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RDA Resolution 1999-007RESOLUTION NO. RA 99-07 A RESOLUTION OF THE REDEVELOPMENT AGENCY OF CITY OF LA QUINTA APPROVING AND AUTHORIZING THE EXECUTION OF AN AFFORDABLE HOUSING AGREEMENT BY AND BETWEEN THE LA QUINTA REDEVELOPMENT AGENCY AND THE SPANOS COMPANY AND MAKING CERTAIN FINDINGS IN CONNECTION THEREWITH WHEREAS, the La Quinta Redevelopment Agency (the "Agency") is engaged in activities necessary to carry out and implement the Redevelopment Plan (the "Redevelopment Plan") for La Quinta Redevelopment Project Area No. 2 (the "Project" or the "Project Area"); and, WHEREAS, in order to carry out and implement such Redevelopment Plan and the affordable housing requirements thereof, the Agency proposes to enter into that certain "Affordable Housing Agreement for Apartments Agreement", (the "Agreement") with The Spanos Company, (the "Developer"), for the disposition and development of the property located northwest of the intersection of 48' Avenue and Adams Street, (the "Site"), more particularly described in the Agreement; and, WHEREAS, the Agreement provides for the installation or construction of infrastructure improvements (referenced therein as the "Off -Site Improvements"), which are more particularly described in the Agreement. The Off -Site Improvements which among other things, consist of drainage improvements, streets, and pedestrian access facilities as provided for in the Redevelopment Plan; and, WHEREAS, pursuant to Section 33433 of the Community Redevelopment Law, California Health and Safety Code Section 33000, et seq., (the "Community Redevelopment Law") the Agency is authorized, with the approval of the City Council, after a duly noticed public hearing, to sell the Site for development pursuant to the Redevelopment Plan upon a determination by the City Council that the sale of the property will assist in the elimination of blight and that the consideration for such sale is not less than either the fair market value or fair reuse value of the Site in accordance with the covenants and conditions governing the sale and the development costs required thereof; and, WHEREAS, Sections 33334.2 and 33334.6 of the Community Redevelopment Law, California Health and Safety Code Section 33000, et seq. (the "Community Redevelopment Law") authorize and direct the Agency to expend a certain percentage of all taxes which are allocated to the Agency pursuant to Section 33670 of the Community Redevelopment Law for the purposes of increasing, improving and preserving the community's supply of low- and moderate -income, lower income, and very low income; and, Resolution RA 99-07 A. G. Spanos Affordable Housing Agreement Adopted: September 7, 1999 Page 2 WHEREAS, pursuant to applicable law, the Agency has established a Low and Moderate Income Housing Fund (the "Housing Fund"); and, WHEREAS, pursuant to Section 33334.2(e) of the Community Redevelopment Law, in carrying out its affordable housing activities, the Agency is authorized to provide subsidies to or for the benefit of very low income and lower income households, or persons and families of low or moderate income, to the extent those households cannot obtain housing at affordable costs on the open market; and, WHEREAS, the construction of the housing development pursuant to the Agreement will benefit the Project Area by providing decent, safe, and sanitary housing for persons who may work, shop, or use services within the Project Area, and by establishing higher quality standards for the supply of housing which is available to low- and moderate income persons within the community; and, WHEREAS, Section 33445 of the Community Redevelopment Law provides that with the consent of the City Council the Agency may pay all or part of the value of the land for and the cost of the installation and construction of any building, facility, structure, or other improvement which is publicly owned either within or without of the Project Area if the City Council determines that the buildings, facilities, structures, or other improvements are of benefit to the Project Area or the immediate neighborhood in which the project is located, that no other reasonable means of financing the buildings, facilities, structures or other improvements are available to the community and that the payment of funds for the acquisition of land or the cost of buildings, facilities, structures, or other improvements will assist in the elimination of one or more blighting conditions inside the Project Area; and, WHEREAS, a joint public hearing of the Redevelopment Agency and City Council on the proposed Agreement was duly noticed in accordance with the requirements of Section 33433 of the Community Redevelopment Law; and, WHEREAS, the proposed Agreement, and a Summary Report meeting the requirements of Section 33433 of the Community Redevelopment Law, were available for public inspection consistent with the requirements of Section 33433 of the Community Redevelopment Law; and, Resolution RA 99-07 A. O. Spanos Affordable Housing Agreement Adopted: September 7, 1999 Page 3 WHEREAS, on the 7th day of September, 1999, the Agency and City Council did hold a joint public hearing on the proposed Agreement, at which time the City Council reviewed and evaluated all of the information, testimony, and evidence presented during the public hearing; and, WHEREAS, all actions required by all applicable law with respect to the proposed Agreement have been taken in an appropriate and timely manner; and, WHEREAS, the Redevelopment Agency has reviewed the Summary required pursuant to Section 33433 of the Community Redevelopment Law and has evaluated any and all other information pertaining to the findings required pursuant thereto; and, WHEREAS, the Agreement requires that twenty (20) of the units developed pursuant thereto be rented, as more particularly specified in the Agreement, to households having limited incomes, and that the units remain affordable for a substantial period of time to those households; and, WHEREAS, the sale of the Site pursuant to the Agreement will assist in the elimination of blight by providing for the provision of affordable housing within the Project Area, the provision of physical improvements, including the provision of flood control and vehicular and pedestrian access facilities, and encouraging the development of land the development of which had proven to be infeasible for the private sector, acting alone; and, WHEREAS, the proposed development of the Site pursuant to the terms of the Agreement has been previously evaluated pursuant to the California Environmental Quality Act ("CEQA"), and no additional impacts not previously addressed will result from this Agreement; and, WHEREAS, the Redevelopment Agency has duly considered all terms and conditions of the proposed Agreement and believes that the redevelopment of the Site pursuant thereto is in the best interests of the City of La Quinta 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. NOW, THEREFORE, BE IT RESOLVED, by the Redevelopment Agency of the City of La Quinta as follows: Resolution RA 99-07 A. G. Spanos Affordable Housing Agreement Adopted: September 7, 1999 Page 4 Section 1. The Agency finds and determines that, based upon substantial evidence provided in the record before it, the consideration for the Agency's disposition of the Site pursuant to the terms and conditions of the Agreement is not less than fair reuse value in accordance with the covenants and conditions governing the sale, and the development costs required under the Agreement. Section 2. The Agency hereby finds and determines that the sale of the Site is consistent with the implementation plan adopted pursuant to Health and Safety Code Section 33490. Section 3. The project is exempt from CEQA, except to the extent prior approvals have been given pursuant to CEQA. Section 4. The Agency hereby approves the execution of the Agreement. Section 5. The Agency Secretary shall certify to the adoption of this Resolution in the manner required by law. PASSED, APPROVED AND ADOPTED this 7t' day of September, 1999, by the following vote: AYES: Members Adolph, Henderson, Pena, Sniff, Chairman Perkins NOES: None ABSENT: None ABSTAIN: None RON PERKINS, Chairman La Quinta Redevelopment Agency Resolution RA 99-07 A. G. Spanos Affordable Housing Agreement Adopted: September 7, 1999 Page 5 ATTEST: UNDRA L. JU OLA, Secretary La Quinta Redevelopment Agency APPROVED AS TO FORM: ct�. r-lZuZoe(, w-e Y DAWN C. HONEYWELL, Attorney La Quinta Redevelopment Agency AFFORDABLE HOUSING AGREEMENT FOR APARTMENTS BY AND BETWEEN LA QUINTA REDEVELOPMENT AGENCY, AGENCY AND THE SPANOS CORPORATION DEVELOPER SEPTEMBER 7, 1999 Pape TABLE OF CONTENTS [100] SUBJECT OF AGREEMENT ................................. A. [101 ] Purpose of Agreement ................................. B. [102] The Redevelopment Plan ............................... C. [103] The Project Area ...................................... D. [104] The Site ............................................ E. [105] Parties to the Agreement ............................... 1. [106] The Agency .................................... 2. [107] The Developer, Developer Property ................. 3. [108] Prohibition Against Changing Ownership Management and Control of Developer and Prohibition Against Transfer F. G. [200] A. B. M. N. 0. 6 6 6 7 7 7 7 8 of the Site ..................................... 8 [109] Representations by the Developer ........................ 9 [110] Representation by the Agency ........................... 9 AGENCY ASSISTANCE .................................... 10 [201 ] Acquisition and Construction Assistance ................... 11 [202] Conditions Precedent to the Transfer of the Site and Developer Property ............................. [203] Exchange of the Site and the Developer Property ........... [204] Escrow ............................................ [205] [Intentionally Omitted] ................................. [206] Conveyance of Title and Delivery of Possession ............ [207] Condition of Title .................................... [208] Payment of the Purchase Price and Recordation of Deed ..... [209] Title Insurance ...................................... [210] Taxes and Assessments ............................... [211 ] Conveyance Free of Possession ........................ [212] Inspections; Condition of Site ........................... 1 Inspections ......................................... 2. "As Is" ............................................. 3. Indemnity .......................................... 4. Release and Waiver .................................. 5. Definitions ......................................... 6. Materiality .......................................... 7. Right to Contest ..................................... [213] Preliminary Work by the Developer ...................... [214] Intentionally Omitted .................................. [215] Disbursement of Agency Assistance for Improvements ....... 1. Deposit of Agency Assistance .......................... 2. Conditions for Each Disbursement ....................... 12 12 12 14 14 14 15 15 16 16 16 16 16 17 17 18 18 18 19 19 19 19 20 III. [300] DEVELOPMENT OF THE SITE .............................. 20 A. [301 ] Development of the Site ................................ 20 1. [302] Scope of Development ............................. 20 SACity C1erk\Reso1utions\Agent-Spanos - AFA - Apartments.wpd 2 2. [303] Site Plan ; . , : °................................. 20 3. [304] Review and Approval of Plans, Drawings, and Related Documents ............................. 21 4. [305] Cost of Development ............................ 21 5. [306] Construction Schedule .......................... 22 6. [307] Indemnity, Bodily Injury and Property Damage Insurance 22 7. [308] City and Other Governmental Agency Permits ........ 22 8. [309] Rights of Access ............................... 23 9. [310] Local, State and Federal Laws .................... 23 10. [311 ] Anti -Discrimination .............................. 23 11. [312] Taxes and Assessments ......................... 23 B. [313] Prohibition Against Transfer of the Site, the Buildings or Structures Thereon and Assignment of Agreement .......... 24 C. [314] Right of the Agency to Satisfy Other Liens on the Site After Title Passes .................................... 24 D. [315] Certificate of Completion .............................. 24 E. [316] No Encumbrances Except Mortgages, Deeds of Trust, Sales and Leases -Back or Other Financing for Development .. 25 F. [317] Holder Not Obligated to Construct Improvements ........... 25 G. [318] Notice of Default to Mortgage, Deed of Trust or Other Security Interest Holders; Right to Cure ................... 25 H. [319] Failure of Holder to Complete Improvements ............... 26 I. [320] Right of Agency to Cure Mortgage, Deed of Trust or Other Security Interest Default .................... 26 IV. [400] USE OF THE SITE ........................................ 27 A. [401 ] Affordable Housing ................................... 27 1. Number of Units ..................................... 27 B. [402] Uses In Accordance with Redevelopment Plan, Nondiscrimination .............................. 27 C. [403] Effect of Violation of the Terms and Provisions of this Agreement After Completion of Construction ............... 29 D. [404] Maintenance of the Site ............................... 29 V. [500] DEFAULTS AND REMEDIES ................................ 29 A. [501 ] Defaults -- General ................................... 29 B. [502] Legal Actions ....................................... 30 1. [503] Institution of Legal Actions ........................ 30 2. [504] Applicable Law ................................. 30 3. [505] Acceptance of Service of Process ................... 30 C. [506] Rights and Remedies Are Cumulative .................... 30 D. [507] Inaction Not a Waiver of Default ........................ 31 E. [508] Remedies and Rights of Termination ..................... 31 1. [509] Damages ..................................... 31 2. [510] Specific Performance ............................ 31 VI. [600] GENERAL PROVISIONS ................................... 31 SACity C1erk\Reso1utions\Agmt-Spanos - AFA - Apartments.wpd 3 A. [601 ] Notices, Demands and Communications Between Parties ..... 31 B. [602] Conflicts of Interest ................................... 32 C. [6031 Enforced Delay; Extension of Times of Performance ......... 32 D. [604] Non -Liability of Officials and Employees of the Agency and the Developer ................................... 32 E. [6051 Entire Agreement, Waivers ............................ 33 F. [606] Amendments to this Agreement ......................... 33 VII. [700] TIME FOR ACCEPTANCE OF AGREEMENT BY AGENCY ......... 33 SACity C1erk\Reso1utions\Ag nt-Spanos - AFA - Apartments.wpd 4 Attachment No. I Attachment No. 2 Attachment No. 3 Attachment No. 4 Attachment No. 5 Attachment No. 6 Attachment No. 7 Attachment No. 8 Attachment No. 9 Attachment No. 10 ATTACHMENTS The Site Legal Description Scope of Development Schedule of Performance Grant Deed Promissory Note Short Form Deed of Trust and Assignment of Rents Declaration of Conditions, Covenants & Restrictions Certificate of Completion Application for Disbursement S ACity Clerk\Resolutions\AgmA-Spanos - AFA - Apartments.wpd 5 AFFORDABLE HOUSING AGREEMENT This Affordable Housing Agreement ("Agreement") is entered into this day of , 1999, by and between LA QUINTA REDEVELOPMENT AGENCY, a public body corporate and politic (the "Agency") and THE SPANOS CORPORATION, a California corporation (the "Developer"). The Agency and the Developer (collectively referred to as the "Parties") hereby agree as follows: [100] SUBJECT OF AGREEMENT A. [101 ] Purpose of Agreement The purpose of this Agreement is to effectuate the Redevelopment Plan (as hereinafter defined) for the La Quinta Redevelopment Project Area No. 2 (the "Project") by providing for the improvement of certain property situated within the Project Area of the Project (the "Project Area"), by assisting in the financing of the acquisition and development of 14.4 acres (the "Site") situated within the Project Area, of approximately 200 apartment units and related improvements (the " Development") on 14.4 acres (the Site") and the long-term maintenance of 20 such apartment units at an affordable housing cost for persons and households of low and moderate -income, all as more fully described in this Agreement. The Agency financial assistance in this Agreement shall be utilized to effectuate a portion of the Agency's overall affordable housing program pursuant to the requirements of California Health and Safety Code Section 33334.2 to expend twenty percent (20%) of its increment funds to improve, increase and preserve the community's supply of low- and moderate housing. The acquisition and development of the Site and the occupancy of ten percent (10%) of the apartment units as developed for households of limited incomes all as provided in this Agreement are in the vital and best interests of the City of La Quinta (the "City") and the health, safety and welfare of its residents, and in accord with the public purposes and provisions of applicable state and local laws and requirements under which the Project has been undertaken. B. [102] The Redevelopment Plan This Agreement is subject to the provisions of the Redevelopment Plan for Project Area No. 2 (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. 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 the Developer's obligations or rights with respect to the Site, shall not apply to the Site without the written consent of the Developer. Amendments to the SACity C1erk\Reso1utions\Agmt-Spanos - AFA- Apartments.wpd Redevelopment Plan applying to other property in Project Area No. 2 shall not require the consent of the Developer. C. [103] The Project Area The La Quinta Redevelopment Project Area No. 2 ("Project Area") is located in the City and is generally bounded by Washington Street, the northern corporate boundary, Jefferson Street and Avenue 50. The exact boundaries are as set out in the Redevelopment Plan. D. [104] The Site The "Site" is currently owned by the Agency and consists of 14.4 acres of real property northeast of the intersection of 481h Avenue and Adams Street located within the Project Area in the City of La Quinta, County of Riverside. The Site is depicted in the Site Map on Attachment No. 1 attached hereto and incorporated herein by this reference. The legal description of the Site is provided on Attachment No. 2 attached hereto and incorporated hereby by this reference. According to the proposed Specific Plan for the Site, a maximum of 200 rental units will be developed on the Site in accordance with the "Scope of Development" and by the times set forth in the "Schedule of Performance, " which are attached hereto as Attachment Nos. 3 and 4, respectively, and incorporated herein by reference. Any material change, as reasonably determined by the Agency, in the Scope of Development (Attachment No. 3) which affects the size, quality, or type of development proposed for the Site shall require the written approval of the Agency, which approval may be contingent upon the review and renegotiation of all of the economic and financial terms of this Agreement and such other matters as the Agency shall deem appropriate. E. [105] Parties to the Agreement [106] The Agency The Agency is a public body, corporate and politic, exercising governmental functions and powers and organized and existing under Chapter 2 of the Community Redevelopment Law of the State of California, Division 24 of the California Health and Safety Code, the principal office of the Agency is located at 78-495 Calle Tampico, La Quinta, California 92253, or such other address as Agency shall hereafter designate in writing to Developer. "Agency", as used in this Agreement, includes the La Quinta Redevelopment _ Agency and any and all assignees of or successors to its rights, powers and responsibilities. 2. [107] The Developer, Developer Property SACity C1erk\Resolutions\Agrmt-Spanos - AFA - Apatttnents.wpd 7 The Developer, The Spanos Corporation, is a California corporation. The principal office and mailing addresses of the Developer for purposes of this Agreement is 3773 Howard Hughes Parkway, Suite 590S, Las Vegas, Nevada 89109. By executing this Agreement, each person signing on behalf of the Developer warrants and represents to the Agency that the Developer has the full power and authority to enter into this Agreement, that all authorizations required to make this Agreement binding upon the Developer have been obtained, and that the person or persons executing this Agreement on behalf of the Developer are fully authorized to do so. Whenever the term "Developer" is used in this Agreement, such term shall include any and all nominees, assignees, or successors in interests as herein provided. The Developer owns ten (10) acres of property located generally at the southwest corner of 47th Avenue and Adams Street (the "Developer Property"). The legal description for the Developer Property is attached hereto as Attachment No. 2B 3. [108] Prohibition Against Changing Ownership Management and Control of Developer and Prohibition Against Transfer of the Site The qualifications and identity of the Developer are of particular interest to the Agency. It is because of these qualifications and identity that the Agency has entered into this Agreement with the Developer. Prior to the issuance of a Certificate of Completion for Improvements (as defined in Section 302) on the Site, the Developer shall not, except as permitted by this Agreement, assign or attempt to assign this Agreement or any rights or duties herein, nor make any total or partial sale, transfer, conveyance, or assignment of the whole or any part of the Site or the Developer Improvements thereon, without the prior written approval of the Agency. Any purported transfer prior to the issuance of a Certificate of Completion, whether voluntary or by operation of law, except with the prior written consent of the Agency, shall render this Agreement absolutely null and void and shall confer no rights whatsoever upon any purported assignee or transferee. Notwithstanding any other provision of this Agreement to the contrary, Agency approval of an assignment of this Agreement or transfer of the Site 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 development of the Site; and (b) any assignment of this Agreement or transfer of the Site or the Site Improvements located thereon to a limited liability Corporation in which Developer is a member and has a greater than fifty percent (50%) ownership and management interest. F. [109] Representations by the Developer SACity Clerk\Resolutions\A -Spanos - AFA - Apadments.wpd 8 The Developer represents and warrants to the Agency as follows: 1. The Developer is duly established and in good standing under the laws of the State of California and has duly authorized, executed and delivered this Agreement and any and all other agreements and documents required to be executed and delivered by the Developer in order to carry out, give effect to, and consummate the transactions contemplated by this Agreement. This Agreement is enforceable against the Developer in accordance with its terms. 2. The Developer does not have any contingent obligations or contractual agreements which will materially adversely affect the ability of the Developer to carry out its obligations hereunder. 3. There are no pending or, so far as is known to the Developer, threatened, legal proceedings to which the Developer is or may be made a party, or to which it or any of its property is or may become subject, which have not been fully disclosed in the material submitted to the Agency, which will materially adversely affect the ability of the Developer to carry out its obligations hereunder. 4. There is no action or proceeding pending or, to the Developer's best knowledge, threatened, looking toward the dissolution or liquidation of the Developer and there is no action or proceeding pending or, to the Developer's best knowledge, threatened by or against the Developer which could affect the validity and enforceability of the terms of this Agreement, or adversely affect the ability of the Developer to carry out its obligations hereunder. 5. The Developer has, and will as required by its obligations hereunder, dedicate, allocate and otherwise make available, sufficient financial and other resources to perform its obligations under this Agreement. Each of the foregoing items 1 to 5, inclusive, shall be deemed to be an ongoing representation and warranty and shall survive the close of escrow for the Site and shall continue until issuance of the Certificate of Completion for the Development. The Developer shall advise the Agency in writing if there is any material change pertaining to any matters set forth or referenced in the foregoing items 1 to 5, inclusive. G. [110] Representations by the Agency The Agency represents and warrants to Developer as follows: 1. 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 Site 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 S ACity C1erk\Resolutions\Agnnt-Spanos - AFA - Apadmentsmpd 9 signatures hereto. 2. Agency does not 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 best knowledge, threatened, looking toward the dissolution or liquidation of Agency and there is no action or proceeding pending or, to Agency's best 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 the best of Agency's knowledge, the Site is not currently in violation of any law, ordinance, rule, regulation or requirement applicable to its use and operation. 6. Agency is not the subject of a bankruptcy proceeding. [200] AGENCY ASSISTANCE The Agency agrees to provide to Developer pursuant to the Agreement, certain financial assistance and incentives in an amount not to exceed a total of Two Hundred and Seventeen Thousand Seven Hundred and Twenty-three Dollars ($217,723), which shall include funding for a portion of the off -site public infrastructure improvements for the Development; and payment of City entity fees all as more particularly set forth in Sections 201 and 203 below (collectively, "Agency Assistance"). Agency shall provide for transfer in fee of the Site (14.4 acres) appraised at $1,117,723 or $78,712 per acre and Developer shall provide for transfer in fee of its Developer Property as consideration for transfer by the Agency of the Site. The fair market value of the Developer Property has been appraised as One Million Two Hundred Thousand Dollars ($1,200,000) or $117,000 per acre for 10.17 acres. This exchange of properties shall include a transfer of $82,277 from the Agency to the Developer so that the consideration for each property is equivalent. The Agency Assistance has been funded from the Agency's Low and Moderate Income Housing Fund. Accordingly, Developer acknowledges and agrees that the use of the Site shall be subject to all of the income and affordability restrictions set forth in this Agreement, and the Declaration of Covenants, Conditions and Restrictions (Attachment No. 8). A. [201 ] Acquisition and Construction Assistance Agency shall provide Agency Assistance in a maximum amount not SACity C1erk\Resolutions\Agmt-Spanos - AFA - Apartments.wpd 10 _ to exceed Two Hundred Seventeen Thousand Seven Hundred Twenty-three Dollars ($217,723) in financial assistance for the Development (the "Assistance") separate from the exchange and transfer of the Site and the $82,277 necessary to balance the exchange from the Developer Property. The Agency Assistance shall be provided 50% after grading is complete and 50% after construction of the off -site street improvements are complete. The Assistance shall be evidenced by a Promissory Note in the amount of Two Hundred Seventeen Thousand Seven Hundred Twenty-three Dollars ($217,723) (the "Developer Note") in the form of Attachment No. 6 and secured by a Deed of Trust (the "Developer Deed of Trust") in the form of Attachment No. 7. The Developer Deed of Trust shall secure the Developer's obligations to utilize the Assistance evidenced by the Developer Note and to complete the Development substantially in accordance with the terms of this Agreement. 2. The Site Purchase Price shall be One Million One Hundred Seventeen Thousand Seven Hundred Twenty-three Dollars ($1,117,723). This amount represents the appraised value of the land. The Purchase Price shall be composed of the exchange of the Developer Property valued at One Million Two Hundred Thousand Dollars ($1,200,000) in addition to the cash payment from the Agency to the Developer of $82,277. The cash payment shall be placed into escrow by the Agency and paid to the Developer upon the close of escrow for the Site and the Developer's Property. The Site shall be transferred to the Developer by Grant Deed in the form of Attachment No. 5A. The Developer Property shall be transferred from the Developer to the Agency in the form of Attachment No. 5B 3. The Developer Note shall bear no interest and shall be due and payable in accordance with the terms of the Developer Note. If the apartments are developed, the Developer Note shall be canceled and the Deed of Trust shall be reconveyed after the term of thirty (30) years of continuous implementation of the affordability restrictions as set out in the Conditions, Covenants, and Restrictions (Attachment No. 8). 4. Agency shall disburse an amount for site preparation, grading, utility systems and streets, for other governmental agency fees for project planning and development costs, for utility and bond costs, and for City fees up to a maximum amount of Two Hundred Seventeen Thousand Seven Hundred and Twenty-three Dollars ($217,723) of additional project costs. This amount is inclusive of the up to $100,000 originally approved in the Exclusive Negotiation Agreement. The Assistance shall be disbursed to Developer in accordance with the provisions of Section 215 hereof. B. [202] Conditions Precedent to the Transfer of the Site and Developer Property SACity C1erk\Resolutions\Agrmt-Spanos - AFA- Apa tments.wpd 11 Prior to and as conditions to transfer of the Site, the Developer shall complete each of the following by the respective times established therefor in the Schedule of Performance (Attachment No. 4): the Developer shall not be in default of this Agreement; and 2. the Developer provides to the Executive Director insurance certificates conforming to Section 307 of this Agreement; and 3. the Developer shall have executed and deposited with escrow for delivery to the Agency the Developer Promissory Note (Attachment No. 6) and the Deed of Trust (Attachment No. 7); and 4. the Developer shall have executed and deposited with escrow for recordation and delivery to the Agency the Declaration of Conditions, Covenants and Restrictions (Attachment No. 8) and the Grant Deed for the Developer Property; and 5. the Developer shall have provided evidence of their financing plan reasonably satisfactory to the Agency Executive Director sufficient to perform Developer's responsibilities for construction of the Development pursuant to this Agreement; and 6. the Developer has approved the environmental condition of the Site and agrees to acquire the Site in its present condition; and 7. the Agency shall have executed the Grant Deed for the Site and placed the $82,277 of the cash portion of the purchase price for the Developer Property in escrow. The foregoing items numbered 1 to 6, inclusive, together constitute the "Conditions" Precedent to the close of escrow for the Site and the Developers Property. C. [203] Exchange of the Site and the Developer Property The Developer shall acquire a fee simple marketable title to the Site pursuant to a Grant Deed in the form of Attachment No. 5A attached hereto and incorporated hereby by this reference. The Agency shall acquire a fee simple marketable title to the Developer Property pursuant to a Grant Deed in the form of Attachment No. 5B. D. [204] Escrow The Developer agrees to open an escrow (the "Exchange Escrow") with First American Title Insurance Co., or with another mutually agreeable escrow company (the "Escrow Agent"), within 30 days after approval of this Agreement. This Agreement constitutes the Agency and Developer's escrow instructions for the sale and acquisition of the Site and for the sale and acquisition of the Developer Property. A duplicate original of this Agreement shall be delivered to the Escrow Agent upon the opening of the SACity C1erk\Reso1utions\Agrmt-Spanos - AFA- Apartments.wpd 12 Exchange Escrow. The Escrow Agent is hereby empowered to act under this Agreement, and the Escrow Agent, upon indicating within five (5) days after the opening of the Acquisition Escrow its acceptance of the provisions of this Section 204, in writing, delivered to the Agency and the Developer, shall carry out its duties as Escrow Agent hereunder. The Agency and the Developer shall each pay into the Exchange Escrow fifty percent (50%) of the following fees, charges and costs promptly after the Escrow Agent has notified the Agency and Developer of the total amount of such fees, charges and costs, but not earlier than ten (10) days prior to the scheduled date for closing the Exchange Escrow: 1. The Escrow fee; 2. Costs of drawing the grant deed; 3. Recording fees; 4. Notary fees; 5. The title insurance policy premiums; and 6. Any transfer tax and any state, county or city documentary stamps. The Developer shall deposit with the Escrow Agent the executed Developer Promissory Note (Attachment No.6) and Developer Deed of Trust (Attachment No. 7). The Escrow Officer shall notify the Agency when all outstanding documents including the respective Grant Deeds to the Developer and to the Agency, the Developer Deed of Trust (Attachment No. 7) and the Declaration of Conditions, Covenants and Restrictions (Attachment No. 8) have been executed and submitted to Escrow by the applicable party. The Escrow Agent is authorized to utilize the funds provided for the above exchange costs on the condition of the immediate recording of the Developer Deed of Trust (Attachment No. 7) and the Declaration of Conditions, Covenants and Restrictions (Attachment No. 8) after recording of each of the Grant Deeds (Attachment No. 5A and 513) vesting title in the Developer and the Agency respectively. All funds received in the Exchange Escrow shall be deposited by the Escrow Agent, with other escrow funds of the Escrow Agent in an interest -earning general escrow account or accounts with any State or national bank doing business in the State of California. Such funds may be transferred to any other general escrow account or accounts. All disbursements shall be made by check of the Escrow Agent. If the Exchange Escrow has not closed within three (3) working days of the receipt by Escrow of the Parties funds, then said funds shall be returned to the Parties unless both parties agree to extend the close of Escrow. Any amendment to these escrow instructions shall be in writing and signed by the Agency. At the time of any amendment, the Escrow Agent shall agree to carry out its duties as Escrow Agent under such amendment. SACity C1erk\Reso1utions\Agrmt-Spanos - AFA - Apartments.wpd 13 The liability of the Escrow Agent in the capacity of escrow holder with respect to the Agency is limited to performance of the obligations imposed under it under this Section 204 of this Agreement. E. [205] [Intentionally Omitted] F. [206] Conveyance of Title and Delivery of Possession Provided that the Developer is not in default under this Agreement and all conditions precedent to such conveyance have occurred, and subject to any mutually agreed upon extensions of time, conveyance to the Developer of title to the Site and conveyance to the Agency of the Developer Property shall be completed on or prior to commencement of construction unless otherwise agreed to by the Agency. The Agency and the Developer agree to perform all acts necessary to conveyance of title in sufficient time for title to be conveyed in accordance with the foregoing provisions. Possession shall be delivered to the Developer and the Agency respectively, concurrently with the conveyance of title, except that limited access may be permitted before conveyance of title as permitted in Section 213 of this Agreement. The Developer and Agency shall accept title and possession on the said date. G. [207] Condition of Title The Agency shall convey to the Developer fee simple title to the Site and the Developer shall convey to the Agency fee simple title to the Developer Property free and clear of all recorded liens, encumbrances, encroachments, assessments, leases and taxes except as approved by Developer and Agency pursuant to this Section 207. Within five (5) days of execution of this Agreement, Agency shall with respect to the Site and Developer with respect to Developer Property, cause First American Title Insurance Company, or another title company reasonably acceptable to Agency and Developer (the "Title Company"), to deliver to each other a standard preliminary title report (the "Title Report") with respect to the Site and Developer Property, together with legible copies of the documents underlying the exceptions ("Exceptions") set forth in the Title Report. Developer and Agency shall have the right to reasonably approve or disapprove the Exceptions; provided, however, that the Developer hereby approves the Redevelopment Plan and the lien of current non -delinquent real property taxes and assessments, if any, as Exceptions. Developer and Agency shall each have ten (10) days from the date of receipt of the Title Report and the Exceptions pursuant to this Section 207 to give written notice to each other of its approval or disapproval of any of such Exceptions. If either Party fails to give written approval of the Title Report within such time limit then it shall be deemed to have approved the Title Report. If either Party notifies the other Party of its disapproval of any Exceptions in the Title Report, owner shall have the right, but not the obligation, to remove any disapproved Exceptions within ten (10) days after receiving written notice of the disapproval or provide assurances satisfactory to the other Party that such Exception(s) will be removed on or before conveyance of the Site and Developer Property. If Developer SACity C1erk\Resolutions\. g -Spanos - AFA - Apartments. wpd 14 or Agency cannot or in its sole discretion does not elect to remove any of the disapproved Exceptions within that period, the other Party shall have ten (10) business days after the expiration of such ten (10) days to either give written notice that it elects to proceed with the conveyance of the Site subject to the disapproved Exceptions or to give written notice that it elects to terminate this Agreement. Neither Developer nor Agency shall voluntarily create any new exceptions to title following the date of this Agreement. H. [208] Payment of the Purchase Price and Recordation of Deed The Developer shall deposit the Grant Deed to the Developer Property (Attachment 5 No. B) , the executed Developer Note, the Deed of Trust, and the Conditions, Covenants, and Restrictions (Attachment No. 8) for the Site and other sums required hereunder, if any, with the Escrow Agent prior to the date for conveyance of the Site, provided that the Escrow Agent shall have notified the Developer in writing that each Grant Deed, properly executed and acknowledged by the Agency, has been delivered to the Escrow Agent and that title is in condition to be conveyed in conformity with the provisions of Section 207 of this Agreement. Upon the close of escrow, the Escrow Agent shall record the respective Grant Deeds for recordation among the land records in the Office of the County Recorder of Riverside County. [209] Title Insurance Concurrently with recordation of the respective Grant Deeds, First American Title Insurance Company or some other title insurance company satisfactory to the Agency and the Developer having equal or greater financial responsibility ("Title Company"), shall provide and deliver to the Developer and to the Agency a CLTA or ALTA title insurance policy issued by the Title Company insuring that the title is vested in the Developer and the Agency, as applicable, in the condition required by Section 207 of this Agreement. The Title Company shall provide the Developer and the Agency with a copy of the title insurance policy and the title insurance policy shall be in the amount of Dollars ($ ) for the Site and the Developer Property. The Developer and Agency shall pay the title insurance premium attributable to a CLTA standard form policy of title insurance in the amount of the purchase price of the Site and the Developer Property respectively. The Title Company shall, if requested by the Developer, increase the amount of the title insurance policy or provide the Developer with an endorsement to insure the amount of the Developer's estimated development costs of the improvements to be constructed upon the Site. The Developer shall pay the entire premium for any such increase in coverage requested by it. J. [210] Taxes and Assessments Ad valorem taxes and assessments, if any, on the Site and the Developer Property, 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 and S ACity C1erk\Reso1utions\Agcmt-Spanos - AFA - Apartrnentsmpd 15 Developer respectively. All ad valorem taxes and assessments levied or imposed for any period commencing after closing of escrow for the Site shall be paid by the Developer. K. [211 ] Conveyance Free of Possession Except as otherwise provided in the Scope of Development (Attachment No. 3), the Site and the Developer Property shall be conveyed free of any possession or right of possession by any person except that of the Developer and the Agency respectively and the easements of record. L. [212] Inspections, Condition of Site 1. Inspections. The Developer shall conduct the Developer's own investigation of the Site, including but not limited to the existing improvements, if any, its physical condition, the soils and toxic conditions of the Site and all other matters which in the Developer's judgment affect or influence the Developer's proposed use of the Site and the Developer's willingness to develop the Site pursuant to this Agreement. The Developer's investigation may include, without limitation, the preparation by a duly licensed soils engineer of a soils report for the Site. Within the time set forth therefor in the Schedule of Performance (Attachment No. 4), the Developer shall provide written notice to the Agency of the Developer's determinations concerning the suitability of the physical condition of the Site. If, in the Developer's reasonable judgment, the physical condition of the Site is unsuitable for the use or uses to which the Site will be put to the extent that it is not economically feasible for the Developer to develop the Site pursuant to this Agreement, then the Developer shall have the option either to (a) take any action necessary to place the applicable Site in a condition suitable for development, at no cost to the Agency; or (b) terminate this Agreement pursuant to the provisions of Section 511 hereof with respect to the Site. If the Developer has not notified the Agency of its determinations concerning the suitability of the physical condition of the Site within the time set forth in the Schedule of Performance (Attachment No. 4), the Developer shall be deemed to have waived its right to terminate this Agreement pursuant to this Section. 2. "As Is". The Agency has provided the Developer 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 below. The Developer acknowledges and agrees that any portion of the Site, including but not limited to the existing improvements that it acquires from the Agency pursuant to this Agreement shall be purchased "as is," in its current physical condition, with no warranties, express or implied, 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 Site. The Developer has provided the Agency 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 below. The Agency acknowledges and agrees that any portion of the Site, including but not limited to the existing improvements that it acquires from the Developer pursuant to this Agreement shall be purchased "as is," in its current physical condition, with no warranties, express or SACity C1erk\Reso1utions\Agtmt-Spanos - AFA - Apartrnents.wpd 16 implied, 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 Site. 3. Indemnity. The Developer agrees, with respect to the Site and the Agency agrees with respect to the Developer Property from and after the date of recording of the deeds conveying title to the Site and the Developer Property respectively, to defend, indemnify, protect and hold harmless the Agency and the Developer respectively and their officers, beneficiaries, employees, agents, attorneys, representatives, legal successors and assigns ("Indemnities") from, regarding and against any and all liabilities, obligations, orders, decrees, judgments, liens, demands, actions, Environmental Response Actions (as defined in subsection 5 below), claims, losses, damages, fines, penalties, expenses, Environmental Response Costs (as defined herein) 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 Developer's use and occupancy of the Site and the Agency's respective use and occupancy of the Developer's Property, 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 (as defined in subsection 5 below), at, on, in, beneath or from the Site, unless caused by the negligence or willful misconduct of Indemnitees. The respective Developer's and Agency'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 the Developer's sole cost. Developer shall have no liability under this Section 212(3) for any Environmental Response costs, Hazardous Materials or any other matter to be indemnified hereunder occurring after the sale or transfer of the completed Development in accordance with the terms of this Agreement. 4. Release and Waiver. Subject to the exceptions set forth in Section 212(3) above, the Developer with respect to the Site and the Agency with respect to the Developer Property hereby releases and waives all rights, causes of action and claims the Developer or Agency has or may have in the future against the Indemnities arising out of or in connection with any Hazardous Materials (as defined subsection 5 below), at, on, in, beneath or from the Site and the Developer Property respectively. In furtherance of the intentions set forth herein, the Developer and the Agency acknowledge that they are 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 favor at the time of executing the release, which if known by him must have materially affected this settlement with the debtor." The Developer and the Agency hereby waive and relinquish 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 nonstatutory 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 212. SACity C1erk\Reso1utions\Agrmt-Spanos - AFA - Apartments.wpd 17 5. 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 the Developer. (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) determined by California, federal or local governmental authority to be capable of posing a risk of injury to health, safety or property. 6. Materiality. The Developer acknowledges and agrees that the defense, indemnification, protection and hold harmless obligations of the Developer 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 the Developer's obligations were as provided for herein. 7. Right to - ontest. Developer may contest in good faith any claim, demand, levy or assessment under Hazardous Materials Laws if: (a) the contest is based on a material question of law or fact raised by Developer in good faith, (b) Developer promptly commences and thereafter diligently pursues the contest, (c) the contest will not materially impair the taking of any remedial action with respect to such claim, demand, levy or assessment, and (d) if r- , -)per deposits with Agency any funds or other forms of assurance Agency in good faith from time to time determines appropriate to protect Agency in good faith from the consequences of the contest being unsuccessful and any remedial action then reasonably necessary. No default shall be deemed to exist with respect to any claim, demand, levy or attachment being contested by Developer under the conditions of this section. &\City Clerk\Resolutions\Agnnt-Spanos - AFA - Apartniert .,spd 18 M. [213] Preliminary Work by the Developer Prior to the conveyance of title from the Agency, representatives of the Developer shall have the right of access to the Site at all reasonable times for the purpose of obtaining data and making surveys and tests necessary to carry out this Agreement. The Developer shall hold the Agency harmless for any injury or damages arising out of any activity pursuant to this section. The Developer shall have access to all data and information on the Site available to the Agency, but without warranty or representation by the Agency as to the completeness, correctness or validity of such data and information. Any preliminary work undertaken on the Site by the Developer prior to conveyance of title thereto shall be done only after written consent of the Agency and at the sole expense of the Developer. The Developer shall save and protect the Agency against any claims resulting from such preliminary work, access or use of the Site by Developer, its agents or contractors. Copies of data, surveys and tests obtained or made by the Developer on the Site shall be filed with the Agency. Any preliminary work by the Developer shall be undertaken only after securing any necessary permits from the appropriate governmental agencies. N. [214] [Intentionally Omitted] O. [215] Disbursement of Agency Assistance for Improvements. 1. Deposit of Agency Assistance. The portion of Agency Assistance to be utilized for reimbursement of construction and planning costs according to the schedule set out in the Scope of Development (Attachment No. 3) shall be deposited in an interest bearing account to be designated by the Agency in the name of the Agency ("Agency Account") and funds shall be disbursed from the Agency Account upon the signature of the Executive Director or Finance Director, acting alone, for the purposes set forth in this Agreement pursuant to the disbursement procedures set forth in this Section 215. The amount to be deposited in this account shall be equal to Three Hundred Thousand Dollars ($300,000). The $300,000 is composed of $82,277 to be paid into Escrow and paid to Developer at close of Escrow as part of the consideration for the Developer Property and $217,723 towards reimbursement of improvement costs such as grading and street improvement requirements. The Application for disbursement shall be submitted to the Executive Director of the Agency for review and approval in accordance with this Section 215. 2. Conditions for Each Disbursement. Prior to each and every disbursement, the following conditions shall be satisfied: (a) Application. Developer shall have delivered the Application attached hereto as Attachment No. 10 to the Executive Director at least fifteen (15) business days prior to the requested disbursement. The Application shall be completed and certified to be accurate by Developer. The Application shall specifically identify the nature of each expense, by reference to items in the Budget, and shall identify the status S ACity C1erk\Resolutions\Ag -Spanos - AFA - Apactments.wpd 19 of completion of such construction. (b) Approval of Application. The Executive Director shall have reviewed and approved the Application and accompanying documents, and the Executive Director shall have determined that the work is within the scope of the applicable section of the Budget within ten (10) business days. The Executive Director shall advise Developer of any issues within the ten (10) day period and shall pay all uncontested amounts requested by the Application within twenty (20)days or the receipt of the Application. (c) Amount: Frequency. Agency shall not be obligated to make disbursements more frequently than once per month. III. [300] DEVELOPMENT OF THE SITE A. [301 ] Development of the Site [302] Scope of Development The Site shall be developed as 200 apartment units with ten percent (10%) set aside on a floating basis for low, and moderate income individuals. The development of the Site shall include both public improvements and private improvements on the Site and off -site public improvements required in the normal course of City's review of the development. The scope is more fully described in the Scope of Development (Attachment No. 3) and Specific Plan 99-037. The Developer shall commence and complete construction of the development of the Site by the respective times established therefor in the Schedule of Performance (Attachment No. 4). The Scope of Development (Attachment No. 3) shall include any plans and specifications submitted to the City and/or Agency for approval, and shall incorporate or show compliance with all mitigation measures. 2. [303] Site Plan By the time set forth therefor in the applicable Schedule of Performance (Attachment No. 4), the Developer shall prepare and submit to the City for its approval a Site Plan and related documents which conform to the approved Specific Plan for the Project and the requirements of the City and which contain the overall plan for development of the Site in sufficient detail to enable the City to evaluate the proposal for conformity to the requirements of the La Quinta Municipal Code and this Agreement. The Site shall be developed as established in this Agreement and such documents, except as changes may be mutually agreed upon between the Developer and the Agency. Any such changes shall be within the limitations of the Scope of Development (Attachment No. 3). During the preparation of all drawings and plans, staff of the City and the Agency and the Developer shall hold regular progress meetings to coordinate the SACity C1erk\Reso1utions\Agnnt-Spanos - AFA - Apa tments.wpd 20 preparation of, submission to, and review of drawings, plans and related documents by the City. The staff of City and the Agency and the Developer shall communicate and consult informally as frequently as is necessary to insure that the formal submittal of any documents to the Agency can receive prompt consideration. 3. [304] Review and Approval of Plans, Drawings. and Related Documents The Agency and the City shall have the right to review and approve all plans and drawings which may be required by the City with respect to any permits and entitlements which are required to be obtained to develop the Project, including any changes therein. During each stage of the processing of plans for the Site, the Agency and the City shall have the right to require additional information and shall advise the Developer if any submittal of plans or drawings is not complete or not in accordance with City/Agency procedures. If the Agency or the City determines that such a submittal is not complete or not in accordance with procedures, such tender shall not be deemed to constitute a submittal for purposes of satisfying the Schedule of Performance (Attachment No. 4); provided, however, Agency or City, as applicable, shall provide Developer with a detailed written report of any such deficiency or noncompliance with procedures and Developer shall revise and resubmit such plans in accordance with the Schedule of Performance and such written report. If the Developer desires to make any substantial changes in the construction plans for the Site after their approval by the Agency and the City, the Developer shall submit the proposed change to the Agency and the City for their approval. If the construction plans, as modified by the proposed change, conform to the requirements of this Section 304 and the Scope of Development (Attachment No. 3), the Agency and the City will approve the proposed change and notify the Developer in writing within thirty (30) days after submission to the Agency and the City. 4. [305] Cost of Development With the exception of the Agency Assistance as set forth in Section 201 of this Agreement, all costs for planning, designing, and constructing the Improvements shall be borne exclusively by the Developer. The Developer shall also bear all costs related to discharging the duties of the Developer set forth in this Agreement. 5. [306] Construction Schedule The Developer shall use best efforts to commence and complete development of the Site by the respective times established therefor in the Schedule of Performance (Attachment No. 4). 6. [307] Indemnity, Bodily Injury and Property Damage Insurance The Developer shall defend, assume all responsibility for and hold the S ACity C1erk\Reso1utions\Agrnt-Spanos - AFA - Apartrnents.wpd 21 Agency and the City, and their respective officers, agents and employees, harmless from all claims or suits for, and damages to, property and injuries to persons, including accidental death (including attorneys fees and costs), which may be caused by any of the Developer's activities under this Agreement. The Developer shall take out and maintain during the life of this Agreement a comprehensive liability policy in the amount of One Million Dollars ($1,000,000) combined single limit policy, [including contractual liability,] as shall protect the Developer, the City, and the Agency from claims for such damages. Coverage shall be primary and not contributing with any policy or coverage maintained by or obtained by the Agency, and an appropriate endorsement shall so state. The policy shall contain a waiver of subrogation. Insurance coverage furnished by the Developer pursuant to this Section 307 shall conform to this Section 307 and shall pertain to all activities on the Site and adjacent public rights -of -way surrounding the Site and all work on off -site public improvements. Developer shall furnish or cause to be furnished to the Agency a Certificate of Insurance from the insurer evidencing compliance with this Section 307 and providing that the insurer shall not change or modify the policy without thirty (30) days' prior written notice to Agency. In the alternative, Developer may show proof of a certificate of consent to self -insure issued by the Director of Industrial Relations according to California Labor Code Section 3800. Developer additionally agrees to and shall save the Agency and the City and their officers, employees and agents harmless from and assume all responsibility for any and all liability or responsibility for damage, costs, losses, or suit arising in any manner from the approval of this Agreement or the development and activities conducted by Developer or its agents pursuant this Agreement. This obligation and indemnification shall constitute a covenant running with the land throughout the life of the Redevelopment Plan. 7. [308] City and Other Governmental Agency Permits Before commencement of construction or development of any buildings, structures or other works of improvement upon the Site or in connection with any off -site improvement, the Developer shall, at its own expense, secure or cause to be secured any and all permits which may be required by the City or any other governmental agent affected by such construction, development or work. It is understood that the Developer's obligation is to pay all necessary fees and to timely submit to the City final drawings with final corrections to obtain building permit; the Agency will, without obligation to incur liability or expense therefor, use its best efforts to expedite issuance of building permits and Certificates of Occupancy for construction that meets the requirements of the City Code. 8. [309] Rights of Access For purpose of assuring compliance with this Agreement, representatives of the Agency and the City shall have the right of access to the Site without charges or fees, SACity C1erk\Reso1utions\Agrmt-Spanos - AFA - Apartments.wpd 22 _ at normal business hours during the period of this Agreement for the purposes of this Agreement, including, but not limited to, the inspection of the work being performed in constructing the Project, so long as they comply with all safety rules. Such representatives of the Agency or of the City shall be those who are so identified in writing by the Executive Director of the Agency. The Agency shall hold the Developer harmless from any bodily injury or related damages arising out of the activities of the Agency and the City as referred to in this Section 309. 9. [310] Local. State and Federal Laws The Developer shall perform under this Agreement and carry out its performance under this Agreement, including without limitation the construction of the Project, in conformity with all applicable Federal and State laws and local ordinances, including all applicable Federal and State labor standards, as to the Site, provided, however, Developer and its contractors, successors, assigns, transferees, and lessees are not waiving their rights to contest any such laws, rules or standards. 10. [311 ] Anti -Discrimination Pursuant to Section 33435 and 33050 of the California Community Redevelopment Law, the Developer for itself and its successors and assigns, agrees, that in the construction of Project on the Site or other performance under this Agreement, the Developer will not discriminate against any employee or applicant for employment because of sex, marital status, race, color, religion, ancestry, or national origin. 11. [312] Taxes and Assessments After the conveyance of title by Agency to Developers or its assignee, the Developer shall pay prior to delinquency all real estate taxes and assessments on the Site for any period subsequent to the conveyance of title and possession, so long as the Developer retains any ownership interest therein. The Developer shall remove or have removed any levy or attachment made on the Site 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, the Developer shall have the right to contest the validity or amounts of any tax, assessment, or encumbrance available to the Developer in respect thereto, and nothing herein shall limit the remedies available to the Developer in respect thereto. B. [313] Prohibition Against Transfer of the Site, the Buildings or Structures Thereon and Assignment of Agreement The Developer shall not, without prior approval of the Agency, make any total or partial sale, transfer, conveyance of, or enter into any assignment or ground lease of the whole or any part of the Site or of the buildings or structures on the Site prior to the issuance of the Certificate of Completion. Further, prior to any transfer of interest which results in the Developer no longer being the owner or having a controlling interest in the developed property, the Developer shall provide the Agency with evidence of the transfer, assignment and acceptance by the new owner of all of the operational and maintenance SACity Clerk\Resolutions\Agrmt-Spanos - AFA - Apartments.wpd 23 obligations set out in this Agreement, the Developer Note, Deed of Trust, and Covenants, Conditions, and Restrictions. This prohibition shall not be deemed to prevent leasing of the individual apartment units or the granting of temporary or permanent easements or permits to facilitate the development of the Site. C. [314] Right of the Agency to Satisfy Other Liens on the Site After Title Passes After the conveyance of title by Agency and prior to the completion of construction, and after the Developer has had written notice and has failed after a reasonable time, but in any event not less than forty-five (45) days, to challenge, cure, adequately bond against, or satisfy any liens or encumbrances on the Site which are not otherwise permitted under this Agreement, the Agency shall have the right, but no obligation to satisfy any such liens or encumbrances. Notwithstanding the above, the Developer shall have the right to contest the validity or amounts of any tax, assessment, or encumbrance available to the Developer in respect thereto. D. [315] Certificate of Completion Promptly after the completion of construction of the Project in conformity with this Agreement (as determined by the Executive Director of the Agency), upon the written request of the Developer the Agency shall furnish the Developer with the Certificate of Completion (in the form attached hereto as Attachment No. 9) which evidences and determines the satisfactory completion of the construction, and development of the Project, pursuant to the provisions and covenants specified in this Agreement, the Redevelopment Plan and the California Community Redevelopment Law. The issuance and recordation of a Certificate of Completion (Attachment No. 9) with respect to the Project shall not supersede, cancel, amend or limit the continued effectiveness of any obligations relating to the maintenance, or uses, or payment of monies, or any other obligations, except for the obligation to complete construction of the Project as of the time of the issuance of such applicable certificate in accordance with the requirements of this Agreement. The Agency shall not unreasonably withhold any Certificate of Completion. If the Agency refuses or fails to furnish a Certificate of Completion after written request from the Developer, the Agency shall, within ten (10) days of the written request, provide the Developer with a written statement of the reasons the Agency refused or failed to furnish such Certificate of Completion. The statement shall also contain the Agency's opinion of the action the Developer must take to obtain the Certificate of Completion. Upon issuance of a Certificate of Completion (Attachment No. 9) for the Project, construction of the Project shall be deemed to have been completed in conformity with this Agreement. The Certificate of Completion (Attachment No. 9) is not a Notice of Completion as referred to in Section 3093 of the California Civil Code. The issuance of SACity C1erk\Reso1utions\Agrmt-Spanos - AFA - Apartments.wpd 24 a Certificate of Completion shall not affect the continued effectiveness of the Declaration of Conditions, Covenants and Restrictions (Attachment No. 8) recorded pursuant to this Agreement. E. [316] No Encumbrances Except Mortgages. Deeds of Trust. Sales and Leases -Back or Other Financing for Development (Reserved - not applicable to this Agreement) F. [317] Holder Not Obligated to Construct Improvements The holder of any mortgage, Deed of Trust or other security interest authorized by this Agreement shall in no way be obligated by the provisions of this Agreement to construct or complete the Project or to guarantee such construction or completion, nor shall any covenant or any other provision in the Grant Deed for the Site be construed so to obligate such holder. Nothing in this Agreement shall be deemed to construe, permit or authorize any such holder to devote the Site to any uses or to construct any improvements thereon other than those uses or improvements provided for or authorized by this Agreement. G. [318] Notice of Default to Mortgage. Deed of Trust or Other Security Interest Holders: Right to Cure Whenever the Agency shall deliver any notice or demand to the Developer with respect to any breach or default by the Developer in completion of construction of the Project, the Agency shall at the same time deliver a copy of such notice or demand to each holder or record of any mortgage, Deed of Trust or other security interest authorized by this Agreement who has previously made a written request to the Agency therefor. Each such holder shall (insofar as the rights of the Agency are concerned) have the right, at its option, within ninety (90) days after the receipt of the notice, to cure or remedy or commence to cure or remedy any such default and to add the cost thereof to the security interest debt and the lien on its security interest. In the event there is more than one such holder, the right to cure or remedy a breach or default of the Developer under this Section 318 shall be exercised by the holder first in priority or as the holders may otherwise agree among themselves, but there shall be only one exercise of such right to cure and remedy a breach or default of the Developer under this Section 318. Nothing contained in this Agreement shall be deemed to permit or authorize such holder to undertake or continue the construction or completion of the Project (beyond the extent necessary to conserve or protect the improvements or construction already made) without first having expressly assumed the Developer's obligations to the Agency by written agreement satisfactory to the Agency. The holder in that event must agree to complete, in the manner provided in this Agreement, the Project to which the lien or title of such holder relates and submit evidence satisfactory to the Agency that it has the qualifications and financial responsibility necessary to perform such obligations. Any such holder properly completing the Project shall be entitled, upon written request made to the Agency, to a Certificate of Completion from the Agency. S ACity C1erk\Reso1utions\AgmA-Spanos - AFA - Apartments.wpd 25 H. [319] Failure of Holder to Complete Improvements In any case where, six (6) months after default by the Developer in completion of construction of the Project under this Agreement, the holder of any mortgage, Deed of Trust or other security interest creating a lien or encumbrance upon the Site has not exercised the option to construct, or if it has exercised the option and has not proceeded diligently with construction, the Agency may purchase the mortgage, Deed of Trust or other security interest by payment to the holder of the amount of the unpaid debt, plus any accrued and unpaid interest. If the ownership of the Site has vested in the holder, the Agency, if it so desires, shall be entitled to a conveyance of the Site from the holder to the Agency upon payment to the holder of an amount equal to the sum of the following: (a) The unpaid mortgage, Deed of Trust or other security interest debt at the time title became vested in the holder (less all appropriate credits, including those resulting from collection and application of rentals and other income received during foreclosure proceedings); (b) All expenses with respect to foreclosure; (c) The net expenses, if any (exclusive of general overhead), incurred by the holder as a direct result of the subsequent management of the Site; (d) The costs of any authorized improvements made by such holder; and (e) An amount equivalent to the interest that would have accrued on the aggregate of such amounts had all such amounts become part of the mortgage or Deed of Trust debt and such debt had continued in existence to the date of payment by the Agency. (320] Right of Agency to Cure Mortgage, Deed of Trust or Other Security Interest Default In the event of a default or breach by the Developer of a mortgage, Deed of Trust or other security interest with respect to the Site prior to the completion of the Project, and the holder has not exercised its option to complete the Project, the Agency may cure the default prior to completion of any foreclosure. In such event, the Agency shall be entitled to reimbursement from the Developer of all costs and expenses incurred by the Agency in curing the default. The Agency shall also be entitled to a lien upon the Site to the extent of such costs and disbursements. Any such lien shall be subject to mortgages, Deeds of Trust or other security interests executed for the sole purpose of obtaining funds to purchase and develop the Site as authorized herein. IV. [400] USE OF THE SITE A. [401 ] Affordable Housing Number of Units SACity Clerk\Resolutions\Agnnt-Spanos - AFA - Apartrnents.wpd 26 Developer shall develop the Site consisting of up to 200 apartments on the Site and shall develop all on -site and off -site public improvements connected therewith, all as described and set forth in the'Scope of Development (Attachment No. 3). Developer shall restrict the leases of ten (10) of the units to Low Income and ten (10) of the units to Moderate Income Households pursuant to the applicable income and affordability provisions contained herein. The Developer further covenants and agrees that the above -referenced occupancy and affordability requirements shall bind and be enforceable against the Site for the period of a minimum of thirty (30) years commencing with the acquisition of the Site by the Developer with the simultaneous recording of the Conditions, Covenants and Restrictions (Attachment No. 8). (a) "Affordable Rental Costs" shall mean that rent which shall not exceed the percentage of the gross income of the occupant person or household established by regulations of the United States Department of Housing and Urban Development which shall not be less than fifteen percent (15 %) of gross income nor exceed thirty percent (30%) of gross income, adjusted for family size and a utility allowance. (b) "Low Income Household" shall mean a household earning not greater than eighty percent (80 %) of Riverside County median income, as determined by the United States Department of Housing and Urban Development from time to time, as set forth in Health and Safety Code Section 50105. (c) "Moderate Income Household" shall mean a household earning not greater than one hundred and twenty percent (120%) of Riverside County median income, as determined by the United States Department of Housing and Urban Development from time to time, as set forth in Health and Safety Code Section 50105. B. [402] Uses In Accordance with Redevelopment Plan, Nondiscrimination The Developer covenants and agrees for itself, its successors, its assigns, and every successor in interest to the Site or any part thereof that the Developer and such successors and assignees, shall devote the Site to the uses specified in the Redevelopment Plan, the Grant Deed (Attachment No. 5), the Declaration of Conditions, Covenants and Restrictions (Attachment No. 8) and this Agreement for the periods of time specified therein. The foregoing covenants shall run with the land. The Developer covenants by and for itself and any successors in interest that there shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Site, nor shall the Developer itself or any person claiming under or though it establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the Site. The foregoing covenants shall run with the land. The Developer shall refrain from restricting the rental, sale or lease of the property on the basis of race, color, creed, religion, sex, marital status, national origin or ancestry S ACity C1erk\Reso1utions\Agmrt-Spanos - AFA - Apartments."d 27 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 or account of race, color, creed, religion, sex, marital status, ancestry or national origin in the leasing, subleasing, transferring, use, occupancy, tenure or enjoyment of the premises herein leased nor shall the lessee himself or herself, or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, sublessees, subtenants or vendees in the premises herein leased." 3. In contracts: 'There shall be no discrimination against or segregation of, any person, or group of persons on account of race, color, creed, religion, sex, marital status, ancestry or national origin, in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the premises, nor shall the transferee himself or herself or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the premises." The covenants established in this Agreement and the deeds of conveyance for the Site shall, without regard to technical classification and designation, be binding for the benefit and in favor of the Agency, its successors and assigns, the City and any successor in interest to the Site, together with any property acquired by the Developer pursuant to this Agreement, or any part thereof. The covenants against racial discrimination shall remain in effect in perpetuity. C. [403] Effect of Violation of the Terms and Provisions of this Agreement SACity C1erk\Reso1utions\Agrmt-Spanos - AFA - Apaaztments.wpd m After Completion of Construction The Agency is deemed the beneficiary of the terms and provisions of this Agreement and of the covenants running with the land, for and in its own rights and for the purposes of protecting the interests of the community and other parties, public or private, in whose favor and for whose benefit this Agreement and the covenants running with the land have been provided. The Agreement and the covenants shall run in favor of the Agency, without regard to whether the Agency has been, remains, or is an owner of any land or interest therein in the Site or in the Project Area. The Agency shall have the right, if this Agreement or covenants are breached, to exercise all rights and remedies, and to maintain any actions or suites at law or in equity or other property proceedings to enforce the curing of such breaches to which it or any other beneficiaries of this Agreement and covenants may be entitled. D. [404] Maintenance of the Site The Developer shall maintain the Improvements on the Site in conformity with the La Quinta Municipal Code and the requirements of the Declaration of Conditions, Covenants and Restrictions (Attachment No. 8), and shall keep the Site free from any accumulation of debris or waste materials. The Developer shall also maintain the landscaping required to be planted under the Scope of Development (Attachment No. 3) in a healthy and attractive condition. If, at any time, Developer fails to maintain the Site or any portion thereof, and said condition is not corrected as soon as reasonably possible after written notice from the Agency, either the Agency or the City may perform the necessary maintenance and Developer shall pay such costs as are reasonably incurred for such maintenance. V. [500] DEFAULTS AND REMEDIES A. [501 ] Defaults - General Subject to the extensions of time set forth in Section 603, failure or delay by either party to perform any term or provision of this Agreement constitutes a default under this Agreement. A party claiming a default shall give written notice of default to the other party, specifying the default complained of and the actions required to correct such default. Except as otherwise expressly provided in Sections 508 and 509 of this Agreement, the claimant shall not institute proceedings against the other party if the other party within thirty (30) days from receipt of such notice immediately, with due diligence, commences to cure, correct or remedy such failure or delay and shall complete such cure, correction or remedy as soon as reasonably practicable after receipt of such notice. B. [502] Legal Actions [503] Institution of Legal Actions In addition to any other rights or remedies and subject to the restrictions in S ACity C1erk\Reso1utions\Agcmt-Spanos - AFA - Apartments.wpd 29 Section 501, either party may institute legal action to seek specific performance of the terms of this Agreement, or to cure, correct or remedy any default, to recover damages for any default, or to obtain any other legal or equitable remedy consistent with the purpose of this Agreement. Such legal actions must be instituted in the Superior Court of the County of Riverside, State of California, in an appropriate municipal court in that county, or in the Federal District Court in the Central District of California. 2. [504] Applicable Law The laws of the State of California shall govern the interpretation and enforcement of this Agreement. 3. [505] Acceptance of Service of Process In the event that any legal action is commenced by the Developer against the Agency, service of process on the Agency shall be made by 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 the Developer, service of process on the Developer shall be made by personal service upon any officer or director of the Developer and shall be valid whether made with in or without the State of California or in such other manner as may be provided by law. C. [506] Rights and Remedies Are Cumulative Except as otherwise expressly stated in this Agreement, the rights and remedies of the parties are cumulative, and the exercise by either party of one or more of such rights or remedies shall not preclude the exercise by it at the same or different times, of any other rights or remedies for the same default or any other default by the other party. D. [507] Inaction Not a Waiver of Default Any failures or delays by either 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. E. [508] Remedies [509] Damages If either 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 SACity C1erk\Reso1utions\Agmt-Spanos - AFA- Apartments.wpd 30 (30) days after service of the notice of default (or within such other period as is set forth herein), the defaulting party shall be liable to the other party for any damages caused by such default. 2. [510] Specific Performance If either party defaults under any of the provisions of this Agreement, the non - defaulting party shall serve written notice of such default upon the defaulting party. If the default is not cured and/or commenced to be cured by the defaulting party within thirty (30) days of service of the notice of default, or such other time limit as may be set forth herein with respect to such default, the non -defaulting party as its option may thereafter (but not before) commence an action for specific performance of terms of this Agreement. VI. [600] GENERAL PROVISIONS A. [601 ] Notices, Demands and Communications Between Parties Written notices, demands and communications between the Agency and the Developer shall be sufficiently given if delivered by hand or dispatched by registered or certified mail, postage prepaid, return receipt requested, to the principal offices of the Agency and the Developer at the addresses specified in Section 106 and 107, respectively. Such written notices, demands and communications may be sent in the same manner to such other addresses as either party may from time to time designate by mail as provided in this Section 601. Any written notice, demand or communication shall be deemed received immediately if delivered by hand and shall be deemed received on the tenth (10th) day from the date it is postmarked if delivered by registered or certified mail. B. [602] Conflicts of Interest No member, official or employee of the Agency shall have any personal interest, direct or indirect, in this Agreement, nor shall any member, official or employee participate in any decision relating to the Agreement which affects his personal interests or the interests of any corporation, partnership or association in which he is directly or indirectly interested. No member, official or employee of the Agency shall be personally liable to the Developer, or any successor in interest, in the event of any default or breach by the Agency, or for any amount which may become due to the Developer or successor or on any obligations under the terms of this Agreement. C. [603] Enforced Delay-. Extension of Times of Performance In addition to specific provisions of this Agreement, performance by either party hereunder shall not be deemed to be in default, and all performance and other date SACity Clerk\Resolutions\Ag -Spanos - AFA- Apartments.wpd 31 specified in this Agreement shall be extended, where delays or defaults are due to: war; insurrection; strikes; lockouts; riots; floods; earthquakes; fires; casualties; acts of God; acts of the public enemy; epidemics; quarantine restrictions; freight embargoes; lack of transportation; governmental restrictions or priority; litigation; unusually severe weather; inability to secure necessary labor, materials or tools; delays of any contractor; subcontractor or supplier; acts or omissions of the other party; acts or failures to act of the City of La Quinta as the Agency or any other public or governmental agency or entity (other than the acts or failures to act of the Agency which shall not excuse performance by the Agency); or any other causes beyond the control or without the default of the party claiming an extension of time to perform. Notwithstanding anything to the contrary in this Agreement, an extension of time for any such cause shall be for the period of the enforced delay and shall commence to run from the time of the commencement of the cause, if notice by the party claiming such extension is sent to the other party within thirty (30) days of the commencement of the cause. Times of performance under this Agreement may also be extended in writing by the mutual agreement of Agency and Developer. Notwithstanding the foregoing portion of this Section 603, the Developer is not entitled pursuant to this Section 603 to an extension of time to perform because of past, present, or future difficulty in obtaining suitable construction financing for the development of the Site or because of the physical condition or suitability of the Site for the purposes of this Agreement. D. [604] Non -Liability of Officials and Employees of the Agency and the Developer No member, official or employee of the Agency or the City shall be personally liable to the Developer, or any successor in interest, in the event of any default or breach by the Agency or the City or for any amount which may become due to the Developer or its successors, or on any obligations under the terms of this Agreement. No officer, director or employee of the Developer shall be personally liable to the Agency or the City, or any successor in interest, in the event or breach by the Developer. E. [605] Entire Agreement, Waivers This Agreement is executed in three (3) duplicate originals, each of which is deemed to be an original. This Agreement includes pages 1 through 36 and Attachment Nos. 1 through 11, which constitutes the entire understanding and agreement of the parties. Each of the foregoing Attachments are incorporated herein by reference. This Agreement integrates all of the terms and conditions mentioned herein or incidental hereto, and supersedes all negotiations or previous agreements between the parties or their predecessors in interest with respect to all or any part of the subject matter hereof. All waivers of the provisions of this Agreement must be in writing by the appropriate SACity C1erk\ResolutionsOgtmt-Spanos - AFA- Apartments.wpd 32 authorities of the Agency and the Developer, and all amendments hereto must be in writing by the appropriate authorities of the Agency and the Developer. In any circumstance where under this Agreement either party is required to approve or disapprove any matter, approval shall not be unreasonably withheld. F. [606] Amendments to this Agreement The Developer and the Agency agree to mutually consider reasonable requests for amendments to this Agreement which may be made by any of the parties hereto, lending institutions, or bond counsel 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. For purposes of this paragraph the Agency's Executive Director shall have the authority to approve such an amendment. VII. [700] TIME FOR ACCEPTANCE OF AGREEMENT BY AGENCY This Agreement, when executed by the Developer and delivered to the Agency, must be authorized, executed and delivered by the Agency on or before , 1999, or this Agreement shall be void, except to the extent that the Developer shall consent in writing to a further extension of time for the authorization, execution and delivery of this Agreement. The date of this Agreement shall be the date when it shall have been signed by the Agency. IN WITNESS WHEREOF, the Agency and the Developer have signed this Agreement on the respective dates set forth below. LA QUINTA REDEVELOPMENT AGENCY, a public body corporate and politic By: Dated: Its: RON PERKINS, Chairman ATTEST: SACity C1erk\Resolutions\Agrmt-Spanos - AFA - Apartments.wpd 33 SAUNDRA L. JUHOLA, Agency Secretary City of La Quinta, California APPROVED AS TO FORM: DAWN C. HONEYWELL, Agency Counsel City of La Quinta, California THE SPANOS CORPORATION a California corporation By: Its: Dated: SACity C1erk\Reso1utions\AgmA-Spanos - AFA - Apartments.wpd 34 ATTACHMENT NO. 1 THE SITE SACity Clerk\Resolutions\Agrmt-Spanos - AFA - Aparlments.wpd 35 ATTACHMENT NO. 2 LEGAL DESCRIPTION OF PROPERTY SACity Clerk\Resolutions\Ag it-Spanos - AFA - Apartments.wpd 36 ATTACHMENT 3 SCOPE OF DEVELOPMENT GENERAL SUMMARY This document outlines general requirements for all improvements to the project Site, including on -Site and off -Site public improvements. Detailed requirements will be addressed in the development review process and approval of specific construction plans and related documents. II. DEVELOPMENT CONCEPT The development concept is to construct approximately 200 rental apartments with ten units affordable to low and ten units affordable to moderate incomes. The 14.4 acre Site (hereinafter "Site") is located south of State Highway 111 at Adams Street approximately 500 feet north of 4Vh Avenue. The Developer and Agency agree that the Site shall be developed and improved by the Developer in accordance with the provision of this agreement, subject to all applicable codes, ordinances, and statutes including requirements and procedures set forth in the La Quinta Municipal Code, and the Redevelopment Plan regulations adopted in conjunction with or subsequent to execution of this Agreement. III. SITE DESCRIPTION The proposed Site is 14.4 acres in size and is undeveloped. The Site as it currently exists has variable topography with sand dunes ranging in elevation from 1 to 10 feet in elevation with several sand hummocks. The Site is bordered to the north by commercial land use, and to the south and east by proposed Agency Affordable Housing Project and to the west existing single family residences. IV. ON -SITE DEVELOPMENT AND IMPROVEMENTS Developer shall, prepare a grading plan, scarify, overexcavate, cut, fill, compact, rough grade and fine grade, as required pursuant to a grading plan approved by the Director of Public Works, to create building pads, and appropriate rights of way configurations as necessary for construction of the project. Plans shall be prepared by a licensed civil engineer in good standing and subject to the approval of the Director of Public Work. Developer shall prepare or cause to be prepared Specific Plan 99-037 and Site Development Permit 99-654 which illustrates the Site, easements encumbering the Site, dedications and realignment of streets, if any. Developer shall grant and permit all necessary and appropriate utility easements and rights for the development of the Site, including but not limited to sanitary sewers, storm drains, water, electrical power, telecommunications, natural gas, cable, etc. SACity C1erk\Reso1utions\Agnnt-Spanos - AFA- Apartments.wpd 37 V. PUBLIC IMPROVEMENTS The Developer shall be responsible for the installation of the necessary utility connections in the boundaries of the project Site between the improvements and the water, sanitary sewer, storm drain, electric, natural gas, telecommunications, cable television or other public utilities. The Developer shall secure any permits required for any such installation or installations. The Developer shall construct all required public improvements in accordance with the standards and specifications adopted by the city. The Developer shall be responsible for repairing any public improvements it damages during construction of the project. VI. DEVELOPMENT STANDARDS All development on the project Site shall conform with the development standards adopted as part of Specific Plan 99-037. A. General Project Design All structures on the Site shall be designed and constructed to be consistent with the conceptual drawings prepared as part of the development proposal submitted by the Developer. B. Dwelling Unit Design The dwelling units range in size from a minimum of 792 square feet to a maximum of 1121 square feet and include at least two distinct floor plans. There shall be a mix of 72 one and 128 two bedrooms units, ten of which are affordable to low and ten to moderate income groups. Each of the units shall have covered parking. C. Development Process The developer and its representatives, including its architect and engineer, shall work with the Agency and City Staff to develop and execute the architectural concept, architectural drawings, Site plan, specific plan, precise plan, grading plan, off -Site improvement plans, landscaping plans and related plans consistent with the conditions of approval adopted by the City and Agency and the applicable regulations contained in the La Quinta Municipal Code. SACity Clerk\Resolutions\Agrmt.-Spanos - AFA - Apartrnentsmpd 38 ATTACHMENT #4 SCHEDULE OF PERFORMANCE RENTAL APARTMENTS 1. Developer to submit to City, Completed. Specific Plan and Site Development Permit Applications. 2. City approves, or approves subject September 7, 1999. to conditions, Specific Plan and Site Development Permit applications and and this Agreement. 3. City approves this Affordable September 7, 1999. Housing Agreement. 4. Developer receives access permit Within 30 days of approval of AHA by to stage and pre -water site. City and Agency. 5. Developer submits evidence of Prior to transfer of title to the Site. satisfaction of the AHA conditions precedent set forth in Section 202 and 212. 6. Grading Plan. Developer submits grading plan to Within 120 days of approval of City. Affordable Housing Agreement. City provides correction comments Within 15 days of receipt of grading plan. to developer Developer completes corrections Within 30 days of receipt of City and resubmits to City. comments. City approves grading plan. Within 15 days of receipt of resubmittal. Developer submits approved grading plan and receives permit Within 30 days of receipt of approved from City. grading plan. SACity C1erk\Resolu6ons\Agrmt-Spanos - AFA- Apartments.wpd 39 7. Construction Drawings Developer submits construction Within 150 days of receipt of approval of drawings to City. the Affordable Housing Agreement. City provides correction comments Within 45 days of receipt of construction to developer. drawings. Developer completes corrections Within 30 days of receipt of City and resubmits to City. comments. City approves construction drawings. Within 30 days of receipt of resubmittal. Developer submits approved Within 30 days of receipt of approved grading plan and receives permits. grading plan. 8. Developer shall obtain all Prior to commencement of the respective necessary permits for the improvement construction. construction of the improvements. 9. Developer shall commence grading Within 30 days of issuance of grading operations. permit. 10. Developer shall commence Within 6 months of issuance of building construction. permits. 11. Developer shall complete Within 30 months after approval of the construction of the Development Affordable Housing Agreement. 12. Upon completion of construction, Within 10 days after Agency receipt of Agency shall issue a Certificate of written request from Developer for Completion for the improvements or Certificate of Completion pursuant to shall provide Developer with a Section 315 of the AHA. written explanation of reasons why such a Certificate shall not be issued. 13. Developer receives complete bond Within 60 days of receipt of Certificate of exoneration from City and installs Completion. all final monuments. SACity C1erk\Resolutions\Agrmt-Spanos - AFA - Apartments.wpd 40 ATTACHMENT NO. 5 FORM OF GRANT DEED RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: The Spanos Corporation 3773 Howard Hughes Parkway, Suite 5905 Las Vegas, Nevada 89109. Attention: MAIL TAX STATEMENTS TO: Same as above. Assessor's Parcel Number: GRANT DEED This document is exempt from payment of a recording fee pursuant to Government Code Section 6103. LA QUINTA REDEVELOPMENT AGENCY By: Its: Executive Director FOR VALUABLE CONSIDERATION, receipt of which is hereby acknowledged, the undersigned, LA QUINTA REDEVELOPMENT AGENCY, a public body corporate and politic ("Grantor"), hereby grants to THE SPANOS CORPORATION., a California corporation ("Grantee"), that certain real property in the City of La Quinta, County of Riverside, State of California described in Exhibit "A" attached hereto and incorporated herein, together with any and all buildings and improvements located thereon (the "Property"). This Grant Deed is conditioned upon the affordability restrictions set out in Section 401 of the Affordable Housing Agreement for Apartments and the Declarations of Conditions, Covenants and Restrictions recording simultaneously herewith Date: LA QUINTA REDEVELOPMENT AGENCY, a public body corporate and politic as THOMAS P. GENOVESE Executive Director SACity Clerk\Resolutions\Agrmt-Spanos - AFA - Apartments.wpd 41 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. (SEAL) Signature Printed name Commissioner expires 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. (SEAL) Signature Printed name Commissioner expires SACity C1erk\Reso1utions\Agrmt-Spanos - AFA - Apaitments.wpd 42 R ATTACHMENT NO. 6 FORM OF PROMISSORY NOTE SECURED BY DEED OF TRUST La Quinta, California August 3, 1999 On (the "Maturity Date"), for money advanced and value received, the undersigned (the "Promisor"), promises to pay to the La Quinta Redevelopment Agency (the "Holder"), or to order at 78-495 Calle Tampico, La Quinta, California 92253, or any other place designated in a writing submitted by Holder to Promisor, the principal sum of $217,723, with no interest on the principal amount; provided, however, that the payment of the principal sum shall be waived and the obligation deemed for all purposes fully satisfied after a time period of thirty (30) years and upon performance by Promisor of considerations and covenants provided in the Affordable Housing Agreement for Apartments executed by and between the Promisor and the Holder, dated the same date as this Developer Note and executed concurrently herewith (the "Affordable Housing Agreement"), or upon termination of the Affordable Housing Agreement under its terms. — Principal and interest payable under this Developer Promissory Note, if any, shall be paid in lawful money of the United States of America. There shall be no prepayment of this Developer Promissory Note. This Developer Promissory Note is secured by, among other things, the Deed of Trust and Security Agreement with Assignment of Rents and Agreements dated the same date as this Developer Promissory Note, executed by Promisor, as trustor, in favor of Holder, as beneficiary (the "Deed of Trust"), and encumbering the fee interest in the real property described in the Deed of Trust (the "Land"). The Holder will be entitled to the benefits of the security provided by the Deed of Trust and will have the right to enforce the covenants and agreements of Promisor contained in the Deed of Trust and the Affordable Housing Agreement. If: a. Promisor fails to pay when due any sums payable under this Developer Promissory Note; or b. an Event of Default (as defined in the Deed of Trust) occurs; or C. a default under the Affordable Housing Agreement occurs which is not cured within the applicable cure period set forth therein; then Holder, at its sole option, shall have the right to declare all sums owing under this Developer Promissory Note immediately due and payable. However, if any document related to this Developer Promissory Note (including, but not limited to, the Affordable SACity C1erk\Reso1utions\Agmt-Spanos - AFA- Apartments.wpd 43 Housing Agreement) provides for the automatic acceleration of payment of sums owing under this Developer Promissory Note, all sums owing shall be automatically due in accordance with the terms of that document. Promisor shall pay to Holder all sums owing under this Developer Promissory Note, if not waived, without deduction, offset, or counterclaim of any kind. The advance of money evidenced by this Developer Promissory Note and secured by the Deed of Trust shall in no manner make Holder the partner or joint venturer of Promisor. If any attorney is engaged by Holder to enforce or construe any provision of this Developer Promissory Note, the Deed of Trust, the Affordable Housing Agreement or any other Security Documents (as defined in the Deed of Trust) or as a consequence of any Event of Default, with or without the filing of any legal action or proceeding, then Promisor shall immediately pay to Holder on demand all reasonable attorney fees and other costs incurred by Holder, together with interest. No previous waiver or failure or delay by Holder in acting with respect to the terms of this Developer Promissory Note, the Deed of Trust or the Affordable Housing Agreement shall constitute a waiver of any breach, default, or failure of condition under this Developer Promissory Note, the Deed of Trust or the Affordable Housing Agreement. A waiver of any term of this Developer Promissory Note, the Deed of Trust or the Affordable Housing Agreement must be made in writing and shall be limited to the express written terms of the waiver. If there are any inconsistencies between the terms of this Developer Promissory Note and the terms of the Deed of Trust or the Affordable Housing Agreement, the terms of this Developer Promissory Note shall prevail. All notice required or permitted in connection with this Developer Promissory Note shall be in writing and shall be given at the place and in the manner provided in the Deed of Trust for the giving of notices. If this Developer Promissory Note is executed by more than one person or entity as Promisor, the obligations of each person or entity shall be joint and several. No person or entity shall be a mere accommodation maker, but each shall be primarily and directly liable. Promisor waives presentment; demand; notice of dishonor; notice of default or delinquency; notice of acceleration; notice of protest and nonpayment; notice of costs, expenses, or losses and interest; notice of interest on interest and late charges; and diligence in taking any action to collect any sums owing under this Developer Promissory Note or in proceeding against any of the rights or interests to properties securing payment of this Developer Promissory Note. Time is of the essence with respect to every provision of this Developer Promissory Note. This Developer Promissory Note shall be construed and enforced in accordance with the laws of the State of California, except to the extent that Federal law preempts state law, and all persons and entities in any manner obligated under this Developer Promissory Note consent to the jurisdiction of any Federal or State Court within California having proper venue and also consent to service of process by any means authorized by California or Federal law. SACity Clerk\Resolutions\Agent-Spanos - AFA - Apartrnents.wpd 44 Promisor shall not be personally liable for the payment of the indebtedness or any obligations evidenced by this Developer Promissory Note or the Affordable Housing Agreement, and any judgment or decree in any action brought to enforce the obligation of Promisor to pay the indebtedness shall be enforceable against Promisor and the partners of the Promisor, if any, only to the extent of Promisor's interest in the Land and any other collateral pledged, encumbered, or otherwise covered by the Deed of Trust. Any judgment or decree shall not be subject to execution, or be a lien, on the assets of Promisor and the partners of the Promisor, if any, other than Promisor's interest in the Land and any other collateral pledged, encumbered, or otherwise covered by the Deed of Trust. Nothing in the preceding paragraph shall affect or limit the rights of Holder to enforce any of Holder's rights or remedies with respect to any portion of the Land or any other collateral pledged, encumbered, or otherwise covered by the Deed of Trust. THE SPANOS CORPORATION, a California corporation By: Its: SACity C1erk\Resolutions\Agrmt-Spanos - AFA - Apartments.wpd 45 ATTACHMENT NO. 7 SHORT FORM DEED OF TRUST AND ASSIGNMENT OF RENTS AND AGREEMENTS RECORDING REQUESTED BY: SELZER, EALY, HEMPHILL & BLASDEL 777 E. Tahquitz Canyon Way, Suite 328 Palm Springs, CA 92262 Attention: Ms. Emily Hemphill AND WHEN RECORDED MAIL TO LA QUINTA REDEVELOPMENT AGENCY 78-495 Calle Tampico La Quinta, California 92253 Attention: Executive Director Space Above For Recorder SHORT FORM DEED OF TRUST AND ASSIGNMENT OF RENTS AND AGREEMENTS THIS DEED OF TRUST, made this day of , 1999, by The Spanos Corporation, a California corporation, hereinafter called TRUSTOR, whose address is 1341 W. Robinhood Drive, Stockton, CA, 95207 and FIRST AMERICAN TITLE INSURANCE COMPANY, herein called Trustee, and La Quinta Redevelopment Agency, a public body, corporate and politic, herein called BENEFICIARY, Witnesseth: That Trustor IRREVOCABLY GRANTS, TRANSFERS AND ASSIGNS to TRUSTEE IN TRUST, WITH POWER OF SALE, that property in the City of La Quinta, County of Riverside, State of California, described as: SEE ATTACHED EXHIBIT "A" TOGETHER WITH the rents, issues and profits thereof, SUBJECT, HOWEVER, to the right, power and authority given to and conferred upon Beneficiary by paragraph (10) of the provisions incorporated herein by reference to collect and apply such rents, issues and profits. For the Purpose of Securing: 1. Performance of each agreement of Trustor incorporated by reference or contained herein. 2. Performance of each and every obligation of Trustor as set forth in that certain Affordable Housing Agreement between S ACity C1erk\Reso1utions\Agrmt-Spanos - AFA - Apartments.wpd 46 Trustor and Beneficiary of even date herewith, and 3. Performance of each and every obligation of Trustor as set forth in that certain Developer Note executed by Trustor in favor of Beneficiary of even date herewith securing the principal sum of $217,723.00, a copy of which is incorporated herein by referenced, payable to Beneficiary or to order, and all extensions, modifications, or renewals thereof. Trustor further adopts and agrees to perform and be bound by each and all of the terms and provisions set forth in the Addendum to Short Form Deed of Trust and Assignment of Rents attached hereto and incorporated herein by this reference. 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 of that certain Fictitious Deed of Trust referenced herein, and it is mutually agreed that all of the provisions set forth in subdivision B of that certain Fictitious Deed of Trust recorded in the book and page of Official Records in the office of the county recorder of the county where said property is located, noted below opposite the name of such county, namely: COUNTY BOOK PAGE COUNTY BOOK PAGE COUNTY BOOK PAGE COUNTY BOOK PAGE Alameda 1288 556 Kings 858 713 Placer 1028 379 Sierra 38 187 Alpine 3 130-31 Lake 437 110 Ptumas 166 1307 Siskiyou 506 762 Amador 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 jsa 323 391 Marin 1849 122 San Bernardino 6213 768 Sutter 655 585 :ra Costa 4684 1 Mariposa 90 453 San Francisco A-804 596 Tehama 457 183 Norte 101 549 Mendocino 667 99 San Joaquin 2855 283 Trinity 108 595 )orado 704 635 Merced 1660 753 San Luis Obispo 1311 137 Tulare 2530 108 Glenn 469 76 Mono 69 302 Santa Barbara 2065 881 Ventura 2607 237 Fresno 5052 623 Modoc 191 93 San Mateo 4778 175 Tuolumne 177 160 Humboldt 801 83 Monterey 357 239 Santa Clara 6626 664 Yolo 769 16 Imperial 1189 701 Napa 704 742 Santa Cruz 1638 607 Yuba 398 693 Inyo 165 672 Nevada 363 94 Shasta 800 633 Kern 3756 690 Orange 7182 18 San Diego Series 5 Book 1964, Page 149774 (which provisions, identical in all counties, hereby are adopted and incorporated herein and made a part hereof as fully as though set forth herein at length) that he will observe and perform said provisions; and that the references to property, obligations, and parties in said provisions shall be construed to refer to the property, obligations and parties set forth in this Deed of Trust. The undersigned Trustor requests that a copy of any Notice of Default and of any Notice of Sale hereunder be mailed to him at his address hereinbefore set forth. The Spanos Corporation, a California corporation By: Its: SACity Clerk\Resolutions\Agrmt-Spanos - AFA- Aparf nents.wpd 47 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. (SEAL) Signature Printed name State of California County of Riverside Commissioner expires ) ss. 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. (SEAL) Signature Printed name Commissioner expires SACity C1erk\ResolutionsUgnnt-Spanos - AFA - Aparlmentsmpd 48 ADDENDUM TO SHORT FORM DEED OF TRUST AND ASSIGNMENT OF RENTS The following provisions are incorporated into that certain Short Form Deed of Trust and Assignment of Rents attached hereto executed on , 1999 by The Spanos Corporation, a California corporation ("Trustor") in favor of the La Quinta Redevelopment Agency ("Beneficiary"): Use of Property. Trustor hereby warrants and represents that it shall, at times during the term of this Deed of Trust, use the property which constitutes the collateral hereunder ("Property") in full and strict conformity with all applicable ordinances, laws, statutes, regulations, and governmental requirements. Trustor further warrants that it shall use the Property during the term hereof in strict conformity with the terms set forth in that certain Affordable Housing Agreement ("AHA") dated concurrently herewith by and between Trustor and Beneficiary. Any default of Trustor under the terms of said AHA, if not cured within the time specified in the AHA for such cure, shall be deemed a breach of Trustor's obligations under this Deed of Trust. 2. Performance by Trustor. Trustor will faithfully perform every covenant to be performed by Trustor under any lien or encumbrance that Beneficiary reasonably believes may be prior and superior to or on a parity with the lien or charge of this Deed of Trust. A breach of or default under any such lien or encumbrance that exists after any applicable grace period in the pertinent instrument has expired will constitute an event of default under this Deed of Trust. If Trustor fails to do so, Beneficiary, without demand or notice, and in its sole judgment, may do any things required by Trustor by any of the provisions in this Deed of Trust and incur and pay expenses in connection with such provisions, and hold Trustor responsible for same. 3. Subordination. This Deed of Trust and all covenants, restrictions and/or regulatory agreements executed by Trustor in favor of Beneficiary in connection with the Property are expressly and shall be automatically subordinated to any deed of trust securing the repayment of construction financing for the development of the Property in accordance with the AHA, any permanent financing used to repay any such construction financing, any purchase money mortgage placed on the Property by any successor in interest to Trustor in ownership of the Property or any other refinancing of any of the foregoing (collectively referred to hereinafter as the "Subordinating Loans"). The proceeds of the Subordinating Loans shall be used only to construct and/or repair Improvements, reimburse Trustor for construction or development costs, repay other liens that are senior to this Deed of Trust, or provide for purchase money upon sale of the Property and the Improvements. The total amount of the Subordinating Loans shall not exceed 90% of the then appraised value of the Property and the Improvements as set forth in an MAI Appraisal provided by Trustor or, in the case of a purchase money loan, 90% of the then applicable purchase price for the Property and the Improvements. The interest S ACity C1erk\Resolutions\Agrmt-Spanos - AFA - Apartments.wpd 49 rate charged on the Subordinating Loans shall not exceed the prime rate charged by the Bank of America plus 5%, exclusive of late charges, penalties or fees payable in case of default, shall have a term of not more than thirty (30) years, and may provide for periodic payments of principal and interest, interest only and/or may provide for balloon payments. The maximum loan fees on the Subordinating Loans shall not exceed 5% of the relevant loan amount. For the purpose of implementing the aforementioned subordination, by accepting this Deed of Trust, Beneficiary agrees that in consideration of the Trustor's execution and delivery of this Deed of Trust, as long as Trustor is not then in default, Beneficiary shall from time to time execute in recordable form and deliver to Trustor within fifteen (15) days of receipt of the request therefor, an agreement expressly subordinating the lien or charge of this Deed of Trust to the lien or charge of any lender under any Subordinating Loan, and said lender shall upon receipt of said agreement, be entitled to record said agreement to evidence the subordination as described in this paragraph. Upon recording, any such subordination agreement shall prevail over the provisions otherwise set forth in this Deed of Trust. 4. Books and Records. Trustor will maintain complete books and records reflecting Trustor's compliance with the terms of the AHA and this Deed of Trust, in a form satisfactory to Beneficiary, and furnish to Beneficiary any reasonable reports requested by Beneficiary to document Trustor's compliance with the terms of the AHA and this Deed of Trust. Beneficiary shall have the right, not more than twice per year and upon not less than three (3) business days' notice, to inspect Trustor's records for the purpose of determining Trustor's compliance with the terms of the AHA and this Deed of Trust. Any such inspection shall be done during normal business hours and shall not unreasonably interfere with Trustor's operation of the Property. In the event that such inspection shows that Trustor has complied with the terms of the AHA and this Deed of Trust, then the cost of such inspection shall be borne by Beneficiary. If said inspection shows that Trustor is in material default of any provision of the AHA or this Deed of Trust, then the cost of said inspection shall be borne by Trustor, and Trustor shall pay said expenses within ten (10) days of written demand therefor, and if Trustor fails to so pay said costs, said costs shall bear interest at the maximum rate allowed by law until paid in full. 5. Hazardous Materials. Trustor hereby warrants and covenants that, throughout the term of this Deed of Trust, there shall be no use, storage, generation, manufacture, disposal, discharge, release or threatened release of any Hazardous Materials on, around or under the Property except in strict conformity with all applicable, federal, state and local laws, rules, statutes and regulations. For purposes of this Deed of Trust, "Hazardous Materials" shall have the meaning set forth in Section 214(5) of the AHA. Trustor agrees to indemnify, defend, and hold Beneficiary and Trustee harmless from all losses, costs, claims, damages, penalties, liabilities, causes of action, judgments, court costs, attorney fees and other legal expenses incurred as the result of Trustor's breach of the provisions contained in this paragraph 5. S ACity C1erk\Resolutions\A-Spanos - AFA - Apariments.wpd 50 The Spanos Corporation, a California corporation By: Its: La Quinta Redevelopment Agency By: Its: SACity C1erk\Reso1utions\AgmA-Spanos - AFA - Apartments.wpd 51 ATTACHMENT NO. 8 DECLARATION OF CONDITIONS, COVENANTS AND RESTRICTIONS FOR PROPERTY RECORDING REQUESTED BY AND ) WHEN RECORDED MAIL TO: ) La Quinta Redevelopment Agency ) 78-495 Calle Tampico ) La Quinta, California 92253 ) Attention: Executive Director ) (Space Above for Recorder's Use) This document is exempt from payment of a recording fee pursuant to Government Code Section 6103. THIS DECLARATION OF CONDITIONS, COVENANTS, AND RESTRICTIONS FOR PROPERTY (the "Declaration") is made by and between THE SPANOS CORPORATION (the "Buyer" or "Covenantor") and the LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic (the "Agency" or "Covenantee") as of the day of , 1999. RECITALS A. The Buyer is fee owner of record or has entered into an agreement for the purchase of that certain real property (the "Property") located in the City of La Quinta, County of Riverside, State of California legally described in the attached Exhibit "A". The developer shall construct 200 apartment units and rent 20 of the units to tenants that qualify as moderate income families or individuals (ten low and ten moderate). B. The Property is within the La Quinta Project Area No. 2 (the "Project") in the City of La Quinta and is subject to the provisions of the "Redevelopment Plan" for the Project. C. The Community Redevelopment Law (California Health and Safety Code 33000 et sew.) provides that a redevelopment agency shall establish covenants running with the land in furtherance of redevelopment plans. NOW, THEREFORE, THE AGENCY AND THE BUYER AGREE AS FOLLOWS: Affordable Housing. SACity C1erk\Reso1utions\Agnnt-Spanos - AFA - Apartments.wpd 52 The apartment project is to be used for constructed with 200 units of which ten units are to be held available to be rented to low and ten units to be rented to moderate income tenants. The Property has been made available, in part, with financial assistance provided by the Agency. In consideration of its participation, the Agency requires that the twenty (20) apartment units on the Property be maintained as an affordable housing resource until thirty (30) years from the date this Declaration is recorded. The terms and conditions relating to such use and occupancy are set forth in the Affordability Restrictions. The Affordability Restrictions and this Declaration shall be construed as consistent and not in conflict to the greatest extent feasible, in the event of conflict involving the Agency and the Buyer, the Affordability Restrictions shall control. 2. Affordability Covenants. Covenantor agrees for itself, and its successors and assigns, and every successor to Covenantor's interest in the Property, or any part thereof that these covenants shall remain in force and effect until thirty (30) years from the date this Declaration is recorded (the "Expiration Date"): (a) The twenty (20) apartment units (ten low and ten moderate) shall be rented or available for rentat Affordable Rental Costs which shall mean that rent which shall not exceed the percentage of the gross income of the occupant person or household established by regulations of the United States Department of Urban Development which shall not be less than fifteen percent (15%) of gross income nor exceed thirty percent (30% of gross income, adjusted for family size and a utility allowance to Low Income Households and Moderate Income Households defined as follows: (1) "Low Income Household" shall mean a household earning not greater than eighty percent (80 %) of Riverside County median income, as determined by the United States Department of Housing and Urban Development from time to time, as set forth in Health and Safety Code Section 50105. (2) "Moderate Income Household" shall mean a household earning not greater than one hundred twenty percent (120%) of Riverside County median income, as determined by the United States Department of Housing and Urban Development from time to time, as set forth in Health and Safety Code Section 50105. (b) The covenant contained in this Section 2 shall run with the land and shall automatically terminate and be of no further force or effect upon the Expiration Date. (c) Notwithstanding the foregoing, this Declaration shall be subordinate to the lien of a first deed of trust against the Property, and shall not impair the rights of any institution or lender which is the maker of a loan secured by such first deed of trust, or such lender's assignee or successor in interest, to exercise its remedies under the deed of trust in the event of default under the first deed of trust by the Covenantor. Such remedies under the first deed of trust include the right of foreclosure or acceptance of a SACity C1erk\Resolutions\Agnnt-Spanos - AFA - Aparfinents.wpd 53 deed or assignment in lieu of foreclosure. After such foreclosure or acceptance of a deed in lieu of foreclosure, the affordability covenants and the transfer restrictions set forth in Sections 1, 2, 3 and 7 of this Declaration shall be forever terminated and shall have no further effect as to the Property or any transferee thereafter; provided, however, if the holder of such deed of trust acquired title to the Property pursuant to a deed or assignment in lieu of foreclosure, said Sections 1, 2 3 and 7 of this Declaration shall automatically terminate upon such acquisition of title, provided that (i) the Agency has been given written notice of a default under such first deed of trust; and (ii) the Agency shall not have cured the default under such first deed of trust within the thirty (30) day period provided in such notice sent to the Agency. Notwithstanding any other provision hereof, the nondiscrimination covenants and the maintenance requirements set forth in this Declaration shall remain in full force and effect as to the Property and any transferee. 3. Transfer of Property The covenant contained in this Section 2 shall run with the land and be binding on subsequent transferees and shall automatically terminate and be of no further force or effect upon the Expiration Date. 4. Nondiscrimination Covenants. Covenantor by and for itself, its successors 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, religion, sex, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the Property, nor shall Covenantor 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 in the Property. Covenantor and its successors and assigns, shall refrain from restricting the rental or lease (if permitted by Covenantee) or sale of the Property on the basis of race, color, 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: (a) 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 them, that there shall be no discrimination against or segregation of, any person or group of persons on account of race, color, 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 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 in the land herein SACity C1erk\Reso1utions\Agrmt-Spanos - AFA- Apartments.wpd 54 conveyed. The foregoing covenants shall run with the land." (b) 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 of any person or group of persons on account of race, color, 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." (c) In contracts: "There shall be no discrimination against or segregation of, any person, or group of persons on account of race, color, 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 of 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 or vendees of the premises." Nothing in this Section 4 shall be construed to authorize the rental or lease of the Property if such rental or lease is not otherwise permitted. The covenants in this paragraph 4 shall run with the land in perpetuity. 5. Maintenance of Property. Covenantor shall properly maintain the buildings, landscaping and yard areas on the Property as follows: (a) No improperly maintained landscaping shall be visible from public rights -of - way, including: no lawns with grasses in excess of six (6) inches in height; 2 no untrimmed hedges; 3. no trees, shrubbery, lawns, and other plant life dying from lack of water or other necessary maintenance; 4. no trees and shrubbery grown uncontrolled without proper pruning, SACity C1erk\Resolutions\Agrmt-Spanos - AFA - Apartments.wpd 55 5. no vegetation so overgrown as to be likely to harbor rats or vermin; and 6. no dead, decayed, or diseased trees, weeds, and other vegetation. (b) No yard areas shall be left unmaintained, including: 1. no broken or discarded furniture, appliances, and other household equipment stored in yard areas for periods exceeding one (1) week; 2. no packing boxes, lumber, trash, dirt, and other debris stored in yards for periods exceeding one (1) week in areas visible from public property or neighboring properties; 3. no unscreened trash cans, bins, or containers stored for unreasonable periods in areas visible from public property or neighboring properties; and 4. no vehicles parked or stored in areas other than approved parking areas. (c) No buildings may be left in an unmaintained condition, including: 1. no violations of state law, Uniform Codes, or City ordinances; 2. 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; 3. no broken windows or chipped, cracked, or peeling paint; and 4. no conditions constituting hazards and/or inviting trespassers or malicious mischief. 6. Covenants do not Impair Lien. No violation or breach of the covenants, conditions, restrictions, provisions, or limitations contained in this Declaration shall defeat or render invalid or in any way impair the lien or charge of any mortgage or deed of trust or security interest. 7. Conflict with Other Laws: Severability. In the event that any provision of this Declaration is found to be contrary to applicable law or the Affordability Restrictions, then the contrary provisions of this Declaration shall be deemed to mean those provisions which are enforceable and SACity C1erk\Reso1utions\Agnnt-Spanos - AFA - Apartments.wpd 56 consistent with such laws and policies. The remaining portions of this Declaration shall be deemed modified in a manner which is consistent with the goals and intent of this Declaration to provide housing at an affordable housing cost to low and moderate income households. Every provision of this Declaration is intended to be severable. In the event any term or provision of this Declaration is declared by a court of competent jurisdiction to be unlawful, invalid or unenforceable for any reason, such determination shall not affect the balance of the terms and provisions of this Declaration, which terms and provisions shall remain binding and enforceable. 9. Covenants for Benefit of City and Agency. All covenants without regard to technical classification or designation shall be binding for the benefit of the Covenantee and the City of La Quinta (the "City") and such covenants shall run in favor of the Covenantee and the City for the entire period during which such covenants shall be in force and effect, without regard to whether the Covenantee or the City is or remains an owner of any land or interest therein to which such covenants relate. The Covenantee and the City, 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 suits in equity or other proper legal proceedings to enforce and to cure such breach to which it or any other beneficiaries of these covenants may be entitled during the term specified for such covenants, except the covenants against discrimination which may be enforced at law or in equity at any time in perpetuity. 10. Notices, Demands and Communications Written notices, demands and communications between the Covenantor and the Covenantee shall be sufficiently given if delivered by hand or dispatched by registered or certified mail, postage prepaid, return receipt requested, as follows: Covenantor: The Spanos Corporation 3773 Howard Hughes Parkway, Suite 590S Las Vegas, Nevada 89109 Attn: Covenantee: La Quinta Redevelopment Agency Attention: Executive Director 78-495 Calle Tampico La Quinta, California 92253 Such addresses for notice may be changed from time to time upon notice to the other party. Any written notice, demand or communication shall be deemed received S:\City Clerk\Resolutions\Agmt-Spanos - AFA - Apaztmentsmpd 57 immediately if delivered by hand and shall be deemed received on the fifth (5th) calendar day from the date it is postmarked if delivered by registered or certified mail. 11. Expiration Date. This Declaration shall automatically terminate and be of no further force or effect as of thirty (30) years from the date this Declaration is recorded. IN WITNESS WHEREOF, the Covenantee and Covenantor have caused this instrument to be executed on their behalf of their respective officers hereunto duly authorized as of the date set forth above. THE LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic By: THOMAS P. GENOVESE, Executive Director "COVENANTEE" ATTEST: SAUNDRA L. JUHOLA, Agency Secretary (Agency's and Owner's Signature must be acknowledged by a Notary Public) THE SPANOS CORPORATION "COVENANTOR" or DEVELOPER" SACity C1erk\Reso1utions\Agent-Spanos - AFA - Aparfinents.wpd m EXHIBIT A LEGAL DESCRIPTION OF PROPERTY SACity C1erk\Resolutions\Agnnt-Spanos - AFA- Apartments.wpd 59 ATTACHMENT NO. 9 CERTIFICATE OF COMPLETION RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: LA QUINTA REDEVELOPMENT AGENCY ) 78-495 Calle Tampico ) La Quinta, California 92253 ) Attn: Executive Director ) Space above for Recorder's use. CERTIFICATE OF COMPLETION OF CONSTRUCTION AND DEVELOPMENT WHEREAS, by an Affordable Housing Agreement dated , 19_, by and between the LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic (hereinafter referred to as the "Agency") and THE SPANOS CORPORATION (collectively referred to as the "Developer"), the Developer has constructed improvements upon the real property (the "Site"), legally described on the Attached Exhibit "A", by constructing or causing to be constructed the improvements thereon according to the terms and conditions of said Affordable Housing Agreement (the "Agreement"); and WHEREAS, pursuant to Section 315 of the Agreement, promptly after completion of the Improvements the Agency shall furnish the Developer with a Certificate of Completion upon written request therefor by the Developer; and WHEREAS, the issuance by the Agency of the Certificate of Completion shall be conclusive evidence that the construction of the Improvements conforms to the Agreement; and WHEREAS, the Developer has requested that the Agency furnish the Developer with the Certificate of Completion; and WHEREAS, the Agency has conclusively determined that the construction of the Improvements conforms to the Agreement; NOW, THEREFORE: 1. As provided in the Agreement, the Agency does hereby certify that the construction of the Improvements required to be constructed on the Site described in Exhibit "A" hereto has been satisfactorily performed and completed and that such S ACity Clerk\Resolutions\Agmt-Spanos - AFA - Apartments.wpd 60 development and construction work complies with the Agreement. 2. This Certificate of Completion does not constitute evidence of compliance with or satisfaction of any obligation of the Developer to any holder of a mortgage or any insurer of a mortgage security money loaned to finance the work of construction if improvements and development of the Site, or any part hereof. This Certificate of Completion is not a notice of completion as referred to in Section 3093 of the California Civil Code. 3. This Certificate of Completion does not denote completion of any work required to be completed, other than on the Site. 4. The Deed of Trust recorded as Document No. among the official land records of the County of Riverside and those Conditions, Covenants and Restrictions recorded as Document No. among the official land records of the County of Riverside shall remain in full force and effect. IN WITNESS WHEREOF, the Agency has executed this Certificate as of this day of , 19_. M ATTEST: LA QUINTA REDEVELOPMENT AGENCY THOMAS P. GENOVESE, Executive Director SAUNDRA L. JUHOLA, Agency Secretary SACity C1erk\Reso1utions\Agrmi1t-Spanos - AFA - Apartmentsmpd 61