT 50.00 CHECK TOTAL 3,678.59 037 ID34 .y 0 a F O Z e x lJ £ Q Q m W E W E W F w E w E w E w F W F W F W E W F W F w E (D O F Z F O O O N O O O O M O O W O O O O O O m O O 4] Z d IZ ~ O O O JI O O O O M m fD O O O O O O m O� O O O N N N VI O N O N M m b N N O Z ill O O N •+ O Z N O r IZ N O N O N w Z F E F z a z > a u z > a u > > m a a F U E W F w W U z £ £ a F a O s F Z Q a F £ £ a F Q F w Z a F a s d F £ £ a F a s d E Z a O F a s W E Z a W 0 0 U 0 E a o E a o E 0 O 0 F o F z o E 0 a F 0 O 0 F o a F x o d F O a F a H a 0 m > a u a u a >> a ❑ a u a u a u a a s u a p O > a z , O ❑ Q m O ❑ w F 0 ❑ z " 0 N ❑ m O ❑ a O ❑ i-+ O a ❑ z , O ❑ O a ❑ a O a ❑ •+ O a ❑ w E z H u w z z z w F z w " x z w z z z a w w a w z w u z z w o z F w z z z w o z F w 0 z a w o z F w s W❑ .a] > a > a > a > F E > ❑ > v> > Q > > a > m > U ❑ a o 0 0 0 0 0 0 o I 0 0 0 > Z > Z£ ❑ ❑ ❑ z a d a � m a d a a a a r o �� r o a d a a d a a a a �n r m a d a a d a Y Q Z d a m w m a � o o d E a m o o 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 o 0 io 0 0 0 0 ❑ Z m o ✓1 r m �O rn o N m o N m �O m �D ri 1p m o N m 0 J1 m o ✓1 N m 1p rn o � m 0 N F O N M M Q U a O O O o 0 o O O o o O O o U z a F a E Z m > 3 3 O d O VI cry y a m uai a .ai z S Z F z q>q a m o o E o " a y ❑ .aa .aa csi a a a a rG Q a a W a S U U (Y m x S F a Z d a a o ❑ u a ❑ z a E u Q o a o a a a £ o u x W z u u W m F E z � W z o 'J > .. O o rl 0 O 0 rl o 0 a m 0 N 0 N 0 ti 0 �!1 0 rl 0 N N �n 0133 O N U N O w O ❑ m O F O a O s O O O O O O U a U m Q Z a O m m m O U O V a w a JG £ w Z ❑ d w a 035 a o F z 0 m \ N x �n U O O U U t9 t9 U U U U U (➢ C'1 Q W W W W W W W W W W W W S Qa m E F E F F F F F F F F E Rae O O N O M M m O O O O m C' 01 O 1 1 O o Z F in vi r ui r r r r ri N io �n N00og � O M O F O E W F F a z a z s z N z z F W F W W 4 £ a a s a £ a a W a a s Q Z E £ F a F F £ E F O F a F a O O O O 0 O O O O Ua O 0 W a a d U IUi a U m m > m 0 m >>>>>> a F a U a O H O z 0 H O m O z 0 m m m m m N O W O O > a ❑ F ❑ a ❑ ❑ ❑ ❑ z ❑ a ❑ Z U Z z Z O Z w Z z Z W W W W W W Z a z O Z H m W Z W E W Z W Z W Z Z Z Z Z Z W w w F w W > a> m> o> a> o 0 0 0 0 0> E> m> I ❑ .a H x a x x x x x x z a x a a a a a a �, a m ❑ � W ❑ a O O M O n N .+ N O� O O m O w O O O Ol m r O N O l0 O > I > m N N O N N M m N W H ❑ H ❑ a a r, a P �n .� �n a I H Z a a m a io io �o m P r N w O ❑ a a a �� , m M r M a F H x a z a a m w m a I o o w E a o 0 0 0 0 0 0 0 P o 0 0 W o 0 0 0 0 0 0 o io 0 0 0 z o o M o M M M M M M o 0 F Z F M in M m M M O P P rl P rl r-I N e-1 O' N rl P U a o O O O O O o 0 0 o O O Z O E F o O M m 0 O F a a z x a m z a a "ai F mm S F 3 W ryi z O m F m m H a z z z z Z z z a o W E F o 0 0 0 0 0 o E !+ [l W H y a N N N N N N N a a s o r>i u a m s a z s a a a m .] ❑ F a a O W W W W W W W O m z m a m a >>>>>> > a F W W z 0 > o o 0 0 0 0 0 0 0 0 0 0 'J ill Vl .y N O O O O O O ti JI O N O O O N N N N N N N O U M m Q a F1 a a a a a a a H Q U a m m F >>>>>> > 3 033 036 ACCOUNTS PAYABLE - AP5005 CHECK REGISTER CITY OF LA QUINTA BANK ID: DEF CHECK CHECK VENDOR NUMBER DATE NO. NAME ***NO CHECKS WERE USED FOR PRINT ALIGNMENT.*** 45382 05/11/01 MIL100 MARY K MILLER 45383 05/11/01 MOR100 CITY OF MORENO VALLEY 45384 05/11/01 WES009 WEST COAST TRANSPORTATION CHECK TOTAL 2:11PM 05/11/01 PAGE 1 PAYMENT AMOUNT 33.12 56.00 500.00 589.12 040 037 6a' O F Z ti O ti W W N O N O O O N E O O O Z F W 2 m m m O (L /i N O O O O E Z Z O Z F W F F E £ W W Q a s z E 4 a s W J+ F F m E V H F Z O Ili a 0 z z 0 m O > a I -I ❑ W W ❑ F ❑ Z m U m a W W W W W m > U U > '+ > ❑ U V a m ❑ a a F W � U W F ❑ a o W N Z £ N ~ Z in ❑ N H Y a Z d Q (0 W m a I O O fu F a o O O o W O O O O m O O O O ❑ m r r m Z m m o N l0 lO r F 'J O O O ifl U Q o 0 0 0 Z O F E N N Q fil 4] F a a a m a a O a a a o > > y Z R a z z a W W W E a a o o E a £ £ z E a ° o x o o U U 3 F W Z O > o 0 o m O N o U H a a s 4 U £ £ z 3 A C41 AN ACCOUNTS PAYABLE - AP5005 CHECK REGISTER 4:37PM 05/10/01 CITY OF LA QUINTA BANK ID: DEF PAGE 1 CHECK CHECK VENDOR PAYMENT NUMBER DATE NO. NAME AMOUNT ***NO CHECKS WERE USED FOR PRINT ALIGNMENT.*** 45366 05/10/01 BYRO10 RIV CO SHERIFF 256.80 45367 05/10/01 CAL040 CALIFORNIA VISION SERVICE 1007.75 45368 05/10/01 CAN050 CANADA LIFE ASSURANCE CO 493.72 45369 05/10/01 COU350 COUNTRY CLUB OF DESERT 3850.00 45370 05/10/01 HOM030 HOME DEPOT 321.70 45371 05/10/01 HOM031 HOME DEPOT 637259.31 45372 05/10/01 LAQ050 LA QUINTA CITY EMPLOYEES 312.00 45373 05/10/01 PRI050 PRINCIPAL MUTUAL 42512.44 45374 05/10/01 RIV040 RIVERSIDE CNTY DEPT CHILD 426.50 45375 05/10/01 SPL100 RON SPLUDE 352.80 45376 05/10/01 STA056 STATE BOARD OF EQUALIZATN 938.07 45377 05/10/01 SUP100 SUPPORT PAYMENT CLEARING- 150.00 45378 05/10/01 TRA030 TRANSAMERICA INSURANCE 51.07 45379 05/10/01 UN1005 UNITED WAY OF THE DESERT 179.00 45380 05/10/01 UNU050 UNUM LIFE INS 1613.62 45381 05/10/01 WEL025 WELLS FARGO BANKCARD 1217.15 CHECK TOTAL 690,941.93 039 C O E Z O O O w F m o+ rn £ £ £ £ £ £ £ £ £ £ £ m m m 6 d m E F F F F E F F F E F F E F F F E F rl N O ifl N O O N O t"1 O O� tl> M O O� ifl O Z E O O r 0 O1 O \O m O £❑ ul O T O N I r I ✓1 m �� .i M r N d � M N O ul N O O O r r o r ri o O �O r M O £ T 'J N N ❑ U �(1 O Ol Jl N 41 J1 ❑ 'i > N O p N V] M w N f"1 ✓1 > z w w o M Q p s x w x H Y Y X a m W U U Q U s a z a w a O 2 O F a O H s a F C O ❑ F Z R u H Z O F ❑ a u H O Z H a u Z .a] a F O E a F 0 F w w a N u Z a E O H i 1 H a E O F w Z w a a F U O F O > H N n O ❑ Z 0 m O Z ❑ H 0 d O ❑ ❑ LL ❑ 0 O ❑ - w m H m H w w w W w w w ry 0 0 ❑ �t w O y O a 0 11 O N H u U ❑ Z O Z Z Z Z Z a a a a a �-] a Z d O z ❑ Z U R z ❑ w W w w ❑ a> \ d w> > H ra w K w a ❑❑ w w :� w ❑ w p w 0 w :� w y a > a> w o w £ z> w ❑ z \ a u w e ., ❑ a N o ry ry .-1 p o 1 I ❑ .+ .'� o m r �n m �n o m N o 0 Z z a z a a m w m s i o o w F £ o 0 o M M o 0 0 0 o m o 0 0 0 0 0 0 0 0 0 Z N M M p O O O O O O M t0 lO N M M N F Z U o 0 0 0 o r r r M M o 0 0 0 a O o O O O O O O O O O O o O O O O O w ❑ M o o Q I a m a❑ N R d m E z H a a a w C o ❑ z w W a w O U H m > a w w Z p I-1 > z w O w a a u W U R2R tG ) 4 w a Q ❑ R z a U F w W w O 0 m p❑ u a. K E Z ❑ o u F w W N ❑ 0 m u a• K H Z. ❑ 0 U o a w 0❑❑❑❑ w £ 0 x 0 a w w £ 0 x 0 a w w £ 0 x 0 a w w £ 0 x 0 a w w £ 0 x 0 w W 0❑ w £ 0 x 0 a w W £ 0 x 0 a w 0❑ W £ 0 x o s w W £ o x W N p w £ w N H U a F z ❑ p a a a F ❑ ££ a Q w H U Z x m a F O s Q a u N s m S U � w ❑ N F Z U w ❑ H m C w H a Z U u a O u > o a r m 0 a a u 0 Z R u 0 O o u 0 ❑ o u 0 £ p x 0 £ o x 0 £ p x 0 0 o x 0 Z 0 x 0 £ o x 0 £ p x £ o x £ o x 0 p a a 0 .. a a 0 .. z d 0 > s Qt 040 r-1 N N N N N E E Z O 0 \ N S £ V' Q W W rn m m rn m N o r o r o N m ui P F Z E m O O O O l0 N P �. W 2 N m O .-I rn n m N ✓� 1'1 m �p l0 N N QO a 0 o r o r o N �O N m a O OI 1+1 r N ✓1 (�1 ❑ �l) �() r N > I Y a rl 'i W 3 a x m ❑ W X Ii W W U a F a F a a s z a a a a z F a F F F j H F F O O O F O I O D O I O m O O H O F N F E F F F F O F u Z H H O O U O Q O m 0 O O ❑ O 0 0 W O o H z z c� z a z z z z ❑ z a z I -I «. a z .z, VI W F W m W W w W W \ W F F a W W > m > £ > a > > a > ❑ > W W a > ❑ z E a m W a a y E E C U o O W m o O 0 0 0 > > {p N �p m OOi OOi z o z z ~ m 4 P C ❑� Z m o m v v c H a O Q Z a a W W ❑ a � o o W H O rn m a r �n m r r m F i(t O O O O O O O vt O N ul O O O O N U .+ Q O O O O O o O O o 2 I a z a N W W a a a U Z N W ❑ ❑ ❑ � � a �a ❑ a a a W U O U❑I S Y a W Z IZ-I F a z a z Q a O Pl ttl m £ Q O Z a o a x a �d ❑ a L. W W a ❑ o F ❑ a z z W W W m Z a m y F O ❑ 3 3 3 F z 0 W O Vl N N N U a a a Q o .a a s U Q YE a F O a 044 041 A/P - '.P6002 CHECKS TO BE VOIDED 3:17PM 05/23/01 C-TY OF LA QUINTA BANK ID: DEF PAGE 1 CHECK BK INVOICE VENDOR VENDOR INVOICE NUMBER ID DATE AMT. PAID NUMBER NAME DESCRIPTION 45384 DEF 05/10/01 500.00 WES009 WEST COAST TRANSPORTATION TRIP TRANSPORTATION TOTAL VOIDED 500.00 045 049 A/P - AP6002 CHECKS TO BE VOIDED CITY OF LA QUINTA BANK ID: DEF CHECK BK INVOICE VENDOR VENDOR NUMBER ID DATE AMT. PAID NUMBER NAME 38817 DEF 10/11/99 45.81 RUI100 JOHN RUIZ TOTAL VOIDED 45.81 3:30PM 05/10/01 PAGE 1 INVOICE DESCRIPTION INTERVIEW PANEL LUNCH 04f 043 A/P - AP6002 CHECKS TO BE VOIDED 3:21PM 05/10/01 CITY OF LA QUINTA BANK ID: DEF PAGE 1 CHECK BK INVOICE NUMBER ID DATE 44986 DEF 04/12/01 44986 DEF 04/12/01 TOTAL VOIDED VENDOR VENDOR AMT. PAID NUMBER NAME 680.00 CAT035 CATAMARAN HOTEL 1358.73 CAT035 CATAMARAN HOTEL 2,038.73 INVOICE DESCRIPTION HOUSING/CA PRESERVATION CONF HOUSING/CA PRESERVATION CONF 047 044 A/P - AP6002 CHECKS TO BE VOIDED 09:33AM 05/10/01 CITY OF LA QUINTA BANK ID: DEF PAGE 1 CHECK BK INVOICE NUMBER ID DATE 45309 DEF 05/01/01 TOTAL VOIDED VENDOR VENDOR AMT. PAID NUMBER NAME 938.07 MOM100 MOM'S GAS STATION INVOICE DESCRIPTION FUEL PURCHASES rim 045 A/P - AP6002 CHECKS TO BE VOIDED 4:40PM O5/08/01 CITY OF LA QUINTA BANK ID: DEF PAGE 1 CHECK BK INVOICE VENDOR VENDOR INVOICE NUMBER ID DATE AMT. PAID NUMBER NAME DESCRIPTION 45262 DEF 03/20/01 1000.00 COU350 COUNTRY CLUB OF DESERT REFUND PLAN CHECK FEES OVERPD 45262 DEF 04/03/01 2850.00 COU350 COUNTRY CLUB OF DESERT REFUND PLAN CHECK FEES OVERPD 45262 DEF 05/07/01 2850.00 COU350 COUNTRY CLUB OF DESERT REFUND PLAN CHECK OVERPAYMENT 45262 DEF 05/07/01 1000.00 COU350 COUNTRY CLUB OF DESERT REFUND PLAN CHECK OVERPAYMENT TOTAL VOIDED 7,700.00 049 049 A/P - AP6002 CHECKS TO BE VOIDED CITY OF LA QUINTA BANK ID: DEF CHECK BK INVOICE VENDOR VENDOR NUMBER ID DATE AMT. PAID NUMBER NAME 45289 DEF 04/25/01 186.99 HOM032 HOME DEPOT TOTAL VOIDED 186.99 3:23PM 05/08/01 PAGE 1 INVOICE DESCRIPTION COMMUNITY PICNIC 05� 047 A/P - AP6002 CHECKS TO BE VOIDED 3:22PM 05/08/01 CITY OF LA QUINTA BANK ID: DEF PAGE 1 CHECK BK INVOICE VENDOR VENDOR INVOICE NUMBER ID DATE AMT. PAID NUMBER NAME DESCRIPTION 45288 DEF 04/19/01 7.42 HOM030 HOME DEPOT SUPPLIES 45288 DEF 04/19/01 -5.30 HOM030 HOME DEPOT SUPPLIES 45288 DEF 04/19/01 78.91 HOM030 HOME DEPOT SUPPLIES 45288 DEF 04/19/01 -6.13 HOM030 HOME DEPOT SUPPLIES 45288 DEF 04/19/01 9.11 HOM030 HOME DEPOT SUPPLIES 45288 DEF 04/13/01 5D.70 HOM030 HOME DEPOT SUPPLIES 45288 DEF 05/07/01 52668.48 HOM030 HOME DEPOT 1ST QTR 2001 SALES TAX 45288 DEF 05/07/01 584590.83 HOM030 HOME DEPOT PAY FOO PRINCIPAL TOTAL VOIDED 637,394.02 051. COUNCIL/RDA MEETING DATE: June 5, 2001 Authorization of Overnight Travel to New York on July 18-22, 2001 for Bond Transaction(s) for the Following: Mayor, RDA Chairperson, Executive Director, Assistant City Manager, Community Development Director, and Finance Director RECOMMENDATION: AGENDA CATEGORY: BUSINESS SESSION: CONSENT CALENDAR: CP — STUDY SESSION: PUBLIC HEARING: Approve authorization for the Mayor, RDA Chairperson, Executive Director, Assistant City Manager, Community Development Director, and Finance Director to travel to New York City to meet with bond rating and insurance agencies, and appropriate $15,000 from the Project No. 1 unappropriated reserve fund to fund transportation, lodging and meal expenses. FISCAL IMPLICATIONS: The $15,000 expenditure will be for transportation, lodging and meal expenses. These costs will be reimbursed from bond proceeds. If bond insurance and an AAA investment grade rating are obtained, then bond debt service payments will be lower due to the greater security that bond payments will occur. The projected bond debt service savings could be $400,000 per year. The anticipated bond term is 30 years. BACKGROUND AND OVERVIEW: As part of the Agency's fiscal management activities, the Agency Board authorized staff to evaluate the feasibility of issuing additional tax allocation bonds secured only by tax increment revenue from Project No. 1. In May 2001, the Agency Board approved the financing team (bond counsel, disclosure counsel, underwriter and fiscal consultant) and directed the team to structure a tax allocation bond issue. The team has subsequently been evaluating existing Agency payment obligations, preparing tax increment revenue projections, and consulting with both rating agencies and insurance 052 companies. The amount of capital the Agency can raise through tax allocation bonds will be determined by market conditions (interest rates, discount rates, and overall economic conditions); however, preliminary projections indicate that the Agency can raise $40.0 to $46.0 million today, and an additional $25.0 to $30.0 million in 2003. In order to secure the greatest amount of capital at the least cost (interest and discount rate costs), the financing team recommends that the Agency pursue a bond rating and bond insurance. Four of the Agency's five outstanding bond issues are insured and feature AAA investment grade ratings. The last time the Agency issued tax allocation bonds was in 1998 when the existing Project Area No. 1 and 2 bonds were refunded to reduce interest costs. Since then both the municipal bond market and the southern California economy have changed. Rating agencies and insurance companies are scrutinizing large bond issues in greater detail given the softening California economy, the potential impacts of rolling blackouts on continued economic growth, and the high-tech sector slowdown. Initial discussions with both the rating agencies and bond insurers indicate that the complexity of this financing, questions regarding the impacts of potential blackouts and the uncertain California economy on continued Project Area growth, and the potential to issue additional Project Area No. 1 bonds in 2003, lead the financing team to recommend that direct meetings be held with the analysts who will be requested to rate and insure this bond issue. These analysts are located at the home offices of these companies in New York. Given the size of this bond issue, the financing team has proposed that the Mayor, RDA Chairperson and the City/Agency management team attend these meetings. Additional attendees would be the bond and disclosure counsels, underwriter and fiscal consultant. They will fund their costs that would be reimbursed from bond proceeds per their contracts. It is anticipated that the trip would take place from July 18 through July 21, 2001. Two days would be allotted for travel time, with Wednesday and Thursday scheduled for rating agency and insurer meetings. Meetings would be scheduled with Standard and Poors, Moodys, AMBAC, MBIA and Fitsch. FINDINGS AND ALTERNATIVES: The alternatives available to the Redevelopment Agency Board include: Approve authorization for the Mayor, RDA Chairperson, Executive Director, Assistant City Manager, Community Development Director, and Finance Director to travel to New York City to meet with bond rating and insurance agencies, and appropriate $15,000 from the 051 002 Project No. 1 unappropriated reserve fund to fund transportation, lodging and meal expenses; or 2. Do not approve authorization to travel to New York City; or 3. Provide staff with alternative direction. Respectfully submitted, Mark Weiss Assistant City Manager Approved for submission by: G� 'Thomas P. Genovese Executive Director Redevelopment Agency g/k'sdoc/mw/ccnewyork6501 054 1. 003 T4ht 4 4 Q" AGENDA CATEGORY: BUSINESS SESSION: COUNCIL/RDA MEETING DATE: June 5, 2001 CONSENT CALENDAR: STUDY SESSION: PUBLIC HEARING: Consideration of an Affordable Housing Rehabilitation Agreement by and Between the La Quinta Redevelopment Agency and Lawrence Rael for the Property Located at the Southeast Corner of Eisenhower Drive and Calle Tampico RECOMMENDATION: Adopt a Resolution of the Redevelopment Agency approving the Affordable Housing Rehabilitation Agreement, authorize the Executive Director to execute the necessary documents, and allocate $350,000 from the Redevelopment Project Area No. 1 Low and Moderate Income Housing Tax Increment Fund account. FISCAL IMPLICATIONS: The expenditure of $350,000 to fund property purchase and limited rehabilitation activities will be required. The funds are structured as a loan to be repaid if the improvements are not made and the affordable housing covenants do not remain in place for thirty years. The funds would be allocated from Redevelopment Project Area No. 1 Low and Moderate Income Housing Tax Increment Fund account number 245- 903-684-000. BACKGROUND AND OVERVIEW: In April 2001, Mr. Lawrence Rael requested affordable housing assistance to provide additional off-street parking, construct carports, and install tile on the building roof mansards. Mr. Rae[ purchased this complex in 2000 and has rehabilitated both the apartment units and the grounds. In order to further improve the property, he desires to: 11 purchase adjoining vacant property, increasing off-street parking opportunities and reducing on -street parking; 2) improve these parcels with pavement, security fencing and carports; and 3) improve the apartment structures with tile mansard roofing. The total cost will be $350,000. Staff entered into negotiations to confirm the cost and nature of the proposed improvements and whether or not financial assistance was warranted. These discussions resulted in the attached Affordable Housing Rehabilitation Agreement.055 G:\WPDOCS\ccjhRaeIAHRA. wpd Basically, the Agreement provides that the Agency will loan the apartment complex ownership entity (Mr. Rael is the majority partner) $350,000; the loan term is for 30 years and the outstanding principal accrues interest at 7% per annum. In return, Mr. Rael will: 1 . Purchase two adjoining vacant properties of approximately 10,000 square feet in area. 2. Improve these properties as off-street parking for the apartment complex. These improvements will include paving, security fencing and carports. 3. Replace the existing deteriorated wood shake roofing material with tile roofing. 4. Reserve 14 apartment units as affordable housing for moderate income households for 30 years. The loan is structured so that no principal or interest payments will be made as long as the adjoining property is purchased and the improvements are made, and as long as the 14 units remain affordable to moderate income households for 30 years. The Agreement includes covenants to insure this performance. If these and other maintenance conditions are not maintained, then the principal and accrued interest is due and payable. Enforcement is guaranteed via a second trust deed that the Agency could elect to foreclose upon. The La Quinta Palms Apartments complex is approximately twenty-five years old and in dire need of rehabilitation, additional off-street parking, and access and security improvements. The apartments are multi -level two and three bedroom units with kitchens and living rooms on the first floor, with bedrooms and baths on the second floor. The average unit size is approximately 1,000 square feet. A small pool, laundry facilities, limited off-street parking, and open space areas are included in the complex. The units are rented to low- and moderate -income family households. Implementing this Agreement will not result in the displacement of any residents. The Agency must continually seek affordable housing opportunities to meet its State obligations to secure dwellings that remain affordable for the longest feasible period. This Agreement would assist in achieving this mandate by securing 14 moderate income units for 30 years. Further, the parking and building improvements will improve the property and reduce on -street parking impacts. The $350,000 expenditure is $25,000 per affordable unit. Other per unit costs to secure moderate -income units range from $25,000 to $80,000. FINDINGS AND ALTERNATIVES: Alternatives available to the Redevelopment Agency Board include: 056 G:\WPD0CS\ccjhRae1AHRA. wpd 1. Adopt a Resolution of the Redevelopment Agency approving the Affordable Housing Rehabilitation Agreement, authorize the Executive Director to execute the necessary documents, and allocate $350,000 from the Redevelopment Project Area No. 1 Low and Moderate Income Housing Tax Increment Fund account; or 2. Do not adopt a Resolution of the Redevelopment Agency approving the Affordable Housing Rehabilitation Agreement, authorizing the Executive Director to execute the necessary documents, and allocating $350,000 from the Redevelopment Project Area No. 1 Low and Moderate Income Housing Tax Increment Fund account; or 3. Provide staff with alternative direction. Respectfully submitted, d"t, � W'I Jerry Herman Community Development Director Approved for submission by: Thomas P. Genovese, Executive Director Redevelopment Agency Attachments: 1. Affordable Housing Rehabilitation Agreement 057 G:\WPDOCS\cghRaeIAH RA.wpd RESOLUTION RDA NO. A RESOLUTION OF THE LA QUINTA REDEVELOPMENT AGENCY APPROVING AN "AFFORDABLE HOUSING REHABILITATION AGREEMENT" BETWEEN THE AGENCY AND LA QUINTA 34 LLC LA QUINTA PALMS APARTMENTS LAWRENCE RAEL WHEREAS, the La Quinta Redevelopment Agency ("Agency") is a public body, corporate and politic, organized and existing under the California Community Redevelopment Law ("Health & Safety Code § 33000 et seq.) ("CRL"); and WHEREAS, pursuant to the CRL, the Agency and the City Council of the City of La Quinta ("City" or "City Council," as applicable) previously approved and adopted the Redevelopment Plan, as amended ("Redevelopment Plan") for Project Area No. 1 ("Project Area"); and WHEREAS, the Agency is engaged in activities leading to increasing and improving the supply of affordable housing within and outside the Project Area; WHEREAS, Agency staff has negotiated an Affordable Housing Rehabilitation Agreement ("Agreement") with La Quinta 34 LLC, a California limited liability company ("Participant") which is the owner of that certain real property improved with an apartment complex located generally southeast of the Eisenhower Drive/Calle Tampico intersection and known as Assessor Parcel No. 773-071-017 ("Apartment Parcel"); and WHEREAS, Participant is also in escrow to acquire that certain real property, across the street from the Apartment Parcel, known as Assessor Parcel Nos. 773-073-004 and 005 ("Acquisition Parcels"); and WHEREAS, the Apartment Parcel and Acquisition Parcels are collectively referred to hereinafter as the "Site;" and WHEREAS, pursuant to the Agreement the Agency proposes to assist Participant with redeveloping the Site by providing a loan to the Participant from the Agency's Low and Moderate Income Housing Tax Increment Fund to enable the completion of the acquisition of the Acquisition Parcels and construction thereon of carports to serve the apartment complex as well as certain other needed improvements to the apartment complex; and JIM 0f.)4 G:\WPD0CS\CCResoRae1AHRA.doc Resolution RDA No. _ Affordable Housing Rehabilitation Agreement Lawrence Reel Adopted: June 5, 2001 WHEREAS, pursuant to the Agreement, Participant, as a condition to receipt of the Agency loan, shall record against the Site a regulatory agreement and Declaration of Covenants, Conditions, and Restrictions that requires that not fewer than fourteen (14) of the apartment units on the Site be rented at an affordable housing cost to, and occupied by, persons and families of "moderate income," i.e., persons and families whose income does not exceed 120% of the median income for Riverside County, adjusted for family size; and WHEREAS, the Agreement provides for other conditions, time schedules, and requirements all as set forth in the Agreement; and WHEREAS, all actions required of the Agency to be taken precedent to review and consideration of the Agreement by the Agency have been taken in accordance with applicable law; NOW, THEREFORE, the La Quinta Redevelopment Agency hereby resolves as follows: 1 . The Agency finds and determines that the Agreement effectuates the purposes of the Community Redevelopment Law (Health & Safety Code § 33000 et seq.) and of the Plan and is in the best interests of the citizens of the City of La Quinta. 2. The Agreement, a copy of which is on file with the Agency Secretary, is hereby approved. The Agency Executive Director and Agency Counsel are hereby authorized and directed to make final modifications to the Agreement that are consistent with the substantive terms of the Agreement approved hereby, and the Agency Executive Director is authorized to thereafter sign the Agreement on behalf of the Agency. 3. The Agency Executive Director is authorized and directed, on behalf of the Agency, to sign such other and further documents, including but not limited to subordination agreements and escrow instructions, that require the Agency's signature, and to take such other and further actions, as may be necessary and proper to carry out the terms of the Agreement. PASSED, APPROVED, AND ADOPTED at a regular meeting of the La Quinta Redevelopment Agency held this 5th day of June, 2001, by the following vote: 051 G:\WPDOCS\CCResoRaeIAHRA.doc 005 Resolution RDA No. _ Affordable Housing Rehabilitation Agreement Lawrence Rae] Adopted: June 5, 2001 AYES: NOES: ABSENT: ABSTAIN: TERRY HENDERSON, Agency Chair City of La Quinta, California ATTEST: JUNE S. GREEK, Agency Secretary City of La Quinta, California APPROVED AS TO FORM: M. KATHERINE JENSON, Agency Counsel City of La Quinta, California ME 006 G:\WPDOCS\CCResoRaelAHRA.doc ATTACHMENTS 007 ATTACHMENT AFFORDABLE HOUSING REHABILITATION AGREEMENT BY AND AMONG LA QUINTA REDEVELOPMENT AGENCY, AND LA QUINTA 34 LLC 06' G:\WPDOCS\AHRA-Rael.wpd 008{� nn Qp AFFORDABLE HOUSING REHABILITATION AGREEMENT THIS AFFORDABLE HOUSING REHABILITATION AGREEMENT ("Agreement') is entered into this day of , 2001 (the "Effective Date") by and among the LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic ("Agency"), and LA QUINTA 34 LLC, a California limited liability company ("Participant'). RECITALS A. Agency is a public body, corporate and politic, exercising governmental functions and powers and organized and existing under the Community Redevelopment Law of the State of California (California Health and Safety Code Section 33000 et 5—QQ.). B. Participant is the owner of that certain apartment complex located southeast of the Eisenhower Drive/Calle Tampico intersection in the City of La Quinta known as Assessor Parcel No. 773-071-017 ("Apartment Parcel"). Participant is also currently in escrow to acquire title to two parcels, commonly known as the Parker Lots and having Assessor Parcel Nos. 773-073-004 and 0005, which are located across the street from the apartment complex ("Acquisition Parcels"). The Apartment Parcel and the Acquisition Parcels are collectively referred to herein as the "Site." C. Agency desires to meet its respective affordable housing goals by assisting Participant in the rehabilitation of the Site as set forth in this Agreement (the "Project") by making certain financial assistance in the form of a rehabilitation loan, as described in this Agreement, available to Participant for the Project. D. Agency has determined that providing assistance to Participant for the Project is in the best interests of the City and the welfare of its citizens. Therefore, the parties desire to execute this Agreement for the Project on the terms and conditions set forth below. AGREEMENT NOW, THEREFORE, in consideration of the foregoing Recitals and the covenants and promises hereinafter contained, and for good and valuable consideration, the sufficiency and receipt of which are hereby acknowledged, Agency and Participant hereby agree as follows: 1.0 DEFINITIONS. 063 GAWPDOCS\AHRA-Rael.wpd 2 OGJ 1 .1 Acquisition Parcels. The term "Acquisition Parcels" shall mean the two parcels, commonly known as Assessor Parcel Nos. 773-073-004 and 005, which are currently owned by Owner. The Acquisition Parcels are legally described in Exhibit „A, 1.2 Agency Deed of Trust. The term "Agency Deed of Trust" shall mean that certain Deed of Trust With Assignment of Rents to secure the Agency Note, in the form attached hereto as Exhibit "F". 1.3 Agency Note. The term "Agency Note" shall mean that certain promissory note, in the form attached hereto as Exhibit "E", in favor of Agency, evidencing the loan by Agency to Participant. 1.4 Agency Regulatory Agreement. The term "Agency Regulatory Agreement" shall mean that certain Regulatory Agreement and Declaration of Covenants and Restrictions, in the form attached hereto as Exhibit "G". 1.5 Agreement. The term "Agreement" shall mean this entire Affordable Housing Rehabilitation Agreement, including all exhibits, which exhibits are a part hereof and incorporated herein in their entirety, and all other documents attached hereto which are incorporated herein by reference as if set forth in full. 1.6 Apartment Parcel. The term "Apartment Parcel" shall mean that certain parcel, commonly known as Assessor Parcel No. 773-071-017, which is owned in fee by Participant, and which is improved with an apartment complex. The Apartment Parcel is legally described in Exhibit "A". 1.7 CEQA. The term "CEQA" shall mean the California Environmental Quality Act, Public Resources Code Section 21000 et seq., as amended. 1.8 Cky. The term "City" shall mean the City of La Quinta, a municipal corporation, having its offices at 78-495 Calle Tampico, La Quinta, CA 92253. The City is not a party to this Agreement and shall have no obligations hereunder. 1.9 Closina. The terms "Closing" or "Closing Date" of "Close of Escrow" shall mean the date on which the grant deed conveying fee title to the Acquisition Parcels to Participant is recorded in the Office of the County Recorder of Riverside County, California, which Closing shall occur on or before the date established therefor in the Schedule of Performance. 1.10 Days. The term "days" shall mean calendar days and the statement of any time period herein shall be calendar days, and not business days, unless otherwise specified. 1.11 Declaration. The term "Declaration" shall mean the Declaration of 064 Covenants, Conditions, and Restrictions And Agreement To Hold Property As One Parcel," in the form attached hereto as Exhibit I. 010 G:\WPDOCS\AHRA-Rael.wpd 3 1.12 Disbursement Procedures. The term "Disbursement Procedures" shall mean the procedures and conditions to disbursement of the Rehabilitation Loan set forth in Exhibit K attached hereto. 1 .13 Effective Date. The Effective Date of this Agreement shall occur after public hearing and approval hereof by Agency and shall mean the later of the dates this Agreement is executed on behalf of Agency and Participant. 1.14 Enforced Delay. The term "Enforced Delay" shall have the meaning set forth in Section 13.4. 1.15 Escrow. The term "Escrow" shall mean the escrow opened for the conveyance of fee title to the Acquisition Parcels to Participant. 1.16 Escrow Agent. The term "Escrow Agent" shall mean the person responsible at the Escrow for executing escrow instructions and effecting the Closing. 1.17 Executive Director. The term "Executive Director" shall mean the individual duly appointed to the position of Executive Director of Agency, or his or her authorized designee. Whenever an administrative action is required by Agency to implement the terms of this Agreement, the Agency Executive Director, or his or her authorized designee, shall have authority to act on behalf of Agency, except with respect to matters reserved for Agency Board determination. 1.18 First Deed of Trust. The term "First Deed of Trust" shall mean Participant's existing first position deed of trust recorded against the Apartment Site that secures an outstanding loan to Participant by Rubicon Realty Capital Corporation, the beneficiary of such First Deed of Trust, as amended or repealed hereafter. 1.19 Hazardous Materials. The term "Hazardous Materials" shall mean (i) any hazardous or toxic substance, material or waste which is or becomes regulated by any local or regional governmental authority, the State of California, or the United States Government and/or (ii) any substance or material identified by the United States Government, the State of California, County of Riverside, or any local or regional governmental authority as hazardous or toxic and which is included on any list of such substances published by any such governmental entity and shall specifically include petroleum, petroleum -based products, asbestos and PCBs. 1.20 Owner. The. term "Owner" shall mean Robert L. Parker and Zelda M. Parker, as Co -Trustees of the Parker Revocable Trust Dated December 21, 1989, which is the current owner of the Acquisition Parcels. 1.21 Participant. The term "Participant" shall mean La Quinta 34 LLC, a California limited liability company, and any permitted assignees and successors of 065 same as set forth in Section 7.0. 011. G:\WPDOCS\AHRA-Rael.wpd 4 1.22 Pro'ect. The term "Project" shall include all construction, improvement, modification, and rehabilitation of the Site to be performed by Participant pursuant to this Agreement. The Project is more particularly described in the Scope of Development attached hereto as Exhibit "C". 1 .23 Project Area. The term "Project Area" shall mean Redevelopment Project Area No. 1 which is located in the City of La Quinta, California. The exact boundaries of the Project Area are specifically described in the Redevelopment Plan. 1.24 Redevelopment Plan. The term "Redevelopment Plan" shall mean the Redevelopment Plan for the Project Area, as the same has been amended prior to the Effective Date and as it may be further amended from time to time. A copy of the Redevelopment Plan in effect on the Effective Date is on file in the Office of the City Clerk of the City. The Redevelopment Plan is incorporated herein by this reference as though fully set forth herein. 1.25 Rehabilitation Loan. The term "Rehabilitation Loan" shall mean the loan by Agency to Participant in the amount set forth in Section 4.1, as evidenced by the Rehabilitation Loan Documents, for the purposes of rehabilitating the Site. 1.26 Rehabilitation Loan Documents. The term "Rehabilitation Loan Documents" shall mean, collectively, the Agency Note, Agency Deed of Trust, Agency Regulatory Agreement, and Declaration. 1 .27 Release of Construction Covenants. The term "Release of Construction Covenants" shall mean that certain Release of Construction Covenants, in the form attached hereto as Exhibit "H". 1.28 Sale Escrow Instructions. The term "Sale Escrow Instructions" shall mean that certain contract of purchase and sale and escrow instructions for the Site between Owner, as seller, and Participant. 1.29 Schedule of Performance. The term "Schedule of Performance" shall mean that certain Schedule attached hereto as Exhibit "D". 1 .30 Site. The term "Site" shall mean, collectively, the Apartment Parcel and the Acquisition Parcels, together with all improvements now or hereafter constructed thereon. The Site is shown on the Site Map attached hereto as Exhibit "B". 1.31 Subordination Agreement. The term "Subordination Agreement" shall mean that certain Subordination Agreement, in the form attached hereto as Exhibit "K," between Participant, Agency, and Rubicon Realty Capital Corporation, the beneficiary of the First Deed of Trust. ()12 [lam G:\WPDOCS\AH RA-Rael. wpd 5 1 .32 Title Company. The term "Title Company" shall mean the title company approved by Agency and Participant responsible for issuing a title lender's policy of title insurance to the Agency insuring the priority of the Agency Deed of Trust, Agency Regulatory Agreement, and Declaration, if Agency elects to obtain title insurance. 2.0 PURPOSE OF AGREEMENT. The purpose of this Agreement is to effectuate the Redevelopment Plan for the Project Area by providing for Participant's rehabilitation of the Site and thereby assisting in the provision of adequate housing affordable to low and moderate income households within the City. The development of the Project on the Site and the fulfillment generally of this Agreement are in the best interests of the City and the welfare of its residents and are in accordance with the public purposes and provisions of applicable federal, state, and local laws and regulations, pursuant to which the Project is being undertaken. 3.0 CURRENT OWNERSHIP OF THE SITE: PARTICIPANT ACQUISITION OF THE ACQUISITION PARCELS. 3.1 Ownership of the Site: Participant -Owner Escrow. Participant is the owner of fee title to the Apartment Parcel. Participant has entered into the Sale Escrow Instructions with Owner for Participant's acquisition of the Acquisition Parcels. Prior to the execution of this Agreement, Participant has (i) entered into the Sale Escrow Instructions with Owner, (ii) delivered to Agency a true and correct copy of the fully signed Sale Escrow Instructions and a copy of the proposed grant deed conveying the Acquisition Parcels to Participant (the "Grant Deed"); (iii) opened the Escrow with the Escrow Agent, and (iv) notified Agency in writing of the name, address, telephone number, and fax number of the Escrow Agent. The Sale Escrow Instructions provide that Participant's purchase price for the Acquisition Parcels is not greater than Seventy Thousand Dollars ($70,000) and does not contain any terms that would cause the Escrow or other fees to be charged to Participant at the Closing to be higher than what would normally be charged for a similar transaction in Riverside County. Based on the foregoing, Participant qualifies as an "owner -participant" within the meaning of the California Community Redevelopment Law (Health & Safety Code 33000 et seq.). 3.2 Participant Acquisition of the Acquisition Parcels. Participant shall close escrow on the Acquisition Parcels not later than the time set forth in the Schedule of Performance. Participant shall not modify or amend the material terms of the Sale Escrow Instructions or the Grant Deed without the prior written consent of the Executive Director which consent shall not be unreasonably withheld, conditioned, or delayed. Participant shall comply with and fulfill each and every condition, responsibility, and obligation it may have pursuant to the Sale Escrow Instructions in order to accomplish the Close of Escrow at or prior to the time set forth in the Schedule of Performance. Participant shall indemnify, defend, and hold Agency harmless from and against all liability, loss, damage, cost, and expense (including 067 013 G:\WPDOCS\AHRA-Rael.wpd 6 expert witness fees, attorney's fees, and defense costs) arising from or related to any dispute related to the Sale Escrow Instructions or any other agreement or document pertaining to Participant's acquisition of the Acquisition Parcels. Participant shall not transfer or assign the Sale Escrow Instructions except to a Permitted Transferee as set forth in Section 7.0. Except for the portion of the Rehabilitation Loan to be disbursed by Agency to the Escrow as set forth in Section 4.1, all costs and expenses pertaining to or related to Participant's acquisition of the Acquisition Parcels shall be the responsibility of Participant and Agency shall have no responsibility therefor. 3.3 Condition of Title. Prior to the Close of Escrow, Participant shall provide the Executive Director with a copy of a preliminary report issued by the Title Company for the Apartment Site and for the Acquisition Parcels that is not more than fifteen (15) days old. As a condition precedent to Agency's performance of its obligations set forth in this Agreement that are to occur on and after Close of Escrow, the Executive Director shall have approved, prior to the Close of Escrow, the exceptions to title listed on the preliminary report or shall have stated in writing to Participant those exceptions to title that are acceptable and those that are unacceptable. Participant shall use commercially reasonable efforts to effect removal or deletion of those exceptions to title that are unacceptable to the Executive Director. As a condition precedent to Agency's performance of its obligations set forth in this Agreement that are to occur on and after Close of Escrow, (i) Participant shall close escrow with title subject to only those exceptions to title that the Executive Director has approved as "acceptable," and (ii) escrow shall close no later than the date specified in the Schedule of Performance. 3.4 Agency Title Policy. Upon the Close of Escrow, Participant shall cause the Title Company to issue and deliver to Agency an CLTA lender's policy of title insurance, together with such endorsements as may be reasonably requested by Agency, with liability in the amount of the Agency Note, covering the Site, showing title vested in Participant and insuring the validity and priority of, respectively, the Declaration, Agency Deed of Trust, and Agency Regulatory Agreement (the "Agency Title Policy") subject only to: 3.4.1 All nondelinquent general and special real property taxes and assessments; 3.4.2 the First Deed of Trust 3.4.3 the Grant Deed; and 3.4.4 such other matters as may be approved in writing by the Executive Director. 3.5 Conditions to Agency's Performance. As a further condition precedent to Agency's performance of its obligations set forth in this Agreement that are to occur on and after Close of Escrow, all of the following shall have occurred or will 068 G:\WPDOCS\AHRA-Rael.wpd 7 01 14 occur concurrently with the Closing (and as to those items required to have been performed or completed at a date prior to Closing in accordance with the Schedule of Performance, such items have been performed or completed by the date set forth in the Schedule of Performance): 3.5.1 All conditions precedent required to be satisfied by Participant prior to the Close of Escrow as set forth in the Sale Escrow Instructions shall have been satisfied by Participant. 3.5.2 Participant and Rubicon Realty Capital Corporation (the beneficiary of the First Deed of Trust) shall have signed (and acknowledged) and delivered to Escrow the Subordination Agreement. 3.5.3 Participant shall have executed (and acknowledged where required) the Agency Note, Agency Deed of Trust, Agency Regulatory Agreement, and Declaration, and all other agreements and documents reasonably required to be signed by Participant pursuant to this Agreement and the agreements and documents referenced in this Agreement. 3.5.4 The Executive Director shall have reviewed and approved the title condition and the Title Company shall be ready to issue the Agency Title Policy with only those exceptions pre -approved in this Agreement or as approved by the Executive Director in his/her sole and absolute discretion. 3.5.5 Participant shall have submitted to the Executive Director the evidence of insurance required by the Agency Regulatory Agreement, with such insurance coverages to be effective as of the Closing. 3.5.6 The Escrow Agent shall be ready to record the Declaration, Agency Deed of Trust, Agency Regulatory Agreement, and Subordination Agreement in accordance with escrow instructions submitted to the Escrow Agent by Agency or Agency's legal counsel (Escrow Agent shall notify Agency's legal counsel in writing if escrow instructions on behalf of Agency have not been submitted, and if no such instructions are submitted within three (3) business days thereafter this Section 3.0 shall serve as the Agency's Escrow instructions). 3.5.7 Participant has timely completed or performed all of the items required by this Agreement, including but not limited to the Schedule of Performance, required to be completed or performed prior to the Closing. 3.5.8 Participant is not in material default of any of the terms of this Agreement. 3.6 Duties of Escrow Agent. Participant shall notify the Escrow Agent that it shall be responsible for recordation of certain documents referred to in this 061 Agreement at the Closing and for delivering the Agency Title Policy to Agency, and 015 GAWPDOCS\AHRA-Rael.wpd 8 that the Escrow Agent shall be responsible for adhering to the directions set forth in an escrow instruction letter from Agency or its legal counsel with respect to the execution and recordation of such documents and related matters. At the Closing, the Escrow Agent shall record the following documents in the following order of recordation: (1) the grant deed conveying the Acquisition Parcels to Participant; (2) Agency Deed of Trust; (3) Agency Regulatory Agreement; (4) Declaration; and (5) Subordination Agreement. At the Closing the Escrow Agent shall deliver the original Note to the Agency and shall also provide the Agency with conformed copies of each of the recorded documents. 3.7 Brokerage Commissions. Participant and Agency shall each indemnify, defend, and hold harmless the other from and against all liabilities, costs, damages, and expenses, including, without limitation, attorneys' fees, resulting from any claims for fees or commissions, based upon agreements by the other or any person or entity affiliated with the other, if any, to pay a broker's commission and/or finder's fee pertaining to Participant's acquisition of the Acquisition Parcels. No such feels), if any, shall be paid out of the Rehabilitation Loan. 3.8 Taxes and Assessments and Liens. Participant shall pay, when due, all real estate taxes and assessments assessed or levied against all or any portion of the Acquisition Parcels subsequent to conveyance of title. 4.0 REHABILITATION LOAN: PHYSICAL CONDITION OF SITE. 4.1 Rehabilitation Loan: Disbursement. Within the time set forth in the Schedule of Performance, and subject to the terms and conditions of this Agreement, Agency shall assist in the financing of the rehabilitation of the Site by providing Participant with the Rehabilitation Loan from the Agency's Low and Moderate Income Housing Fund in the amount of THREE HUNDRED FIFTY THOUSAND DOLLARS ($350,000.00), amortized over thirty (30) years at seven percent interest, compounded annually. The Rehabilitation Loan shall be evidenced by the Agency Note and Agency Deed of Trust. A portion of the Rehabilitation Loan in an amount up to but not exceeding Seventy Thousand Dollars ($70,000) plus buyer's escrow closing costs (the "Agency Escrow Deposit") shall be disbursed by Agency into the Escrow for use by Participant toward acquisition of the Acquisition Parcels so that the Acquisition Parcels may be rehabilitated in conjunction with the Apartment Site and thereafter used with and as part of the overall Site. Remaining disbursements of the Rehabilitation Loan by Agency shall be in accordance with the Disbursement Procedures set forth in Exhibit "J" attached hereto. Interest shall accrue on the Agency Escrow Deposit commencing on the date disbursed, and interest shall accrue on the remaining portions of the Rehabilitation Loan as such disbursements are made. 4.2 Termination for Failure to Close Escrow. Participant and Agency shall each have the right to terminate this Agreement upon written notice to the other in the event that, within the time set forth in the Schedule of Performance, Participant is0.70 unable, despite its reasonable commercial efforts, to effect the Closing. Such ()1 rk G:\WPDOCS\AHRA-Rael.wpd 9 termination shall be effective upon delivery of the foregoing described notice of termination. In the event of such termination, each party hereto shall have no further rights or obligations under this Agreement. Participant shall indemnify, defend, and hold Agency harmless from and against all liability, loss, damage, cost, and expense (including expert witness fees, attorney's fees, and defense costs) arising from or associated with any dispute related to the effect of such termination on the Sale Escrow Instructions or any other agreement or document pertaining to Participant's acquisition or use of the Acquisition Parcels. 4.3 Subordination of Agency Deed of Trust and Agency Regulatory Aareement. Pursuant to Health and Safety Code Section 33334.14, in approving this Agreement Agency hereby finds and determines that the lien of the Rehabilitation Loan and the covenants and restrictions set forth in the Agency Regulatory Agreement shall be subordinated to the First Deed of Trust, and in connection therewith Agency finds and determines that an economically feasible alternative method of financing on substantially comparable terms and conditions, but without subordination, is not reasonably available. An Agency condition to the Closing is the recordation of a subordination agreement substantially in accordance with Exhibit "K". Such subordination agreement is reasonably designed to protect Agency's investment in the event of default by providing for rights of notice and opportunities to cure and other rights protective of Agency's investment. 4.4 Conditions to Disbursement of Rehabilitation Loan. No portion of the Rehabilitation Loan (except for the Agency Escrow Deposit) shall be disbursed unless and until Escrow has closed and the conditions to disbursement set forth in Exhibit "J" are satisfied. 4.5 Physical Condition of Site. 4.5.1 Disclaimer of Warranties. Participant acknowledges that neither the Agency nor any of its employees, agents, contractors, or representatives have made any representations, warranties or agreements to or with Participant on behalf of Agency as to any matters concerning the Site, the present use thereof, or the suitability of Participant's intended or contemplated use of the Site. The foregoing disclaimer includes, without limitation, topography, climate, air, water rights, utilities, present and future zoning, soil, subsoil, Hazardous Materials, patent and latent physical conditions or defects, the purposes to which the Site is suited, drainage, access to public roads, and the availability of governmental permits or approvals of any kind. Participant represents and warrants to Agency that it has investigated the Site, and in particular the Acquisition Parcels, and has knowledge of the operative governmental laws and regulations (including, but not limited to, zoning, environmental, hazardous waste and land use laws and regulations) to which the Site may be subject, and in particular is acquiring the Acquisition Parcels on the basis of its review and determination of the application and effect of such laws and regulations. Participant has neither received nor relied upon any representations concerning such laws and 071 regulations made by Agency or its employees, agents, contractors, or representatives, 017 G:\WPDOCS\AHRA-Rae1.wpd 10 or any other person acting on the behalf of Agency except as set forth in this Agreement. Any agreements, warranties, or representations not expressly contained in this Agreement shall in no way bind Agency. Participant acknowledges that it is fully responsible for obtaining any and all permits from the City and other governmental entities as may be required for the Project. Nothing in this paragraph is intended to defeat or declare void any permits, approvals, or entitlements that Participant has obtained with respect to the Site prior to the date of this Agreement. 4.5.2 Participant Indemnity Regarding Physical Condition of the Site. From and after the Effective Date with respect to the Apartment Parcel, and from and after the Closing with respect to the entire Site, Participant shall indemnify, defend, and hold Agency harmless from and against any and all claims, suits, penalties, expenses, losses, damages, attorney's fees, judgments, or any other action or damage of any kind or nature arising out of or related to any of the matters described in Section 4.5.1. Notwithstanding any other provision of this Agreement to the contrary, Participant's indemnification as set forth in this Section 4.5.2 shall survive the termination of this Agreement and shall continue in perpetuity. 5.0 PARTICIPANT REPRESENTATIONS AND WARRANTIES. 5.1 Effective Date of Representations and Warranties. All of the representations and warranties set forth in this Section 5.0 are valid as of Effective Date and shall remain valid, true, and correct unless Participant discloses to Agency in writing a change in any of the representations or warranties set forth herein. 5.2 Representations and Warranties. In addition to other representations and warranties of Participant set forth in this Agreement, Participant hereby makes the following representations, covenants, and warranties for the benefit of Agency and Agency's successors and assigns, and acknowledges that the execution of this Agreement by Agency has been made in material reliance by Agency on such representations and warranties: 5.2.1 No Default. Other than the consents obtained as set forth in this Agreement, the execution and delivery of this Agreement and all other documents to be executed by Participant pursuant to this Agreement will not constitute or result in any default or event that with notice or the lapse of time, or both, would be a default, breach, or violation of any other agreement, instrument, or arrangement by which Participant is bound. 5.2.2 No Violation. The execution and delivery of this Agreement and all other documents to be executed by Participant pursuant to this Agreement and the consummation of the transactions contemplated herein will not violate any provision of or require any consent, authorization, or approval under any law or administrative regulation or any other order, award, judgment, writ, injunction or decree applicable to, or any governmental permit or license issued to Participant. 072 018 G:\WPDOCS\AHRA-Rael.wpd 11 5.2.3 N-Q Bankruptcy_. Participant has not filed or been the subject of any filing of a petition under the Federal Bankruptcy Law or any insolvency laws, or any laws for the discharge of indebtedness or for the reorganization of debtors. 5.2.4 NQ Misrepresentation. No representation, warranty, or covenant of Participant in this Agreement, or in any document or certificate furnished or to be furnished to Agency pursuant to this Agreement, contains or will contain any untrue statement of a material fact or omits or will omit to state a material fact necessary to make the statements contained herein or therein not misleading. 5.2.5 Due Execution. This Agreement and all other documents to be executed by Participant pursuant to this Agreement have been or will be duly executed by Participant and constitute valid, binding, and enforceable obligations of Participant. If other than an individual, Participant has complied with all laws and regulations concerning its organization, existence, and transaction of business. 5.2.6 N-Q Extraneous Consideration. Participant has not paid or given to, and will not pay or give to, Agency or any official or agent of Agency any money or other consideration for obtaining this Agreement, except as may be expressly provided herein. 5.2.7 Financial Information. All financial information delivered to Agency, including, without limitation, information relating to the financial condition of Participant, the Site, and the Project accurately represents such financial condition and has been prepared in accordance with accepted accounting principles consistently applied, unless otherwise noted in such information. Participant shall notify Agency in writing of any material changes to such information delivered to the Agency. 6.0 PROJECT DEVELOPMENT. 6.1 Rehabilitation Loan. The proceeds of the Rehabilitation Loan shall be disbursed in accordance with the procedures set forth in Exhibit "J." 6.2 Construction of the Project. 6.2.1 Development In Accordance With Plans. Participant shall develop the Project in accordance with this Agreement, the Scope of Development, and the plans and permits approved by Agency and City for the Project, including any changes thereto as may be subsequently approved in writing by Participant, Agency, and City. As completed, the Project: (a) shall comply with all applicable laws and ordinances of all governmental authorities, including, without limitation, all laws and ordinances necessary to permit rehabilitation of the Site as permitted by this Agreement; (b) except as expressly provided herein, will be entirely on the Site and will not encroach upon the land of others or overbound any easement or right-of-way; and (c) will be wholly in compliance with any enforceable building restriction laws, however 071 established, and will not violate any enforceable use, easement, license, covenant, condition, or other restriction affecting the Site. 019 G:\WPDO CS\AH RA-Rael. wpd 12 6.2.2 Evolution Q Rehabilitation man. 6.2.2.1 Within the times set forth in the Schedule of Performance, Participant shall submit to the City preliminary and final drawings and specifications for rehabilitation development of the Site and each parcel thereof in accordance with the Scope of Development, the concept drawings, and in accordance with the City's requirements. The term preliminary and final drawings shall be deemed to include, unless otherwise waived by City, site plans, building plans and elevations, landscaping plans, parking plans, and all other plans, drawings, and specifications required to obtain site plan approval and, with respect to final drawings, to obtain a building permit. Said plans, drawings and specifications shall be consistent with the Scope of Development and the various development approvals referenced hereinabove, except as such items may be amended by City (if applicable) and by mutual consent of City, Agency, and Participant. Plans, (concept, preliminary and construction) shall be progressively more detailed. 6.2.3 Other Governmental Permits. Before commencement of construction, rehabilitation, restoration, revitalization, or development of any buildings, structures, or other work of improvement upon the Site, Participant shall secure or cause to be secured any and all permits and approvals which may be required by City or any other governmental agency affected by such construction, development, or work to be performed by Participant pursuant to the Scope of Development, including but not limited to, necessary building permits and all approvals required under CEQA. Not by way of limiting the foregoing, in rehabilitating and constructing the Project, Participant shall comply with all applicable development standards in City's Municipal Code and shall comply with all building code, landscaping, signage, and parking requirements except as may be permitted through approved variances and modifications. Participant shall not be obligated to commence construction if any such permit is not issued despite commercially reasonable efforts by Participant to obtain the same. Agency agrees to reasonably assist Participant in its efforts to obtain permits and approvals for the Project; provided, however, that Agency does not represent, warrant, or guarantee that any permit or approval will be granted or issued or that any such permit or approval will be granted or issued with or without any particular conditions. 6.2.4 Cost Q Construction. Except for the Rehabilitation Loan, Participant shall bear all costs of preparing and developing the Project and constructing and rehabilitating all improvements on the Site, including, but not limited to, any and all costs for construction, architectural and engineering plans, preparation of the Site, costs associated with meeting applicable seismic standards, interim and permanent financing, and fees or charges for development and building. 6.2.5 Construction Schedule: Reports. Participant shall commence and complete construction of the Project within the times set forth in the Schedule of Performance. Once construction is commenced, Participant shall diligently pursue such construction to completion and Participant shall not abandon such construction 074 for more than ten (10) consecutive business days. Participant shall keep Agency 13 2 G:\WPDOCS\AHRA-Rael.wpd � �� informed of the progress of construction and submit to the Executive Director written reports of the progress of construction when and in the form requested, but not more frequently than monthly. 6.2.6 Plans and Specifications. Participant shall construct the Project upon the Site in accordance with the construction drawings, working specifications, and related documents that shall be submitted to and approved by the Agency and City in advance and in writing. 6.2.7 Nondiscrimination Durina Construction. Participant, for itself and its successors and assigns, agrees that during the rehabilitation of the Project, Participant shall not discriminate against any employee or applicant for employment because of race, color, creed, religion, sex, marital status, national origin, or ancestry. 6.2.8 Riahts of Access. Representatives of Agency shall have the reasonable right of access to the Site without charges or fees, at any time during normal construction hours during the period of construction, for the purpose of assuring compliance with this Agreement, including but not limited to the inspection of the construction and rehabilitation work being performed by or on behalf of Participant. Each such representative s► of Agency shall identify himself or herself at the job site office upon his or her entrance to the Site, and shall provide Participant, or the construction superintendent or similar person in charge on the Site, a reasonable opportunity to have a representative accompany him or her during the observation. Agency shall indemnify, defend, and hold Participant harmless from any injury or property damage caused or liability arising out of Agency's exercise of this right of access. Any observation, examination, or inspection occurring by Agency during its/their access pursuant to this Section shall not be construed or deemed as an inspection pursuant to any building codes or the Municipal Codes or any other inspection that may be performed by City or any other public entity. 6.2.9 Construction Contract. The Agency acknowledges and agrees that Participant shall act as the general contractor for the improvements required to be constructed by Participant for the Project. Participant shall comply with all applicable laws and regulations pertaining to the contracting of work for construction of the improvements, including but not limited to the payment of wages for services engaged and bills for materials, supplies, and equipment. Participant shall not permit any mechanics' or material-man's liens to be recorded against the Site. 6.3 Indemnification. During the period of any construction of the improvements pursuant to this Agreement and until such time as the Agency issues its Release of Construction Covenants for the Project, Participant agrees to and shall indemnify and hold Agency and City harmless from and against all liability, loss, damage, cost, or expense (including expert witness fees and reasonable attorneys' fees and court costs) arising from or as a result of the death of any person or any accident, injury, loss, or damage whatsoever caused to any person or to the property of any person which shall occur on the Site and which shall be directly or indirectly O7 caused by the acts done thereon or any errors or omissions of Participant or its agents, G:\WPDOCS\AHRA-Rael.wpd 14 0 012, servants, employees, invitees, or contractors. Participant shall not be responsible for (and such indemnity shall not apply to) any acts, errors, or omissions of Agency or City or their respective agents, servants, employees, or contractors acting in an official capacity. Agency and City shall not be responsible for any acts, errors, or omissions of any person or entity except Agency and City and their respective agents, servants, employees, or contractors acting in an official capacity, subject to any and all statutory and other immunities. The provisions of this Section shall survive the termination of this Agreement. 6.4 Applicable Laws. Participant shall construct the Project in conformity with all applicable laws and regulations. Participant agrees to indemnify, defend, and hold Agency and City harmless from and against all liability, loss, damage, cost, or expense (including expert witness fees and reasonable attorney's fees and costs) arising from or as a result of any violation of any applicable law, ordinance, or statute including, but not limited to, prevailing wage laws, except to the extent such violation arises from the negligence of Agency. 6.5 Release of Construction Covenants. Upon written request by Participant, and upon satisfactory completion of the Project, Agency shall issue to Participant a Release of Construction Covenants as long as Participant is not in default under this Agreement or any documents related hereto. The Release of Construction Covenants shall be, and shall so state, a conclusive determination of satisfactory completion of construction of the Project. After the date Participant is entitled to issuance of the Release of Construction Covenants, and notwithstanding any other provision of this Agreement to the contrary, any party then owning or thereafter purchasing, leasing or otherwise acquiring any interest in the Site shall not (because of any such ownership, purchase, lease, or acquisition) incur any obligation or liability under this Agreement, except that such party shall be bound by the covenants that survive the issuance of the Release of Construction Covenants, including as set forth in the Regulatory Agreement. The Release of Construction Covenants is not a notice of completion as referred to in California Civil Code section 3093. If Agency refuses or fails to furnish a Release of Construction Covenants after written request from Participant, Agency shall, within ten (10) days of the written request, provide the Participant a written statement of the reasons Agency refused or failed to furnish a Release of Construction Covenants. The statement shall also contain the Agency's opinion of the action Participant must take to obtain a Release of Construction Covenants. If Agency shall have failed to provide such written statement within said ten 1101 day period, Participant shall be deemed entitled to the Release of Construction Covenants. If Agency refuses or fails to furnish the Release of Construction Covenants for the reason that specific minor non -life safety items or materials are not available or landscaping is not complete and the cost thereof is less than two percent (2%) of the Rehabilitation Loan amount, as set forth in the Project Budget, Agency shall issue the Release of Construction Covenants upon the posting by Participant with Agency of a cash deposit, bond, or irrevocable letter of credit (in 076 a form acceptable to Agency), at Participant's option, in an amount representing one hundred percent (100%) of the fair value of the work not yet completed. 2 G:\WPDOCS\AHRA-Rael.wpd 15 O "' 7.0 TRANSFER AND ASSIGNMENT. 7.1 Sale or Transfer of the Project. Participant covenants that during the term of this Agreement and the Agency Regulatory Agreement Participant shall not assign this Agreement or transfer the Site or any of its interests therein except as provided in this Section 7.0. 7.2 Transfer Defined. As used in this Section 7.0, the term "Transfer" shall include any assignment, hypothecation, mortgage, pledge, conveyance, or encumbrance of this Agreement, the Site, or the improvements thereon. A Transfer shall also include the transfer to any person, entity, or group of persons or entities acting in concert of more than twenty-five percent (25%) (in the aggregate) of the present ownership and/or control of any person or entity constituting Participant, taking all transfers into account on a cumulative basis. In the event any entity constituting Participant, its successor or the constituent partners or members of Participant or any successor of Participant, is a corporation or trust, such transfer shall refer to the transfer of the issued and outstanding capital stock of such corporation, or of beneficial interests of such trust; in the event that any entity constituting Participant, its successor or the constituent partners of Participant or any successor of Participant is a limited or general partnership, such transfer shall refer to the transfer of more than twenty-five percent (25%) of such limited or general partnership interest; in the event that any entity constituting Participant, its successor or the constituent members of Participant or any successor of Participant is a limited liability company, such transfer shall refer to the transfer of more than twenty-five percent (25%) of such membership interest; in the event that any entity constituting Participant, its successor or the constituent partners of Participant or any successor of Participant is a joint venture, such transfer shall refer to the transfer of more than twenty-five percent (25%) of the ownership and/or control of any such joint venture partner, taking all transfers into account on a cumulative basis. 7.3 Agency Approval of Transfer Required. Except as set forth below, Participant shall not Transfer this Agreement or any of Participant's rights hereunder, or any interest in the Site or in the improvements thereon, directly or indirectly, voluntarily or by operation of law, without the prior written approval of Agency, which approval shall not be unreasonably withheld, conditioned, or delayed, and any such purported Transfer without such approval shall be null and void. In addition to the foregoing and notwithstanding anything in this Section to the contrary, so long as the Project is encumbered by the First Deed of Trust, any proposed transferee or assignee must also receive the prior written consent of the beneficiary of the First Deed of Trust, if required by the First Deed of Trust, before Agency shall approve such transfer or assignment; provided, however, that such consent of beneficiary shall not obligate Agency to approve such Transfer. Notwithstanding the foregoing, the following types of transfers shall not require Agency approval but as with all Transfers shall be subject to Section 7.4: 077 G:\WPDOCS\AHRA-Rael.wpd 16 023 (a) Any refinancing of the First Deed of Trust such that the new loan amount does not exceed ninety-five percent (95%) of the then appraised fair market value of the Site. (b) Any new or additional financing in which the Site is security for the loan, provided that the total of all then -outstanding loans secured by the Site does not exceed ninety-five percent (95%) of the then -appraised fair market value of the Site. (c) The leasing of individual rental units on the Site provided that such leasing is in accordance with the terms of this Agreement and of the Agency Regulatory Agreement; (d) Transfers resulting from the death or mental or physical incapacity of an individual; (e) Transfers in trust for the benefit of a spouse, children, grandchildren, or other family member, or for charitable purposes; (f) Transfers of stock in a publicly -held corporation or of the beneficial interest in ay publicly -held partnership or real estate investment trust; or (g) The conveyance or dedication or portions of the Site to the City or other governmental entity, or the granting of easements or permits to facilitate the development of the Site. 7.4 Assignment and Assumption Agreement. In the absence of specific written agreement by Agency, no Transfer by Participant of all or any portion of its interest in the Site or this Agreement, whether or not requiring the approval by Agency, shall be deemed to relieve Participant or any successor party from the obligation to timely complete construction of the Project. In addition, no attempted Transfer of any of Participant's obligations hereunder shall be effective unless and until Participant and the transferee or successor party execute and deliver to Agency a binding assignment and assumption agreement in a form reasonably approved by Agency's legal counsel. 7.5 Permitted Transferee. A "Permitted Transferee" under this Agreement shall be a transferee or assignee that either (i), has been approved by the Executive Director, or (ii) is a transferee of a Transfer not requiring the approval of the Executive Director pursuant to the terms of this Agreement, and both the cases described in the foregoing clauses (i) and (ii) has executed and delivered to the Executive Director an assignment and assumption agreement pursuant to Section 7.4. 8.0 INSURANCE. 8.1 Required Minimum Policies. Commencing with Effective Date hereof and ending with the Closing, Participant shall procure and maintain, at its sole cost and 078 expense, in a form and content satisfactory to the Executive Director, the followin policies of insurance: O�4 G:\WPDOCS\AHRA-Rael.wpd 17 8.1.1 Commercial Gener I Liability Insurance. A policy of commercial general liability insurance written on a per occurrence basis in an amount not less than: (A) for death and bodily injury, either (i) a combined single limit of ONE MILLION DOLLARS ($1,000,000.00) or (ii) ONE MILLION DOLLARS ($1,000,000) per person and ONE MILLION DOLLARS ($1,000,000.00) per occurrence, and ONE MILLION DOLLARS ($1,000,000.00) in the aggregate, and (B) for property damage, ONE MILLION DOLLARS ($1,000,000.00) per occurrence. 8.1.2 Worker's Compensation Insurance. A policy of worker's compensation insurance in such amount as will fully comply with the laws of the State of California and which shall indemnify, insure, and provide legal defense for both the Participant and Agency against any loss, claim or damage arising from any injuries or occupational diseases occurring to any worker employed by or any persons retained by Participant in the course of carrying out the work or services contemplated in this Agreement. 8.1.3 Automotive Insurance. A policy of comprehensive automobile liability insurance written on a per occurrence basis in an amount not less than either (i) bodily injury liability limits of ONE MILLION DOLLARS ($1,000,000.00) per person and ONE MILLION DOLLARS ($1,000,000.00) per occurrence, and property damage liability limits of ONE MILLION DOLLARS ($1,000,000.00) per occurrence and ONE MILLION DOLLARS ($1,000,000.00) in the aggregate or (ii) combined single limit liability of ONE MILLION DOLLARS ($1,000,000.00). Said policy shall include coverage for owned, non -owned, leased, and hired cars. 8.1.4 Additional Requirements. The following additional requirements shall apply to all of the above policies of insurance. 8.1.4.1 All of the above policies of insurance shall be primary insurance and, except the Worker's Compensation insurance, shall name Agency, City, and their respective officers, officials, members, employees, agents, and representatives as additional insureds. The insurer shall waive all rights of subrogation and contribution it may have against Agency, City, and their officers, officials, members, employees, agents, and representatives, and their respective insurers. All of said policies of insurance shall provide that said insurance may not be amended or cancelled without providing thirty (30) days' prior written notice to Agency and City. In the event any of said policies of insurance are cancelled, the Participant shall, prior to the cancellation date, submit new evidence of insurance in conformance with this Section to the Executive Director. Not later than the Effective Date of this Agreement, Participant shall provide the Executive Director with Certificates of Insurance or appropriate insurance binders evidencing the above insurance coverages and said Certificates of Insurance or binders shall be subject to the reasonable approval of the Executive Director. 079 025 G:\WPDOCS\AHRA-Rael.wpd 18 8.1 .4.2 The policies of insurance required by this Agreement shall be satisfactory only if issued by companies qualified to do business in California, rated "A" or better in the most recent edition of Best Rating Guide, The Key Rating Guide or in the Federal Register, and only if they are of a financial category Class VII or better, unless such requirements are waived by the Risk Manager of Agency ("Risk Manager") due to unique circumstances. 8.1.4.3 Participant agrees that the provisions of this Section shall not be construed as limiting in any way the extent to which Participant may be held responsible for the payment of damages to any persons or property resulting from the Participant's activities or the activities of any person or persons for which the Participant is otherwise responsible. 8.2 Insurance After Close Q Escrow. From and after the Closing, and for the term of the Agency Regulatory Agreement, Participant shall procure and maintain the insurance set forth in the Agency Regulatory Agreement. 9.0 RIGHTS OF HOLDERS OF APPROVED SECURITY INTERESTS IN SITE. 9.1 Definitions. As used in this Section 9.0, the term "mortgage" shall include any mortgage, whether a leasehold mortgage or otherwise, deed of trust, or other security interest, or sale and lease -back, or any other form of conveyance for financing. The term "holder" shall include the holder of any such mortgage, deed of trust, or other security interest, or the lessor under a lease -back, or the grantee under any other conveyance for financing. 9.2 Limitation on Encumbrances: Subordination. Except as otherwise permitted by this Agreement, including but not limited to clauses (a) and (b) of Section 7.3, Participant shall not mortgage the Site or any portion thereof or any interest therein, any other mortgages or conveyances for financing that encumber the Site or any portion thereof, without the prior written approval of the Executive Director. Agency agrees to subordinate the Agency Deed of Trust and Agency Regulatory Agreement to the financing or refinancing meeting the terms of clauses (a) and (b) of Section 7.3. In agreeing to provide the subordination referred to in the preceding sentence, Agency hereby incorporates the finding set forth in Section 4.3 made pursuant to Health and Safety Code Section 33334.14. 9.3 Participant's Breach Does Not Defeat Mortgage Lien. Participant's breach of any of the covenants or restrictions contained in this Agreement or in the Agency Regulatory Agreement shall not defeat or render invalid the lien of any mortgage permitted pursuant to this Agreement, including but not limited to, the First Deed of Trust, made in good faith and for value as to the Site, or any part thereof or interest therein, but unless otherwise provided herein, the terms, conditions, covenants, restrictions, easements, and reservations of this Agreement shall be binding and �80 effective against the owner of the Site where such owner, including any lender, acquires the Site by foreclosure, trustee's sale, or otherwise. 026 G:\WPDOCS\AH RA-Rael.wpd 19 9.4 Notice Qf Default to Mortgagee. Deed of Trust or Other Security Interest Holders. Whenever Agency shall deliver any notice or demand to Participant with respect to any breach or default by Participant hereunder, Agency shall at the same time deliver a copy of such notice or demand to each holder of record of any mortgage who has previously made a written request to Agency therefor, or to the representative of such lender as may be identified in such a written request by the lender. No notice of default shall be effective as to the holder unless such notice is given. 9.5 Riaht of the Agency to Satisfy Other Liens on the Property After Conveyance of Title. Prior to the recordation of the Release of Construction Covenants for the Project, and after Participant has had a reasonable time to challenge, cure, or satisfy any liens or encumbrances on the Site or any portion thereof, Agency shall have the right to satisfy any such liens or encumbrances; provided, however, that nothing in this Agreement shall require Participant to pay or make provision for the payment of any tax, assessment, lien or charge so long as Participant in good faith shall contest the validity or amount thereof, and so long as such delay in payment shall not subject the Site or any portion thereof to forfeiture or sale. Agency shall have the right to reimbursement from Participant for any amount expended pursuant to this Section, which right of reimbursement shall be secured by a lien on the Site, with power of sale. 10.0 USE OF THE SITE. 10.1 Use of the Site. 10.1 .1 Dwelling Unila. Participant hereby covenants and agrees, for itself and its successors and assigns, to use and maintain the Site only as a rental apartment housing project with thirty-four (34) apartment dwelling units ("Units"), with fourteen (14) of the Units to be rented to persons and families whose income does not exceed 120% of the median income for Riverside County as determined by the California Department of Housing and Community Development ("Restricted Units"). The balance of the Units shall be available for rent without restriction and are referred to herein as the "Unrestricted Units." 10.2 NQ Inconsistent Uses. Participant covenants and agrees that it shall not devote the Site to uses inconsistent with the Redevelopment Plan, the applicable zoning restrictions, this Agreement, the Agency Regulatory Agreement, or the Rehabilitation Loan Documents. Agency hereby confirms that multifamily residential use (and associated parking) is a use permitted by the Redevelopment Plan. 10.3 Obligation t4 Refrain from Discrimination. There shall be no discrimination against, or segregation of, any persons, or group of persons, on account of race, color, creed, religion, sex, marital status, ancestry, or national origin in the rental, sale, lease, sublease, transfer, use, occupancy, or enjoyment of the Site, or any portion thereof, nor shall Participant, or any person claiming under or through Participant, establish or 081 permit any such practice or practices of discrimination or segregation with reference G:\WPDOCS\AHRA-Rael.wpd 20 027 to the selection, location, number, use, or occupancy of tenants, lessees, subtenants, sublessees, or vendees of the Site or any portion thereof. The nondiscrimination and nonsegregation covenants contained herein shall remain in effect in perpetuity. 10.4 Effect Q.f Covenants. Agency is deemed beneficiaries of the terms and provisions of this Agreement and of the restrictions and covenants running with the land, whether or not appearing in the Agency Regulatory Agreement, for and in its own right and for the purposes of protecting the interests of the community in whose favor and for whose benefit the covenants running with the land have been provided. The covenants in favor of Agency shall run with the land without regard to whether Agency has been, remains, or is an owner of any land or interest therein in the Site, or in the Redevelopment Project Area, and shall be effective as both covenants and equitable servitudes against the Site. Agency shall have the right, if any of the covenants set forth in this Agreement which are provided for its benefit are breached, to exercise all rights and remedies and to maintain any actions or suits at law or in equity or other proper proceedings to enforce the curing of such breaches to which it may be entitled. The covenants running with the land and their duration are set forth in the Agency Regulatory Agreement. 10.5 Relocation of Existina Tenants. Participant has provided to Agency documentation confirming that, as of the date of this Agreement, not fewer that fourteen (14) units on the Site are leased to and occupied by persons and families whose household incomes do not exceed one hundred twenty percent (120%) of the median income for Riverside County. In the event any tenants are required to move during the rehabilitation, Participant shall be responsible for any temporary relocation and such tenants shall be permitted to return to the same unit they occupied prior to the temporary relocation. In the event the temporary relocation of a tenant extends beyond 180 days, Participant shall offer such tenant a reasonable permanent relocation alternative. Participant shall indemnify, defend, and hold harmless Agency and City from all liability for any and all relocation expenses and any and all claims, expenses, damages, liabilities, judgments and costs (including attorney's fees) pertaining to all relocation expenses. �140111MRM 101' 1l_► 11.1 Defaults. Right 1:4 Cure Ond Waivers. 1 1.1 .1 Subject to any Enforced Delay, and unless otherwise more specifically provided in this Agreement, failure or delay by either party to timely perform any covenant of this Agreement constitutes a default under this Agreement, but only if the party who so fails or delays does not commence to cure, correct or remedy such failure or delay within thirty (30) days after receipt of a written notice specifying such failure or delay, and does not thereafter prosecute such cure, correction or remedy with diligence to completion. 028 G:\WPDOCS\AHRA-Rael.wpd 21 1 1 .1 .2 Any default by Participant under this Agreement, or of the Agency Note, or of the Agency Deed of Trust, or of the Agency Regulatory Agreement, shall constitute a default of all of the foregoing agreements entitling Agency to pursue whatever remedies to which they are entitled under such agreements; provided that the required notice of default under Section 1 1.1.1 has been given and the time period to commence and complete a cure, correction, or remedy of such noticed default has expired without such default having been cured, corrected, or remedied. 1 1.1.3 The injured party shall give written notice of default to the party in default, specifying the default complained of by the injured party. Except as required to protect against further damages, the injured party may not institute proceedings against the party in default until thirty (30) days after giving such notice. Failure or delay in giving such notice shall not constitute a waiver of any default, nor shall it change the time of default. 11.1.4 Except as otherwise provided. in this Agreement, waiver by either party of the performance of any covenant, condition, or promise, shall not invalidate this Agreement, nor shall it be considered a waiver of any other covenant, condition, or promise. Waiver by either party of the time for performing any act shall not constitute a waiver of time for preforming any other act or an identical act required to be performed at a later time. The delay or forbearance by either party in exercising any remedy or right as to any default shall not operate as a waiver of any default or of any rights or remedies or to deprive 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. 11.2 Legal Actions. 1 1.2.1 Institution 2 Legal Actions. In addition to any other rights or remedies, and subject to the requirements of Section 1 1.1, either party may institute legal or equitable action to cure, correct or remedy any default, to recover damages for any default, or to obtain any other remedy consistent with the purpose of this Agreement; provided, however, that notwithstanding the foregoing, in no event shall Participant be entitled to damages related to economic loss, lost profits, or any other damages of like or similar kind or nature. Actions must be instituted and maintained in the Superior Court of the County of Riverside, State of California, in any other appropriate court in that county, or in the appropriate federal district court. 1 1.2.2 Applicable mow. The laws of the State of California shall govern the interpretation and enforcement of this Agreement. 11.2.3 Acceptance Q Service of Process. In the event that any legal action is commenced by Participant against Agency, or by Agency against Participant, service of process shall be made in such manner as may be provided by 083 California law for service on such entity. 029 G:\WPDO CS\AH RA-Rael. wpd 22 11.3 Riohts 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 its 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. 11 .4 Attorneys' Fees. If either party to this Agreement is required to initiate or defend any action or proceeding in any way arising out of the parties' agreement to, or performance of, this Agreement, or is made a party to any such action or proceeding by a third party, such that the parties hereto are adversarial, the prevailing party, as between the Participant and Agency, in such action or proceeding, in addition to any other relief which may be granted, whether legal or equitable, shall be entitled to its/their expert witness fees and reasonable attorneys' fees from the other. Attorneys' fees shall include attorneys' fees on any appeal, and in addition a party entitled to attorneys' fees shall be entitled to all other reasonable costs for investigating such action, taking depositions and discovery and all other necessary costs the court allows which are incurred in such litigation. All such fees shall be deemed to have accrued on commencement of such action and shall be enforceable whether or not such action is prosecuted to judgment. 12.0 MISCELLANEOUS. 12.1 Notices. Formal notices, demands, and communications between Agency and Participant shall be sufficiently given if (i) personally delivered, (ii) delivered by a reputable same -day or overnight courier services that provides a receipt showing date and time of delivery, (iii) delivered by United States mail, registered or certified, postage prepaid, return receipt requested, or (iv) delivered by facsimile transmission, provided the original of the faxed communication is delivered within twenty-four (24) hours by one of methods described in clauses (i), (ii), or (iii) of the foregoing. Delivery shall be made to the following addresses: If to Agency: La Quinta Redevelopment Agency 78-495 Calle Tampico La Quinta, CA 92253 Attn: Executive Director Fax: (760) 777-7101 With a copy to: Rutan & Tucker, LLP 611 Anton Boulevard, Suite 1400 Costa Mesa, CA 92626 Attn: M. Katherine Jenson, Esq. Fax: (714)546-9035 If to Participant: La Quinta 34 LLC 1800 East Gary Avenue, Suite 117 Santa Ana, CA 92705 Attn: Lawrence C. Rael Fax: (714)xxx-xxxx G:\WPDOCS\AHRA-Rael.wpd 23 030 With copy to: Gibson, Dunn & Crutcher LLP Jamboree Center 4 Park Plaza, Suite 1400 Irvine, CA 92614-8557 Attn: Teresa J. Farrell, Esq. Fax: (949) 451-4220 Notices that are personally delivered, delivered by messenger/courier, or by fax (provided there is compliance with the terms of clause (iv) above) shall be deemed effective upon receipt. Notices delivered by mail shall be deemed effective upon the earlier of actual receipt by the addressee thereof or the expiration of forty-eight (48) hours after depositing in the United States Postal System in the manner described in this Section. Such written notices, demands, and communications may be sent in the same manner to such other addresses as a party may from time to time designate by mail. 12.2 Nonliability of Agency Officials and Employees. No member, official, employee, or consultant of Agency shall be personally liable to Participant, or any successor in interest of Participant, in the event of any default or breach by Agency or for any amount which may become due to Participant or to its successor, or on any obligations under the terms of this Agreement. 12.3 Time of Essence. Time is of the essence in the performance of this Agreement. 12.4 Enforced Delay: Extension of Tim Q Performance. Notwithstanding the foregoing, in addition to specific provisions of this Agreement, performance by either party hereunder shall not be deemed to be in default where delays or defaults are due to war; insurrection; strikes; lock -outs; riots; floods; earthquakes; fires; casualties; supernatural causes; 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; acts of the other party; acts or the failure to act of a public or governmental agency or entity (except that acts or the failure to act of Agency shall not excuse performance by Agency unless the act or failure is caused by the acts or omissions of Participant); or any other causes beyond the reasonable control or without the fault of the party claiming an extension of time to perform. In the event of such a delay (herein "Enforced Delay"), the party delayed shall continue to exercise commercially reasonable efforts minimize the period of the delay. An extension of time for any such cause shall be limited to the period of the Enforced Delay, and shall commence to run from the time of the commencement of the cause, provided notice by the party claiming such extension is sent to the other party within fifteen (15) days following the commencement of the cause. The following shall not be considered as events or causes beyond the control of Participant, and shall not entitle Participant to an extension of time to perform: (i) Participant's failure to obtain financing for the QBs Project, (ii) Participant's failure to negotiate agreements with prospective tenants or G:\WPDOCS\AH RA-Rael. wpd 24 031, users for the Project, or (iii) interest rates or (iv) economic or market conditions. Times of performance under this Agreement may also be extended by mutual written agreement by Agency and Participant. The Executive Director shall also have the authority on behalf of Agency to administratively approve extensions of time not to exceed a cumulative total of one (1) year. 12.5 Books and Records. 12.5.1 Maintenance of Books and Records. Participant shall prepare and maintain all books, records, and reports necessary to substantiate Participant's compliance with the terms of this Agreement. 12.5.2 Right I2 Inspect. Agency shall have the right, upon not less than forty-eight (48) hours' notice, at all reasonable times, to inspect the books and records of the Participant pertinent to the purposes of this Agreement. Said right of inspection shall not extend to documents privileged under attorney -client or other such privileges. 12.6 Ownership of Documents. Copies of all drawings, specifications, reports, records, documents and other materials prepared by Participant, its employees, agents and subcontractors, in the performance of this Agreement, which documents are in the possession of Participant and are not confidential or to which other persons have rights shall be delivered to Agency upon request in the event of a termination of this Agreement, and Participant shall have no claim for additional compensation as a result of the exercise by Agency of their respective rights hereunder. Agency shall have an unrestricted right to use such documents and materials as if it were in all respects the owner of the same. Participant makes no warranty or representation regarding the accuracy or sufficiency of such documents for any future use by Agency, and Participant shall have no liability therefor. 12.7 Modifications. Any alteration, change or modification of or to this Agreement, in order to become effective, shall be made by written instrument or endorsement thereon and in each such instance executed on behalf of each party hereto. 12.8 Binding Effect 2 Agreement. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto, their legal representatives, successors, and assigns. This Agreement shall likewise be binding upon and obligate the Site and the successors in interest, owner or owners thereof, and all of the tenants, lessees, sublessees, and occupants of such Site. 12.9 Assurances to Act in Good Fai h. Agency and Participant agree to execute all documents and instruments and to take all action and shall use their best efforts to accomplish the purposes of this Agreement. Agency and Participant shall each diligently and in good faith pursue the satisfaction of any conditions or contingencies subject to their approval. 086 G:\WPDOCS\AHRA-Rael.wpd 25 0 3 1 2.10 Severability. Wherever possible, each provision of this Agreement shall be interpreted in such a manner as to be effective and valid under applicable law. If, however, any provision of this Agreement shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Agreement. 12.11 Interpretation. The terms of this Agreement shall be construed in accordance with the meaning of the language used and shall not be construed for or against either party by reason of the authorship of this Agreement or any other rule of construction which might otherwise apply. The Section headings are for purposes of convenience only, and shall not be construed to limit or extend the meaning of this Agreement. 12.12 Entire Aareement. This Agreement and all documents incorporated herein contain the entire understanding among the parties hereto relating to the transactions contemplated herein and all prior or contemporaneous agreements, understandings, representations, and statements, oral or written, are merged herein and shall be of no further force or effect. 12.13 Waiver: Amendments. All waivers of the provisions of this Agreement, unless specified otherwise herein, must be in writing and signed by the appropriate authorities of Agency or Participant, as applicable. No delay or omission by either party hereto in exercising any right or power accruing upon the compliance or failure of performance by the other party hereto under the provisions of this Agreement shall impair any such right or power or be construed to be a waiver thereof. A waiver by either party hereto of a breach of any of the covenants, conditions or agreements hereof to be performed by the other party shall not be construed as a waiver of any succeeding breach of the same or other covenants, agreements, restrictions or conditions hereof. All amendments hereto must be in writing and signed by the appropriate authorities of Agency and Participant. 12.14 Counterparts. This Agreement may be executed in counterparts, each of which, when this Agreement shall have been signed by all the parties hereto, shall be deemed to be an original, and such counterparts shall constitute one and the same instrument. 12.15 Authority. Agency represents and warrants that: (i) it is a redevelopment agency duly organized and existing under the laws of the State of California; (ii) by proper action of Agency, Agency has been duly authorized to execute and deliver this Agreement, acting by and through its duly authorized officers; and (iii) the entering into this Agreement by Agency does not violate any provision of any other agreement to which Agency is a party. Participant represents and warrants that: (i) it is duly organized and existing under the laws of the State of California; (ii) by proper action of Participant, Participant has been duly authorized to execute and deliver this 087 G:\WPDOCS\AHRA-RaeI.wpd 26 031 Agreement, acting by and through its duly authorized principals or officers; and (iii) the entering into this Agreement by Participant does not violate any provision of any other agreement to which Participant is a party to which consent has not been obtained. 12.16 Exhibits. This Agreement includes all exhibits and attachments attached hereto, which are by this reference are incorporated in this Agreement in their entirety. This Agreement also includes the Redevelopment Plan and any other documents incorporated herein by reference, as though fully set forth herein. 12.17 Effective Date. The effective date of this Agreement shall be the latest of the dates set next to the signatures of the parties hereto after all the parties hereto have signed this Agreement, which latest date shall be inserted into the preamble to this Agreement. [end - signature page and exhibits follow] 034 G:\WPDOCS\AH RA-Rael.wpd 27 IN WITNESS WHEREOF, Agency and Participant have executed this Agreement as of the Effective Date. Date: ATTEST: By: Agency Secretary APPROVED AS TO FORM: RUTAN & TUCKER, LLP By: Attorneys for La Quinta Redevelopment Agency Date: "AGENCY" LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic Thomas Genovese, Executive Director "PARTICIPANT" LA QUINTA 34 LLC, a California limited liability company M2 Lawrence C. Rael Managing Member MM G:\WPDOCS\AHRA-Rael.wpd 28 035 EXHIBIT "A" LEGAL DESCRIPTION OF THE APARTMENT PARCEL: [TO BE INSERTED] LEGAL DESCRIPTION OF THE ACQUISITION PARCELS: LOTS 6 AND 7 IN BLOCK 125 OF SANTA CARMELITA AT VALE LA QUINTA, UNIT NO. 14, AS SHOWN BY MAP RECORDED IN BOOK 18, PAGE 82 OF MAPS, RECORDS OF RIVERSIDE COUNTY, CALIFORNIA. 036 090 G:\WPDOCS\AHRA-Rael.wpd 1 EXHIBIT "B" SITE MAP [SEE FOLLOWING PAGE] ml G:\WPDOCS\AHRA-Rael.wpd 037 [REPLACE THIS PAGE WITH SITE MAP] 09' 038 G:\WPDOCS\AHRA-Rael.wpd EXHIBIT "C" SCOPE OF DEVELOPMENT The renovation of the Site shall result in the rehabilitation of the Units on the Apartment Parcel and the rehabilitation of the Acquisition Parcel with new paving and the installation of carports to be used exclusively for vehicle parking for residents leasing Units, in accordance with the following: A. MINIMUM IMPROVEMENTS The following improvements shall be minimum improvements performed by Participant under this Agreement and the disbursements of the Rehabilitation Loan shall first be used toward the payment of the following improvements: 1 . A tile mansard roof shall be installed on the entire existing apartment complex. 2. The Acquisition Parcel shall be graded and paved with asphalt paving. 3. Approximately twenty-three (23) carports shall be installed on the Acquisition Parcel. B. ADDITIONAL IMPROVEMENTS Should Rehabilitation Loan funds be available after disbursements devoted toward payment of the improvements identified in Section A above have been made, and the improvements identified in Section A have been completed, or in the sole judgment of the Agency Executive Director will be completed without further disbursements from the Rehabilitation Loan, the remaining Rehabilitation Loan funds may, at Participant's discretion, be disbursed to assist in meeting Participant's costs of the following additional rehabilitation improvements: 1. Upgrading the landscaped common areas; 2. Upgrading the fencing for the complex and carport/parking area; 3. Installing or upgrading patio enclosures on all units having patios; 4. Upgrading or installing wood shingle and Spanish tile on all units; 5. Payment of permit fees to the City related to the fourteen (14) units identified herein and in the Agency Regulatory Agreement as the Restricted Units. 093 039 G:\WPD0CS\AHRA-Rae1.wpd EXHIBIT "D" SCHEDULE OF PERFORMANCE ITEM TIME FOR NO. ITEM OF PERFORMANCE PERFORMANCE REFERENCE 1 . Participant submits evidence of Concurrent with Effective § 8.0 insurance required by Date of Agreement. Agreement. 2. Participant submits complete Not later than thirty (30) §6.2.2, 6.2.3 application on Project to City, days after Close of Escrow. including all required preliminary and final drawings and permit applications, and City has approved same and is ready to issue building permits for the Project upon payment of fees, and Participant has obtained all permits and approvals required to commence construction of the Project.. 3. Participant (i) enters into Sale Completed. §3.1 Escrow Instructions with Owner, (ii) opens the Escrow, (iii) delivers to Agency a signed copy of the Sale Escrow Instructions and a copy of the Grant Deed; and (iv) notifies Agency in writing of the name, address, telephone number, and fax number of the Escrow Agent. 4. Participant submits evidence of Prior to Close of Escrow. Agency insurance required by Agency Regulatory Regulatory Agreement. Agreement, § 7.0 5. Participant satisfies all Not later than June 30, § 3.2-3.7 conditions to close of escrow, 2001. closes escrow (and at Closing Agency funds the Agency Escrow Deposit) and acquires the Acquisition Parcels, and Escrow Agent records the Agency Deed of Trust, Agency Regulatory Agreement, Declaration, and Subordination Agreement. 040 6. Participant commences Fourteen (14) days after § 6.2.5 construction of the Project. issuance of building permits. 7. Agency disburses Rehabilitation Per terms of the § 4. 1 ; Loan (other than Agency Agreement. Exh. J Escrow Deposit) in accordance with terms of Agreement. 8 Participant completes Not later than ninety (90) §6.2.5, 6.5, construction of the days after performance of Exh. C. improvements to the Acquisition Item No. 6. Parcel, including new paving and installation of carports. 10. Participant completes Not later than one hundred § 6.2.5; 6.5, construction of other Minimum eighty (180) days after Exh. C. Improvements identified in performance of Item No. 6. Scope of Development (Exhibit "C"), obtains a certificate of occupancy from the City (if applicable). , and requests Agency issuance of the Release of Construction Covenants. 1 1 . Participant completes any of the Not later than one hundred §6.2.5, 6.5, Additional Improvements funded eighty (180) days after Exh. C. in whole or in part with performance of Item No. 6. Rehabilitation Loan. 12. Agency issues Release of Within ten (10) days after § 6.5 Construction Covenants. Participant's request, if Participant is entitled thereto. 13. Participant submits annual Not later than the Agency report pursuant to Health and September 1 following the Regulatory Safety Code Section 33418 to June 30 end of each fiscal Agr., § 3.7 Agency. year for term of the Regulatory Agreement. It is understood that this Schedule of Performance is subject to all of the terms and conditions of the text of the Agreement. The summary of the items performance in this Schedule of Performance is not intended to supersede or modify the more complete description in the text; in the event of any conflict or inconsistency between this Schedule of Performance and the text of the Agreement, the text shall govern. 041. 0919 7 EXHIBIT "E" AGENCY NOTE [SEE FOLLOWING PAGES] 09� 04?. NOTE $350,000.00 ("Loan Amount") 2001 ("Note Date") FOR VALUE RECEIVED, the undersigned (herein, the "Maker") hereby promises to pay to the order of the LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic ("Holder" or "Agency"), at a place designated by Holder, the principal sum of THREE HUNDRED FIFTY THOUSAND DOLLARS ($350,000.00) ("Note Amount"), plus accrued interest, or such lesser amount which shall from time to time be owing hereunder pursuant to the terms hereof. The principal sum hereof shall be disbursed pursuant to the terms and conditions set forth in that certain Affordable Housing Rehabilitation Agreement by and among Maker and Holder, of even date herewith ("AHRA"), pertaining to Maker's redevelopment of certain real property defined in the AHRA as the "Site." Reference is also made to the following additional agreements and documents of even date herewith involving Maker and Holder and/or pertaining to the Site: (i) Deed of Trust with Assignment of Rents by and between Maker as borrower, Holder as beneficiary, and Orange Coast Title Company as Trustee, and recorded in the Office of the Riverside County Recorder ("Agency Deed of Trust"). The Agency Deed of Trust partially secures repayment of this Note. (ii) Regulatory Agreement and Declaration of Covenants and Restrictions, by and between Maker and Holder, for the benefit of Holder, and recorded in the Office of the Riverside County Recorder ("Agency Regulatory Agreement'). (iii) Declaration of Covenants, Conditions, and Restrictions And Agreement To Hold Property As One Parcel, by and between Maker and Holder, for the benefit of Holder, and recorded in the Office of the Riverside County Recorder ("Declaration"). (iv) Subordination Agreement, by and among Maker, Holder, and Rubicon Realty Capital Corporation, recorded in the Office of the Riverside County Recorder. All of the foregoing listed documents are referred to herein collectively as the "Agency Agreements." The Agency Agreements are incorporated herein as though fully set forth. Except as otherwise provided herein, the defined terms used in this Note shall have the same meaning as set forth in the AHRA. 1 . Purpose gf man. The loan evidenced by this Note is a loan for the purpose of rehabilitating the Site in accordance with the AHRA. 0 043 G:\WPD0CS\AHRA-Rae1.wpd 2. Principal Amount. The principal amount of this Loan shall be THREE HUNDRED FIFTY THOUSAND DOLLARS ($350,000.00). Simple interest shall accrue on the outstanding principal amount at seven percent (7%) per annum, compounded annually. 3. Term Qf Note: Repayment. 3.1 Subject to provisions of Paragraph 4 hereof which provides for acceleration of all principal and accrued interest and immediate repayment thereof in the event of a default by Maker, this Note shall expire and be of no force or effect as of the date of expiration of the Agency Regulatory Agreement. Maker shall not be obligated to make any payments on this Note and unless and until any of the events described in Paragraph 4 occur. Upon the occurrence of an uncured default, the full Note Amount and all accrued interest thereon shall be immediately due and payable as set forth in Paragraph 4. 3.2 Maker shall have the right to prepay all or any portion of this Note at any time without penalty, and upon such repayment the Agency Deed of Trust shall be reconveyed. Prepayment shall not affect the Agency Regulatory Agreement or the term of the Agency Regulatory Agreement. 3.3 Any payments made by Maker in payment of this Note shall be applied in the following order: (i) first to the interest then accrued and due on the unpaid principal balance under this Note, (ii) second to reduction of the principal balance of this Note. 4. Defaul • Cross -Default: Acceleration. 4.1 In addition to Maker's failure to timely perform the requirements of this Note, a default by Maker of any of the Agency Agreements shall constitute a default of this Note and all of the Agency Agreements. 4.2 In the event of a default of this Note or a default of any of the Agency Agreements by Maker, which default has not been cured within the cure period applicable to such default, Holder may, at its option, declare this Note and the entire obligation hereby evidenced, including accrued interest, immediately due and payable and collectible then or thereafter as Holder may elect, regardless of the date of maturity, and notice of the exercise of said option is hereby expressly waived by Maker. 5. Collection Costs: Attorneys' Fees. If, because of any event of default under this Note or any of the Agency Agreements, any attorney is engaged by Holder to enforce or defend any provision of this instrument, whether or not suit is filed hereon, then Maker shall pay upon demand reasonable attorneys' fees, expert witness fees and all costs so incurred by Holder together with interest thereon until paid at the 098 applicable rate of interest payable hereunder, as if such fees and costs had been added to the principal owing hereunder. 044 G:\WPDOCS\AHRA-Rael.wpd 2 6. Waivers by Maker. Maker and all endorsers, guarantors and persons liable or to become liable on this Note waive presentment, protest and demand, notice of protest, demand and dishonor and nonpayment of this Note and any and all other notices or matters of a like nature, and consent to any and all renewals and extensions near the time of payment hereof and agree further that at any time and from time to time without notice, the terms of payment herein may be modified or the security described in any documents securing this Note released in whole or in part, or increased, changed or exchanged by agreement between Holder and any owner of the premises affected by said documents securing this Note, without in any way affecting the liability of any party to this Note or any persons liable or to become liable with respect to any indebtedness evidenced hereby. 7. Severability. The unenforceability or invalidity of any provision or provisions of this Note as to any persons or circumstances shall not render that provision or those provisions unenforceable or invalid as to any other provisions or circumstances, and all provisions hereof, in all other respects, shall remain valid and enforceable. 8. Modifications. Neither this Note nor any term hereof may be waived, amended, discharged, modified, changed or terminated orally; nor shall any waiver of any provision hereof be effective except by an instrument in writing signed by Maker and Holder. No delay or omission on the part of Holder in exercising any right hereunder shall operate as a waiver of such right or of any other right under this Note. 9. No Waiver by Holder. No waiver of any breach, default or failure of condition under the terms of this Note shall be implied from any failure of the Holder of this Note to take, or any delay be implied from any failure by the Holder in taking action with respect to such breach, default or failure from any prior waiver of any similar or unrelated breach, default or failure. 10. Usury. Notwithstanding any provision in this Note, the total liability for payment in the nature of interest shall not exceed the limit imposed by applicable laws of the State of California. 11. Nonassignability. Maker may only Transfer (as that term is defined in the AHRA) this Note in accordance with provisions and restrictions pertaining to a transfer of the AHRA as set forth in the AHRA. Holder may freely Transfer Holder's interest in this Note in any manner, at Holder's sole discretion; provided, that at the time of such Transfer Holder also transfers .the AHRA to such transferee. 12. Governing Law. This Note has been executed and delivered by Maker in the State of California and is to be governed and construed in accordance with the laws thereof. 13. Time of Essence. Time is of the essence in the performance of the 099 obligations and provisions set forth in this Note. 04rr G:\WPDOCS\AHRA-Rael.wpd 3 IN WITNESS WHEREOF, Maker has executed this Note as of the Note Date. "Maker" LA QUINTA 34 LLC, a California limited liability company Lawrence C. Rael, Managing Member 100 'm G:\WPDOCS\AHRA-Rael.wpd 4 EXHIBIT "F" AGENCY DEED OF TRUST [SEE FOLLOWING PAGES] 101 G:\WPDOCS\AHRA-Rael.wpd 047 Recording Requested By And When Recorded Return to: La Quinta Redevelopment Agency 78-495 Calle Tampico La Quinta, CA 92253 Attn: Executive Director SPACE ABOVE THIS LINE FOR RECORDER'S USE EXEMPT FROM RECORDING FEE PER GOV. CODE § 6103 DEED OF TRUST WITH ASSIGNMENT OF RENTS AND RIDER ATTACHED HERETO NOTE: RIDER ATTACHED TO THIS DEED OF TRUST CONTAINING TERMS INCLUDING SECURITY AGREEMENT AND FIXTURE FILING. This DEED OF TRUST WITH ASSIGNMENT OF RENTS AND RIDER ATTACHED HERETO ("Deed of Trust"), is made , 2001, between LA QUINTA 34 LLC, a California limited liability company, herein called TRUSTOR, whose address is 1800 East Garry Avenue, Suite 177, Santa Ana, CA 92705, ORANGE COAST TITLE COMPANY, a California corporation, herein called TRUSTEE, and LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic, herein called BENEFICIARY. WITNESSETH: That Trustor grants to Trustee in trust, with power of sale, Trustor's estate, dated on or about the date hereof, in that property in the City of La Quinta, County of Riverside, State of California, described as: [TO BE AND LOTS 6 AND 7 IN BLOCK 125 OF SANTA CARMELITA AT VALE LA QUINTA, UNIT NO. 14, AS SHOWN BY MAP RECORDED IN BOOK 18, PAGE 82 OF MAPS, RECORDS OF RIVERSIDE COUNTY, CALIFORNIA together with the rents, issues and profits thereof, subject, however, to the right, power and authority hereinafter given to and conferred upon Beneficiary to collect and apply such rents, issues and profits for the purpose of securing (1) payment of the sum of THREE HUNDRED FIFTY THOUSAND DOLLARS ($350,000.00), with interest thereon according to the terms of a promissory note or notes of even date herewith made by Trustor, payable to order of Beneficiary, and extensions or renewals thereof; (2) the performance of each agreement of Trustor incorporated by reference or contained herein; and (3) payment of additional sums and interest thereon which may 102 hereafter be loaned to Trustor, or his successors or assigns, when evidenced by a promissory note or notes reciting that they are secured by this Deed of Trust. �048 G:\WPD0CS\AHRA-RaeI.wpd To protect the security of this Deed of Trust, and with respect to the Property above described, Trustor expressly makes each and all of the agreements, and adopts and agrees to perform and be bound by each and all of the terms and provisions set forth in subdivision A, and it is mutually agreed that each and all of the terms and provisions set forth in subdivision B of the fictitious deed of trust recorded in Orange County August 17, 1964, and in all other counties August 18, 1964, in the book and at the page of Official Records in the office of the county recorder of the county where said property is located, noted below opposite the name of such county, namely: COUNTY BOOK PAGE COUNTY BOOK PAGE COUNTY BOOK PAGE COUNTY BOOK PAGE Alameda 1288 556 Kings 858 713 Placer 1028 379 Sierra 38 187 Alpine 3 1 30- Lake 437 110 Plumas 166 1307 Siskiyou 506 762 31 Amador 133 438 Lassen 192 367 Riverside 3778 347 Solano 1287 621 Butte 1330 513 L o s T - 874 Sacramento 5039 124 Sonoma 2067 427 Angeles 3878 Calaveras 185 338 Madera 911 136 San Benito 300 405 Stanislaus 1970 56 Colusa 323 391 Marin 1849 122 San Bernardino 6213 768 Sutter 655 585 C o n t r a 4684 1 Mariposa 90 453 San Francisco A-804 596 Tehama 457 183 Costa Del Norte 101 549 Mendocino 667 99 San Joaquin 2855 283 Trinity 108 595 El Dorado 704 635 Merced 1660 753 San Luis 1311 137 Tulare 2530 108 Obispo Fresno 5052 623 Modoc 191 93 San Mateo 4778 175 Tuolumne 177 160 Glenn 469 76 Mono 69 302 Santa Barbara 2065 881 Ventura 2607 237 Humboldt 801 83 Monterey 357 239 Santa Clara 6626 664 Yolo 769 16 Imperial 1189 701 Napa 704 742 Santa Cruz 1638 607 Yuba 398 693 Inyo 165 672 Nevada 363 94 Shasta 800 633 Kern 3756 690 Orange 7182 18 San Diego SERIES 5 Book 1964, Page 149774 shall inure to and bind the parties hereto, with respect to the property above described. Said agreements, terms and provisions contained in said subdivisions A and B (identical in all counties, and printed on pages 3 and 4 hereof) are by the within reference thereto, incorporated herein and made a part of this Deed of Trust for all purposes as fully as if set forth at length herein, and Beneficiary may charge for a statement regarding the obligation secured hereby, provided the charge therefor does not exceed the maximum allowed by law. The undersigned Trustor, requests that a copy of any notice of default ,and any notice of sale hereunder be mailed to him at his address hereinbefore set forth. SEE RIDER ATTACHED TO THIS DEED OF TRUST STATE OF CALIFORNIA COUNTY OF Signature of Trustor } } LA QUINTA -34 LLQ. } a California limited liability company 049 103 G:\WPDOCS\AHRA-Rael.wpd 2 On before me, personally appeared LAWRENCE C. RAEL, personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose names(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 signatures(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. Signature (This area for official notarial seal) M Lawrence C. Rael, Managing Member 104 G:\WPDOCS\AH RA-Rael. wpd 3 050 DO NOT RECORD The following is a copy of Subdivisions A and B of the fictitious Deed of Trust recorded in each county in California as stated in the foregoing Deed of Trust and incorporated by reference in said Deed of Trust as being a part thereof as if set forth at length therein. A. To protect the security of this Deed of Trust, Trustor agrees: 1) To keep said property in good condition and repair, not to remove or demolish any building thereon; to complete or restore promptly and in a good and workmanlike manner any building which may be constructed, damaged or destroyed thereon and to pay when due all claims for labor performed and materials furnished therefor, to comply with all laws affecting said property or requiring any alterations or improvements to be made thereon; not to commit or permit waste thereof; not to commit, suffer or permit any act upon said property in violation of law; to cultivate, irrigate, fertilize, fumigate, prune and do all other acts which from the character or use of said property may be reasonably necessary, the specific enumerations herein not excluding the general. 2) To provide, maintain and deliver to Beneficiary fire insurance satisfactory to and with loss payable to Beneficiary. The amount collected under any fire or other insurance policy may be applied by Beneficiary upon any indebtedness secured hereby and in such order as Beneficiary may determine, or at the option of Beneficiary the entire amount so collected or any part thereof may be released to Trustor. Such application or release shall not cure or waive any default or notice of default hereunder or invalidate any act done pursuant to such notice. 3) To appear in and defend any action or proceeding purporting to affect the security hereof or the rights or powers of Beneficiary or Trustee; and to pay all costs and expenses, including cost of evidence of title and attorney's fees in a reasonable sum, in any such action or proceeding in which Beneficiary or Trustee may appear, and in any suit brought by Beneficiary to foreclose this Deed. 4) To pay: at least ten (10) days before delinquency all taxes and assessments affecting said property, including assessments on appurtenant water stock; when due, all encumbrances, charges and liens, with interest, on said property or any part thereof, which appear to be prior or superior hereto; all costs, fees and expenses of this Trust. Should Trustor fail to make any payment or to do any act as herein provided, then Beneficiary of Trustee, but without obligation so to do and without notice to or demand upon Trustor and without releasing Trustor from any obligation hereof, may: make or do the same is such manner and to such extent as either may deem necessary 105 to protect the security hereof, Beneficiary or Trustee being authorized to enter upon said property for such purposes; appear in and defend any action or proceeding purporting to affect the security hereof or the rights or powers of Beneficiary or G:\WPDO MAH RA-Rael. wpd 4 V 5 J- Trustee; pay, purchase, contest or compromise any encumbrance, charge or lien which in the judgment of either appears to be prior or superior hereto; and, in exercising any such powers, pay necessary expenses, employ counsel and pay his reasonable fees. 5) To pay immediately and without demand all sums so expended by Beneficiary or Trustee, with interest from the date of expenditure at the amount allowed by law in effect at the date hereof, and to pay for any statement provided for by law in effect at the date hereof regarding the obligation secured hereby any amount demanded by the Beneficiary not to exceed the maximum allowed by law at the time when said statement is demanded. B. It is mutually agreed: 1) That any award in connection with any condemnation for public use of or injury to said property or any part thereof is hereby assigned and shall be paid to Beneficiary who may apply or release such moneys received by him in the same manner and with the same effect as above provided for disposition of proceeds of fire or other insurance. 2) That by accepting payment of any sum secured hereby after its due date, Beneficiary does not waive his right either to require prompt payment when due of all other sums so secured or to declare default for failure so to pay. 3) That at any time or from time to time, without liability therefor and without notice, upon written request of Beneficiary and presentation of this Deed and said note for endorsement, and without affecting the personal liability of any person for payment of the indebtedness secured hereby, Trustee may: reconvey any part of said property; consent to the making of any map or plat thereof; join in granting any easement thereon, or join in any extension agreement or any agreement subordinating the lien or charge hereof. 4) That upon written request of Beneficiary stating that all sums secured hereby have been paid, and upon surrender of this Deed and said note to Trustee for cancellation and retention or other disposition as Trustee in its sole discretion may choose and upon payment of its fees, Trustee shall reconvey, without warranty, the property then held hereunder. The recitals in such reconveyance of any matters or facts shall be conclusive proof of the truthfulness thereof. The Grantee in such reconveyance may be described as "the person or persons legally entitled thereto." 5) That as additional security, Trustor hereby gives to and confers upon Beneficiary the right, power and authority, during the continuance of these Trusts, to collect the rents, issues and profits of said property, reserving unto Trustor the right, prior to any default by Trustor in payment of any indebtedness secured hereby or in the performance of any agreement hereunder, to collect and retain such rents, issues 1 s and profits as they become due and payable. Upon any such default, Beneficiary may at any time without notice, either in person, by agent, or be a receiver to be appointed by a court, and without regard to the adequacy of any security for the indebtedness G:\WPDOCS\AHRA-Rael,wpd 5 ~ hereby secured, enter upon and take possession of said property or any part thereof, in his own name sue for or otherwise collect such rents, issues, and profits, including those past due and unpaid, and apply the same, less costs and expenses of operation and collection, including reasonable attorney's fees, upon any indebtedness secured hereby, and in such order as Beneficiary may determine. The entering upon and taking possession of said property, the collecting of such rents, issues and profits and the application thereof as aforesaid, shall not cure or waive any default or notice of default hereunder or invalidate any act done pursuant to such notice. 6) That upon default by Trustor in payment of any indebtedness secured hereby or in the performance of any agreement hereunder, Beneficiary may declare all sums secured hereby immediately due and payable by delivery to Trustee of written declaration of default and demand for sale and of written notice of default and of election to cause to be sold said property, which notice Trustee shall cause to be filed for record. Beneficiary also shall deposit with Trustee this Deed, said note and all documents evidencing expenditures secured hereby. After the lapse of such time as may then be required by law following the recordation of said notice of default, and notice of sale having been given as then required by law, Trustee, without demand on Trustor, shall sell said property at the time and place fixed by it in said notice of sale, either as a whole or in separate parcels, and in such order as it may determine, at public auction to the highest bidder for cash in lawful money of the United States, payable at time of sale. Trustee may postpone sale of all or any portion of said property by public announcement at such time and place of sale, and from time to time thereafter may postpone such sale by public announcement at the time fixed by the preceding postponement. Trustee shall deliver to such purchaser its deed conveying the property so sold, but without any covenant or warranty, express or implied. The recitals in such deed of any matters or facts shall be conclusive proof of the truthfulness thereof. Any person, including Trustor, Trustee, or Beneficiary as hereinafter defined, may purchase at such sale. After deducting all costs, fees and expenses of Trustee and of this Trust, including cost of evidence of title in connection with sale, Trustee shall apply the proceeds of sale to payment of: all sums expended under the terms hereof, not then repaid, with accrued interest at the amount allowed by law in effect at the date hereof; all other sums then secured hereby; and the remainder, if any, to the person or persons legally entitled thereto. 7) Beneficiary, or any successor in ownership of any indebtedness secured hereby, may from time to time, by instrument in writing, substitute a successor or successors to any Trustee named herein or acting hereunder, which instrument, executed by the Beneficiary and duly acknowledged and recorded in the office of the recorder of the county or counties where said property is situated shall be conclusive proof of proper substitution of such successor Trustee or Trustees, who shall, without 107 conveyance from the Trustee predecessor, succeed to all its title, estate, rights, 053 GAWPDOCS\AHRA-Rael.wpd 6 powers and duties. Said instrument must contain the name of the original Trustor, Trustee and Beneficiary hereunder, the book and page where this Deed is recorded and the name and address of the new Trustee. 8) That this Deed applies to, inures to the benefit of, and binds all parties hereto, their heirs, legatees, devisees, administrators, executors, successors and assigns. The term Beneficiary shall mean the owner and holder, including pledgees, of the note secured hereby, whether or not named as Beneficiary herein. In this Deed, whenever the context so requires, the masculine gender includes the feminine and/or neuter, and the singular number includes the plural. 9) That Trustee accepts this Trust when this Deed, duly executed, and acknowledged, is made a public record as provided by law. Trustee is not obligated to notify any party hereto of pending sale under any other Deed of Trust or of any action or proceeding in which Trustor, Beneficiary or Trustee shall be a party unless brought by Trustee. DO NOT RECORD REQUEST FOR FULL RECONVEYANCE TO TRUSTEE: The undersigned is the legal owner and holder of the note or notes and of all indebtedness secured by the foregoing Deed of Trust. Said note or notes, together with all other indebtedness secured by said Deed of Trust, have been fully paid and satisfied; and you are hereby requested and directed, on payment to you of any sums owing to you under the terms of said Deed of Trust, to cancel said note or notes above mentioned, an all other evidences of indebtedness secured by said Deed of Trust delivered to you herewith, together with the said Deed of Trust, and to reconvey, without warranty, to the parties designated by the terms of said Deed of Trust, all the estate now held by you under the same. Dated Please mail Deed of Trust, Note and Reconveyanceto Do Not lose or destroy this Deed of Trust OR THE NOTE which it secures. Both must be delivered to the Trustee for cancellation before reconveyance will be made. 054 108 GAWPDOCS\AHRA-Rael.wpd 7 RIDER TO SUBORDINATED DEED OF TRUST WITH ASSIGNMENT OF RENTS THIS RIDER TO DEED OF TRUST WITH ASSIGNMENT OF RENTS ("Rider") is executed this day of , 2001, by LA QUINTA 34 LLC, a California limited liability company, herein "Trustor," in favor of the LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic, herein "Beneficiary," the same parties to that certain form Deed of Trust With Assignment of Rents, of even date hereto, to which this Rider is attached. This Rider is made a part of and is incorporated into said Deed of Trust. This Rider shall supersede any conflicting term or provision of the form Deed of Trust to which it is attached. Reference is made to (i) that certain Note by and between Trustor and Beneficiary, dated on or about the date set forth above, the repayment of which by Trustor is secured by this Deed of Trust ("Agency Note"), and (ii) to the Agency Agreements which are described in the Agency Note. The parties hereto agree: 1. Property. The estate subject to this Deed of Trust is Trustor's fee estate in the real property legally described in the foregoing Deed of Trust to which this Rider is attached (the "Property"). 2. Obligations Secured. Trustor makes this grant and assignment for the purpose of securing the following obligations ("Secured Obligations"): a. Payment to Beneficiary of all indebtedness at any time owing under the terms of the Note; b. Payment and performance of all obligations of Trustor under this Deed of Trust; C. Payment and performance of all obligations of Trustor under the Agency Agreements. d. Payment and performance of all future advances and other obligations of Trustor or any other person, firm, or entity with the approval of Trustor, may agree to pay and/or perform (whether as principal, surety or guarantor) for the benefit of Beneficiary, when the obligation is evidenced by a writing which recites that it is secured by this Deed of Trust; and e. All modifications, extensions and renewals of any of the obligations secured hereby, however evidenced. 3. Obligations. The term `obligations" is used herein in its broadest and most comprehensive sense and shall be deemed to include, without limitation, all interest and charges, prepayment charges, late charges and fees at any time accruos, or assessed on any of the Secured Obligations. l� `� 109 G:\WPD0CS\AHRA-Rae1.wod 4. Incorporation. All terms of the Agency Note, Agency Agreements, and the Secured Obligations are incorporated herein by this reference. All persons who may have or acquire an interest in the Property shall be deemed to have notice of the terms of all of the foregoing documents. 5. Mortgagee -in -Possession. Neither the assignment of rents set forth in the Deed of Trust nor the exercise by Beneficiary of any of its rights or remedies hereunder shall be deemed to make Beneficiary a "mortgagee -in -possession" or otherwise liable in any manner with respect to the Property, unless Beneficiary, in person or by agent, assumes actual possession thereof. Nor shall appointment of a receiver for the Property by any court at the request of Beneficiary or by agreement with Trustor, or the entering into possession of the Property by such receiver, be deemed to make Beneficiary a "mortgagee -in -possession" or otherwise liable in any manner with respect to the Property. 6. No Cure. In the event Beneficiary collects and receives any rents under the Deed of Trust upon any default hereof, such collection or receipt shall in no way constitute a curing of the default. 7. Possession Upon Default. Upon the occurrence of and during the continuation of a default, Beneficiary, after having given notice and the applicable cure periods having expired with the default having not been cured (hereinafter, a "default"), may, at its option, without any action on its part being required and without in any way waiving such default, take possession of the Property in accordance with applicable law and have, hold, manage, lease and operate the same, on such terms and for such period of time as Beneficiary may deem proper, and may collect and receive all rents and profits, with full power to make, from time to time, all commercially reasonable alterations, renovations, repairs or replacements thereto as may seem proper to Beneficiary, and to apply such rents and profits to the payment of (a) the cost of all such alterations, renovations, repairs and replacements, and all costs and expenses incident to taking and retaining possession of the Property, and the management and operation thereof, and keeping the same properly insured; (b) all taxes, charges, claims, assessments, and any other liens which may be prior in lien or payment of the Note, and premiums for insurance, with interest on all such items; and (c) the indebtedness secured hereby, together with all costs and attorney's fees, in such order or priority as to any of such items as Beneficiary in its sole discretion may determine, any statute, law, custom or use to the contrary notwithstanding. Any amounts received by Beneficiary or its agents in the performance of any acts prohibited by the terms of this assignment, including, but not limited to, any amounts received in connection with any cancellation, modification or amendment of any lease prohibited by the terms of this assignment and any rents and profits received by Trustor after the occurrence of a default shall be held by Trustor as trustee for Beneficiary and all such amounts shall be accounted for to Beneficiary and shall not be commingled with other funds of the Trustor. Any person receiving any portion of such trust funds shall receive the same in trust for Beneficiary as if such person had 11 actual or constructive notice that such funds were impressed with a trust in accordance therewith. 056 G:\WPD0CS\AHRA-Rae1.wDd 2 8. Receiver. In addition to any and all other remedies of Beneficiary set forth under this Deed of Trust or permitted at law or in equity, if a default shall have occurred, Beneficiary, to the extent permitted by law and without regard to the value, adequacy or occupancy of the security for the Note and other sums secured hereby, shall be entitled as a matter of right if it so elects to the appointment of a receiver to enter upon and take possession of the Property and to collect all rents and profits and apply the same as the court may direct, and such receiver may be appointed by any court of competent jurisdiction by ex parte application and without notice, notice of hearing being hereby expressly waived. The expenses, including receiver's fees, attorneys' fees, costs and agent's compensation, incurred pursuant to the power herein contained shall be secured by this Deed of Trust. 9. Notice to Beneficiary. Notices to Beneficiary shall be sent to Beneficiary addressed to: La Quinta Redevelopment Agency 78-495 Calle Tampico La Quinta, CA 92263 Attn: Executive Director IN WITNESS WHEREOF, Trustor has executed this Rider on the date of Trustor's acknowledgment hereinbelow, to be effective for all purposes as of the day and year first set forth above. TRUSTOR: LA QUINTA 34 LLC, a California limited liability company M Lawrence C. Rael, Managing Member lit 057 G:\WPDOCS\AH RA-Rael. W ud 3 STATE OF CALIFORNIA ) ss. COUNTY OF 1 On before me, , personally appeared , personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. Witness my hand and official seal. Notary Public [SEAL] M 11' G:\WPD0CS\AHRA-Rae1.wDd EXHIBIT "G" AGENCY REGULATORY AGREEMENT [SEE FOLLOWING PAGES] 113 059 G:\WPDOCS\AHRA-Rael.wod Recording Requested By And When Recorded Mail To: La Quinta Redevelopment Agency 78-495 Calle Tampico La Quinta, CA 92253 Attn: Executive Director (Space Above This Line for Recorder's Office Use Only) (Exempt from Recording Fee per Gov. Code ?6103) REGULATORY AGREEMENT AND DECLARATION OF COVENANTS AND RESTRICTIONS THIS REGULATORY AGREEMENT AND DECLARATION OF COVENANTS AND RESTRICTIONS ("Agreement") is made and entered into this day of , 200, by and between LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic ("Agency") and LA QUINTA 34 LLC, a California limited liability company ("Participant"). RECITALS: A. Participant is the owner of fee title to that certain real property more particularly described in Attachment No. 1, attached hereto and incorporated by reference herein (the "Site"). B. Pursuant to an Affordable Housing Rehabilitation Agreement, by and among Participant and Agency, of even date herewith, (the "AHRA"), Agency has provided a loan to Participant in the sum of Three Hundred Fifty Thousand Dollars ($350,000.00) (the "Agency Loan") for the purpose of assisting Participant's rehabilitation of an existing apartment complex on the Site and to provide on-site/off- street parking for the residents of the apartments on the Site (the 'Project"). The AHRA requires Participant to enter into this Agreement, which provides, among other requirements, that the rental and occupancy of not fewer than fourteen (14) of the apartment units on the Site be rented to and occupied by persons and families whose household income does not exceed 120% of the median income for Riverside County, in effect from time to time. C. Reference is also made to the following documents of even date herewith: (i) Note, by Participant as Maker and borrower in favor of the Agency as lender, ("Agency Note"). The Agency Note evidences the Agency Loan. (ii) Deed of Trust with Assignment of Rents, by and between 114 Participant as borrower and Agency as beneficiary, and recorded in the Office of the Riverside County Recorder ("Agency Deed of Trust"). The Agency Deed of Trust partially secures repayment of the Agency Note. 060 G:\WPDOCS\AHRA-Rael.wod i (iii) Declaration of Covenants, Conditions, and Restrictions And Agreement To Hold Property As One Parcel, by and between Participant and Agency, and recorded in the Office of the Riverside County Recorder ("Declaration"). (iv) Subordination Agreement, by and among Maker, Holder, and Rubicon Realty Capital Corporation, recorded in the Office of the Riverside County Recorder. The AHRA and all of the foregoing listed documents are referred to herein collectively as the "Agency Agreements." The Agency Agreements are incorporated herein as though fully set forth. D. Pursuant to the this Agreement and the Agency Agreements, Participant has agreed to rehabilitate the Site and develop thereon, and thereafter maintain, a rental housing project with not fewer than fourteen (14) units restricted to rental and occupancy to persons and families whose household income does not exceed 120% of the median income for Riverside County. E. Agency and Participant now desire to place restrictions upon the use and operation of the Site, in order to ensure that the Site shall be operated continuously as a rental apartment complex in accordance with the terms hereof. AGREEMENT: NOW, THEREFORE, the Participant and Agency declare, covenant and agree, by and for themselves, their heirs, executors, administrators, successors and assigns, and all persons claiming under or through them, that, for a term equal to thirty (30) years commencing upon the date of the recordation of the Release of Construction Covenants for the Site in accordance with the AHRA„ as follows: 1.0 DEFINITIONS. 1.1 Riverside County Median Income. For purposes of this Agreement, the "Riverside County Median Income" as of any date shall be determined by reference to the regulations published by the California Department of Housing and Community Development pursuant to Health and Safety Code Section 50093, or its successor, as of such date. 1.2 Unit. As used in this Agreement, the term "Unit' or "unit" shall mean a rental apartment dwelling unit on the Site. 1.3 Restricted Unit. As used in this Agreement, the term "Restricted Unit" shall mean not fewer than fourteen (14) Units to be rented to and occupied by Eligible Tenants. 115 1.4 Eligible Tenant. As used in this Agreement, the term "Eligible Tenant' shall refer to a Moderate Income Tenant. 061, G:\WPDOCS\AHRA-Rael.wod 2 1.5 Moderate Income. As used in this Agreement, the term "Moderate Income" shall mean household income, adjusted for family size, which does not exceed one hundred twenty percent (120%) of the Riverside County Median Income. 1.6 Moderate Income Tenant. As used in this Agreement, the term "Moderate Income Tenant" shall mean a tenant whose household income does not exceed Moderate Income and who is otherwise eligible to rent, and does rent, a Restricted Unit and thus is an Eligible Tenant for a Restricted Unit. 1.7 Affordable Rent. As used in this Agreement, the term "Affordable Rent" shall mean annual rentals whose amount does not exceed the maximum percentage of income that can be devoted to rent by a Moderate Income Tenant as set by California law. 1.8 Unrestricted Unit. As used in this Agreement, the term "Unrestricted Unit" shall mean a Unit that is not a Restricted Unit, i.e., a Unit that is not subject to the affordability covenants that apply to the Restricted Units. 2.0 RESIDENTIAL RENTAL PROPERTY. 2.1 Rehabilitation Qf the Site. Participant shall rehabilitate the Site and develop the Project thereon in accordance with the Agency Agreements, including the Schedule of Performance set forth in the AHRA, for the purpose of providing the Restricted Units described herein and in the Agency Agreements. The Project shall be owned, managed, and operated as a rental apartment project, with not fewer than fourteen (14) Units rented and occupied as Restricted Units as provided in this Agreement. 2.2 Facilities. All of the dwelling units in the Project shall contain facilities for living, sleeping, eating, cooking and sanitation in accordance with the this Agreement, the AHRA, the Agency Agreements, and all of the permits and approvals for the Project. 2.3 Residential Use. Without the Agency's prior written consent which consent may be given or withheld in its sole and absolute discretion. none of the dwelling units in the Project will at any time be utilized on a transient basis or will ever be used as a hotel, motel, dormitory, fraternity house, sorority house, rooming house, nursing home, hospital, sanitarium, or trailer court or park, nor shall the Units be used for day care facilities or as a place of business except as may otherwise be allowed by applicable law. 2.4 Conversion Qf Unfta. No part of the Project will at any time be owned by a cooperative housing corporation, nor shall the Participant take any steps in connection with the conversion to such ownership or uses to condominiums, or to any other form of ownership, without the prior written approval of Agency which approval 116 may be given or withheld in its sole and absolute discretion. 062 G:\WPDOCS\AHRA-Rael.wpd 3 2.5 Preference to Eliaible Tenants. All of the dwelling units will be available for rental in accordance with the terms of this Agreement, and the Participant shall not give preference to any particular class or group in renting the dwelling units in the Project, except to the extent that the Restricted Units are required to be leased or rented to Eligible Tenants and except as provided in Section 3.5 below. 2.6 Resident Manaaer and Staff Unita. A resident manager or staff unit or units may be counted as a Restricted Unit only if the tenants of such Unit(s) are Eligible Tenants. 2.7 Liability cLf Participant. Participant and any manager it employs shall not incur any liability under this Agreement as a result of fraud or intentional misrepresentation by a tenant. 2.8 Qualified Affordable Housing Preservation Project. The beneficiary/ies of this Agreement elect/s to define the Project to which this Agreement applies as a "qualified affordable housing preservation project" within the meaning of Government Code Section 7260(c)(3)A) and by this designation such beneficiary/ies may, but are not required to, utilize the provisions of said section of the Government Code. 3. OCCUPANCY OF RESTRICTED UNITS BY ELIGIBLE TENANTS. Participant hereby represents, warrants, and covenants as follows: 3.1 Occupancy Levels. Except as expressly provided herein, throughout the term of this Regulatory Agreement, the Restricted Units shall be continuously occupied or held vacant and available for occupancy by Eligible Tenants. 3.2 Rental Rates. Participant hereby agrees to and shall rent Restricted Units occupied by Eligible Tenants at no greater than Affordable Rent. 3.3 Occupancy -By Eligible Tenant. A Restricted Unit occupied by an Eligible Tenant who qualified as a Moderate Income Tenant at the commencement of the occupancy, shall be treated as occupied by an Eligible Tenant at such income level until a recertification of such Eligible Tenant's income in accordance with Section 3.7 below demonstrates that such tenant no longer qualifies as an Eligible Tenant at that income level. A Restricted Unit previously occupied by an Eligible Tenant and then vacated shall be considered occupied by an Eligible Tenant until the Restricted Unit is reoccupied. Any vacated Restricted Unit shall be held vacant until re -leased to an Eligible Tenant, unless there are sufficient numbers of Eligible Tenants then leasing and occupying Units. 3.4 Income Computation Certificate. Immediately prior to an Eligible Tenant's occupancy of a Restricted Unit, Participant shall obtain and maintain on file an Income Computation and Certification form (which form shall be approved in advance by the 11 Agency Executive Director) from each such Eligible Tenant dated immediately prior to the date of initial occupancy in the Project by such Eligible Tenant. In addition,063 G:\WPDO CS\AHRA-Rael.wpd 4 Participant shall provide such further information as may be required in the future by the Agency. Participant shall use its best efforts to verify that the income provided by an applicant is accurate by taking the following steps as a part of the verification process: (i) obtain three (3) pay stubs for the most recent pay periods; (ii) obtain a written verification of income and employment from applicant's current employer; (iii) obtain an income verification form from the Social Security Administration and/or California Department of Social Services if the applicant receives assistance from either agency; (iv) if an applicant is unemployed or did not file a tax return for the previous calendar year, obtain other verification of such applicant's income as is satisfactory to the Agency; or (v) such other information as may be requested by the Agency. A copy of each such Income Computation and Certification shall be filed with the Agency prior to the occupancy of a Restricted Unit by an Eligible Tenant whenever possible, but in no event more than thirty (30) days after initial occupancy by said tenant. Agency acknowledges and agrees that Participant has provided adequate documentation that, as of the date of this Agreement, there are at least fourteen (14) Restricted Units as herein defined. 3.5 Rental Priority. During the term of this Agreement, Participant shall use its reasonable commercial efforts to lease Restricted Units to credit -worthy Eligible Tenants in the following order of priority: (i) displaced persons entitled to a preference pursuant to California Health and Safety Code Section 33411.3 or successor statute, with highest priority in this category to residents of the apartment complex that were living there on the Effective Date of this Agreement and who were required to be relocated from the Site during the rehabilitation work and who are Eligible Tenants, and secondary priority within this category to residents of the City of La Quinta; (ii) residents of the City of La Quinta who are Eligible Tenants and who meet the other eligibility requirements of this Agreement; and (iii) other persons meeting the eligibility requirements of this Agreement. Participant shall, and Agency may, maintain a list (the "Housing List") of persons who have notified Participant and/or Agency of their desire to rent a Restricted Unit in the Project and who have incomes which would qualify them as an Eligible Tenant, and Participant shall offer to rent units on the above -referenced priority basis. Should multiple tenants be equally eligible (as to income, credit history, and other nondiscriminatory criteria) and qualified to rent a unit, Participant shall rent available Restricted Units to Eligible Tenants on a first -come, first - served basis. 3.6 Recertification. Immediately prior to the first anniversary date of the occupancy of a Restricted Unit by an Eligible Tenant, and on each anniversary date thereafter, Participant shall recertify the income of such Eligible Tenant by obtaining a completed Income Computation and Certification based upon the current income of each occupant of the Restricted Unit. If, upon recertification, the occupants do not qualify as an Eligible Tenant, then the occupants' lease shall not be renewed and said occupants shall be required to either vacate the Restricted Unit upon the expiration of the lease, or such occupants may be allowed to remain if either (i) there is a vacant Unrestricted Unit and Participant notifies Agency in writing that it is designating such 118 vacant Unrestricted Unit as a Restricted Unit and Participant thereafter rents such redesignated unit to an Eligible Tenant, or (ii) Participant identifies an occupant of an 064 GAWPDOCS\AHRA-Rael.wpd 5 Unrestricted Unit as qualifying as an Eligible Tenant, completes an Income Computation Certificate and any other required documentation to confirm that such occupant(s) is an Eligible Tenant, redesignates that unit as a Restricted Unit, and notifies the Agency in writing of such redesignation. . Participant shall provide the Agency with a copy of each such recertification with the next submission of Certificate of Continuing Program Compliance pursuant to Section 3.7. 3.7 Certificate of Continuina Program Compliance. Upon the issuance of the Release of Construction Covenants, and by September 1 following the end of the immediately preceding fiscal year ending on June 1, Participant shall annually advise the Agency of the occupancy of the Project by delivering a Certificate of Continuing Program Compliance in the form required by Agency (or complying with this section if no form is provided), stating M the dwelling units of the Project which were Restricted Units during such period and (ii) that to the knowledge of Participant either (a) no unremedied default has occurred under this Agreement, or (b) a default has occurred, in which event the Certificate shall describe the nature of the default and set forth the measures being taken by the Participant to remedy such default. Participant shall to pay Agency an annual fee pursuant to Health and Safety Code Section 33418(c) which shall not exceed FIVE HUNDRED DOLLARS ($500) as such amount shall be permitted to increase by the Consumer Price Index ("CPI") published by the United States Department of Labor, Bureau of Labor Statistics, for Urban Wage Earners and Clerical Workers, Los Angeles -Long Beach -Anaheim Average, All Items 0 984 =100), from and after the date of this Agreement, or the CPI is discontinued, such official index as may then be in existence and which is most nearly equivalent to the CPI. 3.8 Maintenance Qf Records. Participant shall maintain complete and accurate records pertaining to the Units, and shall permit any duly authorized representative of the Agency to inspect the books and records of Participant pertaining to the Project including, but not limited to, those records pertaining to the occupancy of the Restricted Units. 3.9 Reliance on Tenant Representations. Each tenant lease shall contain a provision to the effect that Participant has relied on the income certification and supporting information supplied by the tenant in determining qualification for occupancy of the unit, and that any material misstatement in such certification (whether or not intentional) will be cause for immediate termination of such lease. 3.10 Remedy For Excessive Rent Charge. 3.10.1 It shall constitute a default for Participant to charge or accept for a Restricted Unit rent amounts in excess of the amount provided for in Section 3.2 of this Agreement. In the event that Participant charges or receives such higher rental amounts, in addition to any other remedy Agency shall have for such default, Participant shall be required to pay to Agency an amount equal to two (2) 11 times the entire amount of rent received in excess of the amount permitted pursuant to this Agreement. 065 G:\WPDOCS\AHRA-Rael.wpd 6 3.10.2 It shall constitute a default for Participant to rent any Restricted Unit to a tenant who is not an Eligible Tenant. In the event Participant rents a Restricted Unit to an ineligible tenant, in addition to any other equitable remedy Agency shall have for such default, Participant, for each separate violation shall be required to pay to Agency an amount equal to (i) two times the greater of (A) the total rent Participant received from such ineligible tenant, or (B) the total rent Participant was entitled to receive for renting that Restricted Unit, plus (ii) any relocation expenses incurred by Agency or the City of La Quinta as a result of Participant having rented to such ineligible person. 3.10.3 It shall constitute a default for Participant to rent any of the Restricted Units in violation of the leasing preference requirements of Sections 3.5 of this Agreement. In the event Participant rents a unit in violation of the leasing preference requirements, in addition to any other equitable remedy Agency shall have for such default, Participant, for each separate violation shall be required to pay Agency an amount equal to two (2) months of rental charges. The terms of this Section shall not apply if Participant rents to an ineligible person as a result of such person's fraud or misrepresentation. THE PARTIES HERETO AGREE THAT THE AMOUNTS SET FORTH IN SECTION 3.12 (THE "DAMAGE AMOUNTS") CONSTITUTE A REASONABLE APPROXIMATION OF THE ACTUAL DAMAGES THAT AGENCY WOULD SUFFER DUE TO THE DEFAULTS BY PARTICIPANT SET FORTH IN SECTIONS 3.12.1 THROUGH 3.12.3, CONSIDERING ALL OF THE CIRCUMSTANCES EXISTING ON THE EFFECTIVE DATE OF THIS AGREEMENT, INCLUDING THE RELATIONSHIP OF THE DAMAGE AMOUNTS TO THE RANGE OF HARM TO AGENCY AND ACCOMPLISHMENT OF AGENCY'S PURPOSE OF ASSISTING IN THE PROVISION OF AFFORDABLE HOUSING TO ELIGIBLE TENANTS THAT REASONABLY COULD BE ANTICIPATED AND THE ANTICIPATION THAT PROOF OF ACTUAL DAMAGES WOULD BE COSTLY OR INCONVENIENT. THE AMOUNTS SET FORTH IN THIS SECTION 3.11 SHALL BE THE SOLE MONETARY DAMAGES REMEDY FOR THE DEFAULTS SET FORTH IN THIS SECTION 3.11, BUT NOTHING IN THIS SECTION 3.10 SHALL BE INTERPRETED TO LIMIT AGENCY'S REMEDY FOR SUCH DEFAULT TO SUCH A DAMAGES REMEDY AND IN THAT REGARD AGENCY MAY DECLARE A DEFAULT UNDER THE TERMS OF THE NOTE OR OTHER OF THE AGENCY AGREEMENTS. IN PLACING ITS INITIAL AT THE PLACES PROVIDED HEREINBELOW, EACH PARTY SPECIFICALLY CONFIRMS THE ACCURACY OF THE STATEMENTS MADE ABOVE AND THE FACT THAT EACH PARTY HAS BEEN REPRESENTED BY COUNSEL WHO HAS EXPLAINED THE CONSEQUENCES OF THE LIQUIDATED DAMAGES PROVISION AT OR PRIOR TO THE TIME EACH EXECUTED THIS AGREEMENT. PARTICIPANT'S INITIALS: AGENCY'S INITIALS: 120 066 G:\WPDO CS\AH RA-Rael. wpd 7 4. MAINTENANCE. 4.1 Maintenance Obligation. Participant agrees to and shall maintain all interior and exterior improvements, including landscaping, on the Site in good condition and repair (and, as to landscaping, in a healthy condition) and in accordance with the all permits and approvals for the Project, and all other applicable laws, rules, ordinances, orders, and regulations of all federal, state, county, municipal, and other governmental agencies and bodies having or claiming jurisdiction and all their respective departments, bureaus, and officials. Agency places prime importance on quality maintenance to protect its investment and to ensure that all Agency -assisted affordable housing projects within the City are not allowed to deteriorate due to below - average maintenance. Normal wear and tear of the Site improvements will be acceptable to Agency assuming Participant agrees to perform all necessary Site improvements to assure the Site is maintained in good condition. Maintenance requirements shall include: (a) no improperly maintained landscaping shall be visible from public rights -of -way, including (i) no lawns with grasses in excess of six (6) inches in height, (ii) no trees, shrubbery, lawns, and other plant life dying from lack of water or other necessary maintenance, (iii) no trees, hedges, or shrubbery grown uncontrolled without proper pruning, (iv) no vegetation so overgrown as to be likely to harbor rats or vermin, and (v) no dead, decayed, or diseased trees, weeds, and other vegetation; (b) no yard areas shall be left unmaintained, including (i) no broken or discarded furniture, appliances, and other household equipment stored in yard areas for periods exceeding one (1) week, (ii) no packing boxes, lumber, trash, dirt, and other debris stored in yards for periods exceeding one (1) week in areas visible from public property or neighboring properties, (iii) no unscreened trash cans, bins, or containers stored for unreasonable periods in areas visible from public property or neighboring properties, and (iv) no vehicles parked or stored in areas other than approved parking areas; (c) no buildings may be left in an unmaintained condition, including (i) no violations of state law, Uniform Codes, or City ordinances, (ii) no condition that constitutes an unsightly appearance that detracts from the aesthetics or property value of the subject property or constitutes a private or public nuisance, (iii) no broken windows or chipped, cracked, or peeling paint, (iv) no conditions constituting hazards and/or inviting trespassers or malicious mischief, and (v) no graffiti or accumulation of waste or debris. Participant shall make all repairs and replacements necessary to keep the improvements in good condition and repair and shall promptly eliminate all graffiti and replace dead and diseased plants and landscaping with comparable approved materials. In the event that Participant breaches any of the covenants contained in this Section and Participant does not commence to cure such breach within ten 0 0) days after written notice from Agency (with respect to graffiti, debris, waste material, landscaping, and general maintenance) or thirty (30) days after written notice from Agency (with respect to building improvements), and after commencing the cure to diligently prosecute such cure to completion, then Agency, in addition to whatever other remedy it may have at law or in equity, shall have the right, but not the obligation, to enter upon the Site and perform all acts and work necessary to protect, maintain, and preserve the improvements and landscaped areas on the Site, and to 121 attach a lien on the Site, or to assess the Site, in the amount of the expenditures G:\WPDOCS\AHRA-Rael.wpd 8 067 arising from such acts and work of protection, maintenance, and preservation by Agency and/or costs of such cure, including a fifteen percent (15%) administrative charge, which amount shall be promptly paid by Participant to Agency upon demand. 4.2 Lien. If the costs incurred pursuant to Section 4.1 are not reimbursed within thirty (30) days after Participants' receipt of notice thereof, the same shall be deemed delinquent, and the amount thereof shall bear interest thereafter at a rate of ten percent (10%) per annum until paid. Any and all delinquent amounts, together with said interest, costs and reasonable attorney's fees, shall be a lien and charge, with power of sale, upon the property interests of Participant, and the rents, issues and profits of such property. Agency may bring an action at law against Participant obligated to pay any such sums or foreclose the lien against Participant's property interests. Any such lien may be enforced by sale by the Agency following recordation of a Notice of Default of Sale given in the manner and time required by law as in the case of a deed of trust; such sale to be conducted in accordance with the provisions of Section 2924, et sQq., of the California Civil Code, applicable to the exercise of powers of sale in mortgages and deeds of trust, or in any other manner permitted by law. No lien recorded by Agency pursuant to this Section 4.2 shall defeat or render invalid the lien of any senior mortgage or deed of trust. 5.0 MANAGEMENT. 5.1 Gross Mismanagement. In the event of "Gross Mismanagement" (as that term is defined below) of the Project, Agency shall have the authority to require that such Gross Mismanagement cease immediately, and further to require the immediate replacement of the manager. Agency shall provide written notice to Participant of the event(s) of Gross Mismanagement occurring and Participant shall have five (5) business days after receipt of such notice to commence to cure, correct, or remedy the event(s) of Gross Mismanagement identified in the Agency's notice and to notify the Agency's Executive Director of the steps taken to effect such cure, correction, or remedy, and upon commencing such cure, correction, or remedy to thereafter diligently prosecute such cure, correction, or remedy to completion. For purposes of this Agreement the term "Gross Mismanagement" shall mean management of the Project in a manner which violates the terms and/or intention of this Agreement to operate an affordable rental housing complex of the highest standard, and shall include, but is not limited to, the following: 5.1 .1 Knowingly leasing Restricted Units to ineligible tenants or tenants whose income exceeds the prescribed levels; 5.1.2 Knowingly allowing the tenants to exceed permitted occupancy levels without taking immediate steps to stop such overcrowding; 5.1 .3 Failing to timely maintain the Project and the Site in the manner required by this Agreement or failing to submit materially complete reports; 122 5.1 .4 Failing to timely submit the reports as required by this Agreement- 68 G:\WPDOCS\AHRA-Rael.wpd 9 5.1 .5 Fraud in connection with any document or representation relating to this Agreement or embezzlement of Project monies; and 5.1 .6 Failing to fully cooperate with law enforcement in maintaining a crime -free environment on the Site. 5.2 Lease Approval. Agency shall have the right to approve any lease forms, revisions, amendments and modification made to same, used by Participant or the manager for leasing Units within the Site, which approval shall not be unreasonably withheld, conditioned, or delayed. 6.0 COMPLIANCE WITH LAWS: ENVIRONMENTAL MATTERS. 6.1 Compliance With Laws. Participant shall comply with (i) all ordinances, regulations and standards of the City, Agency, County of Riverside, any regional governmental entity, State of California, and federal government applicable to the Property; (ii) all rules and regulations of any assessment district of the City with jurisdiction over the Property; and (iii) all applicable labor standards of California law and federal law, including the payment of prevailing wages; and (iv) the requirements of California law and federal law with respect to the employment of undocumented workers or illegal aliens. 6.2 Environmental Matters. 6.2.1 Definitions. For the purposes of this Agreement, unless the context otherwise specifies or requires, the following terms shall have the meanings herein specified: 6.2.1.1 The term "Hazardous Materials" shall mean any substance, material, or waste which is or becomes regulated by any local governmental authority, the County of Riverside, the State of California, a regional governmental authority, or the United States Government, including, but not limited to, any material or substance which is (i) defined as a "hazardous waste," "extremely hazardous waste," or "restricted hazardous waste" under Section 25115, 25117 or 25122.7, or listed pursuant to Section 25140 of the California Health and Safety Code, Division 20, Chapter 6.5 (Hazardous Waste Control Law)), (ii) defined as a "hazardous substance" under Section 25316 of the California Health and Safety Code, Division 20, Chapter 6.8 (Carpenter -Presley -Tanner Hazardous Substance Account Act), (iii) defined as a "hazardous material," "hazardous substance," or "hazardous waste" under Section 25501 of the California Health and Safety Code, Division 20, Chapter 6.95 (Hazardous Materials Release Response Plans and Inventory), (iv) defined as a "hazardous substance" under Section 25281 of the California Health and Safety Code, Division 20, Chapter 6.7 (Underground Storage of Hazardous Substances), (v) petroleum, (vi) friable asbestos, (vii) polychlorinated byphenyls, (viii) listed under Article 9 or defined as "hazardous" or "extremely hazardous" pursuant to Article 11 of Title 22 of the California Administrative Code, Division 4, Chapter 20, (ix) designated 123 as "hazardous substances" pursuant to Section 311 of the Clean Water Act (33 U.S.C. G:\WPDOCS\AHRA-Rae1.wpd 10 069 ? 1317), (x) defined as a "hazardous waste" pursuant to Section 1004 of the Resource Conservation and Recovery Act, 42 U.S.C. ?6901 gt seq. (42 U.S.C. ?6903) or (xi) defined as "hazardous substances" pursuant to Section 101 of the Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C. ?9601 of seq. 6.2.1.2 The term "Hazardous Materials Contamination" shall mean the contamination (whether presently existing or hereafter occurring) of the improvements, facilities, soil, groundwater, air or other elements on, in or of the Site by Hazardous Materials, or the contamination of the buildings, facilities, soil, groundwater, air or other elements on, in or of any other property as a result of Hazardous Materials at any time emanating from the Site. 6.2.1.3 The term "Governmental Requirements" shall mean all past, present and future laws, ordinances, statutes, codes, rules, regulations, orders and decrees of the United States, the state, the county, the city, or any other political subdivision in which the Site is located, and any other state, county city, political subdivision, agency, instrumentality or other entity exercising jurisdiction over the Site. 6.2.2 Indemnity. Participant shall save, protect, defend, indemnify and hold harmless Agency and the City and their respective officers, officials, members. employees, agents, and representatives from and against any and all liabilities, suits, actions, claims, demands, penalties, damages (including, without limitation, penalties, fines and monetary sanctions), losses, costs or expenses (including, without limitation, consultants' fees, investigation and laboratory fees, reasonable attorneys' fees and remedial and response costs) (the foregoing are hereinafter collectively referred to as "Liabilities") which may now or in the future be incurred or suffered by Agency or City or its respective its officers, officials, members. employees, agents, or representatives by reason of, resulting from, in connection with, or existing in any manner whatsoever as a direct or indirect result of (i) Participant's placement on or under the Site any Hazardous Materials or Hazardous Materials Contamination on or after the date of this Agreement, (ii) the escape, seepage, leakage, spillage, discharge, emission or release from the Site of any Hazardous Materials or Hazardous Materials Contamination on or after the date of this Agreement, or (iii) any Liabilities incurred under any Governmental Requirements relating to the acts described in the foregoing clauses (i) and (ii). 6.3 Duty tQ Prevent Hazardous Material Contamination. Participant shall take commercially reasonable action to prevent the release of any Hazardous Materials into the environment. Such precautions shall include compliance with all Governmental Requirements with respect to Hazardous Materials. In addition, Participant shall install and utilize such equipment and implement and adhere to such procedures as are consistent with the standards generally applied by apartment complexes in Riverside County, California as respects the disclosure, storage, use, removal, and disposal of Hazardous Materials. 6.4 Obligation 2 Participant t_4 Remediate Premises. Notwithstanding the 124 obligation of Participant to indemnify Agency, City, and their respective officers, officials, members, employees, agents, and representatives pursuant to Section 6.2.2070 G:\WPDO CS\AH RA-Rael.wpd I 1 Participant shall, at its sole cost and expense, promptly take (i) all actions required by any federal, state, regional, or local governmental agency or political subdivision or any Governmental Requirements and (ii) all actions necessary to make full economic use of the Site for the purposes contemplated by this Agreement and the AHRA, which requirements or necessity arise from the presence upon, about or beneath the Site of any Hazardous Materials or Hazardous Materials Contamination for which Participant is responsible. Such actions shall include, but not be limited to, the investigation of the environmental condition of the Site, the preparation of any feasibility studies or reports and the performance of any cleanup, remedial, removal or restoration work. 6.5 Environmental Inquiries. Participant, when it has received any notices of violation, notices to comply, citations, inquiries, clean-up or abatement orders, or cease and desist orders related to Hazardous Materials or Hazardous Materials Contamination, or when Participant is required to report to any governmental agency, any violation or potential violation of any Governmental Requirement pertaining to Hazardous Materials or Hazardous Materials Contamination, shall concurrently notify Agency's Executive Director, and provide to him/her a copy or copies, of the environmental permits, disclosures, applications, entitlements or inquiries relating to the Site, the notices of violation, notices to comply, citations, inquiries, clean-up or abatement orders, cease and desist orders, reports filed pursuant to self -reporting requirements, and reports filed or applications made pursuant to any Governmental Requirement relating to Hazardous Materials and underground tanks, and Participant shall report to the Executive Director, as soon as possible after each incident, any unusual, potentially important incidents. In the event of a responsible release of any Hazardous Materials into the environment, Participant shall, as soon as possible after it becomes aware of the release, furnish to the Executive Director a copy of any and all reports relating thereto and copies of all correspondence with governmental agencies relating to the release. Upon request of the Executive Director, Participant shall furnish to the Executive Director a copy or copies of any and all other environmental entitlements or inquiries relating to or affecting the Site including, but not limited to, all permit applications, permits and reports including, without limitation, those reports and other matters which may be characterized as confidential. 7.0 INSURANCE. 7.1 Duty to Procure Insurance. Participant, for the term of this Agreement, shall procure and keep in full force and effect or cause to be procured and kept in full force and effect for the mutual benefit of Participant and Agency, and shall provide Agency evidence reasonably acceptable to Agency Executive Director, insurance policies meeting the minimum requirements set forth below: 7.1.1 Commercial General Liability insurance with respect to the Site and the operations of or on behalf of Participant, in an amount not less than One Million I2rJ Dollars ($1 ,000,000) per occurrence combined single limit including products, completed operations, contractual, bodily injury, personal injury, death and propeftl, G:\WPDO CS\AH RA-Rael. wpd 12 damage liability per occurrence, subject to such increases in amount as Agency may reasonably require from time to time; provided, that the percentage increase in coverage shall not be required to exceed the percentage increase in the Consumer Price Index published by the United States Department of Labor, Bureau of Labor Statistics, for Urban Wage Earners and Clerical Workers, Los Angeles -Long Beach - Anaheim Average, All Items (1984 ' 100) (the "Index"), from and after the date of this Agreement, or, if said Index is discontinued, such official index as may then be in existence and which is most nearly equivalent to said Index (the "CPI Adjustment"). Unless otherwise approved in advance by the Agency Executive Director, the insurance to be provided by Participant may provide for a deductible or self -insured retention of not more than Ten Thousand Dollars ($10,000), with such maximum amount to increase at the same rate as the periodic increases in the minimum amount of total insurance coverage set forth above. 7.1 .2 With respect to the improvements and any fixtures and furnishings to be owned by Participant on the Site, insurance against fire, extended coverage, vandalism, and malicious mischief, and such other additional perils, hazards, and risks as now are or may be included in the standard "all risk" form in general use in Riverside County, California, with the standard form fire insurance coverage in an amount equal to full actual replacement cost thereof, as the same may change from time to time. The above insurance policy or policies shall include coverage for earthquake to the extent generally and commercially available at commercially reasonable rates. Agency shall be a loss payee under such policy or policies and such insurance shall contain a replacement cost endorsement. 7.2 Policy Requirements. All policies of insurance required to be carried by Participant shall meet the following requirements and contain the following endorsements, provisions, or clauses (as applicable): 7.2.1 The policies shall be written by responsible and solvent insurance companies licensed in the State of California and having a policyholder's rating of A or better, in the most recent addition of "Best's Key Rating Guide -- Property and Casualty." A copy of each paid -up policy evidencing such insurance (appropriately authenticated by the insurer) or a certificate of the insurer, certifying that such policy has been issued, providing the coverage required herein, and containing the provisions specified herein, shall be delivered to Agency on or prior to the date of this Agreement, and thereafter, upon renewals, not less than thirty (30) days prior to the expiration of coverage. Agency may, at any time, and from time to time, inspect and/or copy any and all insurance policies required to be procured by Participant hereunder. In no event shall the limits of any policy be considered as limiting the liability of Participant hereunder. 7.2.2 The insurer shall not cancel or materially alter the coverage provided by such policy in a manner adverse to the interest of the insured without first giving Agency a minimum of thirty (30) days prior written notice by certified mail, return receipt requested; and 1 g 072 GAWPDOCS\AHRA-Rael.wpd 13 7.2.3 A waiver by the insurer of any right to subrogation against Agency, its officers, officials, members, employees, agents, or representatives, which arises or might arise by reason of any payment under such policy or policies or by reason of any act or omission of Agency, its officers, officials, members, employees, agents, or representatives. 7.2.4 The Agency and the City and its respective officers, officials, members, employees, agents, and representatives shall be named as additional insureds on the Commercial General Liability policies. 7.2.5 Coverage provided by these policies shall be primary and non- contributory to any insurance carried by the Agency or its officers, officials, members, employees, agents, or representatives. 7.2.6 Failure to comply with reporting provisions shall not affect coverage provided to Agency and its officers, officials, members, employees, agents, or representatives. 7.3 Failure tQ Procure Insurance. If Participant fails to procure and maintain the above -required insurance despite its availability, then Agency, in addition to any other remedy which Agency may have hereunder for Participant's failure to procure, maintain, and/or pay for the insurance required herein, may (but without any obligation to do so) at any time or from time to time, after thirty (30) days written notice to Participant, procure such insurance and pay the premiums therefor, in which event Participant shall immediately repay Agency all sums so paid by Agency together with interest thereon at the maximum legal rate. 8.0 OBLIGATION !Q REP 113. 8.1 Obligation to Repair and Restore Damage lei Ig Casualty Covered by Insurance. Subject to Section 8.3 below, if the Project shall be totally or partially destroyed or rendered wholly or partly uninhabitable by fire or other casualty required to be insured against by Participant, Participant shall promptly proceed to obtain insurance proceeds and take all steps necessary to begin reconstruction and, immediately upon receipt of insurance proceeds, to promptly and diligently commence the repair or replacement of the Project to substantially the same condition as the Project is required to be maintained in pursuant to this Agreement, whether or not the insurance proceeds are sufficient to cover the actual cost of repair, replacement, or restoration, and Participant shall complete the same as soon as possible thereafter so that the Project can continue to be operated and occupied as an affordable housing project in accordance with this Agreement. Subject to extensions of time for "Enforced Delay" as defined in Section 22 of this Agreement, in no event shall the repair, replacement, or restoration period exceed one (1) year from the date Participant obtains insurance proceeds unless the Agency Executive Director, in his or her sole and absolute discretion, approves a longer period of time. Agency shall cooperate with Participant, at no expense to Agency, in obtaining any governmental permits required 1427 for the repair, replacement, or restoration and, upon issuance of such permits Agency 073 G:\WPDOCS\AH RA-Rael.wpd 14 shall promptly release control of any insurance proceeds within Agency's control. If, however, the then -existing laws of any other governmental agencies with jurisdiction over the Property do not permit the repair, replacement, or restoration, Participant may elect not to repair, replace, or restore the Project by giving notice to Agency (in which event Participant shall be entitled to all insurance proceeds but Participant shall be required to remove all debris from the Property) or Participant may reconstruct such other improvements on the Property as are consistent with applicable land use regulations and approved by the City, Agency, and the other governmental agency or agencies with jurisdiction. In such event, the Agency Agreements, including this Agreement, shall automatically terminate and Agency shall cooperate to remove the Agency Agreements from title. If Participant fails to obtain insurance as required by this Agreement (and Agency has not procured such insurance and charged Participant for the cost), Participant shall be obligated to reconstruct and repair any partial or total damage to the Project and improvements located on the site in accordance with this Section 8.1. 8.2 Continued Operations. During any period of repair, Participant shall continue, or cause the continuation of, the operation of the apartment complex on the Site to the extent reasonably practicable from the standpoint of prudent business management. The number of Restricted Units shall be reduced in proportion to the number of Units not habitable as a result of the casualty during such period of repair. 8.3 Damage or Destruction Due to Cause Not Required to hg Covered by Insurance. If the improvements comprising the Project are completely destroyed or substantially damaged by a casualty for which Participant is not required to (and has not) insured against, then Participant shall not be required to repair, replace, or restore such improvements and may elect not to do so by providing Agency with written notice of election not to repair, replace, or restore within ninety (90) days after such substantial damage or destruction. In such event, (i) Participant shall remove all debris from the Property, and (ii) the Agency Agreements, including this Agreement, shall automatically terminate and Agency shall cooperate to remove the Agency Agreements from title. As used in this Section 8.3, "substantial damage" caused by a casualty not required to be (and not) covered by insurance shall mean damage or destruction which is fifty percent (50%) or more of the replacement cost of the improvements comprising the Project. In the event Participant does not timely elect not to repair, replace, or restore the improvements as set forth in the first sentence of this Section 8.3, Participant shall be conclusively deemed to have waived its right not to repair, replace, or restore the improvements and thereafter Participant shall promptly commence and complete the repair, replacement, or restoration of the damaged or destroyed improvements in accordance with Section 8.1 above and continue operation of the apartment complex during the period of repair (if practicable) in accordance with Section 8.2 above. 128 074 G:\WPDOCS\AHRA-Rael. wpd 15 9.0 LIMITATION ON TRANSFERS. 9.1 Sale or Transfer of the Project. Participant covenants that during the term of this Agreement that Participant shall not assign this Agreement or transfer the Site or any of its interests therein except as provided in this Section 9.0. 9.2 Transfer Defined. As used in this Article 9.0, the term "Transfer" shall include any assignment, hypothecation, mortgage, pledge, conveyance, or encumbrance of this Agreement, the Site, or the improvements thereon. A Transfer shall also include the transfer to any person, entity, or group of persons or entities acting in concert of more than twenty-five percent (25%) (in the aggregate) of the present ownership and/or control of any person or entity constituting Participant, taking all transfers into account on a cumulative basis. In the event any entity constituting Participant, its successor or the constituent partners or members of Participant or any successor of Participant, is a corporation or trust, such transfer shall refer to the transfer of the issued and outstanding capital stock of such corporation, or of beneficial interests of such trust; in the event that any entity constituting Participant, its successor or the constituent partners of Participant or any successor of Participant is a limited or general partnership, such transfer shall refer to the transfer of more than twenty-five percent (25%) of such limited or general partnership interest; in the event that any entity constituting Participant, its successor or the constituent members of Participant or any successor of Participant is a limited liability company, such transfer shall refer to the transfer of more than twenty-five percent (25%) of such membership interest; in the event that any entity constituting Participant, its successor or the constituent partners of Participant or any successor of Participant is a joint venture, such transfer shall refer to the transfer of more than twenty-five percent (25%) of the ownership and/or control of any such joint venture partner, taking all transfers into account on a cumulative basis. 9.3 Agency Approval Q Transfer Required. Except as set forth below, Participant shall not Transfer this Agreement or any of Participant's rights hereunder, or any interest in the Site or in the improvements thereon, directly or indirectly, voluntarily or by operation of law, without the prior written approval of Agency, which approval shall not be unreasonably withheld, conditioned, or delayed, and any such purported Transfer without such approval shall be null and void. In addition to the foregoing and notwithstanding anything in this Section to the contrary, so long as the Project is encumbered by a deed of trust (other than a deed of trust the beneficiary of which is the Agency), any proposed transferee or assignee must also receive the prior written consent of the beneficiary of such deed of trust, if required by such deed of trust, before Agency shall approve such transfer or assignment; provided, however, that such consent of beneficiary shall not obligate Agency to approve such Transfer. Notwithstanding the foregoing, the following types of transfers shall not require Agency approval but as with all Transfers shall be subject to Section 9.4: 129 075 G:\WPDOCS\AHRA-Rael.wpd 16 (a) any refinancing of the lien of a deed of trust such that the new loan plus all outstanding amounts of other loan(s) secured by the Site does not exceed ninety-five percent (95%) of the then appraised fair market value of the Site; (b) any new or additional financing in which the Site is security for the loan, provided that the total of all then -outstanding loans secured by the Site does not exceed ninety-five percent (95%) of the then -appraised fair market value of the Site. (c) the leasing of individual rental units on the Site provided that such leasing is in accordance with the terms of this Agreement; (d) Transfers resulting from the death or mental or physical incapacity of an individual; (e) Transfers in trust for the benefit of a spouse, children, grandchildren, or other family member, or for charitable purposes; (f) Transfers of stock in a publicly -held corporation or of the beneficial interest in any publicly -held partnership or real estate investment trust; or (g) the conveyance or dedication or portions of the Site to the City or other governmental entity, or the granting of easements or permits to facilitate the development of the Site. 9.4 Assignment and Assumption Agreement. In the absence of specific written agreement by Agency, no Transfer by Participant of all or any portion of its interest in the Site or this Agreement, whether or not requiring the approval by Agency, shall be deemed to relieve Participant or any successor party from the obligation to timely complete construction of the Project. In addition, no attempted Transfer of any of Participant's obligations hereunder shall be effective unless and until Participant and the transferee or successor party execute and deliver to Agency a binding assignment and assumption agreement in a form reasonably approved by Agency's legal counsel. 9.5 Permitted Transferee. A "Permitted Transferee" under this Agreement shall be a transferee or assignee that either (i), has been approved by the Agency Executive Director or (ii) is a transferee of a Transfer not requiring the approval of the Agency Executive Director pursuant to the terms of this Agreement, and both the cases described in the foregoing clauses (i) and (ii) has executed and delivered to the Agency Executive Director an assignment and assumption agreement pursuant to Section 9.4. 10. EVENTS QIF DEFAULT BY PARTICIPANT. Subject to extensions of time pursuant to the terms of Section 22, the occurrence of one or more of any of the following events shall constitute an "Event of 130 Default" by Participant hereunder if Participant shall have not cured, corrected, or 076 G:\WPDOCS\AHRA-Rael.wpd 17 remedied such failure within, unless a shorter or longer cure period is provided for specific defaults elsewhere in this Agreement, thirty (30) days following the service on Participant of a written notice from Agency specifying the failure complained of, or if it is not practicable to cure or remedy such failure within such thirty (30) day period (which impracticality shall not apply to monetary defaults), within such longer period as shall be reasonable under the circumstances provided that Participant has commenced to cure within the same thirty (30) day period: 10.1 Construction of the rehabilitation work on the Site has not commenced within the time set forth in the AHRA; or 10.2 Construction of the rehabilitation work on the Site is not completed within the time set forth in the AHRA; or 10.3 Participant shall abandon or surrender the Site; or 10.4 Participant is in default of the Note and has not cured such default within the cure period applicable to such default as set forth in the Note; or 10.5 Participant is in material default of any of the covenants, terms or provisions of this Agreement or any of the Agency Agreements; or 10.6 Participant voluntarily files or has involuntarily filed against it any petition under any bankruptcy or insolvency act or law and the same not be dismissed within sixty (60) days thereafter; or 10.7 Participant is adjudicated a bankrupt; or 10.8 Participant makes a general assignment for the benefit of creditors in violation of the terms of this Agreement or any of the Agency Agreements. 1 1 . REMEDIES OF AGENCY. In the event Participant defaults in the performance or observance of any covenant, agreement or obligation of Participant pursuant to this Agreement, and if such default remains uncured for a period of thirty (30) days after written notice thereof shall have been given by Agency (or such lesser period as may apply under Section 4.1), or, in the event said default cannot be cured within said time period, Participant has failed to commence to cure such default within the applicable time period and diligently prosecute said cure to completion, then Agency shall declare an "Event of Default" to have occurred hereunder, and, at its option, may take one or more of the following steps: 11.1 Enter the Site and correct or cause to be corrected said default and 131 charge the costs thereof (including costs incurred by Agency in enforcing this provision) to the account of Participant, which charge shall be due and payable within 071 G:\WPDOCS\AHRA-Rael.wpd 18 thirty (30) days after presentation by Agency of a statement of all or part of said costs, and if such bill is not timely paid then to place a lien on the Site for said amount due plus interest at the maximum legal rate; 1 1.2 Correct or cause to be corrected said default and pay the costs thereof (including costs incurred by Agency in enforcing this provision) from the proceeds of any insurance; 1 1.3 Exercise its right to maintain any and all actions at law or suits in equity to compel Participant to correct or cause to be corrected said default; 11.4 Have a receiver appointed to take possession of Participant's interest in the Site, with power in said receiver to administer Participant's interest in the Site, to collect all funds available to Participant in connection with its operation and maintenance of the Site, and to perform all other consistent with Participant's obligation under this Agreement as the court deems proper; 11.5 Terminate this Agreement by written notice to Participant and seek repayments of any remaining principal and accrued interest then owing on the Agency Note. Except as otherwise expressly stated in this Agreement, the rights and remedies of the parties are cumulative, and the exercise by any party of one or more of its 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 another party. 12.0 NONDISCRIMINATION. 12.1 Antidiscrimination. 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, or any part thereof, nor shall Participant, or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the Site, or any part thereof (except as permitted by this Agreement). 12.2 Anti -Discrimination Clauses in Aareements. Participant agrees for itself and any successor in interest that Participant shall refrain from restricting the rental, sale, or lease of any portion of the Site, or contracts relating to the Site, on the basis of race, color, creed, religion, sex, marital status, ancestry, or national origin of any person. All such deeds, leases or contracts shall contain or be subject to substantially the following nondiscrimination or nonsegregation clauses: 12.2.1 In deeds: "The grantee herein covenants by and for himself, �32 his heirs, executors, administrators, and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of aV78 G:\WPDOCS\AH RA-Rael.wpd 19 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 land herein conveyed, nor shall the grantee himself, or any persons claiming under or through him, 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." 12.2.2 In leases: "The lessee herein covenants by and for himself, his heirs, executors, administrators, and assigns, and all persons claiming under or through him, and this lease is made and accepted upon and subject to the following conditions: "That there shall be no discrimination against or segregation of any person or group of persons on account of status, race, color, creed, religion, sex, marital status, ancestry, or national origin in the leasing, subleasing, transferring, use, occupancy, tenure, or enjoyment of the land herein leased, nor shall the lessee himself, or any person claiming under or through him, 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 land herein leased." 12.2.3 In contracts: "There shall be no discrimination against or segregation of any persons or group of persons on account of status, race, color, creed, religion, sex, marital status, ancestry, or national origin in the sale, lease, transfer, use, occupancy, tenure, or enjoyment of land, nor shall the transferee himself, or any person claiming under or through him, 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 land." 13.0 COVENANTS TO RUN WITH THE LAND. Participant hereby subjects the Site to the covenants, reservations, and restrictions set forth in this Agreement. Agency and Participant hereby declare their express intent that all such covenants, reservations, and restrictions shall be deemed covenants running with the land and shall pass to and be binding upon the Participant's successors in title to the Site; provided, however, that on the termination of this Agreement said covenants, reservations and restrictions shall expire. All covenants without regard to technical classification or designation shall be binding for the benefit of the Agency, and such covenants shall run in favor of the Agency for the entire term of this Agreement, without regard to whether the Agency is or remains an owner of any land or interest therein to which such covenants relate. Each and every contract, deed or other instrument hereafter executed covering or conveying the Site or any portion thereof shall conclusively be held to have been executed, delivered and 13 079 G:\WPDO CS\AH RA-Rael. wpd 20 accepted subject to such covenants, reservations, and restrictions, regardless of whether such covenants, reservations, and restrictions are set forth in such contract, deed or other instrument. Agency and Participant hereby declare their understanding and intent that the burden of the covenants set forth herein touch and concern the land in that Participant's legal interest in the Site is rendered less valuable thereby. Agency and Participant hereby further declare their understanding and intent that the benefit of such covenants touch and concern the land by enhancing and increasing the enjoyment and use of the Project by Eligible Tenants, the intended beneficiaries of such covenants, reservations, and restrictions, and by furthering the public purposes for which the Agency was formed. Participant, in exchange for the Agency entering into the AHRA, hereby agrees to hold, sell, and convey the Site subject to the terms of this Agreement. Participant also grants to the Agency the right and power to enforce the terms of this Agreement against the Participant and all persons having any right, title or interest in the Site or any part thereof, their heirs, successive owners and assigns. The covenants set forth in Article 12.0 of this Agreement shall remain in effect in perpetuity. All other covenants set forth in this Agreement shall remain in effect for a period of thirty (30) years following the date this Agreement is recorded in the office of the Riverside County Recorder. 14.0 INDEMNIFICATION. Participant agrees for itself and its successors and assigns to indemnify, defend, and hold harmless Agency, City, and their respective officers, officials, members, employees, agents, and representatives from and against any loss, liability, claim, or judgment relating in any manner to the Project excepting only any such loss, liability, claim, or judgment arising out of the intentional wrongdoing or gross negligence of Agency, City, or their respective officers, officials, members, employees, agents, or representatives. The foregoing indemnification, defense, and hold harmless agreement shall only be applicable to and binding upon the party then owning the Property or applicable portion thereof. 15.0 UTILITIES AND TAXES. Participant, while in possession of the Property, and each successor or assign of Participant while in possession of the Property, shall remain fully obligated for the payment of (i) real and personal property taxes and assessments in connection with the Property, and (ii) all charges for all utilities serving the Property for which Participant is responsible. 134 G:\WPDOCS\AHRA-Rael.wpd 21 16.0 ATTORNEYS' FEES. In the event that a party to this Agreement brings an action against the other party hereto by reason of the breach of any condition, covenant, representation or warranty in this Agreement, or otherwise arising out of this Agreement, the prevailing party in such action shall be entitled to recover from the other expert witness fees, and its reasonable attorney's fees and costs. Attorney's fees shall include attorney's fees on any appeal, and in addition a party entitled to attorney's fees shall be entitled to all other reasonable costs for investigating such action, including the conducting of discovery. 17.0 AMENDMENTS. This Agreement shall be amended only by a written instrument executed by the parties hereto or their successors in title, and duly recorded in the real property records of the County of Riverside. 18.0 NOTICE. Formal notices, demands, and communications between Agency and Participant shall be sufficiently given if (i) personally delivered, (ii) delivered by a reputable same - day or overnight courier services that provides a receipt showing date and time of delivery, (iii) delivered by United States mail, registered or certified, postage prepaid, return receipt requested, or (iv) delivered by facsimile transmission, provided the original of the faxed communication is delivered within twenty-four (24) hours by one of methods described in clauses (i), (ii), or (iii) of the foregoing. Delivery shall be made to the following addresses: If to Agency: With a copy to If to Participant: La Quinta Redevelopment Agency 78-495 Calle Tampico La Quinta, CA 92253 Attn: Executive Director Fax: (760) 777-7101 Rutan & Tucker, LLP 611 Anton Boulevard, Suite 1400 Costa Mesa, CA 92626 Attn: M. Katherine Jenson, Esq. Fax: (714) 546-9035 La Quinta 34 LLC 1800 East Gary Avenue, Suite 117 Santa Ana, CA 92705 Attn: Lawrence C. Rael Fax: (714) xxx-xxxx 135 081. G:\WPDOCS\AHRA-Rael.wpd 22 With copy to: Gibson, Dunn & Crutcher LLP Jamboree Center 4 Park Plaza, Suite 1400 Irvine, CA 92614-8557 Attn: Teresa J. Farrell, Esq. Fax: (949) 451-4220 Notices that are personally delivered, delivered by messenger/courier, or by fax (provided there is compliance with the terms of clause (iv) above) shall be deemed effective upon receipt. Notices delivered by mail shall be deemed effective upon the earlier of actual receipt by the addressee thereof or the expiration of forty-eight (48) hours after depositing in the United States Postal System in the manner described in this Section. Such written notices, demands, and communications may be sent in the same manner to such other addresses as a party may from time to time designate by mail. 19. NONLIABILITY OF AGENCY OFFICIALS. No officer, official, member, employee, agent, or representative of Agency shall be personally liable to Participant, or any successor in interest, in the event of any default or breach by Agency or for any amount which may become due to Participant or successor or on any obligations under the terms of this Agreement or any of the Agency Agreements. 20. TRANSACTIONS WITH AFFILIATES. Participant shall have the right to enter into contracts with subsidiaries, affiliates and other related entities for the purpose of providing cleaning, maintenance and repair services, insurance policies and other purposes related to the operation of the Site, provided that all such costs and charges are competitive with the costs, charges, rent and other sums which would be paid by or to, as the case may be, an unrelated third party, and further provided that all such contracts and transactions are disclosed to Agency's Executive Director, including the costs and charges of such contracts and transactions. Agency acknowledges and agrees that Participant may act as its own general contractor for the constructions of any improvements on the Site and that will be entitled in so doing to earn a commercially reasonable fee. 21. SEVERABILITY/WAIVER/INTEGRATION. 21.1 Severabilitv. If any provision of this Agreement shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining portions hereof shall not in any way be affected or impaired thereby. 21.2 Waiver. A waiver by either party of the performance of any covenant or condition herein shall not invalidate this Agreement nor shall it be considered a waiver 13G of any other covenants or conditions, nor shall the delay or forbearance by either party in exercising any remedy or right be considered a waiver of, or an estoppel against, the later exercise of such remedy or right. 08 n G:\WPDOCS\AHRA-Rael.wDd 23 21 .3 Integration. This Agreement contains the entire Agreement between the parties concerning the subject matter hereof and neither party relies on any warranty or representation not contained in this Agreement. 22. ENFORCED DELAY: EXTENSIONS OF TIME. Performance by a party hereunder shall not be deemed to be in default where delays or defaults are due to war; insurrection; strikes; lock -outs; riots; floods; earthquakes; fires; casualties; supernatural causes; 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; acts of the other party; acts or the failure to act of a public or governmental agency or entity (except that acts or the failure to act of Agency or City shall not excuse performance by Agency or City unless the act or failure is caused by the acts or omissions of Participant); or any other causes beyond the reasonable control or without the fault of the party claiming an extension of time to perform. In the event of such a delay (herein "Enforced Delay"), the party delayed shall continue to exercise reasonable diligence to minimize the period of the delay. An extension of time for any such cause shall be limited to the period of the Enforced Delay, and shall commence to run from the time of the commencement of the cause, provided notice by the party claiming such extension is sent to the other party within fifteen (15) days of the commencement of the cause. The following shall not be considered as events or causes beyond the control of Participant, and shall not entitle Participant to an extension of time to perform: (i► Participant's failure to obtain financing for the Project, (ii) Participant's failure to negotiate. agreements with prospective tenants or users for the Project, or (iii) interest rates or economic or market conditions. Times of performance under this Agreement may also be extended by mutual written agreement by Agency and Participant. The Agency Executive Director shall also have the authority on behalf of Agency to administratively approve extensions of time not to exceed a cumulative total of one (1) year. 23. FUTUREENFORCEMENT. The parties hereby agree that should the Agency cease to exist as an entity at any time during the term of this Agreement, the City of La Quinta shall have the right to enforce all of the terms and conditions herein, unless the Agency had previously specified another entity to enforce this Agreement. 24. GOVERNING LAW. This Agreement shall be governed by the laws of the State of California. 25. NO MERGER. The covenants, terms, and provisions of this Agreement shall not merge with 137 any grant deed or other instrument pertaining to the conveyance of any interest in real property. 083 G:\WPDOCS\AHRA-RaeI.WDd 24 26. COUNTERPARTS. This Agreement may be executed in any number of counterparts, each of which shall constitute one original and all of which shall be one and the same instrument. [end - signature page follows] 138 084 G:\WPDOCS\AHRA-Rael.wDd 25 IN WITNESS WHEREOF, the Agency and Participant have executed this Regulatory Agreement and Declaration of Covenants and Restrictions by duly authorized representatives on the date first written hereinabove. ATTEST: In Secretary APPROVED AS TO FORM: RUTAN & TUCKER, LLP M Attorneys for the La Quinta Redevelopment Agency LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic By: Thomas Genovese, Executive Director "Agency" LA QUINTA 34 LLC, a California limited liability company Lawrence C Rael, Managing Member "Participant" 139 085 G A W PD0 CS\AH RA-Rael. wod 26 STATE OF CALIFORNIA 1 ss. COUNTY OF 1 On before me, , personally appeared , personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. Witness my hand and official seal. Notary Public [SEAL] 140 086 G:\WPDOCS\AHRA-Rael.wod 27 STATE OF CALIFORNIA 1 1 ss. COUNTY OF ) On before me, , personally appeared , personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. Witness my hand and official seal. Notary Public [SEAL] 141 08" G:\WPD0C5\AHRA-RaeI.wDd 28 ATTACHMENT NO. 1 LEGAL DESCRIPTION OF SITE [TO BE INSERTED] u►b LOTS 6 AND 7 IN BLOCK 125 OF SANTA CARMELITA AT VALE LA QUINTA UNIT NO. 14, AS SHOWN BY MAP RECORDED IN BOOK 18, PAGE 82 OF MAPS, RECORDS OF RIVERSIDE COUNTY, CALIFORNIA. 14'' G:\WPDOCS\AHRA-Rael.wDd 29 EXHIBIT "H" FORM OF RELEASE OF CONSTRUCTION COVENANTS [SEE FOLLOWING PAGES] 143 ME G:\WPDOCS\AHRA-Rael.wod Recording Requested By And When Recorded Return To: La Quinta Redevelopment Agency 78-495 Calle Tampico La Quinta„ CA 92253 Attn: Executive Director [NOTE: RECORD AS PARTIAL RELEASE OF AGREEMENT] (Space Above Line for Recorder's Use Only) (Exempt from Recording Fee per Gov. Code ?6103) RELEASE OF CONSTRUCTION COVENANTS WHEREAS, LA QUINTA 34 LLC, a California limited liability company, is the owner of fee title to that certain real property legally described in Attachment No. 1 attached hereto (the "Site") and incorporated herein by reference, according to the terms and conditions of said Agreement; and WHEREAS, by an Affordable Housing Rehabilitation Agreement (hereinafter referred to as the "Agreement") dated , 2001, by and between Participant and the La Quinta Redevelopment Agency, a public body corporate and politic ("Agency"), Participant has redeveloped and rehabilitated the Site in accordance with the Agreement; and WHEREAS, pursuant to Section of the Agreement, promptly after completion of all rehabilitation work by Participant upon the Site, and upon request by Participant, Agency shall furnish Participant with a Release of Construction Covenants in such form as to permit it to be recorded in the Official Records of the County of Riverside; and WHEREAS, the issuance by Agency of the Release of Construction Covenants shall be conclusive evidence that Participant has complied with the terms of the Agreement pertaining to the rehabilitation of the Site; and WHEREAS, Participant has requested that Agency furnish Participant with the Release of Construction Covenants; and WHEREAS, Agency has conclusively determined that the rehabilitation of the Site has been satisfactorily completed as required by the Agreement; NOW, THEREFORE: 1. As provided in the Agreement, Agency does hereby certify that 144 rehabilitation of the Site has been fully and satisfactorily performed and completed, and that such rehabilitation is in full compliance with said Agreement. 090 G:\WPDOCS\AHRA-Rael.wod 1 2. This Release of Construction Covenants shall not constitute evidence of Participant's compliance with the following agreements, the provisions of which shall continue to run with the land until termination :thereof in accordance with the terms thereof: (i) Deed of Trust with Assignment of Rents, Security Agreement and Fixture Filing, by and between Participant as borrower and Agency as beneficiary, dated 2001, and recorded on , 2001, as Instrument No. , in the Office of the Riverside County; and (ii) Declaration of Covenants, Conditions, and Restrictions And Agreement To Hold Property As One Parcel, by and between Participant and Agency, and recorded on 1 2001, as Instrument No. in the Office of the Riverside County Recorder. 3. This Release of Construction Covenants shall not constitute evidence of compliance with or satisfaction of any obligation of Participant to any holder of a mortgage, or any insurer of a mortgage, securing money loaned to finance construction work on the Site, or any part thereof. 4. This Release of Construction Covenants is not a Notice of Completion as referred to in California Civil Code Section 3093. 5. Except as stated herein, nothing contained in this instrument shall modify in any way any other provisions of the Agreement or any other provisions of any agreements or documents referenced therein. IN WITNESS WHEREOF, Agency has executed this Release of Construction Covenants as of this day of LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic By: THOMAS P. GENOVESE, Executive Director 145, 091. G:\WPDOCS\AHRA-RaeI.wDd 2 CONSENT TO RECORDATION LA QUINTA 34 LLC ("Owner"), owner of the fee interest in the real property legally described in Attachment No. 1 hereto, hereby consents to the recordation of the foregoing Release of Construction Covenants against said real property. LA QUINTA 34 LLC, a California limited liability company By: Lawrence C. Rael, Managing Member 146 092 G:\WPD0CS\AHRA-Rae1.wDd 3 STATE OF CALIFORNIA ) 1 ss. COUNTY OF ) On before me, , personally appeared , personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. Witness my hand and official seal. Notary Public [SEAL] 147 (191 G:\WPD0CS\AHRA-Rae1.wnd 4 STATE OF CALIFORNIA ) 1 ss. COUNTY OF ► On before me, , personally appeared , personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. Witness my hand and official seal. Notary Public [SEAL] 143 094 G:\WPD0CS\AHRA-Rae1.wDd 5 ATTACHMENT NO. 1 LEGAL DESCRIPTION OF SITE [TO BE INSERTED] 149 095 G:\WPDOCS\AHRA-Rael.wnd EXHIBIT "I" FORM OF DECLARATION [SEE FOLLOWING PAGES] 15 r1 G:\WPDOCS\AHRA-Rael.wod 096 Recording Requested By And When Recorded Return To: La Quinta Redevelopment Agency 78-495 Calle Tampico La Quinta„ CA 92253 Attn: Executive Director (Space Above Line for Recorder's Use Only) (Exempt from Recording Fee per Gov. Code ?6103) DECLARATION OF COVENANTS, CONDITIONS, AND RESTRICTIONS AND AGREEMENT TO HOLD PROPERTY AS ONE PARCEL THIS DECLARATION OF COVENANTS, CONDITIONS, AND RESTRICTIONS AND AGREEMENT TO HOLD PROPERTY AS ONE PARCEL ("Declaration") is made and entered into this _ day of 2001, by and between LA QUINTA 34 LLC, a California limited liability company ("Declarant"), and LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic ("Agency")• RECITALS A. Declarant is the owner of fee title of those three (3) certain parcels of real property located in the City of La Quinta, County of Riverside, State of California, more particularly described on Exhibit "A" hereto and incorporated herein by this reference (hereinafter referred to as "Parcel 1," "Parcel 2, and "Parcel 3," and collectively as the "Property"), B. Declarant, and Agency entered into that certain Affordable Housing Rehabilitation Agreement ("AHRA"), of even date herewith, pursuant to which Declarant agreed to enter into this Declaration. Reference is also made to the following recorded documents pertaining to the Property: 1. Deed of Trust with Assignment of Rents, Security Agreement and Fixture Filing, by and between Declarant as trustor and Agency as beneficiary, of even date herewith, and recorded in the Office of the Riverside County (the "Deed of Trust"). The Deed of Trust secures a promissory note by Declarant as Maker and Agency as Holder, dated on or about the date of said Deed of Trust (the "Note"); and 2. Regulatory Agreement and Declaration of Covenants, Conditions, and Restrictions, by and between Declarant and Agency, of even date herewith, and recorded in the Office of the Riverside County Recorder (the "Agency Regulatory Agreement"). 3. Subordination Agreement, dated on or about the date hereto, by 151 and among Maker, Holder, and Rubicon Realty Capital Corporation, and recorded in the Office of the Riverside County Recorder ("Subordination Agreement"). 097 G:\WPD0CS\AHRA-Rae1.WDd This Declaration, the Deed of Trust, the Note, the Agency Regulatory Agreement, and the Subordination Agreement are hereinafter collectively referred to as the "Agency Agreements." C. In order to develop the Property for the purposes set forth in the Agency Agreements, Agency has permitted Declarant and its successors in interest to redevelop the Property as if the three parcels comprising the Property were one. D. Declarant and the Agency intend that in exchange for Agency permitting redevelopment of Parcel 1, Parcel 2, and Parcel 3 in the manner described in the Agency Agreements, Declarant shall hold, sell, and convey the Property subject to the covenants set forth in this Declaration and that the Agency and its successors shall have the right and power to enforce the covenants, conditions, restrictions, and reservations as provided herein. NOW, THEREFORE, the Declarant declares, covenants, and agrees, by and for itself, its heirs, executors, successors, assigns, and all persons claiming under or through it, for the benefit of Agency and its successors, as follows: 1 . Certification of Ownership. The Declarant hereby represents and warrants to Agency that Declarant is the legal owner of fee title to the Property. 2. Covenant IQ Hold Aa One Parcel. Declarant hereby covenants and agrees that Parcel 1, Parcel 2, and Parcel 3 shall be held under common ownership and that none of the parcels shall be sold, conveyed, leased, transferred, hypothecated, held, encumbered, or leased separate and apart from the other. 3. Covenants Running With The Land. 3.1 Covenants Runnina With the Land. This Declaration is designed to create covenants appurtenant to and running with the Property. Declarant hereby declares that all of the Property shall be held, sold, conveyed, encumbered, hypothecated, leased, used, occupied and improved subject to the covenants, conditions, and restrictions set forth herein, all of which are for the purposes of uniformly enhancing or protecting the value and desirability of the Property. The covenants, conditions, and restrictions set forth herein shall run with the Property and shall be binding upon all persons having any right, title or interest in the Property, or any part thereof, their heirs, successive owners and assigns; shall inure to the benefit of every portion of the Property and any interest therein; shall inure to the benefit of the Agency and its successors and assigns and successors in interest; and shall be binding upon Declarant, its successors and assigns and successors in interest. Agency and Declarant hereby declare their understanding and intent that the burden of the covenants set forth herein touch and concern the land in that Declarant's legal interest in the Property is rendered less valuable thereby. Agency and Declarant hereby further 1 rJ n U9g G:\WPDOCS\AHRA-Rael.wpd 2 declare their understanding and intent that the benefit of such covenants touch and concern the land by enhancing and increasing the enjoyment and use of the Property by the citizens of the City and by furthering the health, safety and welfare of the residents of the City. 3.2 Declaration Enforceable by Agency. Declarant grants to Agency the right and power to enforce, by any remedy available to Agency in law or equity, the covenants, conditions, restrictions, reservations, and agreements contained in this Declaration against the Declarant and all persons having any right, title or interest in the Property, or any part thereof, their heirs, successive owners and assigns. 4. Termination. No breach of this Declaration shall entitle any party to cancel, rescind or otherwise terminate this Declaration or excuse the performance of such party's obligation hereunder; provided, however, that this limitation shall not affect in any manner any other rights or remedies which the parties may have by reason of such breach. 5. No Meraer. This Declaration shall not merge with any grant deed or any other conveyance of any interest in the Property or any portion thereof, including any conveyance to the Agency. 6. Miscellaneous. 6.1 Term. The covenants, conditions, restrictions, reservations, and agreements contained in this Declaration shall remain in effect until released by the Agency by an instrument in writing recorded in the official records of Riverside County. There shall be no merger of this Declaration with any other interest pursuant to the terms set forth in Paragraph 5. Should the Property that is the subject of this Declaration undergo a change in use from its use as a multifamily apartment complex and parking area serving the apartment complex, the Agency shall release this Declaration when Declarant or its successor -in -interest can demonstrate that this Declaration is not required for the replacement use. 6.2 Modification. This Declaration may not be amended or modified except by a written instrument duly executed and acknowledged by the parties hereto, or their successors or assigns, and duly recorded in the official records of Riverside County. 6.3 Governing Law. This Declaration shall be governed by and construed in accordance with the laws of the State of California. 6.4 Severability. The invalidity of or inability to enforce any provision of this Declaration with respect to a particular party or set of circumstances shall not in any way affect the validity and enforceability of any other provision hereof, or the same provision when implied to another party or to a different set of circumstances. 153 G:\WPDOCS\AHRA-Rael.wpd 3 099 6.5 Attorneys' Fees. In any action between the parties seeking enforcement of any of the terms and provisions of this Declaration, the prevailing party in such action shall be awarded, in addition to any damages, injunctive or other relief, its reasonable costs and expenses, including attorneys' fees and expert witness fees. 6.6 Counterparts. This Declaration may be executed in any number of counterparts each of which shall be an original but all of which shall constitute one and the same document. [end - signature page follows] 154 100 G:\WPDOCS\AH RA-Rael. wpd 4 IN WITNESS WHEREOF, the undersigned have executed this Declaration as of the date first written above. "Declarant" LA QUINTA 34 LLC, a California limited liability company By: Lawrence C. Rael, Managing Member "AGENCY" LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic By: Thomas P. Genovese, Executive Director ATTEST: June S. Greek, Agency Secretary APPROVED AS TO FORM: RUTAN & TUCKER, LLP M. Katherine Jenson, Attorney for the La Quinta Redevelopment Agency 155 101. GAWPDOCS\AHRA-Rael.wpd 5 EXHIBIT "A" LEGAL DESCRIPTION OF THE PROPERTY [TO BE INSERTED] 156 102 G:\WPDOCS\AHRA-Rael.wpd CERTIFICATE —FF ACCEPTANCE THIS IS TO CERTIFY THAT THE INTEREST IN REAL PROPERTY CONVEYED BY THE FOREGOING DECLARATION BY DECLARANT THEREIN DESCRIBED IN FAVOR OF THE LA QUINTA REDEVELOPMENT AGENCY, A PUBLIC BODY, CORPORATE AND POLITIC, IS HEREBY ACCEPTED BY THE UNDERSIGNED OFFICER OF THE LA QUINTA REDEVELOPMENT AGENCY ON BEHALF OF THE LA QUINTA REDEVELOPMENT AGENCY, PURSUANT TO AUTHORITY CONFERRED ON THE UNDERSIGNED OFFICER BY RESOLUTION NO. ADOPTED BY THE BOARD OF DIRECTORS OF THE LA QUINTA REDEVELOPMENT AGENCY ON , AND THE LA QUINTA REDEVELOPMENT AGENCY CONSENTS TO RECORDATION THEREOF BY ITS DULY AUTHORIZED OFFICER. AM Thomas P. Genovese, Executive Director Date: 157 103 G:\WPDOCS\AHRA-Rael.wpd 7 STATE OF CALIFORNIA ) ) ss. COUNTY OF On before me, a notary public, personally appeared , personally known to me (or proved to me on the basis of satisfactory evidence) to be the person whose name is subscribed to the within instrument and acknowledged to me that he/she executed the same in his/her authorized capacity, and that by his/her signature on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument. WITNESS my hand and official seal. 0 [SEAL] 153 104 GAWPDOCS\AHRA-Rael.wpd 8 STATE OF CALIFORNIA 1 1 ss. COUNTY OF 1 On before me, a notary public, personally appeared , personally known to me (or proved to me on the basis of satisfactory evidence) to be the person whose name is subscribed to the within instrument and acknowledged to me that he/she executed the same in his/her authorized capacity, and that by his/her signature on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument. WITNESS my hand and official seal. 0 [SEAL] 105 159 G:\WPDOCS\AHRA-Rael.wpd 9 EXHIBIT "J" DISBURSEMENT PROCEDURES Disbursement of proceeds of the Rehabilitation Loan (other than the Agency Escrow Deposit) shall be made in accordance with the following procedures: 1. Application for Disbursement --Timing and Documentation. Not more frequently than once each calendar month, Participant may submit a request for a disbursement to pay the actual costs of the rehabilitation work which request shall be in a form acceptable to the Executive Director ("Disbursement Request"). Each Disbursement Request shall be accompanied by: (a) Participant's request for Disbursement only to pay the costs of completed work, which costs shall correspond to and shall not exceed the appropriate budget amounts for the Project as approved by the Agency Executive Director. The budget amounts for each component of work may at adjusted from time to time upon with prior written approval of the Agency Executive Director, which approval shall not be unreasonably withheld, conditioned, or delayed as long as Participant has provided the Agency Executive Director with satisfactory documentation justifying the budget adjustment. (b) True and correct copies of invoices and other supporting documentation for the cost of the work performed, material supplied and/or costs incurred or due for which Disbursement is requested, enabling the Agency Executive Director to determine to his/her reasonable satisfaction that Participant has incurred the costs and fees for which the Disbursement is to be utilized to pay. (c) A description from Participant of the work performed, material supplied and/or costs incurred or due for which Disbursement is requested with respect to each item for which Disbursement is requested; and the total amount incurred, expended and/or due for each requested item less prior Disbursements. (d) Submission by Participant of a written accounting signed by each person or entity who furnished labor, services, equipment or material to the Site for the period covered by the currently requested Disbursement showing all amounts owed to such person or entity, together with a conditional release or waiver from each such person or entity covering the work which is subject to the currently requested Disbursement, said release or waiver conforming to the requirements of Civil Code Section 3262. (e) Unconditional lien releases or waivers, conforming to the requirements of Civil Code Section 3262, from all persons and entities who have furnished labor, services, equipment or material to the Site for the period covered by the immediately preceding Disbursement, or cancelled check(s) verifying that the conditional releases or waivers previously provided pursuant to clause (d) have become unconditional. 160 106 G:\WPDOCS\AHRA-Rae1.wpd (f) If applicable, architect's, inspector's and/or engineer's certificate for payment stating that, based upon said parties periodic review of the progress of rehabilitation work Participant is entitled to the payment requested in the Disbursement Request. 2 Participant Warranty. Each Disbursement Request submitted to the Agency and shall be signed by Participant, which signature shall constitute a warranty by Participant that all information and documents submitted in conjunction with such Disbursement Request are true and correct. 3 Conditions Precedent fo Disbursements. Even if Participant has met all of the requirements for receipt of a Disbursement pursuant to the above, Agency shall not make any Disbursement from the Rehabilitation Loan in response to a Disbursement Request until all of the following conditions are met in connection with such Disbursement, or Agency waives such conditions in their respective sole and absolute discretion: (a) Participant has obtained all required building and other permits and approvals for the work performed. (b) Participant is not in material default of any of its obligations set forth in any of the Agency Agreements or any agreement or document referenced in any of the Agency Agreements. (c). Agency is satisfied that the rehabilitation work is in all material respects in compliance with the plans therefor approved in accordance with the AHRA and all applicable laws, rules and regulations and other requirements. (d). Participant has applied all previously Disbursements to rehabilitation of the Site in accordance with the Agency Agreements and approved Project plans and permits and for no other purpose. (e). The Agency is satisfied, based upon periodic inspections and such other information as the Agency deems relevant, that the progress of the rehabilitation work is as represented by Participant. (f). Agency has not been notified that Agency is required under applicable laws to withhold the Disbursement, no stop notice has been delivered to Agency, and no mechanics' or similar lien has been recorded against the Site. 4. Retainage. Provided that Participant is entitled to receive a Disbursement pursuant to the terms hereof, the amount of each Disbursement from shall be reduced by ten percent (10%) as a "Retainage" amount. Prior to the disbursement of the Retainage, the following shall have occurred: (i) if applicable, the architect, inspector or engineer shall have issued a Certificate of Substantial Completion, (ii) Agency shall 161 107 G:\WPDOCS\AHRA-Rael.wpd 2 have recorded the Release of Construction Covenants, and (iii) the period for filing a mechanic's or similar lien or a stop notice shall have expired with no lien or stop notice having been filed. 5. Form of Disbursement. Disbursement shall be made by means of check(s) made payable jointly to Participant and the persons and entities who have furnished the labor, services, equipment or material to the Site; provided, however, if evidence is provided that confirms that such persons and entities furnishing labor, services, and equipment to the Site have already been paid, the payment made be made solely to Participant. 6. Remainina Funds in Account. If any Rehabilitation Loan amount remains after completion of the rehabilitation work, Agency shall retain the balance and such amount shall be deemed payment on the outstanding balance of the Agency Note. 16? M G:\WPDOCS\AHRA-Rae1.wpd 3 EXHIBIT "K" FORM OF SUBORDINATION AGREEMENT [SEE FOLLOWING PAGES] 163 109 G:\WPDO C S\A H RA-Rael. wpd Recording Requested By And When Recorded Return To: La Quinta Redevelopment Agency 78-495 Calle Tampico La Quinta, CA 92253 Attn: Executive Director [Space Above For Recorder's Use] [Exempt From Recording Fees per Gov. Code ?61031 SUBORDINATION AGREEMENT NOTICE: THIS SUBORDINATION AGREEMENT RESULTS IN YOUR SECURITY INTEREST IN THE PROPERTY BECOMING SUBJECT TO AND OF LOWER PRIORITY THAN THE LIEN OF SOME OTHER OR LATER SECURITY INSTRUMENTS. THIS SUBORDINATION AGREEMENT ("Subordination Agreement") is entered into this day of by and among the LA QUINTA REDEVELOPMENT AGENCY, a public agency, corporate and politic ("Agency"), LA QUINTA 34 LLC, a California limited liability company ("Participant"), and RUBICON REALTY CAPITAL CORP., A CALIFORNIA CORPORATION ("Lender"). RECITALS: A. Participant owns fee title to the real property described on Attachment No. " 1 " ("Apartment Parcel") and has a contract to acquire the real property described on Attachment No. 2 ("Additional Parcels") (collectively, the "Property") attached hereto and incorporated herein by reference. B. The Agency and Participant have entered into an Affordable Housing Rehabilitation Agreement, dated , 2001 (the "AHRA"). Pursuant to the terms of the AHRA and the agreements referred to therein, Agency is obligated to loan Participant the sum of THREE HUNDRED FIFTY THOUSAND DOLLARS ($350,000.00) ("Agency Loan"), to assist Participant in rehabilitating the Property. The Agency Loan is evidenced by a Note ("Agency Note"). The Agency Note is partially secured by a Deed of Trust with Assignment of Rents encumbering the Property recorded in the Official Records of Riverside County (the "Agency Deed of Trust") on or about the date of recordation of this Subordination Agreement. C. Pursuant to the AHRA, and in partial consideration for the Agency Loan, Agency and Participant, executed and recorded against the Property that certain Regulatory Agreement and Declaration of Covenants and Restrictions by and between Agency and Participant recorded in the Official Records of Riverside County (the "Agency Regulatory Agreement") on or about the date of recordation of this l Subordination Agreement. 110 G:\WPDOCS\AHRA-Rael.wpd 5 D. Pursuant to the AHRA, and in partial consideration for the Agency Loan, Agency and Participant, executed and recorded against the Property that certain Declaration of Covenants and Restrictions And Agreement To Hold Property As One Parcel, by and between Agency and Participant recorded in the Official Records of Riverside County (the "Declaration") on or about the date of recordation of this Subordination Agreement. E. Participant has an existing loan from Lender in the original principal amount of NINE HUNDRED THIRTY THOUSAND DOLLARS (the "Lender Loan"), which is evidenced by a promissory note dated on ("Lender Note"). The Lender Note is secured by a deed of trust, dated on and recorded against only the Apartment Parcel (legally described in Attachment No. 1) ("Lender Deed of Trust"). The Lender Deed of Trust was recorded on , as Instrument No. in the Official Records of Riverside County. The Lender Deed of Trust is sometimes referred to in the AHRA as the "First Deed of Trust." F. Agency, Participant, and Lender agree that the Agency will specifically and unconditionally subordinate the lien or charge of the Agency Deed of Trust and the Agency Regulatory Agreement to the lien or charge of the Lender Deed of Trust. NOW, THEREFORE, in consideration of the foregoing Recitals and the covenants and promises hereinafter contained, and for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: 1.0 Subordination 4y Agency. 1.1 Necessity of Subordination. Pursuant to Section 33334.14 of the Health and Safety Code, Agency is permitted to subordinate the Agency Deed of Trust and Agency Regulatory Agreement only if certain specified findings are made and if certain rights are granted to the Agency. In accordance with said Section, the Agency hereby finds that no economically feasible alternative method of financing the units on substantially comparable terms and conditions without subordination is reasonably available and the Agency has obtained written commitments to protect the Agency's investment in the event of a default, as specified in this Subordination Agreement. Therefore, Agency hereby agrees to subordinate the lien or charge of the Agency Deed of Trust and Agency Regulatory Agreement to the Lender Deed of Trust on the terms set forth in this Subordination Agreement. This Subordination Agreement shall set forth the priority of liens between the parties and govern the terms and conditions of such subordination. 1.2 Subordination of Agency Deed of Trust no�lc Agency Regulatory Agreement to Lender Deed of Trust. The Lender Deed of Trust (and any renewals or extensions of, or advances, including interest, thereunder) shall unconditionally be and 165 remain at all times a lien or charge on the Apartment Parcel, prior and superior to the lien or charge of the Agency Deed of Trust and the Agency Regulatory Agreement, to 111. G:\WPDO CS\AHRA-Rael. wpd 6 all present and future indebtedness and obligations secured thereby, together with all rights and privileges of Agency thereunder, but subject to the terms and conditions of this Subordination Agreement. 1.3 Refinancing. If Participant chooses to refinance the Lender Loan with Lender or any other entity, or chooses to obtain new financial secured by the Property, Agency agrees to subordinate the Agency Deed of Trust and the Agency Regulatory Agreement to the refinancing lender's deed of trust under the same terms and conditions as set forth in this Agreement, except that the Agency shall subordinate the Agency Deed of Trust and Agency Regulatory Agreement with respect to the Apartment Parcel and the Additional Parcel on the condition that the amount of the new loan plus the outstanding principal balance secured by the Agency Deed of Trust is not greater than ninety-five percent (95%) of the then appraised fair market value of the Property. 1.4 Covenants of Agency. The Agency declares, agrees and acknowledges that to Agency's actual knowledge, as of the date of this Subordination Agreement there is no breach, event of default or default existing under the Agency Deed of Trust or Agency Regulatory Agreement, or any circumstances, event, omission or failure of condition which would constitute such a breach, default or event of default after notice or lapse of time, or both. 3. Rights of Agency. 3.1 Default Uncle r Lender Deed of Trust. In the event of a breach or default by Participant under the terms of the Lender Deed of Trust, the party alleging such default shall provide the Agency with written notice of such breach or default concurrently with providing such notice to Participant. Upon receipt of such notice of breach or default, the parties hereto agree that Agency shall each have all of the following rights so long as any of the Agency Deed of Trust or Agency Regulatory Agreement encumber any portion of the Apartment Parcel or interest therein: 3.1.1 To cure the noticed default at any time prior to the foreclosure of the Lender Deed of Trust. In connection therewith, the Lender agrees that (i) in the event of a monetary default, the Lender shall not foreclose Lender Deed of Trust or other lien prior to the date that is sixty (60) days after the date that the Lender would otherwise be legally entitled to foreclose Lender Deed of Trust and (ii) in the event of a nonmonetary default, the Lender shall not foreclose its Lender Deed of Trust or other lien prior to the date specified above for monetary defaults; provided that if said nonmonetary default is susceptible to being cured only when the Agency has obtained possession of the Property, the Agency shall have as long as necessary (x) to obtain possession of the Apartment Parcel by either the Agency foreclosing the Agency Deed of Trust, and to cure the default, so long as the Agency does so with reasonable and continuous diligence. 3.1.2 To negotiate with the Lender regarding the noticed default at any 166" time prior to the foreclosure of the Lender Deed of Trust or other lien. G:\WPDO CS\AH RA-Rael. wpd 7 112 3.2 Foreclosure of Dee of Trust. The Lender hereby agrees that in the event that Agency forecloses the Agency Deed of Trust or otherwise acquires title to the Property, said transfer shall not give rise to any right on the part of the Lender to accelerate the amounts due on the Lender Loan. G IFri TOM 4.1 Entire AAareement. This Subordination Agreement shall be the whole and only agreement with regard to the matters set forth herein and shall supersede and cancel, but only insofar as would affect the priority between the Lender Deed of Trust and the Agency Deed of Trust and Agency Regulatory Agreement, any prior agreement as to such subordination including, but not limited to, those provisions, if any, contained in the Agency Deed of Trust or Agency Regulatory Agreement that provide for the subordination of the lien or charge thereof to another deed or deeds of trust or to another mortgage or mortgages, upon the Property. 4.2 Successors and Assions. This Subordination Agreement shall inure to and bind the heirs, legatees, devisees, administrators, executors, successors and assigns of the parties hereto. 4.3 California Law. This Subordination Agreement shall be construed according to the laws of the State of California. 4.4 Severability. If any term, provision, condition or covenant of this Subordination Agreement or the application thereof to any party or circumstances shall, to any extent, be held invalid or unenforceable, the remainder of this instrument, or the application of such term, provision, condition or covenant to persons or circumstances other than those as to whom or which it is held invalid or unenforceable shall not be affected thereby, and each term and provision of this Subordination Agreement shall be valid and enforceable to the fullest extent permitted by law. 4.5 Notice. Formal notices, demands, and communications between Agency, Participant, and Lender shall be sufficiently given if personally delivered, delivered by a reputable same -day or overnight courier services that provides a receipt showing date and time of delivery, or delivered by United States mail, registered or certified, postage prepaid, return receipt requested, to the following addresses If to Agency: La Quinta Redevelopment Agency 78-495 Calle Tampico La Quinta CA 92253 Attn: Executive Director With a copy to: Rutan & Tucker, LLP 611 Anton Boulevard, Suite 1400 Costa Mesa, CA 92626 167 Attn: M. Katherine Jenson, Esq. 113 G:\WPDOCS\AHRA-Rael. wpd 8 If to Participant: La Quinta 34 LLC 1800 East Garry Avenue, Suite 117 Santa Ana, CA 92705 Attn: Lawrence C. Rael With copy to: Gibson, Dunn & Crutcher LLP Jamboree Center 4 Park Plaza, Suite 1400 Irvine, CA 92614-8557 Attn: Teresa J. Farrell, Esq. Fax: (949) 451-4220 If to Lender: Rubicon Realty Capital Corporation 95 Argonaut, Suite 110 Aliso Viejo, CA 92656 Attn: Robert Roberts All notices shall be deemed to be received as of the earlier of actual receipt by the addressee thereof or the expiration of forty-eight (48) hours after depositing in the United States Postal System in the manner described in this Section. Such written notices, demands, and communications may be sent in the same manner to such other addresses as a party may from time to time designate by mail. 4.6 Attorneys' Fees. In the event that any action, suit or other proceeding is brought to enforce the obligations of under this Agreement, the prevailing party shall be entitled to receive all of such party's costs and expenses of suit, including attorneys' fees, expert witness fees and all costs incurred in each and every such action, suit or other proceeding, including any and all appeals or petitions therefrom. 4.7 Nonliability 2 Agency Officials. No officer, official, member, employee, agent, or representative of Agency shall be personally liable to Participant or Lender, or any successor in interest, in the event of any default or breach by Agency or for any amount which may become due to Participant or Lender or successor or on any obligations under the terms of this Agreement. 4.8 Counterparts. This Subordination Agreement may be executed in any number of counterparts, each of which, when all the parties hereto have signed this Subordination Agreement, shall be deemed an original. [END - SIGNATURE PAGES FOLLOW] 166 114 G:\WPDOCS\AH RA-Rael. wpd 9 IN WITNESS WHEREOF, the parties have executed this Subordination Agreement as of the date first written above. NOTICE: THIS SUBORDINATION AGREEMENT RESULTS IN YOUR SECURITY INTEREST IN THE PROPERTY BECOMING SUBJECT TO AND OF LOWER PRIORITY THAN THE LIEN OF SOME OTHER OR LATER SECURITY INSTRUMENTS. ATTEST: By: June S. Greek, Secretary APPROVED AS TO FORM: RUTAN & TUCKER, LLP By: M. Katherine Jenson, Agency Counsel "AGENCY" LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic By: Thomas P. Genovese, Executive Director "PARTICIPANT" LA QUINTA 34 LLC, a California limited liability company 0 Lawrence C. Rael, Managing Member "LENDER" RUBICON REALTY CAPITAL CORPORATION, a California corporation By: [END OF SIGNATURES] 115 169 G:\WPD0CS\AHRA-Rae1.wpd 10 STATE OF CALIFORNIA ► 1 ss. COUNTY OF ► On before me, , personally appeared , personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. Witness my hand and official seal. Notary Public [SEAL] STATE OF CALIFORNIA ► 1 ss. COUNTY OF ► On before me, , personally appeared , personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. Witness my hand and official seal.. Notary Public [SEAL] 116110 G:\WPDOCS\AHRA-Rael. wpd 11 STATE OF CALIFORNIA 1 1 ss. COUNTY OF ► On before me, , personally appeared , personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. Witness my hand and official seal. Notary Public [SEAL] STATE OF CALIFORNIA ) )ss. COUNTY OF 1 On before me, , personally appeared , personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. Witness my hand and official seal. Notary Public [SEAL] 171 117 G:\WPDOCS\AH RA-Rael. wpd 12 ATTACHMENT NO. "1" LEGAL DESCRIPTION OF APARTMENT PARCEL [TO BE INSERTED] 172 119 G:\WPDOCS\AHRA-Rael.wpd 13 ATTACHMENT NO. 2 LEGAL DESCRIPTION OF ADDITIONAL PARCELS LOTS 6 AND 7 IN BLOCK 125 OF SANTA CARMELITA AT VALE LA QUINTA, UNIT NO. 14, AS SHOWN BY MAP RECORDED IN BOOK 18, PAGE 82 OF MAPS, RECORDS OF RIVERSIDE COUNTY, CALIFORNIA. 173 119 G:\WPDOCS\AHRA-Rael.wpd 14 TABLE OF CONTENTS Page 1.0 DEFINITIONS ............................................ 1 1.1 Acquisition Parcels . .................................. 1 1.2 Agency Deed of Trust ................................ 1 1.3 Agency Note.......................................2 1.4 Agency Regulatory Agreement .......................... 2 1.5 Agreement ........................................ 2 1.6 Apartment Parcel . ................................... 2 1.7 CEQA............................................2 1.8 City.............................................2 1.9 Closing ........................................... 2 1.10 Days............................................2 1.11 Declaration ......................................... 2 1.12 Disbursement Procedures ............................... 2 1.13 Effective Date ...................................... 2 1.14 Enforced Delay ..................................... 2 1.15 Escrow...........................................3 1.16 Escrow Agent ....................................... 3 1.17 Executive Director ................................... 3 1.18 First Deed of Trust . .................................. 3 1.19 Hazardous Materials .................................. 3 1.20 Owner...........................................3 1.21 Participant ......................................... 3 1.22 Project ........................................... 3 1.23 Project Area ....................................... 3 1.24 Redevelopment Plan .................................. 3 1.25 Rehabilitation Loan ................................... 4 1.26 Rehabilitation Loan Documents .......................... 4 1.27 Release of Construction Covenants ....................... 4 1.28 Sale Escrow Instructions ............................... 4 1.29 Schedule of Performance .............................. 4 1.30 Site.............................................4 1.31 Subordination Agreement .............................. 4 1.32 Title Company .................................. 4 2.0 PURPOSE OF AGREEMENT..................................4 3.0 CURRENT OWNERSHIP OF THE SITE; PARTICIPANT ACQUISITION OF THE ACQUISITION PARCELS . ................................... 4 3.1 Ownership of the Site; Participant -Owner Escrow ............. 4 3.2 Participant Acquisition of the Acquisition Parcels . 5 3.3 Condition of Title .................................... 5 3.4 Agency Title Policy .................................. 5 174 3.5 Condition to Agency's Performance ....................... 6 3.6 Duties of Escrow Agent ............................... I n n G:\WPDOCS\AHRA-Rael.wpd TABLE OF CONTENTS �•� 3.7 Brokerage Commissions ............................... 7 3.8 Taxes and Assessments and Liens ........................ 7 4.0 REHABILITATION LOAN; PHYSICAL CONDITION OF SITE. ........... 7 4.1 Rehabilitation Loan; Disbursement ........................ 7 4.2 Termination for Failure to Close Escrow ..................... 8 4.3 Subordination of Agency Deed of Trust and Agency Regulatory Agreement........................................8 4.4 Conditions to Disbursement of Rehabilitation Loan ............. 8 4.5 Physical Condition of Site . ............................. 8 5.0 PARTICIPANT REPRESENTATIONS AND WARRANTIES . ............. 9 5.1 Effective Date of Representations and Warranties ............. 9 5.2 Representations and Warranties .......................... 9 6.0 PROJECT DEVELOPMENT..................................10 6.1 Rehabilitation Loan .................................. 10 6.2 Construction of the Project . ........................... 10 6.3 Indemnification .................................... 12 6.4 Applicable Laws .................................... 12 6.5 Release of Construction Covenants ...................... 12 7.0 TRANSFER AND ASSIGNMENT. 13 7.1 Sale or Transfer of the Project .......................... 13 7.2 Transfer Defined ................................... 13 7.3 Agency Approval of Transfer Required .................... 13 7.4 Assignment and Assumption Agreement ................... 14 7.5 Permitted Transferee ................................ 14 8.0 INSURANCE...........................................15 8.1 Required Minimum Policies ............................ 15 8.2 Insurance After Close of Escrow ........................ 16 9.0 RIGHTS OF HOLDERS OF APPROVED SECURITY INTERESTS IN SITE. .. 16 9.1 Definitions ....................................... 16 9.2 Limitation on Encumbrances; Subordination ................. 16 9.3 Participant's Breach Does Not Defeat Mortgage Lien .......... 16 9.4 Notice of Default to Mortgagee, Deed of Trust or Other Security Interest Holders..........................................16 9.5 Right of the Agency to Satisfy Other Liens on the Property After Conveyance of Title ................................. 17 175 191 G:\WPDOCS\AHRA-Rael.wpd ❑ TABLE OF CONTENTS Page 10.0 USE OF THE SITE . ...................................... 17 10.1 Use of the Site ..................................... 17 10.2 No Inconsistent Uses ................................ 17 10.3 Obligation to Refrain from Discrimination .................. 17 10.4 Effect of Covenants ................................. 17 10.5 Relocation of Existing Tenants .......................... 18 11.0 DEFAULT; ENFORCEMENT.................................18 11 .1 Defaults, Right to Cure and Waivers . ..................... 18 1 1 .2 Legal Actions ...................................... 19 1 1 .3 Rights and Remedies are Cumulative ..................... 19 11 .4 Attorneys' Fees .................................... 19 12.0 MISCELLANEOUS.......................................19 12.1 Notices .......................................... 19 12.2 Nonliability of Agency Officials and Employees .............. 20 12.3 Time of Essence ................................... 20 12.4 Enforced Delay: Extension of Times of Performance .......... 20 12.5 Books and Records . ................................. 21 12.6 Ownership of Documents ............................. 21 12.7 Modifications ...................................... 21 12.8 Binding Effect of Agreement ........................... 21 12.9 Assurances to Act in Good Faith ........................ 22 12.10 Severability....................................... 22 12.11 Interpretation ..................................... 22 12.12 Entire Agreement .................................. 22 12.13 Waiver; Amendments ................................ 22 12.14 Counterparts ...................................... 22 12.15 Authority ......................................... 22 12.16 Exhibits ......................................... 23 12.17 Effective Date ..................................... 23 122 176 G:\WPDOCS\AHRA-Rael. wpd iii LIST OF EXHIBITS Exhibit "A" Legal Description of Apartment Parcel and Acquisition Parcels Exhibit "B" Site Map Exhibit "C" Scope of Development Exhibit "D" Schedule of Performance Exhibit "E" Form of Agency Note Exhibit "F" Form of Agency Deed of Trust Exhibit "G" Form of Agency Regulatory Agreement Exhibit "H" Form of Release of Construction Covenants Exhibit "I" Form of Declaration Exhibit "J" Disbursement Procedures Exhibit "K" Form of Subordination Agreement 177 123 GAWPDOCS\AHRA-Rael.wpd 1V