2007 10 23 RDARedevelopment Agency Agendas are
available on the City's Web Page
@ www.la-quinta.org
REDEVELOPMENT AGENCY
AGENDA
LA QUINTA SENIOR CENTER
MULTI -PURPOSE ROOM
78-450 Avenida La Fonda
La Quinta, California 92253
SPECIAL MEETING
TUESDAY, OCTOBER 23, 2007 - 4:30 P.M.
CALL TO ORDER
Roll Call:
Agency Members: Adolph, Henderson, Kirk, Sniff, and Chairman Osborne
PLEDGE OF ALLEGIANCE
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.
CLOSED SESSION
1. CONFERENCE WITH AGENCY'S REAL PROPERTY NEGOTIATOR, DOUGLAS
R. EVANS, PURSUANT TO GOVERNMENT CODE SECTION 54956.8
CONCERNING POTENTIAL TERMS AND CONDITIONS OF ACQUISITION
AND/OR DISPOSITION OF REAL PROPERTY LOCATED AT 78-990 MILES
AVENUE (APN 604-032-022). PROPERTY OWNER/NEGOTIATOR:
NATIONAL COMMUNITY RENAISSANCE OF CALIFORNIA, ALFREDO
IZMAJTOVICH.
Special Redevelopment Agency Agenda 1 October 23, 2007
CONSENT CALENDAR
1. APPROVAL OF AN AMENDED AND RESTATED AFFORDABLE HOUSING
AGREEMENT BY AND BETWEEN THE LA QUINTA REDEVELOPMENT
AGENCY AND NATIONAL COMMUNITY RENAISSANCE OF CALIFORNIA
(FORMERLY THE SOUTHERN CALIFORNIA HOUSING DEVELOPMENT
CORPORATION).
ADJOURNMENT
The next regular meeting of the Redevelopment Agency will be held on November
6, 2007, commencing with closed session at 3:00 p.m. and open session at 4:00
p.m. in the City Council Chambers, 78-495 Calle Tampico, La Quinta, CA 92253.
DECLARATION OF POSTING
I, Veronica J. Montecino, City Clerk of the City of La Quinta, do hereby declare
that the foregoing agenda for the Special La Quinta Redevelopment Agency
Meeting of Tuesday, October 23, 2007, was posted on the outside entry to the
Council Chamber at 78-495 Calle Tampico and on the bulletin boards at 51-321
Avenida Bermudas and 78-630 Highway 1 1 1, on October 19, 2007.
DATEDctober 19, 200
?111�
VONICA J. NTECINO, Secretary
City of La Quinta, California
Special Redevelopment Agency Agenda 2 October 23, 2007
La�� •cam
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S
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NOTICE AND CALL OF SPECIAL MEETING
OF THE LA QUINTA REDEVELOPMENT AGENCY
TO THE MEMBERS OF THE REDEVELOPMENT AGENCY OF THE CITY OF
LA QUINTA AND TO THE CITY CLERK:
NOTICE IS HEREBY GIVEN that a special meeting of the Redevelopment
Agency of the City of La Quinta is hereby called to be held on October 23, 2007,
commencing at 4:30 p.m., in the Multi -Purpose Room at the La Quinta Senior
Center at 78-450 Avenida La Fonda, La Quinta, California 92253.
Said special meeting shall be for the purpose of considering the following
matters:
Closed Session pursuant to Government Code Section 54956.8 concerning
potential terms and conditions of acquisition and/or disposition of real
property located at 78-990 Miles Avenue (APN 604-032-022). Property
Owner/Negotiator: National Community Renaissance of California, Alfredo
Izmajtovich.
Approval of an Amended and Restated Affordable Housing Agreement by
and between the La Quinta Redevelopment Agency and National Community
Renaissance of California (formerly the Southern California Housing
Development Corporation). 114,
Dated: October 19, 2007
i
Attest:
71� VERONICA J. MONTECINO
City Clerk
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COUNCIL/RDA MEETING DATE: October 23, 2007
ITEM TITLE: Approval of an Amended and Restated
Affordable Housing Agreement by and between the La
Quinta Redevelopment Agency and National Community
Renaissance of California (formerly the Southern
California Housing Development Corporation)
RECOMMENDATION:
AGENDA CATEGORY:
BUSINESS SESSION: _
CONSENT CALENDAR:
STUDY SESSION:
PUBLIC HEARING:
Approve the Amended and Restated Affordable Housing Agreement ("Agreement") by
and between the La Quinta Redevelopment Agency and National Community
Renaissance of California ("CORE") (Attachment 1) with any final modifications
approved by Agency Counsel and the Executive Director, and authorize the Executive
Director to execute the Agreement and all other related documents.
FISCAL IMPLICATIONS:
The totaV cost of the Vista Dunes Housing Project ("Project"), including land
acquisition, relocation, construction, reimbursables and the developer fee is estimated
to be $36,675,666. Davis Reed Construction, Inc., the construction contractor for the
Project, is approximately 70% complete with the construction. Pursuant to the
Agreement, the Davis Reed contract will be assigned to CORE, and CORE will be
responsible for paying a total of $3,817,152 of the costs through a combination of
4% Federal Tax Credits and a construction loan. CORE will take title to the land and
improvements, and will operate the Project as a very low-income rental project for 55
years. The Agency will be responsible for the remaining costs to complete the Project.
The Agency will continue to function as the construction manager until the Project is
completed. In 55 years, after the expiration of the affordability covenants, the land
and improvements will revert to the City.
BACKGROUND AND OVERVIEW:
In December 2003, the La Quinta Redevelopment Agency purchased and vacated the
Vista Dunes Mobile Home Park. Site relocation activities were completed by January
2006.
In March 2006, the Agency Board approved a request for proposals seeking non-profit
operators for the Vista Dunes Courtyard Homes. Five firms were contacted and only
one firm, Southern California Housing Development Corporation (now CORE),
responded. Since SCHDC was a qualified non-profit housing owner/operator, and
since they have other local affordable housing complexes in Cathedral City and Indian
Wells that are well run and maintained, staff recommended the Agency proceed to
structure an Affordable Housing Agreement with CORE for the transfer and operation
of the Vista Dunes Courtyard Homes.
Various financial structures have been explored and pursued. At one time, State
investment tax credit financing was considered. However, a Superior Court ruled that
such financing would trigger the requirement of prevailing wages. Nine percent
Federal Tax Credits were then explored, but due to the Agency's use of its 2004 Tax
Exempt Housing Bonds to fund a majority of the land and construction costs, CORE
determined that it was necessary to utilize the 4% Federal Tax Credit in lieu of the 9%
tax credits. (The 4% tax credits have no limitation with regard to the use of tax
exempt bonds on the project.)
CORE has obtained its allocation of tax credits, but must commit that allocation no
later than November 2, 2007. Pursuant to the Agreement, CORE will take the steps
necessary to convert its 9% Federal Tax Credit application to a 4% Federal Tax Credit
application, and is responsible for obtaining a minimum of $2,500,000 in tax credits
which it will use towards completing the construction. These funds will be used for
construction starting on November 2, 2007. In addition, CORE will obtain a
construction loan of $1,317,152, all of which will be used for construction. The Davis
Reed Construction contract will be assigned to CORE. The Agency will fund the
remaining i portion of the construction, and will further fund the developer fee and
$523,8813 of reimbursable costs for lease -up costs and financing costs. The
Agreement contemplates that CORE will transfer the land and assign its rights under
the Agreement to a California limited partnership for purposes of receiving the tax
credits. The Agreement further provides that at the end of the 55-year affordability
period, the land and improvements will be transferred to the City, provided CORE
obtains title from the partnership at the end of the 15-year tax credit term which it is
obligated to do under the terms of the Partnership Agreement.
It is anticipated that leasing and occupancy of this project will commence by May
2008.
FINDINGdi AND ALTERNATIVES:
The alternatives available to the Agency Board include:
1. Approve the Amended and Restated Affordable Housing Agreement by and
between the La Quinta Redevelopment Agency and National Community
Renaissance of California with any final modifications approved by Agency
Counsel and the Executive Director, and Authorize the Executive Director to
execute the Agreement and all other related documents; or
2. Do not approve the proposed Agreement; or
3. Provide staff with alternative direction
Respectfully submitted,
�v4c— '
Douglas Y. Evans, Assistant City Manager
Approved for submission by:
Thomas P. Genovese, Executive Director
Attachment: 1. Amended and Restated Affordable Housing Agreement
ATTACHMENT #1
AMENDED AND RESTATED AFFORDABLE HOUSING AGREEMENT
by and between
LA QUINTA REDEVELOPMENT AGENCY
and
NATIONAL COMMUNITY RENAISSANCE OF CALIFORNIA
882/015610-0047
848399A4 a10118/07
TABLE OF CONTENTS
Page
I. [100]
SUBJECT OF AGREEMENT...............................................................................
3
A.
[101]
Purpose of Agreement.. ..............................................................................
3
B.
[102]
The Redevelopment Plan ...........................................................................3
C.
[103]
The Project Area.........................................................................................4
D.
[104]
The Site......................................................................................................4
E.
[105]
Parties to the Agreement............................................................................4
1.
[106] The Agency....................................................................................4
2.
[107] National CORE..............................................................................4
F.
[108]
Definitions..................................................................................................5
1.
[109] Prohibition Against Change in Ownership, Management
and Control of National CORE and Prohibition Against
Transfer of the Site....................................................................................9
G.
[110]
Representations by National CORE .........................................................
I 1
H.
[ l 11]
Representations by the Agency................................................................12
II. [200]
SALE
OF PROJECT............................................................................................13
A.
[201]
Purchase Price..........................................................................................14
B.
[202]
Tax Credits; Tax Credit Regulatory Agreement......................................15
C.
[203]
Evidence of Financing..............................................................................16
D.
[204]
Acquisition of the Site Pursuant to Grant Deed.......................................17
E.
[205]
Escrow......................................................................................................17
1.
[206] Opening of Escrow.......................................................................17
2.
[207] Deposits Into Escrow...................................................................17
3.
[208] Escrow Officer Obligations..........................................................18
F.
[209]
Conveyance of Title and Delivery of Possession.....................................19
G.
[210]
Conditions to Closing...............................................................................19
1.
[211] Agency's Conditions to Closing..................................................19
2.
[212] National CORE's Conditions to Closing.....................................20
3.
[213] Waiver..........................................................................................21
4.
[214] Intentionally Omitted...................................................................
21
H.
[215]
Condition of Title.....................................................................................21
I.
[216]
Title Insurance..........................................................................................21
J.
[217]
Taxes and Assessments............................................................................22
K.
[218]
Conveyance Free of Possession...............................................................22
L.
[219]
Document Review; Inspections; Condition of Partially
ConstructedProject.............................................................................................22
1.
[220] Document Review........................................................................22
2.
[221] Intentionally Omitted...................................................................23
3.
[222] "As Is............................................................................................23
4.
[223] Indemnity.....................................................................................23
5.
[224] Release and Waiver......................................................................24
6.
[225] Definitions....................................................................................24
7.
[226] Materiality....................................................................................25
882/015610-0047
848399 04 a10/18/07 _t_
Page
III. [300] DEVELOPMENT OF THE SITE; ADDITIONAL, FINANCING FOR
THE? PROJECT...............................................................................................................25
A.
[301]
Selection of Builder; Review and Approval of Project Plans.................25
B.
[302]
Completion of Construction by National CORE......................................25
C.
[303]
Energy Efficiency Rebates.......................................................................25
D.
[304]
Additional Financing for the Project........................................................26
E.
[305]
Disbursement of Agency Construction Financing...................................26
F.
[306]
Permanent Loan Closing..........................................................................26
IV. [400]
USE OF THE PROJECT......................................................................................27
A.
[401]
Affordable Housing..................................................................................27
B.
[402]
Uses In Accordance with Redevelopment Plan;
Nondiscrimination...............................................................................................
27
C.
[403]
Indemnity; Insurance Requirements.........................................................29
D.
[404]
Local, State and Federal Laws.................................................................31
E.
[405]
Taxes and Assessments............................................................................31
F.
[406]
Limitation on Encumbrances...................................................................31
G.
[407]
Maintenance of the Project.......................................................................32
H.
[408]
Effect of Violation of the Terms and Provisions of this
Agreement...........................................................................................................
32
V. [500]
DEFAULTS
AND REMEDIES...........................................................................32
A.
[501]
Defaults — General....................................................................................32
B.
[502]
Legal Actions...........................................................................................33
1.
[503] Specific Performance...................................................................33
2.
[504] Institution of Legal Actions; Attorney's Fees..............................33
3.
[505] Applicable Law............................................................................33
4.
[506] Acceptance of Service of Process................................................33
C.
[507]
Rights and Remedies Are Cumulative.....................................................33
D.
[508]
Inaction Not a Waiver of Default.............................................................34
VI. [600]
GENERAL
PROVISIONS...................................................................................34
A.
[601 ]
Notices, Demands and Communications Between Parties .......................34
B.
[602]
Conflicts of Interest..................................................................................34
C.
[603]
Enforced Delay; Extension of Times of Performance .............................34
D.
[604]
Non -Liability of Officials and Employees of the Agency .......................35
E.
[605]
Interpretation; Entire Agreement, Waivers; Attachments ........................35
F.
[606]
Time of Essence.......................................................................................35
G.
[607]
No Brokers.............................................................. ....... :.........................
36
H.
[608]
Maintenance of Books and Records.........................................................36
I.
[609]
Right to Inspect........................................................................................36
J.
[610]
Binding Effect of Agreement...................................................................36
K.
[611]
Severability...............................................................................................36
L.
[612]
Counterparts.............................................................................................36
M.
[613]
Amendments to this Agreement...............................................................36
182/015610-0 47
848399 04 a10/18/07 -11-
Page
ATTACHMENTS
Site Map
Legal Description
Schedule of Performance
Grant Deed
Agency Note
Agency Construction Deed of Trust
Agency Regulatory Agreement
Project Proforma
Bill of Sale
10 Assignment and Release
11 Memorandum of Affordable Housing Agreement and Notice of Reversion of Title
8821015610-0047
848399.04 aI0/I8/07 —lll—
AMENDED AND RESTATED
AFFORDABLE HOUSING AGREEMENT
This AMENDED AND RESTATED AFFORDABLE HOUSING AGREEMENT
("Agreement") is entered into as of the day of October, 2007 by and between
LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic (the
"Agency"), and NATIONAL COMMUNITY RENAISSANCE OF CALIFORNIA, a California
non-profit public benefit corporation ("National CORE"). The foregoing parties (collectively
referred to as the "Parties") hereby agree as follows:
RECITALS
A. National CORE (formerly known as The Southern California Housing
Development Corporation) and the Agency entered into that certain Affordable Housing
Agreement dated as of March 8, 2007 (the "Initial Agreement"). Subsequent thereto, the Agency
began construction of the Housing Development.
B. On June 6, 2007, Vista Dunes Housing Partners, L.P., a California limited
partnership (the "Limited Partnership") of which the general partner is Vista Dunes GP, LLC, a
California limited liability company, the manager of which is Southern California Housing
Development Corporation of the Inland Empire ("National CORE-IE"), an entity affiliated with
National CORE, was advised by the TCAC of the TCAC's award of 9% Tax Credits to the
Limited Partnership for the Project.
C. National CORE, on behalf of the Limited Partnership, has received an offer from
Hudson Housing Capital LLC ("Hudson"), to be the investor in the Limited Partnership and in
connection therewith to make a total capital contribution to the Limited Partnership of
approximately Three Million Two Hundred Thousand Dollars ($3,200,000).
D. In order to permit the Limited Partnership to claim and take advantage of the
award of Tax Credits, the Limited Partnership must own the Project at the time that it is "placed
in service." Under the Initial Agreement, the Agency would place the Project in service.
E. Further, the Limited Partnership received "readiness to proceed" points under its
TCAC application. The requirement for such points, in the absence of a construction loan, is for
the Tax Credit Investor to be admitted to the Limited Partnership and make an initial
contribution of funds by November 2, 2007. Hudson is not willing to be admitted, and make a
capital contribution, to the Limited Partnership unless and until the Limited Partnership owns the
Project.
F. As a result of all of the foregoing, the Parties have agreed to amend and restate
the Initial Agreement to provide, among other things, for the following:
• At the Closing, which is anticipated to occur on approximately October 30, 2007, Agency
will sell the partially completed Housing Development to National CORE.
882/015610 0047
848399.04 a] 0118/07 A-
-
• The consideration for the sale of the partially completed Housing Development under
these modified terms will be the total amount of Agency expenditures to construct the
Housing Development as of the date of the Closing, which amount, along with other
financing Agency is providing to National CORE pursuant to the terms hereof, is
represented in the Agency Note, Agency Deed of Trust, and Regulatory Agreement.
• National CORE's payment of the consideration to Agency will be paid pursuant to the
terms of the Agency Note, which will be secured by the Agency Construction Deed of
Trust.
• At the Closing, the Agency will assign its construction contract to National CORE.
Notwithstanding the foregoing, the Agency will retain its role as construction manager,
and will be responsible to ensure that construction of the Housing Development is
completed in accordance with the approved plans and specifications and budget therefore,
a colpy of which is attached to this Agreement as Attachment No. 13.
• At the Closing, the Agency and National CORE will enter into an agreement that requires
National CORE to convey to the City, as the Agency's successor, fee title to the Site and
Housing Development on the 55th anniversary of the Permanent Loan Closing,
conditioned on National Core acquiring the Housing Development from the Partnership
at the close of the fifteen (15) year tax credit period commencing on the Permanent Loan
Closing Date.
• The parties contemplate that concurrently with or immediately subsequent to the Closing
National CORE will sell the Site and partially completed Housing Development to the
Limited Partnership.
• The Limited Partnership will fund a minimum of Two Million Five Hundred Thousand
Dollars ($2,500,000) from the proceeds of the capital contribution to be made by the Tax
Credit investor, and a minimum of One Million Three Hundred Seventeen Thousand One
Hundred Fifty -Two Dollars ($1,317,152) in construction loan proceeds of the permanent
loan., towards the cost to complete the Housing Development.
• After expenditure by the Limited Partnership of all of the capital contribution and
construction loan funds, Agency will then provide the following additional funding under
the Agency Note to National CORE: (i) funding in the amount of approximately Two
Million Eight Hundred Ninety -Seven Thousand Twelve Dollars ($2,897,012), which
funding shall be used to complete construction of the Housing Development after
Closing; and (ii) funding in an amount not to exceed Five Hundred Twenty -Three
Thousand Eight Hundred Eighty -Eight Dollars ($523,888), to reimburse National CORE
for costs incurred by National CORE related to obtaining financing and marketing and
leasing Units in the Housing Development. Such additional funding will be secured by
the Agency Construction Deed of Trust.
• Upon completion of the Housing Development, which is anticipated to occur in the first
quarter of 2008, Agency will pay to National CORE a developer fee in the amount of
Four Hundred Fifty Thousand Dollars ($450,000).
882/01561"047
848399 04 a10/18/07 -2-
• Upon operation of the Project in accordance with the terms hereof for a period of five (5)
continuous years after the Permanent Loan Closing, Agency shall cancel the Agency
Note and partially reconvey the Agency Construction Deed of Trust to reflect that the
Agency Construction Deed of Trust no longer secures repayment of the Agency Note.
G. The Parties now desire to enter into this Amended and Restated Affordable
Housing Agreement to accomplish all of the foregoing, all as more particularly set forth herein.
NOW, THEREFORE, in consideration of the foregoing Recitals, which are incorporated
herein by this reference, and for other good and valuable consideration, the receipt of which is
hereby acknowledged, the Parties hereto agree as follows:
I. 11001 SUBJECT OF AGREEMENT
A. [1011 Purpose of Agreement.
The Recitals are incorporated into this Agreement. The purpose of this Agreement is to
effectuate the Redevelopment Plan for the La Quinta Redevelopment Project Area No. 2 (the
"Project Area") by providing for (i) the improvement by the Agency of certain property situated
within the Project Area and referred to herein as the "Site" (as hereinafter defined) with a multi-
family housing development, consisting of not less than eighty (80) residential dwelling units
(the "Housing Development"); (ii) the conveyance of the Site and Housing Development to
National CORE; and (iii) the ownership, operation and management of the Site and Housing
Development as an affordable rental housing development restricted for rental and occupancy by
Eligible Tenants at an Affordable Rent.
As used herein, the term "Unit" refers to each of the 80 rental dwelling units comprising
the Housing Development, and the term "Units" refers to all of the 80 rental dwelling units
comprising the Housing Development. The Units are subject to the Agency Regulatory
Agreement,.
The Agency financial assistance in this Agreement shall be utilized to effectuate a portion
of the Agency's overall affordable housing program pursuant to the requirements of California
Health and Safety Code Section 33334.2 to expend twenty percent (20%) of its increment funds
to improve:, increase and preserve the community's supply of low- and moderate -income
housing. The conveyance to National CORE of the Site and the Housing Development and the
occupancy of Units in the Housing Development by households of limited incomes, all as
provided in this Agreement, are in the vital and best interests of the City of La Quinta (the
"City") and the health, safety and welfare of its residents, and in accord with the public purposes
and provisions of applicable state and local laws and requirements under which the Project has
been undertaken.
B. [1021 The Redevelopment Plan.
This Agreement is subject to the provisions of the Redevelopment Plan for the Project
Area (the `Redevelopment Plan") which was approved and adopted by Ordinance No. 139 of the
City Council of the City of La Quinta on the 16th day of May, 1989. Said ordinance and
Redevelopment Plan are fully incorporated herein by reference.
882/015610-0047 _
848399.04 a10/18207 -3
Any amendment hereafter to the Redevelopment Plan (as so approved and adopted)
which changes the uses or development permitted on the Site as proposed in this Agreement, or
otherwise changes the restrictions or controls that apply to the Site, or otherwise affects National
CORE's obligations or rights with respect to the Site, shall not apply to the Site without the
written consent of National CORE. Amendments to the Redevelopment Plan applying to other
property in the Project Area shall not require the consent of National CORE.
C. [1031 The Project Area.
The Project Area is located in the City and is generally bounded by Washington Street,
the northeast corporate boundary, Jefferson Street and Avenue 50. The exact boundaries are as
set out in the Redevelopment Plan.
D. [1041 The Site.
The "Site" is currently owned by the Agency and consists of approximately 9.7 acres of
that certain real property located at 78990 Miles Avenue within the Project Area in the City of
La Quinta, County of Riverside. The Site is depicted on the Site Map, which is attached hereto
and incorporated herein as Attachment No. 1. The legal description of the Site is provided on
Attachment No. 2, which is attached hereto and incorporated herein by this reference.
E. [1051 Parties to the Agreement.
1. [1061 The Agency.
The Agency is the La Quinta Redevelopment Agency, 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 (Health & Safety Code § 33000 et
seq.). The principal office of the Agency is located at 78-495 Calle Tampico, La Quinta,
California 92253, or such other address as Agency shall hereafter designate in writing to
National CORE.
"Agency", as used in this Agreement, includes any and all assignees of or
successors to its rights, powers and responsibilities.
2. [1071 National CORE.
"National CORE" is National Community Renaissance of California, a California
non-profit public benefit corporation. The principal office and mailing address of National
CORE for purposes of this Agreement is 9065 Haven Avenue, Suite 100, Rancho Cucamonga,
CA 91730, Attn: President.
By executing this Agreement, each person signing on behalf of National CORE
warrants and represents to the Agency that National CORE has the full power and authority to
enter into this Agreement, that all authorizations required to make this Agreement binding upon
National CORE have been obtained, and that the person or persons executing this Agreement on
behalf of National CORE are fully authorized to do so.
882/015610-0047
94839904 n10/18/07 -4-
Whenever the term "National CORE" is used in this Agreement, such term shall
include any and all nominees, assignees, or successors in interest as herein provided.
F. 11081 Definitions.
"50% Very Low Income Household" shall mean a household whose annual
income does not exceed fifty percent (50%) of AMI adjusted for family size.
"Affiliate" shall mean any person or entity directly or indirectly, through one or
more intermediaries, controlling, controlled by or under common control with such person
which, if such person is a partnership or limited liability company, shall include each of the
constituent members or partners, respectively thereof. The term "control" as used in the
immediately preceding sentence, means, with respect to a person that is a corporation, the right
to the exercise, directly or indirectly, of more than fifty percent (50%) of the voting rights
attributable to the shares of the controlled corporation, and, with respect to a person that is not a
corporation, the possession, directly or indirectly, of the power to direct or cause the direction of
the management or policies of the controlled person.
"Affordable Rent" shall mean the amount of monthly rent, including a reasonable
utility allowance, that does not exceed the maximum allowable rent to be charged to and paid by
Eligible Tenants occupying the Units as determined pursuant to Health and Safety Code Section
50053(b), as of the Closing, and the regulations promulgated pursuant to or incorporated therein,
including, without limitation, any applicable regulations promulgated pursuant to Health and
Safety Code Section 50093.
"Agency Construction Deed of Trust" shall mean that certain deed of trust with
assignment of rents substantially in the form attached hereto and incorporated herein as
Attachment No. 6, which secures the Agency Note and performance of the obligations under the
Agency Regulatory Agreement. The Agency Construction Deed of Trust shall be recorded
against the Site at the Closing.
"Agency Construction Financing" shall have the meaning ascribed in Section 304
hereof
"Agency Loan" shall mean the loan the Agency has agreed to provide to National
CORE, which shall be comprised of the Purchase Price, the Agency Construction Financing, and
the Agency Reimbursement Financing.
"Agency Note" shall mean that certain Promissory Note substantially in the form
attached hereto and incorporated herein as Attachment No. S. The Agency Note sets forth
National CORE's obligation to pay the Agency Loan.
"Agency Regulatory Agreement" shall mean that certain Regulatory Agreement
and Declaration of Covenants and Restrictions substantially in the form attached hereto and
incorporated herein as Attachment No. 7. The Agency Regulatory Agreement sets forth National
CORE's obligations concerning the ownership, operation, and management of the Project. The
Agency Regulatory Agreement shall be recorded against the Site at the Closing.
882/015610-0047
948399 04 a10/18/07 -5-
"Agency Reimbursement Financing" shall have the meaning ascribed in Section
304 hereof.
"Agency Title Policy" shall have the meaning ascribed in Section 215 hereof.
"Agency's Conditions to Closing" shall have the meaning ascribed in Section 210
hereof
"Agreement to Convey Fee Title" shall mean an agreement to be entered into by
and between the Agency and National CORE, pursuant to which National CORE is obligated to
(i) exercise its option to acquire the Site and Housing Development from the Limited Partnership
at the close of the fifteen (15) year tax credit period commencing on the Closing Date, as set
forth in Section 8.02 of that certain Amended and Restated Agreement of Limited Partnership
entered into by and between National CORE and the Partnership, and (ii) convey fee title to the
Site and Housing Development to the City, as the Agency's successor, on the fifty-fifth (55th)
anniversary of the Permanent Loan Closing.
"AMI" shall mean the median family income for the Riverside County area
promulgated and published annually by the California Department of Housing and Community
Development ("HCD") pursuant to Title 25, Section 6932 of the California Code of Regulations.
If HCD ceases annually to publish median incomes, the parties will agree upon an adequate
substitute manner for determining area -wide median income.
"Annual Financial Statement" shall mean the financial statements prepared by
National CORE for each calendar year, including a balance sheet, income statement, statement of
retained eamings, statement of cash flow, and footnotes thereto, prepared in accordance with
generally accepted accounting principals consistently applied, as audited by an independent
certified public accountant.
"Assignment" shall mean a general assignment of Agency's entitlements and
approvals substantially in the form attached hereto and incorporated herein as Attachment No.
10.
"Bill of Sale" shall mean a bill of sale substantially in the form attached hereto
and incorporated herein as Attachment No. 9.
"Budget" shall mean that budget attached hereto and incorporated herein as
Attachment No. 13, which sets forth the costs and sources of funds to construct the Project.
"Builder" shall have the meaning ascribed in Section 300 hereof.
"Capital Contribution" shall mean the equity contribution to be made to the
Limited Partnership by the Tax Credit Investor in an amount not less than Two Million Five
Hundred Thousand Dollars ($2,500,000).
"CEQA" shall mean the California Environmental Quality Act, Public Resources
Code Section 21000 et seq., as amended.
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"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. The City shall, however, be deemed a third
party beneficiary of all of the provisions herein in its favor.
"Closing" or "Closing Date" shall have the meaning ascribed in Section 207.3
hereof.
"Days" shall mean calendar days and the statement of any time period herein shall
be calendar days, and not business days, unless otherwise specified.
"Eligible Tenant" shall mean a household which qualifies as a "very low income
household,"' an "extremely low income household" (as those terms are described in California
Health and Safety Code Sections 50105 and 50106), or a 50% Very Low Income Household.
"Escrow" shall have the meaning ascribed in Section 207 hereof.
"Escrow Agent" shall have the meaning ascribed in Section 207 hereof.
"Evidence of Financing" shall have the meaning ascribed in Section 205 hereof.
"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.
"Grant Deed" shall have the meaning ascribed in Section 206 hereof.
"Hazardous Materials" shall have the meaning ascribed in Section 224 hereof.
"Housing Development" shall have the meaning ascribed in Section 101 hereof.
"Institutional Lender" shall mean any of the following institutions having assets
or deposits in the aggregate of not less than One Hundred Million Dollars ($100,000,000):
a California chartered bank; a bank created and operated under and pursuant to the laws of the
United Stales of America; an "incorporated admitted insurer" (as that term is used in Section
1100.1 of the California Insurance Code); a "foreign (other state) bank" (as that term is defined
in Section 1700(1) of the California Financial Code); a federal savings and loan association (Cal.
Fin. Code Section 8600); a commercial finance lender (within the meaning of Section 2600
et seq. of the California Financial Code); a "foreign (other nation) bank" provided it is licensed
to maintain an office in California, is licensed or otherwise authorized by another state to
maintain an agency or branch office in that state, or maintains a federal agency or federal branch
in any state (Section 1716 of the California Financial Code); a bank holding company or a
subsidiary of a bank holding company which is not a bank (Section 3707 of the California
Financial Code); a trust company, savings and loan association, insurance company, investment
banker; college or university; pension or retirement fund or system, either governmental or
private, or any pension or retirement fund or system of which any of the foregoing shall be
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trustee, provided the same be organized under the laws of the United States or of any state
thereof, and a Real Estate Investment Trust, as defined in Section 856 of the Internal Revenue
Code of 1986, as amended, provided such trust is listed on either the American Stock Exchange
or the New York Stock Exchange.
"Management Unit" shall mean the one (1) unit in the Housing Development that
may be occupied by on -site management.
"Memorandum" shall mean the Memorandum of Affordable Housing Agreement
substantially in the form attached hereto and incorporated herein as Attachment No. 11.
"Moderate Income Household" shall have the meaning as set forth in Health and
Safety Code Section 50093, or any successor statute.
"National CORE" shall mean National Community Renaissance of California, a
California nonprofit public benefit corporation.
hereof.
304 hereof.
203 hereof.
"National CORE Consideration" shall have the meaning ascribed in Section 201
"National CORE Construction Fund" shall have the meaning ascribed in Section
"National CORE Construction Loan" shall have the meaning ascribed in Section
"National CORE's Conditions to Closing" shall have the meaning ascribed in
Section 211 hereof
"National CORE Title Policy" shall have the meaning ascribed in Section 215
hereof.
"Partially Constructed Project" shall have the meaning ascribed in Section 200
hereof.
"Partnership Agreement" shall mean the Amended and Restated Agreement of the
Limited Partnership dated as of October 1, 2007.
"Permanent Lender" shall mean U.S. Bank, a national banking association or
other Institutional Lender.
"Permanent Loan" shall mean the permanent loan to be provided by the
Permanent Lender to the Limited Partnership, in the amount of One Million Three Hundred
Seventeen Thousand One Hundred Fifty -Two Dollars ($1,317,152).
"Permanent Loan Closing" shall mean the date the Permanent Lender provides to
the Limited. Partnership the Permanent Loan, as described in Section 306 hereof.
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"Project" shall have the meaning ascribed in Section 200 hereof.
"Project Proforma" shall mean the financial information referred to in Section 205
of this Agreement and attached hereto and incorporated herein as Attachment No. 8 and is
National CORE's best estimate of the costs of ongoing operations based on the information
available to National CORE as of the Closing Date. The Project Proforma shall not undergo
material change without the prior approval of Agency's Executive Director, which approval shall
not be unreasonably withheld (a material change is one or more change(s) that causes the Net
Operating Income as shown on Project Proforma to increase or decrease by a cumulative amount
of two percent (2%) or more from what is shown in Attachment No. 8.
"Property Documents" shall have the meaning ascribed in Section 219 hereof.
"Schedule of Performance" shall mean that certain Schedule attached hereto and
incorporated herein as Attachment No. 3.
"Site" shall mean the land underlying the Project.
"Tax Credit Investor" shall mean Hudson Vista Dunes, LLC, a Delaware limited
liability company or another Affiliate of Hudson Housing Capital LLC.
"Tax Credit Program" shall mean the low-income housing tax credit program
authorized pursuant to Internal Revenue Code Section 42, California Health and Safety Code
Sections 50199.6-50199.19, Revenue and Taxation Code Sections 17057.5, 17058, 23610.4,
23610.5, and applicable federal and State regulations such as 4 California Administrative Code
Sections 10300-10340.
"Tax Credits" shall refer to the reservation of Low Income Housing Tax Credits
awarded by TCAC to the Limited Partnership for the Project as confirmed by the Preliminary
Reservation Letter from TCAC to the Limited Partnership dated June 6, 2007, reserving an initial
amount of Twelve Million One Hundred Seventy Thousand Four Hundred Twelve Dollars
($12,170,412) in annual Federal 9% Tax Credits for the Project.
"Tax Credit Regulatory Agreement" shall mean that certain regulatory agreement
to be recorded against the Site as a condition of the receipt by the Project of an allocation by
TCAC of the Tax Credits.
"TCAC" shall mean the California Tax Credit Allocation Committee.
"Title Company" shall mean Chicago Title Company.
"Unit" and "Units" shall have the meaning ascribed in Section 101 hereof.
1. j1091 Prohibition Against Change in Ownership Management and Control
of National CORE and Prohibition Against Transfer of the Site.
The qualifications and identity of National CORE are of particular interest to the
Agency. It is because of these qualifications and identity that the Agency has entered into this
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Agreement with National CORE. Consequently, no person, whether a voluntary or involuntary
successor of National CORE, shall acquire any rights or powers under this Agreement nor shall
National CORE assign all or any part of this Agreement, the Project, the Site, or the Agency
Regulatory Agreement without the prior written approval of the Agency. A voluntary or
involuntary sale or transfer of any interest in National CORE or the Site during the term of this
Agreement shall be deemed to constitute an assignment or transfer for the purposes of this
Section 109, and the written approval of the Agency shall be required prior to effecting such an
assignment or transfer. Any purported transfer, voluntarily or by operation of law, except with
the prior written consent of the Agency, shall be null and void and shall confer no rights
whatsoever upon any purported assignee or transferee. During the term of this Agreement and
the Agency Regulatory Agreement, National CORE shall not, except as permitted by this
Agreement, assign or attempt to assign this Agreement or any rights or duties herein, nor make
any total or partial sale, transfer, conveyance, or assignment of the whole or any part of the Site
or the Project, without the prior written approval of the Agency.
Notwithstanding any other provision of this Agreement to the contrary, Agency
approval of an assignment of this Agreement or transfer of the Site or the Project, or any interest
therein shall not be required in connection with: (a) the conveyance or dedication of any portion
of the Site to the City of La Quinta, or other appropriate governmental agency, including public
utilities, where the granting of such easements permits or facilitates the operation of the Project
on the Site; (b) any assignment of this Agreement or transfer of the Site, or any of the
improvements located thereon, by National CORE to a limited liability company in which
National CORE or its Affiliates has a greater than fifty percent (50%) ownership and
management interest; (c) any assignment of this Agreement, or transfer of the Site and any of the
improvements located thereon, by National CORE to the Limited Partnership; (d) the leasing of
individual rental Units within the Housing Development provided that such leasing is in
accordance with the terms of this Agreement; (e) transfers resulting from the death or mental or
physical incapacity of an individual; (f) transfers in trust for the benefit of a spouse, children,
grandchildren, or other family member, or for charitable purposes; (g) transfers of stock in a
publicly -held corporation or of the beneficial interest in any publicly -held partnership or real
estate investment trust; (h) the admission of the Tax Credit Investor to the Limited Partnership;
(i) a transfer by the Tax Credit Investor to an entity that is an Affiliate of Hudson Housing
Capital, LLC; 0) the removal by the Tax Credit Investor of the general partner of the Limited
Partnership for a default under the Partnership Agreement, provided the replacement general
partner is reasonably satisfactory to Agency; (k) a sale by the Tax Credit Investor of credits in
syndication; (1) the encumbrance of the limited partner interest by the Tax Credit Investor as
collateral to finance its capital contribution to the Limited Partnership; (m) the exercise by the
general partner of the Limited Partnership or by National CORE of any option to purchase or
right of first refusal to purchase the Limited Partnership or all of the limited partner's interest in
the Limited Partnership at the conclusion of the tax credit period or (n) the execution of a
mortgage secured by the Site and Housing Development in favor of National CORE (as the
beneficiary thereof). Notwithstanding anything in this Section 109 to the contrary, in the
absence of specific written agreement by Agency, no transfer or assignment by National CORE
or any successor in interest to National CORE, whether or not requiring the approval by Agency,
shall be effective unless and until the transferor and transferee execute and deliver to Agency an
assignment and assumption agreement in a form and with content reasonably acceptable to
Agency's legal counsel.
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This Section 109 shall not be applicable to the leasing of individual Units to
Eligible Tenants in accordance with this Agreement and no assignment and assumption
agreement shall be required in connection therewith.
G. [110] Representations by National CORE.
National CORE represents and warrants to the Agency as follows:
1. National CORE is duly established and in good standing under the laws of
the State of California and has duly authorized, executed and delivered this Agreement and any
and all other agreements and documents required to be executed and delivered by National
CORE in order to carry out, give effect to, and consummate the transactions contemplated by
this Agreement. This Agreement is enforceable against National CORE in accordance with its
terms.
2. National CORE does not have any contingent obligations or contractual
agreements which will materially adversely affect the ability of National CORE to carry out its
obligations hereunder.
3. There are no pending or, so far as is known to National CORE, threatened,
legal proceedings to which National CORE is or may be made a party to or to which it or any of
its property is or may become subject, which have not been fully disclosed in the material
submitted to the Agency, which will materially adversely affect the ability of National CORE to
carry out its obligations hereunder.
4. There is no action or proceeding pending or, to National CORE `s best
knowledge, threatened, looking toward the dissolution or liquidation of National CORE and
there is no action or proceeding pending or, to National CORE `s best knowledge, threatened by
or against National CORE which could affect the validity and enforceability of the terms of this
Agreement, or adversely affect the ability of National CORE to carry out its obligations
hereunder.
5. The execution and delivery of this Agreement and all other documents to
be executed by National CORE 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 National CORE is bound.
6. The execution and delivery of this Agreement and all other documents to
be executed by National CORE 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 National CORE.
7. No representation, warranty, or covenant of National CORE 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
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omit to state a material fact necessary to make the statements contained herein or therein not
misleading.
8. All financial information delivered to Agency, including, without
limitation, information relating to the financial condition of National CORE , 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.
National CORE shall notify Agency in writing of any material changes to such information
delivered to the Agency.
9. National CORE has, and will as required by its obligations hereunder,
dedicate, allocate and otherwise make available, sufficient financial and other resources to
perform its obligations under this Agreement.
Each of the foregoing items 1 to 9, inclusive, shall be deemed to be an ongoing
representation and warranty and shall survive the Closing. National CORE shall advise the
Agency in writing if there is any change material pertaining to any matters set forth or referenced
in the foregoing items 1 to 9, inclusive.
H. fill] Representations by the Agency.
The Agency represents and warrants to National CORE as follows:
I. Agency is a public body, corporate and politic, existing pursuant to the
California Community Redevelopment Law (California Health and Safety Code Section 33000),
which has been authorized to transact business pursuant to action of the City of La Quinta.
Agency has full right, power and lawful authority to transfer the Project as provided herein and
the execution, performance, and delivery of this Agreement by Agency has been fully authorized
by all requisite actions on the part of Agency. The parties who have executed this Agreement on
behalf of Agency are authorized to bind Agency by their signatures hereto.
2. Agency does not, as far as is known to Agency, have any contingent
obligations or contractual agreements which will materially adversely affect the ability of
Agency to carry out its obligations hereunder.
3. There are no pending or, so far as is known to Agency, threatened, legal
proceedings to which Agency is or may be made a party or to which it or any of its property is or
may become subject, which will materially adversely affect the ability of Agency to carry out its
obligations hereunder.
4. There is no action or proceeding pending or, to Agency's knowledge,
threatened, looking toward the dissolution or liquidation of Agency and there is no action or
proceeding, pending or, to Agency's knowledge, threatened by or against Agency which could
affect the validity and enforceability of the terms of this Agreement, or adversely affect the
ability of Agency to carry out its obligations hereunder.
5. To Agency's knowledge, the Site is not currently in violation of any law,
ordinance, rule, regulation or requirement applicable to its use and operation.
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84839904 a10/18'07
6. Agency is not the subject of a bankruptcy proceeding.
7. To Agency's knowledge, no Hazardous Materials (as defined in Section
224 below) are now or have been released, used, or stored on or within any portion of the Site in
violation of applicable laws or regulations governing the release, use, or storage of Hazardous
Materials, and there has not been any federal, state, or local enforcement, clean-up, removal,
remedial, or other governmental or regulatory actions instituted or completed affecting the Site.
8. To Agency's knowledge, the execution and delivery of this Agreement
and all other documents to be executed by Agency 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 Agency is
bound.
9. To Agency's knowledge, the execution and delivery of this Agreement
and all other documents to be executed by Agency 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 Agency.
10. To Agency's knowledge, no representation, warranty, or covenant of
Agency in this Agreement, or in any document or certificate furnished or to be furnished to
National CORE 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.
Each of the foregoing items 1 to 10, inclusive, shall be deemed to be an ongoing
representation and warranty and shall survive the Closing. The Agency shall advise National
CORE in writing if there is any change material pertaining to any matters set forth or referenced
in the foregoing items 1 to 11, inclusive.
As used in this Section I11, the term "knowledge" or "known" shall mean the
actual (not constructive or imputed) knowledge of the Agency Executive Director, without any
investigation or inquiry or duty of investigation or inquiry.
IL t2001 SALE OF PROJECT
Pursuant to the terms set forth herein, Agency shall sell to National CORE and National
CORE shall purchase from Agency the Partially Constructed Project. As used herein, the term
"Partially Constructed Project" shall mean and refer to all of the following:
(a) The Housing Development in such condition of completion as exists as of the date
of Closing., including all appurtenant structures and facilities, all plans and specifications, all
work in progress, all contracts in progress, all entitlements, and all material stockpiled on and/or
present on the Site as of the Closing;
(b) All personal property belonging to Agency and located upon the Site; and
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(c) All appurtenances, rights (including reversionary rights), easements and privileges
belonging to or running with the Site, including, without limitation, all of Agency's right, title
and interest in and to any and all land lying in the bed of any street, road, cul-de-sac, alley or
accessway, open or closed, existing, vacated or proposed, adjoining, adjacent to, or contiguous
with the Site, and all water rights and other entitlements which Agency may own in conjunction
with Agency's ownership of the Site, including all fixtures, trade fixtures, as well as the
following items, if any, owned and/or leased by Agency and presently located in, on or upon the
Site: electrical distribution systems (power panels, buss ducting, conduits, disconnects, lighting
fixtures), tellephone distribution systems, and wall coverings.
In connection with Agency's sale of the Partially Constructed Project to National CORE,
Agency shall, at the Closing, assign and be deemed to assign to National CORE all of Agency's
right, title and interest in and to that certain Agreement executed by and between the Agency and
Davis Reed Construction Inc. (the "Contractor"), for the construction of the Housing
Development (the "Construction Contract') and all entitlements, approvals, plans and
specifications, for the Partially Constructed Project owned by Agency, subject to any limitation
which may be imposed by law. At the Closing, Agency shall also assign, on a nonexclusive
basis, all of its respective right, claim, actions or causes of action against the Contractor and any
subcontractors, engineers, architects or other consultants of the Agency or any third party acting
as an agent of either entity relating to the preparation or production of such plans, specifications
and other documents or to the construction to date on or to the Housing Development or based in
any way upon any work performed to the date of Closing on or to the Site including, without
limitation, any and all warranties and guarantees with respect to the development of the Housing
Development on the Site, including, without limitation, grading work performed in connection
therewith, including all statutory, express or implied warranties and all rights of the Agency as
an additional insured or otherwise pertaining to insurance coverage maintained by or for the
Agency prior to Closing and covering the Site. In furtherance of the foregoing, at the Closing
the Agency shall deliver to National CORE an executed general assignment in the form and
content attached hereto as Attachment No. 10.
National CORE and Agency acknowledge and agree that Agency shall act as the
Construction Manager under the Construction Contract. In said capacity, Agency shall, using the
plans, specifications, contracts and other materials assigned and transferred to National CORE,
oversee the completion of construction of the Housing Development in compliance with all such
plans and specifications and project budget. The Agency agrees to fund all construction costs
required to complete construction of the Housing Development in excess of the National CORE
Construction Fund, in accordance with Section 304. National CORE agrees to execute any
documents or instruments which may be required to implement the executory provisions hereof,
and further agrees that the Agency retains the nonexclusive right, claims, actions or causes of
action against the Contractor and any of such subcontractors, engineers, architects and other
consultants relating to construction of the Housing Development occurring prior to Closing or
based in any way on any work performed on or to the Site by such persons and entities.
A. [2011 National CORE Consideration.
The consideration to be paid by National CORE for the Partially Constructed Project
shall be the; sum of all of the Agency's costs incurred in connection with construction of the
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Housing Development prior to the Closing (the "National CORE Consideration"). The National
CORE Consideration shall be paid by National CORE to Agency pursuant to the terms of the
Agency Note.
Agency shall insure that all obligations paid or due as calculated by Agency as of the
Closing Date will be paid by the Agency prior to or concurrently with Closing. As may be
necessary, Agency shall retain the responsibility to pay any such sums following Closing.
B. r2021 Tax Credits,• Tax Credit Regulatory Agreement.
National CORE submitted an application to TCAC for competitive nine percent (9%) tax
credits and obtained a reservation of 2007 Tax Credit from TCAC in the amount of Twelve
Million One Hundred Seventy Thousand Four Hundred Twelve Dollars ($12,170,412).
National CORE shall be responsible for obtaining TCAC's approval to convert the nine
percent (91/0) tax credits to four percent (4%) tax credits. Such approval shall be one of the
Agency's Conditions to Closing.
National CORE shall be responsible to require and ensure that the Limited Partnership
performs all of its obligations under the Tax Credit Regulatory Agreement. In the event Agency
is prevented by a final, non -appealable order of a court of competent jurisdiction in a lawsuit
involving the Project, or by an applicable and binding published appellate opinion, or by a final,
non -appealable order of a regulatory body having jurisdiction, from enforcing, for any reason,
the affordability restrictions set forth in this Agreement, then in such event Agency shall be a
third -party beneficiary under the Tax Credit Regulatory Agreement and shall have full authority
to enforce any breach or default by National CORE or the Limited Partnership under the Tax
Credit Regulatory Agreement in the same manner as though it were a breach or default
hereunder. Without Agency's prior written consent, which consent may be withheld in Agency's
sole and absolute discretion, National CORE shall not consent to any amendment of or
modification to the Tax Credit Regulatory Agreement which (i) shortens the term of the
affordability restrictions on the Units in the Project to a term of less than fifty-five (55) years
from the Permanent Loan Closing or (ii) releases the Limited Partnership from the requirement
that the Units be rented to Eligible Tenants in accordance with the Restricted Unit Matrix
attached to the Agency Regulatory Agreement.
Notwithstanding anything contained in this Agreement to the contrary, when the Site is
subject to the requirements of the Tax Credit Program and there is a conflict between the
requirements of the Tax Credit Program and the provisions set forth in this Agreement, then the
provisions of the Tax Credit Program shall prevail. That notwithstanding, the fact that this
Agreement and the Tax Credit Program provide for greater, lesser or different obligations or
requirements shall not be deemed a conflict unless the applicable provisions are inconsistent and
could not be simultaneously enforced or performed.
Agency shall have no responsibilities with respect to National CORE's or the Limited
Partnership's performance of its obligations under the Tax Credit Program, nor shall Agency do
anything or fail to do anything it is required by law or this Agreement to do which will adversely
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849399 04.10/18,07
affect National CORE or the Limited Partnership's performance of its Tax Credit Program
obligations.
In order to assist Agency in performing its obligations and enforcing its rights under this
Agreement (with respect to insuring the continued affordability and maintenance of the Units),
National CORE agrees to promptly submit to Agency all of the following documents at such
time as the same are submitted by National CORE or the Limited Partnership to the TCAC or
other applicable body or when such documents are received by National CORE or the Limited
Partnership, as applicable:
i) Complete copies of National CORE's or the Limited Partnership's
applications to the TCAC for the carryover allocation, and placed -in-service credit award, and
any amendments or modifications thereto (4 California Administrative Code §§ 10325(b)-(e) and
10345).
ii) Complete copies of any correspondence or transmittals by the
TCAC to National CORE or the Limited Partnership notifying National CORE or the Limited
Partnership regarding the action(s) taken with respect to the Tax Credits.
iii) A complete copy of the Tax Credit Regulatory Agreement between
the TCAC and the Limited Partnership (4 California Administrative Code § 10340(c)). (As more
fully discussed in Section 3.11 of the Agency Regulatory Agreement, should Agency be
prevented by a final order of a court of competent jurisdiction, applicable and binding appellate
opinion, or regulatory body with jurisdiction from enforcing, for any reason, the affordability
restrictions set forth in this Agreement, Agency shall be a third -party beneficiary under said
agreement and shall have full authority to enforce any breach or default by National CORE or
the Limited Partnership thereunder in the same manner as though it were a breach or default
under this Agreement.)
iv) Complete copies of all progress reports submitted by National
CORE or the Limited Partnership to the TCAC prior to the issuance of tax credit allocations (4
California Administrative Code § 10340(d)) and the annual certifications and Project Status
Reports submitted by National CORE or the Limited Partnership to the TCAC subsequent to the
issuance of tax credit allocations (4 California Administrative Code § 10340(e)).
v) Complete copies of all correspondence or transmittals from the
TCAC or other jurisdiction (such as the Internal Revenue Service) containing any notification
regarding the Project's noncompliance with applicable provisions of the Tax Credit Program.
C. [2031 Evidence of Financing.
The financial projections for the Project are set forth in the Project Pro Forma
Attachment No. 8).
National CORE has submitted to the Executive Director evidence reasonably satisfactory
to the Executive Director that National CORE has the financial capability necessary to acquire
and operate; the Project on the Site pursuant to this Agreement. Such evidence of financial
capability (collectively, the "Evidence of Financing") includes all of the following:
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Evidence that National CORE or the Limited Partnership has (i) obtained (a) the Capital
Contribution, and (b) a commitment for a construction loan which coverts into the Permanent
Loan in the amount of One Million Three Hundred Seventeen Thousand One Hundred Fifty -Two
Dollars ($1,317,152) (the "National CORE Construction Loan"), and (ii) deposited the Capital
Contribution with Escrow Agent.
A copy of an executed letter of commitment from the Permanent Lender to make the
Permanent Loan that is subject only to the usual and customary conditions of the lender of the
Permanent Loan for similar loans, which conditions have been approved by Agency.
A true and correct copy of the preliminary reservation letter from TCAC, a copy of the
Partnership Agreement reflecting the total amount of the syndication proceeds and the timing of
the payment of such proceeds.
D. [2041 Acquisition of the Site Pursuant to Grant Deed.
National CORE shall acquire a fee simple title to the Site pursuant to a grant deed
in the form attached hereto and incorporated herein as Attachment No. 4 ("Grant Deed").
E. [2051 Escrow.
1. [2061 Opening of Escrow.
Within the time set forth in the Schedule of Performance Agency and National CORE
shall open an escrow (the "Escrow") with Four Seasons Escrow (the "Escrow Agent"). This
Agreement constitutes Agency's and National CORE's escrow instructions for the Agency's sale
and National CORE's purchase of the Partially Constructed Project and a duplicate original of
this Agreement shall be delivered to the Escrow Agent. The Escrow Agent is hereby empowered
to act under this Agreement, and the Escrow Agent has accepted its obligations under the
provisions of this Section 207, in writing, delivered to the Agency. In the event of any conflict
or inconsistency between any additional escrow instructions required by the Escrow Agent and
the provisions of this Agreement, as between the parties hereto, the provisions of this Agreement
shall supersede and control. Any amendment of the escrow instructions set forth or described
herein shall be in writing and signed by both Agency and National CORE. At the time of any
authorized amendment to the escrow instructions, the Escrow Agent shall agree, by signing
below an appropriate statement on such an amendment, to carry out its duties as Escrow Agent
under such an amendment. All communications from the Escrow Agent to Agency or National
CORE shall be in writing and directed to the addresses and in the manner established in Section
601 of this Agreement for notices, demands, and communications between Agency and National
CORE.
2. L2071 Deposits Into Escrow.
Agency and National CORE shall deposit the following documents and pay into the
Escrow the: following fees, charges and costs promptly after the Escrow Agent has notified the
Agency of the total amount of such fees, charges and costs, but not earlier than two (2) days prior
to Scheduled date for the Closing:
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fee;
Contribution;
a. Agency and National CORE shall each pay one-half of the Escrow
b. Agency shall pay the costs, if any, 'of drawing the Grant Deed;
C. National CORE shall deposit with the Escrow Agent the Capital
d. Agency shall pay recording fees, if any;
e. Agency and National CORE shall pay their respective notary fees;
f. Agency shall pay the premium for the National CORE Title Policy
up to the amount set forth in Section 215 and National CORE shall pay for its portion, if any, as
set forth in Section 215.
g. Agency shall pay for any transfer tax and any state, county or city
documentary stamps.
h. Agency shall deposit with the Escrow Agent the fully executed
Grant Deed, and Agency and National CORE, as applicable, shall deposit the fully executed
Agency Construction Deed of Trust, Agency Regulatory Agreement, and Memorandum or
executed counterparts thereof.
3. [2081 Escrow Officer Obligations.
The Escrow Officer shall notify the Agency and National CORE when all outstanding
documents, including the Grant Deed, the Agency Deed of Trust, the Agency Regulatory
Agreement, and the Memorandum have been executed and submitted to Escrow by the
applicable party.
a. Upon confirmation by the Escrow Agent that all of the Agency's
Conditions to Closing and all of National CORE's Conditions to Closing have been satisfied, or
waived by the appropriate party, the Escrow Agent shall record the following documents in the
following order of recordation: (1) Grant Deed, (2) Agency Regulatory Agreement, (3) Agency
Construction Deed of Trust, (4) deed of trust securing the National CORE Construction Loan,
and (5) Memorandum. The date such documents are recorded shall be referred to herein as the
"Closing Date."
b. All funds received in the Escrow shall be deposited by the Escrow
Agent, with other escrow funds of the Escrow Agent in an interest -earning general escrow
account or accounts with any state or national bank doing business in the State of California.
Such funds may be transferred to any other general escrow account or accounts. All
disbursements shall be made by check or wire from the Escrow Agent.
C. Escrow Agent shall not release any funds from the Capital
Contribution unless jointly instructed to do so by the Limited Partnership and the Agency.
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d. Any amendment to these escrow instructions shall be in writing
and signed by the Agency and National CORE. At the time of any amendment, the Escrow
Agent shall agree to carry out its duties as Escrow Agent under such amendment.
e. The liability of the Escrow Agent in the capacity of escrow holder
with respect to the Agency is limited to performance of the obligations imposed under 'it under
Sections 202, 207, 213, 215, and 216 of this Agreement.
F. [2091 Conveyance of Title and Delivery of Possession.
Provided that National CORE is not in default under this Agreement, as amended,
and all of Agency's Conditions to Closing and National CORE's Conditions to Closing have
occurred, and subject to any mutually agreed upon extensions of time, the Closing shall occur,
and Agency shall convey title to the Partially Constructed Project to National CORE. Agency
and National CORE agree to perform all acts necessary to conveyance of title on or before such
date.
Possession shall be delivered to National CORE concurrently with the
conveyance of title at the Closing and National CORE shall accept title and possession on said
date.
G. f2101 Conditions to Closing.
1. j2111 Agency's Conditions to Closing.
The Agency's obligation to convey the Partially Constructed Project to National CORE
and the closing of the Escrow shall, in addition to any other condition set forth herein in favor of
the Agency, be conditional and contingent upon the satisfaction, or waiver by the Agency in its
sole and absolute discretion, of each and all of the following conditions (collectively, "Agency's
Conditions to Closing");
a. National CORE shall have deposited into Escrow all sums and
documents required of National CORE by this Agreement including, without limitation, the
Capital Contribution;
b. National CORE shall have delivered to Agency or deposited into
Escrow the Agency Note, the Agency Construction Deed of Trust, duly executed and
acknowledged by National CORE, the Agency Regulatory Agreement, duly executed and
acknowledged by National CORE, the Agreement to Convey Fee Title, duly executed and
acknowledged by National CORE, and the Memorandum, duly executed and acknowledged by
National CORE;
C. National CORE shall have executed and delivered to Agency the
Agency Note.
d. National CORE shall have submitted to the Executive Director the
evidence of insurance required pursuant to Section 403 of this Agreement;
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e. National CORE shall have submitted to the Executive Director
National CORE's Evidence of Financing, in accordance with Section 205 herein, and the
Executive Director shall have approved the same;
f. National CORE shall have provided Agency with documentation
from TCAC evidencing TCAC's approval of the conversion of the Tax Credits from nine percent
(9%) tax credits to four percent (4%) tax credits;
g. National CORE shall have provided evidence satisfactory to
Agency that the National CORE Construction Loan shall fund at the Closing;
h. On the Closing Date, the Title Company shall be irrevocably
committed to issue the Agency Title Policy, if elected by Agency;
i. Escrow Agent holds and will deliver to Agency the instruments
and funds to be delivered to Agency under this Agreement;
j. National CORE is not in material default of any term or condition
of this Agreement; and
2. [2121 National CORE's Conditions to Closing.
National CORE's obligation to purchase the Partially Constructed Project from Agency
and the closing of the Escrow shall, in addition to any other condition set forth herein in favor of
National CORE, be conditional and contingent upon the satisfaction, or waiver by National
CORE in its sole and absolute discretion, of each and all of the following conditions
(collectively, "National CORE's Conditions to Closing").
a. Agency has deposited into Escrow the Grant Deed, duly executed
and acknowledged by Agency, and all other sums and documents required of Agency by this
Agreement:,
b. Agency shall have deposited into Escrow the Agency Construction
Deed of Trust, duly executed and acknowledged by Agency, the Agency Regulatory Agreement,
duly executed and acknowledged by Agency, and the Memorandum, duly executed and
acknowledged by Agency;
C. On the Closing Date, the Title Company shall be irrevocably
committed to issue the National CORE Title Policy insuring that fee title to the Site is vested in
National CORE;
d. Escrow Agent holds and will deliver to National CORE the
instruments and funds to be delivered to National CORE under this Agreement;
e. National CORE has approved the environmental condition of the
Site;
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f. National CORE has approved the Documents pursuant to Section
219 below;
g. Agency shall have executed and delivered to Escrow Agent the
Bill of Sale;
h. Agency shall have executed and delivered to Escrow Agent the
Assignment;
i. Agency is not in material default of any term or condition of this
Agreement:, and
j. Agency shall have assigned to National CORE (a) the Construction
Contract, and (b) a budget showing costs incurred by or on behalf of the Agency to the date of
Closing in connection with construction of the Housing Development and showing as well costs
anticipated to complete the Housing Development according to the plans and specifications
therefor, reasonably separated into categories normally and customarily used to describe the
component works of construction in progress.
3. [2131 Waiver.
Agency may at any time or times, at its election, waive any of the conditions set forth in
Section 211 above to its obligations hereunder, but any such waiver shall be effective only if
contained in a writing signed by Agency and delivered to National CORE. National CORE may
at any time or times, at its election, waive any of the conditions set forth in Section 212 above to
its obligations hereunder, but any such waiver shall be effective only if contained in a writing
signed by National CORE and delivered to Agency.
4. [2141 Intentionally Omitted.
H. [2151 Condition of Title.
The Agency shall convey to National CORE fee simple title to the Project free
and clear of all recorded liens, encumbrances, encroachments, assessments, leases and taxes
except the provisions of the Grant Deed, the Agency Construction Deed of Trust, the Agency
Regulatory Agreement, the Memorandum, the standard printed conditions and exceptions
contained in the ALTA standard owner's policy of title insurance that is regularly issued by the
Title Company in transactions similar to the one contemplated by this Agreement, as approved
by National CORE pursuant to this Section 215.
[2161 Title Insurance.
Concurrently with recordation of the Grant Deed, the Escrow Agent shall instruct
the Title Company to provide and deliver to National CORE an ALTA owner's policy of title
insurance that does not require a survey, issued by the Title Company and insuring that the title
to the Site :is vested in National CORE, or its assignee, as applicable, in the condition required by
Section 214 of this Agreement (the "National CORE Title Policy"). The Title Company shall
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provide the Agency with a copy of National CORE Title Policy and National CORE Title Policy
shall be in the amount of the Purchase Price.
The Agency shall pay the title insurance premium attributable to National CORE
Title Policy. The Title Company shall, if requested by National CORE, increase the amount of
National CORE Title Policy or provide National CORE with an extended policy, coverages, or
endorsements. National CORE shall pay the portion of the premium associated with such
extended or additional coverages or endorsements.
At Agency's election, Agency may obtain from the Title Company an ALTA
lender's policy of title insurance that does not require a survey, together with such endorsements
as may be reasonably requested by Agency with liability in the amount of the Agency Note,
covering the Project, showing title vested in National CORE, and insuring the validity and
priority of, respectively, the Agency Construction Deed of Trust, Agency Regulatory Agreement,
and Memorandum (the "Agency Title Policy").
J. [2171 Taxes and Assessments.
Ad valorem taxes and assessments, if any, on the Project, and taxes upon this
Agreement or any rights hereunder, levied, assessed or imposed for any period commencing
prior to conveyance of title shall be borne by the Agency. All ad valorem taxes and assessments
levied or imposed for any period commencing after close of the Escrow shall be paid by National
CORE. -
K. [2181 Conveyance Free of Possession.
The Project shall be conveyed free of any possession or right of possession by any
person excerpt that of National CORE and the easements and other encumbrances of record, and
except for the Agency's rights to enter the Site to perform its duties as Construction Manager
under the Construction Contract.
L. [2191 Document Review; Inspections; Condition of Partially Constructed Project.
[2201 Document Review.
Agency has made available to National CORE for its review, true, correct and
legible copies of those of the following items which are in Agency's possession or control or in
the possession or control of an agent of Agency, which relate to the Site and/or Project
(collectively, and with all other items made available pursuant to the provisions of this Section
219, the "Property Documents"). Any Property Documents which Agency has received from
any third party has been made available to National CORE without any representation or
warranty:
(i) a current waiting list for the Project (if applicable);
(ii) current ad valorem and personal property tax bills for the
Site, and any copies of such bills for the last two tax years;
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(iii) any and all environmental reports, preliminary environ-
mental assessments, soil tests and studies concerning the
Site.
2. (2211 Intentionally Omitted.
3. [2221 "As Is".
The Agency has provided (in compliance with Section 219) National CORE with
all information of which it has actual knowledge concerning the physical condition of the Site,
including, without limitation, information about any "Hazardous Materials," as defined in
Section 224 below. National CORE acknowledges and agrees that any portion of the Site and
Partially Constructed Project that it acquires from the Agency pursuant to this Agreement shall
be purchased "AS IS" "WHERE IS" "WITH ALL FAULTS," in its physical condition as of the
Closing, with no warranties of any kind or nature, express or implied, including, without
limitation, warranties of fitness for a particular purpose or warranties of habitability, except those
warranties set forth in Section 111.7 above, as to the physical condition thereof, the presence or
absence of any latent or patent condition thereon or therein, including, without limitation, any
Hazardous Materials thereon or therein, and any other matters affecting the Partially Constructed
Project.
4. j2231 Indemnity.
National CORE agrees, with respect to matters arising from and after the Closing
Date, to defend, indemnify, protect and hold harmless the Agency and its officers, beneficiaries,
employees, agents, attorneys, representatives, legal successors and assigns (collectively, the
"Indemnities") from, regarding and against any and all liabilities, obligations, orders, decrees,
judgments, liens, demands, actions, "Environmental Response Actions" (as defined in Section
224 below), claims, losses, damages, fines, penalties, expenses, "Environmental Response
Costs" (as defined in Section 224 below) or costs of any kind or nature whatsoever, together with
fees (including, without limitation, reasonable attorneys' fees and experts' and consultants' fees),
occurring during and caused by the National CORE's use and occupancy of the Site, Project or
Partially Constructed Project and resulting from or in connection with the actual or claimed
generation, storage, handling, transportation, use, presence, placement, migration and/or release
of Hazardous Materials at, on, in, beneath or from the Site, Project or Partially Constructed
Project unless caused by the negligence or willful misconduct of Indemnities. National CORE's
defense, indemnification, protection and hold harmless obligations herein shall include, without
limitation, the duty to respond to any governmental inquiry, investigation, claim or demand
regarding the Hazardous Materials, at National CORE's sole cost. Notwithstanding the
foregoing, the Agency agrees to indemnify, defend, and hold National CORE harmless for, from,
and against any and all claims, demands, liabilities, costs, expenses, Environmental Response
Actions, Environmental Response Costs, damages, cause or causes or action of any nature
whatsoever arising from any misrepresentation or breach of the warranty set forth in Section
111.7 above, or otherwise resulting from or in connection with the generation, storage, handling,
transportation, use, and/or release of Hazardous Materials at, on, in, beneath, or from the Site,
Project or Partially Constructed Project by the Agency or during the Agency's ownership or
possession of the Site or Project.
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5. [2241 Release and Waiver.
Subject to the exceptions set forth in Section 222 above, National CORE hereby
releases and waives all rights, causes of action and claims National CORE has or may have in the
future against the Indemnities arising out of or in connection with any Hazardous Materials at,
on, in, beneath or from the Site or Project. In furtherance of the intentions set forth herein,
National CORE acknowledge that it is familiar with Section 1542 of the Civil Code of the State
of California which provides as follows:
"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE
CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER
FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF
KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED THIS
SETTLEMENT WITH THE DEBTOR."
National CORE hereby waives and relinquishes any right or benefit which it has
or may have under Section 1542 of the Civil -Code of the State of California or any similar
provision of the statutory or non -statutory law of any other applicable jurisdiction to the full
extent that it may lawfully waive all such rights and benefits pertaining to the subject matter of
this Section 223.
National CORE's Initials:
6. [2251 Definitions.
a. As used in this Agreement, the term "Environmental Response
Actions" means any and all activities, data compilations, preparation of studies or reports,
interaction with environmental regulatory agencies, obligations and undertakings associated with
environmental investigations, removal activities, remediation activities or responses to inquiries
and notice letters, as may be sought, initiated or required in connection with any local, state or
federal governmental or private party claims, including any claims by National CORE.
b. As used in this Agreement, the term "Environmental Response
Costs" means any and all costs associated with Environmental Response Actions including,
without limitation, any and all fines, penalties and damages.
C. As used in this Agreement, the term "Hazardous Materials" means
any substance, material or waste which is (1) defined as a "hazardous waste," "hazardous
material," "`hazardous substance," "extremely hazardous waste," or "restricted hazardous waste"
under any provision of California law; (2) petroleum; (3) asbestos; (4) polychlorinated biphenyls;
(5) radioactive materials; (6) designated as a "hazardous substance" pursuant to Section 311 of
the Clean Water Act, 33 U.S.C. Section 1251 et seq. (33 U.S.C. Section 1321) or listed pursuant
to Section 307 of the Clean Water Act (33 U.S.C. Section 1317); (7) defined as a "hazardous
substance" pursuant to the Resource Conservation and Recovery Act, 42 U.S.C. Section 6901 et
seq. (42 U.S.C. Section 6903) or its implementing regulations; (8) defined as a "hazardous
substance" pursuant to Section 101 of the Comprehensive Environmental Response,
Compensation, and Liability Act, 42 U.S.C. Section 9601 et seq. (42 U.S.C. Section 9601); or (9)
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determined by a California, federal or local governmental authority to be capable of posing a risk
of injury to health, safety or property.
7. f 2261 Materiality.
National CORE acknowledges and agrees that the defense, indemnification,
protection and hold harmless obligations of National CORE for the benefit of the Agency set
forth in this Agreement are a material element of the consideration to the Agency for the
performance of its obligations under this Agreement, and that the Agency would not have
entered this Agreement unless National CORE's obligations were as provided for herein.
III. 13001 DEVELOPMENT OF THE SITE; ADDITIONAL FINANCING FOR THE
PROJECT
A. [3011 Selection of Builder; Review and Approval of Project Plans.
In August 2006, the Agency selected the Contractor to develop the Housing Development
in accordance with plans and specifications prepared by Agency (the "Project Plans"). The
parties contemplate that construction will be completed by Spring 2008. National CORE
acknowledges that it has reviewed and approved the Project Plans. The Agency shall be
responsible to ensure that the Contractor is developing the Project in compliance with the Project
Plans and all applicable laws, ordinances, and regulations, including applicable labor and wage
standards. After Closing, the Agency shall obtain the approval of National CORE and the
Limited Partnership prior to authorizing any change order that substantially alters the design or
construction of the Housing Development as set forth in the Project Plans.
B. [3021 Completion of Construction.
The Agency, acting as the Construction Manager for the Project, covenants and agrees
that it shall oversee construction of the Housing Development on behalf of National CORE and
the Limited Partnership, with such construction to be completed no later than April 30, 2008.
Further, the Agency, acting as the Construction Manager, covenants and agrees that the
construction of the Housing Development shall be completed in good and workmanlike fashion
and in accordance with the Project Plans, with such changes thereto, if any, as may be required
by the Agency and/or the City. Agency, as the Construction Manager, also agrees to use
reasonable commercial efforts to ensure that construction of the Housing Development is
completed in accordance with and at a cost not to exceed the budget for such construction as
delivered to National CORE by the Agency at Closing, subject to such additions and
modifications as may be permitted by the Agency and the City.
Within thirty (30) days after the Project has been completed, the Agency shall provide to
National CORE a copy of the as -built plans for the Project.
C. [3031 Energy Efficiency Rebates.
National CORE acknowledges that the Project is being developed with energy efficient
facilities, and that prior to completion of construction of the Project, Agency intends to submit an
application to the local gas and electric utility providers for solar energy credits and rebates for
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the use of or installation of environmentally friendly techniques or equipment. Such credits
and/or rebates are not being sold or transferred to National CORE by the Agency, which retains
full right, title and interest therein, which shall survive the Closing and transfer of the Partially
Constructed Project to National CORE. The Agency will apply for such credits/rebate post -
Closing in its name. In the event that any such credits or proceeds therefrom are received by
National CORE or the Limited Partnership, National CORE shall promptly deliver such credits
or proceeds therefrom, less any income tax required to be paid thereon by the Limited
Partnership or its partners or beneficial owners, to the Agency.
D. f 3041 Additional Financing for the Project; Reimbursement to National CORE.
The parties acknowledge and agree that the proceeds of the Capital Contribution and
National CORE Construction Loan (collectively, the "National CORE Construction Fund") shall
be used only to fund the remaining construction activities necessary to complete the Project.
After the National CORE Construction Fund has been depleted and applied towards completion
of the Housing Development, the Agency agrees to (i) fund all remaining amounts required to
complete the construction of the Housing Development out of Agency loan proceeds (the
"Agency Construction Financing"); and (ii) reimburse National CORE, up to a maximum of Five
Hundred Twenty -Three Thousand Eight Hundred Eighty -Eight Dollars ($523,888), for costs
National CORE has expended to obtain financing for the project and in marketing and leasing
the Units (the "Agency Reimbursement Financing").
E. f3051 Disbursement of Agency Construction Financing and Agency
Reimbursement Financing.
Subject to.the provisions of Section 304, portions of the Agency Construction Financing
shall be disbursed by the Agency directly to the Contractor to complete construction of the
Housing Development, upon the Contractor's presentation to the Agency invoices for portions of
work completed and the Agency's approval of such invoices. Portions of the Agency
Reimbursement Financing shall be disbursed by the Agency to National CORE upon National
CORE's submittal to the Agency of a disbursement request and evidence satisfactory to Agency
that the requested amount has been expended and that the expenditure is of a type reimbursable
by Agency pursuant to this Agreement. National CORE shall repay the Agency Construction
Financing and Agency Reimbursement Financing in accordance with the terms of the Agency
Note.
F. f3061 Permanent Loan Closing.
National CORE shall cause the Limited Partnership to satisfy all conditions to funding
imposed by the Permanent Lender by the earlier of (i) 2008, which shall be
extended for any time by which Project Completion extends beyond April 30, 2008; or (ii)
days after the City issues the last certificate of occupancy for the Project. The date on which the
Permanent Lender funds and records the Permanent Loan is hereinafter referred to as the
"Permanent Loan Closing." The parties hereto acknowledge and agree that the parties shall take
all such actions as may be necessary to satisfy in a timely manner the following conditions
precedent to the Permanent Loan Closing:
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(a) At the Permanent Loan Closing, title to the Project shall be subject to the
following recorded instruments in the following order of recordation: (1)
Agency Regulatory Agreement, (2) Agency Construction Deed of Trust,
(3) Memorandum, (4) deed of trust securing the Permanent Loan, and (5) a
Tax Credit Regulatory Agreement (the order of recordation of the Tax
Credit Regulatory Agreement and the deed of trust securing the
Conventional Loan shall be subject to the requirements of TCAC and the
Permanent Lender). National CORE shall, at its expense, cause the Title
Company to furnish Agency at the Permanent Loan Closing with either an
ALTA lender's policy of title insurance or an update to any policy which
Agency may then have received, in the amount of the Agency Note,
showing title of the Project in the manner required by the provisions
hereof and insuring the priority of the Agency Deed of Trust, as required
to satisfy the provisions hereof.
(b) National CORE shall have complied with the provisions of this
Agreement, and shall not be in default under any agreement between
National CORE and Agency.
(c) National CORE shall have made provision to insure the Project in
amounts and as required by the applicable provisions of this Agreement,
as amended, the Agency Regulatory Agreement, the Agency Construction
Deed of Trust and the deed of trust securing the Permanent Loan.
(d) The provisions hereof shall survive the Closing, or transfer of title of the
Project from Agency to National CORE, and Permanent Loan Closing.
IV. 14001 USE OF THE PROJECT
A. [4011 Affordable Housing.
National CORE hereby covenants and agrees, for itself and its successors and
assigns, to use and maintain the Project during the tern of the Agency Regulatory Agreement
only as a rental apartment housing project with eighty (80) apartment dwelling units (the
"Units"), with each such Unit (other than the Management Unit) to be rented to and occupied by
Eligible Tenants at an Affordable Rent, all as more fully described in the Agency Regulatory
Agreement. The Management Unit shall be rented to and occupied by a Moderate Income
Household at a rent that is affordable to such household, as determined pursuant to Health and
Safety Code Section 50093.
B. f 4021 Uses In Accordance with Redevelopment Plan; Nondiscrimination.
National CORE covenants and agrees for itself, its successors, its assigns, and
every successor in interest to the Project or any part thereof that National CORE and such
successors and assignees, shall devote the Project to the uses specified in the Redevelopment
Plan, the Grant Deed, the Agency Regulatory Agreement, and this Agreement for the periods of
time specified therein. The foregoing covenants shall run with the land.
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National CORE covenants by and for itself and any successors in interest that
there shall be no discrimination against or segregation of any person or group of persons on
account of race, color, creed, religion, sex, marital status, national origin or ancestry in the sale,
lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Project, nor shall National
CORE itself or any person claiming under or though it establish or permit any such practice or
practices of discrimination or segregation with reference to the selection, location, number, use
or occupancy of tenants, lessees, subtenants, sublessees or vendees of the Project. The foregoing
covenants shall run with the land.
National CORE shall refrain from restricting the rental, sale or lease of the Project
on the basis of race, color, creed, religion, sex, marital status, national origin or ancestry of any
person. All such deeds, leases or contracts shall contain or be subject to substantially the
following nondiscrimination or nonsegregation clauses:
1. In deeds: "The grantee herein covenants by and for himself or herself, his
or her heirs, executors, administrators and assigns, and all persons claiming under or through his
or her heirs, executors, administrators and assigns, and all persons claiming under or through
them, that there shall be no discrimination against or segregation of, any person or group of
persons on account of race, color, creed, religion, sex, marital status, national origin or ancestry
in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land herein
conveyed, nor shall the grantee himself or herself or any person claiming under or though him or
her, establish or permit any such practice or practices of discrimination or segregation with
reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants,
sublessees or vendees in the land herein conveyed. The foregoing covenants shall run with the
land."
2. In leases: "The lessee herein covenants by and for himself or herself, his
or her heirs, executors, administrators and assigns, and all persons claiming under or through him
or her, and this lease is made and accepted upon and subject to the following conditions:
"There shall be no discrimination against or segregation or any person or group of
persons on account of race, color, creed, religion, sex, marital status, ancestry or national origin
in the leasing, subleasing, transferring, use, occupancy, tenure or enjoyment of the premises
herein leased nor shall the lessee himself or herself, or any person claiming under or through him
or her, establish or permit any such practice or practices of discrimination or segregation with
reference to the selection, location, number, use or occupancy of tenants, lessees, sublessees,
subtenants or vendees in the premises herein leased."
3. In contracts: "There shall be no discrimination against or segregation of,
any person, or group of persons on account of race, color, creed, religion, sex, marital status,
ancestry or national origin, in the sale, lease, sublease, transfer, use, occupancy, tenure or
enjoyment of the premises, nor shall the transferee himself or herself or any person claiming
under or through him or her, establish or permit any such practice or practices of discrimination
or segregation with reference to the selection, location, number, use or occupancy of tenants,
lessees, subtenants, sublessees or vendees of the premises."
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The covenants established in this Agreement and the deeds of conveyance for the
Site shall, without regard to technical classification and designation, be binding for the benefit
and in favor of the Agency, its successors and assigns, the City and any successor in interest to
the Site, together with any property acquired by National CORE pursuant to this Agreement, or
any part thereof. The covenants against racial discrimination shall remain in effect in perpetuity.
C. L4031 Indemnity; Insurance Requirements.
National CORE shall indemnify, defend, and hold harmless the Agency and the
City, and their respective officers, officials, employees, agents, and representatives, from all
claims or suits for, and damages to, property and injuries to persons, including accidental death
(including expert witness fees, attorneys fees, and costs), which may be caused by any of
National CORE's activities under this Agreement.
Commencing with the Closing Date and ending on the expiration date; of the
Agency Regulatory Agreement, National CORE shall procure and maintain, at its sole cost and
expense, in a form and content satisfactory to the Executive Director, the following policies of
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 Three Million Dollars ($3,000,000.00) or (ii) Three Million Dollars ($3,000,000) per
person and Three Million Dollars ($3,000,000.00) per occurrence, and Three Million Dollars
($3,000,000.00) in the aggregate, and (B) for property damage, Three Million Dollars
($3,000,000.00) per occurrence.
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 National CORE 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 National CORE in the course of carrying out the work or services contemplated in this
Agreement.
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 Three
Million Dollars ($3,000,000.00) per person and Three Million Dollars ($3,000,000.00) per
occurrence, and property damage liability limits of Three Million Dollars ($3,000,000.00) per
occurrence and Three Million Dollars ($3,000,000.00) in the aggregate or (ii) combined single
limit liability of Three Million Dollars ($3,000,000.00). Said policy shall include coverage for
owned, non -owned, leased, and hired cars.
With respect to the Housing Development and other improvements and any
fixtures and furnishings to be owned by National CORE 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
882/015610-0047
848399.04 a10/18/07 -29-
insurance policy or policies shall include coverage for earthquakes to the extent generally and
commercially available at commercially reasonable rates, if such insurance is generally obtained
for rental apartment projects of this size and type in the counties of Los Angeles, Orange County,
Riverside, and San Bernardino. Agency shall be a loss payee under such policy or policies and
such insurance shall contain a replacement cost endorsement. Notwithstanding anything; in this
Section 403 to the contrary, the all-risk coverage required pursuant to this paragraph shall not be
required to be procured until, and such procurement shall be a condition to, the Closing.
Commencing as of the Closing, and continuing until the Permanent Loan Closing,
the National CORE shall be required to obtain and maintain such policy or policies of course of
construction insurance, to supplement insurance provided by the Builder, to insure the National
CORE and the Agency, as an additional insured, against damage to the improvements
comprising the Housing Development while under construction and also against damage, injury
or death to persons or property occurring on the Site.
The following additional requirements shall apply to all of the above policies of
insurance:
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, using a pre-
2004 additional insured endorsement form. 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, National CORE shall, prior to the cancellation date, submit new evidence of insurance
in conformance with this Section to the Executive Director. Not later than the Closing Date,
National CORE 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. Upon
the request of the Executive Director, National CORE shall provide Agency with complete
copies of each Policy of Insurance required by this Agreement.
The policies of insurance required by this Agreement shall be satisfactory only if
issued by companies licensed and admitted 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. Notwithstanding the foregoing, in the
event that the policies required hereunder are not available from such insurers at commercially
reasonable rates, the Executive Director shall have the authority, in his or her sole and absolute
discretion, to waive one or more of such requirements provided the proposal policies will
adequately protect the Agency's interests hereunder.
Agency may reasonably require coverage increases, 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 -Riverside -Orange County Average, All
882/015610-0047
848399 04 a10118/07 -30-
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 Executive
Director, the insurance to be provided by National CORE 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.
National CORE agrees that the provisions of this Section shall not be construed as
limiting in any way the extent to which National CORE may be held responsible for the payment
of damages to any persons or property resulting from National CORE's activities or the activities
of any person or persons for which National CORE is otherwise responsible.
To the extent that compliance with the terms and provisions of the Partnership
Agreement requires National CORE to provide greater amounts of insurance, National CORE
shall provide such insurance required by the provisions of the Partnership Agreement, and
Agency shall be named as an additional insured under the policies with such higher liability
limits.
D. f4041 Local, State and Federal Laws.
National CORE shall perform under this Agreement and carry out its performance
under this Agreement in conformity with all applicable federal and state laws and local
ordinances as to the Project, provided, however, National CORE and its contractors, successors,
assigns, transferees, and lessees are not waiving their rights to contest any such laws, rules or
standards.
E. [4051 Taxes and Assessments.
After the conveyance of title by Agency to National CORE or its assignee, and
subject to its right to claim exemption under California Revenue & Taxation Code Section
214(g), National CORE shall pay prior to delinquency all real estate taxes and assessments on
the Project for any period subsequent to the conveyance of title and possession, so long as
National CORE retains any ownership interest therein. National CORE shall remove or have
removed any levy or attachment made on the Project or any part thereof, or assure the
satisfaction thereof within a reasonable time but in any event prior to any sale or transfer of all or
any portions thereof. Notwithstanding the above, National CORE shall have the right to contest
the validity or amounts of any tax, assessment, or encumbrance available to National CORE in
respect thereto, and nothing herein shall limit the remedies available to National CORE in
respect thereto.
F. j4061 Limitation on Encumbrances.
Except as otherwise permitted by this Agreement, including but not limited to
clause (n) of Section 109, National CORE shall not mortgage the Project or any portion thereof
or any interest therein, any other mortgages or conveyances for financing that encumber the
Project or any portion thereof, without the prior written approval of the Executive Director,
which approval shall not be unreasonably withheld.
882/015610-0047
848399 04 a10/18/07 -3 1-
G. [4071 Maintenance of the Project.
National CORE shall maintain the Project in conformity with the La Quinta
Municipal Code and the requirements of the Agency Regulatory Agreement, and shall keep the
Project free from any graffiti and from any accumulation of debris or waste materials.
National CORE shall also maintain the landscaping planted on the Site by
Builder, Agency, and/or Agency's contractors in a healthy and attractive condition. II; at any
time, National CORE fails to maintain the Project or any portion thereof, and said condition is
not corrected as soon as reasonably possible after written notice from the Agency, either the
Agency or the City may enter the Project or applicable portion thereof to perform the necessary
maintenance thereon and National CORE shall pay such costs as are reasonably incurred for such
maintenance plus a fifteen percent (15%) administrative fee. This covenant shall run with the
land and shall remain in effect for the term of the Redevelopment Plan.
H. [4081 Effect of Violation of the Terms and Provisions of this Agreement.
The Agency is deemed the beneficiary of the terms and provisions of this
Agreement and of the covenants running with the land, for and in its own rights and for the
purposes of protecting the interests of the community and other parties, public or private, in
whose favor and for whose benefit this Agreement and the covenants running with the land have
been provided. The Agreement and the covenants shall run in favor of the Agency, without
regard to whether the Agency has been, remains or is an owner of any land or interest therein in
the Project or in the Project Area. The Agency shall have the right, if this Agreement or
covenants are breached, to exercise all rights and remedies, and to maintain any actions or suits
at law or in equity or other property proceedings to enforce the curing of such breaches to which
it or any other beneficiaries of this Agreement and covenants may be entitled.
V. [5001 DEFAULTS AND REMEDIES
A. [5011 Defaults — General.
Subject to the extensions of time set forth in Section 603, failure or delay by any
Party to perform any term or provision of this Agreement constitutes a default under this
Agreement. If any Party defaults with regard to any of the provisions of this Agreement, the
non -defaulting Party shall serve written notice of such default upon the defaulting Party. If the
default is not cured or commenced to be cured by the defaulting Party within thirty (30) days
after service of the notice of default (or within such other period as is set forth herein), the non -
defaulting Party shall be entitled to pursue whatever remedies to which such Party is entitled
under this Agreement.
Notwithstanding anything herein to the contrary, whenever any Party hereto shall
deliver any notice or demand to National CORE with respect to any breach or default by
National CORE of the terms hereunder, the Agency shall at the same time deliver a copy of such
notice or demand to the Limited Partnership and Tax Credit Investor. The Limited Partnership
and Tax Credit Investor (insofar as the rights of the Agency are concerned) shall have the right,
at its option, within thirty (30) days after the receipt of the notice, to cure or remedy or
882/015610-0047
848399.04 a10/19/07 -32
commence to cure or remedy any such default. Such cure period shall run concurrently with
National CORE's cure period described in this Section 501.
B. [5021 Legal Actions.
1. [5031 Specific Performance.
The non -defaulting party, upon expiration of applicable notice and cure periods,
shall be permitted, but not obligated, to commence an action for specific performance of the
terms of this Agreement, or to cure, correct or remedy any default hereunder or to obtain any
other legal or equitable remedy consistent with the purpose of this Agreement. In this regard,
National CORE specifically acknowledges that Agency is entering into this Agreement for the
purpose of assisting in the redevelopment of the Site and the provision of affordable housing and
not for the purpose of enabling National CORE to speculate in land. Agency shall also have the
right to pursue damages for National CORE's defaults but in no event shall National CORE be
entitled to damages of any kind from Agency, except for damages for out-of-pocket losses
resulting from non-performance by Agency of its covenants under this Agreement but excluding
economic loss, lost profits, or any other economic or consequential damages of any kind.
2. [5041 Institution of Legal Actions; Attorney's Fees.
Any legal actions must be instituted in the Superior Court of the County of
Riverside, State of California, or in the Federal District Court in the Central District of
California. In the event of any litigation between the parties hereto, the prevailing party shall be
entitled to receive, in addition to the relief granted, its reasonable attorney's fees and costs and
such other costs incurred in investigating the action and prosecuting the same, including costs for
expert witnesses, costs on appeal, and for discovery.
3. [5051 Applicable Law.
The internal laws of the State of California, without regard to conflicts of law,
shall govern the interpretation and enforcement of this Agreement.
4. [5061 Acceptance of Service of Process.
In the event that any legal action is commenced by National CORE against the
Agency, service of process on the Agency shall be made by personal service upon the Executive
Director or in such other manner as may be provided by law.
In the event that any legal action is commenced by the Agency against National
CORE, service of process on National CORE shall be made by personal service upon any officer
or director of National CORE and shall be valid whether made within or without the State of
California or in such other manner as may be provided by law.
C. f 5071 Rights and Remedies Are Cumulative.
Except as otherwise expressly stated in this Agreement, the rights and remedies of
the parties are cumulative, and the exercise by either party of one or more of such rights or
882/015610-0047 -
949399.04 a10118/07 -33-
remedies shall not preclude the exercise by it, at the same or different times, of any other rights
or remedies for the same default or any other default by the other party.
D. [5081 Inaction Not a Waiver of Default.
Any failures or delays by either party in asserting any of its rights and remedies as
to any default shall not operate as a waiver of any default or of any such rights or remedies, or
deprive either such party of its right to institute and maintain any actions or proceedings which it
may deem necessary to protect, assert or enforce any such rights or remedies.
VI. 16001 GENERAL PROVISIONS
A.' [6011 Notices Demands and Communications Between Parties.
Written notices, demands and communications between the Agency and National
CORE shall be sufficiently given if (i) delivered by hand, (ii) delivered by reputable same -day or
overnight messenger service that provides a receipt showing date and time of delivery, or (iii)
deposited in the United States mail, registered or certified, postage prepaid, return receipt
requested, to the principal offices of the Agency and National CORE at the addresses specified in
Section 106 and 107, respectively with a copy to Hudson Housing Capital, LLC at 630 Fifth
Avenue, Suite 2850, New York, NY 10111. Such written notices, demands and
communications may be sent in the same manner to such other addresses as either party may
from time to time designate by mail as provided in this Section 601. A notice signed by legal
counsel for a party and delivered to the other party in accordance with this Section shall be
deemed notice delivered by the party on whose behalf such legal counsel is acting.
Any written notice, demand, or communication shall be deemed received
immediately if delivered by hand or delivered by messenger in accordance with the preceding
paragraph, and shall be deemed received on the third (3rd) day from the date it is postmarked if
delivered by registered or certified mail in accordance with the preceding paragraph.
B. [6021 Conflicts of Interest.
No member, officer, official, or employee of the Agency shall have any personal
interest, direct or indirect, in this Agreement, nor shall any member, official or employee
participate in any decision relating to the Agreement which affects his personal interests or the
interests of any corporation, partnership or association in which he is directly or indirectly
interested.
C. [6031 Enforced Delay; Extension of Times of Performance.
In addition to specific provisions of this Agreement, performance by either party
hereunder shall not be deemed to be in default, and all performance and other dates specified in
this Agreement shall be extended, where delays or defaults are due to: war; insurrection; strikes;
lockouts; riots; floods; earthquakes; fires; casualties; acts of God; acts of the public enemy;
epidemics; quarantine restrictions; freight embargoes; lack of transportation; governmental
restrictions or priority; litigation; unusually severe weather; inability to secure necessary labor,
materials or tools; delays of any contractor; subcontractor or supplier; acts or omissions of the
882/015610-0047
948399 04 a10/18/07 -34-
other party; acts or failures to act of the City of La Quinta, or the Agency, or any other public or
governmental agency or entity (except that the acts or failures to act of the Agency shall not
excuse performance by the Agency); or any other causes beyond the control or without the
default of the party claiming an extension of time to perform. Notwithstanding anything to the
contrary in this Agreement, an extension of time for any such cause shall be for the period of the
enforced delay and shall commence to run from the time of the commencement of the cause, if
notice by the party claiming such extension is sent to the other party within thirty (30) days after
the commencement of the cause. Times of performance under this Agreement may also be
extended in writing by the mutual agreement of Agency and National CORE. 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.
Notwithstanding the foregoing portion of this Section 603, National CORE is not
entitled pursuant to this Section 603 to an extension of time to perform because of economic or
market conditions.
D. [6041 Non -Liability of Officials and Employees of the Agency.
No member, official or employee of the Agency or the City shall be personally
liable to National CORE, or any successor in interest, in the event of any default or breach by the
Agency or the City or for any amount which may become due to National CORE or its
successors, or on any obligations under the terms of this Agreement.
E. [6051 Interpretation; Entire Agreement, Waivers; Attachments.
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 any Party by reason of the
authorship of this Agreement or any other rule of construction that might otherwise apply.
This Agreement integrates all of the terms and conditions mentioned herein or
incidental hereto, and supersedes all negotiations or previous agreements between the Parties or
their predecessors in interest with respect to all or any part of the subject matter hereof.
All waivers of the provisions of this Agreement must be in writing by the
appropriate authorities of the Agency and National CORE, and all amendments hereto must be in
writing by the appropriate authorities of the Agency and National CORE. Except as otherwise
expressly provided, in any circumstance where under this Agreement either party is required to
approve or disapprove any matter, approval shall not be unreasonably withheld.
The exhibits and attachments to this Agreement are incorporated herein and made
a part hereof.
F. f6061 Time of Essence.
Time is of the essence in the performance of this Agreement.
9821015610-0047
848399.04.10/18/07 -35_
G. L607] No Brokers.
Agency and National CORE each represent and warrant to the other that it has not
retained any real estate broker, agent, or finder in connection with this Agreement or the
disposition or conveyance of the Site as set forth herein, and each shall indemnify, defend, and
hold harmless the other from and against any claim or lawsuit (including attorneys fees) for the
payment of any real estate commission or finder's or broker's fees arising out of this Agreement
to the extent caused by the acts or omissions of the Agency or National CORE as the case may
be.
H. [6081 Maintenance of Books and Records.
National CORE shall prepare and maintain all books, records, and reports
necessary to substantiate National CORE's compliance with the terms of this Agreement.
I. [6091 Right to Inspect.
After the Closing Date, Agency shall have the right, upon not less than twenty-
four (24) hours' notice, at all reasonable times during business hours, to inspect the books and
records of National CORE pertinent to the purposes of this Agreement. Said right of inspection
shall not extend to documents privileged under attorney -client or other such privileges.
J. [6101 Binding Effect of 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 Project and the successors in interest, owner or owners thereof,
and all of the tenants, lessees, sublessees, and occupants of such Project.
K. 16111 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.
L. [6121 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.
M. f6131 Amendments to this Agreement.
The Parties agree to mutually consider reasonable requests for amendments to this
Agreement which may be made by any Party hereto, the TCAC, the Permanent Lender, or
financial consultants to the Agency, provided such requests are consistent with this Agreement
882/015610-0047
848399.04 a10/18/07 -36-
and would not substantially alter the basic business terms included herein. The Agency's
Executive Director shall have the authority to approve, on behalf of the Agency, amendments to
this Agreement that would not substantially alter the basic business terms or substantially
increase the cost or risk of this Agreement to the Agency. All other amendments shall require
the action of the Agency Board. All amendments, including those authorized to be approved by
the Agency's Executive Director, shall be in writing and shall be signed by authorized
representatives of Agency and National CORE.
[end — signature page and attachments follow]
882/015610-0047
848399 04 a10/18107 -37-
IN WITNESS WHEREOF, the Parties have signed this Agreement on the respective
dates set forth below.
LA QUINTA REDEVELOPMENT AGENCY,
a public body corporate and politic
By:
Dated: 2007 Its: Executive Director
ATTEST:
Agency Secretary
APPROVED AS TO FORM:
RUTAN & TUCKER, LLP
Attorneys for the La Quinta
Redevelopment Agency
NATIONAL COMMUNITY RENAISSANCE
OF CALIFORNIA, a California nonprofit
public benefit corporation
By:
Dated: 2007 Its:
882/015610-0047
848399 04 a10/l8/07 -38-
ATTACHMENT NO. 1
SITE MAP
[SEE FOLLOWING PAGE]
882/015610-0047 ATTACHMENT NO. 1
848399 04 a10/13/07
ATTACHMENT NO. 2
LEGAL DESCRIPTION
All of that certain real property in the City of La Quinta, County of Riverside, State of
California, described as follows:
That portion of the Southeast quarter of the Northeast quarter of Section 19, Township 6 South,
Range 7 East, San Bernardino Base and Meridian, described as follows:
Commencing at the Southeast comer of the Northeast quarter of said Section 19; Thence South
89' 33' 05" West, on the Southerly line of the Northeast quarter of said Section, 330 feet, to the
true point of beginning; thence South 89' 33' 05" West, on said Southerly line of the Northeast
quarter, 330 feet; Thence North 0° 13' 40" West, 1,324.57 feet, to the Northerly line of the
Southeast quarter of Northeast quarter of said Section 19; thence North 89' 34' 05" East, on said
Northerly line, 330 feet; thence South 0° 13' 40" East, 1,324.47, feet to the true point of
beginning;
Excepting therefrom the Southerly 50 feet conveyed to the County of Riverside by Deeds
recorded August 30, 1933 in Book 133, Page(s) 292 and Book 134, Page(s) 298 respectively, of
Official Records, Riverside County Records.
Also excepting therefrom that portion of
recorded 02-17-1999, as Instrument No.
therefrom the mobile home located thereon.
described in the deeds to the City of La Quinta,
62425 and 62426, Official Records. Excepting
810-0047 ATTACHMENT NO. 2
84839948399 04 a10/18/07
ATTACHMENT NO.3
SCHEDULE OF PERFORMANCE
ACTIVITY
TIME FRAME
1.
Agency and National CORE open
Within three days after the date hereof.
Escrow. (Section 207)
2.
National CORE submits Initial Tax Credit
Completed.
Application to TCAC. (Section 204)
3.
Agency makes available to National
Completed.
CORE copies of the Property Documents.
(Section 219)
4.
National CORE approves or disapproves
Completed.
the Property Documents. (Section 219)
5.
National CORE provides evidence of
Completed.
insurance to, and obtains approval from,
Agency. (Section 403)
6.
Agency approves or disapproves National
Completed.
CORE's evidence of insurance. (Section
403)
7.
National CORE submits Evidence of
Completed.
Financing to Agency. (Section 205)
8.
Agency approves or disapproves National
Completed.
CORE's Evidence of Financing. (Section
205)
9.
National CORE executes and delivers to
At Closing.
Agency or Escrow Agent Grant Deed,
Agency Regulatory. Agreement, Agency
Construction Deed of Trust and
Memorandum; National CORE deposits
into Escrow the National CORE
Construction Fund. (Section 210)
10.
Agency executes and delivers to Escrow
At Closing.
Agent Grant Deed, Agency Regulatory
Agreement, Agency Construction Deed of
Trust, Memorandum and Bill of Sale.
(Section 211)
882/015610-004 ATTACHMENT NO. 3
848399.04 a10/l8/07
ACTIVITY
TIME FRAME
11.
National CORE executes and delivers to
At Closing.
Agency the Agency Note. (Section 210)
12.
Agency executes and delivers to National
At Closing.
CORE Assignment. (Section 211)
13.
Agency and National CORE close Escrow
At Closing.
on Agency's transfer of title to partially
constructed Project to National CORE.
(Section 208)
14.
National CORE provides evidence of
On or before the date the first certificate of
property insurance to Agency. (Section
occupancy has been issued by the City.
403)
15.
Agency approves or disapproves National
Within fifteen (15) days after submittal.
CORE's evidence of property insurance.
(Section 403)
16.
National CORE obtains Agency
Within ninety (90) days prior to issuance of
Executive Director's approval of Property
first certificate of occupancy for Project by
Manager. (Agency Regulatory
City.
Agreement, Section 5.2)
17.
National CORE or Property Manager
Within ninety (90) days prior to issuance of
submits for Executive Director's review
certificate of occupancy for Project by City.
and approval, a marketing and
management plan for the Project.
(Agency Regulatory Agreement, Section
5.2)
19.
Construction of the Project is completed.
By April 30, 2008.
20.
All conditions and all actions necessary to
By the earlier of (i) by ; or (ii)
close the Permanent Loan have been taken
within days after the City issues the
and satisfied.
last certificate of occupancy for the Project.
21.
National CORE sets aside Operating
On or before the date the close of the
Reserve and provides evidence thereof to
Permanent Loan.
Agency Executive Director. (Agency
Regulatory Agreement, Section 5.5)
882/015610-0047
848399.04 a10118/07 -2-
22. National CORE submits to Agency an
accounting of the Capital Replacement
Reserve. (Agency Regulatory Agreement,
Section 5.6)
23. National CORE submits annual report
pursuant to Health and Safety Code
Section 33418 to Agency. (Agency
Regulatory Agreement, Section 3.7)
TIME FRAME
On or before April 15 of each year subsequent
to the date the City issues the first certificate
of occupancy for the Project.
Not later than the September 1 following the
June 30 end of each fiscal year for term of the
Declaration.
It is understood that the foregoing Schedule is subject to all of the terms and conditions of the
text of the Agreement.
882/015610-0047
848399.04 a10/18/07 -3
ATTACHMENT NO.4
GRANT DEED
[SEE FOLLOWING PAGES]
848399. aao4 ATTACHMENT NO. 4
848399.04 a10/I8/07
RECORDING REQUESTED BY AND
WHEN RECORDED MAIL TO:
Vista Dunes Housing Partners, L.P.,
c/o National Community Renaissance of
California .
9065 Haven Ave., Suite 100
Rancho Cucamonga, CA 91730
Attn: President
In accordance with Section 11932 of the California Revenue and Taxation Code, Grantor has
declared the amount of the transfer tax which is due by a separate statement which is not being
recorded with this Grant Deed.
GRANT DEED
FOR A VALUABLE CONSIDERATION, receipt of which is hereby acknowledged, the
LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic, organized
and existing under the California Community Redevelopment Law (Health & Safety Code
Section 33000 et seq.) (the "Grantor"), hereby grants to VISTA DUNES HOUSING
PARTNERS, L.P., a California limited partnership ("Grantee"), that certain real property
("Property") located in the City of La Quinta, County of Riverside, State of California,
described in the legal description attached hereto as Exhibit "A" and incorporated herein by this
reference, subject to all matters of record, and is further subject to the following:
A. Reservation of Subsurface Rights. Grantor excepts and reserves from the
conveyance herein described all interest of the Grantor in oil, gas, hydrocarbon substances, and
minerals of every kind and character lying more than five hundred (500) feet below the surface,
together with the right to drill into, through, and across, and to use and occupy all parts of the
Property lying more than five hundred (500) feet below the surface thereof for any and all
purposes incidental to the exploration for and production of oil, gas, hydrocarbon substances, or
minerals from the Property or other lands, but without, however, any right to use the surface of
the Property or any portion of the Property within five hundred (500) feet below the surface of
the Property for such exploration.
B. Conveyance in Accordance With Redevelopment Plan. The Property is conveyed
in accordance with and subject to the Redevelopment Plan for Project Area No. 2
("Redevelopment Plan'), a copy of which is on file with the City Clerk of the City of La
Quinta, California. All uses on the Property shall conform to the uses permitted by the
Redevelopment Plan. The foregoing shall remain in effect until the expiration of the
Redevelopment Plan.
ATTACHMENT NO. 4
882/015610-0047 Page 1 of 5
843412 04 a09/24/07 g
C. Nondiscrimination. Grantee, on behalf of itself and its successors and assigns to
all or any portion of the Property, covenants and agrees as follows:
1. 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 sale, lease, or rental or in the use, occupancy, or enjoyment of the Property,
nor shall the grantee itself, or any person claiming under or through it, establish or permit any
such practice or practices of discrimination or segregation with reference to the selection,
location, number, use, or occupancy of tenants, lessees, subtenants, sublessees, or vendees of the
Property or any portion thereof, The foregoing covenants shall run with the land and shall
remain in effect in perpetuity.
2. The grantee shall refrain from restricting the rental, sale, or least; of any
portion of the Property, or contracts relating to the Property, on the basis of race, color, creed,
religion, sex, marital status, age, 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:
a. In deeds: "The grantee herein covenants by and for itself, its heirs,
executors, administrators, and assigns, and all persons claiming under or through them, that there
shall be no discrimination against or segregation of any person or group of persons on account of
race, color, creed, religion, sex, marital status, age, ancestry, or national origin in the sale, lease,
sublease, transfer, use, occupancy, tenure, or enjoyment of the land herein conveyed, nor shall
the grantee itself, or any persons 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 in the land
herein conveyed. The foregoing covenants shall run with the land."
b. In leases: "The lessee herein covenants by and for itself, its heirs,
executors, administrators, and assigns, and all persons claiming under or through it, 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 race, color,
creed, religion, sex, marital status, age, ancestry, or national origin in the leasing, subleasing,
transferring, use, occupancy, tenure, or enjoyment of the land herein leased, nor shall the lessee
itself, or any person claiming under or through it, establish or permit any such practice or
practices of discrimination or segregation with reference to the selection, location, number, use,
or occupancy of tenants, lessees, sublessees, subtenants, or vendees in the land herein leased."'
C. In contracts pertaining to the realty: "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, age, ancestry, or national origin in the sale, lease,
transfer, use, occupancy, tenure, or enjoyment of land, nor shall the transferee itself; or any
person claiming under or through it, establish or permit any such practice or practices of
discrimination or segregation with reference to the selection, location, number, use, or occupancy
of tenants, lessees, subtenants, sublessees, or vendees of land."
The foregoing nondiscrimination covenants shall remain in effect in perpetuity.
ATTACHMENT NO. 4
882/015610.0047 Page 2 of 5
84341204 a09/24/07 g
D. Covenants Run With The Land. All covenants contained in this Grant Deed shall
be covenants running with the land.
E. Covenants for Benefit of Grantor. All covenants set forth in this Grant Deed,
without regard to technical classification or designation, shall be binding for the benefit of the
Grantor, and such covenants shall run in favor of Grantor for the entire period during which such
covenants shall be in force and effect, without regard to whether the Grantor is or remains an
owner of any land or interest therein to which such covenants relate. Grantor, in the event of any
breach of any such covenants, shall have the right to exercise all the rights and remedies and to
maintain any actions at law or equity or other property proceedings to enforce the curing of such
breach.
ATTEST:
Agency Secretary
APPROVED AS TO FORM:
RUTAN & TUCKER, LLP
Agency Counsel
"Grantor"
LA QUINTA REDEVELOPMENT AGENCY,
a public body, corporate and politic
Thomas Genovese
Its: Executive Director
"Grantee"
VISTA DUNES HOUSING PARTNERS,
L.P., a California limited partnership
By: Southern California Housing
Development Corporation of the Inland
Empire, a California nonprofit public
benefit corporation
Its: Managing General Partner
By:
Richard J. Whittingham
Its: CFO
ATTACHMENT NO.4
882/015610-0041 Page 3 of 5
943412.04 a09/24/07 g
STATE OF CALIFORNIA
COUNTY OF
On
personally appeared
) ss
before me,
Notary Public,
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.
[SEAL]
STATE OF CALIFORNIA
COUNTY OF
On
personally appeared
Notary Public
ss
before me,
Notary Public,
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]
ATTACHMENT NO.4
882/015610-0047 Page 4 of 5
843412.04 a09/24/07 g
EXHIBIT "A"
LEGAL DESCRIPTION OF PROPERTY
The land referred to is situated in the City of La Quinta, State of California, County of
Riverside, City of La Quinta and is described as follows:
That portion of the Southeast quarter of the Northeast quarter of Section 19, Township 6 South,
Range 7 East, San Bernardino Base and Meridian, described as follows:
Commencing at the Southeast comer of the Northeast quarter of said Section 19; Thence South
89' 33' 05" West, on the Southerly line of the Northeast quarter of said Section, 330 feet, to the
true point of beginning; thence South 89' 33' 05" West, on said Southerly line of the Northeast
quarter, 330 feet; Thence North 0° 13' 40" West, 1,324.57 feet, to the Northerly line of the
Southeast quarter of Northeast quarter of said Section 19; thence North 89' 34' 05" East, on said
Northerly line, 330 feet; thence South 0° 13' 40" East, 1,324.47 feet to the true point of
beginning;
Excepting therefrom the Southerly 50 feet conveyed to the County of Riverside by Deeds
recorded August 30, 1933 in Book 133, Page(s) 292 and Book 134, Page(s) 298 respectively, of
Official Records, Riverside County Records.
Also excepting therefrom that portion of described in the deeds to the City of La Quinta,
recorded 02-17-1999, as Instrument No. 62425 and 62426, Official Records. Excepting
therefrom the mobile home located thereon.
ATTACHMENT NO. 4
882/015610-0047 Page 5 Of 5
843412.04 a09/24/07 g
ATTACHMENT NO.5
AGENCY NOTE
[SEE FOLLOWING PAGES]
848399 04 a1018 ATTACHMENT NO. 5
848399 04 a10/I8/07
AGENCY NOTE
2007 ("Note Date") $ ("Loan Amount")
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
DOLLARS ($ ("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 herein and
in that certain Amended and Restated Affordable Housing Agreement by and among Maker and
Holder, dated ("AHA"), pertaining to Maker's acquisition of certain real
property defined in the AHA as the "Site" and improved with a partially complete affordable
housing development and Maker's completion of construction and subsequent operation thereof.
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) Construction Deed of Trust with Assignment of Rents and Rider Attached
Thereto by and between Maker as Trustor, Holder as beneficiary, and Chicago
Title Company as Trustee, and recorded in the Office of the Riverside County
Recorder ("Agency Deed of Trust"). The Agency Deed of Trust secures, in part,
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").
The AHA, Agency Deed of Trust, and Agency Regulatory Agreement 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 AHA.
1. Purpose of Loan. The loan evidenced by this Note is a loan for the purpose of
assisting Maker with Maker's costs for acquiring the Site and completing construction of the
Project thereon in accordance with the AHA.
2. Principal Amount. The principal amount of this loan shall be
DOLLARS ($ ) ("Loan Amount"). Simple interest shall accrue on the outstanding
principal amount at three percent (3%) per annum, compounded annually. Interest shalt accrue
as set forth in Section 4 in the event of a Maker default.
Disbursement of Agency Loan.
3.1 The Agency Loan shall be disbursed in accordance with the terms of the
om
882/0156L0-0047 _
948399 04 a10/18/07 1
3.2 Subject to the provisions of Section 4 herein, which provide for
acceleration of the then outstanding principal and accrues interest and immediate payment
thereof in the event of a default by Maker, this Note shall be automatically cancelled, as
evidenced by Holder's return to Maker of the original of this Note marked "cancelled," and the
Agency Deed of Trust shall be partially reconveyed and no longer secure the obligations under it,
on the fifth anniversary of the Permanent Loan Closing. In the event of such cancellation, any
outstanding amounts due under this Note shall automatically be forgiven. In furtherance of the
foregoing, it is understood and agreed that, following the fifth anniversary of the Permanent
Loan Closing the Agency Deed of Trust shall no longer secure the obligations under this Note
(which shall be canceled).
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. Default; Acceleration; Cross -Default. In the event:
4.1 Maker is in material default of any of the covenants, terms, or provisions
of this Note or of any of the Agency Agreements and Maker fails to timely cure such default
under the terms of the applicable agreement, it being understood and agreed by Maker that a
default of this Note or of any of the Agency Agreements (beyond any applicable cure period)
shall be a default of all of the foregoing listed documents;
then Maker shall be in default of this Note, and all portions of the Loan Amount that have been
disbursed to Maker and all accrued interest thereon shall become immediately due and payable.
The rate of interest applicable to periods of default for the defaults set forth in this Section 5 shall
be calculated at the lesser of ten percent (10%) per annum or the maximum legal rate, and shall
accrue as of the date such payment was originally due. Notwithstanding the foregoing, upon
completion of the Housing Development, as evidenced by Holder's issuance of a Release of
Construction Covenants, then only a material default by Maker of any of the covenants, terms, or
provisions of this Note or of the Regulatory Agreement that is not timely cured by Maker under
the terms of the applicable agreement shall constitute a default hereunder and cause the Loan
Amount to be accelerated.
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 applicable rate of interest payable hereunder, as if
such fees and costs had been added to the principal owing hereunder.
The Agency Loan and this Note shall constitute a nonrecourse obligation of Maker, and
neither Maker nor any partner, member, or shareholder thereof shall have any personal liability
for repayment.
However, nothing contained in the foregoing limitation of liability shall (a) limit or
impair the enforcement against all such security for this Note of all the rights and remedies of the
88V015610-0047
8483"A4 a10/I8/07 -2-
Holder, or (b) be deemed in any way to impair the right of the Holder to assert the unpaid
principal amount of this Note as a demand for money within the meaning and intendment of
Section 431.70 of the California Code of Civil Procedure or any successor provision thereto. The
foregoing limitation of liability is intended to apply only to the obligation for the repayment of
the principal of, and payment of interest on this Note; nothing contained therein is intended to
relieve the Maker and, if Maker is a partnership, limited liability company, or corporation, any
general partner, member, or shareholder of Maker, of liability for damages caused to Holder as a
result of (i) fraud or willful misrepresentation; (ii) the failure to pay taxes, assessments or other
charges which may create liens on the real property described in the Agency Agreements that are
payable or applicable prior to any foreclosure under the Agency Deed of Trust (to the full extent
of such taxes, assessments or other charges); (iii) the retention of any rental income or other
income arising with respect to the Housing Development collected by Maker after a Default to
the full extent of the rental income or other income retained and collected by Maker after the
giving of any such notice, and not used to pay Operating Expenses of the Housing Development;
(iv) the misapplication of any proceeds under any insurance policies or awards resulting from
condemnation or the exercise of the power of eminent domain or by reason of damage, loss or
destruction to any portion of the Project; and (v) breach of any environmental covenant or
representation made by the Maker relating to the Housing Development.
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.
98VOIS610-0047
848399.04 a10/18/07 -3-
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 AHA)
this Note in accordance with provisions and restrictions pertaining to a transfer of the AHA as set
forth in the AHA. 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
AHA 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 obligations
and provisions set forth in this Note.
882/015610 0047 _
848399.04 a10/18/07 _4
IN WITNESS WHEREOF, Maker has executed this Note as of the Note Date.
Holder:
LA QUINTA REDEVELOPMENT AGENCY,
a public body corporate and politic
Bv:
Dated: 2007 Its: Executive Director
ATTEST:
Agency Secretary
APPROVED AS TO FORM:
RUTAN & TUCKER, LLP
Attorneys for the La Quinta
Redevelopment Agency
Maker:
NATIONAL COMMUNITY RENAISSANCE
OF CALIFORNIA, a California nonprofit
public benefit corporation
By:
Dated: 2007 Its:
892/015610-0047
84839904 a1Oil 8/07 _5_
ATTACHMENT NO. 6
AGENCY CONSTRUCTION DEED OF TRUST
[SEE FOLLOWING PAGES]
850 a1047 ATTACHMENT NO. 6
8483994879994 al0/18/07
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 § 27383
CONSTRUCTION DEED OF TRUST WITH ASSIGNMENT OF RENTS
AND RIDERS ATTACHED HERETO
NOTE: RIDERS ATTACHED TO THIS DEED OF TRUST CONTAINING TERMS
INCLUDING SECURITY AGREEMENT AND FIXTURE FILING.
This CONSTRUCTION DEED OF TRUST WITH ASSIGNMENT OF RENTS AND RIDERS ATTACHED
HERETO ("Deed of Trust"), is made 1 , between NATIONAL COMMUNITY
RENAISSANCE OF CALIFORNIA, a California nonprofit public benefit corporation, herein called TRUSTOR,
whose address is 9065 Haven Avenue, Suite 100, Rancho Cucamonga, CA 91730, Chicago 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, Truster'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 in Exhibit
"A" (the "Property"),
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 TWENTY-ONE MILLION SEVEN HUNDRED FOURTEEN THOUSAND
ONE HUNDRED SEVENTY-SEVEN DOLLARS ($21,714,177), with interest thereon according to the terms of a
promissory note or notes of even date herewith made by Truster, payable to order of Beneficiary, and extensions or
renewals thereof; (2) the performance of each agreement of Trustor incorporated by reference or contained herein;
and (3) payment of additional sums and interest thereon which may hereafter be loaned to Trustor, or its successors
or assigns, when evidenced by a promissory note or notes reciting that they are secured by this Deed of Trust.
To protect the security of this Deed of Trust, and with respect to the Property above described, Trustor expressly
makes each and all of the agreements, and adopts and agrees to perform and be bound by each and all of the terms
and provisions set forth in subdivision A, and it is mutually agreed that each and all of the terms and provisions set
forth in subdivision B of the fictitious deed of trust recorded in Orange County August 17, 1964, and in all other
counties August 18, 1964, in the book and at the page of Official Records in the office of the county recorder of the
county where said property is located, noted below opposite the name of such county, namely:
COUNTY BOOK PAGE COUNTY BOOK PAGE COUNTY BOOK PAGE COUNTY BOOK PAGE
Alameda 1288 556 Kings 858 713 Placer 1028 379 Siena 38 187
Alpine 3 130-31 Lake 437 110 Plums 166 1307 Siskiyou 506 762
Ariador 133 438 Lassen 192 367 Riverside 3778 347 Solano 1287 621
Butte 1330 513 Los Angeles T-3878 874 Sacramento 5039 124 Sonoma 2067 427
Calaveras 185 338 Madera 911 136 San Benito 300 405 Stanislaus 1970 56
Colusa 323 391 Mann 1849 122 San Bernardino 6213 768 Sutter 655 585
Contra Costa 4684 1 Manposa 90 453 San Francisco A-804 596 Tehama 457 183
Del Norte 101 549 Mendocino 667 99 San Joaquin 2855 283 Trinity 108 595
El Dorado 704 635 Merced 1660 753 San Luis Obispo 1311 137 Tulare 2530 108
Fresno 5052 623 Modoc 191 93 San Mateo 4778 175 Tuolumne 177 160
Glenn 469 76 Mono 69 302 Santa Barbara 2065 881 Ventura 2607 237
Humboldt 801 83 Monterey 357 239 Santa Clara 6626 664 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
882/015610-0047
$43410.06 a10/16/07 -1-
COUNTY BOOK PAGE COUNTY BOOK PAGE COUNTY BOOK PAGE COUNTY BOOK PAGE
Kenn 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 RIDERS ATTACHED TO THIS DEED OF TRUST
STATE OF CALIFORNIA
COUNTY OF
Signature of Trustor
}
} NATIONAL COMMUNITY RENAISSANCE OF
CALIFORNIA, a California nonprofit public benefit
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
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)
corporation
By:
Its:
882/015610-0047
843410 06 a1Oil 6/07 _2
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.
I ) 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 comma, 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 nonce
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 hens, with interest, on said property or any part thereof, which appear to be
prior or superior hereto; all costs, fees and expenses of this Trust
Should Trustor fail to make any payment or to do any act as herein provided, then Beneficiary or Trustee, but without obligation so to
do and without notice to or demand upon Trustor and without releasing Trustor from any obligation hereof, may: make or do the same in such
manner and to such extent as either may deem necessary to protect the security hereof, Beneficiary or Trustee being authorized to enter upon said
property for such purposes; appear in and defend any action or proceeding purporting to affect the security hereof or the rights or powers of
Beneficiary or Trustee; pay, purchase, contest or compromise any encumbrance, charge or hen which in the judgment of either appears in be prior
or superior hereto; and, in exercising any such powers, pay necessary expenses, employ counsel and pay his or her 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.
It is mutually agreed
1) That any award in connection with any condemnation for public use of or injury to said property or any pan 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 its 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 nonce, 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
and profits as they become due and payable. Upon any such default (beyond any applicable cure period, and during the continuance of such
default), Beneficiary may at anytime 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 hereby secured, enter upon and take possession of said property or any part thereof, in its own
882/015610-0047
843410 06 al0/16/07 _3
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 mo 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 u1 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 mteresi 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 conveyance from the Trustee predecessor, succeed to all its title,
estate, rights, powers and duties. Said instrument must contain the name of the original Trustor, Trustee and Beneficiary hereunder, the book and
page where this Deed is recorded and the name and address of the new Trustee
8) That this Deed applies to, mures 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 now 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 Tmstee 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 Reconveyance to
Do Not lose or destroy this Deed of Trust OR THE NOTE which it secures. Both must be delivered to the Trustee for cancellation before
reconveyance will be made
882/015610-0047
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LEGAL DESCRIPTION OF PROPERTY
All of that certain real property in the City of La Quinta, County of Riverside, State of
California, described as follows:
That portion of the Southeast quarter of the Northeast quarter of Section 19, Township 6 South,
Range 7 East, San Bernardino Base and Meridian, described as follows:
Commencing at the Southeast corner of the Northeast quarter of said Section 19; Thence South
890 33' 05" West, on the Southerly line of the Northeast quarter of said Section, 330 feet, to the
true point of beginning; thence South 89' 33' 05" West, on said Southerly line of the Northeast
quarter, 330 feet; Thence North 0° 13' 40" West, 1,324.57 feet, to the Northerly line of the
Southeast quarter of Northeast quarter of said Section 19; thence North 89' 34' 05" East, on said
Northerly line, 330 feet; thence South 0° 13' 40" East, 1,324.47 feet to the true point of
beginning;
Excepting therefrom the Southerly 50 feet conveyed to the County of Riverside by Deeds
recorded August 30, 1933 in Book 133, Page(s) 292 and Book 134, Page(s) 298 respectively, of
Official Records, Riverside County Records.
Also excepting therefrom that portion of described in the deeds to the City of La Quinta,
recorded 02-17-1999, as Instrument No. 62425 and 62426, Official Records. Excepting
therefrom the mobile home located thereon.
882101561M047
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RIDER TO CONSTRUCTION DEED OF TRUST WITH ASSIGNMENT OF RENTS
This RIDER TO CONSTRUCTION DEED OF TRUST WITH ASSIGNMENT OF
RENTS ("Rider") is executed this day of by NATIONAL
COMMUNITY RENAISSANCE OF CALIFORNIA, a California nonprofit public benefit
corporation, 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
Construction 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 Promissory Note by and between Trustor and
Beneficiary, dated on or about the date set forth above, the repayment of which by Truster 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 Truster'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 Agency 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.
Trustor's grant hereunder is subject to the nonrecourse provisions in Section 5 of the
Agency Note, which are incorporated herein by this reference as though set forth in full.
ATTACHMENT NO. 6
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843410.06 a10/16/07 g
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 accruing or assessed on any of the Secured
Obligations.
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, except if and to the extent the same are sufficient to cure all monetary defaults and
no other defaults then exist.
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, subject to
the rights of any senior lienholders, 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 Agency
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
882/015610-0047
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for Beneficiary as if such person had actual or constructive notice that such funds were
impressed with a trust in accordance therewith.
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 and not have
been cured within any applicable cure period, 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
LSIGNATURE ON NEXT PAGE]
882/015610-0 47
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IN WITNESS WHEREOF, Trustor has executed this Rider on the date of Trustor's
acknowledgment herein below, to be effective for all purposes as of the day and year first set
forth above.
TRUSTOR:
NATIONAL COMMUNITY RENAISSANCE OF
CALIFORNIA, a California nonprofit public benefit
corporation
Its:
882/015610-0047 _
843410 06 at 0/16/07 _9
State of California
County of
rein
before me,
(insert name and title of the officer)
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.
Signature
(Seal)
882/015610-0047
84341006 a1016/07 -to-
ATTACHMENT NO.7
AGENCY REGULATORY AGREEMENT
[SEE FOLLOWING PAGES]
848399504.1047 ATTACHMENT NO. 7
848399.04 al0i l8/0]
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.27383)
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 October __, 2007
("Effective Date"), by and between the LA QUINTA REDEVELOPMENT AGENCY, a public
body, corporate and politic ("Agency"), and NATIONAL COMMUNITY RENAISSANCE OF
CALIFORNIA, a California nonprofit public benefit corporation ("Developer").
RECITALS:
A. Developer is the owner of fee title to that certain real property more particularly
described in Exhibit "A", attached hereto and incorporated by reference herein (the "Site").
B. On or about March 8, 2007, Agency and Developer (under its former name, The
Southern California Housing Development Corporation) entered into an Affordable Housing
Agreement (the "Original AHA").
C. On or about October _, 2007, Agency and Developer entered into that certain
Amended and Restated Affordable Housing Agreement (the "AHA") which replaced, in its
entirety, the Original AHA.
D. Pursuant to the AHA, Agency agreed to provide financial assistance to Developer
in the sum of Twenty -One Million Seven Hundred Fourteen Thousand One Hundred Seventy -
Seven Dollars ($21,714,177) (the "Agency Loan") for the purpose of assisting Developer to
acquire the Site, and to complete thereon construction of an affordable rental apartment complex
containing eighty (80) units (the "Project"). The AHA requires Developer to enter into this
Agreement, which provides, among other requirements, that, upon completion of construction of
the Project, all of the apartment units within the Project (with the exception of the Management
Unit) shall thereafter be rented to and occupied by "Eligible Tenants" (as that term is defined in
Section 1.9 below). The AHA is incorporated herein as if fully set forth.
E. Reference is also made to the following documents, of even date herewith:
(i) Promissory Note by Developer as Borrower in favor of Agency as lender
("Agency Note"). The Agency Note evidences the Agency Loan.
ATTACHMENT NO. 7
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(ii) Construction Deed of Trust with Assignment of Rents and Riders attached
hereto, by and between Developer as trustor and Agency as beneficiary, and recorded in the
Office of the Riverside County Recorder ("Agency Deed of Trust"). The Agency Deed of Trust
secures (a) repayment of the Agency Note, and (b) performance of Developer's obligations
hereunder.
The Agency Note and the Agency Deed of Trust are referred to herein collectively as the
"Agency Agreements." The Agency Agreements are incorporated herein as if fully set forth.
F. Developer has obtained an award of 4% low income housing tax credits from the
Tax Credit Allocation Committee (the "TCAC") pursuant to Section 42 of the Internal Revenue
Code (the "Tax Credits"). In connection with obtaining the Tax Credits, Developer has entered
into, or will enter into, with TCAC, a regulatory agreement to be recorded in the Official
Records of the County of Riverside encumbering title to the Project (the "Tax Credit Regulatory
Agreement").
G. Pursuant to the AHA and the Agency Agreements, Developer has agreed to
complete construction of the Project and thereafter to own, operate, manage, and maintain the
Project with all of the units thereon except the Management Unit restricted to rental to and
occupancy by Eligible Tenants.
H. Agency and Developer now desire to place restrictions upon the use and operation
of the Site, in order to ensure that the Site shall be operated continuously, for a period of fifty-
five (55) years commencing on the date of the "Permanent Loan Closing" (as that term is defined
in the AHA) (with such date referred to herein after as the "Permanent Loan Closing Date"), as
an affordable rental apartment complex in accordance with the terms hereof.
AGREEMENT:
NOW, THEREFORE, the Developer 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, commencing upon the Effective Date and continuing for a
period of fifty-five (55) years following the Permanent Loan Closing Date, as follows:
1.0 DEFINITIONS.
1.1 "50% Very Low Income Household" shall mean a household whose annual
income does not exceed fifty percent (50%) of AMI, adjusted for family size.
1.2 Affiliate. As used in this Agreement, the term "Affiliate" shall mean any person
or entity directly or indirectly, through one or more intermediaries, controlling, controlled by or
under common control with such person which, if such person is a partnership or limited liability
company, shall include each of the constituent members or general partners, respectively,
thereof. The term "control" as used in the immediately preceding sentence, means, with respect
to a person that is a corporation, the right to the exercise, directly or indirectly, of more than 50%
of the voting rights attributable to the shares of the controlled corporation, and, with respect to a
person that is not a corporation, the possession, directly or indirectly, of the power to direct or
cause the direction of the management or policies of the controlled person.
ATTACHMENT NO. 7
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943409.05 a10/16/07 g
1.3 Affordable Rent. As used in this Agreement, the term "Affordable Rent" shall
mean the amount of monthly rent, including a reasonable utility allowance, that does not exceed
the maximum allowable rent to be charged by Developer and paid by Very Low Income
Households, 50% Very Low Income Households, or Extremely Low Income Households
occupying the Units as determined pursuant to Health and Safety Code Section 50053(b), as of
the Effective Date, and the regulations promulgated pursuant to or incorporated therein,
including, without limitation, any applicable regulations promulgated pursuant to Health and
Safety Code Section 50093. Subject to Section 3.11 herein, the tenant utility allowance shall be
determined by the Executive Director.
1.4 AMI. As used in this Agreement, the term "AMI" or "Area Median Income"
shall mean the median family income for the Riverside County area promulgated and published
annually by the California Department of Housing and Community Development ("HCD")
pursuant to Title 25, Section 6932 of the California Code of Regulations. If HCD ceases
annually to publish median incomes, the parties will agree upon an adequate substitute manner
for determining AMI.
1.5 Approved Budget. As used in this Agreement, the term "Approved Budget" has
the meaning ascribed in Section 3.13 of this Agreement.
1.6 Capital Improvements. As used in this Agreement, the term "Capital
Improvements" means all work and improvements with respect to the Site for which costs and
expenses may' be capitalized in accordance with generally accepted accounting principles in
effect from time to time, consistently applied.
1.7 Cash Flow. As used in this Agreement, the term "Cash Flow" means, for the
applicable period, Net Operating Income less Debt Service.
1.8 CPI. As used in this Agreement, the term "CPI" means 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 -Riverside -Orange County Average, All Items
(1984=100), or, if the CPI is discontinued, such official index as may then be in existence and
which is most nearly equivalent to the CPI.
1.9 Debt Service. As used in this Agreement, the term "Debt Service" means
scheduled debt service (including impounds, expenses, and other amounts payable) on any loan
that is senior to the Agency Loan.
1.10 Eligible Tenant. As used in this Agreement, the term "Eligible Tenant" shall
mean a household which qualifies as a Very Low Income Household, an Extremely Low Income
Household, or a 50% Very Low Income Household.
1.11 Executive Director. As used in this Agreement, 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 terns of this Agreement, the 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.
ATTACHMENT NO. 7
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843409 05 a10/16107 g
1.12 Extremely Low Income Household. As used in this Agreement, the term
"Extremely Low Income Household" shall have the meaning as set forth in Health and Safety
Code Section 50106, or successor statute, adjusted for family size.
1.13 Management Unit. As used in this Agreement, the term "Management Unit" shall
have the meaning ascribed in Section 2.6 hereof.
1.14 Moderate Income Household. As used in this Agreement, the term "Moderate
Income Household" shall have the meaning as set forth in Health and Safety Code Section
50093, or any successor statute, adjusted for family size.
1.15 Net Operating Income. As used in this Agreement, the term "Net Operating
Income" shall have the meaning ascribed thereto in the Agency Note.
1.16 Operating Expenses. As used in this Agreement, the term "Operating Expenses"
shall have the meaning ascribed thereto in the Agency Note.
1.17 Operating Income. As used in this Agreement, the term "Operating Income" shall
have the meaning ascribed thereto in the Agency Note.
1.18 Permanent Loan Closing Date. As used in this Agreement, the term "Permanent
Loan Closing Date" shall have the meaning ascribed in Recital F hereof.
1.19 Restricted Unit Matrix. As used in this Agreement, the term "Restricted Unit
Matrix" shall mean that certain affordability matrix attached hereto and incorporated herein as
Exhibit "F".
1.20 Tax Credit Investor. As used in this Agreement, the term "Tax Credit hivestor"
shall mean an Affiliate of Hudson Housing Capital, LLC, a Delaware limited liability company
1.21 Tax Credit Program. As used in this Agreement, the term "Tax Credit Program"
shall mean the low-income housing tax credit program authorized pursuant to Internal Revenue
Code Section 42, California Health and Safety Code Sections 50199.6-50199.19, Revenue and
Taxation Code Sections 17057.5, 17058, 23610.4, 23610.5, and applicable federal and State
regulations such as 4 California Administrative Code Sections 10300-10340.
1.22 Tax Credits. As used in this Agreement, the term "Tax Credits" shall mean the
low income housing tax credits granted by TCAC for the Project pursuant to the Tax Credit
Program.
1.23 Tax Credit Regulatory Agreement. As used in this Agreement, the term "Tax
Credit Regulatory Agreement" shall mean that certain regulatory agreement to be recorded
against the Site as a condition of the receipt by the Project of an allocation by TCAC of nine
percent (9%) Tax Credits.
1.24 TCAC. As used in this Agreement, "TCAC" shall mean the California Tax Credit
Allocation Committee.
ATTACHMENT NO. 7
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1.25 Unit. As used in this Agreement, the term "Unit" or "unit" shall mean a rental
apartment dwelling unit on the Site.
1.26 Very Low Income Household. As used in this Agreement, the term "Very Low
Income Household" shall have the meaning as set forth in Health and Safety Code
Section 50105, or any successor statute, adjusted for family size.
2.0 RESIDENTIAL RENTAL PROPERTY.
2.1 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 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.
2.2 Conversion of Units. No part of the Project will at any time be owned by a
cooperative housing corporation, nor shall the Developer 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 may be given or withheld in its sole
and absolute discretion.
2.3 No Preference. All of the Units will be available for rental in accordance with the
terms of this Agreement, and the Developer shall not give preference to any particular class or
group of Eligible Tenants in renting the Units in the Project, except as provided in Section 3.4
below.
2.4 Resident Manager Unit. Notwithstanding anything to the contrary in this
Agreement, one (1) of the Units may be occupied by on -site management (the "Management
Units"). The Management Unit shall be restricted for rental to and occupancy by a Moderate
Income Household at an affordable rent, as determined pursuant to Health and Safely Code
Section 50053. As of the Effective Date, affordable rent, including a reasonable utility
allowance, for a Moderate Income Household is no more than the product of thirty percent (30%)
of one hundred ten percent (110%) of AMI adjusted for family size appropriate for the Unit.
2.5 Liability of Developer. Developer and any manager it employs shall not incur
any liability under this Agreement as a result of fraud or intentional misrepresentation by a
tenant.
3.0 OCCUPANCY OF RESTRICTED UNITS BY ELIGIBLE TENANTS
Developer hereby represents, warrants, and covenants as follows:
3.1 Occupancy Levels. Except as expressly provided herein, throughout the term of
this Agreement, the Units shall be continuously occupied or held vacant and available for
occupancy by Eligible Tenants.
ATTACHMENT NO. 7
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3.2 Occupancy By Eligible Tenant. A Unit occupied by an Eligible Tenant who
qualified as an Eligible Tenant at the commencement of the occupancy shall be treated as
occupied by an Eligible Tenant throughout their tenancy. A Unit previously occupied by an
Eligible Tenant and then vacated shall be considered occupied by an Eligible Tenant until the
Unit is reoccupied, provided Developer uses its best efforts to re -lease the vacant Unit to an
Eligible Tenant. Any vacated Unit shall be held vacant until re -leased to an Eligible Tenant.
Developer shall take any or all of the following actions, as necessary, to locate Eligible Tenants
for the Project: (i) notification to the City of the available Unit; (ii) advertisement of the
available Unit in a newspaper of general circulation in the City; and (iii) contacting and notifying
the Riverside County Housing Authority in writing of the available Unit.
3.3 Income Computation and Certification. Immediately prior to an Eligible Tenant's
occupancy of a Unit, Developer shall obtain an Income Computation and Certification Form in
the form attached hereto and incorporated herein as Exhibit "B", or on a similar form required by
TCAC (the "TCAC Income Certification form") if the TCAC Income Certification Form
requires inclusion of the same information as required in Exhibit `B", from each such Eligible
Tenant dated no more than 90 days prior to the date of initial occupancy in the Project by such
Eligible Tenant. In addition, Developer shall provide such further information as may be
reasonably required in the future by the Agency for purposes of verifying a tenant's status as an
Eligible Tenant, provided the same is reasonably available to Developer without unreasonable
expense in connection with obtaining the same. Developer shall use good faith 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 the applicant's current employer; (iii)
obtain an income verification form from the Social Security Administration, California
Department of Social Services, and/or California Employment Development Department if the
applicant receives assistance from any of said agencies; (iv) if an applicant is unemployed or did
not file a tax return for the previous calendar year, obtain other evidence and/or verification of
such applicant's total income received during the calendar year from any source, taxable or
nontaxable, or such other information as is satisfactory to the Agency. Developer shall maintain
in its records each Income Computation and Certification Form obtained pursuant to this section
for a minimum of five (5) years.
3.4 Rental Priority. During the term of this Agreement, Developer shall use its
reasonable commercial efforts to lease the 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; and (ii) other persons meeting the
eligibility requirements of this Agreement. Developer shall, and Agency may, maintain a list
(the "Housing List") of persons who have notified Developer and/or Agency of their desire to
rent a Unit in the Project and who have incomes which would qualify them as an Eligible Tenant,
and Developer shall offer to rent units on the above -referenced priority basis; provided, however,
that Developer shall not be required to prequalify persons on the Housing List. Should multiple
tenants be equally eligible (as to income, credit history, and other nondiscriminatory criteria) and
qualified to rent a unit, Developer shall rent available Units to Eligible Tenants on a first -come,
first -served basis.
ATTACHMENT NO. 7
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843409A5 a10116/07 g
3.5 Recertification. Within sixty (60) days prior to the first anniversary date of the
occupancy of a Unit by an Eligible Tenant, and on each anniversary date thereafter, Developer
shall recertify the income of such Eligible Tenant by obtaining a completed Income
Recertification Form, in the form attached hereto and incorporated herein as Exhibit " C", based
upon the current income of each known occupant of the Unit; provided, however, that if the
TCAC Regulatory Agreement, or a regulatory agreement required to be entered into by
Developer as a condition to obtaining tax-exempt bonds to finance the Project, requires
Developer to obtain a recertification form which requires inclusion of the same information as
required in Exhibit "C", then Developer shall not be deemed to be in default hereunder if during
the term of the TCAC Regulatory Agreement or bond regulatory agreement (as applicable)
Developer obtains from each Eligible Tenant the TCAC recertification form or the recertification
form required pursuant to the bond regulatory agreement.
3.6 Determination of Affordable Rent. All Units shall be rented at an Affordable
Rent.
3.6.1 Rent Schedule and Utility Allowance. Subject to Section 3.11 hereof,
Agency will establish maximum monthly allowances for utilities and services to be used by the
Developer in calculating Affordable Rent. Developer shall submit to Executive Director for
review and approval the Affordable Rent proposed by Developer for all of the Units. The
Executive Director shall approve such proposal if it complies with the terms of this Agreement.
The maximum monthly rent must be recalculated by Developer and reviewed and approved by
the Agency annually.
3.6.2 Adjustment of Affordable Rent. Affordable Rent may change as changes
in the applicable gross rent amounts, the income adjustments, or the monthly allowance for
utilities and services warrant. Any increase in rents is subject to the provisions of outstanding
leases. Developer must provide households occupying the Units not less than thirty (30) days
prior written notice before implementing any rent increase.
3.7 Certification of Continuing Program Compliance. During the term of this
Agreement, on or before each April 1 following the Term Commencement Date, Developer shall
annually advise the Agency of the occupancy of the Project during the preceding calendar year
by delivering a Certification of Continuing Program Compliance in the form attached hereto and
incorporated herein as Exhibit "E", stating (i) the Units of the Project which have been rented to
and are occupied by Eligible Tenants and (ii) that to the knowledge of Developer either (a) no
unremedied default has occurred under this Agreement, or (b) a default has occurred, in which
event the Certification shall describe the nature of the default and set forth the measures being
taken by the Developer to remedy such default. Developer shall pay to Agency an annual fee
pursuant to Health and Safety Code Section 33418(c) which shall not exceed FIVE HUNDRED
DOLLARS (5500) as such amount shall be permitted to increase by the CPI from and after the
date of this Agreement, or, if 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 of Records. Developer shall maintain complete and accurate records
pertaining to the Units, and shall permit any duly authorized representative of the Agency, upon
twenty-four (24) hours prior notice and during business hours, to inspect the books and records
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of Developer pertaining to the Project including, but not limited to, those records pertaining to
the occupancy of the Units.
3.9 Reliance on Tenant Representations. Each tenant lease shall contain a provision
to the effect that Developer 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. Each such lease shall also include the lease rider attached
hereto and incorporated herein as Exhibit "D" and shall state that occupation of the Unit is
subject to the income restrictions described in this Agreement.
3.10 Remedy For Excessive Rent Charge.
3.10.1 Subject to Section 2.4 hereof, it shall constitute a default for Developer
to charge or accept for any Unit rent amounts in excess of the amount provided for in Section 3.6
of this Agreement. In the event that Developer charges or receives such higher rental amounts,
in addition to any other remedy Agency shall have for such default, Developer shall be required
to pay to Agency an amount equal to two (2) times the entire amount of rent received in excess
of the amount permitted pursuant to this Agreement. For purposes of this Section 3.10.1, the
term "rent" shall not include Section 8 payments Developer receives in connection with the
renting of any of the Units.
3.10.2 Subject to Section 2.4 hereof, and except as otherwise provided in this
Agreement, it shall constitute a default for Developer to knowingly (or without investigation as
required herein) initially rent any Unit to a tenant who is not an Eligible Tenant. In the event
Developer violates this Section, in addition to any other equitable remedy Agency shall have for
such default, Developer, 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 Developer received from such
ineligible tenant, or (B) the total rent Developer was entitled to receive for renting that Unit, plus
(ii) any relocation expenses incurred by Agency or the City of La Quinta as a result of Developer
having rented to such ineligible person.
3.10.3 It shall constitute a default for Developer to knowingly (or without
investigation as required herein) rent a Unit in violation of the leasing preference requirements of
Section 3.4 of this Agreement. In the event Developer violates this Section, in addition to any
other equitable remedy Agency shall have for such default, Developer, 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 Developer rents to an ineligible person as a result of
such person's fraud or misrepresentation.
3.10.4 Notwithstanding anything herein to the contrary and subject to Section
3.10.5 below, in the event Developer violates more than one provision of this Section 3.10 in the
rental of a specific unit to a specific individual, Developer shall be required to pay to Agency for
each such violation the amount listed under the subsection above (e.g., either 3.10.1, 3.10.2, or
3.10.3) that results in the largest payment amount by Developer to the Agency under this Section
3.10, but not the amounts required pursuant to the other subsections, and upon Developer's
payment thereof, the default under this Section 3.10 shall be deemed cured with respect to the
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default for which such penalty is assessed, except to the extent such violation continues after .
Developer's payment hereunder, in which event the amounts required to be paid pursuant to this
Section 3.10 shall apply.
THE PARTIES HERETO AGREE THAT THE AMOUNTS SET FORTH IN
SECTION 3.10 (THE "DAMAGE AMOUNTS") CONSTITUTE A REASON-
ABLE APPROXIMATION OF THE ACTUAL DAMAGES THAT AGENCY
WOULD SUFFER DUE TO THE DEFAULTS BY DEVELOPER SET FORTH
IN SECTIONS 3.10.1 THROUGH 3.10.3, 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 ACCOMPLISH-
MENT 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 3.10 SHALL BE THE SOLE
MONETARY DAMAGES REMEDY FOR THE DEFAULTS SET FORTH IN
THIS SECTION 3.10, 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 Agency 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.
DEVELOPER'S INITIALS: AGENCY'S INITIALS:
3.10.5 Notwithstanding anything herein to the contrary, in the event Developer
violates Section 3.10.1 hereof, to the extent the tenant from whom Developer charged excess rent
still resides in the Project at the time Agency discovers this violation, or Developer knows the
location of such tenant, Developer shall, in lieu of paying damages to Agency as described in
Section 3.10.1 and 3.10.4 above, refund the tenant the entire amount of excess rent charged to
such tenant, calculated with interest at the lesser of the maximum legal rate or ten percent (10%).
Developer shall provide evidence to Agency that such payment has been made, within thirty (30)
days after Agency provides notice to Developer of the default hereunder.
3.11 Tax Credit Regulatory Agreement. Developer agrees to perform all of
Developer's obligations under this Agreement and the Tax Credit Regulatory Agreement. In the
event Agency is prevented by a final, non -appealable order of a court of competent jurisdiction
in a lawsuit involving the Project, or by an applicable and binding published appellate opinion,
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or by a final, non -appealable order of a regulatory body having jurisdiction, from enforcing, for
any reason, the affordability restrictions set forth in this Agreement or in the AHA, then in such
event Agency shall be a third -party beneficiary under the Tax Credit Regulatory Agreement and
shall have full authority to enforce any breach or default by Developer under the Tax Credit
Regulatory Agreement in the same manner as though it were a breach or default hereunder.
Without Agency's prior written consent, which consent may be withheld in Agency's sole and
absolute discretion, Developer shall not consent to any amendment of or modification to the Tax
Credit Regulatory Agreement which (i) shortens the tern of the affordability restrictions on the
Units in the Project to a term of less than fifty-five (55) years from the Effective Date or (ii)
releases Developer from the requirement that the Units be rented to Eligible Tenants in
accordance with the Restricted Unit Matrix.
Notwithstanding anything contained in this Agreement to the contrary, if and when the
Site is subject to the requirements of the Tax Credit Program and there is a conflict between the
requirements of the Tax Credit Program and the provisions set forth in this Agreement, then the
provisions of the Tax Credit Program shall prevail. That notwithstanding, the fact that this
Agreement and the Tax Credit Program provide for greater, lesser or different obligations or
requirements shall not be deemed a conflict unless the applicable provisions are inconsistent and
could not be simultaneously enforced or performed.
3.12 Annual Statements. As soon as available, and in any event not later than one
hundred twenty (120) days after the close of each fiscal year of Developer, financial statements
of Developer, including a profit and loss statement, and a consolidated statement of changes in
financial position of Developer as at the close of and for such fiscal year, all in reasonable detail,
certified by an officer or partner of Developer and, upon request of Agency, if total Operating
Expenses for such year exceed the total amount set forth in the Approved Budget by more than
ten percent (10%), accompanied by a compilation report prepared by a firm of certified public
accountants, and in a format, each reasonably acceptable to the Executive Director.
3.13 Pro Forma Budget. As soon as available and in any event not later than
November I" of each calendar year beginning with the year of recordation hereof, Developer
shall provide Agency, for the Executive Director's approval, with a detailed projection of
Operating Income and budgets of estimated Operating Expenses for the immediately succeeding
calendar year (the "Pro Forma Budget') and a detailed cash flow projection for the next
succeeding year. Developer shall also submit to Agency on request additional detail,
information and assumptions used in the preparation of the Pro Forma Budget.
Within fifteen (15) days following its receipt of the Pro Forma Budget, Agency shall
deliver to Developer its written approval or disapproval thereto, which approval shall not be
unreasonably withheld. If Agency disapproves the Pro Forma Budget, it shall set forth its
reasons with reasonable specificity. If Agency fails to indicate either its approval or disapproval
of the Pro Forma Budget within such period, then Agency shall be deemed to have approved the
Pro Forma Budget as submitted by Developer.
Once the Pro Forma Budget is approved or deemed approved by Agency, such approved
Pro Forma Budget shall become the "Approved Budget" for the entire applicable calendar year.
Developer shall use commercially reasonable efforts to operate the Site during such calendar
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year within the Approved Budget; provided, however, that Developer shall not be required to
obtain the approval of Agency for any deviation from the Approved Budget so long as the total
Operating Expenses and expenditures for Capital Improvements paid or incurred during such
calendar year do not exceed the originally budgeted amount thereof in the Approved Budget by
more than five percent (5%) in the aggregate. To the extent required hereunder, any request by
Developer to deviate from the Approved Budget shall be submitted to Agency in writing with an
explanation thereof and shall be accompanied by supporting information for the request;
provided, however, that in the event of an emergency threatening persons or property, Developer
shall use its good faith efforts to give prior verbal notice to Agency of unbudgeted expenses that
are necessary to avoid damage or injury to persons or property, and in any event shall notify
Agency, in writing, of the nature of the emergency and the amount of the expenses, within ten
(10) days after such expenses have been incurred. Agency shall reasonably respond to any such
request within fifteen (15) days of the receipt of same and if Agency fails to do so, such request
shall be deemed to be approved.
4.0 MAINTENANCE.
4.1 Maintenance Obligation. Developer agrees to and shall maintain all interior and
exterior improvements, including landscaping, on the Site in a first class condition and repair
(and, as to landscaping, in a healthy condition) and in accordance with all of the 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 Developer agrees to perform all necessary Site improvements to assure the
Site is maintained in good condition. Maintenance requirements shall include that: (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/or other
vegetation; (b) no yard areas shall be left unmaintained, including (i) no broken or discarded
furniture, appliances, or other household equipment stored in yard areas for periods exceeding
one (1) week, (ii) no packing boxes, lumber, trash, dirt, or 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. Developer 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
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with comparable approved materials. In the event that Developer breaches any of the covenants
contained in this Section and Developer does not commence to cure such breach within five (5)
business 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 attach a lien on the Site, or to assess the Site, in the amount of the expenditures
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 Developer to Agency upon demand.
4.2 Lien. If the costs incurred pursuant to Section 4.1 are not reimbursed within thirty
(30) days after Developer's receipt of notice thereof, or if Developer fails to timely pay other
sums required to be paid to Agency under this Agreement when due (after notice and an
opportunity to cure, as set forth in Section 10 or Section 11 (as applicable)), 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 Developer, and the rents, issues and profits of such property. Agency may bring an
action at law against Developer to pay any such sums or foreclose the lien against Developer'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 seg., 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 Marketing_ Plan. Prior to the date the City issues a certificate of occupancy for
any of the Units, Developer shall have submitted for the approval of the Executive Director,
which approval shall not unreasonably be withheld, a plan for marketing the rental of the Units
(the "Marketing Plan"). The Marketing Plan shall include affirmative marketing procedures and
requirements. The Marketing Plan shall include a plan for publicizing the availability of the
Units within the City in a manner which gives notice to residents of the City, such as notices in
any Agency sponsored newsletter, newspaper advertising in local newspapers and notices in City
offices and community centers.
5.2 Long Term Management of the PMigct. Prior to the date the City issues a
certificate of occupancy for any of the Units, Developer shall have submitted for the reasonable
approval of the Executive Director a "Management Plan" which sets forth in detail the identity
and the duties of the person or entity retained by Developer to operate and manage the Project
(the "Property Manager"), the management staffing policies (i.e., what staff is on site, how they
are supervised) tenant selection criteria, the tenant selection and income certification process,
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tenant orientation, tenant relations, tenant complaints, routine maintenance, emergencies, a
security system and crime prevention program, the procedures for determining Affordable Rent
and for the collection of rent, occupancy limits and the procedures for monitoring of occupancy
levels, the procedures for eviction of tenants, the rules and regulations of the Project and manner
of enforcement, the initial standard lease form, and other matters relevant to the management of
the Project. The Management Plan shall require the Property Manager to apply for the Crime
Free Multi -Housing Program through the City of La Quinta Police Department. Developer may
from time to time submit amendments and modifications to the Management Plan for the
reasonable approval of the Executive Director. The management of the Project shall be in
compliance with the Management Plan.
5.3 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 Developer of the event(s) of Gross
Mismanagement occurring and Developer 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 materially 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:
5.3.1 Knowingly leasing a Unit to an ineligible tenant or tenants whose income
exceeds the prescribed levels;
5.3.2 Knowingly allowing the tenants to exceed permitted occupancy levels
without taking immediate steps to stop such overcrowding;
5.3.3 Knowingly allowing a tenant to sublease his or her Unit at a rent that
exceeds an Affordable Rent;
5.3.4 Failing to timely maintain the Project and the Site in the manner required
by this Agreement or failing to submit materially complete reports;
5.3.5 Failing to timely submit the reports as required by this Agreement;
5.3.6 Fraud in connection with any document or representation relating to this
Agreement or embezzlement of Project monies; and
5.3.7 Failing to fully cooperate with law enforcement in its attempts to maintain
a crime -free environment on the Site.
5.4 Lease Approval. The initial form lease agreement to be used by Developer for the
rental of any of the Units ("Lease Agreement"), and any changes to such form Lease Agreement
regarding the provisions required by this Agreement, including, but not limited to, the provisions
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required by Section 3.9, to be included in the form Lease Agreement, shall be reasonably
approved in advance by Agency's Executive Director prior to the initial use of the lease form and
prior to the first use of the changed form. The form Lease Agreement shall include a Crime Free
Lease Addendum in the form recommended by the Riverside County Sheriffs Department.
5.5 Operating Reserve. Developer shall, or shall cause the Property Manager to, set
aside in a separate interest -bearing trust account the sum of One Hundred Six Thousand One
Hundred Ninety Dollars ($107,000) ("Operating Reserve") and shall provide evidence
reasonably satisfactory to Agency's Executive Director of compliance herewith, and shall
thereafter retain such amount in the Operating Reserve, to cover shortfalls between Operating
Income and actual Project costs. In the event that Developer's permanent lender, TCAC
regulations or approvals or the Tax Credit Investor, reasonably requires a different type of
account for the Operating Reserve or requires different terms for such account, Developer shall
request Agency's Executive Director's approval, which approval shall not be unreasonably
withheld, to modify the requirements of this paragraph to meet such requirements. Following the
first anniversary date of the City's issuance of the certificate of occupancy for the Project on the
Site, Developer may request release of the Operating Reserve to Developer and cancellation of
the Operating Reserve upon written request to Agency's Executive Director accompanied by an
audited financial statement evidencing sufficient Project income showing, to the reasonable
satisfaction of Agency's Executive Director, that the Operating Reserve is no longer required.
5.6 Capital Replacement Reserve. Developer shall, or shall cause the Property
Manager to, annually set aside a minimum of Three Hundred Nine Dollars ($309) per unit per
year (for example, for 80 units, the annual amount would be $40,000) into a capital replacement
reserve account (the "Capital Replacement Reserve"). Funds in the Capital Replacement
Reserve shall be used solely for Capital Improvements.
As Capital Improvements become necessary, the Capital Replacement Reserve shall be
the first source of payment therefor.
Not less than once per year, Developer, at its expense, shall submit to Agency an
accounting for the Capital Replacement Reserve.
The non -availability of funds in the Capital Replacement Reserve does not in any manner
relieve Developer of the obligation to undertake necessary capital repairs and improvements and
to continue to maintain the Site in the manner prescribed in this Agreement.
Notwithstanding anything herein to the contrary, in the event the permanent lender for the
Project requires the establishment of a capital reserve to fund Capital Improvements, and such
requirements are consistent with, and at least as stringent as those set forth herein, then during
the term of the documents governing such loan, Developer shall not be deemed in default
hereunder if Developer is in compliance with such condition.
6.0 COMPLIANCE WITH LAWS; ENVIRONMENTAL MATTERS.
6.1 Compliance With Laws. Developer 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 Site; (ii) all rules and
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regulations of any assessment district of the City with jurisdiction over the Site; and (iii) all
applicable labor standards of California law and federal law; and (iv) the requirements of
California law and federal law with respect to the employment of undocumented workers or
illegal aliens.
6.2 Waiver and Release. Subject to Section 222 of the AHA, which requires the
Agency to indemnify Developer in certain, specified circumstances, Developer hereby waives,
releases, acquits, and forever discharges Agency, its officers, officials, members, employees,
agents, and representatives, and their respective heirs, successors, personal representatives, and
assigns, of and from any liability for the physical or environmental condition of the Site, or for
removal or remediation of Hazardous Materials, or repair or alteration of the physical condition
of the Site or Project. Developer accepts and approves the physical and environmental condition
of the Site in its "AS IS" 'WHERE IS" "WITH ALL FAULTS" condition.
6.2.2 Definitions. For the purposes of this Agreement, unless the context
otherwise specifies or requires, the following terms shall have the meanings herein specified:
6.2.2.1 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 biphenyls,
(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 as "hazardous substances" pursuant to Section 311 of the Clean Water Act (33 U.S.C.
1317), (x) defined as a "hazardous waste" pursuant to Section 1004 of the Resource
Conservation and Recovery Act, 42 U.S.C..6901 et sec. (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 et M.
6.2.2.2 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.
6.2.2.3 The term "Governmental Requirements" shall mean all past,
present and future laws, ordinances, statutes, codes, rules, regulations, orders and decrees of the
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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.
6.2.3 Indemnity. Developer 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 their respective 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) Developer's placement on or under
the Site of any Hazardous Materials or Hazardous Materials Contamination after the Effective
Date, (ii) the escape, seepage, leakage, spillage, discharge, emission or release from the Site of
any Hazardous Materials or Hazardous Materials Contamination after the Effective Date, or (iii)
any Liabilities incurred under any Governmental Requirements relating to the acts described in
the foregoing clauses (i) and (ii); provided, however, that the same shall not apply to acts or
omissions following Agency's or City's conduct of a foreclosure sale or acceptance of a deed in
lieu thereof.
6.3 Duty to Prevent Hazardous Material Contamination. Developer 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, Developer 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 of Developer to Remediate Premises. Notwithstanding the obligation
of Developer to indemnify Agency, City, and their respective officers, officials, members,
employees, agents, and representatives pursuant to Section 6.2.3, Developer 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 AHA, which requirements or necessity arise from the presence upon, about
or beneath the Site, prior to Agency's or City's conduct of a foreclosure sale or acceptance of a
deed in lieu thereof, of any Hazardous Materials or Hazardous Materials Contamination for
which Developer 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. Developer, 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
Developer is required to report to any governmental agency any violation or potential violation
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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 Developer 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,
Developer 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,
Developer shall fumish 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. Developer, 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 Developer and Agency, and shall provide Agency evidence reasonably
acceptable to Agency's 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 Developer, in an amount not less than Three Million Dollars
($3,000,000) per occurrence combined single limit including products, completed operations,
contractual, bodily injury, personal injury, death and property 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 CPI (the "CPI Adjustment"). Unless otherwise approved in advance by the
Agency Executive Director, the insurance to be provided by Developer 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 Developer 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 earthquakes to the extent generally and commercially available at commercially
reasonable rates, if such insurance is generally obtained for rental apartment projects of this size
and type in the counties of Los Angeles, Orange County, Riverside, and San Bernardino.
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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
Developer 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 policyholders' rating of A or better in
the most recent addition of `Best's Key Rating Guide -- Property and Casualty."
Notwithstanding the foregoing, in the event that the policies required hereunder are not available
from such insurers at commercially reasonable rates, the Executive Director shall have the
authority, in his or her sole and absolute discretion, to waive one or more of such requirements,
provided the proposed policies will adequately protect the Agency's interests hereunder. 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 Developer
hereunder. In no event shall the limits of any policy be considered as limiting the liability of
Developer 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
7.2.3 A waiver by the insurer of any right to subrogation against Agency and
City, and their respective officers, officials, members, employees, agents, and 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 or City or their respective officers, officials, members,
employees, agents, or representatives.
7.2.4 The Agency and the City and their 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 City or their respective 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 to Procure Insurance. If Developer 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 Developer'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
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to time, after thirty (30) days written notice to Developer, procure such insurance and pay the
premiums therefor, in which event Developer shall immediately repay Agency all sums so paid
by Agency together with interest thereon at the maximum legal rate.
8.0 OBLIGATION TO REPAIR.
8.1 Obligation to Repair and Restore Damage Due to 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
Developer, subject to its compliance with any procedures required by a senior lien holder,
Developer 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 Developer 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" events (as defined in Section 22
of this Agreement) occurring after the casualty event, in no event shall the repair, replacement, or
restoration period exceed fifteen (15) months from the date Developer 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 Developer, at no expense to
Agency, in obtaining any governmental permits required for the repair, replacement, or
restoration and, upon issuance of such permits Agency 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 Site do not permit the repair, replacement, or
restoration, Developer may elect not to repair, replace, or restore the Project by giving notice to
Agency (in which event Developer shall be entitled to all insurance proceeds but Developer shall
be required to remove all debris from the Site) or Developer may reconstruct such other
improvements on the Site 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 Developer fails to obtain insurance as required by this Agreement (and Agency has not
procured such insurance and charged Developer for the cost), Developer 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, Developer 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.
8.3 Damage or Destruction Due to Cause Not Required to be Covered by Insurance.
If the improvements comprising the Project are completely destroyed or substantially damaged
by a casualty for which Developer is not required to (and has not) insured against, then
Developer shall not be required to repair, replace, or restore such improvements and may elect
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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)
Developer shall remove all debris from the Site, 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 Developer does not timely elect not to repair, replace, or restore the improvements as
set forth in the first sentence of this Section 8.3, Developer shall be conclusively deemed to have
waived its right not to repair, replace, or restore the improvements and thereafter Developer 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.
9.0 LIMITATION ON TRANSFERS.
9.1 Sale or Transfer of the Project. Developer covenants that during the term of this
Agreement Developer 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 Developer, taking all transfers into account on a cumulative basis. In the event any
entity constituting Developer, or the constituent partners or members of Developer or any
successor of Developer, 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 Developer, or the constituent partners of Developer or
any successor of Developer 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 Developer, or the constituent members of Developer or any
successor of Developer 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 Developer, or the constituent partners of Developer or any successor of Developer 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 of Transfer Required. Except as set forth below, Developer
shall not Transfer this Agreement or any of Developer'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
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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:
(a) transfers to a limited liability company in which Developer has a greater
than fifty percent (50%) ownership and management interest;
(b) transfers to a limited partnership in which Developer or an Affiliate of
Developer which is also a non-profit public benefit corporation is the
general partner (the "Limited Partnership");
(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;
(g) the conveyance or dedication of 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;
(h) the transfer of the limited partner interests of the Limited Partnership to
the Tax Credit Investor;
(i) the transfer by the Tax Credit Investor to an Affiliate of Hudson Housing
Capital, LLC;
(j) the removal by the Tax Credit Investor of the general partner of the
Limited Partnership for a default under the partnership agreement,
provided the replacement general partner is reasonably satisfactory to
Agency;
(k) sale by the Tax Credit Investor of credits in syndication;
(1) encumbrance of the limited partner interest by the Tax Credit Investor as
collateral to finance its capital contribution to the Limited Partnership;
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(m) exercise by the general partner of Developer of any option to purchase or
right of first refusal to purchase the Limited Partnership or all of the
limited partner's interest in the Limited Partnership at the conclusion of
the tax credit period; or
(n) transfer by Agency of its general partnership interest in the Limited
Partnership.
9.4 Assignment and Assumption Agreement. In the absence of specific written
agreement by Agency, no Transfer by Developer 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
Developer or any successor party from the obligation to timely complete construction of the
Project. In addition, no attempted Transfer of any of Developer's obligations hereunder shall be
effective unless and until Developer 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 in 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.
10.0 EVENTS OF DEFAULT BY DEVELOPER.
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 Default" by Developer
hereunder if Developer shall have not cured, corrected, or 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 Developer 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 Developer has commenced
to cure within the same thirty (30) day period and has diligently prosecuted such cure to
completion:
10.1 Developer shall abandon or surrender the Site; or
10.2 Developer is in default of the Agency Note and has not cured such default within
the cure period applicable to such default as set forth in the Agency Note; or
10.3 Developer is in material default of any of the covenants, terms or provisions of
this Agreement or any of the Agency Agreements; or
10.4 Developer voluntarily files or has involuntarily filed against it any petition under
any bankruptcy or insolvency act or law and the same has not been dismissed within sixty (60)
days thereafter; or
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10.5 Developer is adjudicated a bankrupt; or
10.6 Developer makes a general assignment for the benefit of creditors in violation of
the terms of this Agreement or any of the Agency Agreements.
10.7 Developer is in default, beyond any applicable cure period, of either of the
following: (i) any senior indebtedness encumbering the Site, or (ii) the Tax Credit Regulatory
Agreement and the other party has not waived the default.
Notwithstanding anything herein to the contrary, whenever the Agency shall deliver any
notice or demand to the Developer with respect to any breach or default by the Developer of the
terms hereunder, the Agency shall at the same time deliver a copy of such notice or demand to
the Tax Credit Investor. The Tax Credit Investor (insofar as the rights of the Agency are
concerned) shall have the right, at its option, within thirty (30) days after the receipt of the
notice, to cure or remedy or commence to cure or remedy any such default. Such cure period
shall run concurrently with the Developer's cure period described in this Article 10.0.
11.0 REMEDIES OF AGENCY.
In the event Developer defaults in the performance or observance of any covenant,
agreement or obligation of Developer 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, Developer has failed to commence to cure such default
within the applicable time period and diligently prosecute said cure to completion, then Agency
may declare an "Event of Default" to have occurred hereunder, and, at its option, may take one
or more of the following steps:
11.1 With respect to (i) the physical condition of the Site, or (ii) Developer's Gross
Mismanagement of the Project, enter the Site and correct or cause to be corrected said default
and charge the costs thereof (including costs incurred by Agency in enforcing this provision) to
the account of Developer, which charge shall be due and payable within 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 (A) place a lien on the Site for said amount due plus interest at the maximum legal
rate, or (B) foreclose with respect to Agency's lien on the Site for said amount due plus interest
at the maximum legal rate;
11.2 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;
11.3 Exercise its right to maintain any and all actions or proceedings at law or suits in
equity to compel Developer to correct or cause to be corrected said default, or to foreclose as a
result thereof, including without limitation exercise of Agency's rights under the Agency Deed
of Trust;
11.4 Have a receiver appointed to take possession of Developer's interest in the Site,
with power in said receiver to administer Developer's interest in the Site, to collect all funds
available to Developer in connection with its operation and maintenance of the Site, and to
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perform all other actions consistent with Developer's obligations under this Agreement as the
court deems proper;
11.5 Terminate this Agreement by written notice to Developer and seek repayment of
any remaining principal and accrued interest then owing on the Agency Note;
11.6 With respect to a default for which foreclosure would be an available remedy,
exercise the right to foreclose, or, during the period which is five (5) days prior to the foreclosure
sale date, exercise the right to purchase the Project from Developer, for a purchase price equal to
the appraised value of the Site less (i) the outstanding amount due under any senior indebtedness,
(ii) the amount due under the Agency Note, (iii) any delinquent taxes and assessments owing on
the Site, and (iv) any reasonable costs incurred by Agency to effect the curing of a default and
purchase of the Project, including but not limited to escrow fees and attorney's fees.
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 Developer, 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 Agreements. Developer agrees for itself and any
successor in interest that Developer 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 itself, its heirs,
executors, administrators, and assigns, and all persons claiming under or through them, that there
shall be no discrimination against or segregation of any person or group of persons on account of
race, color, creed, religion, sex, marital status, ancestry, or national origin in the sale, lease,
sublease, transfer, use, occupancy, tenure, or enjoyment of the land herein conveyed, nor shall
the grantee itself, or any persons 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 in the land
herein conveyed. The foregoing covenants shall run with the land."
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12.2.2 In leases: "The lessee herein covenants by and for itself, its heirs,
executors, administrators, and assigns, and all persons claiming under or through them, 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
itself, or any person claiming under or through it, establish or permit any such
practice or practices of discrimination or segregation with reference to the
selection, location, number, use, or occupancy of tenants, lessees, 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 itself, or any person claiming under or through it,
establish or permit any such practice or practices of discrimination or segregation with reference
to the selection, location, number, use, or occupancy of tenants, lessees, subtenants, sublessees,
or vendees of land."
13.0 COVENANTS TO RUN WITH THE LAND.
Developer hereby subjects the Site to the covenants, reservations, and restrictions set
forth in this Agreement. Agency and Developer 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 Developer's successors in title to the Site; provided,
however, that on the termination of this Agreement said covenants, reservations and restrictions
shall automatically expire. All covenants established in this Agreement shall, without regard to
technical classification or designation, 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 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 Developer hereby declare their understanding and intent that the burden of
the covenants set forth herein touch and concern the land in that Developer's legal interest in the
Site is rendered less valuable thereby. Agency and Developer further hereby 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.
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Developer, in exchange for the Agency entering into the AHA, hereby agrees to hold,
sell, and convey the Site subject to the terms of this Agreement. Developer also grants to the
Agency the right and power to enforce the terms of this Agreement against the Developer 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 this Agreement shall remain in effect for a period terminating
on the earliest of (i) fifty-five (55) years following the Permanent Loan Closing Date;
(ii) foreclosure by Agency with respect to the Site; and (iii) foreclosure by a senior lender.
14.0 INDEMNIFICATION.
Developer 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, except with respect to those actions
described in the last sentence of Section 222 of the AHA.
15.0 UTILITIES AND TAXES
Developer, while in possession of the Site, and each successor or assign of Developer
while in possession of the Site, shall remain fully obligated for the payment of (i) real and
personal property taxes and assessments in connection with the Site, subject to Developer's right
to claim exemptions under California Revenue & Taxation Code Section 214(g), and (ii) all
charges for all utilities serving the Site for which Developer is responsible.
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.
The Developer and the Agency agree to mutually consider reasonable requests for
amendments to this Agreement which may be made by either of the parties hereto, lending
institutions, the Tax Credit Investor or financial consultants to the Agency, provided such
requests are consistent with this Agreement and would not substantially alter the basic business
terms included herein. The Agency's Executive Director shall have the authority to approve, on
behalf of the Agency, amendments to this Agreement that would not substantially alter the basic
business terms or substantially increase the risk to the Agency. All other amendments shall
require the action of the Agency Board. All amendments, including those authorized to be
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approved by the Agency's Executive Director, shall be in writing and shall be signed by
authorized representatives of Agency and Developer.
18.0 NOTICE.
Formal notices, demands, and communications between Agency and Developer 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 Developer: National Community Renaissance of California
9065 Haven Avenue, Suite 100
Rancho Cucamonga, CA 91730
Attn: Chief Executive Officer
Fax: ( )
With a copy to: Hudson Housing Capital, LLC
630 Fifth Avenue, Suite 2850
New York, NY 10111
Attn:
Fax: ( )
With a copy to: Law Office of
Edward A. Hopson
655A North Mountain Avenue
Upland, CA 91786
Attn: Edward A. Hopson, Esq.
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
ATTACHMENT NO. 7
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843409.05 a10/16/07 g
communications may be sent in the same manner to such other addresses as a party may from
time to time designate by mail.
Written notices, demands and communications between the Agency and the Developer
shall be sufficiently given if (i) delivered by hand, (ii) delivered by reputable same -day or
overnight messenger service that provides a receipt showing date and time of delivery, or (iii)
dispatched by registered or certified mail, postage prepaid, return receipt requested, to the
principal offices of the Agency and the Developer at the addresses set forth above. Such written
notices, demands and communications may be sent in the same manner to such other addresses
as either party may from time to time designate by mail as provided above. A notice signed by
legal counsel for a party and delivered to the other party in accordance with this Section shall be
deemed notice delivered by the party on whose behalf such legal counsel is acting.
Any written notice, demand, or communication shall be deemed received immediately if
delivered by hand or delivered by messenger in accordance with the preceding paragraph, and
shall be deemed received on the third (3rd) day from the date it is postmarked if delivered by
registered or certified mail in accordance with the preceding paragraph.
19.0 NONLIABILITY OF AGENCY OFFICIALS.
No officer, official, member, employee, agent, or representative of Agency shall be
personally liable to Developer, or any successor in interest, in the event of any default or breach
by Agency or for any amount which may become due to Developer or successor or on any
obligations under the terms of this Agreement or any of the Agency Agreements.
20.0 TRANSACTIONS WITH AFFILIATES.
Developer shall have the right to enter into contracts with subsidiaries, and Affiliates for
the purpose of providing management, 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.
21.0 SEVERABILITY/WAIVER/INTEGRATION/INTERPRETATION• ENTIRE AGREE-
MENT.
21.1 Severability. 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. All waivers of the provisions of this Agreement, unless specified
otherwise herein, must be in writing and signed by the appropriate authorities of Agency and
Developer, 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 invalidate this Agreement nor
ATTACHMENT NO. 7
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843409.05 a10/16/07 g
shall it be construed as a waiver of any succeeding breach of the same or other covenants,
agreements, restrictions or conditions hereof.
21.3 Inte rag tion. 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.
21.4 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 that might otherwise apply.
21.5. Entire Agreement. This Agreement integrates all of the terms and conditions
mentioned herein or incidental hereto, and supersedes all negotiations or previous agreements
between the parties or their predecessors -in -interest with respect to all or any part of the subject
matter hereof.
22.0 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 Developer); 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 after the sending party hqs knowledge, or should
have obtained knowledge, of the commencement of the cause. The following shall not be
considered as events or causes beyond the control of Developer, and shall not entitle Developer
to an extension of time to perform: (i) Developer's failure to obtain financing for the Project
(except as a result of an omission or breach by Agency), (ii) Developer'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 Developer. 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.
23.0 THfRD PARTY BENEFICIARY.
The City of La Quinta is deemed a third party beneficiary of the terms and covenants
contained in this Agreement and has the right, but not the obligation, to enforce the terms and
covenants contained herein.
ATTACHMENT NO. 7
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843409.05.10/16/07 g
24.0 FUTURE ENFORCEMENT.
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.
25.0 GOVERNING LAW.
This Agreement shall be governed by the internal laws of the State of California without
regard to conflicts of law.
26.0 NO MERGER.
The covenants, terms, and provisions of this Agreement shall not merge with any grant
deed or other instrument pertaining to the conveyance of any interest in real property.
27. 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]
ATTACHMENT NO. 7
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843409 05 a10/16/07 g
IN WITNESS WHEREOF, the Agency and Developer have executed this Regulatory
Agreement and Declaration of Covenants and Restrictions by duly authorized representatives on
the date first written hereinabove.
Date
ATTEST:
By:
Secretary
APPROVED AS TO FORM:
RUTAN & TUCKER, LLP
By:
Attorneys for the La Quinta
Redevelopment Agency
Date:
"AGENCY"
LA QUINTA REDEVELOPMENT AGENCY,
a public body, corporate and politic
0
Thomas Genovese
Executive Director
"DEVELOPER"
NATIONAL COMMUNITY RENAISSANCE OF
CALIFORNIA, a nonprofit public benefit
corporation
Its:
ATTACHMENT NO. 7
882/015610-0047 Page 31 of 45
843409 05 a10/16/07 g
STATE OF CALIFORNIA )
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 )
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
f SEAL]
ATTACHMENT NO. 7
882/015610-0047 Page 32 of 45
843409.05 a10/16/07 g
STATE OF CALIFORNIA )
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]
ATTACHMENT NO. 7
882/015610-0047 Page 33 of 45
843409.05 a10/16/07 g
EXHIBIT "A"
LEGAL DESCRIPTION OF SITE
All of that certain real property in the City of La Quinta, County of Riverside, State of
California, described as follows:
That portion of the Southeast quarter of the Northeast quarter of Section 19, Township 6 South,
Range 7 East, San Bernardino Base and Meridian, described as follows:
Commencing at the Southeast corner of the Northeast quarter of said Section 19; Thence South
89' 33' 05" West, on the Southerly line of the Northeast quarter of said Section, 330 feet, to the
true point of beginning; thence South 89' 33' 05" West, on said Southerly line of the Northeast
quarter, 330 feet; Thence North 0° 13' 40" West, 1,324.57 feet, to the Northerly line of the
Southeast quarter of Northeast quarter of said Section 19; thence North 89' 34' 05" East, on said
Northerly line, 330 feet; thence South 0° 13' 40" East, 1,324.47 feet to the `true point of
beginning;
Excepting therefrom the Southerly 50 feet conveyed to the County of Riverside by Deeds
recorded August 30, 1933 in Book 133, Page(s) 292 and Book 134, Page(s) 298 respectively, of
Official Records, Riverside County Records.
Also excepting therefrom that portion of described in the deeds to the City of La Quinta,
recorded 02-17-1999, as Instrument No. 62425 and 62426, Official Records. Excepting
therefrom the mobile home located thereon.
ATTACHMENT NO. 7
882/015610-0047 Page 34 of 45
8434W05 al0/16/07 - a g
EXHIBIT `B"
INCOME COMPUTATION AND CERTIFICATION FORM
[See following pages]
ATTACHMENT NO. 7
H2/015610-0047 Page 35 of 45
543409.05 a10116/07 g
CITY OF LA QUINTA REDEVELOPMENT AGENCY
78A95 Calle Tampico, La Quinta, CA 92253
INCOME COMPUTATION AND CERTIFICATION FORM
(Affordable Housing Eligibility for Renter Occupied Unit
PART I. PROPERTY FINANCED WITH GOVERNMENT ASSISTANCE
Property Address:
PART II. TENANT HOUSEHOLD INFORMATION
Date of Birth Soc. Sec. 9 Relationship
TOTAL NUMBER OF PERSONS N HOUSEHOLD: (Please list information on other household members below)
Mailing Address:
Telephone Numbers: Work
Home (�
PART III. GROSS HOUSEHOLD INCOME Complete the following, attach copies of required verification as specified
below. Attach a note explaining any significant changes in household income between the previous year and the current year.
INFORMATION IS REQUIRED FOR ALL MEMBERS OF THE HOUSEHOLD AGE 18 OR OLDER REGARDLESS OF
WHETHER THEY CONTRIBUTE TO THE COSTS OF THE HOUSEHOLD. If you are not required to file a tax return, please
indicate this in Part V by your signature.
ANN INCOME
ANN INCOME
INCOME SOURCES
for owner
others in hshid
VERIFICATIONS (needed for file)
A. Employment earnings
Last tax return & last 3 pay stubs,
employer verification
B. Self-employment earnings
Last 2 tax returns & current financial stint
C. Social Security (OASDI)
Annual award letter
I). Supplemental Security Income (SSI)
Annual award letter
F. Public assistance (AFDC, general
Current benefit statement
assistance, unemployment, etc.)
F. Pension (s)
Annual award letter, year end stint, W-2
(3. Interest income
Last 2 statements for all accounts
H. Investment income (stocks, bonds,
real estate, etc.)
Last 2 statements for all accounts
I. Room rental
Rental agreement, copies of checks, etc.
J. Other income (list type/source)
ATTACHMENT NO. 7
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E 43409.05 a10/16107 g
C. TOTAL INCOME (sum of A thru J) 12 months = _ mo. income
PART IV. PROPERTY STATUS
Will this property be your primary residence?
Will someone other than the individuals listed above be occupying this property?
If yes - Name of occupants:
Telephone Number:
My/our housing expenses are as follows:
1. Monthly tenant rent
2. Average monthly utilities
Mailing Address:
PART V. TENANT CERTIFICATION
I/We understand that after the initial eligibility determination, completion of monitoring forms is required on an annual basis.
I/We certify that I/we have disclosed all information pertaining to my/our application and that the information presented in the
foregoing Sections I through IV is true and accurate to the best of my (our) knowledge.
Tenant
Date
Tenant
For more information regarding this application, please contact management staff at (760)
Comments:
FOR OFFICE USE ONLY
Date
Information verified
Income category
Maximum allowable annual income % of median)
Applicant's annual income gross monthly max housing costs
Management Staff Date
ATTACHMENT NO. 7
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E43409.05 a10/16/07 g
EXHIBIT "C"
INCOME RECERTIFICATION FORM
[See following pages]
ATTACHMENT NO. 7
112/015610-0047
813409.05 a10/16/07 Page 38 of 45
LA QUINTA REDEVELOPMENT AGENCY
78-495 Calle Tampico, La Quinta, CA 92253
INCOME RECERTIFICATION FORM
(Renter Occupied Unit)
PART I. GENERAL INFORMATION
Property Owner Name
2. Renter Name
3. Property Address
La Quinta, CA 92253 (Please include P.O. Box No. if applicable)
4. Has there been a change in ownership of this property during the preceding 12 month
period?
Yes ( ) No ( )
(If yes, please explain)
PART IL UNIT INFORMATION
5. Number of Bedrooms
6. Number of Occupants
Names:
PART III. AFFIDAVIT OF RENTER
I and I, , as renters of units assisted pursuant to
the La Quinta Redevelopment Agency's (the "Agency") Affordable Housing
Program (the "Program"), do hereby represent and warrant that the following computation includes all
income (I/we) anticipate receiving for the 12-month period commencing on January 1, 20_
(including the renter(s) and all family members of the renters):
(a) amount of wages, salaries, overtime pay, commissions, fees,
tips and bonuses, and payments in lieu of earnings, such as
unemployment and disability compensation, worker's compensation
and severance pay (before payroll deduction)
(b) net income from business or profession or rental of property
(without deduction for repayment of debts or expansion of business)
(c) interest and dividends
(d) periodic receipts such as social security, annuities, pensions,
retirement funds, insurance policies, disability or death benefits,
alimony, child support, regular contributions or gifts
from persons not occupying unit
(e) public assistance allowance or grant plus excess of maximum
allowable for shelter or utilities over the actual allowance for
such purposes
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843409 05 a10116107 g
(f) regular and special pay and allowances of a member of
armed services (whether or not living in the dwelling)
who is head of the family or spouse
Subtotal (a) through (f) _
LESS: Portion of above items which are income of a family member
who is less than 18 years old or a full-time student
TOTAL ELIGIBLE INCOME
NOTE: The following items are not considered income: casual or sporadic gifts; amounts
specifically for or in reimbursement of medical expenses; lump sum payment such as inheritances,
insurance payments, capital gains and settlement for personal or property losses; educational
scholarships paid directly to the student or educational institution; government benefits to a
veteran for education; special pay to a serviceman head of family away from home and under
hostile fire; foster child care payments; value of coupon allotments for purpose of food under Food
Stamp Act of 1964 which is in excess of amount actually charged the eligible household;
relocation payments under Title II of Uniform Relocation Assistance and Real Property
Acquisition Policies Act of 1970; payments received pursuant to participation in the following
programs: VISTA, Service Learning Programs, and Special Volunteer Programs, SCORE, ACE,
Retired Senior Volunteer Program, Foster Grandparent Program, Older American Community
Services Program, and National Volunteer Program to Assist Small Business Experience.
2. This affidavit is made with the knowledge that it will be relied upon by the Landlord and
the Agency to determine maximum income for eligibility and (Uwe) warrant that all
information set forth in this Part III is true, correct and complete and based upon
information (Uwe) deem reliable and that the estimate contained in paragraph 1 is
reasonable and based upon such investigation as the undersigned deemed necessary.
3. (I/We) will assist the Landlord and the Agency in obtaining any information or documents
required to verify the statements made in this Part III and have attached hereto a copy of
our federal income tax return for the last year (20__).
4. (I/We) acknowledge that (Uwe) have been advised that the making of any
misrepresentation or misstatement in this affidavit will constitute a material breach of
(my/our) agreement with the Landlord to rent the unit and will additionally enable the
Agency to initiate and pursue all applicable legal and equitable remedies with respect to
the unit and to me/us.
B. (My/Our) monthly housing expenses are limited to the following:
Base rent
2. Average Monthly Utilities
3. Other (explain)
(I/We) understand that completion of monitoring forms is required on an annual basis and agree to notify
the La Quinta Redevelopment Agency in writing of any change in ownership or rental of the unit. (I/We)
do hereby swear under penalty of perjury that the foregoing statements are true and correct.
Date
Renter(s)
ATTACHMENT NO. 10
882/015610-0 47
84340905 a 10/16/07 Page 40 of 45
EXHIBIT "D"
LEASE RIDER
[See following page]
ATTACHMENT NO. 7
882/015610-0047 Page 41 of 45
843409.05 a10/16/07 g
_(Project Name)_ AFFORDABLE HOUSING PROJECT
Lease Rider
RESIDENT:
(if there is more than one adult occupant, each person must sign the rider)
LEASE DATE:
UNIT NO.:
The undersigned tenant(s) hereby certify and agree as follows:
I. Income Certification. The attached income certification is true, correct and complete. Uwe
agree to provide a similar certification annually upon request during the term of my
occupancy.
Employer Verification. The landlord or property manager has my permission to verify
my/our income from any sources of income Uwe receive.
False Statements. If the income certification and/or lease application submitted by me/us is
false, or if Uwe fail to provide annual certifications, the landlord or property manager will
have the right to terminate my/our lease and recover possession of my/our Unit. Uwe
understand that the landlord and property manager are relying on this income certification in
accepting me/us as a tenant, and the landlord or property manager will be seriously harmed if
my/our income does not qualify the Unit for the affordable housing program.
4. This rider shall be considered as part of my/our lease.
Date:
Tenant
Tenant
Tenant
Tenant
ATTACHMENT NO. 7
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843409 05 a10/16/07 g
EXHIBIT "E"
CERTIFICATION OF CONTINUING PROGRAM COMPLIANCE
[See following page]
ATTACHMENT NO. 7
8821015610-0047 Page 43 Of 45
843409 05 a10116/07 g
CERTIFICATION OF CONTINUING PROGRAM COMPLIANCE
The undersigned, being duly authorized to execute this certificate on behalf of
owner of the
and warrants that:
Project, hereby represents
1. He/she has read and is thoroughly familiar with the provisions of the Affordable
Housing Agreement between the La Quinta Redevelopment Agency and National Community
Renaissance of California.
2. As of June 30, 20_, the following number of residential units in the
Project (i) are currently occupied by tenants qualifying as Eligible Tenants at
Affordable Rents; (ii) are currently occupied by Moderate Income Tenants; or (iii) are currently
vacant and being held available for occupancy by Eligible Tenants and have been so held
continuously since the date Eligible Tenants vacated such unit, as indicated:
i. _ Units occupied by Eligible Tenants
H. Units occupied by Moderate Income Tenants
in. _ Vacant units
iv. Other (please explain)
3. The unit number, unit size, the tenant paid rental amount charged and collected,
the number of occupants and the income of the occupants for each restricted unit in the
Project is set forth on the attached list. All restricted units in the
Project are rented at Affordable Rent.
OWNER NAME
Dated: 20_ By:
(Printed name and title)
ATTACHMENT NO. 7
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843409.05 a10/I6/07 g
EXHIBIT "F"
RESTRICTED UNIT MATRIX
INCOME LEVEL NO. OF UNITS
Very Low Income Household 39
50% Very Low Income Household 31
Extremely Low Income Household 9
Moderate Income Household (Management Unit) 1
ATTACHMENT NO. 7
182/015610-0047 Page 45 of 45
843409.05 a10/16/07 g
ATTACHMENT NO. 8
PROJECT PROFORMA
[SEE FOLLOWING PAGES]
8svoiscaw4 ATTACHMENT NO. 8
848399.04a10/18/07
ATTACHMENT NO.9
BILL OF SALE
[SEE FOLLOWING PAGES]
882/01560-0047 ATTACHMENT NO. 9
848399.04 a10/18/07
BILL OF SALE
La Quinta Redevelopment Agency ("Seller"), for good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, paid to it by National Community
Renaissance of California ("Purchaser"), has transferred, sold and assigned and by these presents
does transfer, sell and assign unto Purchaser the following:
Any and all personal property, if any, owned by Seller, described
more specifically in that certain Amended and Restated Affordable
Housing Agreement dated between the parties
identified above (the "Agreement'), which personal property is
located upon or used in connection with the real property described
in Schedule 1 hereto.
Seller makes only those representations and warranties set forth in the Agreement
concerning such personal property, and to the extent that there is any such personal property,
such personal property is transferred, sold and assigned to Purchaser in accordance with the
terms thereof.
Executed as of this day of
"Seller"
LA QUINTA REDEVELOPMENT AGENCY,
a public body, corporate and politic
Its: Executive Director
ATTEST:
Secretary
APPROVED AS TO FORM:
RUTAN & TUCKER, LLP
Attorneys for the La Quinta Redevelopment
Agency
882/015610.0047 _
848399.04 a10/I8/07 _ 1
SCHEDULEI
LEGAL DESCRIPTION OF PROPERTY
All of that certain real property in the City of La Quinta County of Riverside, State of California,
described as follows:
That portion of the Southeast quarter of the Northeast quarter of Section 19, Township 6 South,
Range 7 East, San Bernardino Base and Meridian, described as follows:
Commencing at the Southeast corner of the Northeast quarter of said Section 19; Thence South
89' 33' 05" West, on the Southerly line of the Northeast quarter of said Section, 330 feet, to the
true point of beginning; thence South 89' 33' 05" West, on said Southerly line of the Northeast
quarter, 330 feet; Thence North 0° 13' 40" West, 1,324.57 feet, to the Northerly line of the
Southeast quarter of Northeast quarter of said Section 19; thence North 89' 34' 05" East, on said
Northerly line, 330 feet; thence South 0° 13' 40" East, 1,324.47 feet to the true point of
beginning;
Excepting therefrom the Southerly 50 feet conveyed to the County of Riverside by Deeds
recorded August 30, 1933 in Book 133, Page(s) 292 and Book 134, Page(s) 298 respectively, of
Official Records, Riverside County Records.
Also excepting therefrom that portion of described in the deeds to the City of La Quinta,
recorded 02-17-1999, as Instrument No. 62425 and 62426, Official Records. Excepting
therefrom the mobile home located thereon.
882/015610-0047
84839904 a 10/18/07 -2-
ATTACHMENT NO. 10
ASSIGNMENT AND RELEASE
[SEE FOLLOWING PAGES]
882/0156IM047
948399 04 a10118/07 ATTACHMENT NO. 10
ASSIGNMENT AND RELEASE
This ASSIGNMENT AND RELEASE ("Assignment and Release") dated
, 200. is executed by La Quinta Redevelopment Agency, a public
body, corporate and politic ("Assignor), in favor of The Southern California Housing
Development Corporation, a California nonprofit public benefit corporation ("Assignee").
Assignor is the owner of that certain land (the "Site") located in the City of La Quinta,
California, described more specifically on Schedule "I" hereto. The Site and the Housing
Development thereon are being conveyed by Assignor to Assignee pursuant to a grant deed
delivered concurrently herewith. Terms used herein but not defined shall have the meanings
ascribed thereto in that certain Affordable Housing Agreement by and between Assignor and
Assignee dated as of 2007 (the "Affordable Housing Agreement").
Now, therefore, for good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, Assignor and Assignee hereby agree as follows:
1. Subject to Section 2 below, Assignor hereby grants, assigns, transfers, conveys
and delivers to Assignee, without warranty, all of Assignor's right, title, interest, benefits and
privileges, if any, in and to all entitlements, approvals, maps, applications, plans, specifications,
contracts and other documents relating to the Site, the Housing Development or the construction
of the Housing Development on the Site between Agency and its contractors, subcontractors,
engineers, architects and other consultants, as described more specifically in the Affordable
Housing Agreement, as well as the following described property:
(a) All construction, general contractor, subcontractor, engineering,
consulting, architectural and other similar contracts and any and all amendments and
modifications thereto, concerning the design or construction of all public improvements
constructed upon or in connection with development of the Site as well as construction of the
Housing Development on the Site (as such terms are defined in the Affordable Housing
Agreement), and all warranties with respect thereto (including all statutory, express and implied
warranties);
(b) All architectural drawings, plans, specifications, soils tests, appraisals,
engineering reports and similar materials relating to any or all of the Site and/or the Housing
Development.
(c) All of Assignor's rights, claims, actions, and causes of action against any
of Assignor's general contractors, subcontractors, engineers, architects and consultants relating
to or arising from preparation of the architectural drawings, plans, specifications, reports or
similar materials relating to the development of the Site or construction of public improvements
thereon or construction of the Housing Development, all of the plans and documents referred to
in paragraphs 1 and 2 above, as well as all of the same relating to construction of the Housing
Development, as well as all rights of Assignor as an additional insured or otherwise pertaining to
ATTACHMENT NO. 10
882/015610-0047
856277.01 al0/19107 Page 1 of 6
insurance coverage concerning such architects, engineers, general contractors, consultants and
the Site.
(d) All governmental entitlements, permissions, environmental clearances,
authority to develop the Site and construct the Housing Development, rights, licenses and
permits which relate to all or any of the Site, the Housing Development, or the operation thereof,
and
(e) All general intangibles relating to the development or use of the Site and
the Housing Development.
2. Notwithstanding anything to the contrary herein, the foregoing grants,
assignments, transfers, conveyances, and deliveries are subject to any limitations which may be
imposed by law or under any agreement with any governmental agency or authority or with the
contractors, subcontractors, engineers, consultants, and architects referenced in Section 1 above.
3. In consideration of the foregoing assignment, Assignee, for itself and for its
agents, successors and assigns, fully releases, acquits and discharges the Assignor and the City of
La Quinta ("City") and the Assignor's and City's respective officers, officials, members,
representatives, employees, attorneys and agents (all of the foregoing, collectively, the "Released
Parties"), from all rights, claims, demands, actions or causes of action that Assignee has or may
have against the Released Parties arising out of or related to the development, or physical
condition, of the Housing Development, including, but not limited to, claims for damages,
attorney's fees and costs, and expert witness fees and costs.
ACKNOWLEDGMENT CONCERNING CIVIL CODE SECTION 1542
Waiver of Section 1542 of the Civil Code
Assignee, on behalf of itself and its agents, successors, and assigns, expressly
waives any and all rights under Section 1542 of the Civil Code of the State of
California, or any other federal or state statutory rights or rules, or principles of
common law or equity, or those of any jurisdiction, government, or political
subdivision thereof, similar to Section 1542 (hereinafter referred to as a "Similar
Provision"). Thus, Assignee may not invoke the benefits of Section 1542 or any
Similar Provision in order to prosecute or assert in any manner claims released
hereunder. Section 1542 provides as follows:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE
CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT
THE TIME OF EXECUTING THE RELEASE, WHICH, IF KNOWN BY HIM,
MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE
DEBTOR.
Assignee's initials:
4. The City shall be deemed an express third party beneficiary of the provisions of
this Assignment and Release.
ATTACHMENT NO. 10
8821015610-0047
856277.01 a10/19/07 Page 2 of 6
5. This Assignment and Release shall be construed according to its fair meaning and
as if prepared by both parties hereto.
6. This Assignment and Release shall be governed by the internal laws of the State
of California, without regard to conflict of law principles, and any question arising hereunder
shall be construed or determined according to such law. The Superior Courts of the State of
California in and for the County of Riverside, or such other appropriate court in such county,
shall have exclusive jurisdiction of any litigation between the parties concerning this Assignment
and Release.
7. This Assignment and Release may be executed in counterparts, each of which,
when this Assignment and Release has been signed by all the parties hereto, shall be deemed an
original, and such counterparts shall constitute one and the same instrument.
8. The person(s) executing this Assignment and Release on behalf of each of the
parties hereto represent and warrant that (i) such party is duly organized and existing, (ii) they
are duly authorized to execute and deliver this Assignment and Release on behalf of said party,
(iii) by so executing this Assignment and Release such party is formally bound to the provisions
of this Assignment and Release, and (iv) the entering into this Assignment and Release does not
violate any provision of any other agreement to which such party is bound.
[signatures on next page]
ATTACHMENT NO. 10
882/015610-0047 Page 3 of 6
856277.01 a10/19/07 g
IN WITNESS WHEREOF, Assignee and Assignor each hereby represent that they have
read this Assignment and Release, understand it, and hereby execute this Assignment and
Release to be effective as of the day and year first written above.
ATTEST:
Secretary
APPROVED AS TO FORM:
RUTAN & TUCKER, LLP
Attorneys for the La Quinta Redevelopment
Agency
"Assignor"
LA QUINTA REDEVELOPMENT AGENCY,
a public body, corporate and politic
By:
Its: Executive Director
"Assignee"
THE SOUTHERN CALIFORNIA HOUSING
DEVELOPMENT CORPORATION, a
California nonprofit, public benefit corporation
By:
Its:
ATTACHMENT NO. 10
882/015610-0047 Page 4 Of 6
856277.01 a10/19/07 g
SCHEDULEI
LEGAL DESCRIPTION OF PROPERTY
All of that certain real property in the City of La Quinta County of Riverside, State of California,
described as follows:
That portion of the Southeast quarter of the Northeast quarter of Section 19, Township 6 South,
Range 7 East, San Bernardino Base and Meridian, described as follows:
Commencing at the Southeast corner of the Northeast quarter of said Section 19; Thence South
89' 33' 05" West, on the Southerly line of the Northeast quarter of said Section, 330 feet, to the
true point of beginning; thence South 89' 33' 05" West, on said Southerly line of the Northeast
quarter, 330 feet; Thence North 0° 13' 40" West, 1,324.57 feet, to the Northerly line of the
Southeast quarter of Northeast quarter of said Section 19; thence North 89' 34' 05" East, on said
Northerly line, 330 feet; thence South 00 13' 40" East, 1,324.47 feet to the true point of
beginning;
Excepting therefrom the Southerly 50 feet conveyed to the County of Riverside by Deeds
recorded August 30, 1933 in Book 133, Page(s) 292 and Book 134, Page(s) 298 respectively, of
Official Records, Riverside County Records.
Also excepting therefrom that portion of
recorded 02-17-1999, as Instrument No.
therefrom the mobile home located thereon.
described in the deeds to the City of La Quinta,
62425 and 62426, Official Records. Excepting
ATTACHMENT NO. 10
882/015610-0047 Page 5 of 6
856277.01 a10/19/07 g
SCHEDULE2
[ATTACH SCHEDULE OF CONTRACTS TO BE ASSUMED BY ASSIGNEE]
882/015610-0047
8562770 a10/19/07
ATTACHMENT NO. 11
MEMORANDUM OF AFFORDABLE HOUSING AGREEMENT
[SEE FOLLOWING PAGES]
882,/015e10-0047
84839904 ai0/IB/07 ATTACHMENT NO. 11
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 For Recorder's Use)
This Memorandum of Affordable Housing Agreement is
recorded at the request and for the benefit of the La Quinta
Redevelopment Agency and is exempt from the payment of
a recording fee pursuant to Government Code § 27383.
MEMORANDUM OF AFFORDABLE HOUSING AGREEMENT
This MEMORANDUM OF AFFORDABLE HOUSING AGREEMENT ("Memoran-
dum") is entered into this day of , 2007, by and between the
LA QUINIA REDEVELOPMENT AGENCY, a public body, corporate and politic ("Agency"),
and NATIONAL COMMUNITY RENAISSANCE OF CALIFORNIA, a California nonprofit
public benefit corporation ("National CORE").
This Memorandum is made with reference to the following:
1. On or about the date of this Memorandum, National CORE acquired from Agency
fee title to that certain real property located in the City of La Quinta, County of Riverside, State
of California, more particularly described in the legal description attached hereto as Exhibit "A"
and incorporated herein by this reference (the "Property").
2. On or about , Agency and National CORE entered into that
certain Amended and Restated Affordable Housing Agreement which provides for Agency to
convey the Property and partially developed apartment complex thereon to National CORE for
National CORE's completion, ownership, operation and maintenance thereof as an affordable
rental housing project.
3. The definitions of all terms contained in the AHA shall apply to this
Memorandum.
4. The AHA provides for Agency and National CORE to enter into this
Memorandum and to record the same in the Official Records of the County of Riverside to
provide notice to all persons of the existence of said AHA and the City's reversionary interest,
and to cause the AHA to run with the Property and be binding on National CORE and National
CORE's successors -in -interest as to the Property.
5. This Memorandum may be executed in several counterparts, and all so executed
shall constitute one agreement binding on both parties hereto, notwithstanding that both parties
are not signatories to the original or the same counterpart.
88VOI5610-O047
848399 04 a1048/07 4 -
IN WITNESS WHEREOF, Agency and National CORE have entered into this
Memorandum as of the date first set forth above.
ATTEST:
Secretary
APPROVED AS TO FORM:
RUTAN & TUCKER, LLP
Attorneys for the La Quinta Redevelopment
Agency
"Agency"
LA QUINTA REDEVELOPMENT AGENCY,
a public body, corporate and politic
Its: Executive Director
"National CORE"
THE SOUTHERN CALIFORNIA HOUSING
DEVELOPMENT CORPORATION, a California
nonprofit, public benefit corporation
Ln
Its:
882/01561M047
848399.04 a10/18/07 -2-
STATE OF CALIFORNIA
ss.
COUNTY OF RIVERSIDE
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.
On
before me,
Witness my hand and official seal.
Notary Public
[SEAL]
STATE OF CALIFORNIA )
) ss.
COUNTY OF RIVERSIDE )
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]
882/015610-0047
848399 04 a10/I8/07 -3-
EXHIBIT "A"
LEGAL DESCRIPTION OF PROPERTY
All of that certain real property in the City of La Quinta, County of Riverside, State of
California, described as follows:
That portion of the Southeast quarter of the Northeast quarter of Section 19, Township 6 South,
Range 7 East, San Bernardino Base and Meridian, described as follows:
Commencing at the Southeast corner of the Northeast quarter of said Section 19; Thence South
89' 33' 05" West, on the Southerly line of the Northeast quarter of said Section, 330 feet, to the
true point of beginning; thence South 89' 33' 05" West, on said Southerly line of the Northeast
quarter, 330 feet; Thence North 0° 13' 40" West, 1,324.57 feet, to the Northerly line of the
Southeast quarter of Northeast quarter of said Section 19; thence North 89' 34' 05" East, on said
Northerly line, 330 feet; thence South 0° 13' 40" East, 1,324.47 feet to the true point of
beginning;
Excepting therefrom the Southerly 50 feet conveyed to the County of Riverside by Deeds
recorded August 30, 1933 in Book 133, Page(s) 292 and Book 134, Page(s) 298 respectively, of
Official Records, Riverside County Records.
Also excepting therefrom that portion of described in the deeds to the City of La Quinta,
recorded 02-17-1999, as Instrument No. 62425 and 62426, Official Records. Excepting
therefrom the mobile home located thereon.
882/015610-0047
848399.04 at 0/18/07 -4-