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Dolce (Mauka View-LQ34)/Affordable Housing 01
Recording Requested By And When Recorded Mail To: DOC # 2007-0166709 03/12/2007 08:00R Fee:NC Page 1 of 31 Recorded in Official Records County of Riverside Larry u_ Ward Assessor, County Clerk & Reeorde IIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIILIIIIIIIII11 La Quinta Redevelopment Agency s R u PAGI SIZE DA I MISc I LONG RFD I COF 78-495 Calle Tampico La Quinta, CA 92253 M A L 1 465 1 426 PCOR NCOR -SMF NCH Attention: Executive Director [Exempt From Recording Fee Per Gov Code § 61031 ASSIGNMENT AND ASSUMPTION AGREEMENT This ASSIGNMEN N ASSUMPTION AGREEMENT ("Agreement") is entered into as of this doday of �2007, by and among the LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic ("Agency"), MAUKA VIEW, LLC, a California limited liability company ("Seller"), and PAT A. DOLCE AND LORA DEAN DOLCE, HUSBAND AND WIFE AS JOINT TENANTS ("Purchaser"). RECITALS A. On or about September 13, 2001, Agency and La Quinta 34 LLC, a California limited liability company ("LQ34"), entered into that certain Affordable Housing Rehabilitation Agreement, as amended by that certain First Amendment to Affordable Housing Rehabilitation Agreement dated December 17, 2002 (collectively, the "Original Housing Agreement"). The Original Housing Agreement provides for Seller to rehabilitate that certain real property identified therein as the "Site" (hereinafter, the "Original Site"). The Original Site is more particularly described in Exhibit "A", which is attached hereto and incorporated herein by this reference. B. Pursuant to the Original Housing Agreement, Agency agreed to provide a loan to LQ34 (the "Agency Loan"). The Agency Loan is evidenced by that certain Note dated September 13, 2001 (the "Original Note"). The Original Note is secured by that certain Deed of Trust with Assignment of Rents and Rider Attached Hereto (the "Original Agency Deed of Trust") dated September 13, 2001, and recorded on September 28, 2001, as Instrument No. 2001-474253, in the Official Records of the County of Riverside (the "Official Records"). C. Pursuant to the Original Housing Agreement, Agency and LQ34 entered into that certain Regulatory Agreement and Declaration of Covenants and Restrictions dated September 13, 2001, and recorded on September 28, 2001, as Instrument No. 2001-474254, in the Official Records (the "Original Agency Regulatory Agreement'). The Original Agency Regulatory Agreement places covenants on the use and operation of the Original Site to ensure that the Original Site is operated as a rental housing project with fourteen (14) units to be rented and occupied by moderate income households at affordable rents. D. On or about April 6, 2004, (i) LQ34 assigned its interests in and to the Original Housing Agreement to Seller; (ii) Agency and Seller entered into that certain Second 882/015610-0040 786097 01 a03/01/07 Amendment to Affordable Housing Rehabilitation Agreement (the "Second Amendment to Housing Agreement"); and (iii) Agency and Seller executed that certain Memorandum of Assignment and Assumption Agreement, which was recorded on April 23, 2004, as Instrument No. 2004-301361, in the Official Records (the "Original Memorandum"). E. Pursuant to the Second Amendment to Housing Agreement, Seller and Agency entered into (i) that certain Allonge to Note (the "Allonge"); and (ii) that certain Modification of Deed of Trust (the "Modification"). The Modification was recorded on April 23, 2004, as Instrument No. 2004-301360, in the Official Records. F. On or about February 7, 2006, Agency and Seller entered into that certain Third Amendment to Affordable Housing Rehabilitation Agreement (the "Third Amendment to Housing Agreement"), pursuant to which, among other things, the parties agreed to release portions of the Original Site from the Original Housing Agreement, Original Agency Regulatory Agreement, Original Agency Deed of Trust, and Original Memorandum. The portions of the Original Site that were not released by the Third Amendment are hereinafter referred to as the "Site." The Site is more particularly described in Exhibit `B", which is attached hereto and incorporated herein by this reference. G. Pursuant to the Third Amendment to Housing Agreement, Seller and Agency entered into that certain Amendment to Regulatory Agreement and Declaration of Covenants and Restrictions, releasing the aforementioned released portions of the Original Site from the Original Agency Regulatory Agreement ("Amendment No. 1 to Regulatory Agreement"). Amendment No. 1 to Regulatory Agreement was recorded on February 28, 2006, as Instrument No. 2006-0141068, in the Official Records. H. The Original Housing Agreement, as modified by the Second Amendment to Housing Agreement and the Third Amendment to Housing Agreement, is hereinafter referred to as the "Housing Agreement." The Original Agency Regulatory Agreement, as modified by Amendment No. 1 to Regulatory Agreement, is hereinafter referred to as the "Agency Regulatory Agreement". The Original Agency Deed of Trust, as modified by the Modification, is hereinafter referred to as the "Agency Deed of Trust." The Original Note, as modified by the Allonge, is hereinafter referred to as the "Note." I. Any capitalized terms contained in this Agreement which are not defined herein shall have the meaning given in the Housing Agreement, unless expressly provided to the contrary. J. Seller desires to sell the Site to Purchaser and Purchaser desires to purchase the Site from Seller and to assume the obligations of Seller under the Housing Agreement, Note, Agency Deed of Trust, and Agency Regulatory Agreement (collectively, the "Agency Agreements"). K. The Agency Agreements prohibit Seller from transferring or selling any interest in the Site or assigning any or all of the Agency Agreements without Agency's approval. L. Seller and Purchaser have requested that Agency approve the transfer of the Site to Purchaser, and the assignment of the Agency Agreements by Seller to Purchaser. Agency has 882/015610-0040 -2- 786097 01 a03/01/07 agreed to consent to the transfer of the site to Purchaser, and to the assignment and assumption of the Agency Loan and Agency Agreements between Seller and Purchaser, subject to the terms and conditions set forth in this Agreement. AGREEMENT Based upon the foregoing Recitals, which are incorporated herein by this reference, and for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Agency, Seller and Purchaser agree as follows: 1. Conditions Precedent; Effective Date. This transfer of the Site from Seller to Purchaser and the assignment contemplated under this Agreement, and Agency's approval thereof, is contingent and conditional upon the satisfaction of the following conditions precedent (collectively, the "Transfer Conditions") and such transfer and assignment shall not become effective until the Transfer Conditions are satisfied: (a) Agency Title Policy. First American Title Insurance Company (the "Title Company") is irrevocably committed to issue to Agency a lender's policy of title insurance ("Agency Title Policy"), with liability in the amount of the remaining outstanding balance of the Agency Loan, showing fee title to the Site vested in Purchaser, insuring in favor of Agency the Agency Deed of Trust, subject only to (i) the standard printed exceptions and exclusions contained in the form of the Title Policy commonly used by the Title Company; (ii) non - delinquent property taxes and assessments; (iii) as to the Site, the deed of trust in favor of Palm Desert National Bank in the amount of Two Million Five Hundred Ninety Thousand Dollars ($2,590,000) securing the loan to Purchaser for the acquisition of the Site; and (iv) such other matters as may be approved by Agency in its sole and absolute discretion. (b) Insurance. Purchaser has provided Agency the evidence of insurance required pursuant to Section 8.0 of the Housing Agreement and Section 7.0 of the Agency Regulatory Agreement. The date that all of the Transfer Conditions are satisfied and the grant deed conveying fee title to the Site to the Purchaser has been recorded in the Official Records shall be the "Effective Date." Seller shall not transfer and Purchaser shall not accept title to the Site until all of the Transfer Conditions are satisfied. If the Transfer Conditions are not satisfied on or before March 9, 2007, or such later date as the parties may mutually agree in writing in the sole and absolute discretion of each of them, each party shall have the right to terminate this Agreement by delivery of written notice to the other parties. 2. Assignment. Effective on the Effective Date, Seller hereby assigns to Purchaser all of Seller's rights, title, and interest in and to the Agency Agreements. 3. Assumption. Effective on the Effective Date, Purchaser hereby accepts the foregoing assignment, assumes the Agency Agreements, and agrees to timely pay, perform and discharge all of the obligations of Seller under the Agency Agreements, including without limitation payment of the Agency Loan upon the occurrence of certain events described in the 882/015610-0040 -3- 786097 01 03/01/07 Agency e. Purcaser acknowledges at if the ents tting ency Agency Lotan occur, Purchaser shall betlrequired to repay the lAgency gLoan taccelerate all interest thereon. 4. Consent by Agency. Provided all of the Transfer Conditions are satisfied in full, effective on the Effective Date, Agency consents to the transfer of the Site to Purchaser and the assignment of the Agency Agreements by Seller to Purchaser and the assumption of the Agency Agreements by Purchaser. Such consent by Agency shall not constitute a consent to any further or subsequent sale, conveyance, transfer or assignment of the Site or the Agency Agreements, or any part thereof, or any interest therein. 5. Escrow and Closing Costs. Seller and Purchaser each shall pay one-half of any Escrow fees attributable to the transactions contemplated under this Agreement. Seller shall pay the premium for the Agency Title Policy referred to in Section 1(a) of this Agreement. 6. Acknowledgment of Agreement to Hold Property as One Parcel. Purchaser acknowledges that the Site is encumbered by that certain Declaration of Covenants, Conditions, and Restrictions and Agreement to Hold Property as One Parcel dated September 13, 2001, recorded on September 28, 2001, as Instrument Number 2001-474255 in the Official Records, and modified on or about February 28, 2006, as Instrument No. 2006-0141070, which provides for the parcels comprising the Site to be held under common ownership and Purchaser covenants and agrees to be bound by said agreement from and after the Effective Date. 7. Miscellaneous. 7.1 Entire Agreement Waivers and Amendments. This Agreement, together with the Agency Agreements and other agreements referred to herein, incorporates all of the terms and conditions mentioned herein, or incidental hereto, and supersedes all negotiations and previous agreements among the parties with respect to all or part of the subject matter hereof. All waivers of the provisions of this Agreement must be in writing and signed by the appropriate authorities of the party to be charged. A waiver of the breach of the covenants, conditions or obligations under this Agreement by either party shall not be construed as a waiver of any succeeding breach of the same or other covenants, conditions or obligations of this Agreement. Any amendment or modification to this Agreement must be in writing and executed by the appropriate authorities of Agency, Seller and Purchaser. 7.2 Severability. If any term, provision, covenant, or condition of this Agreement is held by a court of competent jurisdiction to be invalid, void, or unenforceable, the remaining provisions of the Agreement shall continue in full force and effect, unless and to the extent the rights and obligations of one or both parties has been materially altered or abridged by such holding. 7.3 Applicable Law. This Agreement shall be construed and enforced in accordance with the internal laws of the State of California, without regard to conflict of law principles. 7.4 Litigation Expenses. If any party to this Agreement commences an action against any other party to this Agreement arising out of or in connection with this Agreement, 882/O 15610-0040 -4- 786097 01 .03/01/07 the prevailing party shall be entitled to recover reasonable attorneys' fees, expert witness fees, costs of investigation, and costs of suit from the losing party. 7.5 Authority. The persons executing this Agreement on behalf of the parties hereto warrant that they are duly authorized to execute this Agreement on behalf of said parties and that by so executing this Agreement, the parties hereto are formally bound to the provisions of this Agreement. 7.6 Execution in Counterpart. This Agreement may be executed in several counterparts, and all so executed shall constitute one agreement binding on all of the parties hereto, notwithstanding that all parties are not signatories to the original or the same counterpart. [signatures on next page] 882/019610-0040 786097 01 .03/01/07 IN WITNESS WHEREOF, Agency, Seller, and Purchaser have entered into this Agreement as of the date first written above. APPROVED AS TO FORM: RUTAN & TUCKER, LLP `�, &(" /L Attorneys for the a Quinta Redevelopment Agency "AGENCY" LA QUINTA REDEVELOPMEN,T AGENCY, a pub ' od , corporate pol' By Executive Director "PURCHASER" PAT A. DOLCE AND LORA DEAN DOLCE, ut Tc�N AND WISE AS JOINT TENANTS MAUKA VIEW, LLC, a California limited liability company M. James S. Sorenson, on behalf of the Sorenson Family 2001 Revocable Trust, Member 882/015610-0040 _6_ 796097 01 a03/01/07 IN WITNESS WHEREOF, Agency, Agreement as of the date first written above. ATTEST: Agency Secretary APPROVED AS TO FORM: RUTAN & TUCKER, LLP Attorneys for the La Quinta Redevelopment Agency Seller, and Purchaser have entered into this "AGENCY" LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic By: Executive Director "PURCHASER" PAT A. DOLCE AND LORA DEAN DOLCE, HUSBAND AND WIFE AS JOINT TENANTS By: Pat A. Dolce By: Lora Dean Dolce "SELLER" MAUKA VIEW, LLC, a California limited liability company By: ames S. Sorenson, on behalf of the Sorenson Family 2001 Revocable Trust, Member 8821015610-0040 786097 01 a03/01/07 0 STATE OF CALIFORNIA ) ss: COUNTY OF bS / ) %/L, Le/nal On %7iCUl lP ,2tx�� before me, la notary public, personally appeared /w personally known to me (or proved to me on the basis of satisfactory evidence) to be the personK whose name is/are subscribed to the within instrument and acknowledged to me that he/sjae/tJ@y executed the same in his/horftheir authorized capacity(ies% and that by his/her/Their signaturejs� on the instrument the personal, or the entity upon behalf of which the persons) acted, executed the instrument. WITNESS my hand and official seal. Notar�y Publ [SEAL] 1 L. LrM comm. 41Y 719 z -ar -"ryPVft • California o Los fteka County r FA- COttpn.e Tres Oct 21, 2008 STATE OF CALIFORNIA ss. COUNTY OF kt S On %�1 Zt. Q6 before me, a notary public, personally appeared A bOIU le Cf�personally known to me (or proved to me on the basis of satisfactory evidence) to be the persorks'j whose name(ay is/aye subscribed to the within instrument and acknowledged to me that be/she/11y6y executed the same in his/bier/their` authorized capacity(igs-Yand that by his/kef/thMir signature(s)'on the instrument the person(< or the entity upon behalf of which the person(�acted, executed the instrument. WITNESS my hand and official seal. Notary ubli [SEAL] � r.ertnvn 60 M. at520�t9 ,Notary Public • CalifOrma 10s Angeles County '* . • M�C`mm. Ezpires Oct. 21, 2018 882/015610-0040 _9_ 786097 01 a03/01/07 STATE OF CALIFORNIA ) ) ss. COUNTY OF ' C v z�S J t ) c�� ed li �'i% Cif On / V1 Iy� before me, �a notary public, personally appeared J m� S 5. 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/ske/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 sea,. PAMELA M. CROSS ` ' Commisslon # 1535021 N tary Public <y Notary Public - California [SEALSEAL f " J ] `'� . / Riverside County` MY Comm. Eri.7:res Dec 7 4, 2008 STATE OF CALIFORNIA ) //�� ) ss. COUNTY OF/hverS la t ) � 7�� S' On f`rlw& 8 d.00'1 before me�/a notary public, personally appeared THOMAS, P .. GEN��_j", personally known to me (or proved to me on the basis of satistactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal Notary Public [SEAL] PWALA E. NEETO it ConanWbn • 1723211 MOM Public - California MR0 RhorNaO County MyCdrin6 Ef�JlftliOb2, 2t111 8821015610-0040 -10- 796097 01 a03/01/07 EXHIBIT "A" LEGAL DESCRIPTION OF ORIGINAL SITE All that certain property located in the City of La Quinta, County of Riverside, State of California, described as follows: LOTS I TO 11 INCLUSIVE IN BLOCK 126 OF SANTA CARMELITA AT VALE LA QUINTA, UNIT NO. 14, IN THE CITY OF LA QUINTA, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 18 PAGES 82 AND 83 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY. EXCEPTION THEREFROM THOSE PORTIONS OF LOTS 1, 5, 6 AND 11, DEEDED TO THE COUNTY OF RIVERSIDE, BY DOCUMENTS RECORDED MARCH 23, 1978 AS INSTRUMENT NOS. 55038 AND 55039 OF OFFICIAL RECORDS OF RIVERSIDE COUNTY, CALIFORNIA. AND LOTS 6 AND 7 IN BLOCK 125 OF SANTA CARMELITA AT VALE LA QUINTA UNIT NO. 14, AS SHOWN BY MAP RECORDED IN BOOK 18, PAGE 82 OF MAPS, RECORDS OF RIVERSIDE COUNTY, CALIFORNIA. 882MI5610-0040 _7- 786097 01 a03/01/07 EXHIBIT "B" LEGAL DESCRIPTION OF SITE All that certain property located in the City of La Quinta, County of Riverside, State of California, described as follows: LOTS 1 TO 11 INCLUSIVE IN BLOCK 126 OF SANTA CARMELITA AT VALE LA QUINTA, UNIT NO. 14, IN THE CITY OF LA QUINTA, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 18 PAGES 82 AND 83 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY. EXCEPTION THEREFROM THOSE PORTIONS OF LOTS 1, 5, 6 AND 11, DEEDED TO THE COUNTY OF RIVERSIDE, BY DOCUMENTS RECORDED MARCH 23, 1978 AS INSTRUMENT NOS. 55038 AND 55039 OF OFFICIAL RECORDS OF RIVERSIDE COUNTY, CALIFORNIA. APN: 773-071-017-5 882/015610-0040 786097 01 a03/01 /07 -8- DOC # 2007-0166708 ' 03/12/2007 08:00ii Fee:NC ; Page 1 of10 Recorded in Official Records ` County of Riverside Larry W. Ward Cler Recording Recorded stedMail By And Assesso111111111111111111111111111111111111111111111111111111111111 11111111111I II1�I 111 II�III 11III� 11111 II 11111 er II1I I1I When Recorded Mail To: La Quinta Redevelopment Agency s R u 78-495 Calle Tampico La Qulnta, CA 92253 q I L 1 466 1 426 PCOR NCOR S NCHG EXAM — Attention: Executive Director Z [Exempt From Recording Fee Per Gov. Code § 6103) , SUBORDINATION AGREEMENT 027 NOTICE: THIS SUBORDINATION AGREEMENT RESULTS IN YOUR SECURITY INTEREST IN THE PROPERTY BECOMING SUBJECT TO AND OF LOWER PRIORITY THAN THE LIEN OF SOME OTHER OR LATER SECURITY INSTRUMENTS. THIS SUBORDINATION AGREEMENT ("Agreement") is entered into as of 3-J2 , 2007, by and among the LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic ("Agency"), PAT A. DOLCE AND LORA DEAN DOLCE, HUSBAND AND WIFE AS JOINT TENANTS ("Owner"), and PALM DESERT NATIONAL BANK ("Lender"). 1 RECITALS A. Owner owns fee title to the real property described on Attachment No. "1" attached hereto and incorporated herein by reference (the "Property"). B. Owner's predecessors -in -interest in and to the Property (the "Prior Owners") and Agency entered into that certain Affordable Housing Rehabilitation Agreement dated September 13, 2001, which has been amended on three separate occasions (as amended, the "Housing Agreement"). Pursuant to the Housing Agreement, the Agency provided a loan to the Prior Owners (the "Agency Loan"), and the Prior Owners rehabilitated the Property. C. Pursuant to the Housing Agreement, Agency and the Prior Owners entered into that certain Note dated September 13, 2001, which was modified by that certain Allonge dated on or about April 6, 2004 (the "Note") evidencing repayment of the Agency Loan. The Note is secured by that certain Deed of Trust with Assignment of Rents and Rider Attached Hereto dated September 13, 2001, and recorded on September 28, 2001, as Instrument No. 2001-474253, in the Official Records of the County of Riverside (the "Official Records"), which was modified by that certain Modification of Deed of Trust recorded on April 23, 2004, as Instrument No. 2004- 301360, in the Official Records (the "Agency Deed of Trust"). D. As of the date of this Agreement, the outstanding balance on the Agency Loan is Three Hundred Fifty Thousand Dollars ($350,000). 882/015610-0040 798563 02 a03/01 /07 - I' E. Pursuant to the Housing Agreement, Agency and the Prior Owners also entered into that certain Regulatory Agreement and Declaration of Covenants and Restrictions dated September 13, 2001, and recorded on September 28, 2001, as Instrument No. 2001-474254, in the Official Records, which was modified by that certain Amendment No. 1 to Regulatory Agreement was recorded on February 28, 2006, as Instrument No. 2006-0141068, in the Official Records (the "Agency Regulatory Agreement"). The Agency Regulatory Agreement places covenants on the use and operation of the Property to ensure that the Property is operated as a rental housing project with fourteen (14) units to be rented and occupied by moderate income households at affordable rents. F. Owner has executed or is about to execute a deed of trust, in favor of Lender, encumbering the Site to secure a promissory note dated March 1, 2007, in the sum of Two Million Five Hundred Ninety Thousand Dollars ($2,590,000) (the "Lender Loan"), payable with interest and upon the terms and conditions described in such note (respectively, the "Lender Deed of Trust" and "Lender Note"). G. The Lender is willing to make the Lender Loan provided the Lender Deed of Trust is a lien or charge upon the Property prior and superior to the Agency Regulatory Agreement and Agency Deed of Trust (collectively, the "Agency Agreements") and provided that the Agency will specifically and unconditionally subordinate the Agency Agreements to the lien or charge of the Lender Deed of Trust. H. It is for the mutual benefit of the Lender, the Agency and Owner that the Lender make the Lender Loan to Owner. The Agency has agreed that the Lender Deed of Trust shall, when recorded, constitute a lien or charge upon the Property which is unconditionally prior and superior to the Agency Agreements, subject to the specific terms and provisions of this Agreement. NOW, THEREFORE, in consideration of the mutual benefits accruing to the Agency, Lender and Owner, and other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and in order to induce the Lender to make the Lender Loan, it is hereby declared, understood and agreed as follows: 1. Subordination by Agency 1.1 Necessity of Subordination By executing this Agreement, Agency makes the finding set forth in Health and Safety Code Section 33334.14 that subordination is necessary and that Agency has obtained written commitments as set forth in this Agreement, consistent with Health and Safety Code Section 33334.14, to protect the Agency's investment in the event of a default. Therefore, the Agency hereby agrees to subordinate the lien of the Agency Agreements to the Lender Deed of Trust on the terms set forth in this Agreement. This Agreement shall set forth in the priority of liens between the parties and govern the terms and conditions of such subordination. 882/01561 O-0040 _ 788563 02 a03/01/07 -2 1.2 Subordination of Agency_ Agreements to Lender Deed of Trust The Lender Deed of Trust (and any renewals or extensions of, or advances, including interest, thereunder) shall unconditionally be and remain at all times a lien or charge on the Property, prior and superior to the Agency Agreements, together with all rights and privileges of Agency thereunder, but subject to the terms and conditions of this Agreement. 1.3 Covenant of Agency The Agency declares, agrees and acknowledges that to Agency's actual knowledge, there is no breach, event of default or default existing under the Agency Agreements or any circumstances, event, omission or failure of condition which would constitute such a breach, default, or event of default after notice or lapse of time, or both. 2. Reliance by Lender and Agency The Lender would not make the Lender Loan and the Agency would not have agreed to subordinate the Agency Agreements without this Agreement and each of the undersigned understands that in reliance upon, and in consideration of, this subordination, specific loans and advances are being and will be made and, as part and parcel thereof, specific monetary and other obligations are being and will be entered into which would not be made or entered into but for such reliance upon this subordination. 3. Rights of Agency 3.1 Default Under Lender Deed of Trust In the event of a breach or default by Owner under the terms of the Lender Deed of Trust, the party alleging such default shall provide the Agency with written notice of such breach or default concurrently with providing such notice to Owner. Upon receipt of such notice of breach or default, the parties hereto agree that Agency shall have each of the following rights so long as either of the Agency Agreements encumber any portion of the Property or interest therein: (a) To cure the noticed default at any time prior to the foreclosure of the Lender Deed of Trust. In connection therewith, the Lender agrees that, upon written request by Agency received by Lender at least five (5) days prior to the date set for foreclosure sale under the Lender Deed of Trust, Lender shall postpone the foreclosure sale for thirty (30) days, during which thirty (30) day period Agency shall have the right to cure the noticed default, and that, in the event of a nonmonetary default which is susceptible to being cured only when the Agency has obtained possession of the Property, the Agency shall have as long as necessary (x) to obtain possession of the Property by either foreclosing the Agency Deed of Trust or exercising its rights pursuant to Section 3.1(c) of this Agreement and (y) to cure the default, so long as the Agency does so with reasonable and continuous diligence. (b) To negotiate with the Lender regarding the noticed default at any time prior to the foreclosure of the Lender Deed of Trust or other lien. "2/015e10-0040 _ 788563.02 03M/07 _3 (c) To purchase the Property from Owner, subject to the Lender Deed of Trust without the consent of the Owner or the holder of the Lender Deed of Trust. Upon written notice from Agency to Lender received by Lender at least five (5) days prior to the date set for foreclosure sale under the Lender Deed of Trust, Lender shall postpone the foreclosure sale for the time reasonably necessary to allow Agency to complete the purchase of the Property, up to a maximum of ninety (90) days. The purchase price for the Property shall be equal to the appraised value of the Property less (i) the outstanding amount due under the Lender Note, (ii) the amount due under the Agency Note, (iii) any delinquent taxes and assessments owing on the Property, and (iv) any costs incurred by Agency to effect the curing of a default and purchase of the Property, including but not limited to escrow fees and attorney's fees. Owner shall have forty-five (45) days from the date it receives notice of the Agency's election to purchase the Property to execute all documents reasonably requested by the Agency to effectuate the transfer of the Property and to complete the transfer. If Owner fails to close the transfer within said forty-five (45) day period, the Agency shall have the right to specifically enforce this paragraph. The Lender agrees that, in the absence of any default by the Owner under the Lender Loan, the exercise of any of the rights set forth in this Section 3.1 by Agency shall not give rise to any right on the part of the Lender to exercise any right to accelerate the amounts due under the Lender Loan. Agency agrees that nothing in this section 3.1 shall prevent the Lender from exercising its rights and remedies under the Lender Deed of Trust in the event of Owner's default thereunder, provided however, that in that event, Agency shall have the right to cure Owner's default in accordance with Section 3.1(a) above. 3.2 Foreclosure of Agency Deed of Trust The Lender hereby agrees that in the event that Agency forecloses the Agency Deed of Trust, said foreclosure shall not give rise to any right on the part of the Lender to accelerate the amounts due on the Lender Loan. 3.3 Disbursements Lender, in making disbursements of the proceeds of the Lender Loan, is under no obligation or duty to, nor has Lender represented that it will., see to the application of such proceeds by the person or persons to whom disbursements thereof are made and any application or use of such proceeds for purposes other than those provided in the documents evidencing and securing such Loan shall not defeat the subordination herein made in whole or in part. 3.4 Enforcement of Use Restrictions Nothing set forth in this Agreement shall prevent the Agency from enforcing the terms of the Housing Agreement or any other agreement between Owner and Agency with respect to the Property or Agency Loan. 882/015610-0040 _ 788563 02 a03/01/07 _4 4. Miscellaneous 4.1 Entire Agreement This Agreement shall be the whole and only agreement with regard to the matters set forth herein and shall supersede and cancel, but only insofar as would affect the priority between the Lender Deed of Trust and the Agency Agreements, any prior agreement as to such subordination including, but not limited to, those provisions, it any, contained in the Agency Agreements or the Housing Agreement which provide for the subordination of the lien or charge thereof to another deed or deeds of trust or to another mortgage or mortgages, upon the Property. 4.2 Successors and Assigns This Agreement shall inure to and bind the heirs, legatees, devisees, administrators, executors, successors and assigns of the parties hereto. 4.3 California Law This Agreement shall be construed according to the internal laws of the State of California without regard to conflict of law principles. 4.4 Severability If any term, provision, condition or covenant of this Agreement or the application thereof to any party or circumstances shall, to any extent, be held invalid or unenforceable, the remainder of this instrument, or the application of such term, provision, condition or covenant to persons or circumstances other than those as to whom or which it is held invalid or unenforceable shall not be affected thereby, and each term and provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law. 4.5 Notice Any notice, demand, request, consent, approval or communication that any party desires or is required to give to another party or any other person must be in writing and may be given by personal delivery, by mailing the same by registered or certified mail, return receipt requested, postage prepaid, or by a reputable same day or overnight delivery service that provides a receipt showing date and time of delivery, to the party to whom the notice is directed at the address of such party hereinafter set forth, or such other address and to such other persons as the parties may hereafter designate. Any such notice shall be deemed given (i) upon receipt if by personal delivery or by delivery service, or (ii) forty-eight (48) hours after deposit in the United States mail, if sent by mail pursuant to the foregoing. If to Agency: La Quinta Redevelopment Agency 78-495 Calle Tampico La Quinta, CA 92253 Attention: Executive Director 882/015610-0040 _ 788563 02 a03/01107 -5 With copy to: Rutan & Tucker, LLP 611 Anton Boulevard, Suite 1400 Costa Mesa, CA 92626-1998 Attn: M. Katherine Jenson If to Owner: Pat A. Dolce and Lora Dean Dolce 4031 Coogan Circle Culver City, CA 90232 If to Lender: Palm Desert National Bank 73-745 El Paseo Palm Desert, CA 92260 Attn: Jerry Nantell 4.6 Attorneys' Fees In the event that any action, suit or other proceeding is brought to enforce the obligations under this Agreement, the prevailing party shall be entitled to receive all of such party's costs and expenses of suit, including attorneys' fees, expert witness fees, and all costs incurred in each and every action, suit or other proceeding, including any and all appeals or petitions therefrom. 4.7 Counterparts This Agreement may be executed in any number of counterparts, each of which shall be an original, but all of which shall constitute one and the same document. [End — Signature page follows] 882/015610-0040 788563 02 a03/01/07 -6- IN WITNESS WHEREOF, the parties have executed this Subordination Agreement as of the date first written above. NOTICE: THIS SUBORDINATION AGREEMENT RESULTS IN YOUR SECURITY INTEREST IN THE PROPERTY BECOMING SUBJECT TO AND OF LOWER PRIORITY THAN THE LIEN OF SOME OTHER OR LATER SECURITY INSTRUMENTS. "AGENCY" LA QUINTA REDEVELOPMENT AGENCY, a pu rrdy, orporate a�dppjitic 421 By: ! lylay, .� Executive Director A By: W�� tZ7 Secretary APPROVED AS TO FORM RUTAN & TUCKER, LLP By: Agency Counsel "OWNER" PAT A. DOLCE AND LORA DEAN DOLCE, HUSBAND E S JOINT TENANTS By: �P9. Dolce By: l/G 7ov1 " ra ENDER PALM DESERT NATIONAL BANK By: an� Its: Vice President Commercial Lending 882/015610-0040 788563 02 .03/01/07 -7- STATE OF CALIFORNIA ) ) ss: COUNTY OF S . 7W,21�' ) P t0??�� -)')�Cc4 before me, a notary public, personally appeared personally known to me (or proved to me on the basis of satisfactory evidence) to be the personal whose nam s/ar6-subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/hef/their authorized capacity(ja<and that by his/jwr/their signature(* on the instrument the person(s); or the entity upon behalf of which the person(s'l acted, executed the instrument. WIT [SEAL] STATE OF CALIFORNIA ) J ) ss. COUNTY OF 1 / f ) On Gil - before me, a notary public, personally appeared �� lei f�t� n Tly known to me (or proved to me on the basis of satisfactory evidence) to be the person(W whose names) is/4w- subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(iao,- and that by his/her/thgir-signature(syon the instrument the person(< or the entity upon behalf of which the person(s f acted, executed the instrument. WITNESS my hand and official seal. Notary ublic [SEAL]%Zot�oar",yNM. • tg Public • Cali ftms=LoAngeles County Comm. Expires Oct. 21, 20011 182/015610-0040 188563 02 a03/01/07 -8- STATE OF CALIFORNIA ) ss. COUNTY OF On N "c\A $ zzmn before me, a notary public, personally appeared -- �,Eto— , personally known to me ((hf s ) to be the person( whose name(a) is/are subscribed to the within instrument and acknowledged to me that he/sho4hey executed the same in his/her heir authorized capacity(ies'), and that by his/her heir signature($�ron the instrument the person.(s), or the entity upon behalf of which the personal acted, executed the instrument. WITNESS my hand and official seal. Elww Eu1on Comm"m 0169146A im [SEAL] UAM C0 X030. Lq%TMV'"" STATE OF CALIFORNIA ) /� ss. ) COUNTY OF' I'11�er siAe ) Notary Pi I lic On M our 8 ao817 before me, a notary public, personally appeared THOMAS P GENOVESE" _, 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. a n PAMEu 2. T o tary Public Comm72 Commission ! 13211 [SEAL] NowFY Pubile - Colnrornlo Rlveralde Cou" 7 WC Ofab2.2011 882/015610-0040 788563 02 a03/0007 -9- • . . ATTACHMENT NO. 1 LEGAL DESCRIPTION OF PROPERTY All that certain property located in the City of La Quinta, County of Riverside, State of California, described as follows: LOTS 1 TO 11 INCLUSIVE IN BLOCK 126 OF SANTA CARMELITA AT VALE LA QUINTA, UNIT NO. 14, IN THE CITY OF LA QUINTA, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 18 PAGES 82 AND 83 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY. EXCEPTION THEREFROM THOSE PORTIONS OF LOTS 1, 5, 6 AND 11, DEEDED TO THE COUNTY OF RIVERSIDE, BY DOCUMENTS RECORDED MARCH 23, 1978 AS INSTRUMENT NOS. 55038 AND 55039 OF OFFICIAL RECORDS OF RIVERSIDE COUNTY, CALIFORNIA. '82/015610-0040 788563 02 .03/01/07 ASSIGNMENT AND ASSUMPTION AGREEMENT This ASSIGNMENT AND ASSUMPTION AGREEMENT ("Agreement") is entered into as of this 6th day of April, 2004, by and among the LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic ("Agency"), LA QUINTA 34 LLC, a California limited liability company ("Seller"), and MAUKA VIEW, LLC, a California limited liability company ("Purchaser"). RECITALS A. On or about September 13, 2001, Agency and Seller entered into that certain Affordable Housing Rehabilitation Agreement, as amended by that certain First Amendment to Affordable Housing Rehabilitation Agreement dated December 17, 2002 (collectively, the "Housing Agreement"). The Housing Agreement provides for Seller to rehabilitate that certain real property more particularly described therein as the "Site." Any capitalized terms contained in this Second Amendment which are not defined herein shall have the meaning given in the Housing Agreement, unless expressly provided to the contrary. B. Pursuant to the Housing Agreement, Agency agreed to provide a loan to Seller in the amount of Three Hundred Fifty Thousand Dollars ($350,000) ("Rehabilitation Loan") for Seller's rehabilitation of the Site. The Rehabilitation Loan is evidenced by that certain Note dated September 13, 2001 ("Agency Note"). The Agency Note is secured by that certain Deed of Trust With Assignment of Rents and Rider Attached Hereto dated September 13, 2001, from Seller, as trustor, in favor of Agency, as beneficiary, recorded on September 28, 2002, as Instrument No. 2001-474253 in the Official Records of Riverside County, California ("Agency Deed of Trust"). C. Pursuant to the Housing Agreement, Agency and Seller entered into that certain Regulatory Agreement and Declaration of Covenants and Restrictions dated September 13, 2001, and recorded on September 28, 2001, as Instrument No. 2001-474254 in the Official Records of Riverside County, California ("Regulatory Agreement"), which places covenants on the use and operation of the Site to ensure that the Site is operated as a rental housing project with fourteen (14) units to be rented and occupied by moderate income households at affordable rent. D. Seller desires to sell the Site to Purchaser and Purchaser desires to purchase the Site from Seller and to assume the obligations of Seller under the Housing Agreement, Agency Note, Agency Deed of Trust, and Regulatory Agreement (collectively, the "Agency Agreements"). E. The Agency Agreements prohibit Seller from transferring or selling any interest in the Site or assigning the Agency Agreements without Agency's approval. F. Seller and Purchaser have requested that Agency approve the transfer of the Site to Purchaser, and the assignment of the Rehabilitation Loan and Agency Agreements by Seller to Purchaser. In addition, Purchaser has requested that Agency reduce the interest rate under the Rehabilitation Loan and modify the Housing Agreement to, among other things, extend the time under the Housing Agreement to submit the application for the village use permit for the 538/015610-0040 485158.02 a03/31/04 installation of the carports. Agency has agreed to consent to the transfer of the Site to Purchaser, the assignment and assumption of the Agency Loan and Agency Agreements between Seller and Purchaser, and to modify the Rehabilitation Loan and Housing Agreement, subject to the terms and conditions set forth in this Agreement. AGREEMENT Based upon the foregoing Recitals, which are incorporated herein by this reference, and for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Agency, Seller and Purchaser agree as follows: 1. Definitions. The following terms as used in this Agreement shall have the meanings given below unless expressly provided to the contrary: "Acquisition Parcels" shall mean the portion of the Site known as Assessor Parcel Nos. 773-073-004 and 005. "Agreement" shall mean this Assignment and Assumption Agreement among Agency, Seller, and Purchaser, including all exhibits and other documents attached hereto. "Agency Agreements" shall collectively refer to the Housing Agreement, Agency Note, Agency Deed of Trust, and Regulatory Agreement. "Agency Deed of Trust" shall mean that certain Deed of Trust With Assignment of Rents and Rider Attached Hereto dated September 13, 2001, from Seller, as trustor, in favor of Agency, as beneficiary, recorded on September 28, 2002, as Instrument No. 2001-474253 in the Official Records of Riverside County, California, securing the obligations under the Agency Note. "Agency Note" shall have the meaning ascribed in Recital B of this Agreement. "Allonge to Note" shall mean the Allonge to Note to be entered into by Agency and Purchaser in the form attached as Attachment No. 3 to this Agreement. "Apartment Parcel" shall mean the portion of the Site known as Assessor Parcel No. 773- 071-017. "Effective Date" shall have the meaning ascribed in Section 2 of this Agreement. "Escrow" shall mean the escrow that has been opened with the Escrow Agent for Purchaser's acquisition of the Site under Escrow Nos. 1-2428-RJ and 1-2429-RJ. "Escrow Agent" shall mean Escrow Avenue whose offices are located at 95 Argonaut, Suite 230, Aliso Viejo, CA 92656. "Housing Agreement" shall mean that certain Affordable Housing Rehabilitation Agreement between Agency and Seller dated September 13, 2001, as amended by that certain First Amendment to Affordable Housing Rehabilitation Agreement dated December 17, 2002. 538/015610-0040 485158.02 a03/31/04 -2- "Memorandum of Agreement" shall Assumption Agreement to be entered into by Attachment No. 1 to this Agreement. mean the Memorandum of Assignment and Agency and Purchaser in the form attached as "Modification of Deed of Trust" shall mean the Modification of Deed of Trust in the form attached to this Agreement as Attachment No.4 to be entered into by Agency and Purchaser. "Rehabilitation Loan" shall have the meaning ascribed in Recital B to this Agreement. "Regulatory Agreement" shall mean the Regulatory Agreement and Declaration of Covenants and Restrictions between Agency and Seller dated September 13, 2001, and recorded on September 28, 2001, as Instrument No. 2001-474254 in the Official Records of Riverside County, California ("Regulatory Agreement"), which places covenants on the use and operation of the Site. "Second Amendment" shall mean the Second Amendment to Affordable Housing Rehabilitation Agreement to be entered into by Agency and Purchaser in the form attached to this Agreement as Attachment No. 2, which provides for the Housing Agreement to be amended. "Site" shall have the meaning ascribed in Recital A of this Agreement. "Title Company" shall mean First American Title Insurance Company having its offices at 2 First American Way, Santa Ana, CA 92707. "Transfer Conditions" shall mean the conditions set forth in Section 2 of this Agreement that must be satisfied before the transfer of the Site and the assignment of the Agency Agreements are permitted. 2. Conditions Precedent; Effective Date. This transfer of the Site from Seller to Purchaser and the assignment contemplated under this Agreement, and Agency's approval thereof, is contingent and conditional upon the satisfaction of the following conditions precedent (collectively, the "Transfer Conditions") and such transfer and assignment shall not become effective until the Transfer Conditions are satisfied: (a) Agency Title Policy. Title Company is irrevocably committed to issue to Agency a lender's policy of title insurance ("Agency Title Policy"), with liability in the amount of the Rehabilitation Loan, showing fee title to the Site vested in Purchaser, insuring in favor of Agency the Agency Deed of Trust as modified by the Modification of Deed of Trust, subject only to (i) the standard printed exceptions and exclusions contained in the form of the Title Policy commonly used by the Title Company; (ii) non -delinquent property taxes and assessments; (iii) as to the Acquisition Parcels, the deed of trust in favor of LaJolla Bank in the amount of $105,000 securing the loan to Purchaser for the acquisition of the Acquisition Parcels; (iv) as to the Apartment Parcel, the deed of trust in favor of LaJolla Bank in the amount of $1,770,000 securing the loan to Purchaser for the acquisition of the Apartment Parcel; and (v) such other matters as may be approved by Agency in its sole and absolute discretion. 538/015610-0040 485158.02 a03/31/04 -3- (b) Execution and Delivery of Documents. Purchaser shall have executed and delivered to Agency the documents referred to in Section 8 of this Agreement. (c) Insurance. Purchaser has provided Agency the evidence of insurance required pursuant to Section 8.0 of the Housing Agreement and Section 7.0 of the Regulatory Agreement. The date that all of the Transfer Conditions are satisfied and the grant deed conveying fee title to the Site to the Purchaser has been recorded in the Official Records of Riverside County, California shall be the "Effective Date." Seller shall not transfer and Purchaser shall not accept title to the Site until all of the Transfer Conditions are satisfied. If the Transfer Conditions are not satisfied on or before May 20, 2004, or such later date as the parties may mutually agree in writing in the sole and absolute discretion of each of them, each party shall have the right to terminate this Agreement by delivery of written notice to the other parties. 3. Assignment. Effective on the Effective Date, Seller hereby assigns to Purchaser all of Seller's rights, title, and interest in and to the Housing Agreement, the Agency Note, the Agency Deed of Trust, and the Regulatory Agreement (collectively, the "Agency Agreements"), including the right to receive disbursements of the Rehabilitation Loan. 4. Assumption. Effective on the Effective Date, Purchaser hereby accepts the foregoing assignment, assumes the Agency Agreements, and agrees to timely pay, perform and discharge all of the obligations of Seller under the Agency Agreements, including without limitation construction of the Minimum Improvements described in Paragraphs A.1 and A.3 of the Scope of Development attached to the First Amendment to Affordable Housing Rehabilitation Agreement as Attachment No. 1, and payment of the Rehabilitation Loan upon the occurrence of certain events described in the Agency Note. Purchaser acknowledges that if the events permitting Agency to accelerate the Rehabilitation Loan occur, Purchaser shall be required to repay the Rehabilitation Loan disbursed by Agency and interest thereon, including the portion of the Rehabilitation Loan disbursed to Seller prior to the Effective Date. As of the date of this Agreement, Agency has disbursed to Seller Rehabilitation Loan proceeds in the amount of Seventy Thousand Dollars ($70,000). 5. Seller's Relinquishment of Rehabilitation Loan. Effective on the Effective Date, Seller hereby releases Agency from and relinquishes all rights, claims, demands, and obligations of any kind or nature, whether known or unknown, suspected or unsuspected, against Agency with respect to disbursements of proceeds of the Rehabilitation Loan, and agrees it shall not bring any claims for or seek disbursements of the Rehabilitation Loan for any work performed, prior to or after the Effective Date, including any of the Minimum Improvements or the Additional Improvements (as those terms are described in the Scope of Development attached to the First Amendment to Affordable Housing Rehabilitation Agreement). 6. Consent by Agency. Provided all of the Transfer Conditions are satisfied in full, effective on the Effective Date, Agency consents to the transfer of the Site to Purchaser and the assignment of the Agency Agreements by Seller to Purchaser and the assumption of the Agency Agreements by Purchaser. Such consent by Agency shall not constitute a consent to any further 538/015610-0040 485158.02 a03/31/04 -4- or subsequent sale, conveyance, transfer or assignment of the Site or the Agency Agreements, or any part thereof, or any interest therein. 7. Amendment to Housing Agreement and Rehabilitation Loan. Item 10 of the Schedule of Performance attached as Attachment No. 1 to the First Amendment to Affordable Housing Rehabilitation Agreement requires Seller to submit to Agency an application for a village use permit within sixty days after the completion of the asphalt paving on the Apartment Parcel. As of the date of this Agreement, the asphalt paving has been completed but the application for the village use permit has not been submitted. Purchaser has requested Agency extend the date to submit the application. In addition, Purchaser has requested Agency reduce the interest rate under the Agency Note for interest accruing after the Effective Date from seven percent (7%) to five percent (5%). Agency has agreed to extend the date to submit the application for the village use permit and to reduce the interest under the Agency Note provided that the Transfer Conditions are satisfied and the Site is transferred to Purchaser. In connection therewith and to effectuate those modifications, Agency and Purchaser shall enter into the Second Amendment, the Allonge to Note, and the Modification of Deed of Trust as set forth in Section 8 of this Agreement, each to become effective on the Effective Date. 8. Execution and Delivery of Memorandum and Modification Documents. No later than ten (10) days prior to the date Purchaser and Seller are scheduled to close the Escrow for the conveyance of the Site, Purchaser shall deliver to Agency in trust all of the following documents: (a) the Memorandum of Agreement, executed and acknowledged by Purchaser; (b) two copies of the Second Amendment, executed by Purchaser; (c) the Allonge to Note, executed by Purchaser; and (d) the. Modification of Deed of Trust, executed and acknowledged by Purchaser. Agency shall execute and acknowledge the Memorandum of Agreement and the Modification of Deed of Trust and shall deposit said documents into the Escrow with instructions to the Escrow Agent to record said documents concurrently with Purchaser's acquisition of the Site provided the Transfer Conditions have been satisfied. Agency shall execute both copies of the Second Amendment and the Allonge to Note and, within ten (10) days after the Effective Date, provide Purchaser one fully signed original of the Second Amendment and one copy of the executed Allonge to Note. The agreements referred to in this Section 8 shall not become operative until the Effective Date notwithstanding that they may be executed prior to the Effective Date. In the event this Agreement is terminated pursuant to Section 2, any documents delivered by Agency and Purchaser under this Agreement shall be returned to it. 9. Escrow and Closing Costs. Seller and Purchaser each shall pay one-half of any Escrow fees attributable to the transactions contemplated under this Agreement. Seller shall pay the premium for the Agency Title Policy referred to in Section 2(a) of this Agreement; it being understood that Seller was obligated to deliver a lender's title insurance policy to Agency under Section 3.4 of the Housing Agreement and that obligations has not been performed. 10. Acknowledgment of Agreement to Hold Property as One Parcel. Purchaser acknowledges that the Site is encumbered by that certain Declaration of Covenants, Conditions, 538/015610-0040 485158.02 a04/05/04 5 and Restrictions and Agreement to Hold Property as One Parcel dated September 13, 2001, recorded on September 28, 2001, as Instrument Number 2001-474255 in the Official Records of Riverside County, California, which provides for the parcels comprising the Site to be held under common ownership and Purchaser covenants and agrees to be bound by said agreement from and after the Effective Date. 11. Miscellaneous. 11.1 Entire Agreement, Waivers and Amendments. This Agreement, together with the Agency Agreements and other agreements referred to herein, incorporates all of the terms and conditions mentioned herein, or incidental hereto, and supersedes all negotiations and previous agreements among the parties with respect to all or part of the subject matter hereof. All waivers of the provisions of this Agreement must be in writing and signed by the appropriate authorities of the party to be charged. A waiver of the breach of the covenants, conditions or obligations under this Agreement by either party shall not be construed as a waiver of any succeeding breach of the same or other covenants, conditions or obligations of this Agreement. Any amendment or modification to this Agreement must be in writing and executed by the appropriate authorities of Agency, Seller and Purchaser. 11.2 Severability. If any term, provision, covenant, or condition of this Agreement is held by a court of competent jurisdiction to be invalid, void, or unenforceable, the remaining provisions of the Agreement shall continue in full force and effect, unless and to the extent the rights and obligations of one or both parties has been materially altered or abridged by such holding. 11.3 Applicable Law. This Agreement shall be construed and enforced in accordance with the internal laws of the State of California. 11.4 Litigation Expenses. If any party to this Agreement commences an action against any other party to this Agreement arising out of or in connection with this Agreement, the prevailing party shall be entitled to recover reasonable attorneys' fees, expert witness fees, costs of investigation, and costs of suit from the losing party. 11.5 Authority. The persons executing this Agreement on behalf of the parties hereto warrant that they are duly authorized to execute this Agreement on behalf of said parties and that by so executing this Agreement, the parties hereto are formally bound to the provisions of this Agreement. 11.6 Execution in Counterpart. This Agreement may be executed in several counterparts, and all so executed shall constitute one agreement binding on all of the parties hereto, notwithstanding that all parties are not signatories to the original or the same counterpart. [signatures on next page] 538/015610-0040 485158.02 a03/31/04 -6- IN WITNESS WHEREOF, Agency, Seller, and Purchaser have entered into this Agreement as of the date first written above: ATTEST: A cy Secretary APPROVED AS TO FORM: z & TUC R, LLP . J, Attorneys for the La Quinta Redevelopment Agency "AGENCY" LA QUINTA REDEVELOPMENT AGENCY, a pub ' dy corporate and p 'tic V. By. Executive Director "SELLER" LA Q TA 34 L , a California limited liabil& compaw Lo C. Rael, Managi)ig Member "PURCHASER" MAUKA VIEW, LLC, a California limited liability company By: ames S. Sorenson, on behalf of the Sorenson Family 2001 Revocable Trust, Member 538/015610-0040 485158.02 a03/31/04 7 ATTACHMENT NO. 1 MEMORANDUM OF ASSIGNMENT AND ASSUMPTION AGREEMENT [Attached] 538/015610-0040 485158.02 a03/31/04 RECORDED AT THE REQUEST OF AND WHEN RECORDED RETURN TO: La Quinta Redevelopment Agency 78-495 Calle Tampico La Quinta, CA 92253 Attn: Executive Director (SPACE ABOVE FOR RECORDER'S USE) This Memorandum of Assignment and Assumption Agreement is recorded at the request and for the benefit of the La Quinta Redevelopment Agency and is exempt from the payment of a recording fee pursuant to Government Code Section 27383. MEMORANDUM OF ASSIGNMENT AND ASSUMPTION AGREEMENT This MEMORANDUM OF ASSIGNMENT AND ASSUMPTION AGREEMENT ("Memorandum") is dated as of , 2004, and entered into by and between the LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic ("Agency"), and MAUKA VIEW, LLC, a California limited liability company ("Purchaser"). This Memorandum is made with reference to the following: 1. On or about the date of the recordation of this Memorandum, Purchaser acquired from La Quinta 34 LLC, a California limited liability company ("Seller"), fee title to that certain real property located in the City of La Quinta, County of Riverside, State of California, more particularly described in the legal description attached hereto as Exhibit "A" and incorporated herein by this reference ("Site"). 2. On or about September 13, 2001, Agency and Seller entered into that certain Affordable Housing Rehabilitation Agreement, as amended by that certain First Amendment to Affordable Housing Rehabilitation Agreement dated December 17, 2002 (collectively, the "Housing Agreement"). The Housing Agreement provides for Seller to construct certain improvements on the Site. 3. Pursuant to the Housing Agreement, Agency agreed to provide a loan to Seller in the amount of Three Hundred Fifty Thousand Dollars ($350,000) ("Rehabilitation Loan") for Seller's rehabilitation of the Site. The Rehabilitation Loan is evidenced by that certain Note dated September 13, 2001 ("Agency Note"). The Agency Note is secured by that certain Deed of Trust With Assignment of Rents and Rider Attached Hereto dated September 13, 2001, from Seller, as trustor, in favor of Agency, as beneficiary, recorded on September 28, 2002, as Instrument No. 2001-474253 in the Official Records of Riverside County, California ("Agency Deed of Trust"). 538/015610-0040 _ 485158.02 a03/31/04 -1 4. Pursuant to the Housing Agreement, Agency and Seller entered into that certain Regulatory Agreement and Declaration of Covenants and Restrictions dated September 13, 2001, and recorded on September 28, 2001, as Instrument No. 2001-474254 in the Official Records of Riverside, California, which places covenants on the use and operation of the Site to ensure that the Site is operated as a rental housing project with fourteen (14) units to be rented and occupied by moderate income households at affordable rent. 5. In connection with and effective upon Purchaser's acquisition of the Site, Seller assigned to Purchaser and Purchaser assumed from Seller the obligations of Seller under the Housing Agreement, the Agency Note, the Agency Deed of Trust, and the Regulatory Agreement as more fully set forth in that certain Assignment and Assumption Agreement ("Assignment") among Seller, Purchaser and Agency dated April 6, 2004. 6. The parties desire to enter into this Memorandum and to record the same in the Official Records of Riverside County, California, to provide record notice to all persons of the Assignment. 7. This Memorandum may be executed in several counterparts, and all so executed shall constitute one agreement binding on both parties hereto, notwithstanding that both parties are not signatories to the original or the same counterpart. [signatures on next page] 538/015610-0040 485158.02 a03/31/04 -2- IN WITNESS WHEREOF, Agency and Purchaser have entered into this Memorandum as of the date first set forth above. ATTEST: Agency Secretary APPROVED AS TO FORM: RUTAN & TUCKER, LLP Attorneys for the La Quinta Redevelopment Agency "AGENCY" LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic I' , Executive Director "PURCHASER" MAUKA VIEW, LLC, a California limited liability company I0 James S. Sorenson, on behalf of the Sorenson Family 2001 Revocable Trust, Member 538/015610-0040 485158.02 a03/31/04 3 STATE OF CALIFORNIA ) ) ss COUNTY OF ) On , before me, personally appeared personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. Witness my hand and official seal. Notary Public [SEAL] STATE OF CALIFORNIA ) ) ss COUNTY OF On , before me, personally appeared personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. Witness my hand and official seal. Notary Public [SEAL] 538/015610-0040 485158.02 a03/31/04 _4_ EXHIBIT "A" TO MEMORANDUM LEGAL DESCRIPTION OF SITE All that certain property located in the City of La Quinta, County of Riverside, State of California, described as follows: LOTS 1 TO 11 INCLUSIVE IN BLOCK 126 OF SANTA CARMELITA AT VALE LA QUINTA, UNIT NO. 14, IN THE CITY OF LA QUINTA, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 18 PAGES 82 AND 83 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY. EXCEPTION THEREFROM THOSE PORTIONS OF LOTS 1, 5, 6 AND 11, DEEDED TO THE COUNTY OF RIVERSIDE, BY DOCUMENTS RECORDED MARCH 23, 1978 AS INSTRUMENT NOS. 55038 AND 55039 OF OFFICIAL RECORDS OF RIVERSIDE COUNTY, CALIFORNIA. LOTS 6 AND 7 IN BLOCK 125 OF SANTA CARMELITA AT VALE LA QUINTA UNIT NO. 14, AS SHOWN BY MAP RECORDED IN BOOK 18, PAGE 82 OF MAPS, RECORDS OF RIVERSIDE COUNTY, CALIFORNIA. 538/015610-0040 485158.02 a03/31/04 ATTACHMENT NO.2 SECOND AMENDMENT TO AFFORDABLE HOUSING REHABILITATION AGREEMENT [Attached] 538/015610-0040 485158.02 a03/31/04 SECOND AMENDMENT TO AFFORDABLE HOUSING REHABILITATION AGREEMENT This SECOND AMENDMENT TO AFFORDABLE HOUSING REHABILITATION AGREEMENT ("Second Amendment") is dated as of 2004, and entered into by and between the LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic ("Agency"), and MAUKA VIEW, LLC, a California limited liability company ("Participant"). RECITALS A. On or about September 13, 2001, Agency and La Quinta 34 LLC, a California limited liability company ("Original Participant"), entered into that certain Affordable Housing Rehabilitation Agreement which provides for Agency to loan to Original Participant funds for Participant's rehabilitation of that certain real property more particularly described therein as the "Site" ("Original Agreement"). B. On or about December 17, 2002, Agency and Original Participant entered into that certain First Amendment to Affordable Housing Rehabilitation Agreement ("First Amendment"). The Original Agreement and the First Amendment are collectively referred to in this Second Amendment as the "Housing Agreement." C. On or about April 6, 2004, Agency, Original Participant and Participant entered into that certain Assignment and Assumption Agreement ("Assignment Agreement") which provides for Original Participant to assign the Housing Agreement to Participant upon the satisfaction of certain conditions. Provided those conditions are satisfied, Participant and Agency desire to amend the Housing Agreement on the terms set forth in this Second Amendment. AGREEMENT Based upon the foregoing Recitals, which are incorporated herein by this reference, and for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Agency and Participant agree as follows: 1. Defined Terms. Any capitalized terms contained in this Second Amendment which are not defined herein shall have the meaning given in the Housing Agreement, unless expressly provided to the contrary. 2. Effective Date. This Second Amendment shall become effective on the Effective Date of the Assignment Agreement. The "Effective Date" is the date Participant acquires fee title to the Site after the satisfaction of certain conditions referred to in the Assignment Agreement as the "Transfer Conditions," as more fully explained in Section 2 of the Assignment Agreement. If the Transfer Conditions are not satisfied and the Assignment Agreement is terminated in accordance with the terms set forth in the Assignment Agreement, this Second Amendment shall automatically terminate upon the termination of the Assignment Agreement. 538/015610-0040 485158.02 a03/31/04 1 3. Project, Scope of Development. The Housing Agreement provides for Participant to construct five (5) apartment units on the Acquisition Parcel. Participant may desire to construct more than five (5) apartment units on the Acquisition Parcel and Agency has agreed that Participant will not be restricted by the Housing Agreement from constructing more than five (5) units. In order to effectuate this modification, Paragraph A.1 of the Scope of Development attached to the First Amendment as Attachment No. 1 is hereby modified to read: "The Acquisition Parcel shall be improved with at least 5 new apartment units, parking for the units, and landscaping." Notwithstanding the foregoing, Participant understands and acknowledges that Agency cannot guarantee the number of units that ultimately will be approved for development on the Acquisition Parcel as that determination is subject to the City's normal planning review process. 4. Schedule of Performance. Agency has agreed to extend the time for Participant to submit the application for the village use permit for the construction of the carports on the Apartment Parcel. Accordingly, the time for performance of Item 10 (submittal of application for village use permit for carports) in the Schedule of Performance attached to the First Amendment as Attachment No. 2 is hereby amended to read "On or before the date that is thirty (30) days after the date Mauka View, LLC acquires fee title to the Site from La Quinta 34 LLC." 5. Modification of Loan. Participant has requested that Agency modify the Rehabilitation Loan by reducing the interest rate from seven percent (7%) to five percent (5%) effective from and after the Effective Date. Pursuant to the Assignment Agreement, Agency and Participant entered into an Allonge to Note and a Modification of Deed of Trust to implement this modification. Effective as of the Effective Date, all references in the Housing Agreement to the "Agency Note" shall mean and refer to the Agency Note, as amended by the Allonge to Note, all references in the Housing Agreement to the "Agency Deed of Trust" shall mean and refer to the Agency Deed of Trust, as amended by the Modification of Deed of Trust, and all references in the Housing Agreement to the "Rehabilitation Loan" shall mean the Rehabilitation Loan, as amended in those documents. 6. Full Force and Effect; Conflicts. Except as expressly set forth in this Second Amendment, all terms, conditions, and provisions of the Housing Agreement shall remain in full force and effect. If there is a conflict between the provisions of this Second Amendment and the provisions of the Housing Agreement, the provisions of this Second Amendment shall control. 7. Execution in Counterparts. This Second Amendment may be executed in several counterparts, and all so executed shall constitute one agreement binding on both parties hereto, notwithstanding that both parties are not signatories to the original or the same counterpart. [signatures on next page] 538/015610-0040 485158.02 a03/31/04 2 IN WITNESS WHEREOF, Agency and Participant have entered into this Second Amendment as of the date first written above. ATTEST: Agency Secretary APPROVED AS TO FORM: RUTAN & TUCKER, LLP Attorneys for the La Quinta Redevelopment Agency "AGENCY" LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic LI-A Executive Director "PARTICIPANT" MAUKA VIEW, LLC, a California limited liability company Lo James S. Sorenson, on behalf of the Sorenson Family 2001 Revocable Trust, Member 538/015610-0040 485158.02 a03/31/04 3 ATTACHMENT NO.3 ALLONGE TO NOTE [Attached] 538/015610-0040 485158.02 a03/31/04 ALLONGE TO NOTE This ALLONGE TO NOTE ("Allonge") is affixed to and forms a part of that certain Note dated September 13, 2001, in the original principal amount of Three Hundred Fifty Thousand Dollars ($350,000) ("Note"), issued by La Quinta 34 LLC, a California limited liability company ("Original Maker"), whose interest under the Note was assigned to Mauka View, LLC, a California limited liability company ("Maker"), effective as of the Effective Date, and payable to the La Quinta Redevelopment Agency ("Agency"). Effective on , 2004 ("Effective Date"), the Note is hereby endorsed and modified as follows: (a) All references in the Note to "Agency Deed of Trust" shall mean and refer to the Agency Deed of Trust, as amended by that certain Modification of Deed of Trust between Agency and Maker recorded on or about the Effective Date. (b) The Note provides for simple interest to accrue on the outstanding principal amount of the Loan at seven percent (7%) per annum, compounded annually. Interest for the period prior to the Effective Date shall be at the rate set forth in THE preceding sentence. From and after the Effective Date, simple interest shall accrue on the outstanding principal amount of the Loan at five percent (5%) per annum, compounded annually. Except as expressly modified by this Allonge to Note, the Note shall remain unmodified and in full force and effect. [signatures on next page] 538/015610-0040 485158.02 a03/31/04 _ 1 _ IN WITNESS WHEREOF, this Allonge to Note has been executed as of this day of 92004. "MAKER" MAUKA VIEW, LLC, a California limited liability company I- , James S. Sorenson, on behalf of the Sorenson Family 2001 Revocable Trust, Member "AGENCY" LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic 0 Executive Director ATTEST: Agency Secretary APPROVED AS TO FORM: RUTAN & TUCKER, LLP Attorneys for the La Quinta Redevelopment Agency 538/015610-0040 485158.02 a03/31/04 2 ATTACHMENT NO.4 MODIFICATION OF DEED OF TRUST [Attached] 538/015610-0040 485158.02 a03/31/04 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 Modification of Deed of Trust is recorded at the request and for the benefit of the La Quinta Redevelopment Agency and is exempt from the payment of a recording fee pursuant to Government Code Section 27383. MODIFICATION OF DEED OF TRUST This MODIFICATION OF DEED OF TRUST ("Modification") is dated as of , 2004, and made by and between the LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic ("Beneficiary"), and MAUKA VIEW, LLC, a California limited liability company ("Trustor"). RECITALS A. Trustor's predecessor executed that certain Deed of Trust With Assignment of Rents and Rider Attached Hereto dated September 13, 2001, in favor of Orange Coast Title, as Trustee, and Beneficiary, as the beneficiary thereunder, recorded on September 28, 2002, as Instrument No. 2001-474253 in the Official Records of Riverside County, California ("Deed of Trust"). Pursuant to the Deed of Trust, Trustor granted to the Trustee, for the benefit of Beneficiary, certain real property more particularly described in the Deed of Trust and on Exhibit "A" attached hereto ("Property"). B. Trustor and Beneficiary now desire to amend the Deed of Trust as more particularly described herein. NOW, THEREFORE, for good and valuable consideration, the receipt and adequacy of which is hereby acknowledged, the parties hereto agree as follows: 1. Modification to Note. The Note secured by this Deed of Trust has concurrently herewith been modified to reduce the rate of interest payable as more particularly provided in the Allonge to Note dated on or about the date hereof. 2. No Other Modification. Except as expressly modified by this Modification, the Deed of Trust shall remain unmodified and in full force and effect. 538/015610-0040 _ 485158.02 a03/31 /04 -1 IN WITNESS WHEREOF, the parties have executed this Modification as of the date set forth above. ATTEST: Agency Secretary APPROVED AS TO FORM: RUTAN & TUCKER, LLP Attorneys for the La Quinta Redevelopment Agency "BENEFICIARY" LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic 0 Executive Director "TRUSTOR" MAUKA VIEW, LLC, a California limited liability company M James S. Sorenson, on behalf of the Sorenson Family 2001 Revocable Trust, Member 538/015610-0040 485158.02 a03/31/04 -2- STATE OF CALIFORNIA ) SS. COUNTY OF ) On , 2004, before me, a notary public in and for said state, 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 capacities, and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. Witness my hand and official seal. Notary Public [SEAL] STATE OF CALIFORNIA ) ss. COUNTY OF ) On , 2004, before me, a notary public in and for said state, 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 capacities, and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. Witness my hand and official seal. Notary Public [SEAL] 538/015610-0040 485158.02 a03/31/04 -3- EXHIBIT "A" TO MODIFICATION OF DEED OF TRUST LEGAL DESCRIPTION OF PROPERTY All that certain property located in the City of La Quinta, County of Riverside, State of California, described as follows: LOTS 1 TO 11 INCLUSIVE IN BLOCK 126 OF SANTA CARMELITA AT VALE LA QUINTA, UNIT NO. 14, IN THE CITY OF LA QUINTA, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 18 PAGES 82 AND 83 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY. EXCEPTION THEREFROM THOSE PORTIONS OF LOTS 1, 5, 6 AND 11, DEEDED TO THE COUNTY OF RIVERSIDE, BY DOCUMENTS RECORDED MARCH 23, 1978 AS INSTRUMENT NOS. 55038 AND 55039 OF OFFICIAL RECORDS OF RIVERSIDE COUNTY, CALIFORNIA. LOTS 6 AND 7 IN BLOCK 125 OF SANTA CARMELITA AT VALE LA QUINTA UNIT NO. 14, AS SHOWN BY MAP RECORDED IN BOOK 181, PAGE 82 OF MAPS, RECORDS OF RIVERSIDE COUNTY, CALIFORNIA. 538/015610-0040 485158.02 a03/31/04 N AFFORDABLE HOUSING REHABILITATION AGREEMENT BY AND AMONG LA QUINTA REDEVELOPMENT AGENCY, AND LA QUINTA 34 LLC 394/015610-0040 139234.06 a09/12/01 1 TABLE OF CONTENTS Page 1.0 DEFINITIONS..................................................................................................................1 1.1 Acquisition Parcels...............................................................................................1 1.2 Agency Deed of Trust...........................................................................................1 1.3 Agency Note......................................................................................................... 2 1.4 Agency Regulatory Agreement.............................................................................2 1.5 Agreement............................................................................................................. 2 1.6 Apartment Parcel..................................................................................................2 1.7 CEQA.................................................................................................................... 2 1.8 City........................................................................................................................2 1.9 Closing.................................................................................................................. 2 1.10 Days......................................................................................................................2 1.11 Declaration............................................................................................................2 1.12 Disbursement Procedures......................................................................................2 1.13 Effective Date.......................................................................................................2 1.14 Enforced Delay.....................................................................................................2 1.15 Escrow...................................................................................................................3 1.16 Escrow Agent........................................................................................................ 3 1.17 Executive Director................................................................................................ 3 1.18 First Deed of Trust................................................................................................ 3 1.19 Hazardous Materials.............................................................................................3 1.20 Owner....................................................................................................................3 1.21 Participant............................................................................................................. 3 1.22 Proj ect................................................................................................................... 3 1.23 Project Area.......................................................................................................... 3 1.24 Redevelopment Plan ............................................................................................. 3 1.25 Rehabilitation Loan...............................................................................................4 1.26 Rehabilitation Loan Documents...........................................................................4 1.27 Release of Construction Covenants...................................................................... 4 1.28 Sale Escrow Instructions.......................................................................................4 1.29 Schedule of Performance...................................................................................... 4 1.30 Site........................................................................................................................4 1.31 Subordination Agreement..................................................................................... 4 1.32 Title Company......................................................................................................4 2.0 PURPOSE OF AGREEMENT.........................................................................................4 3.0 CURRENT OWNERSHIP OF THE SITE; PARTICIPANT ACQUISITION OF THE ACQUISITION PARCELS...............................................................................4 3.1 Ownership of the Site; Participant -Owner Escrow ............................................... 4 3.2 Participant Acquisition of the Acquisition Parcels ............................................ 5 3.3 Condition of Title.................................................................................................. 5 3.4 Agency Title Policy.............................................................................................. 5 3.5 Conditions to Agency's Performance................................................................... 6 394/015610-0040 139234.06 a09/12/01 -1- 3.6 Duties of Escrow Agent ................... 3.7 Brokerage Commissions .................. 3.8 Taxes and Assessments and Liens ... Paize ..................................................................... 7 ..................................................................... 7 ..................................................................... 7 4.0 REHABILITATION LOAN; PHYSICAL CONDITION OF SITE................................7 4.1 Rehabilitation Loan; Disbursement......................................................................7 4.2 Termination for Failure to Close Escrow.............................................................. 8 4.3 Subordination of Agency Deed of Trust and Agency Regulatory Agreement............................................................................................................. 8 4.4 Conditions to Disbursement of Rehabilitation Loan ............................................ 8 4.5 Physical Condition of Site.................................................................................... 8 5.0 PARTICIPANT REPRESENTATIONS AND WARRANTIES......................................9 5.1 Effective Date of Representations and Warranties ............................................... 9 5.2 Representations and Warranties............................................................................9 6.0 PROJECT DEVELOPMENT.........................................................................................10 6.1 Rehabilitation Loan.............................................................................................10 6.2 Construction of the Project.................................................................................10 6.3 Indemnification...................................................................................................12 6.4 Applicable Laws.................................................................................................12 6.5 Release of Construction Covenants....................................................................12 7.0 TRANSFER AND ASSIGNMENT................................................................................13 7.1 Sale or Transfer of the Project............................................................................13 7.2 Transfer Defined.................................................................................................13 7.3 Agency Approval of Transfer Required.............................................................13 7.4 Assignment and Assumption Agreement............ 7.5 Permitted Transferee...........................................................................................14 8.0 INSURANCE..................................................................................................................15 8.1 Required Minimum Policies...............................................................................15 8.2 Insurance After Close of Escrow........................................................................16 9.0 RIGHTS OF HOLDERS OF APPROVED SECURITY INTERESTS IN SITE ........... 16 9.1 Definitions...........................................................................................................16 9.2 Limitation on Encumbrances; Subordination.....................................................16 9.3 Participant's Breach Does Not Defeat Mortgage Lien.......................................16 9.4 Notice of Default to Mortgagee, Deed of Trust or Other Security InterestHolders...................................................................................................16 9.5 Right of the Agency to Satisfy Other Liens on the Property After Conveyanceof Title............................................................................................17 10.0 USE OF THE SITE.........................................................................................................17 10.1 Use of the Site.....................................................................................................17 10.2 No Inconsistent Uses...........................................................................................17 394/015610-0040 •• 139234.06 a09/12/01 -11- Page 10.3 Obligation to Refrain from Discrimination.........................................................17 10.4 Effect of Covenants.............................................................................................18 10.5 Relocation of Existing Tenants...........................................................................18 11.0 DEFAULT; ENFORCEMENT.......................................................................................18 11.1 Defaults, Right to Cure and Waivers..................................................................18 11.2 Legal Actions......................................................................................................19 11.3 Rights and Remedies are Cumulative.................................................................19 11.4 Attorneys' Fees...................................................................................................19 12.0 MISCELLANEOUS.......................................................................................................20 12.1 Notices................................................................................................................20 12.2 Nonliability of Agency Officials and Employees ............................................... 20 12.3 Time of Essence.................................................................................................. 21 12.4 Enforced Delay: Extension of Times of Performance ....................................... 21 12.5 Books and Records.............................................................................................21 12.6 Ownership of Documents...................................................................................21 12.7 Modifications...................................................................................................... 22 12.8 Binding Effect of Agreement..............................................................................22 12.9 Assurances to Act in Good Faith........................................................................22 12.10 Severability.........................................................................................................22 12.11 Interpretation....................................................................................................... 22 12.12 Entire Agreement................................................................................................ 22 12.13 Waiver; Amendments.........................................................................................22 12.14 Counterparts........................................................................................................ 22 12.15 Authority.............................................................................................................22 12.16 Exhibits...............................................................................................................23 12.17 Effective Date.....................................................................................................23 LIST OF EXHIBITS Exhibit "A" Legal Description of Apartment Parcel and Acquisition Parcels Exhibit `B" Site Map Exhibit "C" Scope of Development Exhibit "D" Schedule of Performance Exhibit "E" Form of Agency Note Exhibit "F" Form of Agency Deed of Trust Exhibit "G" Form of Agency Regulatory Agreement Exhibit "H" Form of Release of Construction Covenants Exhibit "I" Form of Declaration Exhibit "J" Disbursement Procedures Exhibit "K" Form of Subordination Agreement 394/015610-0040 139234.06 a09/12/01 —111— AFFORDABLE HOUSING REHABILITATION AGREEMENT THIS AFFORDABLE HOUSING REHABILITATION AGREEMENT ("Agreement") is entered into as of September 13, 2001 (the "Effective Date") by and among the LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic ("Agency"), and LA QUINTA 34 LLC, a California limited liability company ("Participant"). RECITALS A. Agency is a public body, corporate and politic, exercising governmental functions and powers and organized and existing under the Community Redevelopment Law of the State of California (California Health and Safety Code Section 33000 et seq.). B. Participant is the owner of that certain apartment complex located southeast of the Eisenhower Drive/Calle Tampico intersection in the City of La Quinta known as Assessor Parcel No. 773-071-017 ("Apartment Parcel"). Participant is also currently in escrow to acquire title to two parcels, commonly known as the Parker Lots and having Assessor Parcel Nos. 773-073-004 and 0005, which are located across the street from the apartment complex ("Acquisition Parcels"). The Apartment Parcel and the Acquisition Parcels are collectively referred to herein as the "Site." C. Agency desires to meet its respective affordable housing goals by assisting Participant in the rehabilitation of the Site as set forth in this Agreement (the "Project") by making certain financial assistance in the form of a rehabilitation loan, as described in this Agreement, available to Participant for the Project from the Agency's Low and Moderate Income Housing Fund (Health & Safety Code §§ 33334.2 et seq.). D. Agency has determined that providing assistance to Participant for the Project is in the best interests of the City and the welfare of its citizens. Therefore, the parties desire to execute this Agreement for the Project on the terms and conditions set forth below. AGREEMENT NOW, THEREFORE, in consideration of the foregoing Recitals and the covenants and promises hereinafter contained, and for good and valuable consideration, the sufficiency and receipt of which are hereby acknowledged, Agency and Participant hereby agree as follows: 1.0 DEFINITIONS. 1.1. - Acquisition Parcels. The term "Acquisition Parcels" shall mean the two parcels, commonly known as Assessor Parcel Nos. 773-073-004 and 005, which are currently owned by Owner. The Acquisition Parcels are legally described in Exhibit "A". 1.2 Agency Deed of Trust. The term "Agency Deed of Trust" shall mean that certain Deed of Trust With Assignment of Rents to secure the Agency Note, in the form attached hereto as Exhibit "F". 394/015610-0040 139234.06 a09/12/01 1.3 Agency Note. The term "Agency Note" shall mean that certain promissory note, in the form attached hereto as Exhibit "E", in favor of Agency, evidencing the loan by Agency to Participant. 1.4 Agency Regulatory Agreement. The term "Agency Regulatory Agreement" shall mean that certain Regulatory Agreement and Declaration of Covenants and Restrictions, in the form attached hereto as Exhibit "G". 1.5 Agreement. The term "Agreement" shall mean this entire Affordable Housing Rehabilitation Agreement, including all exhibits, which exhibits are a part hereof and incorporated herein in their entirety, and all other documents attached hereto which are incorporated herein by reference as if set forth in full. 1.6 Apartment Parcel. The term "Apartment Parcel" shall mean that certain parcel, commonly known as Assessor Parcel No. 773-071-017, which is owned in fee by Participant, and which is improved with an apartment complex. The Apartment Parcel is legally described in Exhibit "A„ 1.7 CEQA. The term "CEQA" shall mean the California Environmental Quality Act, Public Resources Code Section 21000 et seq., as amended. 1.8 City. The term "City" shall mean the City of La Quinta, a municipal corporation, having its offices at 78-495 Calle Tampico, La Quinta, CA 92253. The City is not a party to this Agreement and shall have no obligations hereunder. 1.9 Closing. The terms "Closing" or "Closing Date" of "Close of Escrow" shall mean the date on which the grant deed conveying fee title to the Acquisition Parcels to Participant is recorded in the Office of the County Recorder of Riverside County, California, which Closing shall occur on or before the date established therefor in the Schedule of Performance. 1.10 Days. The term "days" shall mean calendar days and the statement of any time period herein shall be calendar days, and not business days, unless otherwise specified. 1.11 Declaration. The term "Declaration" shall mean the Declaration of Covenants, Conditions, and Restrictions And Agreement To Hold Property As One Parcel," in the form attached hereto as Exhibit I. 1.12 Disbursement Procedures. The term "Disbursement Procedures" shall mean the procedures and conditions to disbursement of the Rehabilitation Loan set forth in Exhibit K attached hereto. 1.13 Effective Date. The Effective Date of this Agreement shall occur after public hearing and approval hereof by Agency and shall mean the later of the dates this Agreement is executed on behalf of Agency and Participant. 1.14 Enforced Delay. The term "Enforced Delay" shall have the meaning set forth in Section 13.4. 394/015610-0040 139234.06 a09/12/01 2 1.15 Escrow. The term "Escrow" shall mean the escrow opened for the conveyance of fee title to the Acquisition Parcels to Participant. 1.16 Escrow Agent. The term "Escrow Agent" shall mean the person responsible at the Escrow for executing escrow instructions and effecting the Closing. 1.17 Executive Director. The term "Executive Director" shall mean the individual duly appointed to the position of Executive Director of Agency, or his or her authorized designee. Whenever an administrative action is required by Agency to implement the terms of this Agreement, the Agency Executive Director, or his or her authorized designee, shall have authority to act on behalf of Agency, except with respect to matters reserved for Agency Board determination. 1.18 First Deed of Trust. The term "First Deed of Trust" shall mean Participant's existing first position deed of trust recorded against the Apartment Site that secures an outstanding loan to Participant by Rubicon Realty Capital Corporation, the beneficiary of such First Deed of Trust, as amended or repealed hereafter. 1.19 Hazardous Materials. The term "Hazardous Materials" shall mean (i) any hazardous or toxic substance, material or waste which is or becomes regulated by any local or regional governmental authority, the State of California, or the United States Government and/or (ii) any substance or material identified by the United States Government, the State of California, County of Riverside, or any local or regional governmental authority as hazardous or toxic and which is included on any list of such substances published by any such governmental entity and shall specifically include petroleum, petroleum -based products, asbestos and PCBs. 1.20 Owner. The term "Owner" shall mean Robert L. Parker and Zelda M. Parker, as Co - Trustees of the Parker Revocable Trust Dated December 21, 1989, which is the current owner of the Acquisition Parcels. 1.21 Participant. The term "Participant" shall mean La Quinta 34 LLC, a California limited liability company, and any permitted assignees and successors of same as set forth in Section 7.0. 1.22 Project. The term "Project" shall include all construction, improvement, modification, and rehabilitation of the Site to be performed by Participant pursuant to this Agreement. The Project is more particularly described in the Scope of Development attached hereto as Exhibit "C". 1.23 Project Area. The term "Project Area" shall mean Redevelopment Project Area No. 1 which is located in the City of La Quinta, California. The exact boundaries of the Project Area are specifically described in the Redevelopment Plan. 1.24 Redevelopment Plan. The term "Redevelopment Plan" shall mean the Redevelopment Plan for the Project Area, as the same has been amended prior to the Effective Date and as it may be further amended from time to time. A copy of the Redevelopment Plan in effect on the Effective Date is on file in the Office of the City Clerk of the City. The Redevelopment Plan is incorporated herein by this reference as though fully set forth herein. 394/015610-0040 139234.06 a09/12/01 3 1.25 Rehabilitation Loan. The term "Rehabilitation Loan" shall mean the loan by Agency to Participant in the amount set forth in Section 4.1, as evidenced by the Rehabilitation Loan Documents, for the purposes of rehabilitating the Site. 1.26 Rehabilitation Loan Documents. The term "Rehabilitation Loan Documents" shall mean, collectively, the Agency Note, Agency Deed of Trust, Agency Regulatory Agreement, and Declaration. 1.27 Release of Construction Covenants. The term "Release of Construction Covenants" shall mean that certain Release of Construction Covenants, in the form attached hereto as Exhibit "H„ 1.28 Sale Escrow Instructions. The term "Sale Escrow Instructions" shall mean that certain contract of purchase and sale and escrow instructions for the Site between Owner, as seller, and Participant. 1.29 Schedule of Performance. The term "Schedule of Performance" shall mean that certain Schedule attached hereto as Exhibit "D". 1.30 Site. The term "Site" shall mean, collectively, the Apartment Parcel and the Acquisition Parcels, together with all improvements now or hereafter constructed thereon. The Site is shown on the Site Map attached hereto as Exhibit `B". 1.31 Subordination Agreement. The term "Subordination Agreement" shall mean that certain Subordination Agreement, in the form attached hereto as Exhibit "K," between Participant, Agency, and Rubicon Realty Capital Corporation, the beneficiary of the First Deed of Trust. 1.32 Title Company. The term "Title Company" shall mean the title company approved by Agency and Participant responsible for issuing a title lender's policy of title insurance to the Agency insuring the priority of the Agency Deed of Trust, Agency Regulatory Agreement, and Declaration, if Agency elects to obtain title insurance. 2.0 PURPOSE OF AGREEMENT. The purpose of this Agreement is to effectuate the Redevelopment Plan for the Project Area by providing for Participant's rehabilitation of the Site and thereby assisting in the provision of adequate housing affordable to low and moderate income households within the City. The development of the Project on the Site and the fulfillment generally of this Agreement are in the best interests of the City and the welfare of its residents and are in accordance with the public purposes and provisions of applicable federal, state, and local laws and regulations, pursuant to which the Project is being undertaken. 3.0 CURRENT OWNERSHIP OF THE SITE; PARTICIPANT ACQUISITION OF THE ACQUISITION PARCELS. 3.1 Ownership of the Site; Participant -Owner Escrow. Participant is the owner of fee title to the Apartment Parcel. Prior to the execution of this Agreement, Participant has (i) entered into the Sale Escrow Instructions with Owner for Participant's acquisition of the Acquisition Parcels, (ii) 394/015610-0040 139234.06 a09/12/01 4 delivered to Agency a true and correct copy of the fully signed Sale Escrow Instructions and a copy of the proposed grant deed conveying the Acquisition Parcels to Participant (the "Grant Deed"); (iii) opened the Escrow with the Escrow Agent, and (iv) notified Agency in writing of the name, address, telephone number, and fax number of the Escrow Agent. The Sale Escrow Instructions provide that Participant's purchase price for the Acquisition Parcels is not greater than Seventy Thousand Dollars ($70,000) and does not contain any terms that would cause the Escrow or other fees to be charged to Participant at the Closing to be higher than what would normally be charged for a similar transaction in Riverside County. Based on the foregoing, Participant qualifies as an "owner -participant" within the meaning of the California Community Redevelopment Law (Health & Safety Code §. 33000 et seq.). 3.2 Participant Acquisition of the Acquisition Parcels. Participant shall close escrow on the Acquisition Parcels not later than the time set forth in the Schedule of Performance. Participant shall not modify or amend the material terms of the Sale Escrow Instructions or the Grant Deed without the prior written consent of the Executive Director which consent shall not be unreasonably withheld, conditioned, or delayed. Participant shall comply with and fulfill each and every condition, responsibility, and obligation it may have pursuant to the Sale Escrow Instructions in order to accomplish the Close of Escrow at or prior to the time set forth in the Schedule of Performance. Participant shall indemnify, defend, and hold Agency harmless from and against all liability, loss, damage, cost, and expense (including expert witness fees, attorney's fees, and defense costs) arising from or related to any dispute related to the Sale Escrow Instructions or any other agreement or document pertaining to Participant's acquisition of the Acquisition Parcels. Participant shall not transfer or assign the Sale Escrow Instructions except to a Permitted Transferee as set forth in Section 7.0. Except for the portion of the Rehabilitation Loan to be disbursed by Agency to the Escrow as set forth in Section 4.1, all costs and expenses pertaining to or related to Participant's acquisition of the Acquisition Parcels shall be the responsibility of Participant and Agency shall have no responsibility therefor. 3.3 Condition of Title. Prior to the Close of Escrow, Participant shall provide the Executive Director with a copy of a preliminary report issued by the Title Company for the Apartment Site and for the Acquisition Parcels that is not more than fifteen (15) days old. As a condition precedent to Agency's performance of its obligations set forth in this Agreement that are to occur on and after Close of Escrow, the Executive Director shall have approved, prior to the Close of Escrow, the exceptions to title listed on the preliminary report or shall have stated in writing to Participant those exceptions to title that are acceptable and those that are unacceptable. Participant shall use commercially reasonable efforts to effect removal or deletion of those exceptions to title that are unacceptable to the Executive Director. As a condition precedent to Agency's performance of its obligations set forth in this Agreement that are to occur on and after Close of Escrow, (i) Participant shall close escrow with title subject to only those exceptions to title that the Executive Director has approved as "acceptable," and (ii) escrow shall close no later than the date specified in the Schedule of Performance. 3.4 Agency Title Policy. Upon the Close of Escrow, Participant shall cause the Title Company to issue and deliver to Agency an CLTA lender's policy of title insurance, together with such endorsements as may be reasonably requested by Agency, with liability in the amount of the Agency Note, covering the Site, showing title vested in Participant and insuring the validity and 394/015610-0040 139234.06 a09/12/01 5 priority of, respectively, the Declaration, Agency Deed of Trust, and Agency Regulatory Agreement (the "Agency Title Policy") subject only to: 3.4.1 All nondelinquent general and special real property taxes and assessments; 3.4.2 the First Deed of Trust 3.4.3 the Grant Deed; and 3.4.4 such other matters as may be approved in writing by the Executive Director. 3.5 Conditions to Agency's Performance. As a further condition precedent to Agency's performance of its obligations set forth in this Agreement that are to occur on and after Close of Escrow, all of the following shall have occurred or will occur concurrently with the Closing (and as to those items required to have been performed or completed at a date prior to Closing in accordance with the Schedule of Performance, such items have been performed or completed by the date set forth in the Schedule of Performance): 3.5.1 All conditions precedent required to be satisfied by Participant prior to the Close of Escrow as set forth in the Sale Escrow Instructions shall have been satisfied by Participant. 3.5.2 Participant and Rubicon Realty Capital Corporation (the beneficiary of the First Deed of Trust) shall have signed (and acknowledged) and delivered to Escrow the Subordination Agreement. 3.5.3 Participant shall have executed (and acknowledged where required) the Agency Note, Agency Deed of Trust, Agency Regulatory Agreement, and Declaration, and all other agreements and documents reasonably required to be signed by Participant pursuant to this Agreement and the agreements and documents referenced in this Agreement. 3.5.4 The Executive Director shall have reviewed and approved the title condition and the Title Company shall be ready to issue the Agency Title Policy with only those exceptions pre -approved in this Agreement or as approved by the Executive Director in his/her sole and absolute discretion. 3.5.5 Participant shall have submitted to the Executive Director the evidence of insurance required by the Agency Regulatory Agreement, with such insurance coverages to be effective as of the Closing. 3.5.6 The Escrow Agent shall be ready to record the Declaration, Agency Deed of Trust, Agency Regulatory Agreement, and Subordination Agreement in accordance with escrow instructions submitted to the Escrow Agent by Agency or Agency's legal counsel (Escrow Agent shall notify Agency's legal counsel in writing if escrow instructions on behalf of Agency have not been submitted, and if no such instructions are submitted within three (3) business days thereafter this Section 3.0 shall serve as the Agency's Escrow instructions). 394/015610-0040 139234.06 a09/12/01 6 3.5.7 Participant has timely completed or performed all of the items required by this Agreement, including but not limited to the Schedule of Performance, required to be completed or performed prior to the Closing. 3.5.8 Participant is not in material default of any of the terms of this Agreement. 3.6 Duties of Escrow Agent. Participant shall notify the Escrow Agent that it shall be responsible for recordation of certain documents referred to in this Agreement at the Closing and for delivering the Agency Title Policy to Agency, and that the Escrow Agent shall be responsible for adhering to the directions set forth in an escrow instruction letter from Agency or its legal counsel with respect to the execution and recordation of such documents and related matters. At the Closing, the Escrow Agent shall record the following documents in the following order of recordation: (1) the grant deed conveying the Acquisition Parcels to Participant; (2) Agency Deed of Trust; (3) Agency Regulatory Agreement; (4) Declaration; and (5) Subordination Agreement. At the Closing the Escrow Agent shall deliver the original Note to the Agency and shall also provide the Agency with conformed copies of each of the recorded documents. 3.7 Brokerage Commissions. Participant and Agency shall each indemnify, defend, and hold harmless the other from and against all liabilities, costs, damages, and expenses, including, without limitation, attorneys' fees, resulting from any claims for fees or commissions, based upon agreements by the other or any person or entity affiliated with the other, if any, to pay a broker's commission and/or finder's fee pertaining to Participant's acquisition of the Acquisition Parcels. No such fee(s), if any, shall be paid out of the Rehabilitation Loan. 3.8 Taxes and Assessments and Liens. Participant shall pay, when due, all real estate taxes and assessments assessed or levied against all or any portion of the Acquisition Parcels subsequent to conveyance of title. 4.0 REHABILITATION LOAN; PHYSICAL CONDITION OF SITE. 4.1 Rehabilitation Loan; Disbursement. Within the time set forth in the Schedule of Performance, and subject to the terms and conditions of this Agreement, Agency shall assist in the financing of the rehabilitation of the Site by providing Participant with the Rehabilitation Loan from the Agency's Low and Moderate Income Housing Fund in the amount of THREE HUNDRED FIFTY THOUSAND DOLLARS ($350,000.00), amortized over thirty (30) years at seven percent interest, compounded annually. The Rehabilitation Loan shall be evidenced by the Agency Note and Agency Deed of Trust. A portion of the Rehabilitation Loan in an amount up to but not exceeding Seventy Thousand Dollars ($70,000) plus buyer's escrow closing costs (the "Agency Escrow Deposit") shall be disbursed by Agency into the Escrow for use by Participant toward acquisition of the Acquisition Parcels so that the Acquisition Parcels may be rehabilitated in conjunction with the Apartment Site and thereafter used with and as part of the overall Site. Remaining disbursements of the Rehabilitation Loan by Agency shall be in accordance with the Disbursement Procedures set forth in Exhibit J attached hereto. Interest shall accrue on the Agency Escrow Deposit commencing on the date disbursed, and interest shall accrue on the remaining portions of the Rehabilitation Loan as such disbursements are made. 394/015610-0040 139234.06 a09/12/01 7 4.2 Termination for Failure to Close Escrow. Participant and Agency shall each have the right to terminate this Agreement upon written notice to the other in the event that, within the time set forth in the Schedule of Performance, Participant is unable, despite its reasonable commercial efforts, to effect the Closing. Such termination shall be effective upon delivery of the foregoing described notice of termination. In the event of such termination, each party hereto shall have no further rights or obligations under this Agreement. Participant shall indemnify, defend, and hold Agency harmless from and against all liability, loss, damage, cost, and expense (including expert witness fees, attorney's fees, and defense costs) arising from or associated with any dispute related to the effect of such termination on the Sale Escrow Instructions or any other agreement or document pertaining to Participant's acquisition or use of the Acquisition Parcels. 4.3 Subordination of Agency Deed of Trust and Agency Regulatory Agreement. Pursuant to Health and Safety Code Section 33334.14, in approving this Agreement Agency hereby finds and determines that the lien of the Rehabilitation Loan and the covenants and restrictions set forth in the Agency Regulatory Agreement shall be subordinated to the First Deed of Trust, and in connection therewith Agency finds and determines that an economically feasible alternative method of financing on substantially comparable terms and conditions, but without subordination, is not reasonably available. An Agency condition to the Closing is the recordation of a subordination agreement substantially in accordance with Exhibit "K". Such subordination agreement is reasonably designed to protect Agency's investment in the event of default by providing for rights of notice and opportunities to cure and other rights protective of Agency's investment. 4.4 Conditions to Disbursement of Rehabilitation Loan. No portion of the Rehabilitation Loan (except for the Agency Escrow Deposit) shall be disbursed unless and until Escrow has closed and the conditions to disbursement set forth in Exhibit " J" are satisfied. 4.5 Physical Condition of Site. 4.5.1 Disclaimer of Warranties. Participant acknowledges that neither the Agency nor any of its employees, agents, contractors, or representatives have made any representations, warranties or agreements to or with Participant on behalf of Agency as to any matters concerning the Site, the present use thereof, or the suitability of Participant's intended or contemplated use of the Site. The foregoing disclaimer includes, without limitation, topography, climate, air, water rights, utilities, present and future zoning, soil, subsoil, Hazardous Materials, patent and latent physical conditions or defects, the purposes to which the Site is suited, drainage, access to public roads, and the availability of governmental permits or approvals of any kind. Participant represents and warrants to Agency that it has investigated the Site, and in particular the Acquisition Parcels, and has knowledge of the operative governmental laws and regulations (including, but not limited to, zoning, environmental, hazardous waste and land use laws and regulations) to which the Site may be subject, and in particular is acquiring the Acquisition Parcels on the basis of its review and determination of the application and effect of such laws and regulations. Participant has neither received nor relied upon any representations concerning such laws and regulations made by Agency or its employees, agents, contractors, or representatives, or any other person acting on the behalf of Agency except as set forth in this Agreement. Any agreements, warranties, or representations not expressly contained in this Agreement shall in no way bind Agency. Participant acknowledges that it is fully responsible for obtaining any and all permits from the City and other governmental entities as may be required for the Project. Nothing in this paragraph is intended to defeat or declare void any permits, 394/015610-0040 139234.06 a09/12/01 8 approvals, or entitlements that Participant has obtained with respect to the Site prior to the date of this Agreement. 4.5.2 Participant Indemnity Regarding Physical Condition of the Site. From and after the Effective Date with respect to the Apartment Parcel, and from and after the Closing with respect to the entire Site, Participant shall indemnify, defend, and hold Agency harmless from and against any and all claims, suits, penalties, expenses, losses, damages, attorney's fees, judgments, or any other action or damage of any kind or nature arising out of or related to any of the matters described in Section 4.5.1. Notwithstanding any other provision of this Agreement to the contrary, Participant's indemnification as set forth in this Section 4.5.2 shall survive the termination of this Agreement and shall continue in perpetuity. 5.0 PARTICIPANT REPRESENTATIONS AND WARRANTIES. 5.1 Effective Date of Representations and Warranties. All of the representations and warranties set forth in this Section 5.0 are valid as of Effective Date and shall remain valid, true, and correct unless Participant discloses to Agency in writing a change in any of the representations or warranties set forth herein. 5.2 Representations and Warranties. In addition to other representations and warranties of Participant set forth in this Agreement, Participant hereby makes the following representations, covenants, and warranties for the benefit of Agency and Agency's successors and assigns, and acknowledges that the execution of this Agreement by Agency has been made in material reliance by Agency on such representations and warranties: 5.2.1 No Default. Other than the consents obtained as set forth in this Agreement, the execution and delivery of this Agreement and all other documents to be executed by Participant pursuant to this Agreement will not constitute or result in any default or event that with notice or the lapse of time, or both, would be a default, breach, or violation of any other agreement, instrument, or arrangement by which Participant is bound. 5.2.2 No Violation. The execution and delivery of this Agreement and all other documents to be executed by Participant pursuant to this Agreement and the consummation of the transactions contemplated herein will not violate any provision of or require any consent, authorization, or approval under any law or administrative regulation or any other order, award, judgment, writ, injunction or decree applicable to, or any governmental permit or license issued to Participant. 5.2.3 No Bankruptcy. Participant has not filed or been the subject of any filing of a petition under the Federal Bankruptcy Law or any insolvency laws, or any laws for the discharge of indebtedness or for the reorganization of debtors. 5.2.4 No Misrepresentation. No representation, warranty, or covenant of Participant in this Agreement, or in any document or certificate furnished or to be furnished to Agency pursuant to this Agreement, contains or will contain any untrue statement of a material fact or omits or will omit to state a material fact necessary to make the statements contained herein or therein not misleading. 394/015610-0040 139234.06 a09/12/01 9 5.2.5 Due Execution. This Agreement and all other documents to be executed by Participant pursuant to this Agreement have been or will be duly executed by Participant and constitute valid, binding, and enforceable obligations of Participant. If other than an individual, Participant has complied with all laws and regulations concerning its organization, existence, and transaction of business. 5.2.6 No Extraneous Consideration. Participant has not paid or given to, and will not pay or give to, Agency or any official or agent of Agency any money or other consideration for obtaining this Agreement, except as may be expressly provided herein. 5.2.7 Financial Information. All financial information delivered to Agency, including, without limitation, information relating to the financial condition of Participant, the Site, and the Project accurately represents such financial condition and has been prepared in accordance with accepted accounting principles consistently applied, unless otherwise noted .in such information. Participant shall notify Agency in writing of any material changes to such information delivered to the Agency. 6.0 PROJECT DEVELOPMENT. 6.1 Rehabilitation Loan. The proceeds of the Rehabilitation Loan shall be disbursed in accordance with the procedures set forth in Exhibit "J." 6.2 Construction of the Project. 6.2.1 Development In Accordance With Plans. Participant shall develop the Project in accordance with this Agreement, the Scope of Development, and the plans and permits approved by Agency and City for the Project, including any changes thereto as may be subsequently approved in writing by Participant, Agency, and City. As completed, the Project: (a) shall comply with all applicable laws and ordinances of all governmental authorities, including, without limitation, all laws and ordinances necessary to permit rehabilitation of the Site as permitted by this Agreement; (b) except as expressly provided herein, will be entirely on the Site and will not encroach upon the land of others or overbound any easement or right-of-way; and (c) will be wholly in compliance with any enforceable building restriction laws, however established, and will not violate any enforceable use, easement, license, covenant, condition, or other restriction affecting the Site. 6.2.2 Evolution of Rehabilitation Plan. 6.2.2.1 Within the times set forth in the Schedule of Performance, Participant shall submit to the City preliminary and final drawings and specifications for rehabilitation development of the Site and each parcel thereof in accordance with the Scope of Development, the concept drawings, and in accordance with the City's requirements. The term preliminary and final drawings shall be deemed to include, unless otherwise waived by City, site plans, building plans and elevations, landscaping plans, parking plans, and all other plans, drawings, and specifications required to obtain site plan approval and, with respect to final drawings, to obtain a building permit. Said plans, drawings and specifications shall be consistent with the Scope of Development and the various development approvals referenced hereinabove, except as such items 394/015610-0040 139234.06 a09/12/01 10 may be amended by City (if applicable) and by mutual consent of City, Agency, and Participant. Plans, (concept, preliminary and construction) shall be progressively more detailed. 6.2.3 Other Governmental Permits. Before commencement of construction, rehabilitation, restoration, revitalization, or development of any buildings, structures, or other work of improvement upon the Site, Participant shall secure or cause to be secured any and all permits and approvals which may be required by City or any other governmental agency affected by such construction, development, or work to be performed by Participant pursuant to the Scope of Development, including but not limited to, necessary building permits and all approvals required under CEQA. Not by way of limiting the foregoing, in rehabilitating and constructing the Project, Participant shall comply with all applicable development standards in City's Municipal Code and shall comply with all building code, landscaping, signage, and parking requirements except as may be permitted through approved variances and modifications. Participant shall not be obligated to commence construction if any such permit is not issued despite commercially reasonable efforts by Participant to obtain the same. Agency agrees to reasonably assist Participant in its efforts to obtain permits and approvals for the Project; provided, however, that Agency does not represent, warrant, or guarantee that any permit or approval will be granted or issued or that any such permit or approval will be granted or issued with or without any particular conditions. 6.2.4 Cost of Construction. Except for the Rehabilitation Loan, Participant shall bear all costs of preparing and developing the Project and constructing and rehabilitating all improvements on the Site, including, but not limited to, any and all costs for construction, architectural and engineering plans, preparation of the Site, costs associated with meeting applicable seismic standards, interim and permanent financing, and fees or charges for development and building. 6.2.5 Construction Schedule; Reports. Participant shall commence and complete construction of the Project within the times set forth in the Schedule of Performance. Once construction is commenced, Participant shall diligently pursue such construction to completion and Participant shall not abandon such construction for more than ten (10) consecutive business days. Participant shall keep Agency informed of the progress of construction and submit to the Executive Director written reports of the progress of construction when and in the form requested, but not more frequently than monthly. 6.2.6 Plans and Specifications. Participant shall construct the Project upon the Site in accordance with the construction drawings, working specifications, and related documents that shall be submitted to and approved by the Agency and City in advance and in writing. 6.2.7 Nondiscrimination During Construction. Participant, for itself and its successors and assigns, agrees that during the rehabilitation of the Project, Participant shall not discriminate against any employee or applicant for employment because of race, color, creed, religion, sex, marital status, national origin, or ancestry. 6.2.8 Rights of Access. Representatives of Agency shall have the reasonable right of access to the Site without charges or fees, at any time during normal construction hours during the period of construction, for the purpose of assuring compliance with this Agreement, including but not limited to the inspection of the construction and rehabilitation work being performed by or on 394/015610-0040 139234.06 a09/12/01 11 behalf of Participant. Each such representative(s) of Agency shall identify himself or herself at the job site office upon his or her entrance to the Site, and shall provide Participant, or the construction superintendent or similar person in charge on the Site, a reasonable opportunity to have a representative accompany him or her during the observation. Agency shall indemnify, defend, and hold Participant harmless from any injury or property damage caused or liability arising out of Agency's exercise of this right of access. Any observation, examination, or inspection occurring by Agency during its/their access pursuant to this Section shall not be construed or deemed as an inspection pursuant to any building codes or the Municipal Codes or any other inspection that may be performed by City or any other public entity. 6.2.9 Construction Contract. The Agency acknowledges and agrees that Participant shall act as the general contractor for the improvements required to be constructed by Participant for the Project. Participant shall comply with all applicable laws and regulations pertaining to the contracting of work for construction of the improvements, including but not limited to the payment of wages for services engaged and bills for materials, supplies, and equipment. Participant shall not permit any mechanics' or materialiman's liens to be recorded against the Site. 6.3 Indemnification. During the period of any construction of the improvements pursuant to this Agreement and until such time as the Agency issues its Release of Construction Covenants for the Project, Participant agrees to and shall indemnify and hold Agency and City harmless from and against all liability, loss, damage, cost, or expense (including expert witness fees and reasonable attorneys' fees and court costs) arising from or as a result of the death of any person or any accident, injury, loss, or damage whatsoever caused to any person or to the property of any person which shall occur on the Site and which shall be directly or indirectly caused by the acts done thereon or any errors or omissions of Participant or its agents, servants, employees, invitees, or contractors. Participant shall not be responsible for (and such indemnity shall not apply to) any acts, errors, or omissions of Agency or City or their respective agents, servants, employees, or contractors acting in an official capacity. Agency and City shall not be responsible for any acts, errors, or omissions of any person or entity except Agency and City and their respective agents, servants, employees, or contractors acting in an official capacity, subject to any and all statutory and other immunities. The provisions of this Section shall survive the termination of this Agreement. 6.4 Applicable Laws. Participant shall construct the Project in conformity with all applicable laws and regulations. Participant agrees to indemnify, defend, and hold Agency and City harmless from and against all liability, loss, damage, cost, or expense (including expert witness fees and reasonable attorney's fees and costs) arising from or as a result of any violation of any applicable law, ordinance, or statute including, but not limited to, prevailing wage laws, except to the extent such violation arises from the negligence of Agency. 6.5 Release of Construction Covenants. Upon written request by Participant, and upon satisfactory completion of the Project, Agency shall issue to Participant a Release of Construction Covenants as long as Participant is not in default under this Agreement or any documents related hereto. The Release of Construction Covenants shall be, and shall so state, a conclusive determination of satisfactory completion of construction of the Project. After the date Participant is entitled to issuance of the Release of Construction Covenants, and notwithstanding any other provision of this Agreement to the contrary, any party then owning or thereafter purchasing, leasing or otherwise acquiring any interest in the Site shall not (because of any such ownership, purchase, 394/015610-0040 12 139234.06 a09/12/01 lease, or acquisition) incur any obligation or liability under this Agreement, except that such party shall be bound by the covenants that survive the issuance of the Release of Construction Covenants, including as set forth in the Regulatory Agreement. The Release of Construction Covenants is not a notice of completion as referred to in California Civil Code section 3093. If Agency refuses or fails to furnish a Release of Construction Covenants after written request from Participant, Agency shall, within ten (10) days of the written request, provide the Participant a written statement of the reasons Agency refused or failed to furnish a Release of Construction Covenants. The statement shall also contain the Agency's opinion of the action Participant must take to obtain a Release of Construction Covenants. If Agency shall have failed to provide such written statement within said ten (10) day period, Participant shall be deemed entitled to the Release of Construction Covenants. If Agency refuses or fails to furnish the Release of Construction Covenants for the reason that specific minor non -life safety items or materials are not available or landscaping is not complete and the cost thereof is less than two percent (2%) of the Rehabilitation Loan amount, as set forth in the Project Budget, Agency shall issue the Release of Construction Covenants upon the posting by Participant with Agency of a cash deposit, bond, or irrevocable letter of credit (in a form acceptable to Agency), at Participant's option, in an amount representing one hundred percent (100%) of the fair value of the work not yet completed. 7.0 TRANSFER AND ASSIGNMENT. 7.1 Sale or Transfer of the Project. Participant covenants that during the term of this Agreement and the Agency Regulatory Agreement Participant shall not assign this Agreement or transfer the Site or any of its interests therein except as provided in this Section 7.0. 7.2 Transfer Defined. As used in this Section 7.0, the term "Transfer" shall include any assignment, hypothecation, mortgage, pledge, conveyance, or encumbrance of this Agreement, the Site, or the improvements thereon. A Transfer shall also include the transfer to any person, entity, or group of persons or entities acting in concert of more than twenty-five percent (25%) (in the aggregate) of the present ownership and/or control of any person or entity constituting Participant, taking all transfers into account on a cumulative basis. In the event any entity constituting Participant, its successor or the constituent partners or members of Participant or any successor of Participant, is a corporation or trust, such transfer shall refer to the transfer of the issued and outstanding capital stock of such corporation, or of beneficial interests of such trust; in the event that any entity constituting Participant, its successor or the constituent partners of Participant or any successor of Participant is a limited or general partnership, such transfer shall refer to the transfer of more than twenty-five percent (25%) of such limited or general partnership interest; in the event that any entity constituting Participant, its successor or the constituent members of Participant or any successor of Participant is a limited liability company, such transfer shall refer to the transfer of more than twenty-five percent (25%) of such membership interest; in the event that any entity constituting Participant, its successor or the constituent partners of Participant or any successor of Participant is a joint venture, such transfer shall refer to the transfer of more than twenty-five percent (25%) of the ownership and/or control of any such joint venture partner, taking all transfers into account on a cumulative basis. 7.3 Agency Approval of Transfer Required. Except as set forth below, Participant shall not Transfer this Agreement or any of Participant's rights hereunder, or any interest in the Site or in 394/015610-0040 13 139234.06 a09/12/01 the improvements thereon, directly or indirectly, voluntarily or by operation of law, without the prior written approval of Agency, which approval shall not be unreasonably withheld, conditioned, or delayed, and any such purported Transfer without such approval shall be null and void. In addition to the foregoing and notwithstanding anything in this Section to the contrary, so long as the Project is encumbered by the First Deed of Trust, any proposed transferee or assignee must also receive the prior written consent of the beneficiary of the First Deed of Trust, if required by the First Deed of Trust, before Agency shall approve such transfer or assignment; provided, however, that such consent of beneficiary shall not obligate Agency to approve such Transfer. Notwithstanding the foregoing, the following types of transfers shall not require Agency approval but as with all Transfers shall be subject to Section 7.4: (a) Any refinancing of the First Deed of Trust such that the new loan amount does not exceed ninety-five percent (95%) of the then appraised fair market value of the Site. (b) Any new or additional financing in which the Site is security for the loan, provided that the total of all then -outstanding loans secured by the Site does not exceed ninety-five percent (95%) of the then -appraised fair market value of the Site. (c) The leasing of individual rental units on the Site provided that such leasing is in accordance with the terms of this Agreement and of the Agency Regulatory Agreement; (d) Transfers resulting from the death or mental or physical incapacity of an individual; (e) Transfers in trust for the benefit of a spouse, children, grandchildren, or other family member, or for charitable purposes; (f) Transfers of stock in a publicly -held corporation or of the beneficial interest in ay publicly -held partnership or real estate investment trust; or (g) The conveyance or dedication or portions of the Site to the City or other governmental entity, or the granting of easements or permits to facilitate the development of the Site. 7.4 Assignment and Assumption Agreement. In the absence of specific written agreement by Agency, no Transfer by Participant of all or any portion of its interest in the Site or this Agreement, whether or not requiring the approval by Agency, shall be deemed to relieve Participant or any successor party from the obligation to timely complete construction of the Project. In addition, no attempted Transfer of any of Participant's obligations hereunder shall be effective unless and until Participant and the transferee or successor party execute and deliver to Agency a binding assignment and assumption agreement in a form reasonably approved by Agency's legal counsel. 7.5 Permitted Transferee. A "Permitted Transferee" under this Agreement shall be a transferee or assignee that either (i), has been approved by the Executive Director, or (ii) is a 394/015610-0040 1 4 139234.06 a09/12/01 transferee of a Transfer not requiring the approval of the Executive Director pursuant to the terms of this Agreement, and both the cases described in the foregoing clauses (i) and (ii) has executed and delivered to the Executive Director an assignment and assumption agreement pursuant to Section 7.4. 8.0 INSURANCE. 8.1 Required Minimum Policies. Commencing with Effective Date hereof and ending with the Closing, Participant shall procure and maintain, at its sole cost and expense, in a form and content satisfactory to the Executive Director, the following policies of insurance: 8.1.1 Commercial General Liability Insurance. A policy of commercial general liability insurance written on a per occurrence basis in an amount not less than: (A) for death and bodily injury, either (i) a combined single limit of ONE MILLION DOLLARS ($1,000,000.00) or (ii) ONE MILLION DOLLARS ($1,000,000) per person and ONE MILLION DOLLARS ($1,000,000.00) per occurrence, and ONE MILLION DOLLARS ($1,000,000.00) in the aggregate, and (B) for property damage, ONE MILLION DOLLARS ($1,000,000.00) per occurrence. 8.1.2 Worker's Compensation Insurance. A policy of worker's compensation insurance in such amount as will fully comply with the laws of the State of California and which shall indemnify, insure, and provide legal defense for both the Participant and Agency against any loss, claim or damage arising from any injuries or occupational diseases occurring to any worker employed by or any persons retained by Participant in the course of carrying out the work or services contemplated in this Agreement. 8.1.3 Automotive Insurance. A policy of comprehensive automobile liability insurance written on a per occurrence basis in an amount not less than either (i) bodily injury liability limits of ONE MILLION DOLLARS ($1,000,000.00) per person and ONE MILLION DOLLARS ($1,000,000.00) per occurrence, and property damage liability limits of ONE MILLION DOLLARS ($1,000,000.00) per occurrence and ONE MILLION DOLLARS ($1,000,000.00) in the aggregate or (ii) combined single limit liability of ONE MILLION DOLLARS ($1,000,000.00). Said policy shall include coverage for owned, non -owned, leased, and hired cars. 8.1.4 Additional Requirements. The following additional requirements shall apply to all of the above policies of insurance. 8.1.4.1 All of the above policies of insurance shall be primary insurance and, except the Worker's Compensation insurance, shall name Agency, City, and their respective officers, officials, members, employees, agents, and representatives as additional insureds. The insurer shall waive all rights of subrogation and contribution it may have against Agency, City, and their officers, officials, members, employees, agents, and representatives, and their respective insurers. All of said policies of insurance shall provide that said insurance may not be amended or cancelled without providing thirty (30) days' prior written notice to Agency and City. In the event any of said policies of insurance are cancelled, the Participant shall, prior to the cancellation date, submit new evidence of insurance in conformance with this Section to the Executive Director. Not later than the Effective Date of this Agreement, Participant shall provide the Executive Director with Certificates of Insurance or appropriate insurance binders evidencing the above insurance coverages 394/015610-0040 1$ 139234.06 a09/12/01 and said Certificates of Insurance or binders shall be subject to the reasonable approval of the Executive Director. 8.1.4.2 The policies of insurance required by this Agreement shall be satisfactory only if issued by companies qualified to do business in California, rated "A" or better in the most recent edition of Best Rating Guide, The Key Rating Guide or in the Federal Register, and only if they are of a financial category Class VII or better, unless such requirements are waived by the Risk Manager of Agency ("Risk Manager") due to unique circumstances. 8.1.4.3 Participant agrees that the provisions of this Section shall not be construed as limiting in any way the extent to which Participant may be held responsible for the payment of damages to any persons or property resulting from the Participant's activities or the activities of any person or persons for which the Participant is otherwise responsible. 8.2 Insurance After Close of Escrow. From and after the Closing, and for the term of the Agency Regulatory Agreement, Participant shall procure and maintain the insurance set forth in the Agency Regulatory Agreement. 9.0 RIGHTS OF HOLDERS OF APPROVED SECURITY INTERESTS IN SITE. 9.1 Definitions. As used in this Section 9.0, the term "mortgage" shall include any mortgage, whether a leasehold mortgage or otherwise, deed of trust, or other security interest, or sale and lease -back, or any other form of conveyance for financing. The term "holder" shall include the holder of any such mortgage, deed of trust, or other security interest, or the lessor under a lease- back, or the grantee under any other conveyance for financing. 9.2 Limitation on Encumbrances; Subordination. Except as otherwise permitted by this Agreement, including but not limited to clauses (a) and (b) of Section 7.3, Participant shall not mortgage the Site or any portion thereof or any interest therein, any other mortgages or conveyances for financing that encumber the Site or any portion thereof, without the prior written approval of the Executive Director. Agency agrees to subordinate the Agency Deed of Trust and Agency Regulatory Agreement to the financing or refinancing meeting the terms of clauses (a) and (b) of Section 7.3. In agreeing to provide the subordination referred to in the preceding sentence, Agency hereby incorporates the finding set forth in Section 4.3 made pursuant to Health and Safety Code Section 33334.14. 9.3 Participant's Breach Does Not Defeat Mortgage Lien. Participant's breach of any of the covenants or restrictions contained in this Agreement or in the Agency Regulatory Agreement shall not defeat or render invalid the lien of any mortgage permitted pursuant to this Agreement, including but not limited to, the First Deed of Trust, made in good faith and for value as to the Site, or any part thereof or interest therein, but unless otherwise provided herein, the terms, conditions, covenants, restrictions, easements, and reservations of this Agreement shall be binding and effective against the owner of the Site where such owner, including any lender, acquires the Site by foreclosure, trustee's sale, or otherwise. 9.4 Notice of Default to Mortgagee, Deed of Trust or Other Security Interest Holders. Whenever Agency shall deliver any notice or demand to Participant with respect to any breach or default by Participant hereunder, Agency shall at the same time deliver a copy of such notice or 394/015610-0040 1 6 139234.06 a09/12/01 demand to each holder of record of any mortgage who has previously made a written request to Agency therefor, or to the representative of such lender as may be identified in such a written request by the lender. No notice of default shall be effective as to the holder unless such notice is given. 9.5 Right of the Agency to Satisfy Other Liens on the Property After Conveyance of Title. Prior to the recordation of the Release of Construction Covenants for the Project, and after Participant has had a reasonable time to challenge, cure, or satisfy any liens or encumbrances on the Site or any portion thereof, Agency shall have the right to satisfy any such liens or encumbrances; provided, however, that nothing in this Agreement shall require Participant to pay or make provision for the payment of any tax, assessment, lien or charge so long as Participant in good faith shall contest the validity or amount thereof, and so long as such delay in payment shall not subject the Site or any portion thereof to forfeiture or sale. Agency shall have the right to reimbursement from Participant for any amount expended pursuant to this Section, which right of reimbursement shall be secured by a lien on the Site, with power of sale. 10.0 USE OF THE SITE. 10.1 Use of the Site. 10.1.1 Dwelling Units. Participant hereby covenants and agrees, for itself and its successors and assigns, to use and maintain the Site only as a rental apartment housing project with thirty-four (34) apartment dwelling units ("Units"), with not fewer than fourteen (14) of the Units to be rented to persons and families whose income does not exceed 120% of the median income for Riverside County as determined by the California Department of Housing and Community Development ("Restricted Units"). The balance of the Units shall be available for rent without restriction and are referred to herein as the "Unrestricted Units." Agency acknowledges that as of the date of this Agreement, eight (8) of the thirty-four (34) Units were destroyed by a fire and require reconstruction. If Participant, for some reason outside the reasonable control of Participant, is unable to reconstruct some or all of the eight (8) Units that were destroyed by fire, Participant shall nonetheless provide not fewer than fourteen (14) Units as Restricted Units. 10.2 No Inconsistent Uses. Participant covenants and agrees that it shall not devote the Site to uses inconsistent with the Redevelopment Plan, the applicable zoning restrictions, this Agreement, the Agency Regulatory Agreement, or the Rehabilitation Loan Documents. Agency hereby confirms that multifamily residential use (and associated parking) is a use permitted by the Redevelopment Plan. 10.3 Obligation to Refrain from Discrimination. There shall be no discrimination against, or segregation of, any persons, or group of persons, on account of race, color, creed, religion, sex, marital status, ancestry, or national origin in the rental, sale, lease, sublease, transfer, use, occupancy, or enjoyment of the Site, or any portion thereof, nor shall Participant, or any person claiming under or through Participant, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy of tenants, lessees, subtenants, sublessees, or vendees of the Site or any portion thereof. The nondiscrimination and nonsegregation covenants contained herein shall remain in effect in perpetuity. 394/015610-0040 17 139234.06 a09/12/01 10.4 Effect of Covenants. Agency is deemed beneficiaries of the terms and provisions of this Agreement and of the restrictions and covenants running with the land, whether or not appearing in the Agency Regulatory Agreement, for and in its own right and for the purposes of protecting the interests of the community in whose favor and for whose benefit the covenants running with the land have been provided. The covenants in favor of Agency shall run with the land without regard to whether Agency has been, remains, or is an owner of any land or interest therein in the Site, or in the Redevelopment Project Area, and shall be effective as both covenants and equitable servitudes against the Site. Agency shall have the right, if any of the covenants set forth in this Agreement which are provided for its benefit are breached, to exercise all rights and remedies and to maintain any actions or suits at law or in equity or other proper proceedings to enforce the curing of such breaches to which it may be entitled. The covenants running with the land and their duration are set forth in the Agency Regulatory Agreement. 10.5 Relocation of Existing Tenants. Participant has provided to Agency documentation confirming that, as of the date of this Agreement, not fewer that fourteen (14) units on the Site are leased to and occupied by persons and families whose household incomes do not exceed one hundred twenty percent (120%) of the median income for Riverside County. In the event any tenants are required to move during the rehabilitation, Participant shall be responsible for any temporary relocation and such tenants shall be permitted to return to the same unit they occupied prior to the temporary relocation. In the event the temporary relocation of a tenant extends beyond 180 days, Participant shall offer such tenant a reasonable permanent relocation alternative. Participant shall indemnify, defend, and hold harmless Agency and City from all liability for any and all relocation expenses and any and all claims, expenses, damages, liabilities, judgments and costs (including attorney's fees) pertaining to all relocation expenses. 11.0 DEFAULT; ENFORCEMENT. 11.1 Defaults, Right to Cure and Waivers. 11.1.1 Subject to any Enforced Delay, and unless otherwise more specifically provided in this Agreement, failure or delay by either party to timely perform any covenant of this Agreement constitutes a default under this Agreement, but only if the party who so fails or delays does not commence to cure, correct or remedy such failure or delay within thirty (30) days after receipt of a written notice specifying such failure or delay, and does not thereafter prosecute such cure, correction or remedy with diligence to completion. 11.1.2 Any default by Participant under this Agreement, or of the Agency Note, or of the Agency Deed of Trust, or of the Agency Regulatory Agreement, shall constitute a default of all of the foregoing agreements entitling Agency to pursue whatever remedies to which they are entitled under such agreements; provided that the required notice of default under Section 11.1.1 has been given and the time period to commence and complete a cure, correction, or remedy of such noticed default has expired without such default having been cured, corrected, or remedied. 11.1.3 The injured party shall give written notice of default to the party in default, specifying the default complained of by the injured party. Except as required to protect against further damages, the injured party may not institute proceedings against the party in default until 394/015610-0040 1 g 139234.06 a09/12/01 thirty (30) days after giving such notice. Failure or delay in giving such notice shall not constitute a waiver of any default, nor shall it change the time of default. 11.1.4 Except as otherwise provided in this Agreement, waiver by either party of the performance of any covenant, condition, or promise, shall not invalidate this Agreement, nor shall it be considered a waiver of any other covenant, condition, or promise. Waiver by either party of the time for performing any act shall not constitute a waiver of time for preforming any other act or an identical act required to be performed at a later time. The delay or forbearance by either party in exercising any remedy or right as to any default shall not operate as a waiver of any default or of any rights or remedies or to deprive such party of its right to institute and maintain any actions or proceedings which it may deem necessary to protect, assert, or enforce any such rights or remedies. 11.2 Legal Actions. 11.2.1 Institution of Legal Actions. In addition to any other rights or remedies, and subject to the requirements of Section 11.1, either party may institute legal or equitable action to cure, correct or remedy any default, to recover damages for any default, or to obtain any other remedy consistent with the purpose of this Agreement; provided, however, that notwithstanding the foregoing, in no event shall Participant be entitled to damages related to economic loss, lost profits, or any other damages of like or similar kind or nature. Actions must be instituted and maintained in the Superior Court of the County of Riverside, State of California, in any other appropriate court in that county, or in the appropriate federal district court. 11.2.2 Applicable Law. The laws of the State of California shall govern the interpretation and enforcement of this Agreement. 11.2.3 Acceptance of Service of Process. In the event that any legal action is commenced by Participant against Agency, or by Agency against Participant, service of process shall be made in such manner as may be provided by California law for service on such entity. 11.3 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 its rights or remedies shall not preclude the exercise by it, at the same or different times, of any other rights or remedies for the same default or any other default by the other party. 11.4 Attorneys' Fees. If either party to this Agreement is required to initiate or defend any action or proceeding in any way arising out of the parties' agreement to, or performance of, this Agreement, or is made a party to any such action or proceeding by a third party, such that the parties hereto are adversarial, the prevailing party, as between the Participant and Agency, in such action or proceeding, in addition to any other relief which may be granted, whether legal or equitable, shall be entitled to its/their expert witness fees and reasonable attorneys' fees from the other. Attorneys' fees shall include attorneys' fees on any appeal, and in addition a party entitled to attorneys' fees shall be entitled to all other reasonable costs for investigating such action, taking depositions and discovery and all other necessary costs the court allows which are incurred in such litigation. All such fees shall be deemed to have accrued on commencement of such action and shall be enforceable whether or not such action is prosecuted to judgment. 394/015610-0040 19 139234.06 a09/12/01 12.0 MISCELLANEOUS. 12.1 Notices. Formal notices, demands, and communications between Agency and Participant shall be sufficiently given if (i) personally delivered, (ii) delivered by a reputable same - day or overnight courier services that provides a receipt showing date and time of delivery, (iii) delivered by United States mail, registered or certified, postage prepaid, return receipt requested, or (iv) delivered by facsimile transmission, provided the original of the faxed communication is delivered within twenty-four (24) hours by one of methods described in clauses (i), (ii), or (iii) of the foregoing. Delivery shall be made to the following addresses: If to Agency: La Quinta Redevelopment Agency 78-495 Calle Tampico La Quinta, CA 92253 Attn: Executive Director Fax: (760) 777-7101 With a copy to: Rutan & Tucker, LLP 611 Anton Boulevard, Suite 1400 Costa Mesa, CA 92626 Attn: M. Katherine Jenson, Esq. Fax: (714) 546-9035 If to Participant: La Quinta 34 LLC 1800 East Gary Avenue, Suite 117 Santa Ana, CA 92705 Attn: Lawrence C. Rael Fax: (949) 474-9828 With copy to: Gibson, Dunn & Crutcher LLP Jamboree Center 4 Park Plaza, Suite 1400 Irvine, CA 92614-8557 Attn: Teresa J. Farrell, Esq. Fax: (949) 451-4220 Notices that are personally delivered, delivered by messenger/courier, or by fax (provided there is compliance with the terms of clause (iv) above) shall be deemed effective upon receipt. Notices delivered by mail shall be deemed effective upon the earlier of actual receipt by the addressee thereof or the expiration of forty-eight (48) hours after depositing in the United States Postal System in the manner described in this Section. Such written notices, demands, and communications may be sent in the same manner to such other addresses as a party may from time to time designate by mail. 12.2 Nonliability of Agency Officials and Employees. No member, official, employee, or consultant of Agency shall be personally liable to Participant, or any successor in interest of Participant, in the event of any default or breach by Agency or for any amount which may become due to Participant or to its successor, or on any obligations under the terms of this Agreement. 394/015610-0040 20 139234.06 a09/12/01 12.3 Time of Essence. Time is of the essence in the performance of this Agreement. 12.4 Enforced Delay: Extension of Times of Performance. Notwithstanding the foregoing, in addition to specific provisions of this Agreement, performance by either party hereunder shall not be deemed to be in default where delays or defaults are due to war; insurrection; strikes; lock -outs; riots; floods; earthquakes; fires; casualties; supernatural causes; acts of the public enemy; epidemics; quarantine restrictions; freight embargoes; lack of transportation; governmental restrictions or priority litigation; unusually severe weather; inability to secure necessary labor, materials or tools; acts of the other party; acts or the failure to act of a public or governmental agency or entity (except that acts or the failure to act of Agency shall not excuse performance by Agency unless the act or failure is caused by the acts or omissions of Participant); or any other causes beyond the reasonable control or without the fault of the party claiming an extension of time to perform. In the event of such a delay (herein "Enforced Delay"), the party delayed shall continue to exercise commercially reasonable efforts minimize the period of the delay. An extension of time for any such cause shall be limited to the period of the Enforced Delay, and shall commence to run from the time of the commencement of the cause, provided notice by the party claiming such extension is sent to the other party within fifteen (15) days following the commencement of the cause. The following shall not be considered as events or causes beyond the control of Participant, and shall not entitle Participant to an extension of time to perform: (i) Participant's failure to obtain financing for the Project, (ii) Participant's failure to negotiate agreements with prospective tenants or users for the Project, or (iii) interest rates or (iv) economic or market conditions. Times of performance under this Agreement may also be extended by mutual written agreement by Agency and Participant. The Executive Director shall also have the authority on behalf of Agency to administratively approve extensions of time not to exceed a cumulative total of one (1) year. 12.5 Books and Records. 12.5.1 Maintenance of Books and Records. Participant shall prepare and maintain all books, records, and reports necessary to substantiate Participant's compliance with the terms of this Agreement. 12.5.2 Right to Inspect. Agency shall have the right, upon not less than forty-eight (48) hours' notice, at all reasonable times, to inspect the books and records of the Participant pertinent to the purposes of this Agreement. Said right of inspection shall not extend to documents privileged under attorney -client or other such privileges. 12.6 Ownership of Documents. Copies of all drawings, specifications, reports, records, documents and other materials prepared by Participant, its employees, agents and subcontractors, in the performance of this Agreement, which documents are in the possession of Participant and are not confidential or to which other persons have rights shall be delivered to Agency upon request in the event of a termination of this Agreement, and Participant shall have no claim for additional compensation as a result of the exercise by Agency of their respective rights hereunder. Agency shall have an unrestricted right to use such documents and materials as if it were in all respects the owner of the same. Participant makes no warranty or representation regarding the accuracy or sufficiency of such documents for any future use by Agency, and Participant shall have no liability therefor. 394/015610-0040 139234.06 a09/12/01 21 12.7 Modifications. Any alteration, change or modification of or to this Agreement, in order to become effective, shall be made by written instrument or endorsement thereon and in each such instance executed on behalf of each party hereto. 12.8 Binding Effect of Agreement. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto, their legal representatives, successors, and assigns. This Agreement shall likewise be binding upon and obligate the Site and the successors in interest, owner or owners thereof, and all of the tenants, lessees, sublessees, and occupants of such Site. 12.9 Assurances to Act in Good Faith. Agency and Participant agree to execute all documents and instruments and to take all action and shall use their best efforts to accomplish the purposes of this Agreement. Agency and Participant shall each diligently and in good faith pursue the satisfaction of any conditions or contingencies subject to their approval. 12.10 Severability. Wherever possible, each provision of this Agreement shall be interpreted in such a manner as to be effective and valid under applicable law. If, however, any provision of this Agreement shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Agreement. 12.11 Interpretation. The terms of this Agreement shall be construed in accordance with the meaning of the language used and shall not be construed for or against either party by reason of the authorship of this Agreement or any other rule of construction which might otherwise apply. The Section headings are for purposes of convenience only, and shall not be construed to limit or extend the meaning of this Agreement. 12.12 Entire Agreement. This Agreement and all documents incorporated herein contain the entire understanding among the parties hereto relating to the transactions contemplated herein and all prior or contemporaneous agreements, understandings, representations, and statements, oral or written, are merged herein and shall be of no further force or effect. 12.13 Waiver; Amendments. All waivers of the provisions of this Agreement, unless specified otherwise herein, must be in writing and signed by the appropriate authorities of Agency or Participant, as applicable. No delay or omission by either party hereto in exercising any right or power accruing upon the compliance or failure of performance by the other party hereto under the provisions of this Agreement shall impair any such right or power or be construed to be a waiver thereof. A waiver by either party hereto of a breach of any of the covenants, conditions or agreements hereof to be performed by the other party shall not be construed as a waiver of any succeeding breach of the same or other covenants, agreements, restrictions or conditions hereof. All amendments hereto must be in writing and signed by the appropriate authorities of Agency and Participant. 12.14 Counterparts. This Agreement may be executed in counterparts, each of which, when this. Agreement shall have been signed by all the parties hereto, shall be deemed to be an original, and such counterparts shall constitute one and the same instrument. 12.15 Authority. Agency represents and warrants that: (i) it is a redevelopment agency duly organized and existing under the laws of the State of California; (ii) by proper action of 394/015610-0040 139234.06 a09/12/01 22 Agency, Agency has been duly authorized to execute and deliver this Agreement, acting by and through its duly authorized officers; and (iii) the entering into this Agreement by Agency does not violate any provision of any other agreement to which Agency is a party. Participant represents and warrants that: (i) it is duly organized and existing under the laws of the State of California; (ii) by proper action of Participant, Participant has been duly authorized to execute and deliver this Agreement, acting by and through its duly authorized principals or officers; and (iii) the entering into this Agreement by Participant does not violate any provision of any other agreement to which Participant is a party to which consent has not been obtained. 12.16 Exhibits. This Agreement includes all exhibits and attachments attached hereto, which are by this reference are incorporated in this Agreement in their entirety. This Agreement also includes the Redevelopment Plan and any other documents incorporated herein by reference, as though fully set forth herein. 12.17 Effective Date. The effective date of this Agreement shall be the latest of the dates set next to the signatures of the parties hereto after all the parties hereto have signed this Agreement, which latest date shall be inserted into the preamble to this Agreement. [end - signature page and exhibits follow] 394/015610-0040 139234.06 a09/12/01 23 IN WITNESS WHEREOF, Agency and Participant have executed this Agreement as of the Effective Date. ATTEST: By:. �• agency Secretary - APPROVED AS TO FORM: RUI'AN & TUCKER, LLP By:_ Attorneys for La Quinta Redevelopment Agency "AGENCY" LA QUINTA REDEVELOPMENT AGENCY, a pub ' o , corporate a po it' By: X - Thomas Genovese, Executive Director "PARTICIPANT" LA QUI 34 LLC, a California limited liability omp y By: Lawrence C. Rael Managing Member 394/015610-0040 139234.06 a09/12/01 24 EXHIBIT "A" LEGAL DESCRIPTION OF THE APARTMENT PARCEL: LOTS 1 TO 11 INCLUSIVE IN BLOCK 126 OF SANTA CARMELITA AT VALE LA QUINTA, UNIT NO. 14, IN THE CITY OF LA QUINTA, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 18 PAGES 82 AND 83 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY. EXCEPTION THEREFROM THOSE PORTIONS OF LOTS 1, 5, 6 AND 11, DEEDED TO THE COUNTY OF RIVERSIDE, BY DOCUMENTS RECORDED MARCH 23, 1978 AS INSTRUMENT NOS. 55038 AND 55039 OF OFFICIAL RECORDS OF RIVERSIDE COUNTY, CALIFORNIA. LEGAL DESCRIPTION OF THE ACQUISITION PARCELS: LOTS 6 AND 7 IN BLOCK 125 OF SANTA CARMELITA AT VALE LA QUINTA, UNIT NO. 149 AS SHOWN BY MAP RECORDED IN BOOK 18, PAGE 82 OF MAPS, RECORDS OF RIVERSIDE COUNTY, CALIFORNIA. 394/015610-0040 1 139234.06 a09/12/01 EXHIBIT "B" SITE MAP r _ w • G•'•► , • eG • "'so •-C •� , / - .. a enIfl ,v alb Y^ Z O a w' / 0 o69*10 i � " J n � R- �- •4 1• _ i•yE as SS*S t dn3NI0V ~_ �i 1 r ' 00 O O •i T O Wv C 3 a 1 G- O p mr-- U w m f 1- -� F - ,,. cs e► O m >I 0 -18------------ Z N 1 . 1 0 .. WLn >- w Ir o O O .r ► o U : w� ~' 1 r. •1 < m n W cu r 1 cl� Z; U N M� „ OK' is es ___- --------------- W _--___-__-__-___ ao � . d' r — —; -Z &GN-3-w— — u n t — — F"---- — w O U ----------------------------- -------- m 1 1 1 a m In - Z I ouco : ¢ a 1 ; - I - r 1 '" Y cy- N No - O m LL 1 m J \ i �S •G • in o N � i-W �, O S Z w 7i Z- Z 1' 1 1 � ♦♦ ' n � O 9� ♦ i.7 9 \ ♦ d du • /LA O dn 4-3 aj z K Y OC oc♦ r� �, - = ar V cao --- . / O Y i..i K ►- Le) N N 1 4 LL- VI O N J WJes N < O < V O • 394/015610-0040 ] 139234.06 a09/12/01 EXHIBIT "B" SITE MAP [SEE FOLLOWING PAGE] 394/015610-0040 139234.06 a09/12/01 [REPLACE THIS PAGE WITH SITE MAP] 394/015610-0040 139234.06 a09/12/01 EXHIBIT "C" SCOPE OF DEVELOPMENT The renovation of the Site shall result in the rehabilitation of the Units on the Apartment Parcel and the rehabilitation of the Acquisition Parcel with new paving and the installation of carports to be used exclusively for vehicle parking for residents leasing Units, in accordance with the following: A. MINIMUM IMPROVEMENTS The following improvements shall be minimum improvements performed by Participant under this Agreement and the disbursements of the Rehabilitation Loan shall first be used toward the payment of the following improvements: 1. A tile mansard roof shall be installed on the entire existing apartment complex. 2. The Acquisition Parcel shall be graded and paved with asphalt paving. 3. Approximately twenty-three (23) carports shall be installed on the Acquisition Parcel. B. ADDITIONAL IMPROVEMENTS Should Rehabilitation Loan funds be available after disbursements devoted toward payment of the improvements identified in Section A above have been made, and the improvements identified in Section A have been completed, or in the sole judgment of the Agency Executive Director will be completed without further disbursements from the Rehabilitation Loan, the remaining Rehabilitation Loan funds may, at Participant's discretion, be disbursed to assist in meeting Participant's costs of the following additional rehabilitation improvements: 1. Upgrading the landscaped common areas; 2. Upgrading the fencing for the complex and carport/parking area; 3. Installing or upgrading patio enclosures on all units having patios; 4. Upgrading or installing wood shingle and Spanish tile on all units; 5. Payment of permit fees to the City related to the fourteen (14) units identified herein and in the Agency Regulatory Agreement as the Restricted Units. 6. Payment for, or reimbursement of, costs incurred by Participant related to upgrading the Units or apartment complex as reasonably approved by the Executive Director. All disbursements for the improvements set forth in this Exhibit "C" shall be subject to the Disbursement Procedures set forth in Exhibit "K." 394/015610-0040 139234.06 a09/12/01 EXHIBIT "D" SCHEDULE OF PERFORMANCE ITEM TIME FOR NO. I ITEM OF PERFORMANCE PERFORMANCE REFERENCE l . Participant submits evidence of Concurrent with Effective Date § 8.0 insurance required by Agreement. of Agreement. 2. Participant submits complete Not later than sixty (60) days § 6.2.2, 6.2.3 application on Project to City, after Close of Escrow. including all required preliminary and final drawings and permit applications, and City has approved same and is ready to issue building permits for the Project upon payment of fees, and Participant has obtained all permits and approvals required to commence construction of the Project.. 3. Participant (i) enters into Sale Completed. §3.1 Escrow Instructions with Owner, _ (ii) opens the Escrow, (iii) delivers to Agency a signed copy of the Sale Escrow Instructions and a copy of the Grant Deed; and (iv) notifies Agency in writing of the name, address, telephone number, and fax number of the Escrow Agent. 4. Participant submits evidence of Prior to Close of Escrow. Agency insurance required by Agency Regulatory Regulatory Agreement. Agreement, § 7.0 5. Participant satisfies all conditions to Not later than September 30, § 3.2-3.7 close of escrow, closes escrow (and 2001. at Closing Agency funds the Agency Escrow Deposit) and acquires the Acquisition Parcels, and Escrow Agent records the Agency Deed of Trust, Agency Regulatory Agreement, Declaration, and Subordination Agreement. 394/015610-0040 139234.06 a09/12/01 6. Participant commences construction Fourteen (14) days after § 6.2.5; Exh. C. of Acquisition Parcel improvements issuance of building permits. (paving, carports, etc.) per Scope of Development, ¶¶ A.2 & A.3. 7. Agency disburses Rehabilitation Per terms of the Agreement. § 4.1; Exh. J Loan (other than Agency Escrow Deposit) in accordance with terms of Agreement. 8. Participant completes construction Within one hundred twenty § 6.2.5; Exh. C. of Acquisition Parcel improvements (120) days after performance (paving, carports, etc.) per Scope of of Item No. 6. Development, ¶¶ A.2 & A.3. 9. Participant completes construction Not later than one hundred7] § 6.2.5, Exh. C of the tile mansard roof on the eighty (180) days after Apartment Parcel per the Scope of performance of Item No. 8. Development ¶ A.1. 10. Participant completes any of the Not later than sixty (60) days § 6.2.5; 6.5, Exh. Additional Improvements per the after performance of Item No. C. Scope of Development ¶ B funded 9. in whole or in part with Rehabilitation Loan, obtains a certificate of occupancy from the City (if applicable), and requests Agency issuance of the Release of Construction Covenants. 11. Agency issues Release of Within ten (10) days after § 6.5 Construction Covenants. Participant's request, if Participant is entitled thereto. 12. Participant submits annual report Not later than the September 1 Agency pursuant to Health and Safety Code following the June 30 end of Regulatory Agr., Section 33418 to Agency. each fiscal year for term of the § 3.7 Regulatory Agreement. It is understood that this Schedule of Performance is subject to all of the terms and conditions of the text of the Agreement. The summary of the items performance in this Schedule of Performance is not intended to supersede or modify the more complete description in the text; in the event of any conflict or inconsistency between this Schedule of Performance and the text of the Agreement, the text shall govern. 394/015610-0040 139234.06 a09/12/01 2 EXHIBIT "E" AGENCY NOTE [SEE FOLLOWING PAGES] 394/015610-0040 139234.06 a09/12/01 NOTE 2001 ("Note Date") $350,000.00 ("Loan Amount") FOR VALUE RECEIVED, the undersigned (herein, the "Maker") hereby promises to pay to the order of the LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic ("Holder" or "Agency"), at a place designated by Holder, the principal sum of THREE HUNDRED FIFTY THOUSAND DOLLARS ($350,000.00) ("Note Amount"), plus accrued interest, or such lesser amount which shall from time to time be owing hereunder pursuant to the terms hereof. The principal sum hereof shall be disbursed pursuant to the terms and conditions set forth in that certain Affordable Housing Rehabilitation Agreement by and among Maker and Holder, dated September 13, 2001 ("AHRA"), pertaining to Maker's redevelopment of certain real property defined in the AHRA as the "Site." Reference is also made to the following additional agreements and documents, the first three of even date herewith, involving Maker and Holder and/or pertaining to the Site: (i) Deed of Trust with Assignment of Rents by and between Maker as borrower, Holder as beneficiary, and Orange Coast Title Company as Trustee, and recorded in the Office of the Riverside County Recorder ("Agency Deed of Trust"). The Agency Deed of Trust partially secures repayment of this Note. (ii) Regulatory Agreement and Declaration of Covenants and Restrictions, by and between Maker and Holder, for the benefit of Holder, and recorded in the Office of the Riverside County Recorder ("Agency Regulatory Agreement"). (iii) Declaration of Covenants, Conditions, and Restrictions And Agreement To Hold Property As One Parcel, by and between Maker and Holder, for the benefit of Holder, and recorded in the Office of the Riverside County Recorder ("Declaration"). (iv) Subordination Agreement, by and among Maker, Holder, and Rubicon Realty Capital Corporation, recorded in the Office of the Riverside County Recorder (dated on or about August 9, 2001). All of the foregoing listed documents are referred to herein collectively as the "Agency Agreements." The Agency Agreements are incorporated herein as though fully set forth. Except as otherwise provided herein, the defined terms used in this Note shall have the same meaning as set forth in the AHRA. 1. Purpose of Loan. The loan evidenced by this Note is a loan for the purpose of rehabilitating the Site in accordance with the AHRA. 2. Principal Amount. The principal amount of this Loan shall be THREE HUNDRED FIFTY THOUSAND DOLLARS ($350,000.00). Simple interest shall accrue on the outstanding principal amount at seven percent (7%) per annum, compounded annually. 394/015610-0040 139234.06 a09/12/01 3. Term of Note: Renavment. 3.1 Subject to provisions of Paragraph 4 hereof which provides for acceleration of all principal and accrued interest and immediate repayment thereof in the event of a default by Maker, this Note shall expire and be of no force or effect as of the date of expiration of the Agency Regulatory Agreement. Maker shall not be obligated to make any payments on this Note and unless and until any of the events described in Paragraph 4 occur. Upon the occurrence of an uncured default, the full Note Amount and all accrued interest thereon shall be immediately due and payable as set forth in Paragraph 4. 3.2 Maker shall have the right to prepay all or any portion of this Note at any time without penalty, and upon such repayment the Agency Deed of Trust shall be reconveyed. Prepayment shall not affect the Agency Regulatory Agreement or the term of the Agency Regulatory Agreement. 3.3 Any payments made by Maker in payment of this Note shall be applied in the following order: (i) first to the interest then accrued and due on the unpaid principal balance under this Note, (ii) second to reduction of the principal balance of this Note. 4. Default; Cross -Default; Acceleration. 4.1 In addition to Maker's failure to timely perform the requirements of this Note, a default by Maker of any of the Agency Agreements shall constitute a default of this Note and all of the Agency Agreements. 4.2 In the event of a default of this Note or a default of any of the Agency Agreements by Maker, which default has not been cured within the cure period applicable to such default, Holder may, at its option, declare this Note and the entire obligation hereby evidenced, including accrued interest, immediately due and payable and collectible then or thereafter as Holder may elect, regardless of the date of maturity, and notice of the exercise of said option is hereby expressly waived by Maker. 5. Collection Costs; Attorneys' Fees. If, because of any event of default under this Note or any of the Agency Agreements, any attorney is engaged by Holder to enforce or defend any provision of this instrument, whether or not suit is filed hereon, then Maker shall pay upon demand reasonable attorneys' fees, expert witness fees and all costs so incurred by Holder together with interest thereon until paid at the applicable rate of interest payable hereunder, as if such fees and costs had been added to the principal owing hereunder. 6. Waivers by Maker. Maker and all endorsers, guarantors and persons liable or to become liable on this Note waive presentment, protest and demand, notice of protest, demand and dishonor and nonpayment of this Note and any and all other notices or matters of a like nature, and consent to any and all renewals and extensions near the time of payment hereof and agree further that at any time and from time to time without notice, the terms of payment herein may be modified or the security described in any documents securing this Note released in whole or in part, or increased, changed or exchanged by agreement between Holder and any owner of the premises affected by said documents securing this Note, without in any way affecting the 394/015610-0040 2 139234.06 a09/12/01 liability of any party to this Note or any persons liable or to become liable with respect to any indebtedness evidenced hereby. 7. Severability. The unenforceability or invalidity of any provision or provisions of this Note as to any persons or circumstances shall not render that provision or those provisions unenforceable or invalid as to any other provisions or circumstances, and all provisions hereof, in all other respects, shall remain valid and enforceable. 8. Modifications. Neither this Note nor any term hereof may be waived, amended, discharged, modified, changed or terminated orally; nor shall any waiver of any provision hereof be effective except by an instrument in writing signed by Maker and Holder. No delay or omission on the part of Holder in exercising any right hereunder shall operate as a waiver of such right or of any other right under this Note. 9. No Waiver by Holder. No waiver of any breach, default or failure of condition under the terms of this Note shall be implied from any failure of the Holder of this Note to take, or any delay be implied from any failure by the Holder in taking action with respect to such breach, default or failure from any prior waiver of any similar or unrelated breach, default or failure. 10. Usury. Notwithstanding any provision in this Note, the total liability for payment in the nature of interest shall not exceed the limit imposed by applicable laws of the State of California. 11. Nonassignability. Maker may only Transfer (as that term is defined in the AHRA) this Note in accordance with provisions and restrictions pertaining to a transfer of the AHRA as set forth in the AHRA. Holder may freely Transfer Holder's interest in this Note in any manner, at Holder's sole discretion; provided, that at the time of such Transfer Holder also transfers .the AHRA to such transferee. 12. Governing Law. This Note has been executed and delivered by Maker in the State of California and is to be governed and construed in accordance with the laws thereof. 13. Time of Essence. Time is of the essence in the performance of the obligations and provisions set forth in this Note. IN WITNESS WHEREOF, Maker has executed this Note as of the Note Date. "Maker" LA QUINTA 34 LLC, a California limited liability company By: Lawrence C. Rael, Managing Member 394/015610-0040 139234.06 a09/12/01 3 EXHIBIT "F" AGENCY DEED OF TRUST [SEE FOLLOWING PAGES] 394/015610-0040 139234.06 a09/12/01 Recording Requested By And When Recorded Return to: La Quinta Redevelopment Agency 78-495 Calle Tampico La Quinta, CA 92253 Attn: Executive Director SPACE ABOVE THIS LINE FOR RECORDER'S USE EXEMPT FROM RECORDING FEE PER GOV. CODE § 6103 DEED OF TRUST WITH ASSIGNMENT OF RENTS AND RIDER ATTACHED HERETO NOTE: RIDER ATTACHED TO THIS DEED OF TRUST CONTAINING TERMS INCLUDING SECURITY AGREEMENT AND FIXTURE FILING. This DEED OF TRUST WITH ASSIGNMENT OF RENTS AND RIDER ATTACHED HERETO ("Deed of Trust"), is made , 2001, between LA QUINTA 34 LLC, a California limited liability company, herein called TRUSTOR, whose address is 1800 East Garry Avenue, Suite 177, Santa Ana, CA 92705, ORANGE COAST TITLE COMPANY, a California corporation, herein called TRUSTEE, and LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic, herein called BENEFICIARY. WITNESSETH: That Trustor grants to Trustee in trust, with power of sale, Trustor's estate, dated on or about the date hereof, in that property in the City of La Quinta, County of Riverside, State of California, described as: LOTS 1 TO 11 INCLUSIVE IN BLOCK 126 OF SANTA CARMELITA AT VALE LA QUINTA, UNIT NO. 149 IN THE CITY OF LA QUINTA, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 18 PAGES 82 AND 83 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY. EXCEPTION THEREFROM THOSE PORTIONS OF LOTS 1, 5,6 AND 11, DEEDED TO THE COUNTY OF RIVERSIDE, BY DOCUMENTS RECORDED MARCH 23, 1978 AS INSTRUMENT NOS. 55038 AND 55039 OF OFFICIAL RECORDS OF RIVERSIDE COUNTY, CALIFORNIA. AND LOTS 6 AND 7 IN BLOCK 125 OF SANTA CARMELITA AT VALE LA QUINTA, UNIT NO. 14, AS SHOWN BY MAP RECORDED IN BOOK 18, PAGE 82 OF MAPS, RECORDS OF RIVERSIDE COUNTY, CALIFORNIA together with the rents, issues and profits thereof, subject, however, to the right, power and authority hereinafter given to and conferred upon Beneficiary to collect and apply such rents, issues and profits for the purpose of securing (1) payment of the sum of THREE HUNDRED FIFTY THOUSAND DOLLARS ($350,000.00), with interest thereon according to the terms of a promissory note or notes of even date herewith made by Trustor, payable to order of Beneficiary, and extensions or renewals thereof, (2) the performance of each agreement of Trustor incorporated by reference or contained herein; and (3) payment of additional sums and interest thereon which may hereafter be loaned to Trustor, or his successors or assigns, when evidenced by a promissory note or notes reciting that they are secured by this Deed of Trust. 394/015610-0040 139234.06 a09/12/01 To protect the security of this Deed of Trust, and with respect to the Property above described, Trustor expressly makes each and all of the agreements, and adopts and agrees to perform and be bound by each and all of the terms and provisions set forth in subdivision A, and it is mutually agreed that each and all of the terms and provisions set forth in subdivision B of the fictitious deed of trust recorded in Orange County August 17, 1964, and in all other counties August 18, 1964, in the book and at the page of Official Records in the office of the county recorder of the county where said property is located, noted below opposite the name of such county, namely: COUNTY BOOK PAGE COUNTY BOOK PAGE COUNTY BOOK PAGE COUNTY BOOK PAGE Alameda 1288 556 Kings 858 713 Placer 1028 379 Sierra 38 187 Alpine 3 130-31 Lake 437 110 Plumas 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 Colusa 323 391 Marin 1849 122 San Bernardino 6213 768 Sutter 655 585 Contra Costa 4684 l Mariposa 90 453 San Francisco A-804 596 Tehama 457 183 Del Norte 101 549 Mendocino 667 99 San Joaquin 2855 283 Trinity 108 595 El Dorado 704 635 Merced 1660 753 San Luis Obispo 1311 137 Tulare 2530 108 Fresno 5052 623 Modoc 191 93 San Mateo 4778 175 Tuolumne 177 160 Glenn 469 76 Mono 69 302 Santa Barbara 2065 881 Ventura 2607 237 Humboldt 801 83 Monterey 357 239 Santa Clara 6626 664 Yolo 769 16 Imperial 1189 701 Napa 704 742 Santa Cruz 1638 607 Yuba 398 693 Inyo 165 672 Nevada 363 94 Shasta 800 633 Kern 3756 690 Orange 7182 18 San Diego SERIES 5 Book 1964, Page 149774 shall inure to and bind the parties hereto, with respect to the property above described. Said agreements, terms and provisions contained in said subdivisions A and B (identical in all counties, and printed on pages 3 and 4 hereof) are by the within reference thereto, incorporated herein and made a part of this Deed of Trust for all purposes as fully as if set forth at length herein, and Beneficiary may charge for a statement regarding the obligation secured hereby, provided the charge therefor does not exceed the maximum allowed by law. The undersigned Trustor, requests that a copy of any notice of default and any notice of sale hereunder be mailed to him at his address hereinbefore set forth. SEE RIDER ATTACHED TO THIS DEED OF TRUST Signature of Trustor STATE OF CALIFORNIA } LA QUINTA 34 LLC, COUNTY OF } a California limited liability company .W before me, , personally appeared LAWRENCE C. RAEL, personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose names(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signatures(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. Signature (This area for official notarial seal) Lawrence C. Rael, Managing Member 394/015610-0040 139234.06 a09/12/01 2 DO NOT RECORD The following is a copy of Subdivisions A and B of the fictitious Deed of Trust recorded in each county in California as stated in the foregoing Deed of Trust and incorporated by reference in said Deed of Trust as being a part thereof as if set forth at length therein. A. To protect the security of this Deed of Trust, Trustor agrees: 1) To keep said property in good condition and repair, not to remove or demolish any building thereon; to complete or restore promptly and in a good and workmanlike manner any building which may be constructed, damaged or destroyed thereon and to pay when due all claims for labor performed and materials furnished therefor, to comply with all laws affecting said property or requiring any alterations or improvements to be made thereon; not to commit or permit waste thereof, not to commit, suffer or permit any act upon said property in violation of law; to cultivate, irrigate, fertilize, fumigate, prune and do all other acts which from the character or use of said property may be reasonably necessary, the specific enumerations herein not excluding the general. 2) To provide, maintain and deliver to Beneficiary fire insurance satisfactory to and with loss payable to Beneficiary. The amount collected under any fire or other insurance policy may be applied by Beneficiary upon any indebtedness secured hereby and in such order as Beneficiary may determine, or at the option of Beneficiary the entire amount so collected or any part thereof may be released to Trustor. Such application or release shall not cure or waive any default or notice of default hereunder or invalidate any act done pursuant to such notice. 3) To appear in and defend any action or proceeding purporting to affect the security hereof or the rights or powers of Beneficiary or Trustee; and to pay all costs and expenses, including cost of evidence of title and attorney's fees in a reasonable sum, in any such action or proceeding in which Beneficiary or Trustee may appear, and in any suit brought by Beneficiary to foreclose this Deed. 4) To pay: at least ten (10) days before delinquency all taxes and assessments affecting said property, including assessments on appurtenant water stock; when due, all encumbrances, charges and liens, with interest, on said property or any part thereof, which appear to be prior or superior hereto; all costs, fees and expenses of this Trust. Should Trustor fail to make any payment or to do any act as herein provided, then Beneficiary of Trustee, but without obligation so to do and without notice to or demand upon Trustor and without releasing Trustor from any obligation hereof, may: make or do the same is such manner and to such extent as either may deem necessary to protect the security hereof, Beneficiary or Trustee being authorized to enter upon said property for such purposes; appear in and defend any action or proceeding purporting to affect the security hereof or the rights or powers of Beneficiary or Trustee; pay, purchase, contest or compromise any encumbrance, charge or lien which in the judgment of either appears to be prior or superior hereto; and, in exercising any such powers, pay necessary expenses, employ counsel and pay his reasonable fees. 5) To pay immediately and without demand all sums so expended by Beneficiary or Trustee, with interest from the date of expenditure at the amount allowed by law in effect at the date hereof, and to pay for any statement provided for by law in effect at the date hereof regarding the obligation secured hereby any amount demanded by the Beneficiary not to exceed the maximum allowed by law at the time when said statement is demanded. B. It is mutually agreed: 1) That any award in connection with any condemnation for public use of or injury to said property or any part thereof is hereby assigned and shall be paid to Beneficiary who may apply or release such moneys received by him in the same manner and with the same effect as above provided for disposition of proceeds of fire or other insurance. 2) That by accepting payment of any sum secured hereby after its due date, Beneficiary does not waive his right either to require prompt payment when due of all other sums so secured or to declare default for failure so to pay. 3) That at any time or from time to time, without liability therefor and without notice, upon written request of Beneficiary and presentation of this Deed and said note for endorsement, and without affecting the personal liability of any person for payment of the indebtedness secured hereby, Trustee may: reconvey any part of said property; consent to the making of any map or plat thereof, join in granting any easement thereon, or join in any extension agreement or any agreement subordinating the lien or charge hereof. 4) That upon written request of Beneficiary stating that all sums secured hereby have been paid, and upon surrender of this Deed and said note to Trustee for cancellation and retention or other disposition as Trustee in its sole discretion may choose and upon payment of its fees, Trustee shall reconvey, without warranty, the property then held hereunder. The recitals in such reconveyance of any matters or facts shall be conclusive proof of the truthfulness thereof. The Grantee in such reconveyance may be described as "the person or persons legally entitled thereto." 5) That as additional security, Trustor hereby gives to and confers upon Beneficiary the right, power and authority, during the continuance of these Trusts, to collect the rents, issues and profits of said property, reserving unto Trustor the right, prior to any default by Trustor in payment of any indebtedness secured hereby or in the performance of any agreement hereunder, to collect and retain such rents, issues and profits as they become due and payable. Upon any such default, Beneficiary may at any time without notice, either in person, by agent, or be a receiver to be appointed by a court, and without regard to the adequacy of any security for the indebtedness hereby secured, enter upon and take possession of said property or any part thereof, in his own name sue for or otherwise collect such rents, issues, and profits, including those past 394/015610-0040 139234.06 a09/12/01 due and unpaid, and apply the same, less costs and expenses of operation and collection, including reasonable attorney's fees, upon any indebtedness secured hereby, and in such order as Beneficiary may determine. The entering upon and taking possession of said property, the collecting of such rents, issues and profits and the application thereof as aforesaid, shall not cure or waive any default or notice of default hereunder or invalidate any act done pursuant to such notice. 6) That upon default by Trustor in payment of any indebtedness secured hereby or in the performance of any agreement hereunder, Beneficiary may declare all sums secured hereby immediately due and payable by delivery to Trustee of written declaration of default and demand for sale and of written notice of default and of election to cause to be sold said property, which notice Trustee shall cause to be filed for record. Beneficiary also shall deposit with Trustee this Deed, said note and all documents evidencing expenditures secured hereby. After the lapse of such time as may then be required by law following the recordation of said notice of default, and notice of sale having been given as then required by law, Trustee, without demand on Trustor, shall sell said property at the time and place fixed by it in said notice of sale, either as a whole or in separate parcels, and in such order as it may determine, at public auction to the highest bidder for cash in lawful money of the United States, payable at time of sale. Trustee may postpone sale of all or any portion of said property by public announcement at such time and place of sale, and from time to time thereafter may postpone such sale by public announcement at the time fixed by the preceding postponement. Trustee shall deliver to such purchaser its deed conveying the property so sold, but without any covenant or warranty, express or implied. The recitals in such deed of any matters or facts shall be conclusive proof of the truthfulness thereof. Any person, including Trustor, Trustee, or Beneficiary as hereinafter defined, may purchase at such sale. After deducting all costs, fees and expenses of Trustee and of this Trust, including cost of evidence of title in connection with sale, Trustee shall apply the proceeds of sale to payment of. all sums expended under the terms hereof, not then repaid, with accrued interest at the amount allowed by law in effect at the date hereof; all other sums then secured hereby; and the remainder, if any, to the person or persons legally entitled thereto. 7) Beneficiary, or any successor in ownership of any indebtedness secured hereby, may from time to time, by instrument in writing, substitute a successor or successors to any Trustee named herein or acting hereunder, which instrument, executed by the Beneficiary and duly acknowledged and recorded in the office of the recorder of the county or counties where said property is situated shall be conclusive proof of proper substitution of such successor Trustee or Trustees, who shall, without conveyance from the Trustee predecessor, succeed to all its title, estate, rights, powers and duties. Said instrument must contain the name of the original Trustor, Trustee and Beneficiary hereunder, the book and page where this Deed is recorded and the name and address of the new Trustee. 8) That this Deed applies to, inures to the benefit of, and binds all parties hereto, their heirs, legatees, devisees, administrators, executors, successors and assigns. The term Beneficiary shall mean the owner and holder, including pledgees, of the note secured hereby, whether or not named as Beneficiary herein. In this Deed, whenever the context so requires, the masculine gender includes the feminine and/or neuter, and the singular number includes the plural. 9) That Trustee accepts this Trust when this Deed, duly executed and acknowledged, is made a public record as provided by law. Trustee is not obligated to notify any party hereto of pending sale under any other Deed of Trust or of any action or proceeding in which Trustor, Beneficiary or Trustee shall be a party unless brought by Trustee. DO NOT RECORD REQUEST FOR FULL RECONVEYANCE TO _ , TRUSTEE: The undersigned is the legal owner and holder of the note or notes and of all indebtedness secured by the foregoing Deed of Trust. Said note or notes, together with all other indebtedness secured by said Deed of Trust, have been fully paid and satisfied; and you are hereby requested and directed, on payment to you of any sums owing to you under the terms of said Deed of Trust, to cancel said note or notes above mentioned, an all other evidences of indebtedness secured by said Deed of Trust delivered to you herewith, together with the said Deed of Trust, and to reconvey, without warranty, to the parties designated by the terms of said Deed of Trust, all the estate now held by you under the same. Dated Please mail Deed of Trust, Note and Reconveyance to Do Not lose or destroy this Deed of Trust OR THE NOTE which it secures. Both must be delivered to the Trustee for cancellation before reconveyance will be made. 394/015610-0040 139234.06 a09/12/01 RIDER TO SUBORDINATED DEED OF TRUST WITH ASSIGNMENT OF RENTS THIS RIDER TO DEED OF TRUST WITH ASSIGNMENT OF RENTS ("Rider") is executed this day of , 2001, by LA QUINTA 34 LLC, a California limited liability company, herein "Trustor," in favor of the LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic, herein `Beneficiary," the same parties to that certain form Deed of Trust With Assignment of Rents, of even date hereto, to which this Rider is attached. This Rider is made a part of and is incorporated into said Deed of Trust. This Rider shall supersede any conflicting term or provision of the form Deed of Trust to which it is attached. Reference is made to (i) that certain Note by and between Trustor and Beneficiary, dated on or about the date set forth above, the repayment of which by Trustor is secured by this Deed of Trust ("Agency Note"), and (ii) to the Agency Agreements which are described in the Agency Note. The parties hereto agree: 1. Property. The estate subject to this Deed of Trust is Trustor's fee estate in the real property legally described in the foregoing Deed of Trust to which this Rider is attached (the "Property"). 2. Obligations Secured. Trustor makes this grant and assignment for the purpose of securing the following obligations ("Secured Obligations"): a. Payment to Beneficiary of all indebtedness at any time owing under the terms of the Note; b. Payment and performance of all obligations of Trustor under this Deed of Trust; C. Payment and performance of all obligations of Trustor under the Agency Agreements. d. Payment and performance of all future advances and other obligations of Trustor or any other person, firm, or entity with the approval of Trustor, may agree to pay and/or perform (whether as principal, surety or guarantor) for the benefit of Beneficiary, when the obligation is evidenced by a writing which recites that it is secured by this Deed of Trust; and e. All modifications, extensions and renewals of any of the obligations secured hereby, however evidenced. 3. Obligations. The term "obligations" is used herein in its broadest and most comprehensive sense and shall be deemed to include, without limitation, all interest and charges, prepayment charges, late charges and fees at any time accruing or assessed on any of the Secured Obligations. 394/015610-0040 139234.06 a09/12/01 1 4. Incorporation. All terms of the Agency Note, Agency Agreements, and the Secured Obligations are incorporated herein by this reference. All persons who may have or acquire an interest in the Property shall be deemed to have notice of the terms of all of the foregoing documents. 5. Mortgagee -in -Possession. Neither the assignment of rents set forth in the Deed of Trust nor the exercise by Beneficiary of any of its rights or remedies hereunder shall be deemed to make Beneficiary a "mortgagee -in -possession" or otherwise liable in any manner with respect to the Property, unless Beneficiary, in person or by agent, assumes actual possession thereof. Nor shall appointment of a receiver for the Property by any court at the request of Beneficiary or by agreement with Trustor, or the entering into possession of the Property by such receiver, be deemed to make Beneficiary a "mortgagee -in -possession" or otherwise liable in any manner with respect to the Property. 6. No Cure. In the event Beneficiary collects and receives any rents under the Deed of Trust upon any default hereof, such collection or receipt shall in no way constitute a curing of the default. 7. Possession Upon Default. Upon the occurrence of and during the continuation of a default, Beneficiary, after having given notice and the applicable cure periods having expired with the default having not been cured (hereinafter, a "default"), may, at its option, without any action on its part being required and without in any way waiving such default, take possession of the Property in accordance with applicable law and have, hold, manage, lease and operate the same, on such terms and for such period of time as Beneficiary may deem proper, and may collect and receive all rents and profits, with full power to make, from time to time, all commercially reasonable alterations, renovations, repairs or replacements thereto as may seem proper to Beneficiary, and to apply such rents and profits to the payment of (a) the cost of all such alterations, renovations, repairs and replacements, and all costs and expenses incident to taking and retaining possession of the Property, and the management and operation thereof, and keeping the same properly insured; (b) all taxes, charges, claims, assessments, and any other liens which may be prior in lien or payment of the Note, and premiums for insurance, with interest on all such items; and (c) the indebtedness secured hereby, together with all costs and attorney's fees, in such order or priority as to any of such items as Beneficiary in its sole discretion may determine, any statute, law, custom or use to the contrary notwithstanding. Any amounts received by Beneficiary or its agents in the performance of any acts prohibited by the terms of this assignment, including, but not limited to, any amounts received in connection with any cancellation, modification or amendment of any lease prohibited by the terms of this assignment and any rents and profits received by Trustor after the occurrence of a default shall be held by Trustor as trustee for Beneficiary and all such amounts shall be accounted for to Beneficiary and shall not be commingled with other funds of the Trustor. Any person receiving any portion of such trust funds shall receive the same in trust for Beneficiary as if such person had actual or constructive notice that such funds were impressed with a trust in accordance therewith. 8. Receiver. In addition to any and all other remedies of Beneficiary set forth under this Deed of Trust or permitted at law or in equity, if a default shall have occurred, Beneficiary, to the extent permitted by law and without regard to the value, adequacy or occupancy of the 394/015610-0040 2 139234.06 a09/12/01 security for the Note and other sums secured hereby, shall be entitled as a matter of right if it so elects to the appointment of a receiver to enter upon and take possession of the Property and to collect all rents and profits and apply the same as the court may direct, and such receiver may be appointed by any court of competent jurisdiction by ex parte application and without notice, notice of hearing being hereby expressly waived. The expenses, including receiver's fees, attorneys' fees, costs and agent's compensation, incurred pursuant to the power herein contained shall be secured by this Deed of Trust. 9. Notice to Beneficiary. Notices to Beneficiary shall be sent to Beneficiary addressed to: La Quinta Redevelopment Agency 78-495 Calle Tampico La Quinta, CA 92263 Attn: Executive Director IN WITNESS WHEREOF, Trustor has executed this Rider on the date of Trustor's acknowledgment hereinbelow, to be effective for all purposes as of the day and year first set forth above. TRUSTOR: LA QUINTA 34 LLC, a California limited liability company M Lawrence C. Rael, Managing Member 394/015610-0040 3 139234.06 a09/12/01 STATE OF CALIFORNIA ss. COUNTY OF On before me, , personally appeared personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. Witness my hand and official seal. Notary Public [SEAL] 394/015610-0040 139234.06 a09/12/01 EXHIBIT "G" AGENCY REGULATORY AGREEMENT [SEE FOLLOWING PAGES] 394/015610-0040 139234.06 a09/12/01 Recording Requested By And When Recorded Mail To: La Quinta Redevelopment Agency 78-495 Calle Tampico La Quinta, CA 92253 Attn: Executive Director (Space Above This Line for Recorder's Office Use Only) (Exempt from Recording Fee per Gov. Code 6103) REGULATORY AGREEMENT AND DECLARATION OF COVENANTS AND RESTRICTIONS THIS REGULATORY AGREEMENT AND DECLARATION OF COVENANTS AND RESTRICTIONS ("Agreement") is made and entered into this day of , 2001, by and between LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic ("Agency") and LA QUINTA 34 LLC, a California limited liability company ("Participant"). RECITALS: A. Participant is the owner of fee title to that certain real property more particularly described in Attachment No. 1, attached hereto and incorporated by reference herein (the "Site"). B. Pursuant to an Affordable Housing Rehabilitation Agreement, by and among Participant and Agency, dated September 13, 2001 (the "AHRA"), Agency has provided a loan to Participant in the sum of Three Hundred Fifty Thousand Dollars ($350,000.00) (the "Agency Loan") for the purpose of assisting Participant's rehabilitation of an existing apartment complex on the Site and to provide on-site/off-street parking for the residents of the apartments on the Site (the 'Project"). The AHRA requires Participant to enter into this Agreement, which provides, among other requirements, that the rental and occupancy of not fewer than fourteen (14) of the apartment units on the Site be rented to and occupied by persons and families whose household income does not exceed 120% of the median income for Riverside County, in effect from time to time. - C. Reference is also made to the following documents, the first three of even date herewith: (i) Note, by Participant as Maker and borrower in favor of the Agency as lender, ("Agency Note"). The Agency Note evidences the Agency Loan. (ii) Deed of Trust with Assignment of Rents, by and between Participant as borrower and Agency as beneficiary, and recorded in the Office of the Riverside County Recorder ("Agency Deed of Trust"). The Agency Deed of Trust. partially secures repayment of the Agency Note. 394/015610-0040 139234.06 a09/12/01 (iii) Declaration of Covenants, Conditions, and Restrictions And Agreement To Hold Property As One Parcel, by and between Participant and Agency, and recorded in the Office of the Riverside County Recorder ("Declaration"). (iv) Subordination Agreement, by and among Maker, Holder, and Rubicon Realty Capital Corporation, recorded in the Office of the Riverside County Recorder (dated on or about August 9, 2001). The AHRA and all of the foregoing listed documents are referred to herein collectively as the "Agency Agreements." The Agency Agreements are incorporated herein as if fully set forth. D. Pursuant to the this Agreement and the Agency Agreements, Participant has agreed to rehabilitate the Site and develop thereon, and thereafter maintain, a rental housing project with not fewer than fourteen (14) units restricted to rental and occupancy to persons and families whose household income does not exceed 120% of the median income for Riverside County. E. Agency and Participant now desire to place restrictions upon the use and operation of the Site, in order to ensure that the Site shall be operated continuously as a rental apartment complex in accordance with the terms hereof. AGREEMENT: NOW, THEREFORE, the Participant and Agency declare, covenant and agree, by and for themselves, their heirs, executors, administrators, successors and assigns, and all persons claiming under or through them, that, for a term equal to thirty (30) years commencing upon the date of the recordation of the Release of Construction Covenants for the Site in accordance with the AHRA„ as follows: 1.0 DEFINITIONS. 1.1 Riverside County Median Income. For purposes of this Agreement, the "Riverside County Median Income" as of any date shall be determined by reference to the regulations published by the California Department of Housing and Community Development pursuant to Health and Safety Code Section 50093, or its successor, as of such date. 1.2 Unit. As used in this Agreement, the term "Unit" or "unit" shall mean a rental apartment dwelling unit on the Site. 1.3 Restricted Unit. As used in this Agreement, the term "Restricted Unit" shall mean not fewer than fourteen (14) Units to be rented to and occupied by Eligible Tenants. 1.4 Eligible Tenant. As used in this Agreement, the term "Eligible Tenant" shall refer to a Moderate Income Tenant. 1.5 Moderate Income. As used in this Agreement, the term "Moderate Income" shall mean household income, adjusted for family size, which does not exceed one hundred twenty percent (120%) of the Riverside County Median Income. 394/015610-0040 2 139234.06 a09/12/01 1.6 Moderate Income Tenant. As used in this Agreement, the term "Moderate Income Tenant" shall mean a tenant whose household income does not exceed Moderate Income and who is otherwise eligible to rent, and does rent, a Restricted Unit and thus is an Eligible Tenant for a Restricted Unit. 1.7 Affordable Rent. As used in this Agreement, the term "Affordable Rent" shall mean annual rentals whose amount does not exceed the maximum percentage of income that can be devoted to rent by a Moderate Income Tenant as set by California law. 1.8 Unrestricted Unit. As used in this Agreement, the term "Unrestricted Unit" shall mean a Unit that is not a Restricted Unit, i.e., a Unit that is not subject to the affordability covenants that apply to the Restricted Units. 2.0 RESIDENTIAL RENTAL PROPERTY. 2.1 Rehabilitation of the Site. Participant shall rehabilitate the Site and develop the Project thereon in accordance with the Agency Agreements, including the Schedule of Performance set forth in the AHRA, for the purpose of providing the Restricted Units described herein and in the Agency Agreements. The Project shall be owned, managed, and operated as a rental apartment project, with not fewer than fourteen (14) Units rented and occupied as Restricted Units as provided in this Agreement. 2.2 Facilities. All of the dwelling units in the Project shall contain facilities for living, sleeping, eating, cooking and sanitation in accordance with the this Agreement, the AHRA, the Agency Agreements, and all of the permits and approvals for the Project. 2.3 Residential Use. Without the Agency's prior written consent which consent may be given or withheld in its sole and absolute discretion. none of the dwelling units in the Project will at any time be utilized on a transient basis or will ever be used as a hotel, motel, dormitory, fraternity house, sorority house, rooming house, nursing home, hospital, sanitarium, or trailer court or park, nor shall the Units be used for day care facilities or as a place of business except as may otherwise be allowed by applicable law. 2.4 Conversion of Units. No part of the Project will at any time be owned by a cooperative housing corporation, nor shall the Participant take any steps in connection with the conversion to such ownership or uses to condominiums, or to any other form of ownership, without the prior written approval of Agency which approval may be given or withheld in its sole and absolute discretion. 2.5 Preference to Eligible Tenants. All of the dwelling units will be available for rental in accordance with the terms of this Agreement, and the Participant shall not give preference to any particular class or group in renting the dwelling units in the Project, except to the extent that the Restricted Units are required to be leased or rented to Eligible Tenants and except as provided in Section 3.5 below. 2.6 Resident Manager and Staff Units. A resident manager or staff unit or units may be counted as a Restricted Unit only if the tenants of such Unit(s) are Eligible Tenants. 394/015610-0040 139234.06 a09/12/01 3 2.7 Liability of Participant. Participant and any manager it employs shall not incur any liability under this Agreement as a result of fraud or intentional misrepresentation by a tenant. 2.8 Qualified Affordable Housing Preservation Project. The beneficiary/ies of this Agreement elect/s to define the Project to which this Agreement applies as a "qualified affordable housing preservation project" within the meaning of Government Code Section 7260(c)(3)A) and by this designation such beneficiary/ies may, but are not required to, utilize the provisions of said section of the Government Code. 3. OCCUPANCY OF RESTRICTED UNITS BY ELIGIBLE TENANTS. Participant hereby represents, warrants, and covenants as follows: 3.1 Occupancy Levels. Except as expressly provided herein, throughout the term of this Regulatory Agreement, the Restricted Units shall be continuously occupied or held vacant and available for occupancy by Eligible Tenants. 3.2 Rental Rates. Participant hereby agrees to and shall rent Restricted Units occupied by Eligible Tenants at no greater than Affordable Rent. 3.3 Occupancy By Eligible Tenant. A Restricted Unit occupied by an Eligible Tenant who qualified as a Moderate Income Tenant at the commencement of the occupancy, shall be treated as occupied by an Eligible Tenant at such income level until a recertification of such Eligible Tenant's income in accordance with Section 3.7 below demonstrates that such tenant no longer qualifies as an Eligible Tenant at that income level. A Restricted Unit previously occupied by an Eligible Tenant and then vacated shall be considered occupied by an Eligible Tenant until the Restricted Unit is reoccupied. Any vacated Restricted Unit shall be held vacant until re -leased to an Eligible Tenant, unless there are sufficient numbers of Eligible Tenants then leasing and occupying Units. 3.4 Income Computation Certificate. Immediately prior to an Eligible Tenant's occupancy of a Restricted Unit, Participant shall obtain and maintain on file an Income Computation and Certification form (which form shall be approved in advance by the Agency Executive Director) from each such Eligible Tenant dated immediately prior to the date of initial occupancy in the Project by such Eligible Tenant. In addition, Participant shall provide such further information as may be required in the future by the Agency. Participant shall use its best efforts to verify that the income provided by an applicant is accurate by taking the following steps as a part of the verification process: (i) obtain three (3) pay stubs for the most recent pay periods; (ii) obtain a written verification of income and employment from applicant's current employer; (iii) obtain an income verification form from the Social Security Administration and/or California Department of Social Services if the applicant receives assistance from either agency; (iv) if an applicant is unemployed or did not file a tax return for the previous calendar year, obtain other verification of such applicant's income as is satisfactory to the Agency; or (v) such other information as may be requested by the Agency. A copy of each such Income Computation and Certification shall be filed with the Agency prior to the occupancy of a Restricted Unit by an Eligible Tenant whenever possible, but in no event more than thirty (30) 394/015610-0040 4 139234.06 a09/12/01 days after initial occupancy by said tenant. Agency acknowledges and agrees that Participant has provided adequate documentation that, as of the date of this Agreement, there are at least fourteen (14) Restricted Units as herein defined. 3.5 Rental Priority. During the term of this Agreement, Participant shall use its reasonable commercial efforts to lease Restricted Units to credit -worthy Eligible Tenants in the following order of priority: (i) displaced persons entitled to a preference pursuant to California Health and Safety Code Section 33411.3 or successor statute, with highest priority in this category to residents of the apartment complex that were living there on the Effective Date of this Agreement and who were required to be relocated from the Site during the rehabilitation work and who are Eligible Tenants, and secondary priority within this category to residents of the City of La Quinta; (ii) residents of the City of La Quinta who are Eligible Tenants and who meet the other eligibility requirements of this Agreement; and (iii) other persons meeting the eligibility requirements of this Agreement. Participant shall, and Agency may, maintain a list (the "Housing List") of persons who have notified Participant and/or Agency of their desire to rent a Restricted Unit in the Project and who have incomes which would qualify them as an Eligible Tenant, and Participant shall offer to rent units on the above -referenced priority basis. Should multiple tenants be equally eligible (as to income, credit history, and other nondiscriminatory criteria) and qualified to rent a unit, Participant shall rent available Restricted Units to Eligible Tenants on a first -come, first -served basis. 3.6 Recertification. Immediately prior to the first anniversary date of the occupancy of a Restricted Unit by an Eligible Tenant, and on each anniversary date thereafter, Participant shall recertify the income of such Eligible Tenant by obtaining a completed Income Computation and Certification based upon the current income of each occupant of the Restricted Unit. If, upon recertification, the occupants do not qualify as an Eligible Tenant, then the occupants' lease shall not be renewed and said occupants shall be required to either vacate the Restricted Unit upon the expiration of the lease, or such occupants may be allowed to remain if either (i) there is a vacant Unrestricted Unit and Participant notifies Agency in writing that it is designating such vacant Unrestricted Unit as a Restricted Unit and Participant thereafter rents such redesignated unit to an Eligible Tenant, or (ii) Participant identifies an occupant of an Unrestricted Unit as qualifying as an Eligible Tenant, completes an Income Computation Certificate and any other required documentation to confirm that such occupant(s) is an Eligible Tenant, redesignates that unit as a Restricted Unit, and notifies the Agency in writing of such redesignation. . Participant shall provide the Agency with a copy of each such recertification with the next submission of Certificate of Continuing Program Compliance pursuant to Section 3.7. 3.7 Certificate of Continuing Program Compliance. Upon the issuance of the Release of Construction Covenants, and by September 1 following the end of the immediately preceding fiscal year ending on June 1, Participant shall annually advise the Agency of the occupancy of the Project by delivering a Certificate of Continuing Program Compliance in the form required by Agency (or complying with this section if no form is provided), stating (i) the dwelling units of the Project which were Restricted Units during such period and (ii) that to the knowledge of Participant either (a) no unremedied default has occurred under this Agreement, or (b) a default has occurred, in which event the Certificate shall describe the nature of the default and set forth the measures being taken by the Participant to remedy such default. Participant shall to pay Agency an annual fee pursuant to Health and Safety Code Section 33418(c) which shall not 394/015610-0040 5 139234.06 a09/12/01 exceed FIVE HUNDRED DOLLARS ($500) as such amount shall be permitted to increase by the Consumer Price Index ("CPI") published by the United States Department of Labor, Bureau of Labor Statistics, for Urban Wage Earners and Clerical Workers, Los Angeles -Long Beach - Anaheim Average, All Items (1984=100), from and after the date of this Agreement, or the CPI is discontinued, such official index as may then be in existence and which is most nearly equivalent to the CPI. 3.8 Maintenance of Records. Participant shall maintain complete and accurate records pertaining to the Units, and shall permit any duly authorized representative of the Agency to inspect the books and records of Participant pertaining to the Project including, but not limited to, those records pertaining to the occupancy of the Restricted Units. 3.9 Reliance on Tenant Representations. Each tenant lease shall contain a provision to the effect that Participant has relied on the income certification and supporting information supplied by the tenant in determining qualification for occupancy of the unit, and that any material misstatement in such certification (whether or not intentional) will be cause for immediate termination of such lease. 3.10 Remedy For Excessive Rent Charge. 3.10.1 It shall constitute a default for Participant to charge or accept for a Restricted Unit rent amounts in excess of the amount provided for in Section 3.2 of this Agreement. In the event that Participant charges or receives such higher rental amounts, in addition to any other remedy Agency shall have for such default, Participant shall be required to pay to Agency an amount equal to two (2) times the entire amount of rent received in excess of the amount permitted pursuant to this Agreement. 3.10.2 It shall constitute a default for Participant to rent any Restricted Unit to a tenant who is not an Eligible Tenant. In the event Participant rents a Restricted Unit to an ineligible tenant, in addition to any other equitable remedy Agency shall have for such default, Participant, for each separate violation shall be required to pay to Agency an amount equal to (i) two times the greater of (A) the total rent Participant received from such ineligible tenant, or (B) the total rent Participant was entitled to receive for renting that Restricted Unit, plus (ii) any relocation expenses incurred by Agency or the City of La Quinta as a result of Participant having rented to such ineligible person. 3.10.3 It shall constitute a default for Participant to rent any of the Restricted Units in violation of the leasing preference requirements of Sections 3.5 of this Agreement. In the event Participant rents a unit in violation of the leasing preference requirements, in addition to any other equitable remedy Agency shall have for such default, Participant, for each separate violation shall be required to pay Agency an amount equal to two (2) months of rental charges. The terms of this Section shall not apply if Participant rents to an ineligible person as a result of such person's fraud or misrepresentation. THE PARTIES HERETO AGREE THAT THE AMOUNTS SET FORTH IN SECTION 3.12 (THE "DAMAGE AMOUNTS") CONSTITUTE A REASONABLE APPROXIMATION OF THE ACTUAL DAMAGES THAT 394/015610-0040 139234.06 a09/12/01 6 AGENCY WOULD SUFFER DUE TO THE DEFAULTS BY PARTICIPANT SET FORTH IN SECTIONS 3.12.1 THROUGH 3.12.3, CONSIDERING ALL OF THE CIRCUMSTANCES EXISTING ON THE EFFECTIVE DATE OF THIS AGREEMENT, INCLUDING THE RELATIONSHIP OF THE DAMAGE AMOUNTS TO THE RANGE OF HARM TO AGENCY AND ACCOMPLISHMENT OF AGENCY'S PURPOSE OF ASSISTING IN THE PROVISION OF AFFORDABLE HOUSING TO ELIGIBLE TENANTS THAT REASONABLY COULD BE ANTICIPATED AND THE ANTICIPATION THAT PROOF OF ACTUAL DAMAGES WOULD BE COSTLY OR INCONVENIENT. THE AMOUNTS SET FORTH IN THIS SECTION 3.11 SHALL BE THE SOLE MONETARY DAMAGES REMEDY FOR THE DEFAULTS SET FORTH IN THIS SECTION 3.11, BUT NOTHING IN THIS SECTION 3.10 SHALL BE INTERPRETED TO LIMIT AGENCY'S REMEDY FOR SUCH DEFAULT TO SUCH A DAMAGES REMEDY AND IN THAT REGARD AGENCY MAY DECLARE A DEFAULT UNDER THE TERMS OF THE NOTE OR OTHER OF THE AGENCY AGREEMENTS. IN PLACING ITS INITIAL AT THE PLACES PROVIDED HEREINBELOW, EACH PARTY SPECIFICALLY CONFIRMS THE ACCURACY OF THE STATEMENTS MADE ABOVE AND THE FACT THAT EACH PARTY HAS BEEN REPRESENTED BY COUNSEL WHO HAS EXPLAINED THE CONSEQUENCES OF THE LIQUIDATED DAMAGES PROVISION AT OR PRIOR TO THE TIME EACH EXECUTED THIS AGREEMENT. PARTICIPANT'S INITIALS: AGENCY'S INITIALS: 4. MAINTENANCE. 4.1 Maintenance Obligation. Participant agrees to and shall maintain all interior and exterior improvements, including landscaping, on the Site in good condition and repair (and, as to landscaping, in a healthy condition) and in accordance with the all permits and approvals for the Project, and all other applicable laws, rules, ordinances, orders, and regulations of all federal, state, county, municipal, and other governmental agencies and bodies having or claiming jurisdiction and all their respective departments, bureaus, and officials. Agency places prime importance on quality maintenance to protect its investment and to ensure that all Agency - assisted affordable housing projects within the City are not allowed to deteriorate due to below - average maintenance. Normal wear and tear of the Site improvements will be acceptable to Agency assuming Participant agrees to perform all necessary Site improvements to assure the Site is maintained in good condition. Maintenance requirements shall include: (a) no improperly maintained landscaping shall be visible from public rights -of -way, including (i) no lawns with grasses in excess of six (6) inches in height, (ii) no trees, shrubbery, lawns, and other plant life dying from lack of water or other necessary maintenance, (iii) no trees, hedges, or shrubbery grown uncontrolled without proper pruning, (iv) no vegetation so overgrown as to be likely to harbor rats or vermin, and (v) no dead, decayed, or diseased trees, weeds, and other vegetation; (b) no yard areas shall be left unmaintained, including (i) no broken or discarded furniture, appliances, and other household equipment stored in yard areas for periods exceeding 394/015610-0040 7 139234.06 a09/12/01 one (1) week, (ii) no packing boxes, lumber, trash, dirt, and other debris stored in yards for periods exceeding one (1) week in areas visible from public property or neighboring properties, (iii) no unscreened trash cans, bins, or containers stored for unreasonable periods in areas visible from public property or neighboring properties, and (iv) no vehicles parked or stored in areas other than approved parking areas; (c) no buildings may be left in an unmaintained condition, including (i) no violations of state law, Uniform Codes, or City ordinances, (ii) no condition that constitutes an unsightly appearance that detracts from the aesthetics or property value of the subject property or constitutes a private or public nuisance, (iii) no broken windows or chipped, cracked, or peeling paint, (iv) no conditions constituting hazards and/or inviting trespassers or malicious mischief, and (v) no graffiti or accumulation of waste or debris. Participant shall make all repairs and replacements necessary to keep the improvements in good condition and repair and shall promptly eliminate all graffiti and replace dead and diseased plants and landscaping with comparable approved materials. In the event that Participant breaches any of the covenants contained in this Section and Participant does not commence to cure such breach within ten (10) days after written notice from Agency (with respect to graffiti, debris, waste material, landscaping, and general maintenance) or thirty (30) days after written notice from Agency (with respect to building improvements), and after commencing the cure to diligently prosecute such cure to completion, then Agency, in addition to whatever other remedy it may have at law or in equity, shall have the right, but not the obligation, to enter upon the Site and perform all acts and work necessary to protect, maintain, and preserve the improvements and landscaped areas on the Site, and to attach a lien on the Site, or to assess the Site, in the amount of the expenditures arising from such acts and work of protection, maintenance, and preservation by Agency and/or costs of such cure, including a fifteen percent (15%) administrative charge, which amount shall be promptly paid by Participant to Agency upon demand. 4.2 Lien. If the costs incurred pursuant to Section 4.1 are not reimbursed within thirty (30) days after Participants' receipt of notice thereof, the same shall be deemed delinquent, and the amount thereof shall bear interest thereafter at a rate of ten percent (10%) per annum until paid. Any and all delinquent amounts, together with said interest, costs and reasonable attorney's fees, shall be a lien and charge, with power of sale, upon the property interests of Participant, and the rents, issues and profits of such property. Agency may bring an action at law against Participant obligated to pay any such sums or foreclose the lien against Participant's property interests. Any such lien may be enforced by sale by the Agency following recordation of a Notice of Default of Sale given in the manner and time required by law as in the case of a deed of trust; such sale to be conducted in accordance with the provisions of Section 2924, et seq., of the California Civil Code, applicable to the exercise of powers of sale in mortgages and deeds of trust, or in any other manner permitted by law. No lien recorded by Agency pursuant to this Section 4.2 shall defeat or render invalid the lien of any senior mortgage or deed of trust. 5.0 MANAGEMENT. 5.1 Gross Mismanagement. In the event of "Gross Mismanagement" (as that term is defined below) of the Project, Agency shall have the authority to require that such Gross Mismanagement cease immediately, and further to require the immediate replacement of the manager. Agency shall provide written notice to Participant of the event(s) of Gross Mismanagement occurring and Participant shall have five (5) business days after receipt of such notice to commence to cure, correct, or remedy the event(s) of Gross Mismanagement identified 394/015610-0040 8 139234.06 a09/12/01 in the Agency's notice and to notify the Agency's Executive Director of the steps taken to effect such cure, correction, or remedy, and upon commencing such cure, correction, or remedy to thereafter diligently prosecute such cure, correction, or remedy to completion. For purposes of this Agreement the term "Gross Mismanagement" shall mean management of the Project in a manner which violates the terms and/or intention of this Agreement to operate an affordable rental housing complex of the highest standard, and shall include, but is not limited to, the following: 5.1.1 Knowingly leasing Restricted Units to ineligible tenants or tenants whose income exceeds the prescribed levels; 5.1.2 Knowingly allowing the tenants to exceed permitted occupancy levels without taking immediate steps to stop such overcrowding; 5.1.3 Failing to timely maintain the Project and the Site in the manner required by this Agreement or failing to submit materially complete reports; 5.1.4 Failing to timely submit the reports as required by this Agreement; 5.1.5 Fraud in connection with any document or representation relating to this Agreement or embezzlement of Project monies; and 5.1.6 Failing to fully cooperate with law enforcement in maintaining a crime - free environment on the Site. 5.2 Lease Approval. Agency shall have the right to approve any lease forms, revisions, amendments and modification made to same, used by Participant or the manager for leasing Units within the Site, which approval shall not be unreasonably withheld, conditioned, or delayed. .1 COMPLIANCE WITH LAWS; ENVIRONMENTAL MATTERS. 6.1 Compliance With Laws. Participant shall comply with (i) all ordinances, regulations and standards of the City, Agency, County of Riverside, any regional governmental entity, State of California, and federal government applicable to the Property; (ii) all rules and regulations of any assessment district of the City with jurisdiction over the Property; and (iii) all applicable labor standards of California law and federal law, including the payment of prevailing wages; and (iv) the requirements of California law and federal law with respect to the employment of undocumented workers or illegal aliens. 6.2 Environmental Matters. 6.2.1 Definitions. For the purposes of this Agreement, unless the context otherwise specifies or requires, the following terms shall have the meanings herein specified: 6.2.1.1 The term "Hazardous Materials" shall mean any substance, material, or waste which is or becomes regulated by any local governmental authority, the County of Riverside, the State of California, a regional governmental authority, or the United 394/015610-0040 9 139234.06 a09/12/01 States Government, including, but not limited to, any material or substance which is (i) defined as a "hazardous waste," "extremely hazardous waste," or "restricted hazardous waste" under Section 25115, 25117 or 25122.7, or listed pursuant to Section 25140 of the California Health and Safety Code, Division 20, Chapter 6.5 (Hazardous Waste Control Law)), (ii) defined as a "hazardous substance" under Section 25316 of the California Health and Safety Code, Division 20, Chapter 6.8 (Carpenter -Presley -Tanner Hazardous Substance Account Act), (iii) defined as a "hazardous material," "hazardous substance," or "hazardous waste" under Section 25501 of the California Health and Safety Code, Division 20, Chapter 6.95 (Hazardous Materials Release Response Plans and Inventory), (iv) defined as a "hazardous substance" under Section 25281 of the California Health and Safety Code, Division 20, Chapter 6.7 (Underground Storage of Hazardous Substances), (v) petroleum, (vi) friable asbestos, (vii) polychlorinated byphenyls, (viii) listed under Article 9 or defined as "hazardous" or "extremely hazardous" pursuant to Article 11 of Title 22 of the California Administrative Code, Division 4, Chapter 20, (ix) designated as "hazardous substances" pursuant to Section 311 of the Clean Water Act (33 U.S.C. .1317), (x) defined as a "hazardous waste" pursuant to Section 1004 of the Resource Conservation and Recovery Act, 42 U.S.C., 6901 et seq. (42 U.S.C.. 6903) or (xi) defined as "hazardous substances" pursuant to Section 101 of the Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C., 9601 et seq. 6.2.1.2 The term "Hazardous Materials Contamination" shall mean the contamination (whether presently existing or hereafter occurring) of the improvements, facilities, soil, groundwater, air or other elements on, in or of the Site by Hazardous Materials, or the contamination of the buildings, facilities, soil, groundwater, air or other elements on, in or of any other property as a result of Hazardous Materials at any time emanating from the Site. 6.2.1.3 The term "Governmental Requirements" shall mean all past, present and future laws, ordinances, statutes, codes, rules, regulations, orders and decrees of the United States, the state, the county, the city, or any other political subdivision in which the Site is located, and any other state, county city, political subdivision, agency, instrumentality or other entity exercising jurisdiction over the Site. 6.2.2 Indemnity. Participant shall save, protect, defend, indemnify and hold harmless Agency and the City and their respective officers, officials, members. employees, agents, and representatives from and against any and all liabilities, suits, actions, claims, demands, penalties, damages (including, without limitation, penalties, fines and monetary sanctions), losses, costs or expenses (including, without limitation, consultants' fees, investigation and laboratory fees, reasonable attorneys' fees and remedial and response costs) (the foregoing are hereinafter collectively referred to as "Liabilities") which may now or in the future be incurred or suffered by Agency or City or its respective its officers, officials, members. employees, agents, or representatives by reason of, resulting from, in connection with, or existing in any manner whatsoever as a direct or indirect result of (i) Participant's placement on or under the Site any Hazardous Materials or Hazardous Materials Contamination on or after the date of this Agreement, (ii) the escape, seepage, leakage, spillage, discharge, emission or release from the Site of any Hazardous Materials or Hazardous Materials Contamination on or after the date of this Agreement, or (iii) any Liabilities incurred under any Governmental Requirements relating to the acts described in the foregoing clauses (i) and (ii). 394/015610-0040 10 139234.06 a09/12/01 6.3 Duty to Prevent Hazardous Material Contamination. Participant shall take commercially reasonable action to prevent the release of any Hazardous Materials into the environment. Such precautions shall include compliance with all Governmental Requirements with respect to Hazardous Materials. In addition, Participant shall install and utilize such equipment and implement and adhere to such procedures as are consistent with the standards generally applied by apartment complexes in Riverside County, California as respects the disclosure, storage, use, removal, and disposal of Hazardous Materials. 6.4 Obligation of Participant to Remediate Premises. Notwithstanding the obligation of Participant to indemnify Agency, City, and their respective officers, officials, members, employees, agents, and representatives pursuant to Section 6.2.2, Participant shall, at its sole cost and expense, promptly take (i) all actions required by any federal, state, regional, or local governmental agency or political subdivision or any Governmental Requirements and (ii) all actions necessary to make full economic use of the Site for the purposes contemplated by this Agreement and the AHRA, which requirements or necessity arise from the presence upon, about or beneath the Site of any Hazardous Materials or Hazardous Materials Contamination for which Participant is responsible. Such actions shall include, but not be limited to, the investigation of the environmental condition of the Site, the preparation of any feasibility studies or reports and the performance of any cleanup, remedial, removal or restoration work. 6.5 Environmental Inquiries. Participant, when it has received any notices of violation, notices to comply, citations, inquiries, clean-up or abatement orders, or cease and desist orders related to Hazardous Materials or Hazardous Materials Contamination, or when Participant is required to report to any governmental agency, any violation or potential violation of any Governmental Requirement pertaining to Hazardous Materials or Hazardous Materials Contamination, shall concurrently notify Agency's Executive Director, and provide to him/her a copy or copies, of the environmental permits, disclosures, applications, entitlements or inquiries relating to the Site, the notices of violation, notices to comply, citations, inquiries, clean-up or abatement orders, cease and desist orders, reports filed pursuant to self -reporting requirements, and reports filed or applications made pursuant to any Governmental Requirement relating to Hazardous Materials and underground tanks, and Participant shall report to the Executive Director, as soon as possible after each incident, any unusual, potentially important incidents. In the event of a responsible release of any Hazardous Materials into the environment, Participant shall, as soon as possible after it becomes aware of the release, furnish to the Executive Director a copy of any and all reports relating thereto and copies of all correspondence with governmental agencies relating to the release. Upon request of the Executive Director, Participant shall furnish to the Executive Director a copy or copies of any and all other environmental entitlements or inquiries relating to or affecting the Site including, but not limited to, all permit applications, permits and reports including, without limitation, those reports and other matters which may be characterized as confidential. 7.0 INSURANCE. 7.1 Duty to Procure Insurance. Participant, for the term of this Agreement, shall Procure and keep in full force and effect or cause to be procured and kept in full force and effect for the mutual benefit of Participant and Agency, and shall provide Agency evidence reasonably 394/015610-0040 1 1 139234.06 a09/12/01 acceptable to Agency Executive Director, insurance policies meeting the minimum requirements set forth below: 7.1.1 Commercial General Liability insurance with respect to the Site and the operations of or on behalf of Participant, in an amount not less than One Million Dollars ($1,000,000) per occurrence combined single limit including products, completed operations, contractual, bodily injury, personal injury, death and property damage liability per occurrence, subject to such increases in amount as Agency may reasonably require from time to time; provided, that the percentage increase in coverage shall not be required to exceed the percentage increase in the Consumer Price Index published by the United States Department of Labor, Bureau of Labor Statistics, for Urban Wage Earners and Clerical Workers, Los Angeles -Long Beach -Anaheim Average, All Items (1984 ` 100) (the "Index"), from and after the date of this Agreement, or, if said Index is discontinued, such official index as may then be in existence and which is most nearly equivalent to said Index (the "CPI Adjustment"). Unless otherwise approved in advance by the Agency Executive Director, the insurance to be provided by Participant may provide for a deductible or self -insured retention of not more than Ten Thousand Dollars ($10,000), with such maximum amount to increase at the same rate as the periodic increases in the minimum amount of total insurance coverage set forth above. 7.1.2 With respect to the improvements and any fixtures and furnishings to be owned by Participant on the Site, insurance against fire, extended coverage, vandalism, and malicious mischief, and such other additional perils, hazards, and risks as now are or may be included in the standard "all risk" form in general use in Riverside County, California, with the standard form fire insurance coverage in an amount equal to full actual replacement cost thereof, as the same may change from time to time. The above insurance policy or policies shall include coverage for earthquake to the extent generally and commercially available at commercially reasonable rates. Agency shall be a loss payee under such policy or policies and such insurance shall contain a replacement cost endorsement. 7.2 Policy Requirements. All policies of insurance required to be carried by Participant shall meet the following requirements and contain the following endorsements, provisions, or clauses (as applicable): 7.2.1 The policies shall be written by responsible and solvent insurance companies licensed in the State of California and having a policyholder's rating of A or better, in the most recent addition of `Best's Key Rating Guide -- Property and Casualty." A copy of each paid -up policy evidencing such insurance (appropriately authenticated by the insurer) or a certificate of the insurer, certifying that such policy has been issued, providing the coverage required herein, and containing the provisions specified herein, shall be delivered to Agency on or prior to the date of this Agreement, and thereafter, upon renewals, not less than thirty (30) days prior to the expiration of coverage. Agency may, at any time, and from time to time, inspect and/or copy any and all insurance policies required to be procured by Participant hereunder. In no event shall the limits of any policy be considered as limiting the liability of Participant hereunder. 394/015610-0040 1 2 139234.06 a09/12/01 7.2.2 The insurer shall not cancel or materially alter the coverage provided by such policy in a mariner adverse to the interest of the insured without first giving Agency a minimum of thirty (30) days prior written notice by certified mail, return receipt requested; and 7.2.3 A waiver by the insurer of any right to subrogation against Agency, its officers, officials, members, employees, agents, or representatives, which arises or might arise by reason of any payment under such policy or policies or by reason of any act or omission of Agency, its officers, officials, members, employees, agents, or representatives. 7.2.4 The Agency and the City and its respective officers, officials, members, employees, agents, and representatives shall be named as additional insureds on the Commercial General Liability policies. 7.2.5 Coverage provided by these policies shall be primary and non- contributory to any insurance carried by the Agency or its officers, officials, members, employees, agents, or representatives. 7.2.6 Failure to comply with reporting provisions shall not affect coverage provided to Agency and its officers, officials, members, employees, agents, or representatives. 7.3 Failure to Procure Insurance. If Participant fails to procure and maintain the above -required insurance despite its availability, then Agency, in addition to any other remedy which Agency may have hereunder for Participant's failure to procure, maintain, and/or pay for the insurance required herein, may (but without any obligation to do so) at any time or from time to time, after thirty (30) days written notice to Participant, procure such insurance and pay the premiums therefor, in which event Participant shall immediately repay Agency all sums so paid by Agency together with interest thereon at the maximum legal rate. 8.0 OBLIGATION TO REPAIR. 8.1 Obligation to Repair and Restore Damage Due to Casualty Covered by Insurance. Subject to Section 8.3 below, if the Project shall be totally or partially destroyed or rendered wholly or partly uninhabitable by fire or other casualty required to be insured against by Participant, Participant shall promptly proceed to obtain insurance proceeds and take all steps necessary to begin reconstruction and, immediately upon receipt of insurance proceeds, to promptly and diligently commence the repair or replacement of the Project to substantially the same condition as the Project is required to be maintained in pursuant to this Agreement, whether or not the insurance proceeds are sufficient to cover the actual cost of repair, replacement, or restoration, and Participant shall complete the same as soon as possible thereafter so that the Project can continue to be operated and occupied as an affordable housing project in accordance with this Agreement. Subject to extensions of time for "Enforced Delay" as defined in Section 22 of this Agreement, in no event shall the repair, replacement, or restoration period exceed one (1) year from the date Participant obtains insurance proceeds unless the Agency Executive Director, in his or her sole and absolute discretion, approves a longer period of time. Agency shall cooperate with Participant, at no expense to Agency, in obtaining any governmental permits required for the repair, replacement, or restoration and, upon issuance of such permits Agency shall promptly release control of any insurance proceeds within Agency's control. If, however, 394/015610-0040 1 3 139234.06 a09/12/01 the then -existing laws of any other governmental agencies with jurisdiction over the Property do not permit the repair, replacement, or restoration, Participant may elect not to repair, replace, or restore the Project by giving notice to Agency (in which event Participant shall be entitled to all insurance proceeds but Participant shall be required to remove all debris from the Property) or Participant may reconstruct such other improvements on the Property as are consistent with applicable land use regulations and approved by the City, Agency, and the other governmental agency or agencies with jurisdiction. In such event, the Agency Agreements, including this Agreement, shall automatically terminate and Agency shall cooperate to remove the Agency Agreements from title. If Participant fails to obtain insurance as required by this Agreement (and Agency has not procured such insurance and charged Participant for the cost), Participant shall be obligated to reconstruct and repair any partial or total damage to the Project and improvements located on the site in accordance with this Section 8.1. 8.2 Continued Operations. During any period of repair, Participant shall continue, or cause the continuation of, the operation of the apartment complex on the Site to the extent reasonably practicable from the standpoint of prudent business management. The number of Restricted Units shall be reduced in proportion to the number of Units not habitable as a result of the casualty during such period of repair. 8.3 Damage or Destruction Due to Cause Not Required to be Covered by Insurance. If the improvements comprising the Project are completely destroyed or substantially damaged by a casualty for which Participant is not required to (and has not) insured against, then Participant shall not be required to repair, replace, or restore such improvements and may elect not to do so by providing Agency with written notice of election not to repair, replace, or restore within ninety (90) days after such substantial damage or destruction. In such event, (i) Participant shall remove all debris from the Property, and (ii) the Agency Agreements, including this Agreement, shall automatically terminate and Agency shall cooperate to remove the Agency Agreements from title. As used in this Section 8.3, "substantial damage" caused by a casualty not required to be (and not) covered by insurance shall mean damage or destruction which is fifty percent (50%) or more of the replacement cost of the improvements comprising the Project. In the event Participant does not timely elect not to repair, replace, or restore the improvements as set forth in the first sentence of this Section 8.3, Participant shall be conclusively deemed to have waived its right not to repair, replace, or restore the improvements and thereafter Participant shall promptly commence and complete the repair, replacement, or restoration of the damaged or destroyed improvements in accordance with Section 8.1 above and continue operation of the apartment complex during the period of repair (if practicable) in accordance with Section 8.2 above. 9.0 LIMITATION ON TRANSFERS. 9.1 Sale or Transfer of the Project. Participant covenants that during the term of this Agreement that Participant shall not assign this Agreement or transfer the Site or any of its interests therein except as provided in this Section 9.0. 394/015610-0040 14 139234.06 a09/12/01 9.2 Transfer Defined. As used in this Article 9.0, the term "Transfer" shall include any assignment, hypothecation, mortgage, pledge, conveyance, or encumbrance of this Agreement, the Site, or the improvements thereon. A Transfer shall also include the transfer to any person, entity, or group of persons or entities acting in concert of more than twenty-five percent (25%) (in the aggregate) of the present ownership and/or control of any person or entity constituting Participant, taking all transfers into account on a cumulative basis. In the event any entity constituting Participant, its successor or the constituent partners or members of Participant or any successor of Participant, is a corporation or trust, such transfer shall refer to the transfer of the issued and outstanding capital stock of such corporation, or of beneficial interests of such trust; in the event that any entity constituting Participant, its successor or the constituent partners of Participant or any successor of Participant is a limited or general partnership, such transfer shall refer to the transfer of more than twenty-five percent (25%) of such limited or general partnership interest; in the event that any entity constituting Participant, its successor or the constituent members of Participant or any successor of Participant is a limited liability company, such transfer shall refer to the transfer of more than twenty-five percent (25%) of such membership interest; in the event that any entity constituting Participant, its successor or the constituent partners of Participant or any successor of Participant is a joint venture, such transfer shall refer to the transfer of more than twenty-five percent (25%) of the ownership and/or control of any such joint venture partner, taking all transfers into account on a cumulative basis. 9.3 Agency Approval of Transfer Required. Except as set forth below, Participant shall not Transfer this Agreement or any of Participant's rights hereunder, or any interest in the Site or in the improvements thereon, directly or indirectly, voluntarily or by operation of lav, without the prior written approval of Agency, which approval shall not be unreasonably withheld, conditioned, or delayed, and any such purported Transfer without such approval shall be null and void. In addition to the foregoing and notwithstanding anything in this Section to the contrary, so long as the Project is encumbered by a deed of trust (other than a deed of trust the beneficiary of which is the Agency), any proposed transferee or assignee must also receive the prior written consent of the beneficiary of such deed of trust, if required by such deed of trust, before Agency shall approve such transfer or assignment; provided, however, that such consent of beneficiary shall not obligate Agency to approve such Transfer. Notwithstanding the foregoing, the following types of transfers shall not require Agency approval but as with all Transfers shall be subject to Section 9.4: (a) any refinancing of the lien of a deed of trust such that the new loan plus all outstanding amounts of other loan(s) secured by the Site does not exceed ninety-five percent (95%) of the then appraised fair market value of the Site; (b) any new or additional financing in which the Site is security for the loan, provided that the total of all then -outstanding loans secured by the Site does not exceed ninety-five percent (95%) of the then -appraised fair market value of the Site. (c) the leasing of individual rental units on the Site provided that such leasing is in accordance with the terms of this Agreement; 394/015610-0040 15 139234.06 a09/12/01 (d) Transfers resulting from the death or mental or physical incapacity of an individual; (e) Transfers in trust for the benefit of a spouse, children, grandchildren, or other family member, or for charitable purposes; (f) Transfers of stock in a publicly -held corporation or of the beneficial interest in ay publicly -held partnership or real estate investment trust; or (g) the conveyance or dedication or portions of the Site to the City or other governmental entity, or the granting of easements or permits to facilitate the development of the Site. 9.4 Assignment and Assumption Agreement. In the absence of specific written agreement by Agency, no Transfer by Participant of all or any portion of its interest in the Site or this Agreement, whether or not requiring the approval by Agency, shall be deemed to relieve Participant or any successor party from the obligation to timely complete construction of the Project. In addition, no attempted Transfer of any of Participant's obligations hereunder shall be effective unless and until Participant and the transferee or successor party execute and deliver to Agency a binding assignment and assumption agreement in a form reasonably approved by Agency's legal counsel. 9.5 Permitted Transferee. A "Permitted Transferee" under this Agreement shall be a transferee or assignee that either (i), has been approved by the Agency Executive Director or (ii) is a transferee of a Transfer not requiring the approval of the Agency Executive Director pursuant to the terms of this Agreement, and both the cases described in the foregoing clauses (i) and (ii) has executed and delivered to the Agency Executive Director an assignment and assumption agreement pursuant to Section 9.4. 10. EVENTS OF DEFAULT BY PARTICIPANT. Subject to extensions of time pursuant to the terms of Section 22, the occurrence of one or more of any of the following events shall constitute an "Event of Default" by Participant hereunder if Participant shall have not cured, corrected, or remedied such failure within, unless a shorter or longer cure period is provided for specific defaults elsewhere in this Agreement, thirty (30) days following the service on Participant of a written notice from Agency specifying the failure complained of, or if it is not practicable to cure or remedy such failure within such thirty (30) day period (which impracticality shall not apply to monetary defaults), within such longer period as shall be reasonable under the circumstances provided that Participant has commenced to cure within the same thirty (30) day period: 10.1 Construction of the rehabilitation work on the Site has not commenced within the time set forth in the AHRA; or 10.2 Construction of the rehabilitation work on the Site is not completed within the time set forth in the AHRA; or 394/015610-0040 1 6 139234.06 a09/12/01 10.3 Participant shall abandon or surrender the Site; or 10.4 Participant is in default of the Note and has not cured such default within the cure period applicable to such default as set forth in the Note; or 10.5 Participant is in material default of any of the covenants, terms or provisions of this Agreement or any of the Agency Agreements; or 10.6 Participant voluntarily files or has involuntarily filed against it any petition under any bankruptcy or insolvency act or law and the same not be dismissed within sixty (60) days thereafter; or 10.7 Participant is adjudicated a bankrupt; or 10.8 Participant makes a general assignment for the benefit of creditors in violation of the terms of this Agreement or any of the Agency Agreements. 11. REMEDIES OF AGENCY. In the event Participant defaults in the performance or observance of any covenant, agreement or obligation of Participant pursuant to this Agreement, and if such default remains uncured for a period of thirty (30) days after written notice thereof shall have been given by Agency (or such lesser period as may apply under Section 4.1), or, in the event said default cannot be cured within said time period, Participant has failed to commence to cure such default within the applicable time period and diligently prosecute said cure to completion, then Agency shall declare an "Event of Default" to have occurred hereunder, and, at its option, may take one or more of the following steps: 11.1 Enter the Site and correct or cause to be corrected said default and charge the costs thereof (including costs incurred by Agency in enforcing this provision) to the account of Participant, which charge shall be due and payable within thirty (30) days after presentation by Agency of a statement of all or part of said costs, and if such bill is not timely paid then to place a lien on the Site for said amount due plus interest at the maximum legal rate; 11.2 Correct or cause to be corrected said default and pay the costs thereof (including costs incurred by Agency in enforcing this provision) from the proceeds of any insurance; 11.3 Exercise its right to maintain any and all actions at law or suits in equity to compel Participant to correct or cause to be corrected said default; 11.4 Have a receiver appointed to take possession of Participant's interest in the Site, with power in said receiver to administer Participant's interest in the Site, to collect all funds available to Participant in connection with its operation and maintenance of the Site, and to perform all other consistent with Participant's obligation under this Agreement as the court deems proper; 11.5 Terminate this Agreement by written notice to Participant and seek repayments of any remaining principal and accrued interest then owing on the Agency Note. 394/015610-0040 17 139234.06 a09/12/01 Except as otherwise expressly stated in this Agreement, the rights and remedies of the parties are cumulative, and the exercise by any party of one or more of its rights or remedies shall not preclude the exercise by it, at the same or different times, of any other rights or remedies for the same default or any other default by another party. 12.0 NONDISCRIMINATION. 12.1 Antidiscrimination. There shall be no discrimination against or segregation of any person, or group of persons, on account of race, color, creed, religion, sex, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Site, or any part thereof, nor shall Participant, or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the Site, or any part thereof (except as permitted by this Agreement). 12.2 Anti -Discrimination Clauses in Agreements. Participant agrees for itself and any successor in interest that Participant shall refrain from restricting the rental, sale, or lease of any portion of the Site, or contracts relating to the Site, on the basis of race, color, creed, religion, sex, marital status, ancestry, or national origin of any person. All such deeds, leases or contracts shall contain or be subject to substantially the following nondiscrimination or nonsegregation clauses: 12.2.1 In deeds: "The grantee herein covenants by and for himself, his heirs, executors, administrators, and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex, marital status, ancestry, or national origin in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the land herein conveyed, nor shall the grantee himself, or any persons claiming under or through him, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy of tenants, lessees, subtenants, sublessees, or vendees in the land herein conveyed. The foregoing covenants shall run with the land." 12.2.2 In leases: "The lessee herein covenants by and for himself, his heirs, executors, administrators, and assigns, and all persons claiming under or through him, and this lease is made and accepted upon and subject to the following conditions: "That there shall be no discrimination against or segregation of any person or group of persons on account of status, race, color, creed, religion, sex, marital status, ancestry, or national origin in the leasing, subleasing, transferring, use, occupancy, tenure, or enjoyment of the land herein leased, nor shall the lessee himself, or any person claiming under or through him, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy of tenants, lessees, sublessees, subtenants, or vendees in the land herein leased." 394/015610-0040 18 139234.06 a09/12/01 : "There shall be no discrimination against or segregationa 12.2.3 In contractsl oup of persons on account of status, race, color, creed, religion, sex, m. any persons or ' re, or status, ancestry, or national . origin in the sale, lease, transfer, use, occupancy,or throuuh him, f land nor shall the transferee himself, or any person claiming under t n with reference enjoyment o . establish or permit any such practice or practices of discriminationtenants, enan,ess es, subtenants, sublessees, to the selection, location, number, use, or occupancy of tenant , or vendees of land." 13.0 COVENANTS TO RUN WITH THE LAND. hereby subjects the Site to the covenants, reservations, and restrictions t all such Participant her y J . Agreement. Agency and Participant hereby declare their express intent the land and forth in this covenants, reservations, and restrictions shall be deemed co o sa in title to. running Site; provided, shall pass to and be binding upon the Participant's said covenants, reservatons and restrictions however, that on the termination of this Agree is without regard to technical classification or designation shall be shall expire. All covenan or binding for the benefit of the Agency, and such covenants shall run in favor oemains an wner he entire teen of this Agreement, without regard to whether the Agency is or Each and every contract, deed or t of any land or interest therein to which such covenants in relate. tthe Site or any portion thereof shall other instrument hereafter executed covering del or conveying ered and accepted subject to such covenants, conclusively be held to have been execute , reservations, and rest rictions, regardless of whether such covenants, reservations, and restrictions are set forth in such contract, deed or other instrument. Agency and Participant of the covenants set forth t hereby declare their understanding and intent that the burden he herein touch and concern the land in that Participants legal int clarei t he Site is rendered less valuable thereby. Agency and Participant hereby further de eir that the benefit of such covenants touch and concern the landended understanding and intent the intended and increasing the enjoyment and use of the Project by Eligible Tenants, the public enhancing . beneficiaries of such covenants, reservations, and restrictions, and by benef purposes Cl-r which the Agency was formed. Participant, in exchange for the Agency entering into the AHRA, hereby agrees to holde Site subject to the terms of this Agreement. Participant also grants to dtall sell, and convey the S J right and power to enforce the terms of this Agreement against the Participant Agency the rig Navin an right, title or interest in the Site or any part thereof, their , persons g Y owners and assigns. • icle 12.0 of this Agreement shall remain in effect o The covenants set for th in Art ent shall remain in effect for a period her covenants set forth in this Agreemthe Riverside perpetuity. All of the office o thirty (30) years following the date this Agreement is recorded in County Recorder. 14.0 INDEMNIFICATION. r itself and its successors and assigns to indemnify, defend, and h and Participant agrees ld fo agents, a Agency, City, and their respective officers, officials, members, employees, harmless Ag y, Y 394/015610-0040 19 139234.06 a09/12/01 representatives from and against any loss, liability, claim, or judgment relating in any manner to the Project excepting only any such loss, liability, claim, or judgment arising out of the intentional wrongdoing or gross negligence of Agency, City, or their respective officers, officials, members, employees, agents, or representatives. The foregoing indemnification, defense, and hold harmless agreement shall only be applicable to and binding upon the party then owning the Property or applicable portion thereof. 15.0 UTILITIES AND TAXES. Participant, while in possession of the Property, and each successor or assign of Participant while in possession of the Property, shall remain fully obligated for the payment of (i) real and personal property taxes and assessments in connection with the Property, and (ii) all charges for all utilities serving the Property for which Participant is responsible. 16.0 ATTORNEYS' FEES. In the event that a party to this Agreement brings an action against the other party hereto by reason of the breach of any condition, covenant, representation or warranty in this Agreement, or otherwise arising out of this Agreement, the prevailing party in such action shall be entitled to recover from the other expert witness fees, and its reasonable attorney's fees and costs. Attorney's fees shall include attorney's fees on any appeal, and in addition a party entitled to attorney's fees shall be entitled to all other reasonable costs for investigating such action, including the conducting of discovery. 17.0 AMENDMENTS. This Agreement shall be amended only by a written instrument executed by the parties hereto or their successors in title, and duly recorded in the real property records of the County of Riverside. 18.0 NOTICE. Formal notices, demands, and communications between Agency and Participant shall be sufficiently given if (i) personally delivered, (ii) delivered by a reputable same -day or overnight courier services that provides a receipt showing date and time of delivery, (iii) delivered by United States mail, registered or certified, postage prepaid, return receipt requested, or (iv) delivered by facsimile transmission, provided the original of the faxed communication is delivered within twenty-four (24) hours by one of methods described in clauses (i), (ii), or (iii) of the foregoing. Delivery shall be made to the following addresses: 394/015610-0040 20 139234.06 a09/12/01 If to Agency: La Quinta Redevelopment Agency 78-495 Calle Tampico La Quinta, CA 92253 Attn: Executive Director Fax: (760) 777-7101 With a copy to: Rutan & Tucker, LLP 611 Anton Boulevard, Suite 1400 Costa Mesa, CA 92626 Attn: M. Katherine Jenson, Esq. Fax: (714) 546-9035 If to Participant: La Quinta 34 LLC 1800 East Gary Avenue, Suite 117 Santa Ana, CA 92705 Attn: Lawrence C. Rael Fax: (949) 474-9828 With copy to: Gibson, Dunn & Crutcher LLP Jamboree Center 4 Park Plaza, Suite 1400 Irvine, CA 92614-8557 Attn: Teresa J. Farrell, Esq. Fax: (949) 451-4220 Notices that are personally delivered, delivered by messenger/courier, or by fax (provided there is compliance with the terms of clause (iv) above) shall be deemed effective upon receipt. Notices delivered by mail shall be deemed effective upon the earlier of actual receipt by the addressee thereof or the expiration of forty-eight (48) hours after depositing in the United States Postal System in the manner described in this Section. Such written notices, demands, and communications may be sent in the same manner to such other addresses as a party may from time to time designate by mail. 19. NONLIABILITY OF AGENCY OFFICIALS. No officer, official, member, employee, agent, or representative of Agency shall be personally liable to Participant, or any successor in interest, in the event of any default or breach by Agency or for any amount which may become due to Participant or successor or on any obligations under the terms of this Agreement or any of the Agency Agreements. 20. TRANSACTIONS WITH AFFILIATES. Participant shall have the right to enter into contracts with subsidiaries, affiliates and other related entities for the purpose of providing cleaning, maintenance and repair services, insurance policies and other purposes related to the operation of the Site, provided that all such costs and charges are competitive with the costs, charges, rent and other sums which would be paid by or to, as the case may be, an unrelated third party, and further provided that all such 394/015610-0040 21 139234.06 a09/12/01 contracts and transactions are disclosed to Agency's Executive Director, including the costs and charges of such contracts and transactions. Agency acknowledges and agrees that Participant may act as its own general contractor for the constructions of any improvements on the Site and that will be entitled in so doing to earn a commercially reasonable fee. 21. SEVER.ABILITY/WAIVER/INTEGRATION. 21.1 Severability. If any provision of this Agreement shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining portions hereof shall not in any way be affected or impaired thereby. 21.2 Waiver. A waiver by either party of the performance of any covenant or condition herein shall not invalidate this Agreement nor shall it be considered a waiver of any other covenants or conditions, nor shall the delay or forbearance by either party in exercising any remedy or right be considered a waiver of, or an estoppel against, the later exercise of such remedy or right. 21.3 Integration. This Agreement contains the entire Agreement between the parties concerning the subject matter hereof and neither party relies on any warranty or representation not contained in this Agreement. 22. ENFORCED DELAY; EXTENSIONS OF TIME. Performance by a party hereunder shall not be deemed to be in default where delays or defaults are due to war; insurrection; strikes; lock -outs; riots; floods; earthquakes; fires; casualties; supernatural causes; acts of the public enemy; epidemics; quarantine restrictions; freight embargoes; lack of transportation; governmental restrictions or priority litigation; unusually severe weather; inability to secure necessary labor, materials or tools; acts of the other party; acts or the failure to act of a public or governmental agency or entity (except that acts or the failure to act of Agency or City shall not excuse performance by Agency or City unless the act or failure is caused by the acts or omissions of Participant); or any other causes beyond the reasonable control or without the fault of the party claiming an extension of time to perform. In the event of such a delay (herein "Enforced Delay"), the party delayed shall continue to exercise reasonable diligence to minimize the period of the delay. An extension of time for any such cause shall be limited to the period of the Enforced Delay, and shall commence to run from the time of the commencement of the cause, provided notice by the party claiming such extension is sent to the other party within fifteen (15) days of the commencement of the cause. The following shall not be considered as events or causes beyond the control of Participant, and shall not entitle Participant to an extension of time to perform: (i) Participant's failure to obtain financing for the Project, (ii) Participant's failure to negotiate agreements with prospective tenants or users for the Project, or (iii) interest rates or economic or market conditions. Times of performance under this Agreement may also be extended by mutual written agreement by Agency and Participant. The Agency Executive Director shall also have the authority on behalf of Agency to administratively approve extensions of time not to exceed a cumulative total of one (1) year. 394/015610-0040 139234.06 a09/12/01 22 23. FUTURE ENFORCEMENT. The parties hereby agree that should the Agency cease to exist as an entity at any time during the term of this Agreement, the City of La Quinta shall have the right to enforce all of the terms and conditions herein, unless the Agency had previously specified another entity to enforce this Agreement. 24. GOVERNING LAW. This Agreement shall be governed by the laws of the State of California. 25. NO MERGER. The covenants, terms, and provisions of this Agreement shall not merge with any grant deed or other instrument pertaining to the conveyance of any interest in real property. 26. COUNTERPARTS. This Agreement may be executed in any number of counterparts, each of which shall constitute one original and all of which shall be one and the same instrument. [end - signature page follows] 394/015610-0040 139234.06 a09/12/01 23 IN WITNESS WHEREOF, the Agency and Participant have executed this Regulatory Agreement and Declaration of Covenants and Restrictions by duly authorized representatives on the date first written hereinabove. ATTEST: I' 0 Secretary APPROVED AS TO FORM: RUTAN & TUCKER, LLP im- Attorneys for the La Quinta Redevelopment Agency LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic 0 Thomas Genovese Executive Director "Agency" LA QUINTA 34 LLC, a California limited liability company M Lawrence C Rael, Managing Member "Participant" 394/015610-0040 24 139234.06 a09/12/01 STATE OF CALIFORNIA ss. COUNTY OF On before me, , personally appeared , personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. Witness my hand and official seal. Notary Public [SEAL] 394/015610-0040 5 139234.06 a09/12/01 STATE OF CALIFORNIA ss. COUNTY OF On before me, , personally appeared , personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. Witness my hand and official seal. Notary Public [SEAL] 394/015610-0040 139234.06 a09/12/01 26 ATTACHMENT NO. 1 LEGAL DESCRIPTION OF SITE LOTS 1 TO 11 INCLUSIVE IN BLOCK 126 OF SANTA CARMELITA AT VALE LA QUINTA, UNIT NO. 14, IN THE CITY OF LA QUINTA, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 18 PAGES 82 AND 83 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY. EXCEPTION THEREFROM THOSE PORTIONS OF LOTS 1, 5, 6 AND 11, DEEDED TO THE COUNTY OF RIVERSIDE, BY DOCUMENTS RECORDED MARCH 23, 1978 AS INSTRUMENT NOS. 55038 AND 55039 OF OFFICIAL RECORDS OF RIVERSIDE COUNTY, CALIFORNIA. AND LOTS 6 AND 7 IN BLOCK 125 OF SANTA CARMELITA AT VALE LA QUINTA UNIT NO. 141) AS SHOWN BY MAP RECORDED IN BOOK 18, PAGE 82 OF MAPS, RECORDS OF RIVERSIDE COUNTY, CALIFORNIA. 394/015610-0040 139234.06 a09/12/01 27 EXHIBIT "H" FORM OF RELEASE OF CONSTRUCTION COVENANTS [SEE FOLLOWING PAGES] 394/015610-0040 139234.06 a09/12/01 Recording Requested By And When Recorded Return To: La Quinta Redevelopment Agency 78-495 Calle Tampico La Quinta„ CA 92253 Attn: Executive Director [NOTE: RECORD AS PARTIAL RELEASE OF AGREEMENT] (Space Above Line for Recorder's Use Only) (Exempt from Recording Fee per Gov. Code 6103) RELEASE OF CONSTRUCTION COVENANTS WHEREAS, LA QUINTA 34 LLC, a California limited liability company, is the owner of fee title to that certain real property legally described in Attachment No. 1 attached hereto (the "Site") and incorporated herein by reference, according to the terms and conditions of said Agreement; and WHEREAS, by an Affordable Housing Rehabilitation Agreement (hereinafter referred to as the "Agreement") dated September 13, 2001, by and between Participant and the La Quinta Redevelopment Agency, a public body corporate and politic ("Agency"), Participant has redeveloped and rehabilitated the Site in accordance with the Agreement; and WHEREAS, pursuant to Section 6.5 of the Agreement, promptly after completion of all rehabilitation work by Participant upon the Site, and upon request by Participant, Agency shall furnish Participant with a Release of Construction Covenants in such form as to permit it to be recorded in the Official Records of the County of Riverside; and WHEREAS, the issuance by Agency of the Release of Construction Covenants shall be conclusive evidence that Participant has complied with the terms of the Agreement pertaining to the rehabilitation of the Site; and WHEREAS, Participant has requested that Agency furnish Participant with the Release of Construction Covenants; and WHEREAS, Agency has conclusively determined that the rehabilitation of the Site has been satisfactorily completed as required by the Agreement; NOW, THEREFORE: 1. As provided in the Agreement, Agency does hereby certify that rehabilitation of the Site has been fully and satisfactorily performed and completed, and that such rehabilitation is in full compliance with said Agreement. 394/015610-0040 139234.06 a09/12/01 2. This Release of Construction Covenants shall not constitute evidence of Participant's compliance with the following agreements, the provisions of which shall continue to run with the land until termination thereof in accordance with the terms thereof: (i) Deed of Trust with Assignment of Rents, Security Agreement and Fixture Filing, by and between Participant as borrower and Agency as beneficiary, dated 2001, and recorded on , 2001, as Instrument No. , in the Office of the Riverside County; and (ii) Declaration of Covenants, Conditions, and Restrictions And Agreement To Hold Property As One Parcel, by and between Participant and Agency, and recorded on , 2001, as Instrument No. in the Office of the Riverside County Recorder. 3. This Release of Construction Covenants shall not constitute evidence of compliance with or satisfaction of any obligation of Participant to any holder of a mortgage, or any insurer of a mortgage, securing money loaned to finance construction work on the Site, or any part thereof. 4. This Release of Construction Covenants is not a Notice of Completion as referred to in California Civil Code Section 3093. 5. Except as stated herein, nothing contained in this instrument shall modify in any way any other provisions of the Agreement or any other provisions of any agreements or documents referenced therein. IN WITNESS WHEREOF, Agency has executed this Release of Construction Covenants as of this day of , LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic Lo Executive Director 394/015610-0040 2 139234.06 a09/12/01 CONSENT TO RECORDATION LA QUINTA 34 LLC ("Owner"), owner of the fee interest in the real property legally described in Attachment No. 1 hereto, hereby consents to the recordation of the foregoing Release of Construction Covenants against said real property. LA QUINTA 34 LLC, a California limited liability company M Lawrence C. Rael Managing Member 394/015610-0040 3 139234.06 a09/12/01 STATE OF CALIFORNIA ss. COUNTY OF On before me, personally appeared , personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. Witness my hand and official seal. Notary Public [SEAL] 394/015610-0040 4 139234.06 a09/12/01 STATE OF CALIFORNIA ss. COUNTY OF On before me, , personally appeared , personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. Witness my hand and official seal. Notary Public [SEAL] 394/015610-0040 5 139234.06 a09/12/01 ATTACHMENT NO. 1 LEGAL DESCRIPTION OF SITE LOTS 1 TO 11 INCLUSIVE IN BLOCK 126 OF SANTA CARMELITA AT VALE LA QUINTA, UNIT NO. 14, IN THE CITY OF LA QUINTA, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 18 PAGES 82 AND 83 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY. EXCEPTION THEREFROM THOSE PORTIONS OF LOTS 1, 5, 6 AND 11, DEEDED TO THE COUNTY OF RIVERSIDE, BY DOCUMENTS RECORDED MARCH 23, 1978 AS INSTRUMENT NOS. 55038 AND 55039 OF OFFICIAL RECORDS OF RIVERSIDE COUNTY, CALIFORNIA. AND LOTS 6 AND 7 IN BLOCK 125 OF SANTA CARMELITA AT VALE LA QUINTA UNIT NO. 145 AS SHOWN BY MAP RECORDED IN BOOK 18, PAGE 82 OF MAPS, RECORDS OF RIVERSIDE COUNTY, CALIFORNIA. 394/015610-0040 6 139234.06 a09/12/01 EXHIBIT "I" FORM OF DECLARATION [SEE FOLLOWING PAGES] 394/015610-0040 139234.06 a09/12/01 Recording Requested By And When Recorded Return To: La Quinta Redevelopment Agency 78-495 Calle Tampico La Quinta„ CA 92253 Attn: Executive Director (Space Above Line for Recorder's Use Only) (Exempt from Recording Fee per Gov. Code 6103) DECLARATION OF COVENANTS, CONDITIONS, AND RESTRICTIONS AND AGREEMENT TO HOLD PROPERTY AS ONE PARCEL THIS DECLARATION OF COVENANTS, CONDITIONS, AND RESTRICTIONS AND AGREEMENT TO HOLD PROPERTY AS ONE PARCEL ("Declaration") is made and entered into this day of , 2001, by and between LA QUINTA 34 LLC, a California limited liability company ("Declarant"), and LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic ("Agency"). RECITALS A. Declarant is the owner of fee title of those certain parcels of real property located in the City of La Quinta, County of Riverside, State of California, more particularly described on Exhibit "A" hereto and incorporated herein by this reference (hereinafter referred to collectively as the "Property"), B. Declarant, and Agency entered into that certain Affordable Housing Rehabilitation Agreement ("AHRA"), dated September 13, 2001, pursuant to which Declarant agreed to enter into this Declaration. Reference is also made to the following recorded documents pertaining to the Property: 1. Deed of Trust with Assignment of Rents, Security Agreement and Fixture Filing, by and between Declarant as trustor and Agency as beneficiary, of even date herewith, and recorded in the Office of the Riverside County (the "Deed of Trust"). The Deed of Trust secures a promissory note by Declarant as Maker and Agency as Holder, dated on or about the date of said Deed of Trust (the "Note"); and 2. Regulatory Agreement and Declaration of Covenants, Conditions, and Restrictions, by and between Declarant and Agency, of even date herewith, and recorded in the Office of the Riverside County Recorder (the "Agency Regulatory Agreement"). 3. Subordination Agreement, dated on or about August 9, 2001, by and among Maker, Holder, and Rubicon Realty Capital Corporation, and recorded in the Office of the Riverside County Recorder ("Subordination Agreement"). 394/015610-0040 1 139234.06 a09/12/01 This Declaration, the Deed of Trust, the Note, the Agency Regulatory Agreement, and the Subordination Agreement are hereinafter collectively referred to as the "Agency Agreements." C. In order to develop the Property for the purposes set forth in the Agency Agreements, Agency has permitted Declarant and its successors in interest to redevelop the Property as if the parcels comprising the Property were one. D. Declarant and the Agency intend that in exchange for Agency permitting redevelopment of the parcels comprising the Property in the manner described in the Agency Agreements, Declarant shall hold, sell, and convey the Property subject to the covenants set forth in this Declaration and that the Agency and its successors shall have the right and power to enforce the covenants, conditions, restrictions, and reservations as provided herein. NOW, THEREFORE, the Declarant declares, covenants, and agrees, by and for itself, its heirs, executors, successors, assigns, and all persons claiming under or through it, for the benefit of Agency and its successors, as follows: 1. Certification of Ownership. The Declarant hereby represents and warrants to Agency that Declarant is the legal owner of fee title to the Property. 2. Covenant to Hold As One Parcel. Declarant hereby covenants and agrees that the parcels comprising the Property shall be held under common ownership and that none of the parcels shall be sold, conveyed, leased, transferred, hypothecated, held, encumbered, or leased separate and apart from the other. 3. Covenants Running With The Land. 3.1 Covenants Running With the Land. This Declaration is designed to create covenants appurtenant to and running with the Property. Declarant hereby declares that all of the Property shall be held, sold, conveyed, encumbered, hypothecated, leased, used, occupied and improved subject to the covenants, conditions, and restrictions set forth herein, all of which are for the purposes of uniformly enhancing or protecting the value and desirability of the Property. The covenants, conditions, and restrictions set forth herein shall run with the Property and shall be binding upon all persons having any right, title or interest in the Property, or any part thereof, their heirs, successive owners and assigns; shall inure to the benefit of every portion of the Property and any interest therein; shall inure to the benefit of the Agency and its successors and assigns and successors in interest; and shall be binding upon Declarant, its successors and assigns and successors in interest. Agency and Declarant hereby declare their understanding and intent that the burden of the covenants set forth herein touch and concern the land in that Declarant's legal interest in the Property is rendered less valuable thereby. Agency and Declarant hereby further declare their understanding and intent that the benefit of such covenants touch and concern the land by enhancing and increasing the enjoyment and use of the Property by the citizens of the City and by furthering the health, safety and welfare of the residents of the City. 3.2 Declaration Enforceable by Agency. Declarant grants to Agency the right and power to enforce, by any remedy available to Agency in law or equity, the covenants, conditions, 394/015610-0040 139234.06 a09/12/01 2 restrictions, reservations, and agreements contained in this Declaration against the Declarant and all persons having any right, title or interest in the Property, or any part thereof, their heirs, successive owners and assigns. 4. Termination. No breach of this Declaration shall entitle any party to cancel, rescind or otherwise terminate this Declaration or excuse the performance of such party's obligation hereunder; provided, however, that this limitation shall not affect in any manner any other rights or remedies which the parties may have by reason of such breach. 5. No Merger. This Declaration shall not merge with any grant deed or any other conveyance of any interest in the Property or any portion thereof, including any conveyance to the Agency. 6. Miscellaneous. 6.1 Term. The covenants, conditions, restrictions, reservations, and agreements contained in this Declaration shall remain in effect until released by the Agency by an instrument in writing recorded in the official records of Riverside County. There shall be no merger of this Declaration with any other interest pursuant to the terms set forth in Paragraph 5. Should the Property that is the subject of this Declaration undergo a change in use from its use as a multifamily apartment complex and parking area serving the apartment complex, the Agency shall release this Declaration when Declarant or its successor -in -interest can demonstrate that this Declaration is not required for the replacement use. 6.2 Modification. This Declaration may not be amended or modified except by a written instrument duly executed and acknowledged by the parties hereto, or their successors or assigns, and duly recorded in the official records of Riverside County. 6.3 Governing Law. This Declaration shall be governed by and construed in accordance with the laws of the State of California. 6.4 Severability. The invalidity of or inability to enforce any provision of this Declaration with respect to a particular party or set of circumstances shall not in any way affect the validity and enforceability of any other provision hereof, or the same provision when implied to another party or to a different set of circumstances. 6.5 Attorneys' Fees. In any action between the parties seeking enforcement of any of the terms and provisions of this Declaration, the prevailing party in such action shall be awarded, in addition to any damages, injunctive or other relief, its reasonable costs and expenses, including attorneys' fees and expert witness fees. 6.6 Counterparts. This Declaration may be executed in any number of counterparts each of which shall be an original but all of which shall constitute one and the same document. [end - signature page follows] 394/015610-0040 139234.06 a09/12/01 3 IN WITNESS WHEREOF, the undersigned have executed this Declaration as of the date first written above. "Declarant" LA QUINTA 34 LLC, a California limited liability company 0 Lawrence C. Rael, Managing Member "AGENCY" LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic LIM ATTEST: Agency Secretary APPROVED AS TO FORM: RUTAN & TUCKER, LLP Attorneys for the La Quinta Redevelopment Agency Thomas Genovese Executive Director 394/015610-0040 139234.06 a09/12/01 4 EXHIBIT "A" LEGAL DESCRIPTION OF THE PROPERTY LOTS 1 TO 11 INCLUSIVE IN BLOCK 126 OF SANTA CARMELITA AT VALE LA QUINTA, UNIT NO. 14, IN THE CITY OF LA QUINTA, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 18 PAGES 82 AND 83 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY. EXCEPTION THEREFROM THOSE PORTIONS OF LOTS 1, 5, 6 AND 11, DEEDED TO THE COUNTY OF RIVERSIDE, BY DOCUMENTS RECORDED MARCH 23, 1978 AS INSTRUMENT NOS. 55038 AND 55039 OF OFFICIAL RECORDS OF RIVERSIDE COUNTY, CALIFORNIA. AND LOTS 6 AND 7 IN BLOCK 125 OF SANTA CARMELITA AT VALE LA QUINTA UNIT NO. 141 AS SHOWN BY MAP RECORDED IN BOOK 18, PAGE 82 OF MAPS, RECORDS OF RIVERSIDE COUNTY, CALIFORNIA. 394/015610-0040 139234.06 a09/12/01 5 CERTIFICATE OF ACCEPTANCE THIS IS TO CERTIFY THAT THE INTEREST IN REAL PROPERTY CONVEYED BY THE FOREGOING DECLARATION BY DECLARANT THEREIN DESCRIBED IN FAVOR OF THE LA QUINTA REDEVELOPMENT AGENCY, A PUBLIC BODY, CORPORATE AND POLITIC, IS HEREBY ACCEPTED BY THE UNDERSIGNED OFFICER OF THE LA QUINTA REDEVELOPMENT AGENCY ON BEHALF OF THE LA QUINTA REDEVELOPMENT AGENCY, PURSUANT TO AUTHORITY CONFERRED ON THE UNDERSIGNED OFFICER BY RESOLUTION NO. RDA RA-2001-01 ADOPTED BY THE BOARD OF DIRECTORS OF THE LA QUINTA REDEVELOPMENT AGENCY ON JUNE 5, 2001, AND THE LA QUINTA REDEVELOPMENT AGENCY CONSENTS TO RECORDATION THEREOF BY ITS DULY AUTHORIZED OFFICER. mm Date: Thomas Genovese, Executive Director 394/015610-0040 6 139234.06 a09/12/01 STATE OF CALIFORNIA ) ss. COUNTY OF On before me, a notary public, personally appeared personally known to me (or proved to me on the basis of satisfactory evidence) to be the person whose name is subscribed to the within instrument and acknowledged to me that he/she executed the same in his/her authorized capacity, and that by his/her signature on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument. WITNESS my hand and official seal. Name: [SEAL] 394/015610-0040 139234.06 a09/12/01 7 STATE OF CALIFORNIA ) ) ss. COUNTY OF ) On before me, a notary public, personally appeared personally known to me (or proved to me on the basis of satisfactory evidence) to be the person whose name is subscribed to the within instrument and acknowledged to me that he/she executed the same in his/her authorized capacity, and that by his/her signature on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument. WITNESS my hand and official seal. 0 [SEAL] Name: 394/015610-0040 139234.06 a09/12/01 8 EXHIBIT "J" DISBURSEMENT PROCEDURES Disbursement of proceeds of the Rehabilitation Loan (other than the Agency Escrow Deposit) shall be made in accordance with the following procedures: 1. Application for Disbursement --Timing and Documentation. Not more frequently than once each calendar month, Participant may submit a request for a disbursement to pay the actual costs of the rehabilitation work which request shall be in a form acceptable to the Executive Director ("Disbursement Request"). Each Disbursement Request shall be accompanied by: (a) Participant's request for Disbursement only to pay the costs of completed work, which costs shall correspond to and shall not exceed the appropriate budget amounts for the Project as approved by the Agency Executive Director. The budget amounts for each component of work may at adjusted from time to time upon with prior written approval of the Agency Executive Director, which approval shall not be unreasonably withheld, conditioned, or delayed as long as Participant has provided the Agency Executive Director with satisfactory documentation justifying the budget adjustment. (b) True and correct copies of invoices and other supporting documentation for the cost of the work performed, material supplied and/or costs incurred or due for which Disbursement is requested, enabling the Agency Executive Director to determine to his/her reasonable satisfaction that Participant has incurred the costs and fees for which the Disbursement is to be utilized to pay. (c) A description from Participant of the work performed, material supplied and/or costs incurred or due for which Disbursement is requested with respect to each item for which Disbursement is requested; and the total amount incurred, expended and/or due for each requested item less prior Disbursements. (d) Submission by Participant of a written accounting signed by each person or entity who furnished labor, services, equipment or material to the Site for the period covered by the currently requested Disbursement showing all amounts owed to such person or entity, together with a conditional release or waiver from each such person or entity covering the work which is subject to the currently requested Disbursement, said release or waiver conforming to the requirements of Civil Code Section 3262. (e) Unconditional lien releases or waivers, conforming to the requirements of Civil Code Section 3262, from all persons and entities who have furnished labor, services, equipment or material to the Site for the period covered by the immediately preceding Disbursement, or cancelled check(s) verifying 394/015610-0040 139234.06 a09/12/01 that the conditional releases or waivers previously provided pursuant to clause (d) have become unconditional. (f) If applicable, architect's, inspector's and/or engineer's certificate for payment stating that, based upon said parties periodic review of the progress of rehabilitation work Participant is entitled to the payment requested in the Disbursement Request. 2 Participant Warranty. Each Disbursement Request submitted to the Agency and shall be signed by Participant, which signature shall constitute a warranty by Participant that all information and documents submitted in conjunction with such Disbursement Request are true and correct. 3 Conditions Precedent to Disbursements. Even if Participant has met all of the requirements for receipt of a Disbursement pursuant to the above, Agency shall not make any Disbursement from the Rehabilitation Loan in response to a Disbursement Request until all of the following conditions are met in connection with such Disbursement, or Agency waives such conditions in their respective sole and absolute discretion: a. Participant has obtained all required building and other permits and approvals for the work performed. b Participant is not in material default of any of its obligations set forth in any of the Agency Agreements or any agreement or document referenced in any of the Agency Agreements. C. Agency is satisfied that the rehabilitation work is in all material respects in compliance with the plans therefor approved in accordance with the AHRA and all applicable laws, rules and regulations and other requirements. d. Participant has applied all previously Disbursements to rehabilitation of the Site in accordance with the Agency Agreements and approved Project plans and permits and for no other purpose. e. The Agency is satisfied, based upon periodic inspections and such other information as the Agency deems relevant, that the progress of the rehabilitation work is as represented by Participant. f. Agency has not been notified that Agency is required under applicable laws to withhold the Disbursement, no stop notice has been delivered to Agency, and no mechanics' or similar lien has been recorded against the Site. 4. Retainage. Provided that Participant is entitled to receive a Disbursement pursuant to the terms hereof, the amount of each Disbursement from shall be reduced by ten percent (10%) as a "Retainage" amount. Prior to the disbursement of the Retainage, the following shall have occurred: (i) if applicable, the architect, inspector or engineer shall have issued a Certificate of Substantial Completion, (ii) Agency shall have recorded the Release of Construction Covenants, 394/015610-0040 2 139234.06 a09/12/01 and (iii) the period for filing a mechanic's or similar lien or a stop notice shall have expired with no lien or stop notice having been filed. 5. Form of Disbursement. Disbursement shall be made by means of check(s) made payable jointly to Participant and the persons and entities who have furnished the labor, services, equipment or material to the Site; provided, however, if evidence is provided that confirms that such persons and entities furnishing labor, services, and equipment to the Site have already been paid, the payment made be made solely to Participant. 7. Remaining Funds in Account. If any Rehabilitation Loan amount remains after completion of the rehabilitation work, Agency shall retain the balance and such amount shall be deemed payment on the outstanding balance of the Agency Note. 394/015610-0040 139234.06 a09/12/01 3 EXHIBIT "K" FORM OF SUBORDINATION AGREEMENT [SEE FOLLOWING PAGES] 394/015610-0040 139234.06 a09/12/01 Recording Requested By And When Recorded Return To: La Quinta Redevelopment Agency 78-495 Calle Tampico La Quinta, CA 92253 Attn: Executive Director [Space Above For Recorder's Use] [Exempt From Recording Fees per Gov. Code 6103] SUBORDINATION AGREEMENT NOTICE: THIS SUBORDINATION AGREEMENT RESULTS IN YOUR SECURITY INTEREST IN THE PROPERTY BECOMING SUBJECT TO AND OF LOWER PRIORITY THAN THE LIEN OF SOME OTHER OR LATER SECURITY INSTRUMENTS. THIS SUBORDINATION AGREEMENT ("Subordination Agreement") is entered into this day of , by and among the LA QUINTA REDEVELOPMENT AGENCY, a public agency, corporate and politic ("Agency"), LA QUINTA 34 LLC, a California limited liability company ("Participant"), and RUBICON REALTY CAPITAL CORP., A CALIFORNIA CORPORATION ("Lender"). RECITALS: A. Participant owns fee title to the real property described on Attachment No. "1" ("Apartment Parcel") and has a contract to acquire the real property described on Attachment No. 2 ("Additional Parcels") (collectively, the "Property") attached hereto and incorporated herein by reference. B. The Agency and Participant have entered into an Affordable Housing Rehabilitation Agreement, dated , 2001 (the "AHRA"). Pursuant to the terms of the AHRA and the agreements referred to therein, Agency is obligated to loan Participant the sum of THREE HUNDRED FIFTY THOUSAND DOLLARS ($350,000.00) ("Agency Loan"), to assist Participant in rehabilitating the Property. The Agency Loan is evidenced by a Note ("Agency Note"). The Agency Note is partially secured by a Deed of Trust with Assignment of Rents encumbering the Property recorded in the Official Records of Riverside County (the "Agency Deed of Trust") on or about the date of recordation of this Subordination Agreement. C. Pursuant to the AHRA, and in partial consideration for the Agency Loan, Agency and Participant, executed and recorded against the Property that certain Regulatory Agreement and Declaration of Covenants and Restrictions by and between Agency and Participant recorded in the Official Records of Riverside County (the "Agency Regulatory Agreement") on or about the date of recordation of this Subordination Agreement. 394/015610-0040 139234.06 a09/12/01 5 D. Pursuant to the AHRA, and in partial consideration for the Agency Loan, Agency and Participant, executed and recorded against the Property that certain Declaration of Covenants and Restrictions And Agreement To Hold Property As One Parcel, by and between Agency and Participant recorded in the Official Records of Riverside County (the "Declaration") on or about the date of recordation of this Subordination Agreement. E. Participant has an existing loan from Lender in the original principal amount of NINE HUNDRED THIRTY THOUSAND DOLLARS (the "Lender Loan"), which is evidenced by a promissory note dated on ("Lender Note"). The Lender Note is secured by a deed of trust, dated on and recorded against only the Apartment Parcel (legally described in Attachment No. 1) ("Lender Deed of Trust"). The Lender Deed of Trust was recorded on 5 , as Instrument No. in the Official Records of Riverside County. The Lender Deed of Trust is sometimes referred to in the AHRA as the "First Deed of Trust." F. Agency, Participant, and Lender agree that the Agency will specifically and unconditionally subordinate the lien or charge of the Agency Deed of Trust and the Agency Regulatory Agreement to the lien or charge of the Lender Deed of Trust. NOW, THEREFORE, in consideration of the foregoing Recitals and the covenants and promises hereinafter contained, and for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: 1.0 Subordination by Ap-enc 1.1 Necessity of Subordination. Pursuant to Section 33334.14 of the Health and Safety Code, Agency is permitted to subordinate the Agency Deed of Trust and Agency Regulatory Agreement only if certain specified findings are made and if certain rights are granted to the Agency. In accordance with said Section, the Agency hereby finds that no economically feasible alternative method of financing the units on substantially comparable terms and conditions without subordination is reasonably available and the Agency has obtained written commitments to protect the Agency's investment in the event of a default, as specified in this Subordination Agreement. Therefore, Agency hereby agrees to subordinate the lien or charge of the Agency Deed of Trust and Agency Regulatory Agreement to the Lender Deed of Trust on the terms set forth in this Subordination Agreement. This Subordination Agreement shall set forth the priority of liens between the parties and govern the terms and conditions of such subordination. 1.2 Subordination of Agency Deed of Trust and Agency Regulatory Agreement to Lender Deed of Trust. The Lender Deed of Trust (and any renewals or extensions of, or advances, including interest, thereunder) shall unconditionally be and remain at all times a lien or charge on the Apartment Parcel, prior and superior to the lien or charge of the Agency Deed of Trust and the Agency Regulatory Agreement, to all present and future indebtedness and obligations secured thereby, together with all rights and privileges of Agency thereunder, but subject to the terms and conditions of this Subordination Agreement. 394/015610-0040 6 139234.06 a09/12/01 1.3 Refinancing. If Participant chooses to refinance the Lender Loan with Lender or any other entity, or chooses to obtain new financial secured by the Property, Agency agrees to subordinate the Agency Deed of Trust and the Agency Regulatory Agreement to the refinancing lender's deed of trust under the same terms and conditions as set forth in this Agreement, except that the Agency shall subordinate the Agency Deed of Trust and Agency Regulatory Agreement with respect to the Apartment Parcel and the Additional Parcel on the condition that the amount of the new loan plus the outstanding principal balance secured by the Agency Deed of Trust is not greater than ninety-five percent (95%) of the then appraised fair market value of the Property. 1.4 Covenants of Agency. The Agency declares, agrees and acknowledges that to Agency's actual knowledge, as of the date of this Subordination Agreement there is no breach, event of default or default existing under the Agency Deed of Trust or Agency Regulatory Agreement, or any circumstances, event, omission or failure of condition which would constitute such a breach, default or event of default after notice or lapse of time, or both. 3. Rights of Agency. 3.1 Default Under Lender Deed of Trust. In the event of a breach or default by Participant under the terms of the Lender Deed of Trust, the party alleging such default shall provide the Agency with written notice of such breach or default concurrently with providing such notice to Participant. Upon receipt of such notice of breach or default, the parties hereto agree that Agency shall each have all of the following rights so long as any of the Agency Deed of Trust or Agency Regulatory Agreement encumber any portion of the Apartment Parcel or interest therein: 3.1.1 To cure the noticed default at any time prior to the foreclosure of the Lender Deed of Trust. In connection therewith, the Lender agrees that (i) in the event of a monetary default, the Lender shall not foreclose Lender Deed of Trust or other lien prior to the date that is sixty (60) days after the date that the Lender would otherwise be legally entitled to foreclose Lender Deed of Trust and (ii) in the event of a nonnionetary default, the Lender shall not foreclose its Lender Deed of Trust or other lien prior to the date specified above for monetary defaults; provided that if said nonmonetary default is susceptible to being cured only when the Agency has obtained possession of the Property, the Agency shall have as long as necessary (x) to obtain possession of the Apartment Parcel by either the Agency foreclosing the Agency Deed of Trust, and to cure the default, so long as the Agency does so with reasonable and continuous diligence. 3.1.2 To negotiate with the Lender regarding the noticed default at any time prior to the foreclosure of the Lender Deed of Trust or other lien. 3.2 Foreclosure of Deeds of Trust. The Lender hereby agrees that in the event that Agency forecloses the Agency Deed of Trust or otherwise acquires title to the Property, said transfer shall not give rise to any right on the part of the Lender to accelerate the amounts due on the Lender Loan. 394/015610-0040 7 139234.06 a09/12/01 4. Miscellaneous. 4.1 Entire Agreement. This Subordination Agreement shall be the whole and only agreement with regard to the matters set forth herein and shall supersede and cancel, but only insofar as would affect the priority between the Lender Deed of Trust and the Agency Deed of Trust and Agency Regulatory Agreement, any prior agreement as to such subordination including, but not limited to, those provisions, if any, contained in the Agency Deed of Trust or Agency Regulatory Agreement that provide for the subordination of the lien or charge thereof to another deed or deeds of trust or to another mortgage or mortgages, upon the Property. 4.2 Successors and Assigns. This Subordination Agreement shall inure to and bind the heirs, legatees, devisees, administrators, executors, successors and assigns of the parties hereto. 4.3 California Law. This Subordination Agreement shall be construed according to the laws of the State of California. 4.4 Severability. If any term, provision, condition or covenant of this Subordination Agreement or the application thereof to any party or circumstances shall, to any extent, be held invalid or unenforceable, the remainder of this instrument, or the application of such term, provision, condition or covenant to persons or circumstances other than those as to whom or which it is held invalid or unenforceable shall not be affected thereby, and each term and provision of this Subordination Agreement shall be valid and enforceable to the fullest extent permitted by law. 4.5 Notice. Formal notices, demands, and communications between Agency, Participant, and Lender shall be sufficiently given if personally delivered, delivered by a reputable same -day or overnight courier services that provides a receipt showing date and time of delivery, or delivered by United States mail, registered or certified, postage prepaid, return receipt requested, to the following addresses If to Agency: La Quinta Redevelopment Agency 78-495 Calle Tampico La Quinta CA 92253 Attn: Executive Director With a copy to: Rutan & Tucker, LLP 611 Anton Boulevard, Suite 1400 Costa Mesa, CA 92626 Attn: M. Katherine Jenson, Esq. 394/015610-0040 8 139234.06 a09/12/01 If to Participant: La Quinta 34 LLC 1800 East Garry Avenue, Suite 117 Santa Ana, CA 92705 Attn: Lawrence C. Rael With copy to: Gibson, Dunn & Crutcher LLP Jamboree Center 4 Park Plaza, Suite 1400 Irvine, CA 92614-8557 Attn: Teresa J. Farrell, Esq. If to Lender: Rubicon Realty Capital Corporation 95 Argonaut, Suite 110 Aliso Viejo, CA 92656 Attn: Robert Roberts All notices shall be deemed to be received as of the earlier of actual receipt by the addressee thereof or the expiration of forty-eight (48) hours after depositing in the United States Postal System in the manner described in this Section. Such written notices, demands, and communications may be sent in the same manner to such other addresses as a party may from time to time designate by mail. 4.6 Attorneys' Fees. In the event that any action, suit or other proceeding is brought to enforce the obligations of under this Agreement, the prevailing party shall be entitled to receive all of such party's costs and expenses of suit, including attorneys' fees, expert witness fees and all costs incurred in each and every such action, suit or other proceeding, including any and all appeals or petitions therefrom. 4.7 Nonliability of Agency Officials. No officer, official, member, employee, agent, or representative of Agency shall be personally liable to Participant or Lender, or any successor in interest, in the event of any default or breach by Agency or for any amount which may become due to Participant or Lender or successor or on any obligations under the terms of this Agreement. 4.8 Counterparts. This Subordination Agreement may be executed in any number of counterparts, each of which, when all the parties hereto have signed this Subordination Agreement, shall be deemed an original. END - SIGNATURE PAGES FOLLOW] 394/015610-0040 9 139234.06 a09/12/01 IN WITNESS WHEREOF, the parties have executed this Subordination Agreement as of the date first written above. NOTICE: THIS SUBORDINATION AGREEMENT RESULTS IN YOUR SECURITY INTEREST IN THE PROPERTY BECOMING SUBJECT TO AND OF LOWER PRIORITY THAN THE LIEN OF SOME OTHER OR LATER SECURITY INSTRUMENTS. ATTEST: I= Secretary APPROVED AS TO FORM: RUTAN & TUCKER, LLP 0 Agency Counsel 394/015610-0040 139234.06 a09/12/01 "AGENCY" LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic By: Executive Director "PARTICIPANT" LA QUINTA 34 LLC, a California limited liability company M Lawrence C. Rael Managing Member "LENDER" RUBICON REALTY CAPITAL CORPORATION, a California corporation By: Its: By: Its: [END OF SIGNATURES] 10 STATE OF CALIFORNIA ) ss. COUNTY OF ) On before me, , personally appeared , personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. Witness my hand and official seal. Notary Public [SEAL] STATE OF CALIFORNIA ) ss. COUNTY OF ) On before me, , personally appeared , personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. Witness my hand and official seal. Notary Public [SEAL] 394/015610-0040 1 1 139234.06 a09/12/01 STATE OF CALIFORNIA ) ss. COUNTY OF ) On before me, , personally appeared , personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. Witness my hand and official seal. [SEAL] STATE OF CALIFORNIA ss. COUNTY OF Notary Public On before me, , personally appeared , personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. Witness my hand and official seal. Notary Public [SEAL] 394/015610-0040 12 139234.06 a09/12/01 ATTACHMENT NO. 661" LEGAL DESCRIPTION OF APARTMENT PARCEL LOTS 1 TO 11 INCLUSIVE IN BLOCK 126 OF SANTA CARMELITA AT VALE LA QUINTA, UNIT NO. 14, IN THE CITY OF LA QUINTA, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 18 PAGES 82 AND 83 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY. EXCEPTION THEREFROM THOSE PORTIONS OF LOTS 1, 5, 6 AND 11, DEEDED TO THE COUNTY OF RIVERSIDE, BY DOCUMENTS RECORDED MARCH 23, 1978 AS INSTRUMENT NOS. 55038 AND 55039 OF OFFICIAL RECORDS OF RIVERSIDE COUNTY, CALIFORNIA. 394/015610-0040 13 139234.06 a09/12/01 ATTACHMENT NO. 2 LEGAL DESCRIPTION OF ADDITIONAL PARCELS LOTS 6 AND 7 IN BLOCK 125 OF SANTA CARMELITA AT VALE LA QUINTA, UNIT NO. 145 AS SHOWN BY MAP RECORDED IN BOOK 18, PAGE 82 OF MAPS, RECORDS OF RIVERSIDE COUNTY, CALIFORNIA. 394/015610-0040 139234.06 a09/12/01 14 (e oe--?v - 0 5- ORANGE COAST TITLE COMPANY ESCROW DIVISION 640 N. Tustin_Ave., Suite 211 Santa Ana, CA 92705 (714) 558-0222 (800) 540-3515 October 1, 2001 LA QUINTA REDEVELOPMENT AGENCY P. O. BOX 1504 78-495 CALLE TAMPICO LA QUINTA, CA 92253 ATTENTION: JERRY HERMAN COMMUNITY DEVELOPMENT DIRECTOR Re: Escrow No.: 107234-MC AMD 107234-1-MC Property: APN# 773-073-0049 & 0059 , La Quinta, CA Loan to: La Quinta 34, LLC Loan No. LA QUINTA REDEVELOPMENT AGENCY Our escrow covering the property referenced above has been closed. Enclosed please find the following items: Copy of Settlement Statement (The overages of actual vs estimated costs were refunded to La Quinta through escrow No. 10234-1-MC Refund check for overage of charges in the amount of $182.90 Copy of Note (The Original Note was forwarded with copy of the enclosed to your legal counsel Escrow No. 107234-MC (Recording charges $33.00 less .10 messenger fee net refund $32.90) (Refund of Pad $150) Conformed copies of recorded documents Should you have any questions, or need anything further from our file, please do not hesitate to contact me at the above referenced number. Sincerely, Orange Coast Title Com a Marty Cie s ri, CSEO, Sr. C & scrow Officer fax 714-569-1098 c : RUTAN AND TUCKER, 611 ANTON STREET 14TH FLOOR COSTA MESA, CA 92626-1931 ATTENTION: DAN SLATER NOTE Spy— 13 , 2001 ("Note Date") $350,000-00 ("Loan Amount") FOR VALUE RECEIVED, the undersigned (herein, the "Maker") hereby promises to pay to the order of the LA QUINTA REDEVELOPMENT AGENCY, a public corporate � , orate and politic ("Holder" or "Agency"), at a place designated by Holder, the p p rinci al sum of THREE HUNDRED FIFTY THOUSAND DOLLARS ($350,000.00) ("Note Amount"), plus accrued interest, or such lesser amount which shall from time to time be owing hereunder pursuant to the terms hereof. The principal sum hereof shall be disbursed pursuant to the terms and conditions set forth in that certain Affordable Housing Rehabilitation Agreement by and among Maker and Holder, dated September 13, 2001 ("AHRA"), pertaining to Maker's redevelopment of certain real property dcfincd in the AHRA as the "Site." Reference is also made to the following additional agreements and documents, the first three of even date herewith, involving Maker and Holder and/or pertaining to the Site: (i) Deed of Trust with Assignment c f ' :,4��:. �, ��1 �„� �,,,. i�Taker as borrower Holder as beneficiary, and Orange Coast Title Company as Trustee, and recorded in the Office of the Riverside County Recorder ("Agency Deed of Trust"). The Agency Deed of Trust partially secures repayment of this Note. (ii) Regulatory Agreement and Declaration of Covenants and Restrictions, b and betty Y between Maker and Holder, for the benefit of Holder, and recorded in the Office of the Riverside County Recorder ("Agency Regulatory Agreement'). Declaration of Covenants, Conditions, and Restrictions And Agreement To Hold Property As One Parcel, by and between Maker and Holder, for the benefit of Holder, and recorded in the Office of the Riverside County Recorder ("Declaration"). (iv) Subordination Agreement, by and among Maker, Holder, and Rubicon Realty Capital Corporation, recorded in the Office of the Riverside County Recorder (dated on or about August 9, 2001). All of the foregoing listed documents are referred to herein collectively as the "Agency g Y Agreements." The Agency Agreements are incorporated herein as though fully set forth. Except as otherwise provided herein, the defined terms used In l i i �� �.0 . - . � �iie same meaning as set forth in the AHRA.. 1. Purpose of Loan. The loan evidenced by this Note is a loan for the purpose of rehabilitating the Site to accordance with the AHRA. 2. Principal Amount. The principal amount of this Loan shall be THREE HUNDRED FIFTY THOUSAND DOLLARS ($350,000.00). Simple interest shall accrue on the outstanding principal amount at seven percent (7%) per annum, compowicied annually. 394/015610-0040 139234.06 a09/ 12/01 Certifi to be a true and co- t Copy of the ocument in our i iles OR GE T TITLE By: Escrow Officer 3. Term of Note; Repayment. 3.1 Subject to provisions of Paragraph 4 hereof which provides for acceleration of all principal and accrued interest and immediate repayment thereof in the event of a default by Maker, this Note shall expire and be of no force or effect as of the date of expiration of p the Agency Regulatory Agreement. Maker shall not be obligated to make any PY payments on this Note and unless and until any of the events described in Paragraph 4 occur. Upon the occurrence of anaccrued- p uncured default, the full Note Amount and all interest thereon shall be immediately due and payable as set forth in Paragraph 4. 3.2 Maker shall have the right to prepay all or any portion of this Note at any time without penalty, and upon such repayment the Agency Deed of Trust shall be reconveY ed. Prepayment shall not affect the Agency Regulatory Agreement or the term of the Agency Regulatory g y Re gu ry Agreement. 3.3 Any payments made by Maker in payment �� tT-�-�� -hKll be applied in the following order: (i) first to the interest then accrued and due on the p nc unpaid principal balance p P under this Note, (ii) second to reduction of the principal balance of this Note. 4. Default; Cross -Default; Acceleration. 4.1 In addition to Maker's failure to timely perform the requirements of this Note a default by Maker of any of the Agency Agreements shall constitute a default of this Note and all of the Agency Agreements. 4.2 In the event of a default of this Note o a default of an of the Agency g enc Y Agreements by Maker, which default has not been cured within the cure period applicable p pp a to such default, Holder may, at its option, declare this :Mote and the entire obligation hereby by including ncluding accrued interest, immediately due and payable and collectible then or thereafter as Holder may elect, regardless of the date of maturity, and notice of the exercise of said option is hereby expressly waived by Maker. 5. Collection Cos Attorneys' Fees. If, because of any event of default under this Note or any of the Agency Agreements, any attorney is engaged by Holder to enforce or defend any provision of this instrument, whether or not suit is filed hereon, then Maker shall pay y upon demand reasonable attorneys' fees, expert witness fees- -' 4- v :.curved by Holder together with interest thereon until paid at the applicable rate of interest a able hereunder as if pY , such fees and costs had been added to the principal mving hereunder. 6. Waivers by Maker. Maker and all endorsers, guarantors and persons liable or to become . p ome liable on this Note waive presentment, protest and demand, notice of protest, demand . p and dishonor and nonpayment of this Note and any and all other notices or matters of a like nature, and consent to any and all renewals and extensions near the time of hereof and payment agree further that at any time and from time to time wit , ,. L; k-, the terms of her payment ein may be modified or the security described in any documents securing this Note ref . . g eased in whole or in part, or increased, changed or exchanged by agreement between Holder and any owner of the premises affected by said documents securing this Note, without in an affecting Y way n g the 394/015610-0040 139234.06 a09/12/01 2 liability of any party to this Note or any persons liable or to become liable with respect to any indebtedness evidenced hereby. 7. Severability. The unenforceability or invalidity of any provision or provisions of this Note as to any persons or circumstances shall not render that provision or those provisions unenforceable or invalid as to any other provisions or circumstances, and all provisions hereof, in all other respects, shall remain valid and enforceable. 8. Modifications. Neither this Note nor any term hereof may be waived, amended, discharged, modified, changed or terminated orally; nor shall any waiver of any provision hereof be effective except by an instrument in writing signed by Maker and Holder. No delay or omission on the part of Holder in exercising any right hereunder shall operate as a waiver of such right or of any other right under this Note. 9. No Waiver by Holder. No waiver of any breach, default or failure of condition under the terms of this Note shall be implied from any failure of the Holder of this Note to take, or any delay be implied from any failure by the Holder in taking action with respect to such breach, default or failure from any prior waiver of any similar or unrelated breach, default or failure. 10. U_ sury. Notwithstanding any provision in this Note, the total liability for payment in the nature of interest shall not exceed the limit imposed by applicable laws of the State of California. 11. Nonassignability. Maker may only Transfer (as that term is defined in the AHRA) this Note in accordance with provisions and restrictions pertaining to a transfer of the AHRA as set forth in the AHRA. Holder may freely Transfer Holder's interest in this Note in any manner, at Holder's sole discretion; provided, that at the time of such Transfer Holder also transfers .the AHRA to such transferee. 12. Governing_ Law. This Note has been executed and delivered by Maker in the State of California and is to be governed and construed in accordance with the laws thereof. 13. Time of Essence. Time is of the essence in the performance of the obligations and provisions set forth in this Note. N IN WITNESS WHEREOF, Maker has executed this Note as of the Note Date. "Maker" LA QUINTA 34 LLC, a California limited liability o any By: 64 Lawr .Rae , Kanaging Member 394/015610-0040 139234.06 a09/12/01 3 Closing Date: 9/27/01 Escrow Statement of: LA QUINTA 34, LLC ORANGE COAST TITLE COMPANY ESCROW DIVISION 640 N. Tustin -Ave., Suite 211 Santa Ana, CA 92705 (714) 558-0222 (800) 540-3515 Borrower(s) Closing Statement Dated As of 10/1/01 Escrow No: 107234-1 - MC Escrow Officer: Marty Clesceri, CSEO, Sr. Commercial Escrow Officer Property Address: L. 1-11 B. 126 & L. 6-7 B. 125 SANTA CARMELITA AT VALE LA QUINTA U. 14 , DEBITS CREDITS From New 1st Trust Deed to:LA QUINTA REDEVELOPMENT AGENCY Deposit Title Charges Inspection Misc Lenders For $350,000.00 Escrow Charges Base Escrow Fee Builder Discount New Loan Charges HOLDBACK To LA QUINTA REDEVELOPMENT AGENCY Additional Disbursements City of La Quinta Redevelopment Agency (Refund of chgs 107234-MC) (Refund of recording chgs $33.00 less .10 Mess. Fee Net Refund $32.90 Refund of Pad $150.00) Orange Coast Title Co. Mess/Fed X Fees Orange Coast Title Co. Escrow No. 107234 Balance Due You To 50.00 $1,028.50 $500.00 $2769227.68 $182.90 $20.00 $73, 772.32 $3,368.66 $350,000.00 $5,075.06 $75.00 *Totals* Certified tojbearue an $355,150.06 $355,150.06 d correct Copy of thment in our files ORANGE CITLE By: Esc ow Officer ORANGE COAST TITLE COMPANY ESCROW DIVISION 640 N. Tustin -Ave., Suite 211 Santa Ana, CA 92705 (714) 558-0222 (800) 540-3515 Buyer(s) Closing Statement Dated As of 10/1 /01 Closing Date: 9/27/01 Escrow Statement of: La Quinta 34, LLC Property Address: APN# 773-073-0049 & 0059 La Quinta, CA From Total Consideration New 1 st Trust Deed to:LA QUINTA REDEVELOPMENT AGENCY Deposit Deposit Prorations/Adj ustments County Tax for 6 months @ $387.51 7/1 /01 County Tax for 6 months @ $387.51 7/1 /01 Miscellaneous Adjustments Credit to Buyer for Taxes paid dr buyer/cr seller; seller cost Title Charges 1st & 2nd Installment's for Parcels 4 & 5 Recording Charges Grant Deed LLC-1 Escrow Charges Base Escrow Fee 25% Discount on Fee Additional Disbursements Orange Coast Title Co. Escrow No. 107234-1 Orange Coast Title Co. Mess/Fed X Fees Escrow No: 107234 - MC Escrow Officer: Marty Clesceri, CSEO, DEBITS CREDITS To $709000.00 $73,772.32 $1,705.04 $1,000.00 9/28/01 9/28/01 Certified to be a true and correct *Totals* Copy of tPe document in our files ORANG COAST T oe By: Escr ficer $187.29 $187.29 $1, 72 5.04 $19452.28 $1,725.04 $6.00 $11.00 $350.00 $87.50 $59075.06 $45.10 $78,664.48 $78,664.48 ORANGE COAST TITLE COMPANY ESCROW DIVISION 640 N. Tustin Ave., Suite 211 Santa Ana, CA 92705 (714) 558-0222 (800) 540-3515 October 1, 2001 RUTAN AND TUCKER, 611 ANTON STREET 14TH FLOOR COSTA MESA, CA 92626-1931 ATTENTION: DAN SLATER COUNSEL FOR LA QUINTA REDEVELOPMENT AGENCY Re: Escrow No.: 107234-MC AMD 107234-1-MC Property: APN# 773-073-0049 & 0059 , La Quinta, CA Loan to: La Quinta 34, LLC Loan No. LA QUINTA REDEVELOPMENT AGENCY Our escrow covering the property referenced above has been closed. Enclosed lease find the following ownng items. Copy of Settlement Statement (The overages of actual vs estimated costs were refunded to La Quinta through escrow No. 102 - g 34 1-MC) ORIGINAL copies (2) of subordination agreements for distribution. We recorded one original Conformed copies of recorded documents Hard copy of PTR Should you have any questions, or need anything further from our file, please do not hesitate to contact me at the above referenced number. Sincerely, Orange Coast Title Company Marty Clesceri, CSEO, Sr. C & I Escrow Officer fax 714-569-1098 re, 77 t 41 � ,. = Recording Requested By And When Recorded Return to: La Quinta Redevelopment Agency 78-495 Calle Tampico La Quinta, CA 92253 Attn: Executive Director DOC N 2001-474233 09/28/2001 08:00A Fes:NC Page 1 of 8 Recorded in Official Records County of Riverside Gary L. Orso Assessor, County Clerk d, Recorder 1111111111111111111111111111111111111111111111111111111 U PAGE SIZE DA PCOR NOCOR SMF MISC. F V A R L COPY LONG REFUND NCHG E.- 4M EXEMPT FROM RECORDING FEE PER GOV. CODE § 6103 DEED OF TRUST WITH ASSIGNMENT OF RENTS AND RIDER ATTACHED HERETO NOTE: RIDER ATTACHED TO THIS DEED OF TRUST CONTAINING TERMS INCLUDING SECURITY AGREEMENT AND FIXTURE FILING. This DEED OF TRUST WITH ASSIGNMENT OF RENTS./AND RIDER ATTACHED HERETO ("Deed of Trust"), is made Septenb -r 13 , 2001, between LA QUINTA 34 LLC, a California limited liability company, herein called TRUSTOR, whose address is 1800 East Garry Avenue, Suite 177,tSanta Ana, CA 92705, ORANGE COAST TITLE COMPANY, a California corporation, herein called TRUSTEE, and LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic, herein called BENEFICIARY. WITNESSETH: That Trustor grants to Trustee in trust, with power of sale, Trustor's estate, dated on or about the date hereof, in that property in the City of La Quinta, County of Riverside, State of California, described as: LOTS 1 TO 11 INCLUSIVE IN BLOCK 126 OF SANTA CARMELITA AT VALE LA QUINTA, UNIT NO. 149 IN THE CITY OF LA QUINTA.) COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 18 PAGES 82 AND 83 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY. EXCEPTION THEREFROM THOSE PORTIONS OF LOTS 19 59 6 AND 11, DEEDED TO THE COUNTY OF RIVERSIDE, BY DOCUMENTS RECORDED MARCH 23, 1978 AS INSTRUMENT NOS. 55038 AND 55039 OF OFFICIAL RECORDS OF RIVERSIDE COUNTY, CALIFORNIA. AND LOTS 6 AND 7 IN BLOCK 125 OF SANTA CARMELITA AT VALE LA QUINTA, UNIT NO. 14, AS SHOWN BY MAP RECORDED IN BOOK 18, PAGE 82 OF MAPS, RECORDS OF RIVERSIDE COUNTY, CALIFORNIA together with the rents, issues and profits thereof, subject, however, to the right, power and authority hereinafter given to and conferred upon Beneficiary to collect and apply such rents, issues and profits for the purpose of securing (1) payment of the sum of THREE HUNDRED FIFTY THOUSAND DOLLARS ($350,000.00), with interest thereon according to the terms of a promissory note or notes of even date herewith made by Trustor, payable to order of Beneficiary, and extensions or renewals thereof; (2) the performance of each agreement of Trustor incorporated by reference or contained herein; and (3) payment of additional sums and interest thereon which may hereafter be loaned to Trustor, or his successors or assigns, when evidenced by a promissory note or notes reciting that they are secured by this Deed of Trust. T cz 394/015610-0040 139234.06 a09/12/01 To protect the security of this Deed of Trust, and with respect to the Property above described, Trustor expressly makes each and all of the agreements, and adopts and agrees to perform and be bound by each and all of the terms and provisions set forth in subdivision A, and it is mutually agreed that each and all of the terms and provisions set forth in subdivision B of the fictitious deed of trust recorded in Orange County August 17, 1964, and in all other counties August 18, 1964, in the book and at the page of Official Records in the office of the county recorder of the county where said property is located, noted below opposite the name of such county, namely: COUNTY BOOK PAGE COUNTY BOOK PAGE COUNTY BOOK PAGE COUNTY BOOK PAGE Alameda 1288 556 Kings 858 713 Placer 1028 379 Sierra 38 187 Alpine 3 130-31 Lake 437 110 Plumas 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 Colusa 323 391 Marin 1849 122 San Bernardino 6213 768 Sutter 655 585 Contra Costa 4684 1 Mariposa 90 453 San Francisco A-804 596 Tehama 457 183 Del Norte 101 549 Mendocino 667 99 San Joaquin 2855 283 Trinity 108 595 El Dorado 704 635 Merced 1660 753 San Luis Obispo 1311 137 Tulare 2530 108 Fresno 5052 623 Modoc 191 93 San Mateo 4778 175 Tuolumne 177 160 Glenn 469 76 Mono 69 302 Santa Barbara 2065 881 Ventura 2607 237 Humboldt 801 83 Monterey 357 239 Santa Clara 6626 664 Yolo 769 16 Imperial 1189 701 Napa 704 742 Santa Cruz 1638 607 Yuba 398 693 Inyo 165 672 Nevada 363 94 Shasta 800 633 Kern 3756 690 Orange 7182 18 San Diego SERIES 5 Book 1964, Page 149774 shall inure to and bind the parties hereto, with respect to the property above described. Said agreements, terms and provisions contained in said subdivisions A and B (identical in all counties, and printed on pages 3 and 4 hereof) are by the within reference thereto, incorporated herein and made a part of this Deed of Trust for all purposes as fully as if set forth at length herein, and Beneficiary may charge for a statement regarding the obligation secured hereby, the charge therefor does not exceed the maximum allowed by law. provided The undersigned Trustor, requests that a copy of any notice of default and any notice of sale hereunder be mailed to him at his address hereinbefore set forth. SEE RIDER ATTACHED TO THIS DEED OF TRUST STATE OF CALIFORNIA COUNTY OF C) ;_ On � �T'�M� y41 3_ � 200 , before me, TO67'ee-" -Q'/5 personally appeared LAWRENCE C. RAEL, personally known to me (of pf to be the person(s- - whose names(4) is/ate subscribed to the within instrument and acknowledged to me that he/sticll iey executed the same in his/harAh*k authorized capacity(iee), and that by his k signatures(s) on the instrument the person(s -or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my n d off9ial eal. Signature z (This area Yor official notarial seal) Signature of Trustor LA QUINTA 34 LLCM a C orni 'mited liability company By: Lawrence C. Rael, Managing Member IIIIIIII IIIII IIIII I IIIII IIIII IIIIII III IIII III III ev, z9Rz e74 ge�Aoa JEFFREY P. ALLiSON Commission # 1223314 ���ry pubic C alltomia Orange COUnty r Comm. �m Jun9, ? �Y � - 394/015610-0040 2 139234.06 a09/12/01 DO NOT RECORD The following is a copy of Subdivisions A and B of the fictitious Deed of Trust recorded in each county in California as stated in the foregoing Deed of Trust and incorporated by reference in said Deed of Trust as being a part thereof as if set forth at length therein. A. To protect the security of this Deed of Trust, Trustor agrees: 1) To keep said property in good condition and repair, not to remove or demolish any building thereon; to complete or restore promptly and in a good and workmanlike manner any building which may be constructed, damaged or destroyed thereon and to pay when due all claims for labor performed and materials furnished therefor, to comply with all laws affecting said property or requiring any alterations or improvements to be made thereon; not to commit or permit waste thereof, not to commit, suffer or permit any act upon said property in violation of law; to cultivate, irrigate, fertilize, fumigate, prune and do all other acts which from the character or use of said property may be reasonably necessary, the specific enumerations herein not excluding the general. 2) To provide, maintain and deliver to Beneficiary fire insurance satisfactory to and with loss payable to Beneficiary. The amount collected under any fire or other insurance policy may be applied by Beneficiary upon any indebtedness secured hereby and in such order as Beneficiary may determine, or at the option of Beneficiary the entire amount so collected or any part thereof may be released to Trustor. Such application or release shall not cure or waive any default or notice of default hereunder or invalidate any act done pursuant to such notice. 3) To appear in and defend any action or proceeding purporting to affect the security hereof or the rights or powers of Beneficiary or Trustee; and to pay all costs and expenses, including cost of evidence of title and attorney's fees in a reasonable sum, in any such action or proceeding in which Beneficiary or Trustee may appear, and in any suit brought by Beneficiary to foreclose this Deed. 4) To pay: at least ten (10) days before delinquency all taxes and assessments affecting said property, including assessments on appurtenant water stock; when due, all encumbrances, charges and liens, with interest, on said property or any part thereof, which appear to be prior or superior hereto; all costs, fees and expenses of this Trust. Should Trustor fail to make any payment or to do any act as herein provided, then Beneficiary of Trustee, but without obligation so to do and without notice to or demand upon Trustor and without releasing Trustor from any obligation hereof, may: make or do the same is such manner and to such extent as either may deem necessary to protect the security hereof, Beneficiary or Trustee being authorized to enter upon said property for such purposes; appear in and defend any action or proceeding purporting to affect the security hereof or the rights or powers of Beneficiary or Trustee; pay, purchase, contest or compromise any encumbrance, charge or lien which in the judgment of either appears to be prior or superior hereto; and, in exercising any such powers, pay necessary expenses, employ counsel and pay his reasonable fees. 5) To pay immediately and without demand all sums so expended by Beneficiary or Trustee, with interest from the date of expenditure at the amount allowed by law in effect at the date hereof, and to pay for any statement provided for by law in effect at the date hereof regarding the obligation secured hereby any amount demanded by the Beneficiary not to exceed the maximum allowed by law at the time when said statement is demanded. It is mutually agreed: 1) That any award in connection with any condemnation for public use of or injury to said property or any part thereof is hereby assigned and shall be paid to Beneficiary who may apply or release such moneys received by him in the same manner and with the same effect as above provided for disposition of proceeds of fire or other insurance. 2) That by accepting payment of any sum secured hereby after its due date, Beneficiary does not waive his right either to require prompt payment when due of all other sums so secured or to declare default for failure so to pay. 3) That at any time or from time to time, without liability therefor and without notice, upon written request of Beneficiary and presentation of this Deed and said note for endorsement, and without affecting the personal liability of any person for payment of the indebtedness secured hereby, Trustee may: reconvey any part of said property; consent to the making of any map or plat thereof, join in granting any easement thereon, or join in any extension agreement or any agreement subordinating the lien or charge hereof. 4) That upon written request of Beneficiary stating that all sums secured hereby have been paid, and upon surrender of this Deed and said note to Trustee for cancellation and retention or other disposition as Trustee in its sole discretion may choose and upon payment of its fees, Trustee shall reconvey, without warranty, the property then held hereunder. The recitals in such reconveyance of any matters or facts shall be conclusive proof of the truthfulness thereof. The Grantee in such reconveyance may be described as "the person or persons legally entitled thereto." 5) That as additional security, Trustor hereby gives to and confers upon Beneficiary the right, power and authority, during the continuance of these Trusts, to collect the rents, issues and profits of said property, reserving unto Trustor the right, prior to any default by Trustor in payment of any indebtedness secured hereby or in the performance of any agreement hereunder, to collect and retain such rents, issues and profits as they become due and payable. Upon any such default, Beneficiary may at any time without notice, either in person, by agent, or be a receiver to be appointed by a court, and without regard to the adequacy of any security for the indebtedness hereby secured, enter upon and take possession of said property or any part thereof, in his own name sue for or otherwise collect such rents, issues, and profits, including those past 394/015610-0040 139234.06 a09/12/01 z0a,3 9z 06 due and unpaid, and apply the same, less costs and expenses of operation and collection, including reasonable attorney's fees, upon any indebtedness secured hereby, and in such order as Beneficiary may determine. The entering upon and taking possession of said property, the collecting of such rents, issues and profits and the application thereof as aforesaid, shall not cure or waive any default or notice of default hereunder or invalidate any act done pursuant to such notice. 6) That upon default by Trustor in payment of any indebtedness secured hereby or in the performance of any agreement hereunder, Beneficiary may declare all sums secured hereby immediately due and payable by delivery to Trustee of written declaration of default and demand for sale and of written notice of default and of election to cause to be sold said property, which notice Trustee shall cause to be filed for record. Beneficiary also shall deposit with Trustee this Deed, said note and all documents evidencing expenditures secured hereby. After the lapse of such time as may then be required by law following the recordation of said notice of default, and notice of sale having been given as then required by law, Trustee, without demand on Trustor, shall sell said property at the time and place fixed by it in said notice of sale, either as a whole or in separate parcels, and in such order as it may determine, at public auction to the highest bidder for cash in lawful money of the United States, payable at time of sale. Trustee may postpone sale of all or any portion of said property by public announcement at such time and place of sale, and from time to time thereafter may postpone such sale by public announcement at the time fixed by the preceding postponement. Trustee shall deliver to such purchaser its deed conveying the property so sold, but without any covenant or warranty, express or implied. The recitals in such deed of any matters or facts shall be conclusive proof of the truthfulness thereof. Any person, including Trustor, Trustee, or Beneficiary as hereinafter defined, may purchase at such sale. After deducting all costs, fees and expenses of Trustee and of this Trust, including cost of evidence of title in connection with sale, Trustee shall apply the proceeds of sale to payment of. all sums expended under the terms hereof, not then repaid, with accrued interest at the amount allowed by law in effect at the date hereof; all other sums then secured hereby; and the remainder, if any, to the person or persons legally entitled thereto. 7) Beneficiary, or any successor in ownership of any indebtedness secured hereby, may from time to time, by instrument in writing, substitute a successor or successors to any Trustee named herein or acting hereunder, which instrument, executed by the Beneficiary and duly acknowledged and recorded in the office of the recorder of the county or counties where said property is situated shall be conclusive proof of proper substitution of such successor Trustee or Trustees, who shall, without conveyance from the Trustee predecessor, succeed to all its title, estate, rights, powers and duties. Said instrument must contain the name of the original Trustor, Trustee and Beneficiary hereunder, the book and page where this Deed is recorded and the name and address of the new Trustee. 8) That this Deed applies to, inures to the benefit of, and binds all parties hereto, their heirs, legatees, devisees, administrators, executors, successors and assigns. The term Beneficiary shall mean the owner and holder, including pledgees, of the note secured hereby, whether or not named as Beneficiary herein. In this Deed, whenever the context so requires, the masculine gender includes the feminine and/or neuter, and the singular number includes the plural. 9) That Trustee accepts this Trust when this Deed, duly executed and acknowledged, is made a public record as provided by law. Trustee is not obligated to notify any party hereto of pending sale under any other Deed of Trust or of any action or proceeding in which Trustor, Beneficiary or Trustee shall be a party unless brought by Trustee. DO NOT RECORD REQUEST FOR FULL RECONVEYANCE TO , TRUSTEE: The undersigned is the legal owner and holder of the note or notes and of all, indebtedness secured by the foregoing Deed of Trust. Said note or notes, together with all other indebtedness secured by said Deed of Trust, have been fully paid and satisfied; and you are hereby requested and directed, on payment to you of any sums owing to you under the terms of said Deed of Trust, to cancel said note or notes above mentioned, an all other evidences of indebtedness secured by said Deed of Trust delivered to you herewith, together with the said Deed of Trust, and to reconvey, without warranty, to the parties designated by the terms of said Deed of Trust, all the estate now held by you under the same. Dated Please mail Deed of Trust, Note and Reconveyance to Do Not lose or destroy this Deed of Trust OR THE NOTE which it secures. Both must be delivered to the Trustee for cancellation before reconveyance will be made. IIIIIII IIIIII IIIIII II IIIIII IIIII IIIIIII III IIIII IIII IIII a9?E9r` yi4efl3eea 394/015610-0040 139234.06 a09/12/01 RIDER TO SUBORDINATED DEED OF TRUST WITH ASSIGNMENT OF RENTS THIS RIDER TO DEED OF TRUST WITH ASSIGNMENT OF RENTS ("Rider") is executed this 13th day of S' , 2001, by LA QUINTA 34 LLC, a California limited liability company, herein "Trustor," in favor of the LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic, herein "Beneficiary," the same parties to that certain form Deed of Trust With Assignment of Rents, of even date hereto, to which this Rider is attached. This Rider is made a part of and is incorporated into said Deed of Trust. This Rider shall supersede any conflicting term or provision of the form Deed of Trust to which it is attached. Reference is made to (i) that certain Note by and between Trustor and Beneficiary, dated on or about the date set forth above, the repayment of which by Trustor is secured by this Deed of Trust ("Agency Note"), and (ii) to the Agency Agreements which are described in the Agency Note. The parties hereto agree: l . Property. The estate subject to this Deed of Trust is Trustor's fee estate in the real property legally described in the foregoing Deed of Trust to which this Rider is attached (the "Property"). 2. Obligations Secured. Trustor makes this grant and assignment for the purpose of securing the following obligations ("Secured Obligations"): a. Payment to Beneficiary of all indebtedness at any time owing under the terms of the Note; b. Payment and performance of all obligations of Trustor under this Deed of Trust; C. Payment and performance of all obligations of Trustor under the Agency Agreements. d. Payment and performance of all future advances and other obligations of Trustor or any other person, firm, or entity with the approval of Trustor, may agree to pay and/or perform (whether as principal, surety or guarantor) for the benefit of Beneficiary, when the obligation is evidenced by a writing which recites that it is secured by this Deed of Trust; and e. All modifications, extensions and renewals of any of the obligations secured hereby, however evidenced. 3. Obligations. The term "obligations" is used herein in its broadest and most comprehensive sense and shall be deemed to include, without limitation, all interest and charges, prepayment charges, late charges and fees at any time accruing or assessed on any of the Secured Obligations. I I II�III IIIIII IIIIII II IIIIII �IIII IIIIIII III IIIII IIII IIII es zs0 5 0f4 $e3oRp 394/015610-0040 139234.06 a09/12/01 4. Incorporation. All terms of the Agency Note, Agency Agreements, and the Secured Obligations are incorporated herein by this reference. All persons who may have or acquire an interest in the Property shall be deemed to have notice of the terms of all of the foregoing documents. 5. Mortgagee -in -Possession. Neither the assignment of rents set forth in the Deed of Trust nor the exercise by Beneficiary of any of its rights or remedies hereunder shall be deemed to make Beneficiary a "mortgagee -in -possession" or otherwise liable in any manner with respect to the Property, unless Beneficiary, in person or by agent, assumes actual possession thereof. Nor shall appointment of a receiver for the Property by any court at the request of Beneficiary or by agreement with Trustor, or the entering into possession of the Property by such receiver, be deemed to make Beneficiary a "mortgagee -in -possession" or otherwise liable in any manner with respect to the Property. 6. No Cure. In the event Beneficiary collects and receives any rents under the Deed of Trust upon any default hereof, such collection or receipt shall in no way constitute a curing of the default. 7. Possession Upon Default. Upon the occurrence of and during the continuation of a default, Beneficiary, after having given notice and the applicable cure periods having expired with the default having not been cured (hereinafter, a "default"), may, at its option, without any action on its part being required and without in any way waiving such default, take possession of the Property in accordance with applicable law and have, hold, manage, lease and operate the same, on such terms and for such period of time as Beneficiary may deem proper, and may collect and receive all rents and profits, with full power to make, from time to time, all commercially reasonable alterations, renovations, repairs or replacements thereto as may seem proper to Beneficiary, and to apply such rents and profits to the payment of (a) the cost of all such alterations, renovations, repairs and replacements, and all costs and expenses incident to taking and retaining possession of the Property, and the management and operation thereof, and keeping the same properly insured; (b) all taxes, charges, claims, assessments, and any other liens which may be prior in lien or payment of the Note, and premiums for insurance, with interest on all such items; and (c) the indebtedness secured hereby, together with all costs and attorney's fees, in such order or priority as to any of such items as Beneficiary in its sole discretion may determine, any statute, law, custom or use to the contrary notwithstanding. Any amounts received by Beneficiary or its agents in the performance of any acts prohibited by the terms of this assignment, including, but not limited to, any amounts received in connection with any cancellation, modification or amendment of any lease prohibited by the terms of this assignment and any rents and profits received by Trustor after the occurrence of a default shall be held by Trustor as trustee for Beneficiary and all such amounts shall be accounted for to Beneficiary and shall not be commingled with other funds of the Trustor. Any person receiving any portion of such trust funds shall receive the same in trust for Beneficiary as if such person had actual or constructive notice that such funds were impressed with a trust in accordance therewith. 8. Receiver. In addition to any and all other remedies of Beneficiary set forth under this Deed of Trust or permitted at law or in equity, if a default shall have occurred, Beneficiary, to the extent permitted by law and without regard to the value, adequacy or occupancy of the ^ I III IIIII IIII IIII 09 ryCOA 40$3 200 F 394/1561004 139234.06a 09/12 /Ol G II 11111111111111111111111111111 6 cif S security for the Note and other sums secured hereby, shall be entitled as a matter of right if it so elects to the appointment of a receiver to enter upon and take possession of the Property and to collect all rents and profits and apply the same as the court may direct, and such receiver may be appointed by any court of competent jurisdiction by ex parte application and without notice, notice of hearing being hereby expressly waived. The expenses, including receiver's fees, attorneys' fees, costs and agent's compensation, incurred pursuant to the power herein contained shall be secured by this Deed of Trust. 9. Notice to Beneficiary. Notices to Beneficiary shall be sent to Beneficiary addressed to: La Quinta Redevelopment Agency 78-495 Calle Tampico La Quinta, CA 92263 Attn: Executive Director IN WITNESS WHEREOF, Trustor has executed this Rider on the date of Trustor's acknowledgment hereinbelow, to be effective for all purposes as of the day and year first set forth above. TRUSTOR: LA QU 34 LLC, a California limited liabili co By: OIL? Lawrence C. Rael, anaging Member IIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIII 09 ?a01 -4 i0o�4ae?eea 394/015610-0040 3 139234.06 a09/12/01 STATE OF CALIFORNIA ) ss. COUNTY OF On 5*� ? r-'�.3o before me, `J� ' ,,r r''' L.1a-4e' personally appeared r�� C.. personally known to me pp � p Y (or p arfsatisf�ev.Lue'rP',,e) to be the person( whose names) is/arc subscribed to the within instrument and acknowledged to me that he/executed the same in his�eir authorized capacity(ies�, and that by his/hex.Lt�r signatures} 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. 2 Notaryb uis [SEAL] JEFFREY R ALLISON Commission # 1223314 z , Nagy Public - Califamiv Orange Comfy 4 My Comm. E)PIres Jun 9, 2003 IIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIII os,zAOa a,^as aea 394/015610-0040 139234.06 a09/12/01 ORANGE coaT TITLE CO Recording Requested By And When Recorded Mail To: La Quinta Redevelopment Agency 78-495 Calle Tampico La Quinta, CA 92253 Attn: Executive Director DOC p 2001-4742°34 09/28/2001 08:00A Fee:NC Pale 3 of 28 Recorded In Official Records County of Riverside Gary L. Orso Assessor, County Clerk & Recorder I I I II I I I M S U PAGE SIZE DA PCOR NOCOR SMF MISC. A R L COPY LONG REFUND NCHG E)U (Exempt from Recording Fee per Gov. Code 6103) REGULATORY AGREEMENT AND DECLARATION OF COVENANTS AND RESTRICTIONS Iz THIS REGULATORY AGREEMENT AND DECLARATION OF COVENANTS AND RESTRICTIONS ("Agreement") is made and entered into this 13thday of September , 2001, by and between LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic ("Agency") and LA QUINTA 34 LLC, a California limited liability company ("Participant"). RECITALS: A. Participant is the owner of fee title to that certain real property more particularly described in Attachment No. 1, attached hereto and incorporated by reference herein (the "Site"). B. Pursuant to an Affordable Housing Rehabilitation Agreement, by and among Participant and Agency, dated September 13, 2001 (the "AHRA"), Agency has provided a loan to Participant in the sum of Three Hundred Fifty Thousand Dollars ($350,000.00) (the "Agency Loan") for the purpose of assisting Participant's rehabilitation of an existing apartment complex on the Site and to provide on-site/off-street parking for the residents of the apartments on the Site (the 'Project"). The AHR.A requires Participant to enter into this Agreement, which provides, among other requirements, that the rental and occupancy of not fewer than fourteen (14) of the apartment units on the Site be rented to and occupied by persons and families whose household income does not exceed 120% of the median income for Riverside County, in effect from time to time. C. Reference is also made to the following documents, the first three of even date herewith: (i) Note, by Participant as Maker and borrower in favor of the Agency as lender, ("Agency Note"). The Agency Note evidences the Agency Loan. (ii) Deed of Trust with Assignment of Rents, by and between Participant as borrower and Agency as beneficiary, and recorded in the Office of the Riverside County Recorder ("Agency Deed of Trust"). The Agency Deed of Trust partially secures repayment of the Agency Note. 3 94/015 6 l 0-0040 139234.06 a09/12/01 (iii) Declaration of Covenants, Conditions, and Restrictions And Agreement To Hold Property As One Parcel, by and between Participant and Agency, and recorded in the Office of the Riverside County Recorder ("Declaration"}. (iv) Subordination Agreement, by and among Maker, Holder, and Rubicon Realty Capital Corporation, recorded in the Office of the Riverside County Recorder (dated on or about August 9, 2001). The AHRA and all of the foregoing listed documents are referred to herein collectively as the "Agency Agreements." The Agency Agreements are incorporated herein as if fully set forth. D. Pursuant to the this Agreement and the Agency Agreements, Participant has agreed to rehabilitate the Site and develop thereon, and thereafter maintain, a rental housing project with not fewer than fourteen (14) units restricted to rental and occupancy to persons and families whose household income does not exceed 120% of the median income for Riverside County. E. Agency and Participant now desire to place restrictions upon the use and operation of the Site, in order to ensure that the Site shall be operated continuously as a rental apartment complex in accordance with the terms hereof. AGREEMENT: NOW, THEREFORE, the Participant and Agency declare, covenant and agree, by and for themselves, their heirs, executors, administrators, successors and assigns, and all persons claiming under or through them, that, for a term equal to thirty (30) years commencing upon the date of the recordation of the Release of Construction Covenants for the Site in accordance with the AHRA„ as follows: 1.0 DEFINITIONS. 1.1 Riverside County Median Income. For purposes of this Agreement, the "Riverside County Median Income" as of any date shall be determined by reference to the regulations published by the California Department of Housing and Community Development pursuant to Health and Safety Code Section 50093, or its successor, as of such date. 1.2 Unit. As used in this Agreement, the term "Unit" or "unit" shall mean a rental apartment dwelling unit on the Site. 1.3 Restricted Unit. As used in this Agreement, the term "Restricted Unit" shall mean not fewer than fourteen (14) Units to be rented to and occupied by Eligible Tenants. 1.4 Eligible Tenant. As used in this Agreement, the term "Eligible Tenant" shall refer to a Moderate Income Tenant. 1.5 Moderate Income. As used in this Agreement, the term "Moderate Income" shall mean household income, adjusted for family size, which does not exceed one hundred twenty percent (120%) of the Riverside County Median Income. za01z a74of zE4eE 394/015610-0040 2 139234.06 a09/12/01 1.6 Moderate Income Tenant. As used in this Agreement, the term "Moderate Income Tenant" shall mean a tenant whose household income does not exceed Moderate Income and who is otherwise eligible to rent, and does rent; a Restricted Unit and thus is an Eligible Tenant for a Restricted Unit. 1.7 Affordable Rent. As used in this Agreement, the term "Affordable Rent" shall mean annual rentals whose amount does not exceed the maximum percentage of income that can be devoted to rent by a Moderate Income Tenant as set by California law. 1.8 Unrestricted Unit. As used in this Agreement, the term "Unrestricted Unit" shall mean a Unit that is not a Restricted Unit, i.e., a Unit that is not subject to the affordability covenants that apply to the Restricted Units. 2.0 RESIDENTIAL RENTAL PROPERTY. 2.1 Rehabilitation of the Site. Participant shall rehabilitate the Site and develop the Project thereon in accordance with the Agency Agreements, including the Schedule of Performance set forth in the AHRA, for the purpose of providing the Restricted Units described herein and in the Agency Agreements. The Project shall be owned, managed, and operated as a rental apartment project, with not fewer than fourteen (14) Units rented and occupied as Restricted Units as provided in this Agreement. 2.2 Facilities. All of the dwelling units in the Project shall contain facilities for living, sleeping, eating, cooking and sanitation in accordance with the this Agreement, the AHR.A, the Agency Agreements, and all of the permits and approvals for the Project. 2.3 Residential Use. Without the Agency's prior written consent which consent may be given or withheld in its sole and absolute discretion. none of the dwelling units in the Project will at any time be utilized on a transient basis or will ever be used as a hotel, motel, dormitory, fraternity house, sorority house, rooming house, nursing home, hospital, sanitarium, or trailer court or park, nor shall the Units be used for day care facilities or as a place of business except as may otherwise be allowed by applicable law. 2.4 Conversion of Units. No part of the Project will at any time be owned by a cooperative housing corporation, nor shall the Participant take any steps in connection with the conversion to such ownership or uses to condominiums, or to any other form of ownership, without the prior written approval of Agency which approval may be given or withheld in its sole and absolute discretion. 2.5 Preference to Eligible Tenants. All of the dwelling units will be available for rental in accordance with the terms of this Agreement, and the Participant shall not give preference to any particular class or group in renting the dwelling units in the Project, except to the extent that the Restricted Units are required to be leased or rented to Eligible Tenants and except as provided in Section 3.5 below. 2.6 Resident Manager and Staff Units. A resident manager or staff unit or units may be counted as a Restricted Unit only if the tenants of such Unit(s) are Eligible Tenants. I' IIIIIII IIIIII IIIIII II IIIIII IIIII IIIIIII III IIIII IIII IIII esiz0013 e£Qe 4aeF 2 8 394/015610-0040 3 139234.06 a09/12/01 2.7 Liability of Partici ant. Participant and any manager it employs shall not incur an liability under this Agreement as a result of fraud or intentional misrepresentation by a y y g tenant. 2.8 Qualified Affordable Housing Preservation Pro' ect. The beneficiary/ies of this Agreement elect/s to define the Project to which this Agreement applies as a qualified affordable housing reservationproject " within the meaning of Government Code Section affo g p 7260 c 3 A and b this designation such beneficiary/ies may, but are not required to, utilize the )()) Y g provisions of said section of the Government Code. 3. OCCUPANCY OF RESTRICTED UNITS BY ELIGIBLE TENANTS. Participant hereby represents, warrants, and covenants as follows: 3.1 Occupancy Levels. Except as expressly provided herein, throughout the term of this Regulatory g i Re ulato A reement, the Restricted Units shall be continuously occupied or held vacant and available for occupancy by Eligible Tenants. 3.2 Rental Rates. Participant hereby agrees to and shall rent Restricted Units occupied by Eligible Tenants at no greater than Affordable Rent. 3.3 OccupancyBy Eligible Tenant. A Restricted Unit occupied by an Eligible Tenant who qualified as a Moderate Income Tenant at the commencement of the occupancy, shall be treat p y an treated as occupied b Eligible Tenant at such income level until a recertification of such g Eligible Tenant's income in accordance with Section 3.7 below demonstrates that such tenant no qualifies as an Eligible Tenant at that income level. A Restricted Unit previously longer q g occupy g occupied b an Eligible Tenant and then vacated shall be considered occupied by an Eligibl e Tenant until the Restricted Unit is reoccupied. Any vacated Restricted Unit shall be held vacant untig 1 re -leased to an Eli ible Tenant, unless there are sufficient numbers of Eligible Tenants then leasing and occupying Units. 3.4 Income Computation Certificate. Immediately prior to an Eligible Tenant's occupancy of a Restricted Unit, Participant shall obtain and maintain on file an Income Computation and Certification form (which form shall be approved in advance by the Agency Executive Director) from each such Eligible Tenant dated immediately prior to the date of initial occupancy in the Project by such Eligible Tenant. In addition, Participant shall provide such further information as may be required in the future by the Agency. Participant shall use its best efforts to verify that the income provided by an applicant is accurate by taking the following steps as a part of the verification process: (i) obtain three (3) pay stubs for the most recent pay periods; (ii) obtain a written verification of income and employment from applicant's current employer; (iii) obtain an income verification form from the Social Security Administration and/or California Department of Social Services if the applicant receives assistance from either agency; (iv) if an applicant is unemployed or did not file a tax return for the previous calendar year, obtain other verification of such applicant's income as is satisfactory to the Agency; or (v) such other information as may be requested by the Agency. A copy of each such Income Computation and Certification shall be filed with the Agency prior to the occupancy of a Restricted Unit by an Eligible Tenant whenever possible, but in no event more than thirty (30) 'IIIIIII IIIIII IIIIII II IIIIII IIIII IIIIIII III IIIII IIII IIII �0 44 "sa`azeFe� ar 394/015610-0040 4 139234.06 a09/12/01 days after initial occupancy by said tenant. Agency acknowledges and agrees that Participant has provided adequate documentation that, as of the date of this Agreement, there are at least fourteen (14) Restricted Units as herein defined. 3.5 Rental Priority. During the term of this Agreement, Participant shall use its reasonable commercial efforts to lease Restricted Units to credit -worthy Eligible Tenants in the following order of priority: (i) displaced persons entitled to a preference pursuant to California Health and Safety Code Section 33411.3 or successor statute, with highest priority in this category to residents of the apartment complex that were living there on the Effective Date of this Agreement and who were required to be relocated from the Site during the rehabilitation work and who are Eligible Tenants, and secondary priority within this category to residents of the City of La Quinta; (ii) residents of the City of La Quinta who are Eligible Tenants and who meet the other eligibility requirements of this Agreement; and (iii) other persons meeting the eligibility requirements of this Agreement. Participant shall, and Agency may, maintain a list (the "Housing List") of persons who have notified Participant and/or Agency of their desire to rent a Restricted Unit in the Project and who have incomes which would qualify them as an Eligible Tenant, and Participant shall offer to rent units on the above -referenced priority basis. Should multiple tenants be equally eligible (as to income, credit history, and other nondiscriminatory criteria) and qualified to rent a unit, Participant shall rent available Restricted Units to Eligible Tenants on a first -come, first -served basis. 3.6 Recertification. Immediately prior to the first anniversary date of the occupancy of a Restricted Unit by an Eligible Tenant, and on each anniversary date thereafter, Participant shall recertify the income of such Eligible Tenant by obtaining a completed Income Computation and Certification based upon the current income of each occupant of the Restricted Unit. If, upon recertification, the occupants do not qualify as an Eligible Tenant, then the occupants' lease shall not be renewed and said occupants shall be required to either vacate the Restricted Unit upon the expiration of the lease, or such occupants may be allowed to remain if either (i) there is a vacant Unrestricted Unit and Participant notifies Agency in writing that it is designating such vacant Unrestricted Unit as a Restricted Unit and Participant thereafter rents such redesignated unit to an Eligible Tenant, or (ii) Participant identifies an occupant of an Unrestricted Unit as qualifying as an Eligible Tenant, completes an Income Computation Certificate and any other required documentation to confirm that such occupant(s) is an Eligible Tenant, redesignates that unit as a Restricted Unit, and notifies the Agency in writing of such redesignation. . Participant shall provide the Agency with a copy of each such recertification with the next submission of Certificate of Continuing Program Compliance pursuant to Section 3.7. 3.7 Certificate of Continuing Program Compliance. Upon the issuance of the Release of Construction Covenants, and by September 1 following the end of the immediately preceding fiscal year ending on June 1, Participant shall annually advise the Agency of the occupancy of the Project by delivering a Certificate of Continuing Program Compliance in the form required by Agency (or complying with this section if no form is provided), stating (i) the dwelling units of the Project which were Restricted Units during such period and (ii) that to the knowledge of Participant either (a) no unremedied default has occurred under this Agreement, or (b) a default has occurred, in which event the Certificate shall describe the nature of the default and set forth the measures being taken by the Participant to remedy such default. Participant shall to pay Agency an annual fee pursuant to Health and Safety Code Section 33418(c) which shall not 2001-474254 j!9/28/2FJFJ1 W & 394/015610-0040 5 of 28 139234.06 a09/12/01 exceed FIVE HUNDRED DOLLARS ($500) as such amount shall be permitted to increase by the Consumer Price Index ("CPI") published by the United States Department of Labor, Bureau of Labor Statistics, for Urban Wage Earners and Clerical Workers, Los Angeles -Long Beach - Anaheim Average, All Items (1984=100), from and after the date of this Agreement, or the CPI is discontinued, such official index as may then be in existence and which is most nearly equivalent to the CPI. 3.8 Maintenance of Records. Participant shall maintain complete and accurate records pertaining to the Units, and shall permit any duly authorized representative of the Agency to inspect the books and records of Participant pertaining to the Project including, but not limited to, those records pertaining to the occupancy of the Restricted Units. 3.9 Reliance on Tenant Representations. Each tenant lease shall contain a provision to the effect that Participant has relied on the income certification and supporting information supplied by the tenant in determining qualification for occupancy of the unit, and that any material misstatement in such certification (whether or not intentional) will be cause for immediate termination of such lease. 3.10 Remedy For Excessive Rent Charge. 3.10.1 It shall constitute a default for Participant to charge or accept for a Restricted Unit rent amounts in excess of the amount provided for in Section 3.2 of this Agreement. In the event that Participant charges or receives such higher rental amounts, in addition to any other remedy Agency shall have for such default, Participant shall be required to pay to Agency an amount equal to two (2) times the entire amount of rent received in excess of the amount permitted pursuant to this Agreement. 3.10.2 It shall constitute a default for Participant to rent any Restricted Unit to a tenant who is not an Eligible Tenant. In the event Participant rents a Restricted Unit to an ineligible tenant, in addition to any other equitable remedy Agency shall have for such default, Participant, for each separate violation shall be required to pay to Agency an amount equal to (i) two times the greater of (A) the total rent Participant received from such ineligible tenant, or (B) the total rent Participant was entitled to receive for renting that Restricted Unit, plus (ii) any relocation expenses incurred by Agency or the City of La Quinta as a result of Participant having rented to such ineligible person. 3.10.3 It shall constitute a default for Participant to rent any of the Restricted Units in violation of the leasing preference requirements of Sections 3.5 of this Agreement. In the event Participant rents a unit in violation of the leasing preference requirements, in addition to any other equitable remedy Agency shall have for such default, Participant, for each separate violation shall be required to pay Agency an amount equal to two (2) months of rental charges. The terms of this Section shall not apply if Participant rents to an ineligible person as a result of such person's fraud or misrepresentation. THE PARTIES HERETO AGREE THAT THE AMOUNTS SET FORTH IN SECTION 3.12 (THE "DAMAGE AMOUNTS") CONSTITUTE A REASONABLE APPROXIMATION OF THE ACTUAL DAMAGES THAT � I IIIIII IIIIII IIIIII II IIIIII IIIII IIIIIII III IIIIIIII)IIII � 9 4zs4 s�394/015610.0040 �g�foa 139234.06 a09/12/01 6 AGENCY WOULD SUFFER DUE TO THE DEFAULTS BY PARTICIPANT SET FORTH IN SECTIONS 3.12.1 THROUGH 3.12.3. CONSIDERING ALL OF THE CIRCUMSTANCES EXISTING ON THE EFFECTIVE DATE OF THIS AGREEMENT, INCLUDING THE RELATIONSHIP OF THE DAMAGE .AMOUNTS TO THE RANGE OF HARM TO AGENCY AND ACCOMPLISHMENT OF AGENCY'S PURPOSE OF ASSISTING IN THE PROVISION OF AFFORDABLE HOUSING TO ELIGIBLE TENANTS THAT REASONABLY COULD BE ANTICIPATED AND THE ANTICIPATION THAT PROOF OF ACTUAL DAMAGES WOULD BE COSTLY OR INCONVENIENT. THE AMOUNTS SET FORTH IN THIS SECTION 3.11 SHALL BE THE SOLE MONETARY DAMAGES REMEDY FOR THE DEFAULTS SET FORTH IN THIS SECTION 3.11, BUT NOTHING IN THIS SECTION 3.10 SHALL BE INTERPRETED TO LIMIT AGENCY' S REMEDY FOR SUCH DEFAULT TO SUCH A DAMAGES REMEDY AND IN THAT REGARD AGENCY MAY DECLARE A DEFAULT UNDER THE TERMS OF THE NOTE OR OTHER OF THE AGENCY AGREEMENTS. IN PLACING ITS INITIAL AT THE PLACES PROVIDED HEREINBELOW, EACH PARTY SPECIFICALLY CONFIRMS THE ACCURACY OF THE STATEMENTS MADE ABOVE AND THE FACT THAT EACH PARTY HAS BEEN REPRESENTED BY COUNSEL WHO HAS EXPLAINED THE CONSEQUENCES OF THE LIQUIDATED DAMAGES PROVISION AT OR PRIOR TO THE TIME EACH EXECUTED THIS AGREEMENT. PAR C ANT'S INITIALS: AGENCY'S INITIALS: n ael *A� 4. MAINTENANCE. 4.1 Maintenance Obligation. Participant agrees to and shall maintain all interior and exterior improvements, including landscaping, on the Site in good condition and repair (and, as to landscaping, in a healthy condition) and in accordance with the all permits and approvals for the Project, and all other applicable laws, rules, ordinances, orders, and regulations of all federal, state, county, municipal, and other governmental agencies and bodies having or claiming jurisdiction and all their respective departments, bureaus, and officials. Agency places prime importance on quality maintenance to protect its investment and to ensure that all Agency - assisted affordable housing projects within the City are not allowed to deteriorate due to below - average maintenance. Normal wear and tear of the Site improvements will be acceptable to Agency assuming Participant agrees to perform all necessary Site improvements to assure the Site is maintained in good condition. Maintenance requirements shall include: (a) no improperly maintained landscaping shall be visible from public rights -of -way, including (i) no lawns with grasses in excess of six (6) inches in height, (ii) no trees, shrubbery, lawns, and other plant life dying from lack of water or other necessary maintenance, (iii) no trees, hedges, or shrubbery grown uncontrolled without proper pruning, (iv) no vegetation so overgrown as to be likely to harbor rats or vermin, and (v) no dead, decayed, or diseased trees, weeds, and other vegetation; (b) no yard areas shall be left unmaintained, including (i) no broken or discarded furniture, appliances, and other household equipment stored in yard areas for periods exceeding 139234.06394/015610-0040 .00,a.oi � I� IIIIIII IIIIII IIIIIIII IIIIII IIIII IIIIIII III IIIII IIII IIII as 21�z as °e °z8° one (1) week, (n) no packing boxes, lumber, trash, dirt, and other debris stored in yards for periods exceeding one (1) week in areas visible from public property or neighboring properties, (iii) no unscreened trash cans, bins, or containers stored for unreasonable periods in areas visible from public property or neighboring properties, and (iv) no vehicles parked or stored in areas other than approved parking areas; (c) no buildings may be left in an unmaintained condition, including (i) no violations of state law, Uniform Codes, or City ordinances, (ii) no condition that constitutes an unsightly appearance that detracts from the aesthetics or property value of the subject property or constitutes a private or public nuisance, (iii) no broken windows or chipped, cracked, or peeling paint, (iv) no conditions constituting hazards and/or inviting trespassers or malicious mischief, and (v) no graffiti or accumulation of waste or debris. Participant shall make all repairs and replacements necessary to keep the improvements in good condition and repair and shall promptly eliminate all graffiti and replace dead and diseased plants and landscaping with comparable approved materials. In the event that Participant breaches any of the covenants contained in this Section and Participant does not commence to cure such breach within ten (10) days after written notice from Agency (with respect to graffiti, debris, waste material, landscaping, and general maintenance) or thirty (30) days after written notice from Agency (with respect to building improvements), and after commencing the cure to diligently prosecute such cure to completion, then Agency, in addition to whatever other remedy it may have at law or in equity, shall have the right, but not the obligation, to enter upon the Site and perform all acts and work necessary to protect, maintain, and preserve the improvements and landscaped areas on the Site, and to attach a lien on the Site, or to assess the Site, in the amount of the expenditures arising from such acts and work of protection, maintenance, and preservation by Agency and/or costs of such cure, including a fifteen percent (15%) administrative charge, which amount shall be promptly paid by Participant to Agency upon demand. 4.2 Lien. If the costs incurred pursuant to Section 4.1 are not reimbursed within thirty (30) days after Participants' receipt of notice thereof, the same shall be deemed delinquent, and the amount thereof shall bear interest thereafter at a rate of ten percent (10%) per annum until paid. Any and all delinquent amounts, together with said interest, costs and reasonable attorney's fees, shall be a lien and charge, with power of sale, upon the property interests of Participant, and the rents, issues and profits of such property. Agency may bring an action at law against Participant obligated to pay any such sums or foreclose the lien against Participant's property interests. Any such lien may be enforced by sale by the Agency following recordation of a Notice of Default of Sale given in the manner and time required by law as in the case of a deed of trust; such sale to be conducted in accordance with the provisions of Section 2924, et se ., of the California Civil Code, applicable to the exercise of powers of sale in mortgages and deeds of trust, or in any other manner permitted by law. No lien recorded by Agency pursuant to this Section 4.2 shall defeat or render invalid the lien of any senior mortgage or deed of trust. 5.0 MANAGEMENT. 5.1 _Gross Mismanagement. In the event of "Gross Mismanagement" (as that term is defined below) of the Project, Agency shall have the authority to require that such Gross Mismanagement cease immediately, and further to require the immediate replacement of the manager. Agency shall provide written notice to Participant of the event(s) of Gross Mismanagement occurring and Participant shall have five (5) business days after receipt of such notice to commence to cure, correct, or remedy the event(s) of Gross Mismanagement identified 2061'474254 1394/015610-0040 3vv,.o>ao9. 12/01 g �,IIIIIII IIIIII IIIIII II IIIIII IIIII IIIIIII III IIIII IIII IIII es. �e eeo�aga in the Agency's notice and to notify the Agency's Executive Director of the steps taken to effect such cure, correction, or remedy, and upon commencing such cure, correction, or remedy to thereafter diligently prosecute such cure, correction, or remedy to completion. For purposes of this Agreement the term "Gross Mismanagement" shall mean management of the Project in a manner which violates the terms and/or intention of this Agreement to operate an affordable rental housing complex of the highest standard, and shall include, but is not limited to, the following: 5.1.1 Knowingly leasing Restricted Units to ineligible tenants or tenants whose income exceeds the prescribed levels; 5.1.2 Knowingly allowing the tenants to exceed permitted occupancy levels without taking immediate steps to stop such overcrowding; 5.1.3 Failing to timely maintain the Project and the Site in the manner required by this Agreement or failing to submit materially complete reports; 5.1.4 Failing to timely submit the reports as required by this Agreement; 5.1.5 Fraud in connection with any document or representation relating to this Agreement or embezzlement of Project monies; and 5.1.6 Failing to fully cooperate with law enforcement in maintaining a crime - free environment on the Site. 5.2 Lease Approval. Agency shall have the right to approve any lease forms, revisions, amendments and modification made to same, used by Participant or the manager for leasing Units within the Site, which approval shall not be unreasonably withheld, conditioned, or delayed. 6.0 COMPLIANCE WITH LAWS; ENVIRONMENTAL MATTERS_. 6.1 Compliance With Laws. Participant shall comply with (i) all ordinances, regulations and standards of the City, Agency, County of Riverside, any regional governmental entity, State of California, and federal government applicable to the Property; (ii) all rules and regulations of any assessment district of the City with jurisdiction over the Property; and (iii) all applicable labor standards of California law and federal law, including the payment of prevailing wages; and (iv) the requirements of California law and federal law with respect to the employment of undocumented workers or illegal aliens. 6.2 Environmental Matters. 6.2.1 Definitions. For the purposes of this Agreement, unless the context otherwise specifies or requires, the following terms shall have the meanings herein specified: 6.2.1.1 The term "Hazardous Materials" shall mean any substance, material, or waste which is or becomes regulated by any local governmental authority, the County of Riverside, the State of California, a regional governmental authority, or the United 2001-474254 394/015610-0040 n 0{3� c^001 08 - 139234.06 a09/12/01 7 °� States Government, including, but not limited to, any material or substance which is (i) defined as a "hazardous waste," "extremely hazardous waste," or "restricted hazardous waste" under Section 25115, 25117 or 25122.7, or listed pursuant to Section 25140 of the California Health and Safety Code, Division 20, Chapter 6.5 (Hazardous Waste Control Law)), (ii) defined as a "hazardous substance" under Section 25316 of the California Health and Safety Code, Division 20, Chapter 6.8 (Carpenter -Presley -Tanner Hazardous Substance Account Act), (111) defined as a "hazardous material," "hazardous substance," or "hazardous waste" under Section 25501 of the California Health and Safety Code, Division 20, Chapter 6.95 (Hazardous Materials Release Response Plans and Inventory), (iv) defined as a "hazardous substance" under Section 25281 of the California Health and Safety Code, Division 20, Chapter 6.7 (Underground Storage of Hazardous Substances), (v) petroleum, (vi) friable asbestos, (vil) polychlorinated byphenyls, (viii) listed under Article 9 or defined as "hazardous" or "extremely hazardous" pursuant to Article 11 of Title 22 of the California Administrative Code, Division 4, Chapter 20, (ix) designated as "hazardous substances" pursuant to Section 311 of the Clean Water Act (33 U.S.C. ,1317), (x) defined as a "hazardous waste" pursuant to Section 1004 of the Resource Conservation and Recovery Act, 42 U.S.C.. 6901 et seg. (42 U.S.C. , 6903) or (xi) defined as "hazardous substances" pursuant to Section 101 of the Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C., 9601 et seg. 6.2.1.2 The term "Hazardous Materials Contamination" shall mean the contamination (whether presently existing or hereafter occurring) of the improvements, facilities, soil, groundwater, air or other elements on, in or of the Site by Hazardous Materials, or the contamination of the buildings, facilities, soil, groundwater, air or other elements on, in or of any other property as a result of Hazardous Materials at any time emanating from the Site. 6.2.1.3 The term "Governmental Requirements" shall mean all past, present and future laws, ordinances, statutes, codes, rules, regulations, orders and decrees of the United States, the state, the county, the city, or any other political subdivision in which the Site is located, and any other state, county city, political subdivision, agency, instrumentality or other entity exercising jurisdiction over the Site. 6.2.2 Indemnity. Participant shall save, protect, defend, indemnify and hold harmless Agency and the City and their respective officers, officials, members. employees, agents, and representatives from and against any and all liabilities, suits, actions, claims, demands, penalties, damages (including, without limitation, penalties, fines and monetary sanctions), losses, costs or expenses (including, without limitation, consultants' fees, investigation and laboratory fees, reasonable attorneys' fees and remedial and response costs) (the foregoing are hereinafter collectively referred to as "Liabilities") which may now or in the future be incurred or suffered by Agency or City or its respective its officers, officials, members. employees, agents, or representatives by reason of, resulting from, in connection with, or existing in any manner whatsoever as a direct or indirect result of (i) Participant's placement on or under the Site any Hazardous Materials or Hazardous Materials Contamination on or after the date of this Agreement, (ii) the escape, seepage, leakage, spillage, discharge, emission or release from the Site of any Hazardous Materials or Hazardous Materials Contamination on or after the date of this Agreement, or (iii) any Liabilities incurred under any Governmental Requirements relating to the acts described in the foregoing clauses (i) and (ii). IIIIIII IIIIII IIIIII II 111111 oil 111111111111I III IIII es 20019o74 aaaeF of 394/015610-0040 10 139234.06 a09/ 12/01 6.3 Duty to Prevent Hazardous Material Contamination. Participant shall take commercially reasonable action to prevent the release of any Hazardous Materials into the environment. Such precautions shall include compliance with all Governmental Requirements with respect to Hazardous Materials. In addition, Participant shall install and utilize such equipment and implement and adhere to such procedures as are consistent with the standards generally applied by apartment complexes in Riverside County, California as respects the disclosure, storage, use, removal, and disposal of Hazardous Materials. 6.4 Obligation of Participant to Remediate Premises. Notwithstanding the obligation of Participant to indemnify Agency, City, and their respective officers, officials, members, employees, agents, and representatives pursuant to Section 6.2.2, Participant shall, at its sole cost and expense, promptly take (i) all actions required by any federal, state, regional, or local governmental agency or political subdivision or any Governmental Requirements and (ii) all actions necessary to make full economic use of the Site for the purposes contemplated by this Agreement and the AHRA, which requirements or necessity arise from the presence upon, about or beneath the Site of any Hazardous Materials or Hazardous Materials Contamination for which Participant is responsible. Such actions shall include, but not be limited to, the investigation of the environmental condition of the Site, the preparation of any feasibility studies or reports and the performance of any cleanup, remedial, removal or restoration work. 6.5 Environmental Inquiries. Participant, when it has received any notices of violation, notices to comply, citations, inquiries, clean-up or abatement orders, or cease and desist orders related to Hazardous Materials or Hazardous Materials Contamination, or when Participant is required to report to any governmental agency, any violation or potential violation of any Governmental Requirement pertaining to Hazardous Materials or Hazardous Materials Contamination, shall concurrently notify Agency's Executive Director, and provide to him/her a copy or copies, of the environmental permits, disclosures, applications, entitlements or inquiries relating to the Site, the notices of violation, notices to comply, citations, inquiries, clean-up or abatement orders, cease and desist orders, reports filed pursuant to self -reporting requirements, and reports filed or applications made pursuant to any Governmental Requirement relating to Hazardous Materials and underground tanks, and Participant shall report to the Executive Director, as soon as possible after each incident, any unusual, potentially important incidents. In the event of a responsible release of any Hazardous Materials into the environment, Participant shall, as soon as possible after it becomes aware of the release, furnish to the Executive Director a copy of any and all reports relating thereto and copies of all correspondence with governmental agencies relating to the release. Upon request of the Executive Director, Participant shall furnish to the Executive Director a copy or copies of any and all other environmental entitlements or inquiries relating to or affecting the Site including, but not limited to, all permit applications, permits and reports including, without limitation, those reports and other matters which may be characterized as confidential. 7.0 INSURANCE. 7.1 Duty to Procure Insurance. Participant, for the term of this Agreement, shall procure and keep in full force and effect or cause to be procured and kept in full force and effect for the mutual benefit of Participant and Agency, and shall provide Agency evidence reasonably 2901 474254 1394/015610-0040 39334os a09,12.01 11 II IIIIIII IIIIII IIIIII II IIIIII'llll lllllll111llllll111llll n9/2R,'i90o0z-.e 9� acceptable to Agency Executive Director, insurance policies meeting the minimum requirements set forth below: 7.1.1 Com mercial General Liability insurance with respect to the Site and the operations of or on behalf of Participant, in an amount not less than One Million Dollars ($1,000,000) per oc currence combined single limit including products, completed operations, contractual, body 'it inu personal injury, death and property damage liability per occurrence, injury, subject to such increases in amount as Agency may reasonably require from time to time; provided, that the percentage increase in coverage shall not be required to exceed the percentage • er Price Index published by the United States Department of Labor, Increase in the Consumer Bureau of Labor Statis tics, for Urban Wage Earners and Clerical Workers, Los Angeles -Long Items(1984 ` 100) (the "Index"), from and after the date of this Beach -Anaheim Average, All Agreement, or, if said Index is discontinued, such official index as may then be in existence and equivalent to said Index (the "CPI Adjustment"). Unless otherwise which is most nearly q bytheAgency approved in advance d b the A Executive Director, the insurance to be provide by Y Participant may provide for a deductible or self -insured retention of not more than Ten Thousand Dollars ($10,000), with such maximum amount to increase at the same rate as the periodic increases in the minimum amount of total insurance coverage set forth above. 7.1.2 With respect to the improvements and any fixtures and furnishings to be p p e Site insurance against fire, extended coverage, vandalism, and owned by Participant on the g such other additional perils, hazards, and risks as now are or may be malicious mischief, and su _ p h the standard "all risk" form in general use in Riverside County, California, with included in the sta g standard form fire insurance coverage in an amount equal to full actual replacement cost thereof, as the same may change from time to time. The above insurance policy or policies shall include the extent generally and commercially available at commercially coverage for earthquake to g Y Agency shall be a loss payee under such policy or policies and such insurance reasonable rates. Ag y p Y shall contain a replacement cost endorsement. Requirements. All policies of insurance required to be carried by 7.2 Policy Req et the followin requirements and contain the following endorsements, Participant shall me g re q provisions, or clauses (as applicable): e policies shall be written by responsible and solvent insurance 7.2.1 The he State of California and having a policyholder's rating of A or better, n companies licensed in t i lih the most recent addition of "Best's KeyRating Guide -- Property and Casualty." A copy of each in such insurance(appropriately authenticated by the insurer) or a aid -up policy evidenc g . p providing the coverage certificate of the insurer, certifying that such policy has been issued, p g g containing the provisions specified herein, shall be delivered to Agency on required herein, and co g p A reement and thereafter, upon renewals, not less than thirty (30) or prior to the date of this Agreement, expiration of coverage. Agency may, at any time, and from time to time, days prior to the p g - n and all insurance policies required to be procured by Participant inspect and/or copy any p • • liability f the limits of an policy be considered as limiting the liability o hereunder. In no event shall y p Y Participant hereunder. IIIII ?aa�4e2805gieeF 1111111111111111111111111111111111111111111111111 z 394/015610-0040 12 139234.06 a09/12/01 7.2.2 The insurer shall not cancel or materially alter the coverage provided by such policy in a manner adverse to the interest of the insured without first giving Agency a minimum of thirty (30) days prior written notice by certified mail, return receipt requested; and 7.2.3 A waiver by the insurer of any right to subrogation against Agency, its officers, officials, members, employees, agents, or representatives, which arises or might arise by reason of any payment under such policy or policies or by reason of any act or omission of Agency, its officers, officials, members, employees, agents, or representatives. 7.2.4 The Agency and the City and its respective officers, officials, members, employees, agents, and representatives shall be named as additional insureds on the Commercial General Liability policies. 7.2.5 Coverage provided by these policies shall be primary and non- contributory to any insurance carried by the Agency or its officers, officials, members, employees, agents, or representatives. 7.2.6 Failure to comply with reporting provisions shall not affect coverage provided to Agency and its officers, officials, members, employees, agents, or representatives. 7.3 Failure to Procure Insurance. If Participant fails to procure and maintain the above -required insurance despite its availability, then Agency, in addition to any other remedy which Agency may have hereunder for Participant's failure to procure, maintain, and/or pay for the insurance required herein, may (but without any obligation to do so) at any time or from time to time, after thirty (30) days written notice to Participant, procure such insurance and pay the premiums therefor, in which event Participant shall immediately repay Agency all sums so paid by Agency together with interest thereon at the maximum legal rate. 8.0 OBLIGATION TO REPAIR. 8.1 Obligation to Repair and Restore Damage Due to Casualty Covered by Insurance. Subj ect to Section 8.3 below, if the Project shall be totally or partially destroyed or rendered wholly or partly uninhabitable by fire or other casualty required to be insured against by Participant, Participant shall promptly proceed to obtain insurance proceeds and take all steps necessary to begin reconstruction and, immediately upon receipt of insurance proceeds, to promptly and diligently commence the repair or replacement of the Project to substantially the same condition as the Project is required to be maintained in pursuant to this Agreement, whether or not the insurance proceeds are sufficient to cover the actual cost of repair, replacement, or restoration, and Participant shall complete the same as soon as possible thereafter so that the Project can continue to be operated and occupied as an affordable housing project in accordance with this Agreement. Subject to extensions of time for "Enforced Delay" as defined in Section 22 of this Agreement, in no event shall the repair, replacement, or restoration period exceed one (1) year from the date Participant obtains insurance proceeds unless the Agency Executive Director, in his or her sole and absolute discretion, approves a longer period of time. Agency shall cooperate with Participant, at no expense to Agency, in obtaining any governmental permits required for the repair, replacement, or restoration and, upon issuance of such permits Agency shall promptly release control of any insurance proceeds within Agency's control. If, however, 394/015610-0040 ��ena.ob.w,�z�o� 13 � IIIIIII IIIIII IIIIII II IIIIII IIIII IIIIIII III IIIIII III IIII 09218ia o�as ge the then -existing laws of any other governmental agencies with jurisdiction over the Property do not permit the repair, replacement, or restoration, Participant may elect not to repair, replace, or restore the Project by giving notice to Agency (in which event Participant shall be entitled to all insurance proceeds but Participant shall be required to remove all debris from the Property) or Participant may reconstruct such other improvements on the Property as are consistent with applicable land use regulations and approved by the City, Agency, and the other governmental agency or agencies with jurisdiction. In such event, the Agency Agreements, including this Agreement, shall automatically terminate and Agency shall cooperate to remove the Agency Agreements from title. If Participant fails to obtain insurance as required by this Agreement (and Agency has not procured such insurance and charged Participant for the cost), Participant shall be obligated to reconstruct and repair any partial or total damage to the Project and improvements located on the site in accordance with this Section 8.1. 8.2 Continued Operations. During any period of repair, Participant shall continue, or cause the continuation of, the operation of the apartment complex on the Site to the extent reasonably practicable from the standpoint of prudent business management. The number of Restricted Units shall be reduced in proportion to the number of Units not habitable as a result of the casualty during such period of repair. 8.3 Damage or Destruction Due to Cause Not Required to be Covered by Insurance. If the improvements comprising the Project are completely destroyed or substantially damaged by a casualty for which Participant is not required to (and has not) insured against, then Participant shall not be required to repair, replace, or restore such improvements and may elect not to do so by providing Agency with written notice of election not to repair, replace, or restore within ninety (90) days after such substantial damage or destruction. In such event, (i) Participant shall remove all debris from the Property, and (ii) the Agency Agreements, including this Agreement, shall automatically terminate and Agency shall cooperate to remove the Agency Agreements from title. As used in this Section 8.3, "substantial damage" caused by a casualty not required to be (and not) covered by insurance shall mean damage or destruction which is fifty percent (50%) or more of the replacement cost of the improvements comprising the Project. In the event Participant does not timely elect not to repair, replace, or restore the improvements as set forth in the first sentence of this Section 8.3, Participant shall be conclusively deemed to have waived its right not to repair, replace, or restore the improvements and thereafter Participant shall promptly commence and complete the repair, replacement, or restoration of the damaged or destroyed improvements in accordance with Section 8.1 above and continue operation of the apartment complex during the period of repair (if practicable) in accordance with Section 8.2 above. 9.0 LIMITATION ON TRANSFERS. 9.1 Sale or Transfer of the Project. Participant covenants that during the term of this Agreement that Participant shall not assign this Agreement or transfer the Site or any of its interests therein except as provided in this Section 9.0. IIIIII IIIIII IIIIII II IIIIII IIIII IIIIIII III IIIIII III IIII 09;2A01, 0of 1402EBBH 394/015610-0040 14 139234.06 a09/ 12/01 9.2 Transfer Defined. As used in this Article 9.0, the term "Transfer" shall include any assignment, hypothecation, mortgage, pledge, conveyance, or encumbrance of this Agreement, the Site, or the improvements thereon. A Transfer shall also include the transfer to any person, entity, or group of persons or entities acting in concert of more than twenty-five percent (25%) (in the aggregate) of the present ownership and/or control of any person or entity constituting Participant, taking all transfers into account on a cumulative basis. In the event any entity constituting Participant, its successor or the constituent partners or members of Participant or any successor of Participant, is a corporation or trust, such transfer shall refer to the transfer of the issued and outstanding capital stock of such corporation, or of beneficial interests of such trust; in the event that any entity constituting Participant, its successor or the constituent partners of Participant or any successor of Participant is a limited or general partnership, such transfer shall refer to the transfer of more than twenty-five percent (25%) of such limited or general partnership interest; in the event that any entity constituting Participant, its successor or the constituent members of Participant or any successor of Participant is a limited liability company, such transfer shall refer to the transfer of more than twenty-five percent (25%) of such membership interest; in the event that any entity constituting Participant, its successor or the constituent partners of Participant or any successor of Participant is a joint venture, such transfer shall refer to the transfer of more than twenty-five percent (25%) of the ownership and/or control of any such joint venture partner, taking all transfers into account on a cumulative basis. 9.3 Agency Approval of Transfer Required. Except as set forth below, Participant shall not Transfer this Agreement or any of Participant's rights hereunder, or any interest in the Site or in the improvements thereon, directly or indirectly, voluntarily or by operation of law, without the prior written approval of Agency, which approval shall not be unreasonably withheld, conditioned, or delayed, and any such purported Transfer without such approval shall be null and void. In addition to the foregoing and notwithstanding anything in this Section to the contrary, so long as the Project is encumbered by a deed of trust (other than a deed of trust the beneficiary of which is the Agency), any proposed transferee or assignee must also receive the prior written consent of the beneficiary of such deed of trust, if required by such deed of trust, before Agency shall approve such transfer or assignment; provided, however, that such consent of beneficiary shall not obligate Agency to approve such Transfer. Notwithstanding the foregoing, the following types of transfers shall not require Agency approval but as with all Transfers shall be subject to Section 9.4: (a) any refinancing of the lien of a deed of trust such that the new loan plus all outstanding amounts of other loan(s) secured by the Site does not exceed ninety-five percent (95%) of the then appraised fair market value of the Site; (b) any new or additional financing in which the Site is security for the loan, provided that the total of all then -outstanding loans secured by the Site does not exceed ninety-five percent (95%) of the then -appraised fair market value of the Site. (c) the leasing of individual rental units on the Site provided that such leasing is in accordance with the terms of this Agreement; I IIIIII IIIIII IIIIII II IIIIII IIIII IIIIIII III IIIIII III IIII 01-474254 �9?g8/ is oc� zseea 394/015610-0040 15 139234.06 a09/ 12/01 (d) Transfers resulting from the death or mental or physical incapacity of an individual; (e) Transfers in trust for the benefit of a spouse, children, grandchildren, or other family member, or for charitable purposes; (� Transfers of stock in a publicly -held corporation or of the beneficial interest in ay publicly -held partnership or real estate investment trust; or (g) the conveyance or dedication or portions of the Site to the City or other governmental entity, or the granting of easements or permits to facilitate the development of the Site. 9.4 Assignment and Assumption Agreement. In the absence of specific written agreement by Agency, no Transfer by Participant of all or any portion of its interest in the Site or this Agreement, whether or not requiring the approval by Agency, shall be deemed to relieve Participant or any successor party from the obligation to timely complete construction of the Project. In addition, no attempted Transfer of any of Participant's obligations hereunder shall be effective unless and until Participant and the transferee or successor party execute and deliver to Agency a binding assignment and assumption agreement in a form reasonably approved by Agency's legal counsel. 9.5 Permitted Transferee. A "Permitted Transferee" under this Agreement shall be a transferee or assignee that either (i), has been approved by the Agency Executive Director or (ii) is a transferee of a Transfer not requiring the approval of the Agency Executive Director pursuant to the terms of this Agreement, and both the cases described in the foregoing clauses (i) and (ii) has executed and delivered to the Agency Executive Director an assignment and assumption agreement pursuant to Section 9.4. 10. EVENTS OF DEFAULT BY PARTICIPANT. Subject to extensions of time pursuant to the terms of Section 22, the occurrence of one or more of any of the following events shall constitute an "Event of Default" by Participant hereunder if Participant shall have not cured, corrected, or remedied such failure within, unless a shorter or longer cure period is provided for specific defaults elsewhere in this Agreement, thirty (30) days following the service on Participant of a written notice from Agency specifying the failure complained of, or if it is not practicable to cure or remedy such failure within such thirty (30) day period (which impracticality shall not apply to monetary defaults), within such longer period as shall be reasonable under the circumstances provided that Participant has commenced to cure within the same thirty (30) day period: 10.1 Construction of the rehabilitation work on the Site has not commenced within the time set forth in the AHRA; or 10.2 Construction of the rehabilitation work on the Site is not completed within the time set forth in the AHRA; or IIIIIII'IIIIIIIIIIIIIIIIIIIIII �y 2001'474254 II IIIIIII III IIIIII III IIII c^8/2691 0£t : 56R 16 0£ pg 394/015610-0040 16 139234.06 a09/12/01 10.3 Participant shall abandon or surrender the Site; or 10.4 Participant is in default of the Note and has not cured such default within the cure period applicable to such default as set forth in the Note; or 10.5 Participant is in material default of any of the covenants, terms or provisions of this Agreement or any of the Agency Agreements; or 10.6 Participant voluntarily files or has involuntarily filed against it any petition under any bankruptcy or insolvency act or law and the same not be dismissed within sixty (60) days thereafter; or 10.7 Participant is adjudicated a bankrupt; or 10.8 Participant makes a general assignment for the benefit of creditors in violation of the terms of this Agreement or any of the Agency Agreements. 11. REMEDIES OF AGENCY. In the event Participant defaults in the performance or observance of any covenant, agreement or obligation of Participant pursuant to this Agreement, and if such default remains uncured for a period of thirty (30) days after written notice thereof shall have been given by Agency (or such lesser period as may apply under Section 4.1), or, in the event said default cannot be cured within said time period, Participant has failed to commence to cure such default within the applicable time period and diligently prosecute said cure to completion, then Agency shall declare an "Event of Default" to have occurred hereunder, and, at its option, may take one or more of the following steps: 11.1 Enter the Site and correct or cause to be corrected said default and charge the costs thereof (including costs incurred by Agency in enforcing this provision) to the account of Participant, which charge shall be due and payable within thirty (30) days after presentation by Agency of a statement of all or part of said costs, and if such bill is not timely paid then to place a lien on the Site for said amount due plus interest at the maximum legal rate; 11.2 Correct or cause to be corrected said default and pay the costs thereof (including costs incurred by Agency in enforcing this provision) from the proceeds of any insurance; 11.3 Exercise its right to maintain any and all actions at law or suits in equity to compel Participant to correct or cause to be corrected said default; 11.4 Have a receiver appointed to take possession of Participant's interest in the Site, with power in said receiver to administer Participant's interest in the Site, to collect all funds available to Participant in connection with its operation and maintenance of the Site, and to perform all other consistent with Participant's obligation under this Agreement as the court deems proper; 11.5 Terminate this Agreement by written notice to Participant and seek repayments of any remaining principal and accrued interest then owing on the Agency Note. 2001-474254 394/015610-0040 17 &9/ 28 17 1 0 : 139234.06 a09/12/01 1111111111111111111111111111111111111111111111111111111 Except as otherwise expressly stated in this Agreement, the rights and remedies of the parties are cumulative, and the exercise by any party of one or more of its rights or remedies shall not preclude the exercise by it, at the same or different times, of any other rights or remedies for the same default or any other default by another party. 12.0 NONDISCRIMINATION. 12.1 Antidiscrimination. There shall be no discrimination against or segregation of any person, or group of persons, on account of race, color, creed, religion, sex, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Site, or any part thereof, nor shall Participant, or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the Site, or any part thereof (except as permitted by this Agreement). 12.2 Anti -Discrimination Clauses in Agreements. Participant agrees for itself and any successor in interest that Participant shall refrain from restricting the rental, sale, or lease of any portion of the Site, or contracts relating to the Site, on the basis of race, color, creed, religion, sex, marital status, ancestry, or national origin of any person. All such deeds, leases or contracts shall contain or be subject to substantially the following nondiscrimination or nonsegregation clauses: 12.2.1 In deeds: "The grantee herein covenants by and for himself, his heirs, executors, administrators, and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex, marital status, ancestry, or national origin in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the land herein conveyed, nor shall the grantee himself, or any persons claiming under or through him, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy of tenants, lessees, subtenants, sublessees, or vendees in the land herein conveyed. The foregoing covenants shall run with the land." 12.2.2 In leases: "The lessee herein covenants by and for himself, his heirs, executors, administrators, and assigns, and all persons claiming under or through him, and this lease is made and accepted upon and subject to the following conditions: "That there shall be no discrimination against or segregation of any person or group of persons on account of status, race, color, creed, religion, sex, marital status, ancestry, or national origin in the leasing, subleasing, transferring, use, occupancy, tenure, or enjoyment of the land herein leased, nor shall the lessee himself, or any person claiming under or through him, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy of tenants, lessees, sublessees, subtenants, or vendees in the land herein leased." 2991 474zsa III 1111111111111111111111111111111111111111111111111111111 99 26. 18 of 28 9P 394/015610-0040 18 139234.06 a09/12/01 12.2.3 In contracts: "There shall be no discrimination against or segregation of any persons or group o pe rsons ersons on account of status, race, color, creed, religion, sex, marital ancest or national origin in the sale, lease, transfer, use, occupancy, tenure, or status, � person claiming under or through him, enjoyment ent of land, nor shall the transferee himself, or any p g . J Ym such practice or practices of discrimination or segregation with reference establish or permit any s p to the selection, location 5 number, use or occupancy of tenants, lessees, subtenants, sublessees, or vendees of land." 13.0 COVENANTS TO RUN WITH THE LAND. Participant hereby J eb subjects ects the Site to the covenants, reservations, and restrictions set Agency and Participant hereby declare their express intent that all such forth in this Agreement. g y p covenants, reservations, and restrictions shall be deemed covenants running with the land and shall pass to and be binding upon in u the Participant's successors in title to the Site; provided, p however, that on the termination of this Agreement said covenants, reservations and restrictions shall expire. All covenants without regard to technical classification or designation shall be binding for the benefit oft Agency, he A and such covenants shall run in favor of the Agency for y, the entire term ofthi s Agreement, without regard to whether the Agency is or remains an owner therein to which such covenants relate. Each and every contract, deed or of any land or interest other instrument hereafter executed coveringor conveying the Site or any portion thereof shal l conclusively be he ld to have been executed, delivered and accepted subject to such covenants, reservations, and restrictions regardless of whether such covenants, reservations, and restrictions are set forth in such contract, deed or other instrument. Agency and Participan t herebydeclare their understanding and intent that the burden of the covenants set forth her ein touch and concern the land in that Participant's legal interest in the valuable thereby. Agency and Participant hereby further declare their Site is rendered less va Y g land b understanding and in tent that the benefit of such covenants touch and concern the y enhancing and increasing the enj ' oym ent and use of the Project by Eligible Tenants, the intended beneficiaries of such co, venants reservations, and restrictions, and by furthering the public purposes for which the Agency was formed. Participant, in exchange for the A entering into the AHRA, hereby agrees to hold, Agency Y subject to the terms of this Agreement. Participant also grants to the sell, and convey the Site su J Agency the right and power to enforce the terms of this Agreement against the Participant and all persons having anyright, title or interest in the Site or any part thereof, their heirs, successive owners and assigns. The covenants set forth in Article 12.0 of this Agreement shall remain in effect in s set forth in this Agreement shall remain in effect for a period of perpetuity. All other covenant g thirty (30) years following the date this Agreement is recorded in the office of the Riverside County Recorder. 14.0 INDEMNIFICATION. Participant agrees for itself and its successors and assigns to indemnify, defend, and hold harmless Agency, City, and their respective officers, officials, members, employees, agents, and 20N1-474254 394/015610-0040 19 II IIIIIIIIIIIII IIIIIIIIIIIIIIII IIIIIII 05/28ilq�o f 28 139234.06 a09/12/01 I I IIIIII IIIIII IIII representatives from and against any loss, liability, claim, or judgment relating in any manner to the Project excepting only any such loss, liability, claim, or judgment arising out of the intentional wrongdoing or gross negligence of Agency, City, or their respective officers, officials, members, employees, agents, or representatives. The foregoing indemnification, defense, and hold harmless agreement shall only be applicable to and binding upon the party then owning the Property or applicable portion thereof. 15.0 UTILITIES AND TAXES. Participant, while in possession of the Property, and each successor or assign of Participant while in possession of the Property, shall remain fully obligated for the payment of (i) real and personal property taxes and assessments in connection with the Property, and (ii) all charges for all utilities serving the Property for which Participant is responsible. 16.0 ATTORNEYS' FEES. In the event that a party to this Agreement brings an action against the other party hereto by reason of the breach of any condition, covenant, representation or warranty in this Agreement, or otherwise arising out of this Agreement, the prevailing party in such action shall be entitled to recover from the other expert witness fees, and its reasonable attorney's fees and costs. Attorney's fees shall include attorney's fees on any appeal, and in addition a party entitled to attorney's fees shall be entitled to all other reasonable costs for investigating such action, including the conducting of discovery. 17.0 AMENDMENTS. This Agreement shall be amended only by a written instrument executed by the parties hereto or their successors in title, and duly recorded in the real property records of the County of Riverside. 18.0 NOTICE. Formal notices, demands, and communications between Agency and Participant shall be sufficiently given if (i) personally delivered, (ii) delivered by a reputable same -day or overnight courier services that provides a receipt showing date and time of delivery, (iii) delivered by United States mail, registered or certified, postage prepaid, return receipt requested, or (iv) delivered by facsimile transmission, provided the original of the faxed communication is delivered within twenty-four (24) hours by one of methods described in clauses (i), (ii), or (iii) of the foregoing. Delivery shall be made to the following addresses: 2001-474254 394/015610-0040 20 139234.06 a09/12/01 If to Agency: La Quinta Redevelopment Agency 78-495 Calle Tampico La Quinta, CA 92253 Attn: Executive Director Fax: (760) 777-7101 With a copy to: Rutan & Tucker, LLP 611 Anton Boulevard, Suite 1400 Costa Mesa, CA 92626 Attn: M. Katherine Jenson, Esq. Fax: (714) 546-9035 If to Participant: La Quinta 34 LLC 1800 East Gary Avenue, Suite 117 Santa Ana, CA 92705 Attn: Lawrence C. Rael Fax: (949) 474-9828 With copy to: Gibson, Dunn & Crutcher LLP Jamboree Center 4 Park Plaza, Suite 1400 Irvine, CA 92614-8557 Attn: Teresa J. Farrell, Esq. Fax: (949) 451-4220 Notices that are personally delivered, delivered by messenger/courier, or by fax (provided there is compliance with the terms of clause (iv) above) shall be deemed effective upon receipt. Notices delivered by mail shall be deemed effective upon the earlier of actual receipt by the addressee thereof or the expiration of forty-eight (48) hours after depositing in the United States Postal System in the manner described in this Section. Such written notices, demands, and communications may be sent in the same manner to such other addresses as a party may from time to time designate by mail. 19. NONLIABILITY OF AGENCY OFFICIALS. No officer, official, member, employee, agent, or representative of Agency shall be personally liable to Participant, or any successor in interest, in the event of any default or breach by Agency or for any amount which may become due to Participant or successor or on any obligations under the terms of this Agreement or any of the Agency Agreements. 20. TRANSACTIONS WITH AFFILIATES. Participant shall have the right to enter into contracts with subsidiaries, affiliates and other related entities for the purpose of providing cleaning, maintenance and repair services, insurance policies and other purposes related to the operation of the Site, provided that all such costs and charges are competitive with the costs, charges, rent and other sums which would be paid by or to, as the case may be, an unrelated third party, and further provided that all such 2901-474254 394/015610-0040 09/ 139234.06.09i12i01 21 IIIIIII IIIIII IIIIII II IIIIII IIIII IIIIIII III I'lllll11llll 28 20008 E of contracts and transactions are disclosed to Agency's Executive Director, including the costs and charges of such contracts and transactions. Agency acknowledges and agrees that Participant may act as its own general contractor for the constructions of any improvements on the Site and that will be entitled in so doing to earn a commercially reasonable fee. 21. SEVERABILITY/WAIVER/INTEGRATION. 21.1 Severability. If any provision of this Agreement shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining portions hereof shall not in any way be affected or impaired thereby. 21.2 Waiver. A waiver by either party of the performance of any covenant or condition herein shall not invalidate this Agreement nor shall it be considered a waiver of any other covenants or conditions, nor shall the delay or forbearance by either party in exercising any remedy or right be considered a waiver of, or an estoppel against, the later exercise of such remedy or right. 21.3 Integration. This Agreement contains the entire Agreement between the parties concerning the subject matter hereof and neither party relies on any warranty or representation not contained in this Agreement. 22. ENFORCED DELAY; EXTENSIONS OF TIME. Performance by a party hereunder shall not be deemed to be in default where delays or defaults are due to war; insurrection; strikes; lock -outs; riots; floods; earthquakes; fires; casualties; supernatural causes; acts of the public enemy; epidemics; quarantine restrictions; freight embargoes; lack of transportation; governmental restrictions or priority litigation; g g unusuallysevere weather; inability to secure necessary labor, materials or tools; acts of the other party; ; acts or the failure to act of a public or governmental agency or entity (except that acts or the failure to act of Agency or City shall not excuse performance by Agency or City unless the act or failure is caused by the acts or omissions of Participant); or any other causes beyond the reasonable control or without the fault of the party claiming an extension of time to perform. In the event of such a delay (herein "Enforced Delay"), the party delayed shall continue to exercise reasonable diligence to minimize the period of the delay. An extension of time for any such cause shall be limited to the period of the Enforced Delay, and shall commence to run from the time of the commencement of the cause, provided notice by the party claiming such extension is sent to the other arty within fifteen (15) days of the commencement of the cause. The following p shall not be considered as events or causes beyond the control of Participant, and shall not entitle Participant to an extension of time to perform: (i) Participant's failure to obtain financing for the Project, ii Participant's failure to negotiate agreements with prospective tenants or users for the (iii) or , ect ProJjinterest rates or economic or market conditions. Times of performance under this may Agreement also be extended by mutual written agreement by Agency and Participant. The g y Agency Executive Director shall also have the authority on behalf of Agency to administratively g y approve extensions of time not to exceed a cumulative total of one (1) year. IIIIIIIIIIIII IIIIII II IIIIII IIIII IIIIIII IIIIIIIIII IIIIII 00eof ase1es z22g eR 394/015610-0040 22 139234.06 a09/12/01 2 3 . FUTURE ENFORCEMENT. The parties hereby agree that should the Agency cease to exist as an entity at any time during the term of this Agreement, the City of La Quinta shall have the right to enforce all of the terms and conditions herein, unless the Agency had previously specified another entity to enforce this Agreement. 24. GOVERNING LAW. This Agreement shall be governed by the laws of the State of California. 25. NO MERGER. The covenants, terms, and provisions of this Agreement shall not merge with any grant deed or other instrument pertaining to the conveyance of any interest in real property. 26. COUNTERPARTS. This Agreement may be executed in any number of counterparts, each of which shall constitute one original and all of which shall be one and the same instrument. [end -signature page follows] 2001 474254 i IIIIIIIIIIIIIIIIIIIII IIIIIIIIIII IIIIIII IIIIIIIIIIIIIIII esresi2aoG` e,e oa 394/015610-0040 2 3 139234.06 a09/12/01 IN WITNESS WHEREOF, the Agency and Participant have executed this Regulatory Agreement and Declaration of Covenants and Restrictions by duly authorized representatives on the date first written hereinabove. ATTEST: LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic w By• . _ By: S rotary Thomas Genovese Executive Director "Agency" APPROVED AS FORM: RUTAN & TUCKER, LLP By. le?.� Y414 Attorneys for the La Quinta Redevelopment Agency LA QUINTA 34 LLC, a California limited liability company � By: -'`"" N6,9!MZ Lawrence C Rael, Managing Member "Participant" IIIIIII IIIIII IIIIII II IIIIII IIIII IIIIIII III IIIIIII II IIII 99?Ae'�a o� apeaa u4z3a.oe:000<o 24 0 STATE OF CALIFORNIA ss. COUNTY OF On d-�T-emi3-er 13 before me, ����: Ag-YP- AUX-304) . personally appeared Lout/,personally known to me (vi ed r,�� o ,,. r� P h �;� of r;�f�� ^�To � o==« to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/sbeLtLe3r executed the same in his/hef*teir authorized capacity(igs), and that by his/lt4eir signature(s4 on the instrument the person(} or the entity upon behalf of which the person(s) acted, executed the instrument. Witness my hand and official seal. [SEAL] -+r 3- 314 K..Lr � �'�Y , ,f� ,.�/* un9 ,2DJ Notaryublic 2001-474254 'i IIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIII as 2e 259' ea as 394/015610-0040 25 139234.06 a09/12/01 STATE OF CALIFORNIA ) • ) ss. COUNTY OF i �-� ) On / before me, 4b"Ie-'4personally I../ a eared , personally kno n to me ( d pp • ,; Am �) to be the persono whose named is/a 6 subscribed to the within instrument and acknowledged to me that he/safe/tIVy executed the same in his/hAr/Mir authorized capacity(, es), and that by his/Vr/tXir signature(o) on the instrument the persono or the entity upon behalf of which the person(g) acted, executed the instrument. Witness my hand and official seal. Not ublic V2-w��10 r►.o. REGENIA HENSLEY [SEAL] � # 127440 Tfi�e*e CaN►h► NyCanm.6�iesMgl9 �4 li 1111111111111111111111111111111111111111111111111111111 as e00 zs oeas aeaa 394/015610-0040 26 139234.06 a09/12/01 ATTACHMENT NO. 1 LEGAL DESCRIPTION OF SITE LOTS 1 TO 11 INCLUSIVE IN BLOCK 126 OF SANTA CARMELITA AT VALE LA QUINTA, UNIT NO. 149 IN THE CITY OF LA QUINTA, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 18 PAGES 82 AND 83 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY. EXCEPTION THEREFROM THOSE PORTIONS OF LOTS 19 5, 6 AND I I, DEEDED TO THE COUNTY OF RIVERSIDE, BY DOCUMENTS RECORDED MARCH 23, 1978 AS INSTRUMENT NOS. 55038 AND 55039 OF OFFICIAL RECORDS OF RIVERSIDE COUNTY, CALIFORNIA. AND LOTS 6 AND 7 IN BLOCK 125 OF SANTA CARMELITA AT VALE LA QUINTA UNIT NO. 145 AS SHOWN BY MAP RECORDED IN BOOK 18, PAGE 82 OF MAPS, RECORDS OF RIVERSIDE COUNTY, CALIFORNIA. 111111111111111111111111111111111111111111111111111 lill as2ea � a'°area°p 394/015610-0040 27 139234.06 a09/12/01 Under the provisions of Government Code 27361.7, I certify under the penalty of perjury that the notary seal on the document to which this statement is attached reads as follows: Name of Notary: FF RE Y 'P, &,,06,Lt Commission #: Place of Execution: @`' Dv/Y Date Commission Expires: Date: Signature: VAffA,O IIIIIII IIIIII IIIIII II IIIIII IIIII IIIIIII III IIIIIII II IIII 0920e lzee re ieeer Recording Requested By And When Recorded Return To: La Quinta Redevelopment Agency 78-495 Calle Tampico La Quinta,, CA 92253 Attn: Executive Director -.1 d 6 13 U'-� --- (�p DOC N 2001-474236 09/28/2001 08:00A Fee:NC Pape 1 of 8 Recorded In Offleiai Records County of Riverside Gary L. Orso Assessor, County Clerk d, Recorder MEIN rL1%1MM==M= MEEMMMMMMEVE1 ===I=== W-11 (Exempt from Recording Fee per Gov. Code 6103) DECLARATION OF COVENANTS, CONDITIONS, AND RESTRICTIONS AND AGREEMENT TO HOLD PROPERTY AS ONE PARCEL THIS DECLARATION OF COVENANTS, CONDITIONS, AND RESTRICTIONS AND AGREEMENT TO HOLD PROPERTY AS ONE PARCEL ("Declaration") is made and entered into this 13th day of Septer , 2001, by and between LA QUINTA 34 LLC, a California limited liability company ("Declarant"), and LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic ("Agency"). RECITALS A. Declarant is the owner of fee title of those certain parcels of real property located in the City of La Quinta, County of Riverside, State of California, more particularly described on Exhibit "A" hereto and incorporated herein by this reference (hereinafter referred to collectively as the "Property"), B. Declarant, and Agency entered into that certain Affordable Housing Rehabilitation Agreement '("AHRA"), dated September 13, 2001, pursuant to which Declarant agreed to enter into this Declaration. Reference is also made to the following recorded documents pertaining to the Property: l . Deed of Trust with Assignment of Rents, Security Agreement and Fixture Filing, by and between Declarant as trustor and Agency as beneficiary, of even date herewith, and recorded in the Office of the Riverside County (the "Deed of Trust"). The Deed of Trust secures a promissory note by Declarant as Maker and Agency as Holder, dated on or about the date of said Deed of Trust (the "Note"); and 2. Regulatory Agreement and Declaration of Covenants, Conditions, and Restrictions, by and between Declarant and Agency, of even date herewith, and recorded in the Office of the Riverside County Recorder (the "Agency Regulatory Agreement"). 3. Subordination Agreement, dated on or about August 9, 2001, by and among Maker, Holder, and Rubicon Realty Capital Corporation, and recorded in the Office of the Riverside County Recorder ("Subordination Agreement"). 0 �2 394/015610-0040 139234.06 a09/12/01 'IIIIIII IIIIII IIIIII II IIIIII IIIII IIIIIII III IIIII IIII IIII 2 0 012 ei4eesaeR This Declaration, the Deed of Trust, the Note, the Agency Regulatory Agreement, and the Subordination Agreement are hereinafter collectively referred to as the "Agency Agreements." C. In order to develop the Property for the purposes set forth in the Agency Agreements, Agency has permitted Declarant and its successors in interest to redevelop the Property as if the parcels comprising the Property were one. D. Declarant and the Agency intend that in exchange for Agency permitting redevelopment of the parcels comprising the Property in the manner described in the Agency Agreements, Declarant shall hold, sell, and convey the Property subject to the covenants set forth in this Declaration and that the Agency and its successors shall have the right and power to enforce the covenants, conditions, restrictions, and reservations as provided herein. NOW, THEREFORE, the Declarant declares, covenants, and agrees, by and for itself, its heirs, executors, successors, assigns, and all persons claiming under or through it, for the benefit of Agency and its successors, as follows: 1. Certification of Ownership. The Declarant hereby represents and warrants to Agency that Declarant is the legal owner of fee title to the Property. 2. Covenant to Hold As One Parcel. Declarant hereby covenants and agrees that the parcels comprising the Property shall be held under common ownership and that none of the parcels shall be sold, conveyed, leased, transferred, hypothecated, held, encumbered, or leased separate and apart from the other. 3. Covenants Running With The Land. 3.1 Covenants Running With the Land. This Declaration is designed to create covenants appurtenant to and running with the Property. Declarant hereby declares that all of the Property shall be held, sold, conveyed, encumbered, hypothecated, leased, used, occupied and improved subj ect to the covenants, conditions, and restrictions set forth herein, all of which are for the purposes of uniformly enhancing or protecting the value and desirability of the Property. The covenants, conditions, and restrictions set forth herein shall run with the Property and shall be binding upon all persons having any right, title or interest in the Property, or any part thereof, their heirs, successive owners and assigns; shall inure to the benefit of every portion of the Property and any interest therein; shall inure to the benefit of the Agency and its successors and assigns and successors in interest; and shall be binding upon Declarant, its successors and assigns and successors in interest. Agency and Declarant hereby declare their understanding and intent that the burden of the covenants set forth herein touch and concern the. land in that Declarant's legal interest in the Property is rendered less valuable thereby. Agency and Declarant hereby further declare their understanding and intent that the benefit of such covenants touch and concern the land by enhancing and increasing the enjoyment and use of the Property by the citizens of the City and by furthering the health, safety and welfare of the residents of the City. 3.2 Declaration Enforceable by Agency. Declarant grants to Agency the right and power to enforce, by any remedy available to Agency in law or equity, the covenants, conditions, 394/015610-0040 z 139234.06 a09/12/01 restrictions, reservations, and agreements contained in this Declaration against the Declarant and all persons having any right, title or interest in the Property, or any part thereof, their heirs, successive owners and assigns. 4. Termination. No breach of this Declaration shall entitle any party to cancel, rescind or otherwise terminate this Declaration or excuse the performance of such party's obligation hereunder; provided, however, that this limitation shall not affect in any manner any other rights or remedies which the parties may have by reason of such breach. 5. No Merger. This Declaration shall not merge with any grant deed or any other conveyance of any interest in the Property or any portion thereof, including any conveyance to the Agency. 6. Miscellaneous. 6.1 Term. The covenants, conditions, restrictions, reservations, and agreements contained in this Declaration shall remain in effect until released by the Agency by an instrument in writing recorded in the official records of Riverside County. There shall be no merger of this Declaration with any other interest pursuant to the terms set forth in Paragraph 5. Should the Property that is the sub j ect of this Declaration undergo a change in use from its use as a multifamily apartment complex and parking area serving the apartment complex, the Agency shall release this Declaration when Declarant or its successor -in -interest can demonstrate that this Declaration is not required for the replacement use. 6.2 Modification. This Declaration may not be amended or modified except by a written instrument duly executed and acknowledged by the parties hereto, or their successors or assigns, and duly recorded in the official records of Riverside County. 6.3 Governing Law. This Declaration shall be governed by and construed in accordance with the laws of the State of California. 6.4 Severability. The invalidity of or inability to enforce any provision of this Declaration with respect to a particular party or set of circumstances shall not in any way affect the validity and enforceability of any other provision hereof, or the same provision when implied to another party or to a different set of circumstances. 6.5 Attorneys' Fees. In any action between the parties seeking enforcement of any of the terms and provisions of this Declaration, the prevailing party in such action shall be awarded, in addition to any damages, injunctive or other relief, its reasonable costs and expenses, including attorneys' fees and expert witness fees. 6.6 Counterparts. This Declaration may be executed in any number of counterparts each of which shall be an original but all of which shall constitute one and the same document. [end -signature page follows] IIIIII IIIIII IIIIII II IIIIII IIIII IIIIIII III IIIII IIII IIII 09�e0'i e74 geseaA 394/015610-0040 3 139234.06 a09/12/01 IN WITNESS WHEREOF, the undersigned have executed this Declaration as of the date first written above. "Declarant" LA QUINTA 34 LLC, a California limited liability comp y By: wA Lawrence C. kaeL Managing Member "AGENCY" LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic B Thomas Genovese Executive Director ATTEST-. APPROVED AS TO FORM: RUTAN & TUCKER, LLP f -V�/ Attorneys for the La Quinta Redevelopment Agency 20e a e14of aR5geR 394/015610-0040 4 139234.06 a09/12/01 EXHIBIT "A" LEGAL DESCRIPTION OF THE PROPERTY LOTS 1 TO 11 INCLUSIVE IN BLOCK 126 OF SANTA CARMELITA AT VALE LA QUINTA, UNIT NO. 145, IN THE CITY OF LA QUINTA, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 18 PAGES 82 AND 83 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY. EXCEPTION THEREFROM THOSE PORTIONS OF LOTS 19, 59 6 AND I I, DEEDED TO THE COUNTY OF RIVERSIDE, BY DOCUMENTS RECORDED MARCH 23, 1978 AS INSTRUMENT NOS. 55038 AND 55039 OF OFFICIAL RECORDS OF RIVERSIDE COUNTY, CALIFORNIA. LOTS 6 AND 7 IN BLOCK 125 OF SANTA CARMELITA AT VALE LA QUINTA UNIT NO. 149 AS SHOWN BY MAP RECORDED IN BOOK 18, PAGE 82 OF MAPS, RECORDS OF RIVERSIDE COUNTY, CALIFORNIA. IIIIIII IIIIII IIIIII II IIIIII IIIII IIIIIII III IIIII IIII IIII g074of Eeses,z5a er 394/015610-0040 5 139234.06 a09/12/01 CERTIFICATE OF ACCEPTANCE THIS IS TO CERTIFY THAT THE INTEREST IN REAL PROPERTY CONVEYED BY THE FOREGOING DECLARATION BY DECLARANT THEREIN DESCRIBED IN FAVOR OF THE LA QUINTA REDEVELOPMENT AGENCY, A PUBLIC BODY, CORPORATE AND POLITIC, IS HEREBY ACCEPTED BY THE UNDERSIGNED OFFICER OF THE LA QUINTA REDEVELOPMENT AGENCY ON BEHALF OF THE LA QUINTA REDEVELOPMENT AGENCY, PURSUANT TO AUTHORITY CONFERRED ON THE UNDERSIGNED OFFICER BY RESOLUTION NO. RDA RA-2001-01 ADOPTED BY THE BOARD OF DIRECTORS OF THE LA QUINTA REDEVELOPMENT AGENCY ON JUNE 5, 2001, AND THE LA QUINTA REDEVELOPMENT AGENCY CONSENTS TO RECORDATION THEREOF BY ITS DULY AUTHORIZED OFFICER. Thomas Genovese, Executive Director Date: IIIIII IIIIII IIIIII II IIIIII IIIII IIIIIII III IIIII IIII IIII es, i001 e�ef4 ea590F 394/015610-0040 6 139234.06 a09/12/01 STATE OF CALIFORNIA ) )ss. COUNTY OF '9V2'qVV4;�,e ) On 5 ,� �1,3, &,0/, before me, a notary public, personally appeared C ., ,personally known to me (or-pToved—to-4xwe..-on- the bps.-af._satisfacteFy--gvide--nee) to be the person whose name is subscribed to the within instrument and acknowledged to me that he/sty-executed the same in his/hgr.authorized capacity, and that by his/her signature on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument. WITNESS my hand and official seal. [SEAL] JEFFREY P. ALLISON Commission # 1223314 � -�►' :: �.; � No f ctry Public - Orange County MY Comm. Expk s Jun 9, 20M 2001-474255 &9/228i f 2da 1 198 : &0A f '0f 394/015610-0040 7 139234.06 a09/ 12/01 STATE OF CALIFORNIA ) ss. COUNTY OF On before me, a notary public, personally appeared v , personally known to me e b to be the person whose name is subscribed to the within: instrument and acknowledged to me that he/We executed the same in his/Vr authorized capacity, and that by his/10 signature on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument. WITNESS my hand and official seal. By: r409 Can REGEN{A WNSLEY Hoiay K*ft - ctcookaffftft ams wveckw tour" Coffy . n.ENphMAU919,20D41 2001-474255 cof 394/015610-0040 g 139234.06 a09/ 12/01 Le "ww:#,T�4 ,egg Recording Requested By And When Recorded Return To: La Quinta. Redevelopment Agency 78-495 Ca11e Tampico La Quinta, CA 92253 Attn: Executive Director o3- DOC N 2001-474236 09/28/2001 08:00A Fee:NC Page 1 of 11 Recorded in Official Records County of Riverside Gary L. Orso Assessor, County Clerk & Recorder M $ U PAGE SIZE DA PCOR NOCOR SMF MISC. 7A, R L COPY LONG REFUND NCHG EA [Exempt From Recording Fees per Gov. Code 6103] SUBORDINATION AGREEMENT NOTICE: THIS SUBORDINATION AGREEMENT RESULTS IN YOUR SECURITY INTEREST IN THE PROPERTY BECOMING - SUBJECT TO AND OF LOWER PRIORITY THAN THE LIEN OF SOME OTHER OR LATER SECURITY INSTRUMENTS. THIS SUBORDINATION AGREEMENT ("Subordination Agreement") is entered into this 9th day of August, 2001, by and among the LA QUINTA REDEVELOPMENT AGENCY, a public agency, corporate and politic ("Agency"), LA QUINTA 34 LLC, a California limited liability company ("Participant"), and FIRST FIDELITY INVESTMENT AND LOAN, a California corporation, as successor to RUBICON REALTY CAPITAL CORPORATION, A CALIFORNIA CORPORATION ("Lender"). RECITALS: A. Participant owns fee title to the real property described on Attachment No. "1" ("Apartment Parcel") and has a contract to acquire the real property described on Attachment No. 2 ("Additional Parcels") (collectively, the "Property") attached hereto and incorporated herein by reference. B . The Agency and Participant have entered into an Affordable Housing Rehabilitation Agreement, dated S en t emb e r 13, , 2001 (the "AHRA"). Pursuant to the terms of the AHRA and the agreements referred to therein, Agency is obligated to loan Participant the sum of THREE HUNDRED FIFTY THOUSAND DOLLARS ($350,000.00) ("Agency Loan"), to assist Participant in rehabilitating the Property. The Agency Loan is evidenced by a Note ("Agency Note"). The Agency Note is partially secured by a Deed of Trust with Assignment of Rents encumbering the Property recorded in the Official Records of Riverside County (the "Agency Deed of Trust") on or about the date of recordation of this Subordination Agreement. C. Pursuant to the AHRA,. and in partial consideration for the Agency Loan, Agency and Participant, executed and recorded against the Property that certain Regulatory Agreement and Declaration of Covenants and Restrictions by and between Agency and Participant recorded in the Official Records of Riverside County (the "Agency Regulatory Agreement") on or about the date of recordation of this Subordination Agreement. T cz 394/015610-0040 139234.03 PM01 D. Pursuant to the AHRA, and in partial consideration for the Agency Loan, Agency and Participant,, executed and recorded against the Property that certain Declaration of Covenants and Restrictions And Agreement To Hold Property As One Parcel, by and between Agency and Participant recorded in the Official Records of Riverside County (the "Declaration") on or about the date of recordation of this Subordination Agreement. E. Participant has an existing loan from Lender in the original principal amount of NI NE HUNDRED THIRTY THOUSAND DOLLARS (the "Lender Loan"), which is evidenced promissory by a romisso note dated as of June 14, 2000 ("Lender Note"). The Lender Note is secured by a deed of trust dated as of June 14, 2000 and recorded against only the Apartment Parcel (legally described in Attachment No. 1) ("Lender Deed of Trust"). The Lender Deed of Trust was recorded on Jul 7, 2000, as Instrument No. 2000-2675 82 in the Official Records of Riverside County. The Lender Deed of Trust is sometimes referred to in the AHRA as th e "First Deed of Trust." F. Agency, Participant, and Lender agree that the Agency will specifically and unconditionally subordinate the lien or charge of the Agency Deed of Trust and the Agency Regulatory Agreement to the lien or charge of the Lender Deed of Trust. NOW THEREFORE, in consideration of the foregoing Recitals and the covenants and promises hereinafter contained, and for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: 1.0 Subordination by Agency. 1.1 Necessity of Subordination. Pursuant to Section 33334.14 of the Health and Safety Code Agency is permitted to subordinate the Agency Deed of Trust and Agency s y g y Regulatory g y ulato Agreement only if certain specified findings are made and if certain rights are grantedAgency. to the A . In accordance with said Section, the Agency hereby finds that no y economically feasible alternative method of financing the units on substantially comparable term s and conditions without subordination is reasonably available and the Agency has obtained written commitments to protect the Agency's investment in the event of a default, as specified in w this Subordination Agreement. Therefore, Agency hereby agrees to subordinate the lien or chargeAgency of the A Deed of Trust and Agency Regulatory Agreement to the Lender Deed of y Trust on the terms set forth in this Subordination Agreement. This Subordination Agreement 11 set forth the priority of liens between the parties and govern the terms and conditions of shall p y such subordination. 1.2 Age Subordination of A Deed of Trust and Agency Re ulato A reement to Lender y Deed of Trust. The Lender Deed of Trust (and any renewals or extensions of, or advances includinginterest thereunder) shall unconditionally be and remain at all times a lien or the Apartment Parcel, prior and superior to the lien or charge of the Agency Deed of charge on p TrustAgency and the A Regulatory Agreement, to all present and future indebtedness and y g ry IIIII IIIII IIIIII II �IIIII IIIII IIIIII III IIII IIII III ee 2e01- oi4es5eea 394/015610-0046 Repl. Pg. 2 218948.01 a09/ 12/01 obligations secured thereby, together with all rights and privileges of Agency thereunder, but sub ect to the terms and conditions of this Subordination Agreement. 1.3 Refinancin . If Participant chooses to refinance the Lender Loan with Lender or any other othentity, or chooses to obtain new financial secured by the Property, Agency agrees to Y subordinate the Agency Deed of Trust and the Agency Regulatory Agreement to the refinancing g Y lender's deed of trust under the same terms and conditions as set forth in this Agreement, except that the Agency shall subordinate the Agency Deed of Trust and Agency Regulatory Agreement g Y with respect to the Apartment Parcel and the Additional Parcel on the condition that the amount p p of the new loan p g plus the outstanding principal balance secured by the Agency Deed of Trust is not g ninety-five greater than nine five percent (95%) of the then appraised fair market value of the Property. 1.4 Covenants of Agency. The Agency declares, agrees and acknowledges that to Agency g 's actual knowledge, as of the date of this Subordination Agreement there is no breach, even t of default or default existing under the Agency Deed of Trust or Agency Regulatory Agreement, or any circumstances, event, omission or failure of condition which would constitute g such a breach, default or event of default after notice or lapse of time, or both. 3. Riphts of Agency. 3.1 Default Under Lender Deed of Trust. In the event of a breach or default by Partic ipant ant under the terms of the Lender Deed of Trust, the party alleging such default shall p Agency provide the A with written notice of such breach or default concurrently with providing Y suchp. notice to Participant. Upon receipt of such notice of breach or default, the parties hereto p agreeAgency that A shall each have all of the following rights so long as any of the Agency Deed y of T Agency Trust or A Regulatory Agreement encumber any portion of the Apartment Parcel or y g rY interest therein: 3.1.1 To cure the noticed default at any time prior to the foreclosure of the Lender Deed of Trust. In connection therewith, the Lender agrees that (i) in the event of a monetary default, the Lender shall not foreclose Lender Deed of Trust or other lien prior to the date that is sixty (60) days after the date that the Lender would otherwise be legally entitled to foreclose Lender Deed of Trust and (ii) in the event of a nonmonetary default, the Lender shall not foreclose its Lender Deed of Trust or other lien prior to the date specified above for monetary defaults; provided that if said nonmonetary default is susceptible to being cured only when the Agency has obtained possession of the Property, the Agency shall have as long as necessary (x) to obtain possession of the Apartment Parcel by either the Agency foreclosing the Agency Deed of Trust, and to cure the default, so long as the Agency does so with reasonable and continuous diligence. 3.1.2 To negotiate with the Lender regarding the noticed default at any time prior to the foreclosure of the Lender Deed of Trust or other lien. 3.2 Foreclosure of Deeds of Trust. The Lender hereby agrees that in the event that Agency forecloses the Agency Deed of Trust or otherwise acquires title to the Property, said Ag y g Y IIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIII e�2aQ19e,4e9E9yti 394/015610-0040 3 139234.03 PMO1 transfer shall not give rise to any right on the part of the Lender to accelerate the amounts due on t the Lender Loan. 4. Miscellaneous. 4.1 Entire A reement. This Subordination Agreement shall be the whole and only � agreement with regard to the matters set forth herein and shall supersede and cancel, but only would affect the priority between the Lender Deed of Trust and the Agency Deed of insofar as p Y Trust Agency Regulatory genc and A Re ulato A reement, any prior agreement as to such subordination din but not limited to, those provisions, if any, contained in the Agency Deed of Trust or including, Agreement that provide for the subordination of the lien or charge thereof to Agency Regulatory g another deed or deeds of trust or to another mortgage or mortgages, upon the Property. 4.2 . Successors and Assi nsThis Subordination Agreement shall inure to and bind � the g heirs legatees, devisees, administrators, executors, successors and assigns of the parties hereto. 4.3 California Law. This Subordination Agreement shall be construed according to the laws of the State of California. Severabili If an term, provision, condition or covenant of this Subordination 4.4 Y r the application thereof to any party or circumstances shall, to any extentbe held _Agreement or , invali d or unenforceable, the remainder of this instrument, or the application of such term, on condition or covenant to persons or circumstances other than those as to whom or provisio n, which it is held invalid or unenforceable shall not be affected thereby, and each term and provisio n of this Subordination Agreement shall be valid and enforceable to the fullest extent permitted by law. 4.5 Notice. Formal notices, demands, and communications between Agency, Lender shall be sufficient) Participant, and Le Y given if personally delivered, delivered by a reputable samey or -day overnight courier services that provides a receipt showing date and time of g y delivery, or delivered b United States mail, registered or certified, postage prepaid, return receipt requested, to the following addresses If to Agency: La Quints Redevelopment Agency 78-495 Calle Tampico La Quints CA 92253 Attn: Executive Director With a copy to: Rutan & Tucker, LLP 611 Anton Boulevard, Suite 1400 Costa Mesa, CA 92626 Attn: M. Katherine Jenson, Esq. 2@91 474256 'IIIIIII IIIIII IIIIII II IIIIII IIIII IIIIIII III IIIII IIII IIII 0 �(. 9P'. P9R 394/015610-0040 4 139234.03 PMO1 If to Participant: La Quinta 34 LLC 1800 East Garry Avenue, Suite 117 Santa Ana, CA 92705 Attn: Lawrence C. Rael With copy to: Gibson, Dunn & Crutcher LLP Jamboree Center 4 Park Plaza, Suite 1400 Irvine, CA 92614- 8 5 5 7 Attn: Teresa J. Farrell, Esq. Fax: (949) 451-4220 If to Lender: First Fidelity Investment and Loan 3061 Edinger Avenue Tustin, CA 92780-7204 Attn: Loan Servicing Fax: (949) 654-9006 All notices shall be deemed to be received as of the earlier of actual receipt by the addressee thereof or the expiration of forty-eight (48) hours after depositing in the United States Postal System in the manner described in this Section. Such written notices, demands, and communications may be sent in the same manner to such other addresses as a party may from time to time designate by mail. 4.6 Attorneys' Fees. In the event that any action, suit or other proceeding is brought to enforce the obligations of under this Agreement, the prevailing party shall be entitled to receive all of such party's costs and expenses of suit, including attorneys' fees, expert witness fees and all costs incurred in each and every such action, suit or other proceeding, including any and all appeals or petitions therefrom. 4.7 Nonliability of Agency Officials. No officer, official, member, employee, agent, or representative of Agency shall be personally liable to Participant or Lender, or any successor in interest, in the event of any default or breach by Agency or for any amount which may become due to Participant or Lender or successor or on any obligations under the terms of this Agreement. 4.8 Counterparts. This Subordination Agreement may be executed in any number of counterparts, each of which, when all the parties hereto have signed this Subordination Agreement, shall be deemed an original. END -SIGNATURE PAGES FOLLOW] 394/015610-0040 5 139234.03 PMO1 IN WITNESS WHEREOF, the parties have executed this Subordination Agreement as of the date first written above. NOTICE: THIS SUBORDINATION AGREEMENT RESULTS IN YOUR SECURITY INTEREST IN THE PROPERTY BECOMING SUBJECT TO AND OF LOWER PRIORITY THAN THE LIEN OF SOME OTHER OR LATER SECURITY INSTRUMENTS. APPROVED AS TO FORM: RUTAN &TUCKER, LLP Bv: 7C �� Agency Counsel "AGENCY" LA QUINTA REDEVELOPMENT AGENCY, a public bod ,corporate and politic B Executive Director "PARTICIPANT" LA QUI 4 LLC, a California limited liabili com By: ence C. Rae Managing Member "LENDER" FIRST FIDELITY INVESTMENT AND LOAN, a California corporation, as successor to Rubicon Realty Capital Corporation, a California corporati By_ � � ,c�c. �r.v✓ Its: Y �F�, r I IIIIII IIIIII IIIIII II IIIIII IIIII IIIIIII III IIIII IIII IIII 9� 4 ��9. 2fi��rF By:°f Its: 394/015610-0040 6 139234.03 PM01 [END OF SIGNATURES] 2901 4 42 6 'i IIIIIIIIIIIIIIIIIIIII IIIIIIIIIII IIIIIIIIII IIIII IIII IIII e�, �a''"°r i i faF 394/015610-0040 139234.03 PM01 STATE OF CALIFORNIA ) ss. COUNTY OF � ) On C�6-- C� , bemire me personally appeared personally known to me (ni to be the person ose name,066, subscri d to the within instrument and acknowledgeacknowledgeo to me tha sh executed the same in /he 'r authorized capacity(, and that by �h signatur�on the instrument the person or the entity upon behalf of which the perNnol qAed, executed the instrument. Witness my hand and officic, Notary Public [SEAL] wt'14 SH RON A. D. MC DEPJ %6.. �- Commission # 1201133 ar� ,rig Notary ubrc - .�: Caifom:a > orange County My COMM. E Nov 7, 2002 STATE OF CALIFORNIA ) ) ss. COUNTY OF On T� (3� I 2 � j before me, .�e'Ff ��N � lq�-14,'5'0110 personally appeared 4,4kXe iZ )q -e, G' personally known to me (of- 16 nQ i Q ck:C Q af; n -r- -4-A L/"OLO %J.L b3L4LXk3.LL4%ofL%J1Zy--1&VH e) to be the person(s) whose name() is/aye subscribed to the within instrument and acknowledged to me that he/sley executed the same in his/kon4heir-authorized capacity(iesj, and that by his/kekheir signature(s) on the instrument the person(-s} or the entity upon behalf of which the person(s) acted, executed the instrument. Witness my hand and official seal. Notary li [SEAL] JEFfREY P. ALLISON Commission # 1223314 Z ,� ;J. +, plp; ary public -California Z Orange �� MyCommJu 9,20ai I I IIIIII IIIIII IIIIII I� IIIII� IIIII IIIIIII III IIIII IIII Eq 2�92 9i4esse INW, -low,IIII s or i i 394/015610-0040 8 139234.03 PM01 STATE OF CALIFORNIA •U ) ss. COUNTY OF V gar ) O before me, �� 1,,wV , personally appeared M d.5 personally 4known to me (of -prg-upti to ma,-4mt-4he-+*9iQ AC Q At %0 V to be the person) whose namef� is/axe subscribed to the within instrument and acknowledged to me that he/sale/they executed the same in his/ho/tWir authorized capacity(ieg), and that by his/ber/tl6r signature) on the instrument the person(jr) or the entity upon behalf of which the person($) acted, executed the instrument. Witness my hand and official seal. STATE OF CALIFORNIA ss. COUNTY OF Not Public On before me, personally appeared 30 personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. Witness my hand and official seal. Notary Public [SEAL] 2001 4742SE i I IIIIII IIIIII IIIIII II IIIIII IIIII 11111111111111111111111 °9.�ee.5 of e11 e eer+ i9i a.oi envoi 9 ATTACHMENT NO. " 1 " LEGAL DESCRIPTION OF APARTMENT PARCEL LOTS 1 TO 11 INCLUSIVE IN BLOCK 126 OF SANTA CARMELITA AT VALE LA QUINTA, UNIT NO. 14, IN THE CITY OF LA QUINTA5 COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 18 PAGES 82 AND 83 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY. EXCEPTING THEREFROM THOSE PORTIONS OF LOTS 1, 55 6 AND I I, DEEDED TO THE COUNTY OF RIVERSIDE, BY DOCUMENTS RECORDED MARCH 23, 1978 AS INSTRUMENT NOS. 55038 AND 55039 OF OFFICIAL RECORDS OF RIVERSIDE COUNTY, CALIFORNIA. 2901 474256 IIIIIII IIIIII IIIIII II IIIIII IIIII IIIIIII III IIIIII III IIII eiie5oe�atesA 394/015610-0040 10 139234.03 PM01 ATTACHMENT NO. 2 LEGAL DESCRIPTION OF ADDITIONAL PARCELS LOTS 6 AND 7 IN BLOCK 125 OF SANTA CARMELITA AT VALE LA QUINTA5 UNIT NO. 145 AS SHOWN BY MAP RECORDED IN BOOK 18, PAGE 82 OF MAPS, RECORDS OF RIVERSIDE COUNTY, CALIFORNIA. I IIIIII IIIIII IIIIII II IIIIII IIIII IIIIIII III IIIIII III IIII "s 26s 1ia o4es6naa 394/015610-0040 11 139234.03 PM01 (4�p 04=;? - 0 6- ORANGE COAST TITLE COMPANY ESCROW DIVISION 640 N. Tustin -Ave., Suite 211 Santa Ana, CA 92705 (714) 558-0222 (800) 540-3515 October 1, 2001 LA QUINTA REDEVELOPMENT AGENCY P. O. BOX 1504 78-495 CALLE TAMPICO LA QUINTA, CA 92253 ATTENTION: JERRY HERMAN COMMUNITY DEVELOPMENT DIRECTOR Re: Escrow No.: 107234-MC AMD 107234-1-MC Property: APN# 773-073-0049 & 0059 , La Quinta, CA Loan to: La Quinta 34, LLC Loan No. LA QUINTA REDEVELOPMENT AGENCY Our escrow covering the property referenced above has been closed. Enclosed please find the following items: Copy of Settlement Statement (The overages of actual vs estimated costs were refunded to La Quinta through escrow No. 10234-1-MC) Refund check for overage of charges in the amount of $182.90 Copy of Note (The Original Note was forwarded with copy of the enclosed to your legal counsel) Escrow No. 107234-MC (Recording charges $33.00 less .10 messenger fee net refund $32.90) (Refund of Pad $150) Conformed copies of recorded documents Should you have any questions, or need anything further from our file, please do not hesitate to contact me at the above referenced number. Sincerely, Orange Coast Title Compaly Marty Cles ri, CSEO, Sr. C & YZscrow Officer fax 714-569-1098 c : RUTAN AND TUCKER, 611 ANTON STREET 14TH FLOOR COSTA MESA, CA 92626-1931 ATTENTION: DAN SLATER NOTE Sept muter 13 , 2001 ("Note Date") $350,000.00 ("Loan Amount") FOR VALUE RECEIVED, the undersigned (herein, the "Maker") hereby promises to pay to the order of the LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic ("Holder" or "Agency"), at a place designated by Holder, the principal sum of THREE HUNDRED FIFTY THOUSAND DOLLARS ($350,000.00) ("Mote Amount"), plus accrued interest, or such lesser amount which shall from time to time be owing hereunder pursuant to the terms hereof. The principal sum hereof shall be disbursed pursuant to the terms and conditions set forth in that certain Affordable Housing Rehabilitation Agreement by and among Maker and Holder, dated September 13, 2001 ("AHRA"), pertaining to Maker's redevelopment of certain real property defined in the AHRA as the "Site." Reference is also made to the following additional agreements and documents, the first three of even date herewith, involving Maker and. Holder and/or pertaining to the Site: (i) Deed of Trust with Assignment 1,Iaker as borrower, Holder as beneficiary, and Orange Coast Title Company as Trustee, and recorded in the Office of the Riverside County Recorder ("Agency Deed of Trust"). The Agency Deed of Trust partially secures repayment of this Note. Regulatory Agreement and Declaration of Covenants and Restrictions, by and between Maker and Holder, for the benefit of Holder, and recorded in the Office of the Riverside County Recorder ("Agency Regulatory Agreement"). Declaration of Covenants, Conditions, and Restrictions And Agreement To Hold Property As One Parcel, by and between Maker and Holder, for the benefit of Holder, and recorded in the Office of the Riverside County Recorder ("Declaration"). (iv) Subordination Agreement, by and among Maker, Holder, and Rubicon Realty Capital Corporation, recorded in the Office of the Riverside County Recorder (dated on or about August 9, 2001). All of the foregoing listed documents are referred to herein collectively as the "Agency Agreements." The Agency Agreements are incorporated herein as though fully set forth. Except as otherwise provided herein, the defined terms used in ill�� l � �� J0 .. Ala � �iie same meaning as set forth in the AHRA. 1. Purpose of Loan. The loan evidenced by this Note is a loan for the purpose of rehabilitating the Site in accordance with the AHRA. 2. Principal Amount. The principal amount of this Loan shall be THREE HUNDRED FIFTY THOUSAND DOLLARS ($350,000.00). Simple interest shall accrue on the outstanding principal amount at seven percent (7%) per annum, compowicied annually. 394/015610-0040 139234.06 a09/ 12/01 Certifi to e and cc.- t Copy of theLbeautrL, ent in our i ices OR GELE By: Escrow Cuff icer 3. Term of Note; Repayment. 3.1 Subject to provisions of Paragraph 4 hereof which provides for acceleration of all principal and accrued interest and immediate repayment thereof in the event of a default by Maker, this Note shall expire and be of no force or effect as of the date of expiration of the Agency Regulatory Agreement. Maker shall not be obligated to make any payments on this Note and unless and until any of the events described in Paragraph 4 occur. Upon the occurrence of an uncured default, the full )Note Amount and all accr aed imerest thereon shall be immediately due and payable as set forth in Paragraph 4. 3.2 Maker shall have the right to prepay all or any portion of this Note at any time without penalty, and upon such repayment the Agency Deed of Trust shall be reconveyed. Prepayment shall not affect the Agency Regulatory Agreement or the term of the Agency Regulatory Agreement. 3.3 Any payments made by Maker in paymtmm *' - , - - .., ~h 11 be applied in the following order: (i) first to the interest then accrued and due on the unpaid principal balance under this Note, (ii) second to reduction of the principal balance of this Note. 4. Default; Cross -Default; Acceleration. 4.1 In addition to Maker's failure to timely perform the requirements of this Note, a default by Maker of any of the Agency Agreements shall constitute a default of this Note and all of the Agency Agreements. 4.2 In the event of a default of this NTot� o a default of any of the Agency Agreements by Maker, which default has not been cured within the cure period applicable to such default, Holder may, at its option, declare this Note and the entire obligation hereby evidenced, including accrued interest, immediately due and payable and collectible then or thereafter as Holder may elect, regardless of the date of maturity, and notice of the exercise of said option is hereby expressly waived by Maker. 5. Collection Costs;Attorn ys' Fees. If, because of any event of default under this Note or any of the Agency Agreements, any attorney is engaged by Holder to enforce or defend an provision of this instrument, whether or not suit is filed hereon, then Maker shall pay upon demand reasonable attorneys fees, expert witness fees curred by Holder together with interest thereon until paid at the applicable rate of interest payable hereunder, as if such fees and costs had been added to the principal owing hereunder. 6. Waivers by Maker. Maker and all endorsers, guarantors and persons liable or to become liable on this Note waive presentment, protest and demand, notice of protest, demand and dishonor and nonpayment of this Note and any and all other notices or matters of a like nature, and consent to any and all renewals and extensions near the time of payment hereof and agree further that at any time and from time to time �-itj r� L.�,;, the terms of payment herein ma • Y be modified or the security described in any documents securing this Note released in whole or . • g in part, or increased, changed or exchanged by agreement between Holder and any owner of the premises affected by said documents securing this Note, without in any way affecting the 394/015610-0040 139234.06 a09/12/01 2 liability of any party to this Note or any persons liable or to become liable with respect to any indebtedness evidenced hereby. 7. Severability. The unenforceability or invalidity of any provision or provisions of this Note as to any persons or circumstances shall not render that provision or those provisions unenforceable or invalid as to any other provisions or circumstances, and all provisions hereof, in all other respects, shall remain valid and enforceable. 8. Modifications. Neither this Note nor any term hereof may be waived, amended, discharged, modified, changed or terminated orally; nor shall any waiver of any provision hereof be effective except by an instrument in writing signed by Maker and Holder. No delay or omission on the part of Holder in exercising any right hereunder shall operate as a waiver of such right or of any other right under this Note. 9. No Waiver by Holder. No waiver of any breach, default or failure of condition under the terms of this Note shall be implied from any failure of the Holder of this Note to take, or any delay be implied from any failure by the Holder in taking action with respect to such breach, default or failure from any prior waiver of any similar or unrelated breach, default or failure. 10. Usury. Notwithstanding any provision in this Note, the total liability for payment in the nature of interest shall not exceed the limit imposed by applicable laws of the State of California. 11. Nonassignability. Maker may only Transfer (as that term is defined in the AHRA) this Note in accordance with provisions and restrictions pertaining to a transfer of the AHRA as set forth in the AHR.A. Holder may freely Transfer Holder's interest in this Note in any manner, at Holder's sole discretion; provided, that at the time of such Transfer Holder also transfers .the AHRA to such transferee. 12. Governing Law. This Note has been executed and delivered by Maker in the State of California and is to be governed and construed in accordance with the laws thereof. 13. Time of Essence. Time is of the essence in the performance of the obligations and provisions set forth in this Note. IN WITNESS WHEREOF, Maker has executed this Note as of the Note Date. "Maker" LA QUINTA 34 LLC, a California limited liability o any By: COR Lawr .Rae , Kanaging Member 394/015610-0040 139234.06 a09/12/01 3 Closing Date: 9/27/01 Escrow Statement of: LA QUINTA 34, LLC - - - ORANGE COAST TITLE COMPANY ESCROW DIVISION 640 N. Tustin -Ave., Suite 211 Santa Ana, CA 92705 (714) 558-0222 (800) 540-3515 Borrower(s) Closing Statement Dated As of 10/1/01 Escrow No: 107234-1 - MC Escrow Officer: Marty Clesceri, CSEO, Sr. Commercial Escrow Officer Property Address: L. 1-11 B. 126 & L. 6-7 B. 125 SANTA CARMELITA AT VALE LA QUINTA U. 14, DEBITS CREDITS From New 1 st Trust Deed to:LA QUINTA REDEVELOPMENT AGENCY Deposit Title Charges Inspection Misc Lenders For $350,000.00 Escrow Charges Base Escrow Fee Builder Discount New Loan Charges HOLDBACK To LA QUINTA REDEVELOPMENT AGENCY Additional Disbursements City of La Quinta Redevelopment Agency (Refund of chgs 107234-MC) (Refund of recording chgs $33.00 less .10 Mess. Fee Net Refund $32.90 Refund of Pad $150.00) Orange Coast Title Co. Mess/Fed X Fees Orange Coast Title Co. Escrow No. 107234 Balance Due You To 50.00 $1 y028.50 $500.00 $276,227.68 $182.90 $20.00 $73,772.32 $39368.66 $350,000.00 $5,075.06 $75.00 *Totals* Certified to be a rue and correct$3559150.06 $355,150.06 Copy of the doc ment in our files ORANGE COAS TITLE By: Esc ow Officer ORANGE COAST TITLE COMPANY ESCROW DIVISION 640 N. Tustin -Ave., Suite 211 Santa Ana, CA 92705 (714) 558-0222 (800) 540-3515 Buyer(s) Closing Statement Dated As of 10/1/01 Closing Date: 9/27/01 Escrow Statement of: La Quinta 34, LLC Property Address: APN# 773-073-0049 & 0059 La Quinta, CA From Total Consideration New 1st Trust Deed to:LA QUINTA REDEVELOPMENT AGENCY Deposit Deposit Pro rations/Adiustments County Tax for 6 months @ $387.51 7/1 /01 County Tax for 6 months @ $387.51 7/1/01 Miscellaneous Adjustments Credit to Buyer for Taxes paid dr buyer/cr seller; seller cost Title Charges 1 st & 2nd Installment's for Parcels 4 & 5 Recordinq Charges Grant Deed LLC-1 Escrow Charges Base Escrow Fee 25% Discount on Fee Additional Disbursements Orange Coast Title Co. Escrow No. 107234-1 Orange Coast Title Co. Mess/Fed X Fees Escrow No: 107234 - MC Escrow Officer: Marty Clesceri, CSEO, DEBITS CREDITS ro $709000.00 $73,772.32 $1,705.04 $1,000.00 9/28/01 9/28/01 Certified to be a true and correct Copy of t document in our files Totals QRANG COAA By: Escr 1. $187.29 $187.29 $1,725.04 $1,452.28 $1,725.04 $6.00 $11.00 $350.00 $87.50 $5,075.06 $45.10 $789664.48 $78,664.48 .............................................................................. ORANGE COAST TITLE COMPANY ESCROW DIVISION 640 N. Tustin.Ave., Suite 211 Santa Ana, CA 92705 (714) 558-0222 (800) 540-3515 October 1, 2001 RUTAN AND TUCKER, 611 ANTON STREET 14TH FLOOR COSTA MESA, CA 92626-1931 ATTENTION: DAN SLATER COUNSEL FOR LA QUINTA REDEVELOPMENT AGENCY Re: Escrow No.: 107234-MC AMD 107234-1-MC Property: APN# 773-073-0049 & 0059 , La Quinta, CA Loan to: La Quinta 34, LLC Loan No. LA QUINTA REDEVELOPMENT AGENCY Our escrow covering the property referenced above has been closed. Enclosed please find the following items: Copy of Settlement Statement (The overages of actual vs estimated costs were refunded to La Quinta through escrow No. 10234-1-MC) ORIGINAL copies (2) of subordination agreements for distribution. We recorded one original Conformed copies of recorded documents Hard copy of PTR Should you have any questions, or need anything further from our file, please do not hesitate to contact me at the above referenced number. Sincerely, Orange Coast Title Company Marty Clesceri, CSEO, Sr. C & I Escrow Officer fax 714-569-1098 Recording Requested By First American Title Company Recording Requested By And When Recorded Return To: La Quinta Redevelopment Agency 78-495 Calle Tampico La Quinta, CA 92253 Attn: Executive Dire(,tor HOC a 0002-02aZZ4 04/24/2002 08:00A Fee:NC Page 1 of 14 Recorded in Official Records County of Riverside Gary L. Orso Assessor, County Clerk & Recorder 1111111111111111111111111111111111111111111111111111111 M $ I U PAGE SIZE DA PCOR NOCOR SMF MISC. A I R L COPY I LONG I REFUND NCHG EXAM [Exempt From Recording Fees per Gov. Code. 6103] ^� SUBORDINATION AGREEMENT NOTICE: THIS SUBORDINATION AGREEMENT RESULTS IN YOUR SECURITY 0 INTEREST IN THE PROPERTY BECOMING SUBJECT TO AND OF LOWER r) PRIORITY THAN THE LIEN OF SOME OTHER OR LATER SECURITY n INSTRUMENTS. d THIS SUBORDINATION AGREEMENT ("Subordination Agreement") is entered into this ri day of April, 2002, by and among the LA QUINTA REDEVELOPMENT AGENCY, a public 14 agency, corporate and politic ("Agency"), LA QUINTA 34 LLC, a California limited liability company ("Participant"), and QUAKER CITY BANK, a federally chartered savings association ("Lender"). RECITALS: A. Participant owns fee title to the real property described on Attachment No. "I" ("Apartment Parcel"? and on Attachment No. 2 ("Additional Parcels") (collectively, the "Property") attached hereto and incorporated herein by reference. B. The Agency and Participant have entered into an Affordable Housing Rehabilitation Agreement, dated September 13, 2001 (the "AHRA"). Pursuant to the terms of the AHRA and the agreements referred to therein, Agency is obligated to loan Participant the sum of THREE HUNDRED FIFTY THOUSAND DOLLARS ($350,000.00) ("Agency Loan"), to assist Participant in rehabilitating the Property. The Agency Loan is evidenced by a Note ("Agency Note"). The Agency Note is partially secured by a Deed of Trust with Assignment of Rents encumbering the Property recorded in the Official Records of Riverside County (the "Agency Deed of Trust") on September 28, 2001 as instrument number 2001-474253. C. Pursuant to the AHRA, and in partial consideration for the Agency Loan, Agency and Participant, executed and recorded against the Property that certain Regulatory Agreement and Declaration of Covenants and Restrictions by and between Agency and Participant recorded in the Official Records of Riverside County (the "Agency Regulatory Agreement") on September 28, 2001 as instrument number 2001-474254. D. Pursuant to the AHRA, and in partial consideration for the Agency Loan, Agency and Participant, executed and recorded against the Property that certain Declaration of Covenants and Restrictions And kgreement To Hold Property As One Parcel, by and between Agency and M 394/01S610-0040 139234.03 PM02 Participant recorded in the Official Records of Riverside County (the "Declaration") on September 28, 2001 as instrument number 2001-474255. E. Participant is in the process of obtaining a loan from Lender in the original principal amount of NINE HUNDRED THOUSAND DOLLARS (the "Lender Loan"), which is evidenced by a promissory note dated as of April 2, 2002 ("Lender Note"). The Lender Note is to be secured by a deed of trust, dated as of April 2, 2002 to be recorded against the Apartment Parcel ("Lender Deed of Trust"). The Lender Deed of Trust will be recorded on or about the date of recordation of this Subordination Agreement in the Official Records of Riverside County. The Lender Deed of Trust is sometimes referred to in the AHRA as the "First Deed of Trust." F. Agency, Participant, and Lender agree that the Agency will specifically and unconditionally subordinate the lien or charge of the Agency Deed of Trust and the Agency Regulatory Agreement to the lien or charge of the Lender Deed of Trust. NOW, THEREFORE, in consideration of the foregoing Recitals and the covenants and promises hereinafter contained, and for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: 1.0 Subordination by Agency. 1.1 Necessity of Subordination. Pursuant to Section 33334.14 of the Health and Safety Code, Agency is permitted to subordinate the Agency Deed of Trust and Agency Regulatory Agreement only if certain specified findings are made and if certain rights are granted to the Agency. In accordance with said Section, the Agency hereby finds that no economically feasible alternative method of financing the units on substantially comparable terms and conditions without subordination is reasonably available and the Agency has obtained written commitments to protect the Agency's investment in the event of a default, as specified in this Subordination Agreement. Therefore, Agency hereby agrees to subordinate the lien or charge of the Agency Deed of Trust and Agency Regulatory Agreement to the Lender Deed of Trust on the terms set forth in this Subordination Agreement. This Subordination Agreement shall set forth the priority of liens between the parties and govern the terms and conditions of such subordination. 1.2 Subordination of Agency Deed of Trust and Agency Regulatory Agreement to Lender Deed of Trust. The Lender Deed of Trust (and any renewals or extensions of, or advances, including interest, thereunder) shall unconditionally be and remain at all times a lien or charge on the Property, prior and superior to the lien or charge of the Agency Deed of Trust and the Agency Regulatory Agreement, to all present and future indebtedness and obligations secured thereby, together with all rights and privileges of Agency thereunder, but subject to the terms and conditions of this Subordination Agreement. 1.3 Refinancing. If Participant chooses to refinance the Lender Loan with Lender or any other entity, or chooses to obtain new financial secured by the Property, Agency agrees to subordinate the Agency Deed of Trust and the Agency Regulatory Agreement to the refinancing lender's deed of trust under the same terms and conditions as set forth in this Agreement, except that the Agency shall subordinate the Agency Deed of Trust and Agency Regulatory Agreement �0� 2 o f4 11111111 IN 1111111111111111111111111111111111111111111104/24/20&20 �Q0A 394/015610-0040 2 139234.03 PM02 with respect to the Property on the condition that the amount of the new loan plus the outstanding principal balance secured by the Agency Deed of Trust is not greater than ninety- five percent (95%) of the then appraised fair market value of the Property. Rights of Agency. 3.1 Default Under Lender Deed of Trust. In the event of a breach or default by Participant under the terms of the Lender Deed of Trust, the party alleging such default shall provide the Agency with written notice of such breach or default concurrently with providing such notice to Participant. Upon receipt of such notice of breach or default, the parties hereto agree that Agency shall each have all of the following rights so long as any of the Agency Deed of Trust or Agency Regulatory Agreement encumber any portion of the Apartment Parcel or interest therein: 3.1.1 To cure the noticed default at any time prior to the foreclosure of the Lender Deed of Trust. In connection therewith, the Lender agrees that (i) in the event of a monetary default, the Lender shall not foreclose Lender Deed of Trust or other lien prior to the date that is sixty (60) days after the date that the Lender would otherwise be legally entitled to foreclose Lender Deed of Trust and (ii) in the event of a nonmonetary default, the Lender shall not foreclose its Lender Deed of Trust or other lien prior to the date specified above for monetary defaults; provided that if said nonmonetary default is susceptible to being cured only when the Agency has obtained possession of the Property, the Agency shall have as long as necessary (x) to obtain possession of the Apartment Parcel by either the Agency foreclosing the Agency Deed of Trust, and to cure the default, so long as the Agency does so with reasonable and continuous diligence. 3.1.2 To negotiate with the Lender regarding the noticed default at any time prior to the foreclosure of the Lender Deed of Trust or other lien. 3.2 Foreclosure of Deeds of Trust. The Lender hereby agrees that in the event that Agency forecloses the Agency Deed of Trust or otherwise acquires title to the Property, said transfer shall not give rise to any right on the part of the Lender to accelerate the amounts due on the Lender Loan. 4. Miscellaneous. 4.1 Entire Agreement. This Subordination Agreement shall be the whole and only agreement with regard to the matters set forth herein and shall supersede and cancel, but only insofar as would affect the priority between the Lender Deed of Trust and the Agency Deed of Trust and Agency Regulatory Agreement, any prior agreement as to such subordination including, but not limited to, those provisions, if any, contained in the Agency Deed of Trust or Agency Regulatory Agreement that provide for the subordination of the lien or charge thereof to another deed or deeds of trust or to another mortgage or mortgages, upon the Property. 4.2 Successors and Assigns. This Subordination Agreement shall inure to and bind the heirs, legatees, devisees, administrators, executors, successors and assigns of the parties hereto. IIIIII IIIIII IIII IIIIII IIIIII (IIII IIIII III IIIII IIII IIII 04!^ce�l3 e£3es MA 394/015610-0040 3 139234.03 PM02 4.3 California Law. This Subordination Agreement shall be construed according to the laws of the State of California. 4.4 Severability. If any term, provision, condition or covenant of this Subordination Agreement or the application thereof to any party or circumstances shall, to any extent, be held invalid or unenforceable, the remainder of this instrument, or the application of such term, provision, condition or covenant to persons or circumstances other than those as to whom or which it is held invalid or unenforceable shall not be affected thereby, and each term and provision of this Subordination Agreement shall be valid and enforceable to the fullest extent permitted by law. 4.5 Notice. Formal notices, demands, and communications between Agency, m t Participant, and Lender shall be sufficiently given if personally delivered, delivered by a CU ti 0 o reputable same -day or overnight courier services that provides a receipt showing date and time of CU m Gn CU I delivery, or delivered by United States mail, registered or certified, postage prepaid, return CU m receipt requested, to the following addresses If to Agency: La Quinta Redevelopment Agency 78-495 Calle Tampico p La Quinta CA 92253 Attn: Executive Director With a copy to: Rutan &Tucker, LLP 611 Anton Boulevard, Suite 1400 Costa Mesa, CA 92626 C Attn: M. Katherine Jenson, Esq. If to Participant: La Quinta 34 LLC 1800 East Garry Avenue, Suite 117 Santa Ana, CA 92705 Attn: Lawrence C. Rael With copy to: Gibson, Dunn & Crutcher LLP Jamboree Center 4 Park Plaza, Suite 1400 Irvine, CA 92614-8557 Attn: Teresa J. Farrell, Esq. Quaker City Bank If to Lender: 7021 Greenleaf Avenue Whittier, CA 90602 Attn: Hank Kadowaki All notices shall be deemed to be received as of the earlier of actual receipt by the addressee thereof or the expiration of forty-eight (48) hours after depositing in the United States Postal System in the manner described in this Section. Such written notices, demands, and 394/015610-0040 4 139234.03 PM02 communications may be sent in the same manner to such other addresses as a party may from time to time designate by mail. 4.6 Attorneys' Fees. In the event that any action, suit or other proceeding is brought to enforce the obligations of under this Agreement, the prevailing party shall be entitled to receive all of such party's costs and expenses of suit, including attorneys' fees, expert witness fees and all costs incurred in each and every such action, suit or other proceeding, including any and all appeals or petitions therefrom. 4.7 Nonliability of Agency Officials. No officer, official, member, employee, agent, or representative of Agency shall be personally liable to Participant or Lender, or any successor in interest, in the event of any default or breach by Agency or for any amount which may become due to Participant or Lender or successor or on any obligations under the terms of this Agreement. 4.8 Counterparts. This Subordination Agreement may be executed in any number of counterparts, each of which, when all the parties hereto have signed this Subordination Agreement, shall be deemed an original. END - SIGNATURE PAGES FOLLOW] 2902-213234 394/015610-0040 5 139234.03 PM02 IN WITNESS WHEREOF, the parties have executed this Subordination Agreement as of the date first written above. NOTICE: THIS SUBORDINATION AGREEMENT RESULTS IN YOUR SECURITY INTEREST IN THE PROPERTY BECOMING SUBJECT TO AND OF LOWER PRIORITY THAN THE LIEN OF SOME OTHER OR LATER SECURITY INSTRUMENTS. ATTEST: Im Secretary APPROVED AS TO FORM: RUTAN & TUCKE &-�4 LLP By: Agency tounsel "AGENCY" LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic Lo Executive Director "PARTICIPANT" Z A m n LA QUINTA 34 LLC, a California limited m o liability company N N fD QD m N Cal 1 y. m Lawrence C. Rael p Managing Member "LENDER" QUAKER CITY BANK, a federally chartered sa ' gs a ciation By: HANK KADOWAKI Its: SR. VICE PRESIDENT By: Its: [END OF SIGNATURES] 615/015610-0040 6 277474.04 a04/17/02 m 2 m Ctl m O m CU \ M1 G m N CUl 7 Q IN WITNESS WHEREOF, the parties have executed this Subordination Agreement as of the date first written above. NOTICE: THIS SUBORDINATION AGREEMENT RESULTS IN YOUR SECURITY INTEREST IN THE PROPERTY BECOMING SUBJECT TO AND OF LOWER PRIORITY THAN THE LIEN OF SOME OTHER OR LATER SECURITY INSTRUMENTS. ATTEST: B Sec tary I C� APPROVED AS TO FORM: RUTAN & TUCKER, LLP Un Agency Counsel "AGENCY" LA QUINTA REDEVELOPMENT AGENCY, a publo y, corporate politic By: Executive Director "PARTICIPANT" LA QUINTA 34 LLC, a California limited liability company By: Lawrence C. Rael Managing Member "LENDER" QUAKER CITY BANK, a federally chartered savings association By: Its: By: Its: [END OF SIGNATURES] 615/015610-0040 6 277474.04 AM02 IN WITNESS WHEREOF, the parties have executed this Subordination Agreement as of the date first written above. az 0 0 M0� CL 0 m(w "0O CU N CU m m tU CU \ 0 0 NOTICE: THIS SUBORDINATION AGREEMENT RESULTS IN YOUR SECURITY INTEREST IN THE PROPERTY BECOMING SUBJECT TO AND OF LOWER PRIORITY THAN THE LIEN OF SOME OTHER OR LATER SECURITY INSTRUMENTS. ATTEST: Secretary APPROVED AS TO FORM: RUTAN & TUCKER, LLP Agency Counsel 394/015610-0040 139234.03 PM02 "AGENCY" LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic Executive Director "PARTICIPANT" LA TA 34 LLC, a California limited liabi ity c any By. Lawrence Rael Managing Member "LENDER" QUAKER CITY BANK, a federally chartered savings association By: Its: By: Its: [END OF SIGNATURES] 6 STATE OF CALIFORNIA ss. COUNTY OF &6 n 6 4 ) On before me, 4%jar�a�S �'len personally appeared 7 Gt 'L.( pers^n ; know to me (or proved to me on the basis of satisfactory evidence) to be the per�r>�whose name(o s�% re sub bed to the within instrument and acknowledge o me tha�I�ehe/they executed the same in is her erso/their authorized capacit and that by�er/their signature(' n the instrument the r the entit u on behya�which the erson(s-} acted, execute`d"the instrument. p Y p p Witness my hand and official seal. [SEAL] STATE OF CALIFORNIA COUNTY OF ) ss. Notary P blic MARIA I. MENA Commission # 1326672 Notary Public - California Orange County My Comm. Expires Nov21, On before me, , personally appeared , personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. Witness my hand and official seal. Notary Public [SEAL] 111111YIININ�NI�VNNIM�VM ,.,�;��:�w, 394/015610-0040 139234.03 PM02 STATE OF CALIFORNIA ) ss. COUNTY OF Ole ) On /��' c" f/d'.g Dd oZ, before me, f '�rS %e personally appeared %h�r,�4S ���✓e e personally kno to me {e to be the person(s) whose name($) is/ark subscribed to the within instrument and acknowledged to me that he/slt/tWy executed the same in his4jer/tVir authorized capacity(ies), and that by his/jk*,r/t1*r signature(.) on the instrument the person(,$) or the entity upon behalf of which the person(4g) acted, executed the instrument. Witness my hand and official seal. REGENIA HENSLEY NOt Public CommWon # 12744M [SEAL] Notcry Ktk Rtvar1de County MyCarrrn.B#wAM19,=4 STATE OF CALIFORNIA COUNTY OF ) 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] Notary Public INIY�IM�INIVNd�INIYIYI a�=�'=e,�:� 615/015610-0040 % 277474.04 AM02 STATE OF CALIFORNIA ) ) ss. COUNTY OF LDS *q-el-e-2 ) On .A AX 1 I ' l � Z 02— , before me, & rLr �f) -Qt + lVCl�b� Personally appeared V-1 IL la,Gt t) w 0,16t. ,J 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. A " �1� (I- kv�—�� Notary Public [SEAL] MARGARET RfVERA Commission S 13356gg Notary Public - California Los Angeles County WMYCoffn. Exp w Dec 22, 2005 STATE OF CALIFORNIA COUNTY OF ) 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 er_tity upon behalf of which the person(s) acted, executed the instrument. Witness my hand and official seal. Notary Public [SEAL] 2002-213234 394/015610-0040 % 139234.03 PM02 STATE OF CALIFORNIA ) ss. COUNTY OF ) On before me, , personally appeared , personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. Witness my hand and official seal. [SEAL] STATE OF CALIFORNIA ss. COUNTY OF Notary Public 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 hi nd and official seal. Notary Public [SEAL] 2092-213234 394/015610-0040 g 139234.03 PM02 ATTACHMENT NO. "1" LEGAL DESCRIPTION OF APARTMENT PARCEL LOTS 1 TO I INCLUSIVE IN BLOCK 126 OF SANTA CARMELITA AT VALE LA QUINTA, UNIT NO. 14, IN THE CITY OF LA QUINTA, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 18, PAGES 82 AND 83 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY. EXCEPTION THEREFROM THOSE PORTIONS OF LOTS 1, 5, 6 AND 11, DEEDED TO THE COUNTY OF RIVERSIDE, BY DOCUMENTS RECORDED MARCH 23, 1978 AS INSTRUMENT NO. 55038 AND 55039 OF OFFICIAL RECORDS OF RIVERSIDE COUNTY, CALIFORNIA. IIIIIIIIIIIIIIIIII@III�IIIIIIIIIIII�III ��=,�'e14 ��w 394/015610-0040 9 139234.03 PM02 ATTACHMENT NO. 2 LEGAL DESCRIPTION OF ADDITIONAL PARCELS LOTS 6 AND 7 IN BLOCK 125 OF SANTA CARMELITA AT VALE LA QUINTA, UNIT NO. 14, AS SHOWN BY MAP RECORDED IN BOOK 18, PAGE 82 OF MAPS, RECORDS OF RIVERSIDE COUNTY, CALIFORNIA. IIIIIIIIIIIIIIIINIIIIIIRIIIIIIIIIIIIIIIIIIIIYI e�`��'�;�t� 394/015610-0040 1 0 139234.03 PM02 FIRST AMENDMENT TO AFFORDABLE HOUSING REHABILITATION AGREEMENT This FIRST AMENDMENT TO AFFORDABLE HOUSING REHABILITATION AGREEMENT ("Amendment") is entered into this 17th day of December, 2002, by and between the LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic ("Agency"), and LA QUINTA 34 LLC, a California limited liability company ("Participant"). RECITALS: A. On or about September 13, 2001, Agency and Participant entered into that certain Affordable Housing Rehabilitation Agreement (the "Original Agreement"), which Original Agreement provides for Agency to loan to Participant funds for Participant's rehabilitation of that certain real property more particularly described therein as the "Site." B. Agency and Participant desire to amend the Original Agreement on the terms set forth in this Amendment. AGREEMENT: Based upon the foregoing Recitals, which are incorporated herein by this reference, and for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Agency and Participant agree as follows: I. Defined Terms. Any capitalized terms contained in this Amendment which are not defined herein shall have the meaning given in the Original Agreement, unless expressly provided to the contrary. 2. Project; Scope of Development. Agency and Participant have agreed to modify the improvements Participant is required to construct and install on the Site. In order to effectuate this modification, the Scope of Development attached to the Original Agreement as Exhibit "C" is hereby replaced with "Exhibit C (revised)" attached to this Amendment as Attachment No. 1. 3. Schedule of Performance. The Schedule of Performance attached to the Original Agreement as Exhibit "D" is hereby replaced with "Exhibit D (revised)" attached to this Amendment as Attachment No. 2. 4. Agency Note. Concurrently with the execution of this Amendment, Participant shall execute an endorsement to the Agency Note in the form attached hereto as Attachment No. 3. Said endorsement shall be affixed to the Agency Note and made a part thereof. 5. Disbursement of Rehabilitation Loan. Notwithstanding any provision in the Disbursement Procedures attached to the Original Agreement as Exhibit "J" to the contrary, the Rehabilitation Loan shall be disbursed for payment of the minimum improvements in the order of priority set forth in Section A of the revised Scope of Development attached hereto. ,538/015610-0040 304887.04 a12/10/02 6. Full Force and Effect; Conflicts. Except as expressly set forth in this Amendment, all terms, conditions, and provisions of the Original Agreement shall remain in full force and effect. If there is a conflict between the provisions of this Amendment and the provisions of the Original Agreement, the provisions of this Amendment shall control. 7. Execution and Counterparts. This Amendment may be executed in several counterparts, and all so executed shall constitute one agreement binding on both parties hereto, notwithstanding that both parties are not signatories to the original or the same counterpart. [signatures on next page] 538/015610-0040 304887 04 a12/10/02 -2- IN WITNESS WHEREOF, Agency and Participant have entered into this Amendment as of the date first written above. ATTEST: Ag&Zy Kecretary APPROVED AS TO FORM: RUTAN & TUCKER, LLP 4CCJ��� Attorneys for the La Quinta Redevelopment Agency "AGENCY" LA QUINTA REDEVELOPMENT AGENCY, a publicbody, corporate d of is Executive Director "PARTICIPANT" LA QU�4 LLC, a California limited liabili co anv By:� / Its: K-o^ 538/015610-0040 304887.01 PM02 -3- ATTACHMENT NO. 1 EXHIBIT "C" (revised) SCOPE OF DEVELOPMENT The renovation of the Site shall result in the rehabilitation of the Units on the Apartment Parcel, the installation of carports on the Apartment Parcel to be used exclusively for vehicle parking for residents leasing Units on the Apartment Parcel, and the rehabilitation of the Acquisition Parcel with new Units, in accordance with the following: A. MINIMUM IMPROVEMENTS The following improvements shall be minimum improvements performed by Participant under this Agreement and the disbursements of the Rehabilitation Loan shall first be used toward the payment of the following improvements in the following order of priority: The Acquisition Parcel shall be improved with 5 new apartment units, parking for the units, and landscaping. 2. The portion of the Apartment Parcel on which the carports are to be installed shall be graded and paved with asphalt paving. 3. Approximately sixteen (16) carports shall be installed on the Apartment Parcel. Participant acknowledges and agrees that it is required to construct and install the foregoing improvements whether or not the amount of the Rehabilitation Loan is sufficient to pay for the costs of the improvements. B. ADDITIONAL IMPROVEMENTS Should Rehabilitation Loan funds be available after disbursements devoted toward payment of the improvements identified in Section A above have been made, and the improvements identified in Section A have been completed, or in the sole judgment of the Agency Executive Director will be completed without further disbursements from the Rehabilitation Loan, the remaining Rehabilitation Loan funds shall, at Participant's discretion, be disbursed to assist in meeting Participant's costs of the following additional rehabilitation improvements: 1. Upgrading the landscaped common areas on the Apartment Parcel. 2. Upgrading the fencing for the complex and carport/parking area on the Apartment Parcel. 3. Installing or upgrading patio enclosures on all units having patios on the Apartment Parcel. 4. Installing Spanish tile on all units on the Apartment Parcel. 538/015610-0040 304887.(14 a12/10/02 - I 5. Payment of permit fees to the City related to the fourteen (14) units identified herein and in the Agency Regulatory Agreement as the Restricted Units. 6. Payment for, or reimbursement of, costs incurred by Participant related to upgrading the Units or apartment complex on the Apartment Parcel as reasonably approved by the Executive Director. All disbursements for the improvements set forth in this Exhibit "C" shall be subject to the Disbursement Procedures set forth in Exhibit "J." 538/015610-0040 304887 04 a12/10/02 -2- ATTACHMENT NO. 2 EXHIBIT "D" (revised) SCHEDULE OF PERFORMANCE ITEM TIME FOR NO. ITEM OF PERFORMANCE PERFORMANCE REFERENCE 1. Participant submits evidence of Concurrent with Effective Date § 8.0 insurance re ired by Agreement. of Agreement. 2. Participant (i) enters into Sale Completed. §3.1 Escrow Instructions with Owner, (ii) opens the Escrow, (iii) delivers to Agency a signed copy of the Sale Escrow Instructions and a copy of the Grant Deed; and (iv) notifies Agency in writing of the name, address, telephone number, and fax number of the Escrow Agent. 3. Participant submits evidence of Prior to Close of Escrow (Item Agency insurance required by Agency completed as of the date of this Regulatory Regulatory Agreement. Amendment). Agreement, § 7.0 4. Participant satisfies all conditions to Not later than September 30, § 3.2-3.7 close of escrow, closes escrow (and 2001 (Item completed as of the at Closing Agency funds the date of this Amendment). Agency Escrow Deposit) and acquires the Acquisition Parcels, and Escrow Agent records the Agency Deed of Trust, Agency Regulatory Agreement, Declaration, and Subordination Agreement. 5. Participant files application with No later than January 31, 2003. §§ 6.2.3, 6.2.5; City for a village use permit for the Exh. C improvements on the Acquisition Parcel described in ¶ A. l of the Scope of Development. 53W015610-0040 304887 04 a 12/10/02 -1- 6. Participant submits to City Within ninety (90) days after § 6.2.3, 6.2.5; complete application on City's approval of the village Exh. C construction of Acquisition Parcel use permit. improvements described in ¶ A.1 of the Scope of Development, including all required final plans and permit applications. 7. Participant commences construction Within thirty (30) days after § 6.2.5; Exh. C. of Acquisition Parcel improvements City's approval of the final described in ¶ A.1 of the Scope of plans for the improvements. Development. 8. Participant completes construction Within three hundred sixty- § 6.2.5; Exh. C. of Acquisition Parcel improvements five (365) days after described in ¶ A. l of the Scope of performance of Item No. 7. Development. 9. Participant completes installation of No later than February 1, 2003. § 6.2.5; Exh. C. asphalt paving on portion of Apartment Parcel on which carports are to be installed. 10. Participant files application with No later than sixty (60) days §§ 6.2.3, 6.2.5; City for a village use permit for after completion of Item No. 9. Exh. C. installation of the carports on the Apartment Parcel. 11. Participant submits to City Within forty-five (45) days §§ 6.2.3, 6.2.5; complete application on installation after City's approval of the Exh. C of carports on the Apartment Parcel village use permit. including all required final plans and permit applications. 12. Participant commences construction Within sixty (60) days after § 6.2.5; Exh. C. of carports on the Apartment Parcel City's approval of the final per Scope of Development. plans for the improvements. 13. Participant completes construction Within ninety (90) days after § 6.2.5; Exh. C. of carports on the Apartment Parcel performance of Item No. 12. per Scope of Development. 14. Agency disburses Rehabilitation Per terms of the Agreement. § 4.1, Exh. J Loan (other than Agency Escrow Deposit) in accordance with terms of Agreement. 538/015610-0040 304887.04 a12/10/02 -2- 15. Participant completes any of the Not later than sixty (60) days § 6.2.51 6.5, Exh. Additional Improvements per the after performance of Item Nos. C. Scope of Development ¶ B funded 8 and 13. in whole or in part with Rehabilitation Loan, obtains a certificate of occupancy from the City (if applicable), and requests Agency issuance of the Release of Construction Covenants. 16. Agency issues Release of Within ten (10) days after § 6.5 Construction Covenants. Participant's request, if Participant is entitled thereto. 17. Participant submits annual report Not later than the September 1 Agency pursuant to Health and Safety Code following the June 30 end of Regulatory Agr., Section 33418 to Agency. each fiscal year for term of the § 3.7 Regulatory Agreement. It is understood that this Schedule of Performance is subject to all of the terms and conditions of the text of the Agreement. The summary of the items performance in this Schedule of Performance is not intended to supersede or modify the more complete description in the text; in the event of any conflict or inconsistency between this Schedule of Performance and the text of the Agreement, the text shall govern. 538/015610-0040 304887-04 a12/10/02 -3- ATTACHMENT NO. 3 ENDORSEMENT TO NOTE [Attached] 538/015610-0040 304887 04 a] 2/10/02 ENDORSEMENT TO NOTE The Affordable Housing Rehabilitation Agreement between the La Quinta Redevelopment Agency and La Quinta 34, LLC dated September 13, 2001, was amended pursuant to that certain First Amendment to Affordable Housing Rehabilitation Agreement dated December 17, 2002. Accordingly, the references in the Note to which this Endorsement is attached to the Affordable Housing Rehabilitation Agreement shall be deemed to refer to the Affordable Housing Rehabilitation Agreement as amended by the First Amendment to Affordable Housing Rehabilitation Agreement. Date: 1Z ZU 7002, LA QUINTA 34 LLC, a California limited liability company By: Cep Lawrence C Rael, Managing Member �38/015610-0040 304887-04 al2/10/02 _ 1 . a _ Ab NOTE September 13 , 2001 ("Note Date") $350,000.00 ("Loan Amount") FOR VALUE RECEIVED, the undersigned (herein, the "Maker") hereby promises to pay to the order of the LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic ("Holder" or "Agency"), at a place designated by Holder, the principal sum of THREE HUNDRED FIFTY THOUSAND DOLLARS ($350,000.00) ("Note Amount"), plus accrued interest, or such lesser amount which shall from time to time be owing hereunder pursuant to the terms hereof. The principal sum hereof shall be disbursed pursuant to the terms and conditions set forth in that certain Affordable Housing Rehabilitation Agreement by and among Maker and Holder, dated September 13, 2001 ("AHRA"), pertaining to Maker's redevelopment of certain real property defined in the AHRA as the "Site." Reference is also made to the following additional agreements and documents, the first three of even date herewith, involving Maker and Holder and/or pertaining to the Site: (i) Deed of Trust with Assignment of Rents by and between Maker as borrower, Holder as beneficiary, and Orange Coast Title Company as Trustee, and recorded in the Office of the Riverside County Recorder ("Agency Deed of Trust"). The Agency Deed of Trust partially secures repayment of this Note. (ii) Regulatory Agreement and Declaration of Covenants and Restrictions, by and between Maker and Holder, for the benefit of Holder, and recorded in the Office of the Riverside County Recorder ("Agency Regulatory Agreement"). (iii) Declaration of Covenants, Conditions, and Restrictions And Agreement To Hold Property As One Parcel, by and between Maker and Holder, for the benefit of Holder, and recorded in the Office of the Riverside County Recorder ("Declaration"). (iv) Subordination Agreement, by and among Maker, Holder, and Rubicon Realty Capital Corporation, recorded in the Office of the Riverside County Recorder (dated on or about August 9, 2001). All of the foregoing listed documents are referred to herein collectively as the "Agency Agreements." The Agency Agreements are incorporated herein as though fully set forth. Except as otherwise provided herein, the defined terms used in this Note shall have the same meaning as set forth in the AHRA. 1. Purpose of Loan. The loan evidenced by this Note is a loan for the purpose of rehabilitating the Site in accordance with the AHRA. 2. Principal Amount. The principal amount of this Loan shall be THREE HUNDRED FIFTY THOUSAND DOLLARS ($350,000.00). Simple interest shall accrue on the outstanding principal amount at seven percent (7%) per annum, compounded annually. 394/015610-0040 139234.06 a09/12/01 r' .. 3. Term of Note; Repayment. 3.1 Subject to provisions of Paragraph 4 hereof which provides for acceleration of all principal and accrued interest and immediate repayment thereof in the event of a default by Maker, this Note shall expire and be of no force or effect as of the date of expiration of the Agency Regulatory Agreement. Maker shall not be obligated to make any payments on this Note and unless and until any of the events described in Paragraph 4 occur. Upon the occurrence of an uncured default, the full Note Amount and all accrued interest thereon shall be immediately due and payable as set forth in Paragraph 4. 3.2 Maker shall have the right to prepay all or any portion of this Note at any time without penalty, and upon such repayment the Agency Deed of Trust shall be reconveyed. Prepayment shall not affect the Agency Regulatory Agreement or the term of the Agency Regulatory Agreement. 3.3 Any payments made by Maker in payment of this Note shall be applied in the following order: (i) first to the interest then accrued and due on the unpaid principal balance under this Note, (ii) second to reduction of the principal balance of this Note. 4. Default; Cross -Default; Acceleration. 4.1 In addition to Maker's failure to timely perform the requirements of this Note, a default by Maker of any of the Agency Agreements shall constitute a default of this Note and all of the Agency Agreements. 4.2 In the event of a default of this Note or a default of any of the Agency Agreements by Maker, which default has not been cured within the cure period applicable to such default, Holder may, at its option, declare this Note and the entire obligation hereby evidenced, including accrued interest, immediately due and payable and collectible then or thereafter as Holder may elect, regardless of the date of maturity, and notice of the exercise of said option is hereby expressly waived by Maker. 5. Collection Costs; Attorneys' Fees. If, because of any event of default under this Note or any of the Agency Agreements, any attorney is engaged. by Holder to enforce or defend any provision of this instrument, 'whether or not suit is filed hereon, then Maker shall pay upon demand reasonable attorneys' fees, expert witness fees and all costs so incurred by Holder together with interest thereon until paid at the applicable rate of interest payable hereunder, as if such fees and costs had been added to the principal owing hereunder. 6. Waivers by Maker. Maker and all endorsers, guarantors and persons liable or to become liable on this Note waive presentment, protest and demand, notice of protest, demand and dishonor and nonpayment of this Note and any and all other notices or matters of a like nature, and consent to any and all renewals and extensions near the time of payment hereof and agree further that at any time and from time to time without notice, the terms of payment herein may be modified or the security described in any documents securing this Note released in whole or in part, or increased, changed or exchanged by agreement between Holder and any owner of the premises affected by said documents securing this Note, without in any way affecting the 394/015610-0040 2 139234.06 a09/12/01 ok i. liability of any party to this Note or any persons liable or to become liable with respect to any indebtedness evidenced hereby. 7. Severability. The unenforceability or invalidity of any provision or provisions of this Note as to any persons or circumstances shall' not render that provision or those provisions unenforceable or invalid as to any other provisions or circumstances, and all provisions hereof, in all other respects, shall remain valid and enforceable. 8. Modifications. Neither this Note nor any term hereof may be waived, amended, discharged, modified, changed or terminated orally; nor shall any waiver of any provision hereof be effective except by an instrument in writing signed by Maker and Holder. No delay or omission on the part of Holder in exercising any right hereunder shall operate as a waiver of such right or of any other right under this Note. 9. No Waiver by Holder. No waiver of any breach, default or failure of condition under the terms of this Note shall be implied from any failure of the Holder of this Note to take, or any delay be implied from any failure by the Holder in taking action with respect to such breach, default or failure from any prior waiver of any similar or unrelated breach, default or failure. 10. Usury. Notwithstanding any provision in this Note, the total liability for payment in the nature of interest shall not exceed the limit imposed by applicable laws of the State of California. 11. Nonassignability. Maker may only Transfer (as that term is defined in the AHRA) this Note in accordance with provisions and restrictions pertaining to a transfer of the AHRA as set forth in the AHRA. Holder may freely Transfer Holder's interest in this Note in any manner, at Holder's sole discretion; provided, that at the time of such Transfer Holder also transfers .the AHRA to such transferee. 12. Governing Law. This Note has been executed and delivered by Maker in the State of California and is to be governed and construed in accordance with the laws thereof. 13. Time of Essence. Time is of the essence in the performance of the obligations and provisions set forth in this Note. IN WITNESS WHEREOF, Maker has executed this Note as of the Note Date. "Maker" LA QUINTA 34 LLC, a California limited liability o any By: Lawr . Rae , >1ranaging Member 394/015610-0040 3 139234.06 a09/12/01 SECOND AMENDMENT TO AFFORDABLE HOUSING REHABILITATION AGREEMENT This SECOND AMENDMENT TO AFFORDABLE HOUSING REHABILITATION AGREEMENT ("Second Amendment") is dated as of , 2004, and entered into by and between the LA QUINTA ADEVELOPMENT AGENCY, a public body, corporate and politic ("Agency"), and MAUKA VIEW, LLC, a California limited liability company ("Participant"). RECITALS A. On or about September 13, 2001, Agency and La Quinta 34 LLC, a California limited liability company ("Original Participant"), entered into that certain Affordable Housing Rehabilitation Agreement which provides for Agency to loan to Original Participant funds for Participant's rehabilitation of that certain real property more particularly described therein as the "Site" ("Original Agreement"). B. On or about December 17, 2002, Agency and Original Participant entered into that certain First Amendment to Affordable Housing Rehabilitation Agreement ("First Amendment"). The Original Agreement and the First Amendment are collectively referred to in this Second Amendment as the "Housing Agreement." C. On or about April 6, 2004, Agency, Original Participant and Participant entered into that certain Assignment and Assumption Agreement ("Assignment Agreement") which provides for Original Participant to assign the Housing Agreement to Participant upon the satisfaction of certain conditions. Provided those conditions are satisfied, Participant and Agency desire to amend the Housing Agreement on the terms set forth in this Second Amendment. AGREEMENT Based upon the foregoing Recitals, which are incorporated herein by this reference, and for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Agency and Participant agree as follows: 1. Defined Terms. Any capitalized terms contained in this Second Amendment which are not defined herein shall have the meaning given in the Housing Agreement, unless expressly provided to the contrary. 2. Effective Date. This Second Amendment shall become effective on the Effective Date of the Assignment Agreement. The "Effective Date" is the date Participant acquires fee title to the Site after the satisfaction of certain conditions referred to in the Assignment Agreement as the "Transfer Conditions," as more fully explained in Section 2 of the Assignment Agreement. If the Transfer Conditions are not satisfied and the Assignment Agreement is terminated in accordance with the terms set forth in the Assignment Agreement, this Second Amendment shall automatically terminate upon the termination of the Assignment Agreement. 538/015610-0040 494480.01 a03/31/04 _ 1 3. Project; Scope of Development. The Housing Agreement provides for Participant to construct five (5) apartment units on the Acquisition Parcel. Participant may desire to construct more than five (5) apartment units on the Acquisition Parcel and Agency has agreed that Participant will not be restricted by the Housing Agreement from constructing more than five (5) units. In order to effectuate this modification, Paragraph A.1 of the Scope of Development attached to the First Amendment as Attachment No. 1 is hereby modified to read: "The Acquisition Parcel shall be improved with at least 5 new apartment units, parking for the units, and landscaping." Notwithstanding the foregoing, Participant understands and acknowledges that Agency cannot guarantee the number of units that ultimately will be approved for development on the Acquisition Parcel as that determination is subject to the City's normal planning review process. 4. Schedule of Performance. Agency has agreed to extend the time for Participant to submit the application for the village use permit for the construction of the carports on the Apartment Parcel. Accordingly, the time for performance of Item 10 (submittal of application for village use permit for carports) in the Schedule of Performance attached to the First Amendment as Attachment No. 2 is hereby amended to read "On or before the date that is thirty (30) days after the date Mauka View, LLC acquires fee title to the Site from La Quinta 34 LLC." 5. Modification of Loan. Participant has requested that Agency modify the Rehabilitation Loan by reducing the interest rate from seven percent (7%) to five percent (5%) effective from and after the Effective Date. Pursuant to the Assignment Agreement, Agency and Participant entered into an Allonge to Note and a Modification of Deed of Trust to implement this modification. Effective as of the Effective Date, all references in the Housing Agreement to the "Agency Note" shall mean and refer to the Agency Note, as amended by the Allonge to Note, all references in the Housing Agreement to the "Agency Deed of Trust" shall mean and refer to the Agency Deed of Trust, as amended by the Modification of Deed of Trust, and all references in the Housing Agreement to the "Rehabilitation Loan" shall mean the Rehabilitation Loan, as amended in those documents. 6. Full Force and Effect; Conflicts. Except as expressly set forth in this Second Amendment, all terms, conditions, and provisions of the Housing Agreement shall remain in full force and effect. If there is a conflict between the provisions of this Second Amendment and the provisions of the Housing Agreement, the provisions of this Second Amendment shall control. 7. Execution in Counterparts. This Second Amendment may be executed in several counterparts, and all so executed shall constitute one agreement binding on both parties hereto, notwithstanding that both parties are not signatories to the original or the same counterpart. [signatures on next page] 538/015610-0040 494480.01 a03/31/04 -2- IN WITNESS WHEREOF, Agency and Participant have entered into this Second Amendment as of the date first written above. ATTEST: Ag c Secretary APPROVED AS TO FORM: RUTAN & TUCKER, LLP Attorneys for the La Quinta Redevelopment Agency "AGENCY" LA QUINTA REDEVELOPMENT AGENCY, a publ' dy, orporate and po ' is Executive Director "PARTICIPANT" MAUKA VIEW, LLC, a California limited liability company By: ames S. Sorenson, on behalf of the Sorenson Family 2001 Revocable Trust, Member 538/015610-0040 494480.01 a03/31/04 -3- ALLONGE TO NOTE This ALLONGE TO NOTE ("Allonge") is affixed to and forms a part of that certain Note dated September 13, 2001, in the original principal amount of Three Hundred Fifty Thousand Dollars ($350,000) ("Note"), issued by La Quinta 34 LLC, a California limited liability company ("Original Maker"), whose interest under the Note was assigned to Mauka View, LLC, a California limited liability company ("Maker"), effective as of the Effective Date, and payable to the La Quinta Redevelopment Agency ("Agency"). Effective on �,orl z .P�3 , 2004 ("Effective Date"), the Note is hereby endorsed and modified as follows: (a) All references in the Note to "Agency Deed of Trust" shall mean and refer to the Agency Deed of Trust, as amended by that certain Modification of Deed of Trust between Agency and Maker recorded on or about the Effective Date. (b) The Note provides for simple interest to accrue on the outstanding principal amount of the Loan at seven percent (7%) per annum, compounded annually. Interest for the period prior to the Effective Date shall be at the rate set forth in THE preceding sentence. From and after the Effective Date, simple interest shall accrue on the outstanding principal amount of the Loan at five percent (5%) per annum, compounded annually. Except as expressly modified by this Allonge to Note, the Note shall remain unmodified and in full force and effect. [signatures on next page] 538/015610-0040 _ 494483.01 a03/31/04 1 IN WITNESS WHEREOF, this Allonge to Note has been executed as of this day of �. ( , 2004. "MAKER" MAUKA VIEW, LLC, a California limited liability company By: ames S. Sorenson, on behalf of the Sorenson Family 2001 Revocable Trust, Member "AGENCY" LA QUINTA REDEVELOPMENT AGENCY, a pub ' y, orporate and opolitic 'moo ,�%s �ZZ..t-�•.-,c By:,"' Executive Director ATTEST: &icly Secretary APPROVED AS TO FORM: RUT N & TUC R, LLP Attorneys for the La Quinta Redevelopment Agency 538/015610-0040 494483.01 a03/31/04 2 t Order No. 1299947 Escrow No. 1-2428-RJ Loan No. 0152-20569 WHEN RECORDED MAIL TO: La Quinta Redevelopment Agency P.O. Box 1504 La Qunita, CA 92253 Attn: Agency Secretary DOD a 2004-0301352 04/23/2004 08:00A Fee:49.00 Page 1 of 15 Recorded in Official Records County of Riverside Gary L. Orso Assessor, County Clerk & Recorder M s U PAGE SIZE DA PCOR NOCOR SMF Sc.MI 1A±:R:]-1--� COPY LONG REFUND NCHG EXAM Parcel No. 773-073-004-9 & 773-073-005-0 1L_ tti�r�r�t AA T REQ G 1 EOMTED BY SUBORDINATION AGREEMENT LS FIRST AMEMCAN TITLE COMPANY % RESIPENT1AL DIVISION NOTICE: THIS SUBORDINATION AGREEMENT RESULTS IN YOUR SECURITY INTEREST IN THE PROPERTY BECOMING SUBJECT TO AND OF LOWER PRIORITY THAN THE LIEN OF SOME OTHER OR LATER SECURITY INSTRUMENT. THIS AGREEMENT, made this 12th day of April, 2004, by Mauka View LLC, a California Limited Liability Company owner of the land hereinafter described and hereinafter referred to as "Owner", and La Qunita Redevelopment Agency, a Public Body, Corporate and Politic, present owner and holder of the deed of trust and note first hereinafter described and hereinafter referred to as `Beneficiary"; WITNESSETH THAT WHEREAS, La Qunita 34, LLC, a California Limited Liability Company, did on Setpember 13, 2001 , execute a deed of trust to Orange Coast Title Company, a California Corporation, as trustee, covering: Vacant Lots APN Number 773-073-004 and 773-073-005. Complete Legal Description Attached Hereto and Made A Part Hereof as Exhibit "A". to secure a note in the sum of $350,000.00, dated September 13, 2001, in favor of La Qunita Redevelopment Agency, a Public Body, Corporate and Politic, which deed of trust was recorded September 28, 2001, as Instrument Number 01-474253 in, Official Records of said county and is subject and subordinate to the deed of trust next hereinafter described; and WHEREAS, Mauka View LLC, a California Limited Liability Company, did on March 19, 2004, execute a deed of trust to Old Republic Title Company, as trustee, covering said land and securing an indebtedness in the amount of $105,000.00, in favor of La Jolla Bank, FSB, hereinafter referred to as "Lender", which deed of trust is recording concurrently herewith , Official Records of said county and provides among other thing that is shall also secure additional loans and advances thereafter made upon the terms and conditions set forth; and WHEREAS, owner has executed, or is about to execute, a note in the amount of $105,000.00, dated March 19, 2004 , in favor of Lender, payable with interest and upon the terms and conditions described therein, which note evidences an additional loan to be made by Lender to owner under the terms and conditions described therein, which note evidences as additional to be made by Lender to owner under the terms and provisions of, and secured by, said deed of trust in favor. of Lender; and WHEREAS, it is a condition precedent to obtaining said loan that said deed of trust last above mentioned shall unconditionally be and remain at all times a lien or charge upon the land hereinbefore described, prior and superior to the lien or charge of the deed of trust first above mentioned; and Page 1 of 4 WHEREAS, Lender is willing to make said loan provided the deed of trust securing the same is a lien or charge upon the above described property prior and superior to the lien or charge of the deed of trust first above mentioned and provided that Beneficiary will specifically and unconditionally subordinate the lien or charge of the deed of trust first above mentioned to the lien or charge of the deed of trust in favor of Lender; and WHEREAS, it is to the mutual benefit of the parties hereto that Lender make such loan to Owner; and Beneficiary is willing that the deed of trust securing the same shall, when recorded, constitute a lien or charge upon said land which is unconditionally prior and superior to the lien or charge of the deed of trust above mentioned. NOW, THEREFORE, in consideration of the mutual benefits accruing to the parties hereto and other valuable consideration, the receipt and sufficiency of which consideration is hereby acknowledged, and in order to induce Lender to make the loan above referred to, it is hereby declared, understood and agreed as follows: 1. That said deed of trust securing said note in favor of Lender, and any renewals or extensions thereof, shall unconditionally be and remain at all times a lien or charge on the property therein described, prior and superior to the lien or charge of the deed of trust first above mentioned. 2. That Lender would not make its loan above described without this subordination agreement. 3. That this agreement shall be the whole and only agreement with regard to the subordination of the lien or charge of the deed of trust first above mentioned to the lien or charge of the deed of trust in favor of lender above referred to and shall supersede and cancel, but only insofar as would affect the priority between the deeds of trust hereinbefore specifically described, any prior agreement as to such subordination including, but not limited to, those provisions, if any, contained in the deed of trust first above mentioned, which provide for the subordination of the lien or charge thereof to another deed or deed of trust or to another mortgage or mortgages. Beneficiary declares, agrees and acknowledges that (a) He consents to and approves (i) all provisions of the note and deed of trust in favor of Lender above referred to, and (ii) all agreements, including but not limited to any loan or escrow agreements, between Owner and Lender for the disbursement of the proceeds of Lender's loan; (b) Lender in making disbursements pursuant to any such agreement is under no obligation or duty to, nor has Lender represented that it will see to the application of such proceeds by the person or persons to whom Lender disburses such proceeds and any application or use of such proceeds for purposes other than those provided for in such agreement or agreements shall not defeat the subordination herein made in whole or in part; (c) He intentionally and unconditionally waives, relinquishes and subordinates the lien or charge of the deed of trust first above mentioned in favor of the lien or charge upon said land of the deed of trust in favor of Lender above referred to and understands that in reliance upon, and in consideration of, this waiver, relinquishment and subordination specific loans and advances are being and will be made and, as part and parcel thereof, specific monetary and other obligations are being and will be entered into which would not be made or entered into but for said reliance upon this waiver, relinquishment and subordination; and NOTICE: THIS SUBORDINATION AGREEMENT CONTAINS A PROVISION WHICH ALLOWS THE PERSON OBLIGATED ON YOUR REAL PROPERTY SECURITY TO OBTAIN A LOAN A PORTION OR WHICH MAY BE EXPENDED FOR OTHER PURPOSES THAN IMPROVEMENT OF THE LAND. Beneficiary Owner La Qunita Redevelopment Agency, a Public Body, Mauka View LLC, a California Limited Liability Company Corporate and Politic `�-y By: Executive Director * signed in counterpart By: The Sorenson Family 2001 Revocable Trust, Managing Member of Mauka View, LLC James S. Sorenson, Trustee of The Sorenson Family 2001 Trust Marguerite W. Sorenson, Trustee of The. Sorenson Family 2001 Trust Page 2 of 4 Subordination Agreement dated April 12, 2004 Signatures continued: Owner Continued By: The James E. Mc Kellar Revocable Living Trust, Managing Member of Mauka View, LLC James E. Mc Kellar, Trustee of The James E. Mc Kellar Revocable Living Trust By: The Sharon A. Mc Kellar Revocable Living Trust, Managing Member of Mauka View LLC Sharon A. Mc Kellar, Trustee of The Sharon A. Mc Kellar Revocable Living Trust (ALL SIGNATURES MUST BE ACKNOWLEDGED) IT IS RECOMMENDED THAT, PRIOR TO THE EXECUTION OF THIS SUBORDINATION AGREEMENT, THE PARTIES CONSULT WITH THEIR ATTORNEYS WITHRESPECT THERETO. (CLTA SUBORDINATION FORM "C") STATE OF } } S.S. COUNTY OF } On , before me, , a Notary Public in and for said County and State, personally appeared James E. McKellar, personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. Signature STATE OF } } S.S. COUNTY OF } On , before me, , a Notary Public in and for said County and State, personally appeared Sharon A. McKellar, personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to -me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. Signature Page 3 of 4 STATE OF CALIFORNIA } COUNTY OF 5G1>v"4***"-5r4d On /T,p/��before me, Pam/ • leul a Notary Public in and for said County and State, personally appeared T�pM� s, 7�"• eep wea5 e. , personally known to me ( ) to be the person(,) whos named) is/art subscribed to the within instrument and acknowledged to me that he/5kjt/t1Wy executed the same in his/b4/t1v& authorized capacity(iog), and that by his/jer/t}e it signature(p) on the instrument the person($), or the entity upon behalf of which the person(y) acted, executed the instrument. WITNESS my d official seal. Signature REGENIA HENSLEY Commission # 1274458 Notary public - Cd ftmio It Riverside CotmtY � � �yCorrvn.Expires�ug19,�04 Page 4 of 4 Escrow No.: 1-2428-RJ EXHIBIT "A" LEGAL DESCRIPTION Lots 6 and 7 in Block 125, Unit No. 14 of Santa Carmelita at Vale La Quinta, as shown by Map on file in Book 18, Pages 82 and 83 of Maps, Records of Riverside County, California APN: 773-073-004-9 AND 773-073-005-0 Order No. 1299947 Escrow No. 1-2428-RJ Loan No. 01-12-20569 WHEN RECORDED MAIL TO: La Quinta Redevelopment Agency P.O. Box 1504 La Qunita, CA 92253 Attn: Agency Secretary Parcel No. 773-073-004-9 & 773-073-005-0 SPACE ABOVE THIS LINE FOR RECORDER'S USE SUBORDINATION AGREEMENT NOTICE: THIS SUBORDINATION AGREEMENT RESULTS IN YOUR SECURITY INTEREST IN THE PROPERTY BECOMING SUBJECT TO AND OF LOWER PRIORITY THAN THE LIEN OF SOME OTHER OR LATER SECURITY INSTRUMENT. THIS AGREEMENT, made this 12th day of April, 2004, by Mauka View LLC, a California Limited Liability Company owner of the land hereinafter described and hereinafter referred to as "Owner", and La Qunita Redevelopment Agency, a Public Body, Corporate and Politic, present owner and holder of the deed of trust and note first hereinafter described and hereinafter referred to as `Beneficiary"; WITNESSETH THAT WHEREAS, La Qunita 34, LLC, a California Limited Liability Company, did on Setpember 13, 2001 , execute a deed of trust to Orange Coast Title Company, a California Corporation, as trustee, covering: Vacant Lots APN Number 773-073-004 and 773-073-005. Complete Legal Description Attached Hereto and Made a Part Hereof as Exhibit "A" to secure a note in the sum of $350,000.00, dated September 13, 2001, in favor of La Qunita Redevelopment Agency, a Public Body, Corporate and Politic, which deed of trust was recorded September 28, 2001, as Instrument Number 01474253 in, Official Records of said county and is subject and subordinate to the deed of trust next hereinafter described; and WHEREAS, Mauka View LLC, a California Limited Liability Company, did on March 19, 2004, execute a deed of trust to Old Republic Title Company, as trustee, covering said land and securing an indebtedness in the amount of $105,000.00, in favor of La Jolla Bank, FSB, hereinafter referred to as "Lender", which deed of trust is recording concurrently herewith , Official Records of said county and provides among other thing that is shall also secure additional loans and advances thereafter made upon the terms and conditions set forth; and WHEREAS, owner has executed, or is about to execute, a note in the amount of $105,000.00, dated March 19, 2004 , in favor of Lender, payable with interest and upon the terms and conditions described therein, which note evidences an additional loan to be made by Lender to owner under the terms and conditions described therein, which note evidences as additional to be made by Lender to owner under the terms and provisions of, and secured by, said deed of trust in favor of Lender; and WHEREAS, it is a condition precedent to obtaining said loan that said deed of trust last above mentioned shall unconditionally be and remain at all times a lien or charge upon the land hereinbefore described, prior and superior to the lien or charge of the deed of trust first above mentioned; and Pagel of 4 CONTINUAMON Of SUBORIl►INATiON AGREEMENT WHEREAS, Lender is willing to make said loan provided the deed of trust securing the some a alien or charge uq= the above described property prior and superior to the lien or charge of the deed of trust first above metitioned and provided that Beneficiary will specifically and unconditionally subordinate the lien or charge of the deed of trust firA above mentioned to the lien or charge of the deed of trust in favor of Lender; and WHEREAS, it is to the mutual benefit of the parties hereto that Lender make such loom to Owner, and Beneefcutry is willing that the deed of trust securing the same shall, when rocorded, constitute a lien or charge upon said land which is unmriditionally prior and superior to the lien or charge of the deed of trot above mentioned. NOW, THEREFORE, in consideration of the mutual benefits accruing to the parties hereto and other valuable consideration, the receipt and sufficiency of which considgmmon is hereby acknowledged, and in carder to induce L xkx to matte the loan above referred to, it is hereby declared, understood and agreed as follows: 1. That said deed of trust securing said note in favor of Lender, and any renewals or extensions thereof, shall unconditionally be and remain at all times a lien or charge on the property therein described, prior and superior to the lien or charge of the deed of trust first above rimfioned. 2. That lender would not make its loan above described without this subordination agreement. 3. That this agreement shall be the whore and only agreement with regard to the subordination of the lien or charge of the deed of trust first above mentioned to the lien or charge of the deed of trust in favor of tender above referred to and shall supersede and mil, but only insofar as would affect the priority betweeah the deeds of trust hcreiribefore specifically described, any prior agreement as to such subordination including, but not limited to, those provisions, if any, contained in the deed of trust first above mentioned, which provide for the subordination of the lien or charge thereof to another deed or dead of trust or to another mortgage or mortgages. Beneficiary declares, agrees and acknowledges that (a) He eoahsents to and approves (i) all provisions of the note and deed of trust in favor of Lender above referred to, and (h) all agreements, including but not limited to any loan or escrow agreements, between Owner and Leader for the disbursement of the proceeds of Lender's loan; (b) Lender in making disbnrwme cts pursuant to any such agreement is under no obligation or duty to, nor has Lender representedd that it will see to the application of such proceeds by the person or persons to whom Lender disburses such proceeds and any application ar use of such proceeds for purposes other than those provided for in such agreement or agreements shall not ,defeat the subordimtion herein made in whole or in part; (c) He intentionally and unconditionally waives, relinquishes and subordinates the lien or charge of deed of trust first above mentioned in favor of the lien or charge upon said land of the deed of wok in favor of Lender above referred to and understands that in reliance upon, and in consideration of, this waiver, reliaquishment and subordination specific loans aid advances are being and will be made and, as part and parcel thereof, specific monetary and other obligations an being and will be entered into which would not be made or eawred into but for said reliance upon this waiver, relinquishment and subordination; and (d) An endorsement has been placed upon the mate secured by deed of trust first above mentioned that said deed of trust has by this instrument been subordinated to the lien or charge of the deed of trust in favor of Lender above referred to. NOTICE: THIS SUBORDINATION AGREEMENT CONTAINS A PROVISION WHICH ALLOWS THE PERSON OBLIGATED ON YOUR REAL PROPERTY SECURITY TO OBTAIN A LOAN A PORTION OR WHICH MAY BE EXPENDED FOR OTHER PURPOSES THAN IMPROVEMENT OF THE LAND. Beneficiary La eta Redevelopnmwt Agency, a Pub& Body, Corporate aril Politic By: Executive Director * signed in counterpart Owner MaWw View LLC, a Califerab Lnised Wbdity Cmpaary By: TTte Sorenson Fanny 2001 Rev mble Trai;4 Managing M otf Maakst Vi000, ehv7LC Page 2 of CONTINUATION OF SiiBURDiNATiON AGREEMENT SulwWwation Agent dated April 12, 2004 Sipaum 00gWUed: * signed in counterpart (ALL SIGNATURES MUST BE ACKNOWLEDGED) W.W1-& 61, 4 Scmemsrn, Trustee offhe Sorenson Fancy 2002 Trust By: The James E. Mc Kellar Revocable Living Trust, Managing Member of Mania Vim, LLC James E. Mc Kellar, Trustee of The James E. Mc Kellar Revocable Living Trust Bp: The Sharon A. Me Kei[ar Revocable Living Trust, Managing Member of Maya View LLC Sharon A. Mc Kellar, Trustee of The Sharon A. Mc Kellar Revocable Living Trust jTrsRrc©A#ApDED mr: PRroR ro rmE�wcuHoN of 2m SUBORW,trrarr GR aWT =P.tRTIEs CONSULT W=.TBErR A7M!RWxs 3€1THRESPECT T'HCRt1'O. (CLTA SUBORDINATION FORM "C") STATE OF CALIFORNU } } S.S. COUNTY OF W-j } on � ., before me, , a Notary Public in anX f said County and State, pally appeared Ja . Sorenson and Marguerite W. So rram s, personally known to me (or proved to me or the basis of satisfactory evidence) to be the person(s) whose name(s) islare subscribed to the within instrument and acknowledged to me that he/she/they executed the same in histhedtheir authorized capacity(iesj 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 and official 3igmtur-a t7t e-- A. ORR Commbaon # t 4306" Noksy Pubic - CONOMIo RkerAde Cm* io-,MVCantn. r ,,w 14, 2007 PaF 3 of 4 STATE OF } ) S.S. COUNTY OF } On , before me, , a Notary Public in and for said County and State, personally appeared James E.. McKellar, personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. Signature STATE OF } } S.S. COUNTY OF } On , before me, , a Notary Public in and for said County and State, personally appeared Sharon A. McKellar, personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. Signature STATE OF CALIFORNIA } } S.S. COUNTY OF } On , before me, , a Notary Public in and for said County and State, personally appeared personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. Signature Page 4 of 4 Escrow No.: l-2428-RJ EXHIBIT "A" LEGAL DESCRIPTION Lots 6 and 7 in Block 125, Unit No. 14 of Santa Carmelita at Vale La Quinta, as shown by Map on file in Book 18, Pages 82 and 83 of Maps, Records of Riverside County, California APN: 773-073-004-9 AND 773-073-005-0 Order No. 1299945 Escrow No. 1-2429-RJ Loan No. 01-12-20568 WHEN RECORDED MAIL TO: La Quinta Redevelopment Agency P.O. Box 1504 La Qunita, CA 92253 Parcel No. 773-073-004-9 and 773-073- 005-0 SPACE ABOVE THIS LINE FOR RECORDER'S USE SUBORDINATION AGREEMENT NOTICE: THIS SUBORDINATION AGREEMENT RESULTS IN YOUR SECURITY INTEREST IN THE PROPERTY BECOMING SUBJECT TO AND OF LOWER PRIORITY THAN THE LIEN OF SOME OTHER OR LATER SECURITY INSTRUMENT. THIS AGREEMENT, made this 12th day of April, 2004, by Mauka View LLC, a California Limited Liability Company owner of the land hereinafter described and hereinafter referred to as "Owner", and La Qunita Redevelopment Agency, a Public Body, Corporate and Politic, present owner and holder of the deed of trust and note first hereinafter described and hereinafter referred to as "Beneficiary"; WITNESSETH THAT WHEREAS, La Qunita 23, LLC, a California Limited Liability Company, did on Seppember 13, 2001 , execute a deed of trust to Orange Coast Title Company, a California Corporation , as trustee, covering: Vacant Lots APN Number 773-073-M and 773-073-005 Complete Legal Description Attached Hereto and Made a A Part Hereof as Exhibit "A" to secure a note in the sum of $350,000.00, dated September 19, 2001, in favor of La Qunita Redevelopment Agency, a Public Body, Corporate and Politic, which deed of trust was recorded September 28, 2001, as Instrument Number 01-474253 in Book , Page(s) , Official Records of said county and is subject and subordinate to the deed of trust next hereinafter described; and WHEREAS, Mauka View LLC, a California Limited Liability Company, did on March 19, 2004, execute a deed of trust to Old Republic Title Company, as trustee, covering said land and securing an indebtedness in the amount of $105,000.00, in favor of La Jolla Bank, FSB, hereinafter referred to as "Lender", which deed of trust is recording concurrently herewith , Official Records of said county and provides among other thing that is shall also secure additional loans and advances thereafter made upon the terms and conditions set forth; and WHEREAS, owner has executed, or is about to execute, a note in the amount of $105,000.00, dated March 19, 2004, in favor of Lender, payable with interest and upon the terms and conditions described therein, which note evidences an additional loan to be made by Lender to owner under the terms and conditions described therein, which note evidences as additional to be made by Lender to owner under the terms and provisions of, and secured by, said deed of trust in favor of Lender; and WHEREAS, it is a condition precedent to obtaining said loan that said deed of trust last above mentioned shall unconditionally be and remain at all times a lien or charge upon the land hereinbefore described, prior and superior to the lien or charge of the deed of trust first above mentioned; and CONTINUATION OF SUBORDINATION AGREEMENT WHEREAS, Lender is willing to make said loan provided the deed of trust securing the same is a lien or charge upon the above described property prior and superior to the lien or charge of the deed of trust first above mentioned and provided that Beneficiary will specifically and unconditionally subordinate the lien or charge of the deed of trust first above mentioned to the lien or charge of the deed of trust in favor of Lender; and WHEREAS, it is to the mutual benefit of the parties hereto that Lender make such loan to Owner; and Beneficiary is willing that the deed of trust securing the same shall, when recorded, constitute a lien or charge upon said land which is unconditionally prior and superior to the lien or charge of the deed of trust above mentioned. NOW, THEREFORE, in consideration of the mutual benefits accruing to the parties hereto and other valuable consideration, the receipt and sufficiency of which consideration is hereby acknowledged, and in order to induce Lender to make the loan above referred to, it is hereby declared, understood and agreed as follows: 1. That said deed of trust securing said note in favor of Lender, and any renewals or extensions thereof, shall unconditionally be and remain at all times a lien or charge on the property therein described, prior and superior to the lien or charge of the deed of trust first above mentioned. 2. That Lender would not make its loan above described without this subordination agreement. 3. That this agreement shall be the whole and only agreement with regard to the subordination of the lien or charge of the deed of trust first above mentioned to the lien or charge of the deed of trust in favor of lender above referred to and shall supersede and cancel, but only insofar as would affect the priority between the deeds of trust hereinbefore specifically described, any prior agreement as to such subordination including, but not limited to, those provisions, if any, contained in the deed of trust first above mentioned, which provide for the subordination of the lien or charge thereof to another deed or deed of trust or to another mortgage or mortgages. Beneficiary declares, agrees and acknowledges that (a) He consents to and approves (i) all provisions of the note and deed of trust in favor of Lender above referred to, and (ii) all agreements, including but not limited to any loan or escrow agreements, between Owner and Lender for the disbursement of the proceeds of Lender's loan; (b) Lender in making disbursements pursuant to any such agreement is under no obligation or duty to, nor has Lender represented that it will see to the application of such proceeds by the person or persons to whom Lender disburses such proceeds and any application or use of such proceeds for purposes other than those provided for in such agreement or agreements shall not defeat the subordination herein made in whole or in part; (c) He intentionally and unconditionally waives, relinquishes and subordinates the lien or charge of the deed of trust first above mentioned in favor of the lien or charge upon said land of the deed of trust in favor of Lender above referred to and understands that in reliance upon, and in consideration of, this waiver, relinquishment and subordination specific loans and advances are being and will be made and, as part and parcel thereof, specific monetary and other obligations are being and will be entered into which would not be made or entered into but for said reliance upon this waiver, relinquishment and subordination; and (d) An endorsement has been placed upon the note secured by deed of trust first above mentioned that said deed of trust has by this instrument been subordinated to the lien or charge of the deed of trust in favor of Lender above referred to. NOTICE: THIS SUBORDINATION AGREEMENT CONTAINS A PROVISION WHICH ALLOWS THE PERSON OBLIGATED ON YOUR REAL PROPERTY SECURITY TO OBTAIN A LOAN A PORTION OR WHICH MAY BE EXPENDED FOR OTHER PURPOSES THAN 1WROVEMENT OF THE LAND. Beneficiary Owner La Qunita Redevelopment Agency, a Public Body, Mauka View LLC, a California Limited Liability Company Corporate and Politic By: Executive Director By: The Sorenson Family 2001 Revocable Trust, Managing Member of Mauka View, LLC Page 2 of 4 CONTINUATION OF SUBORDINATION AGREEMENT Subordination Agreement dated April 12, 2004 Signatures continued: Marguerite W. Sorenson, Trustee of The Sorenson Family 2001 Trust By: The James E. Mc Kellar Revocable Living Trust, Managing Member of Mauka View, LLC James E. Mc Kellar, Trustee of The James E. Mc Kellar * signed in counterpart Revocable Living Trust By: The Sharon A. Mc Kellar Revocable Living Trust, Managing Member of Mauka View LLC �• e Sharon A. Mc Kellar, Trustee of a Sharon A. Mc Kellar Revocable Living Trust (ALL SIGNATURES MUST BE ACKNOWLEDGED) IT IS RECOMMENDED THAT, PRIOR TO THE EXECUTION OF THIS SUBORDINATION AGREEMENT, THE PARTIES CONSULT WITH THEIR ATTORNEYS WITHRESPECT THERETO. (CLTA SUBORDINATION FORM "C") STATE OF CALIFORNIA } ) S.S. COUNTY OF } On , before me, , a Notary Public in and for said County and State, personally appeared James S. Sorenson and Marguerite W. Sorrenson, 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✓shelthey executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. Signature Page 3 of 4 ' CONTINUATION OF SUBORDINATION AGREEMENT STATE OF HAWAI I } } S.S. COUNTY OF HONOLULU } On April 14 , 2004 ^ , before me, Candace MT Villarmia , a Notary Public in and for said County and State, personally appeared James E. McKellar , personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. Signature - STATE OF HAWAI I } } S.S. COUNTY OF HONOLULU } On April 14, 2004 , before me, Candace MT Villarmia , a Notary Public in and for said County and State, personally appeared Sharon A. McKellar, 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., Signatu STATE OF CALIFORNIA } a } S.S. COUNTY OF } On , before me, , a Notary Public in and for said County and State, personally appeared , personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. Signature Page 4 of 4 Escrow No.: 1-2428-RJ EXHIBIT "A" LEGAL DESCRIPTION Lots 6 and 7 in Block 125, Unit No. 14 of Santa'Carmelita at Vale La Quinta, as shown by Map on file in Book 18, Pages 82 and 83 of Maps, Records of Riverside County, California APN: 773-073-004-9 AND 773-073-005-0 RECORDED AT THE REQUEST OF AND WHEN RECORDED RETURN TO: La Quinta Redevelopment Agency 78-495 Calle Tampico La Quinta, CA 92253 Attn: Executive Director RECORDING REQUESTED BY FIRST AMERICAN TITLE COMPANY RESIDENTIAL. DIVISION DOG N 2004—OZO23SI 04/23/2004 08:00A Fee:NC Page 1 of 5 Recorded in Official Records County of Riverside Gary L. Orso Assessor, County Clerk & Recorder 1111111111111111111111111111111111111111111111111111111 M S U PAGE SIZE DA PCOR NOCOR SMF MISC. A R L COPY LONG REFUND I NCHG EXAM This Memorandum of Assignment and Assumption Agreement is recorded at the request and for the benefit of the La Quinta Redevelopment Agency and is exempt from the payment of a recording fee pursuant to Government Code Section 27383. MEMORANDUM OF ASSIGNMENT AND ASSUMPTION AGREEMENT L jL's, This MEMORANDUM OF ASSIGNMENT AND ASSUMPTION AGREEMENT ("Memorandum") is dated as of i 1 , 2004, and entered into by and between the LA QUINTA RE15EVELOPMENT AGENCY, a public body, corporate and politic ("Agency"), and MAUKA VIEW, LLC, a California limited liability company ("Purchaser"). This Memorandum is made with reference to the following: 1. On or about the date of the recordation of this Memorandum, Purchaser acquired from La Quinta 34 LLC, a California limited liability company ("Seller"), fee title to that certain real property located in the City of La Quinta, County of Riverside, State of California, more particularly described in the legal description attached hereto as Exhibit "A" and incorporated herein by this reference ("Site"). 2. On or about September 13, 2001, Agency and Seller entered into that certain Affordable Housing Rehabilitation Agreement, as amended by that certain First Amendment to Affordable Housing Rehabilitation Agreement dated December 17, 2002 (collectively, the "Housing Agreement"). The Housing Agreement provides for Seller to construct certain improvements on the Site. 3. Pursuant to the Housing Agreement, Agency agreed to provide a loan to Seller in the amount of Three Hundred Fifty Thousand Dollars ($350,000) ("Rehabilitation Loan") for Seller's rehabilitation of the Site. The Rehabilitation Loan is evidenced by that certain Note dated September 13, 2001 ("Agency Note"). The Agency Note is secured by that certain Deed of Trust With Assignment of Rents and Rider Attached Hereto dated September 13, 2001, from Seller, as trustor, in favor of Agency, as beneficiary, recorded on September 28, 2001, as Instrument No. 2001-474253 in the Official Records of Riverside County, California ("Agency Deed of Trust"). 538/015610-0040 494476.01 a04/12/04 -1- 4. Pursuant to the Housing Agreement, Agency and Seller entered into that certain Regulatory Agreement and Declaration of Covenants and Restrictions dated September 13, 2001, and recorded on September 28, 2001, as Instrument No. 2001-474254 in the Official Records of Riverside, California, which places covenants on the use and operation of the Site to ensure that the Site is operated as a rental housing project with fourteen (14) units to be rented and occupied by moderate income households at affordable rent. 5. In connection with and effective upon Purchaser's acquisition of the Site, Seller assigned to Purchaser and Purchaser assumed from Seller the obligations of Seller under the Housing Agreement, the Agency Note, the Agency Deed of Trust, and the Regulatory Agreement as more fully set forth in that certain Assignment and Assumption Agreement ("Assignment") among Seller, Purchaser and Agency dated April 6, 2004. 6. The parties desire to enter into this Memorandum and to record the same in the Official Records of Riverside County, California, to provide record notice to all persons of the Assignment. 7. This Memorandum may be executed in several counterparts, and all so executed shall constitute one agreement binding on both parties hereto, notwithstanding that both parties are not signatories to the original or the same counterpart. [signatures on next page] 538/015610-0040 494476.01 a03/31/04 -2- IN WITNESS WHEREOF, Agency and Purchaser have entered into this Memorandum as of the date first set forth above. ATTEST: riy eetary APPROEP AS,--'0'FQ9M: RU 'A, T '' ,i✓P Attorneys for the La Quinta Redevelopment Agency "AGENCY" LA QUINTA REDEVELOPMENT AGENCY, a pu y, rporate and p ' is By: _. Executive Director "PURCHASER" MAUKA VIEW, LLC, a California limited liability company By: ames S. Sorenson, on behalf of the Sorenson Family 2001 Revocable Trust, Member 538/015610-0040 494476.01 a03/31/04 -3- STATE OF CALIFORNIA ) ) ss COUNTY O r/'Cr�► �d ) On �r^e � dod , before personally appeared dir�as v, personally known to me ( ) to be the person(s) whose name( is/we subscribed to the within instrument and acknowledged to me that he/she/th* i executed the same in his/her/their authorized capacity(*), and that by his/*/tWr signature(0) on the instrument the person(*) or the entity upon behalf of which the person(g) acted, executed the instrument. Witness my ha icial seal. REGENU►14lo tfY # MAC • : w;.COMW9,=4 IN Public � �yC,crrm6�� [SEAL] STATE OF CALIFORNIA ) . ) ss COUNTY OF /✓ e.^,a/� _ ) On ,Dr, personally appeared before me, t 94ge,7,*eC Y-cr22 s le — (or proved to me on the basis of satisfactory evidence) to be the person(,*) whose nam) is1W subscribed to the within instrument and acknowledged to me that he/Sb*/tbey executed the same in his/her/their authorized capacity(i @s), and that by his/her/their signature(,) on the instrument the person(g) or the entity upon behalf of which the person(o) acted, executed the instrument. Witness my hand and official seal. REGENIA HENSLEY091, 7 �,mwm # 1y,� Not ublic .�.. ;,. Notay - catr«nto ovemme [SEAt Mycoffm.EOMAG19,M 538/015610-0040 494476.01 a03/31 /04 —4— EXHIBIT "A" TO MEMORANDUM LEGAL DESCRIPTION OF SITE All that certain property located in the City of La Quinta, County of Riverside, State of California, described as follows: LOTS 1 TO 11 INCLUSIVE IN BLOCK 126 OF SANTA CARMELITA AT VALE LA QUINTA, UNIT NO. 14, IN THE CITY OF LA QUINTA, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 18 PAGES 82 AND 83 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY. EXCEPTION THEREFROM THOSE PORTIONS OF LOTS 1, 5, 6 AND 11, DEEDED TO THE COUNTY OF RIVERSIDE, BY DOCUMENTS RECORDED MARCH 23, 1978 AS INSTRUMENT NOS. 55038 AND 55039 OF OFFICIAL RECORDS OF RIVERSIDE COUNTY, CALIFORNIA. AND LOTS 6 AND 7 IN BLOCK 125 OF SANTA CARMELITA AT VALE LA QUINTA UNIT NO. 14, AS SHOWN BY MAP RECORDED IN BOOK 18, PAGE 82 OF MAPS, RECORDS OF RIVERSIDE COUNTY, CALIFORNIA 538/015610-0040 494476.01 a03/31/04 RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: La Quinta Redevelopment Agency 78-495 Calle Tampico La Quinta, California 92253 Attention: Executive Director RECORDING REQUESTED BY FIRST AMERICAN TITLE COMPANY RESIDENTIAL DIVISION DOC # 2004-03013SO 04/23/2004 08:00A Fee:NC Page 1 of 4 Recorded in Official Records County of Riverside Gary L. Orso Assessor, County Clerk & Recorder 1111111111111111111111111111111111111111111111111111111 M $ U PAGE SIZE DA PCOR NOCOR SMF MISC. A R I L COPY LONG REFUND NCHG EXAM 4 This Modification of Deed of Trust is recorded at the request and for the benefit of the La Quinta T Redevelopment Agency and is exempt from the payment of a recording fee pursuant to Government Code Section LS 27383. MODIFICATION OF DEED OF TRUST This MODIFICATION OF DEED OF TRUST ("Modification") is dated as of \ El , 2004, and made by and between the LA QUINTA REDS LOPMENT AGENCY, a public body, corporate and politic ("Beneficiary"), and MAUKA VIEW, LLC, a California limited liability company ("Trustor"). RECITALS A. Trustor's predecessor executed that certain Deed of Trust With Assignment of Rents and Rider Attached Hereto dated September 13, 2001, in favor of Orange Coast Title, as Trustee, and Beneficiary, as the beneficiary thereunder, recorded on September 28, 2001, as Instrument No. 2001-474253 in the Official Records of Riverside County, California ("Deed of Trust"). Pursuant to the Deed of Trust, Trustor granted to the Trustee, for the benefit of Beneficiary, certain real property more particularly described in the Deed of Trust and on Exhibit "A" attached hereto ("Property"). B. Trustor and Beneficiary now desire to amend the Deed of Trust as more particularly described herein. NOW, THEREFORE, for good and valuable consideration, the receipt and adequacy of which is hereby acknowledged, the parties hereto agree as follows: 1. Modification to Note. The Note secured by this Deed of Trust has concurrently herewith been modified to reduce the rate of interest payable as more particularly provided in the Allonge to Note dated on or about the date hereof. 2. No Other Modification. Except as expressly modified by this Modification, the Deed of Trust shall remain unmodified and in full force and effect. 538/015610-0040 494484.01 a04/12/04 -1- IN WITNESS WHEREOF, the parties have executed this Modification as of the date set forth above. ATTEST: Agency -Secretary APPROVED AS TO FORM: RUTAN & TUCKER, LLP Attorneys for the La Quinta Redevelopment Agency "BENEFICIARY" LA QUINTA REDEVELOPMENT AGENCY, a' public dy, corporate and pol' 'c By: Executive Director "TRUSTOR" MAUKA VIEW, LLC, a California limited liability company By: Xr�es S. Sorenson, on behalf of the Sorenson Family 2001 Revocable Trust, Member 538/015610-0040 494484.01 a03/31 /04 2 STATE OF CALIFORNIA ) .��, ) ss. COUNTY FI il���S O ) On 2004, before a notary public in and for sid state, persona y a eared personally known to me ( ` ) to be the person(jr)whose name(�a) is/aX subscribed to the within instrument and acknowledged to me that he/aft/they executed the same in his/,t C&/tMr authorized capacities, and that by hisAw/tlwit signature(w) on the instrument the persono, or the entity upon behalf of which the person() acted, executed the instrument. Witness my hand and official seal. REGENIA HENSLEY Commission # 1274158 < Notc ry ftUr- - Caftf mia Z _ Not Public STATE OF CALIFORNIA ) � ) ss. COUNTY OF 7T /r/�/`.S,�D�.t- ) On 4p r-,* / , 2004, before me, , a notary public in and for said state, personally�peare f f (or proved to me on the basis of satisfactory evidence) to be the person(jr) whose named is/are subscribed to the within instrument and acknowledged to me that he/s>e/they executed the same in his/b&/th@4r authorized capacities, and that by his/bef/tbeir signature(,$) on the instrument the persona), or the entity upon behalf of which the person(p) acted, executed the instrument. Witness my hand and official seal. 75 F4100. REGENIA HENSLEY Not ublic Comm�ion # 1274{58 Z [St # Notay Public - Cam Riverside County MyCcrrm ErasAug 19,20D4 538/015610-0040 494484.01 a03/31/04 —3— EXHIBIT "A" TO MODIFICATION OF DEED OF TRUST LEGAL DESCRIPTION OF PROPERTY All that certain property located in the City of La Quinta, County of Riverside, State of California, described as follows: LOTS 1 TO 11 INCLUSIVE IN BLOCK 126 OF SANTA CARMELITA AT VALE LA QUINTA, UNIT NO. 14, IN THE CITY OF LA QUINTA, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 18 PAGES 82 AND 83 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY. EXCEPTION THEREFROM THOSE PORTIONS OF LOTS 1, 5, 6 AND 11, DEEDED TO THE COUNTY OF RIVERSIDE, BY DOCUMENTS RECORDED MARCH 23, 1978 AS INSTRUMENT NOS. 55038 AND 55039 OF OFFICIAL RECORDS OF RIVERSIDE COUNTY, CALIFORNIA. LOTS 6 AND 7 IN BLOCK 125 OF SANTA CARMELITA AT VALE LA QUINTA UNIT NO. 14, AS SHOWN BY MAP RECORDED IN BOOK 18, PAGE 82 OF MAPS, RECORDS OF RIVERSIDE COUNTY, CALIFORNIA. 538/015610-0040 494484.01 a03/31/04 Order No. 1299945 Escrow No. 1-2429-RJ Loan No. 01-12-20568 WHEN RECORDED MAIL TO: La Quinta Redevelopment Agency P.O. Box 1504 La Qunita, CA 92253 Attn: Agency Secreta L14 A Parcel No. 773-071-017-5 a 7 W' 10: i �� � ' CI y L,', Gv dTA ,IT Y CLr;tk'S OFFICE DOC # 2004--03 21470 04/28/2004 08:00A Fee:55.00 Page 1 of 17 Recorded in Official Records County of Riverside Gary L. Orso Assessor, County Clerk & Recorder 1111111111111111111111111111111111111111111111111111111 M s U PAGE SIZE DA PCOR NOCOR SMF MISC. A R L COPY I LONG REFUND NCHG EXAM RECORDING REQUESTED BY FIRST AMERICAN TITLE COMPANY SUBORDINATION AGREEMENT t9 LL. SIGK M COUKE 9 RESIDENTIAL DIVISION NOTICE: THIS SUBORDINATION AGREEMENT RESULTS IN YOUR SECURITY INTEREST IN THE PROPERTY BECOMING SUBJECT TO AND OF LOWER PRIORITY THAN THE LIEN OF SOME OTHER OR LATER SECURITY INSTRUMENT. ELS THIS AGREEMENT, made this 12th day of April, 2004, by Mauka View LLC, a California Limited Liability Company owner of the land hereinafter described and hereinafter referred to as "Owner", and La Qunita Redevelopment Agency, a Public Body, Corporate and Politic, present owner and holder of the deed of trust and note first hereinafter described and hereinafter referred to as `Beneficiary"; WITNESSETH THAT WHEREAS, La Qunita 34, LLC, a California Limited Liability Company, did on Setpember 13, 2001 , execute a deed of trust to Orange Coast Title Company, a California Corporation, as trustee, covering: Lots 1 to 11 Inclusive in block 126 of Santa Carmelita at Vale La Quinta, Unit No.14, in the City of La Quinta, County of Riverside,. State of California, as per map recorded in Book 18, Pages 82 and 83 of Maps, in the office of the County Recorder of said county. Exception therefrom those Portions of Lots 1, 5, 6 and 11 Deeded to the County of Riverside, by Documents Recorded March 23,1978 as Instrument No. 55038 and 55039 of Official Records of Riverside County, California to secure a note in the sum of $350,000.00, dated September 13, 2001, in favor of La Qunita Redevelopment Agency, a Public Body, Corporate and Politic, which deed of trust was recorded September 28, 2001, as Instrument Number 01-474253 in, Official Records of said county and is subject and subordinate to the deed of trust next hereinafter described; and WHEREAS, Mauka View LLC, a California Limited Liability Company, did on March 19, 2004, execute a deed of trust to Old Republic Title Company, as trustee, covering said land and securing an indebtedness in the amount of $1,770,000.00, in favor of La Jolla Bank, FSB, hereinafter referred to as "Lender", which deed of trust is recording concurrently herewith , Official Records of said county and provides among other thing that is shall also secure additional loans and advances thereafter made upon the terms and conditions set forth; and WHEREAS, owner has executed, or is about to execute, a note in the amount of $1,770,000.00, dated March 19, 2004 , in favor of Lender, payable with interest and upon the terms and conditions described therein, which note evidences an additional loan to be made by Lender to owner under the terms and conditions described therein, which note evidences as additional to be made by Lender to owner under the terms and provisions of, and secured by, said deed of trust in favor of Lender; and WHEREAS, it is a condition precedent to obtaining said loan that said deed of trust last above mentioned shall unconditionally be and remain at all times a lien or charge upon the land hereinbefore described, prior and superior to the lien or charge of the deed of trust first above mentioned; and Page 1 of 4 WHEREAS, Lender is willing to make said loan provided the deed of trust securing the same is a lien or charge upon the above described property prior and superior to the lien or charge of the deed of trust first above mentioned and provided that Beneficiary will specifically and unconditionally subordinate the lien or charge of the deed of trust first above mentioned to the lien or charge of the deed of trust in favor of Lender; and WHEREAS, it is to the mutual benefit of the parties hereto that Lender make such loan to Owner; and Beneficiary is willing that the deed of trust securing the same shall, when recorded, constitute a lien or charge upon said land which is unconditionally prior and superior to the lien or charge of the deed of trust above mentioned. NOW, THEREFORE, in consideration of the mutual benefits accruing to the parties hereto and other valuable consideration, the receipt and sufficiency of which consideration is hereby acknowledged, and in order to induce Lender to make the loan above referred to, it is hereby declared, understood and agreed as follows: 1. That said deed of trust securing said note in favor of Lender, and any renewals or extensions thereof, shall unconditionally be and remain at all times a lien or charge on the property therein described, prior and superior to the' lien or charge of the deed of trust first above mentioned. 2. That Lender would not make its loan above described without this subordination agreement. 3. That this agreement shall be the whole and only agreement with regard to the subordination of the lien or charge of the deed of trust first above mentioned to the lien or charge of the deed of trust in favor of lender above referred to and shall supersede and cancel, but only insofar as would affect the priority between the deeds of trust hereinbefore specifically described, any prior agreement as to such subordination including, but not limited to, those provisions, if any, contained in the deed of trust first above mentioned, which provide for the subordination of the lien or charge thereof to another deed or deed of trust or to another mortgage or mortgages. Beneficiary declares, agrees and acknowledges that (a) He consents to and approves (i) all provisions of the note and deed of trust in favor of Lender above referred to, and (ii) all agreements, including but not limited to any loan or escrow agreements, between Owner and Lender for the disbursement of the proceeds of Lender's loan; (b) Lender in making disbursements pursuant to any such agreement is under no obligation or duty to, nor has Lender represented that it will see to the application of such proceeds by the person or persons to whom Lender disburses such proceeds and any application or use of such proceeds for purposes other than those provided for in such agreement or agreements shall not defeat the subordination herein made in whole or in part; (c) He intentionally and unconditionally waives, relinquishes and subordinates the lien or charge of the deed of trust first above mentioned in favor of the lien or charge upon said land of the deed of trust in favor of Lender above referred to and understands that in reliance upon, and in consideration of, this waiver, relinquishment and subordination specific loans and advances are being and will be made and, as part and parcel thereof, specific monetary and other obligations are being and will be entered into which would not be made or entered into but for said reliance upon this waiver, relinquishment and subordination; and NOTICE: THIS SUBORDINATION AGREEMENT CONTAINS A PROVISION WHICH ALLOWS THE PERSON OBLIGATED ON YOUR REAL PROPERTY SECURITY TO OBTAIN A LOAN A PORTION OR WHICH MAY BE EXPENDED FOR OTHER PURPOSES THAN IMPROVEMENT OF THE LAND. Beneficiary Owner La Qunita Redevelopment Agency, a Public Body, Mauka View LLC, a California Limited Liability Company Corporate and Politic By: Executive Director By: The Sorenson Family 2001 Revocable Trust, Managing Member of Mauka View, LLC *signed in counterpart James S. Sorenson, Trustee of The Sorenson Family 2001 Trust Marguerite W. Sorenson, Trustee of The Sorenson Family 2001 Trust Page 2 of 4 Subordination Agreement dated April 12, 2004 Signatures continued: Owner Continued By: The James E. Mc Kellar Revocable Living Trust, Managing Member of Mauka View, LLC SIGNED IN COUNTERP'APi James E. Mc Kellar, Trustee of The James E. Mc Kellar Revocable Living Trust By: The Sharon A. Mc Kellar Revocable Living Trust, Managing Member of Mauka View LLC SIGNED IN COUNTERPART Sharon A. Mc Kellar, Trustee of The Sharon A. Mc Kellar Revocable Living Trust (ALL SIGNATURES MUST BE ACKNOWLEDGED) IT IS RECOMMENDED THAT, PRIOR TO THE EXECUTION OF THIS SUBORDINATION AGREEMENT, THE PARTIES CONSULT WITH THEIR ATTORNEYS WITHRESPECT THERETO. (CLTA SUBORDINATION FORM "C") STATE OF } } S.S. COUNTY OF } On , before me, , a Notary Public in and for said County and State, personally appeared James E. McKellar, personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. Signature STATE OF } } S.S. COUNTY OF } On , before me, , a Notary Public in and for said County and State, personally appeared Sharon A. McKellar, personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. Signature Page 3 of 4 STATE OF CALIFORNIA } } S.S. COUNTY OF On -A o� O, Oo ,before me, �tel_ `C , a Notary Public in and for said County and State, personally appeared ?"� o/nQsS �Op (/',c3 t ,personally known to me ( ) to be the person(r) who a name(*) is/ape subscribed to the within instrument and acknowledged to me that he/ske/they executed the same in his/Wr/tb6r authorized capacity(jes), and that by hisAWtbvir signature(d) on the instrument the person(^ or the entity upon behalf of which the person) acted, executed the instrument. WITNESS m d official seal. Signature REGENUI HENSLEY It CoffvnlW t # 1274458 z No�l'M - rUl -CadRomTa WYMId@ cowty MVC ffM B#WAM 19,2JD4 Page 4 of 4 CERIMCATION Under the provisions of Government code 27361.7 I certify under the penalty of perjury that the following is.a true copy of illegible wording found in the attached document: (Print or type the pAge numbgdsj and MMdnS below *SEE ATTACHED DOCUMENT FOR CLARITY Date: D Signature: �� . Order No. 1299945 Escrow No. 1-2429-RJ Loan No. 01-12-20568 WHEN RECORDED MAIL TO: La Quinta Redevelopment Agency P.O. Box 1504 La Qunita, CA 92253 Attn: Agency Secretary Parcel No. 773-071-017-5 SPACE ABOVE THIS LINE FOR RECORDER'S USE SUBORDINATION AGREEMENT NOTICE: THIS SUBORDINATION AGREEMENT RESULTS IN YOUR SECURITY INTEREST IN THE PROPERTY BECOMING SUBJECT TO AND OF LOWER PRIORITY THAN THE LIEN OF SOME OTHER OR LATER SECURITY INSTRUMENT. THIS AGREEMENT, made this 12th day of April, 2004, by Mauka View LLC, a California Limited Liability Company owner of the land hereinafter described and hereinafter referred to as "Owner", and La Qunita Redevelopment Agency, a Public Body, Corporate and Politic, present owner and holder of the deed of trust and note first hereinafter described and hereinafter referred to as `Beneficiary"; WITNESSETH THAT WHEREAS, La Qunita 34, LLC, a California Limited Liability Company, did on Setpember 13, 2001 , execute a deed of trust to Orange Coast Title Company, a California Corporation, as trustee, covering: Lots 1 to 11 Inclusive in block 126 of Santa Carmelita at Vale La Quinta, Unit No. 14, in the City of La Quinta, County of Riverside, State of California, as per map recorded in Book 18, Pages 82 and 83 of Maps, in the office of the County Recorder of said county. Exception therefrom those Portions of Lots 1, 5, 6 and 11 Deeded to the County of Riverside, by Documents Recorded March 23, 1978 as Instrument No. 55038 and 55039 of Official Records of Riverside County, California to secure a note in the sum of $350,000.00, dated September 13, 2001, in favor of La Qunita Redevelopment Agency, a Public Body, Corporate and Politic, which deed of trust was recorded September 28, 2001, as Instrument Number 01-474253 in, Official Records of said county and is subject and subordinate to the deed of trust next hereinafter described; and WHEREAS, Mauka View LLC, a California Limited Liability Company, did on March 19, 2004, execute a deed of trust to Old Republic Title Company, as trustee, covering said land and securing an indebtedness in the amount of $1,770,000.00, in favor of La Jolla Bank, FSB, hereinafter referred to as "Lender", which deed of trust is recording concurrently herewith , Official Records of said county and provides among other thing that is shall also secure additional loans and advances thereafter made upon the terms and conditions set forth; and WHEREAS, owner has executed, or is about to execute, a note in the amount of $1,770,000.00, dated March 19, 2004 , in favor of Lender, payable with interest and upon the terms and conditions described therein, which note evidences an additional loan to be made by Lender to owner under the terms and conditions described therein, which note evidences as additional to be made by Lender to owner under the terms and provisions of, and secured by, said deed of trust in favor of Lender; and WHEREAS, it is a condition precedent to obtaining said loan that said deed of trust last above mentioned shall unconditionally be and remain at all times a lien or charge upon the land hereinbefore described, prior and superior to the lien or charge of the deed of trust first above mentioned; and Pagel U4 WHEREAS, Lender is willing to make said loan provided the deed of trust securing the same is a lien or charge upon the above described property prior and superior to the lien or charge of the deed of trust first above mentioned and provided that Beneficiary will specifically and unconditionally subordinate the lien or charge of the deed of trust first above mentioned to the lien or charge of the deed of trust in favor of Lender; and WHEREAS, it is to the mutual benefit of the parties hereto that Lender make such loan to Owner; and Beneficiary is willing that the deed of trust securing the same shall, when recorded, constitute a lien or charge upon said land which is unconditionally prior and superior to the lien or charge of the deed of trust above mentioned. NOW, THEREFORE, in consideration of the mutual benefits accruing to the parties hereto and other valuable consideration, the receipt and sufficiency of which consideration is hereby acknowledged, and in order to induce Lender to make the loan above referred to, it is hereby declared, understood and agreed as follows: 1. That said deed of trust securing said note in favor of Lender, and any renewals or extensions thereof, shall unconditionally be and remain at all times a lien or charge on the property therein described, prior and superior to the lien or charge of the deed of trust first above mentioned. 2. That Lender would not make its loan above described without this subordination agreement. 3. That this agreement shall be the whole and only agreement with regard to the subordination of the lien or charge of the deed of trust first above mentioned to the lien or charge of the deed of trust in favor of lender above referred to and shall supersede and cancel, but only insofar as would affect the priority between the deeds of trust hereinbefore specifically described, any prior agreement as to such subordination including, but not limited to, those provisions, if any, contained in the deed of trust first above mentioned, which provide for the subordination of the lien or charge thereof to another deed or deed of trust or to another mortgage or mortgages. Beneficiary declares, agrees and acknowledges that (a) He consents to and approves (i) all provisions of the note and deed of trust in favor of Lender above referred to, and (ii) all agreements, including but not limited to any loan or escrow agreements, between Owner and Lender for the disbursement of the proceeds of Lender's loan; (b) Lender in making disbursements pursuant to any such agreement is under no obligation or duty to, nor has Lender represented that it will see to the application of such proceeds by the person or persons to whom Lender disburses such proceeds and any application or use of such proceeds for purposes other than those provided for in such agreement or agreements shall not defeat the subordination herein made in whole or in part; (c) He intentionally and unconditionally waives, relinquishes and subordinates the lien or charge of the deed of trust first above mentioned in favor of the lien or charge upon said land of the deed of trust in favor of Lender above referred to and understands that in reliance upon, and in consideration of, this waiver, relinquishment and subordination specific loans and advances are being and will be made and, as part and parcel thereof, specific monetary and other obligations are being and will be entered into which would not be made or entered into but for said reliance upon this waiver, relinquishment and subordination; and NOTICE: THIS SUBORDINATION AGREEMENT CONTAINS A PROVISION WHICH ALLOWS THE PERSON OBLIGATED ON YOUR REAL PROPERTY SECURITY TO OBTAIN A LOAN A PORTION OR WHICH MAY BE EXPENDED FOR OTHER PURPOSES THAN IMPROVEMENT OF THE LAND. Beneficiary Owner La Qunita Redevelopment Agency, a Public Body, Mauka View LLC, a California Limited Liability Company Corporate and Politic By: Executive Director By: The Sorenson Family 2001 Revocable Trust, Managing Member of Mauka View, LLC Page 2 of 4 v Tames S. Sorenson, Trustee of Tbe Smv&bn Family 2WI Trust Subordination Agreement dated April 12, 2W4 Signatures continued~ Magul4kie W. Smrnson, Tru of The Sorenson Family 2001 Trust *signed in counterpart By: The James E. Me Kellar Revocable Living Trost, Msaa&g Member of Msa1Ca View, LLC SIGNED IN COUNTERPART James E. Mc Kellar, Trustee of The James E. Mc Kellar Revocable Living Trust By: The Sharon A. Me Kellar Revocable Living Truss Managing Member of Mao" View LLC SIGNED IN COUNTERPAR1 Sham A. Mc Kellar, Tho tee of The %amn A. Mc Kellar Revocable Living Trust (ALL SIGNATURES MUST BE ACKNOWLEDGED) IT IN NECOM ENOEB THAT, PRM TV ME MCUMN OF 77M SIlEORMAMN AG1RMffNr, 7w PAR= cvNs&zr WrM 7VM ATYURAWn WIMRESP'ECTTFIERET'O. (CLTASUBORDINATION FORM -C") STATE OF CALIFORNIA ) S.S. COUNTY OF R\kKkSIA— } On C 2-G , before: me, o - 'a Notary Public~ in and Ifor said County and State, persomlly appeared S. sermon sad margaerite W. Swenson, personalty known to me (or proved to me on the bans of satisfactory evidence) to be the pmoa(s) whose name(s) is/me subscribed to the within rent and acknowledged tv me that he/she/they executed the same in hiwberltheir authorized capacity(ies) and that by hwber/thew signature(s) on the instnmwnt the petson(s), or g0tntity upon behalf of which the persons} acted, executed the mstneaent. WITNESS Signature r Page 3of4 CHOMAOR CoMbdon #t 1430SU MV6NkJ8C.ow* jw,MyCWn.b0ftAd14.2007 STATE OF CALIFORNIA } ) S.S. COUNTY OF } On , before me, , a Notary Public in and for said County and State, personally appeared , personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. Signature Page 4 of 4 Order No. 1299945 Escrow No. 1-2429 RJ Loam No. 01-12-20568 WHEN RECORDED MAIL TO: La Quanta Redevelopment Agency P.O. Box 1504 La Qunitaa, CA 92253 Attn: Agency Secretary Parcel No. 773-071-017-5 SPACE ABOVE THIS LINE FOR RECORDER'S USE SUBORDINATION AGREEMENT NOTICE: THIS SUBORDINATION AGREEMENT RESULTS IN YOUR SECURITY INTEREST IN THE PROPERTY BECOMING SUBJECT TO AND OF LOWER PRIORITY THAN THE LIEN OF SOME OTHER OR LATER SECURITY INSTRUMENT. THIS AGREEMENT, made this 12th day of April, 2004, by Mauka View LLC, a California Limited Liability Company owner of the land hereinafter described and hereinafter referred to as "Owner", and La Qumita Redevelopment Agency, a Public Body, Corporate And Politic, present owner and holder of the deed of trust and note first hereinafter described and hereinafter referred to as "Beneficiary"; WITNESSETH THAT WHEREAS, La Qunita 34, LLC, a California Limited Liability Company, did on Seppember 13, 2001 , execute a deed of trust to Orange Coast Title Company, a California Corporation, as trustee, covering: Lots 1 to 11 Inclusive In block 126 of Santa Carmeli a at Vaie La Quitnta, Unit No. 14, in the City of La Quitnta, County of Riverside, State of California, as per map recorded in Book 18, Pages 82 and 83 of Maps, in the office of the County Recorder of said county. Exception therefrom those Pordons of Lots 1, 5,6 and 11 Deeded to the County of Riverside, by Documents Recorded March 23,1978 as Instrument No. 55038 and 55039 of Official Records of Riverside County, California to secure a note in the sum of $350,000.00, dated September 139 2001, in favor of La Qumita Redevelopment Ageau►cy, a Public Body, Corporate and Politic, which deed of trust was recorded September 28, 2001, as Instrument Number 01-474253 in, Official Records of said county and is subject and subordinate to the deed of trust next hereinafter described; and WHEREAS, Mm" View LLC, a California Limited Liability Company, did on March 19, 2004, execute a deed of trust to Old Republic Title Company, as trustee, covering said land and securing an indebtedness in the amount of $1,770,000.00, in favor of La Jolla Bank, FSB, hereinafter referred to as "Lender", which deed of trust is recording concurrently herewith , Official Records of said county and provides among other thing that is shall also secure additional loans and advances thereafter made upon the terms and conditions set forth; and WHEREAS, owner has executed, or is about to execute, a note in the amount of $1,770,000.00, dated Mardi 19, 2004 , in favor of Lender, payable with interest and upon the terms and conditions described therein, which note evidences an additional loan to be made by Lender to owner under the terms and conditions described therein, which note evidences as additional to be made by Lender to owner under the terms and provisions of, and secured by, said deed of trust in favor of Lender, and WHEREAS, it is a condition precedent to obtaining said loan that said deed of trust last above mentioned shall unconditionally be and remain at all times alien or charge upon the land hmwibefore described, prior and superior to the lien or charge of the deed of trust first above mentioned; and Page 1 of 4 Saxamistm Awsswent d" APR 11, 2M4 * signed in counterpart p cmdwad Livia` Trust, g�: 7b* JMM L BIc Nk=bw of D V1&*+ LLC K,c�ac, Too of The .lames E Rcvambb Test Dr Mw OW. A. Ie $djw Revue" 1' + �lr6�elaa View LLC A. ,TieofThe Shrwimm AW R9voable Living UNA llrT7�DX OF TR[9 pe�auT10N � ' nW PA1ls� G'QN ? AI�l11v PS IMF -r,& R �XK'M STATE OF HAWAI I couwc Y or HONOLULU } , a Nowy Pabiic April 12 , 2004 bdom m% C a • c , p va ms (�. prcrradta,oa. va to buve of ee•d . ��on jw= g*szftd 0 to WXWA mvaowe t seamoo* do me tbat Mfi wi3eevo•) be ale M= Impachy(ml sW &t by fib 'Wit'} of am Moky urn bdu wrn-ESSmy bwd emu offk1dam. STATE OF AWAI I COUNTY OF HONOLULU } Candace MT Viliarmia '^ April 12 �2004 be�Os+e I ]again y4 me Q. M,cd fwss�d �Y be tllc �(s) i� m � to ibt wider p��(e), ca t� � q, v+�k. d ! w'r .df�.�'�i1 wmew mw bad md offlaid 9W. S' Pap 3af4 CERTINCAUON Una the provisions of Government Code~ 27361.71 certify under the penalty of perjury that the following is a trove copy of illegible wording found in the a#whed docmueur Pe t or We. tha page number 0 and wording below): SEE ATTACHED FOR CLARITY Date: � D Signature: ` X� , Subordination Agreement dated April 12, 2004 Signatures continued: Owner Continued By: The James E. Mc Kellar Revocable Living Trust, Managing Member of Mauka View, LLC James E. Mc Kellar, Trustee of The James E. Mc Kellar Revocable Living Trust By: The Sharon A. Mc Kellar Revocable Living Trust, Managing Member of Mauka View LLC Sharon A. Mc Kellar, Trustee of The Sharon A. Mc Kellar Revocable Living Trust (ALL SIGNATURES MUST BE ACKNOWLEDGED) IT IS RECOMMENDED THAT, PRIOR TO THE EXECUTION OF THIS SUBORDINATION AGREEMENT, THE PARTIES CONSULT WITH THEIR ATTORNEYS WITHRESPECT THERETO. (CLTA SUBORDINATION FORM "C") STATE OF } ) S.S. COUNTY OF } On , before me, , a Notary Public in and for said County and State, personally appeared James E. McKellar , personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. Signature STATE OF } ) S.S. COUNTY OF } On , before me, , a Notary Public in and for said County and State, personally appeared Sharon A. McKellar, personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. Signature Page 3 of 4 STATE OF CALIFORNIA } ) S.S. COUNTY OF } On , before me, , a Notary Public in and for said County and State, 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&er/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument WITNESS my hand and official seal. Signature Page 4of4 40 Code 27361.7 I Certify Under Penalty of Perjury That Thy Notary Seal On The Document To Which This Statemeat Is Attached Rea& As Follows; Name of Notary: _L,,�.. Comm'&8'on Na; -Zg-2,11 q5--,q Date Commission Expires: --------------- By Government. Code 27361.7 I Certify Under Penalty of Perjury That The Notary Seal On The Document To Which This Statement Is Attached Reads As Follows: Name of Notary:Off r ef ,QLr. _!J L . 79& 15�2 if Commission No: 111,41 Date Commission Expires: County: nA)C4 ,tL C.c, By Date: THIRD AMENDMENT TO AFFORDABLE HOUSING REHABILITATION AGREEMENT This THIRD AMENDMENT TO AFFORDABLE HOUSING REHABILITATION AGREEMENT ("Third Amendment") is entered into as of this 7th day of February, 2006, by and between the LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic ("Agency"), and MAUKA VIEW, LLC, a California limited liability company ("Participant"). RECITALS A. Agency and Participant are parties to that certain Affordable Housing Rehabilitation Agreement dated September 13, 2001, as amended by that certain First Amendment to Affordable Housing Rehabilitation Agreement dated December 17, 2002, and that certain Second Amendment to Affordable Housing Rehabilitation Agreement dated April 7, 2004 (collectively, the "Existing Housing Agreement"). B. The Existing Housing Agreement provides for Participant, with certain financial assistance provided by Agency from Agency's Low and Moderate Income Housing Fund, to rehabilitate that certain real property more particularly described therein as the "Site." In consideration for Agency's provision of financial assistance to Participant, Participant is required to restrict fourteen (14) of the rental units on the Site to occupancy by moderate income households at an affordable rent. C. Participant and Agency desire to enter into this Third Amendment to (i) provide for the release a portion of the Site from the Existing Housing Agreement and certain other related agreements, (ii) modify the improvements Participant is required to construct and install on the Site, and (iii) provide for Agency to periodically forgive portions of the Rehabilitation Loan upon completion of the Project provided no defaults or other events of acceleration have occurred, all on the terms and conditions set forth herein. AGREEMENT Based upon the foregoing Recitals, which are incorporated herein by this reference, and for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged by Agency and Participant, the parties hereto agree as follows: 1. Defined Terms. Any capitalized terms contained in this Third Amendment which are not defined herein shall have the meaning given in the Existing Housing Agreement, unless expressly provided to the contrary. 2. Release of Acquisition Parcels. The Site is comprised of the "Apartment Parcel" which is improved with an apartment complex, and the "Acquisition Parcels" which are unimproved. Agency has agreed, at Participant's request, to release the Acquisition Parcels from the Existing Housing Agreement and from the following additional agreements entered into by Agency and Participant or Participant's predecessor and recorded against the Site pursuant to the Existing Housing Agreement (collectively, the "Additional Housing Agreements"): (i) the 538/015610-0040 660579 03 a01 /23/06 Declaration, which provides for the parcels comprising the Site to be held under common ownership; (ii) the Regulatory Agreement, which places covenants on the use and operation of the Site to ensure that the Site is operated as a rental housing project with fourteen (14) units rented and occupied by moderate income households at affordable rent; (iii) the Agency Deed of Trust securing the obligations under the Agency Note; and (iv) the Memorandum of Assignment and Assumption Agreement, memorializing Participant's assumption of the Existing Housing Agreement and the foregoing agreements from Participant's predecessor. In order to effectuate the release of the Acquisition Parcels from the Existing Housing Agreement, the references in the Existing Housing Agreement to the term "Site" shall be deemed to refer only to the Apartment Parcel. In order to effectuate the release of the Acquisition Parcels from the Additional Housing Agreements, Agency and Participant shall enter into the following agreements: (i) the Amendment to Declaration of Covenants, Conditions, and Restrictions and Agreement to Hold Property as One Parcel in the form attached hereto as Attachment No. 1; (ii) the Amendment to Regulatory Agreement and Declaration of Covenants and Restrictions in the form attached hereto as Attachment No. 2; and (iii) the Partial Reconveyance of Deed of Trust and Partial Termination of Memorandum in the form attached hereto as Attachment No. 3. Concurrently with the execution of this Third Amendment, Participant shall execute and deliver to Agency the foregoing agreements and, Agency shall within ten (10) days thereafter execute and submit said agreements to the Riverside County Recorder's Office to be recorded in the Official Records of Riverside, California. 3. Project; Scone of Development. Agency and Participant have agreed to modify the improvements that Participant is required to construct and install. In order to effectuate this modification, the Scope of Development attached to the Existing Housing Agreement as Exhibit "C" is hereby replaced with Exhibit "C" (revised) attached to this Third Amendment as Attachment No. 4, and all references in the Existing Housing Agreement to the term "Project" shall be deemed to refer to the installation and construction of the improvements described in said revised exhibit. Notwithstanding any provision in the Existing Housing Agreement to the contrary, Participant shall complete the Project no later than December 31, 2006. 4. Rehabilitation Loan. 4.1 Use of Rehabilitation Loan. Participant shall be permitted to use the Rehabilitation Loan proceeds only for the improvements set forth in the Scope of Development attached to this Third Amendment as Attachment No. 4. The maximum amount of Rehabilitation Loan proceeds that may be used for each improvement is set forth in the Project Budget; provided, however, that the Executive Director shall have the authority in his sole and absolute discretion to reallocate the amount of Rehabilitation Loan proceeds that may be used for each improvement if the actual amounts incurred by Participant are different than the cost estimates set forth in the Project Budget. The term "Project Budget" refers to the cost estimates for the Project set forth in Attachment No. 5 to this Third Amendment. The Project Budget may not be materially changed without the prior written approval of the Executive Director (a material change is a change that causes the total Project costs to increase or decrease from what is shown in the Project Budget, or that causes any of the line items in the Project Budget to 538/015610-0040 660579.03 a01/23/06 -2- increase or decrease by more than 5%). If the total Project costs are less than the Rehabilitation Loan, the Executive Director shall have the authority to approve additional improvements to the Apartment Parcel for which the Rehabilitation Loan may be used, with the understanding, however, that Participant shall have no right to expect that Agency will approve any such additional improvements for which the Rehabilitation Loan may be used. Prior to the date of this Third Amendment, Agency disbursed a portion of the Rehabilitation Loan in the amount of Two Hundred Five Thousand Five Hundred Seventy -One Dollars ($205,571) to Participant and Participant's predecessor for the acquisition and rehabilitation of the Acquisition Parcels ("Acquisition Parcels Disbursed Loan Amount"). Participant has constructed certain improvements on the Apartment Parcel, and agreed to construct certain additional improvements on the Apartment Parcel, which were not required of Participant in the Existing Housing Agreement, which improvements are included in the Scope of Development attached to this Third Amendment as Attachment No. 4. In consideration for Participant's construction of such improvements, Agency has agreed that Participant shall not be required to return the Acquisition Parcels Disbursed Loan Amount to Agency upon the release of the Acquisition Parcels from the Existing Housing Agreement, and that the Acquisition Parcels Disbursed Loan Amount shall instead be allocated to, and deemed to have been disbursed for, the Project improvements made to the Apartment Parcel. 4.2 Forgiveness of Rehabilitation Loan; Modification of Agency Note. The Agency Note provides for the Rehabilitation Loan and accrued interest to be forgiven in its entirety upon the expiration of the term of the Regulatory Agreement provided no defaults or other events of acceleration have occurred. Participant has requested and Agency has agreed to modify the Agency Note to provide for periodic reductions in the amount of the Rehabilitation Loan owing to Agency, such that if an event of acceleration were to occur, Participant would pay to Agency only the portion of the Rehabilitation Loan that had not been forgiven as of the date of the event of acceleration. Concurrently with the execution of this Amendment, Participant shall execute and deliver to Agency the Second Allonge to Note in the form attached hereto as Attachment No. 61 which generally provides for which generally provides for Agency to forgive upon completion of the Project, a portion of the Rehabilitation Loan in the amount of Fifty -Eight Thousand Three Hundred Thirty -Three Dollars ($58,333) plus all interest accrued on the entire Rehabilitation Loan, and to forgive each year thereafter a portion of the Rehabilitation Loan in the amount of Eleven Thousand and Sixty -Seven Dollars ($11,067) plus all accrued interest. Concurrently with the execution of this Third Amendment, Participant shall execute and deliver to Agency the Second Allonge to Note and, within ten (10) days thereafter, Agency shall execute the Second Allonge to Note and affix the Second Allonge to Note to the Agency Note and it shall be made a part thereof. 5. Full Force and Effect: Conflicts. Except as expressly set forth in this Third Amendment, all terms, conditions, and provisions of the Existing Housing Agreement shall remain in full force and effect. If there is a conflict between the provisions of this Third Amendment and the provisions of the Existing Housing Agreement, the provisions of this Third Amendment shall control. 538/015610-0040 660579 03 a01/23/06 -3- 6. Execution and Counterparts. This Third Amendment may be executed in several counterparts, and all so executed shall constitute one agreement binding on both parties hereto, notwithstanding that both parties are not signatories to the original or the same counterpart 7. Attachments. The following exhibits are attached to this Third Amendment and made a part hereof: Attachment No. 1 Amendment to Declaration of Covenants, Conditions, and Restrictions and Agreement to Hold Property as One Parcel Attachment No. 2 Amendment to Regulatory Agreement and Declaration of Covenants and Conditions Attachment No. 3 Partial Reconveyance of Deed of Trust and Partial Release of Memorandum Attachment No. 4 Scope of Development Attachment No. 5 Project Budget Attachment No. 6 Second Allonge to Note [signatures on next page] 538/015610-0040 660579.03 a01/23/06 -4- IN WITNESS WHEREOF, Agency and Participant have entered into this Third Amendment as of the date first set forth above. ATTEST: bo w(L-��Ac n9 Agency Secretary APPROVED AS TO FORM: RUTAN & TUCKER, LLP Attojiidys for the La Quinta Redevelopment Agency "AGENCY" LA QUINTA REDEVELOPME AGENCY, a pubod,corporate atldlp Executive Director "PARTICIPANT" MAUKA VIEW, LLC, a California limited liability company By 147 ......i b ames S. Srenson, on of the Sorenson Family 2001 Revocable Trust, Member 538/015610-0040 660579 03 a01/23/06 -5- ATTACHMENT NO. 1 AMENDMENT TO DECLARATION OF COVENANTS, CONDITIONS, AND RESTRICTIONS AND AGREEMENT TO HOLD PROPERTY AS ONE PARCEL [Attached] 538/015610-0040 660579 03 a0l/23/06 RECORDED AT THE REQUEST OF AND WHEN RECORDED RETURN TO: La Quinta Redevelopment Agency 78-495 Calle Tampico La Quinta, CA 92253 Attn: Agency Secretary (SPACE ABOVE FOR RECORDER'S USE) This Amendment to Declaration of Covenants, Conditions and Restrictions and Agreement to Hold Property as One Parcel is recorded at the request and for the benefit of the La Quinta Redevelopment Agency and is exempt from the payment of a recording fee pursuant to Government Code Section 27383. AMENDMENT TO DECLARATION OF COVENANTS, CONDITIONS, AND RESTRICTIONS AND AGREEMENT TO HOLD PROPERTY AS ONE PARCEL This AMENDMENT TO DECLARATION OF COVENANTS, CONDITIONS, AND RESTRICTIONS AND AGREEMENT TO HOLD PROPERTY AS ONE PARCEL ("Amendment") is entered into as of this / 5 7j' day of /191/-W—d , 2006, by and between the LA QUINTA REDEVELOPMENT AGENCY, a public b dy, corporate and politic ("Agency"), and MAUKA VIEW, LLC, a California limited liability company ("Declarant"). RECITALS A. Agency and Declarant are parties to that certain Declaration of Covenants, Conditions, and Restrictions and Agreement to Hold Property as One Parcel dated September 13, 2001, recorded on September 28, 2001, as Instrument Number 2001-474255 in the Official Records of Riverside County, California ("Original Declaration"), relating to that certain real property located in the City of La Quinta, County of Riverside, State of California, more particularly described therein as the "Property." The Original Declaration provides for the parcels comprising the Property to be held under common ownership. B. Declarant and Agency desire to amend the Original Declaration to provide for the release of certain parcels from the Original Declaration, on the terms set forth herein. AGREEMENT NOW, THEREFORE, in consideration of the foregoing Recitals and for good and valuable consideration, the receipt and sufficiency of which is acknowledged by Agency and Declarant, the parties hereto agree as follows: 1. Release of Portion of Property from Declaration. Agency and Declarant hereby release the following portion of the Property ("Released Parcels") from the terms and conditions 538/015610-0040 660579.03 a01/23/06 -1- of the Original Declaration and agree that the Original Declaration shall no longer constitute an encumbrance upon title to the Released Parcels: Lots 6 and 7 in Block 125 of Santa Carmelita at Vale La Quints Unit No. 14, as shown by map recorded in Book 18, Page 82 of Maps, Records of Riverside County, California. In connection with the foregoing, all references to the term "Property" in the Original Declaration shall be deemed to refer only to the remainder of the Property, which is described below, and such remainder property shall continue to be subject to the terms and conditions of the Original Declaration, as amended by this Amendment, including without limitation the requirement that the parcels be held under common ownership: Lots 1 to 11 inclusive in Block 126 of Santa Carmelita at Vale La Quinta, Unit No. 14, in the City of La Quinta, County of Riverside, State of California, as per Map recorded in Book 18 Pages 82 and 83 of Maps, in the Office of the County Recorder of said County. Exception therefrom those portions of Lots 1, 5, 6 and 11, deeded to the County of Riverside, by documents recorded March 23, 1978 as Instrument Nos. 55038 and 55039 of Official Records of Riverside County, California. 2. Full Force and Effect: Conflicts. Except as expressly set forth in this Amendment, all terms, conditions, and provisions of the Original Declaration shall remain in full force and effect. If there is a conflict between the provisions of this Amendment and the provisions of the Original Declaration, the provisions of this Amendment shall control. 3. Execution in Counterparts. This Amendment may be executed in several counterparts, and all so executed shall constitute one agreement binding on both parties hereto, notwithstanding that both parties are not signatories to the original or the same counterpart. [signatures on next page] 538/015610-0040 660579 03 a01/23/06 -2- IN WITNESS WHEREOF, Agency and Declarant have entered into this Amendment as of the date first set forth above. ATTEST: Agency Secretary APPROVED AS TO FORM: RUTAN & TUCKER, LLP Attorn for e La Quinta Rede elopment Agency "AGENCY" LA QUINTA REDEVELOPMENT AGENCY, a pub dy, rporate and /politic 3y: Z, Executive Director "DECLARANT" MAUKA VIEW, LLC, a California limited liability company / By: ames S. Sorenson, on behalf of the Sorenson Family 2001 Revocable Trust, Member 538/015610-0040 660579.03 a0123/06 -3- State of California County of Riverside On February 8, 2006 before me, Phyllis Manley, Notary Public, personally appeared James S. Sorenson, personally known to me to be the person whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his authorized capacity, and that by his signature on the instrument the person or the entity upon behalf of which the person acted, executed the instrument. WITNESS my hand and official seal. (Seal) 61, s% , • 46 WE STATE OF CALIFORNIA ) COUNTY OF RIVERSIDE ► ss. CITY OF LA QUINTA ► On February 13, 2006 1 before me, Regenia Hensley, Notary Public, personally appeared THOMAS P. GENOVESE, personally known to me to be the person whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his authorized capacity, and that by his signature on the instrument the person or the entity upon behalf of which the person acted, executed the instrument. WITNESS my hand and official seal REG IA HENSLEY Not ry Public Commission # 1521423 Expiration: October 23, 2008 (Seal) ATTACHMENT NO. 2 AMENDMENT TO REGULATORY AGREEMENT AND DECLARATION OF COVENANTS AND RESTRICTIONS [Attached] 538/015610-0040 660579.03 e01/23/06 RECORDED AT THE REQUEST OF AND WHEN RECORDED RETURN TO: La Quinta Redevelopment Agency 78-495 Calle Tampico La Quinta, CA 92253 Attn: Agency Secretary (SPACE ABOVE FOR RECORDER'S USE) This Amendment to Regulatory Agreement and Declaration of Covenants and Restrictions is recorded at the request and for the benefit of the La Quinta Redevelopment Agency and is exempt from the payment of a recording fee pursuant to Government Code Section 27383. AMENDMENT TO REGULATORY AGREEMENT AND DECLARATION OF COVENANTS AND RESTRICTIONS This AMENDMENT TO REGULATORY AGREEMENT AND DECLARATION OF COVENANTS AND RESTRICTIONS ("Amendment") is entered into as of this /��day of rtl� 2006, by and between the LA QUINTA REDEVELOPMENT AGENCY, a pu lic body, corporate and politic ("Agency"), and MAUKA VIEW, LLC, a California limited liability company ("Participant"). RECITALS A. Agency and Participant are parties to that certain Regulatory Agreement and Declaration of Covenants and Restrictions dated September 13, 2001, recorded on September 28, 2001, as Instrument No. 2001-474254 in the Official Records of Riverside, California, which places covenants on the use and operation of that certain real property more particularly described therein as the "Site" providing for the Site to be operated as a rental housing project with fourteen (14) units rented to moderate income households at an affordable rent ("Original Regulatory Agreement"). B. Participant and Agency desire to amend the Original Regulatory Agreement to provide for the release of certain parcels from the Original Regulatory Agreement, on the terns set forth herein. AGREEMENT NOW, THEREFORE, in consideration of the foregoing Recitals and for good and valuable consideration, the receipt and sufficiency of which is acknowledged by Agency and Participant, the parties hereto agree as follows: 1. Defined Terms. Unless expressly provided to the contrary, any capitalized terms contained in this Amendment which are not defined herein shall have the meaning given in the Original Regulatory Agreement. 538/015610-0040 660579 03 a01/23/06 -1- 2. Release of Portion of Site from Regulatory Agreement Agency and Participant hereby release the following portion of the Site ("Released Parcels") from the terms and conditions of the Original Regulatory Agreement and agree that the Original Regulatory Agreement shall no longer constitute an encumbrance upon title to the Released Parcels: Lots 6 and 7 in Block 125 of Santa Carmelita at Vale La Quinta Unit No. 14, as shown by map recorded in Book 18, Page 82 of Maps, Records of Riverside County, California. In connection with the foregoing, all references to the term "Site" in the Original Regulatory Agreement shall be deemed to refer only to the remainder of the Site, which is described below ("Remainder Parcels"): Lots 1 to 11 inclusive in Block 126 of Santa Carmelita at Vale La Quinta, Unit No. 14, in the City of La Quinta, County of Riverside, State of California, as per Map recorded in Book 18 Pages 82 and 83 of Maps, in the Office of the County Recorder of said County. Exception therefrom those portions of Lots 1, 5, 6 and 11, deeded to the County of Riverside, by documents recorded March 23, 1978 as Instrument Nos. 55038 and 55039 of Official Records of Riverside County, California. Participant acknowledges and agrees that all fourteen (14) Restricted Units shall be located on the Remainder Parcels. 3. Term. Agency and Participant desire to modify the Original Regulatory Agreement to provide for the term to expire on the date that is thirty (30) years after the recordation of the Original Regulatory Agreement. hi order to effectuate this modification, the words "the Release of Covenants for the Site in accordance with the AHRA" in the paragraph immediately preceding Section I of the Original Regulatory Agreement is hereby modified to read "this Agreement ...." 4. Agency Agreements. The references to the Agency Agreements in the Original Agreement shall be deemed to include all existing and future amendments to said agreements. 5. Full Force and Effect; Conflicts. Except as expressly set forth in this Amendment, all terns, conditions, and provisions of the Original Regulatory Agreement shall remain in full force and effect. If there is a conflict between the provisions of this Amendment and the provisions of the Original Regulatory Agreement, the provisions of this Amendment shall control. 6. Execution in Counterparts. This Amendment may be executed in several counterparts, and all so executed shall constitute one agreement binding on both parties hereto, notwithstanding that both parties are not signatories to the original or the same counterpart. [signatures on next page] 5381015610-0040 660579.03 a0123/06 -2- IN WITNESS WHEREOF, Agency and Participant have entered into this Amendment as of the date first set forth above. ATTEST: Agency Secretary APPROVED AS TO FORM: RUTAN & TUCKER LLP Attome for e La Quinta dev op Rement Agency "AGENCY" LA QUINTA REDEVELOPMENT AGENCY, a pub ' orporate and po tic By: t Executive Director "PARTICIPANT" MAUKA VIEW, LLC, a California limited liability company By: I l o.� mes S. Sorenson, on behalf of the Sorenson Family 2001 Revocable Trust, Member 538/015610-0040 660579 03 a01/23/06 -3- State of California County of Riverside On February 8, 2006 before me, Phyllis Manley, Notary Public, personally appeared James S. Sorenson, personally known to me to be the person whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his authorized capacity, and that by his signature on the instrument the person or the entity upon behalf of which the person acted, executed the instrument. WITNESS my hand and official seal. (Seal) PHYWS MA UU Y 9Comrnksbn t 139T i Notosy PrWc - CCot b s RNerside County 1MyCorrml!e�16,2MI STATE OF CAL►FORNIA ) COUNTY OF RIVERSIDE ) ss. CITY OF LA QUINTA ► On February 13, 2006 before me, Regenia Hensley, Notary Public, personally appeared THOMAS P. GENOVESE, personally known to me to be the person whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his authorized capacity, and that by his signature on the instrument the person or the entity upon behalf of which the person acted, executed the instrument. WITNESS my hand and official seal REG A HENSLEY Notary Public Commission # 1521423 Expiration: October 23, 2008 (Seal) ATTACHMENT NO. 3 PARTIAL RECONVEYANCE OF DEED OF TRUST AND PARTIAL RELEASE OF MEMORANDUM [Attached] 538/015610-W40 660579 03 a0l/23/06 RECORDED AT THE REQUEST OF AND WHEN RECORDED RETURN TO: La Quinta Redevelopment Agency 78-495 Calle Tampico La Quinta, CA 92253 Attn: Agency Secretary Space above this line for Recorder's use This Partial Reconveyance of Deed of Trust and Partial Release of Memorandum is recorded at the request and for the benefit of the La Quinta Redevelopment Agency and is exempt from the payment of a recording fee pursuant to Government Code Section 27383. PARTIAL RECONVEYANCE OF DEED OF TRUST AND PARTIAL RELEASE OF MEMORANDUM This PARTIAL RECONVEYANCE OF DEED OF TRUST AND PARTIAL RELEASE OF MEMORANDUM ("Partial Reconveyance") is entered into as of this / 3 day of e 2006, by and between the LA QUINTA REDEVELOPMENT AGENCY, a pti6lic body, corporate and politic ("Agency"), and MAUKA VIEW, LLC, a California limited liability company ("Owner"). RECITALS A. Owner is the owner of that certain real property located in the City of La Quinta, County of Riverside, State of California, more particularly described in Exhibit "A" attached hereto ("Released Parcels") and Exhibit `B" attached hereto ("Remainder Parcels"). The Remainder Parcels and the Released Parcels are collectively referred to herein as the "Site." B. Owner is the trustor, Agency is the beneficiary, and Orange Coast Title Company is the trustee, of that certain Deed of Trust With Assignment of Rents and Rider Attached Hereto dated September 13, 2001, recorded against the Site on September 28, 2001, as Instrument No. 2001-474253 in the Official Records of Riverside County, California, as modified by that certain Modification of Deed of Trust recorded against the Site on April 23, 2004, as Instrument No. 2004-301360 in the Official Records of Riverside County, California (collectively, the "Agency Deed of Trust"). C. On or about April 7, 2004, Agency and Owner entered into that certain Memorandum of Assignment and Assumption Agreement ("Memorandum") recorded on April 23, 2004, as Instrument Number 2004-301361 in the Official Records of Riverside County, California, memorializing Owner's assumption of certain agreements relating to the Site, including the Agency Deed of Trust. D. Agency and Owner have agreed to reconvey the Agency Deed of Trust as to the Released Parcels and to release the Released Parcels from the Memorandum. 538/015610-0040 660579 03 a01/23/06 NOW, THEREFORE, Agency and Owner hereby agrees as follows: 1. Partial Reconveyance of Agency Deed of Trust. Effective upon the recordation of this Partial Reconveyance, Agency, as the current beneficiary and owner and holder of the Agency Deed of Trust hereby substitutes Agency as trustee under the Agency Deed of Trust, and Agency hereby accepts said appointment as trustee under the Agency Deed of Trust and, as successor trustee, pursuant to the request of said owner and holder and in accordance with the provisions of the Agency Deed of Trust, does hereby reconvey to the person or persons legally entitled thereto, all the estate, title and interest now held by it under the Agency Deed of Trust in and to the Released Parcels, being a portion of the premises described in the Agency Deed of Trust. Owner acknowledges and agrees that the foregoing reconveyance is a partial reconveyance and that nothing herein is intended or shall be construed to reconvey the Agency Deed of Trust as to the Remainder Parcels. 2. Release of Memorandum from Released Parcels. Effective upon the recordation of this Partial Reconveyance, the Released Parcels shall be released from the Memorandum and the Memorandum shall be removed as an encumbrance upon title to the Released Parcels. Owner acknowledges and agrees that the nothing herein is intended or shall be construed to release the Remainder Parcels from the Memorandum. [signatures on next page] 538/015610-0040 660579 03 a01/23/06 -2- IN WITNESS WHEREOF, Agency and Owner have entered into this Partial Reconveyance as of the date set forth above. ATTEST: Agency Secretary APPROVED AS TO FORM: RUTAN & TUCKER, L' Attorney or the a Quinta Redev opment Agency "AGENCY" LA QUINTA REDEVELOPMENT AGENCY, a pub j y, c rporate and BY: Executive Director "OWNER" MAUKA VIEW, LLC, a California limited liability company By:�--�i Ames S. Sorenson, on behalf of the Sorenson Family 2001 Revocable Trust, Member 539/015610-0040 660579 03 a01/23/06 -3- EXHIBIT "A" TO PARTIAL RECONVEYANCE LEGAL DESCRIPTION OF RELEASED PARCELS That certain property located in the City of La Quinta, County of Riverside, State of California, described as follows: LOTS 6 AND 7 IN BLOCK 125 OF SANTA CARMELITA AT VALE LA QUINTA UNIT NO. 14, AS SHOWN BY MAP RECORDED IN BOOK 18, PAGE 82 OF MAPS, RECORDS OF RIVERSIDE COUNTY, CALIFORNIA. 538/015610-0040 660579.03 a01/23/06 EXHIBIT "B" TO PARTIAL RECONVEYANCE LEGAL DESCRIPTION OF REMAINDER PARCELS That certain property located in the City of La Quinta, County of Riverside, State of California, described as follows: LOTS 1 TO 11 INCLUSIVE IN BLOCK 126 OF SANTA CARMELITA AT VALE LA QUINTA, UNIT NO. 14, IN THE CITY OF LA QUINTA, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 18 PAGES 82 AND 83 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY. EXCEPTION THEREFROM THOSE PORTIONS OF LOTS 1, 5, 6 AND 11, DEEDED TO THE COUNTY OF RIVERSIDE, BY DOCUMENTS RECORDED MARCH 23, 1978 AS INSTRUMENT NOS. 55038 AND 55039 OF OFFICIAL RECORDS OF RIVERSIDE COUNTY, CALIFORNIA. 538/015610-0040 660579 03 a01/23/06 State of California County of Riverside On February 8, 2006 before me, Phyllis Manley, Notary Public, personally appeared James S. Sorenson, personally known to me to be the person whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his authorized capacity, and that by his signature on the instrument the person or the entity upon behalf of which the person acted, executed the instrument. 'ITITTIESS my hand and. MTLu 'Iii3':� : • STATE OF CALIFORNIA ► COUNTY OF RIVERSIDE ) ss. CITY OF LA QUINTA ► On February 13, 2006 before me, Regenia Hensley, Notary Public, personally appeared THOMAS P. GENOVESE, personally known to me to be the person whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his authorized capacity, and that by his signature on the instrument the person or the entity upon behalf of which the person acted, executed the instrument. WITNESS my hand and official seal REG A HENSLEY Notary Public Commission # 1521423 Expiration: October 23, 2008 (Seal) ATTACHMENT NO.4 Exhibit "C" (revised) SCOPE OF DEVELOPMENT IMPROVEMENTS COMPLETED NOT COMPLETED Install21 carports X Pave parking lot X Install patio enclosures in 26 units X Install Spanish tile on roof X Install shower valves in 36 tubs/showers X Painting prep, fix roof drains and drainage X Install new carpet in 6 units X Replace 17 air conditioning units 13 units 4 units Refurbish tubs/showers in 26 units 20 units 6 units Ceramic tile kitchens and bathrooms in 26 units 10 units 16 units Paint inside of 26 units 22 units 4 units Paint outside of building X Participant acknowledges and agrees that it is required to construct and install the foregoing improvements whether or not the amount of the Rehabilitation Loan is sufficient to pay for the costs of the improvements. 538/015610-0040 660579 03 a01/23/06 ATTACHMENT NO. 5 PROJECT BUDGET IMPROVEMENT BUDGET COMPLETED COST BUDGET REMAINING CompletedImprovements Install 21 carports $22,743 $22,743 $0 Pave parking lot $27,528 $27,528 $0 Install patio enclosures in 26 units $19,000 $19,000 $0 Install Spanish tile on roof $29,000 $29,000 $0 Install shower valves in 36 tubs/showers $16,213 $16,213 $0 Painting prep, fix roof drains and drainage $29,276 $29,276 $0 Install new carpet in 6 units $8,955 $8,955 $0 Improvementsbe-Completed Replace 17 air conditioning units $63,500 $48,218 $15,282 Refurbish tubs/showers in 26 units $13,200 $9,223 $3,977 Ceramic tile kitchens and bathrooms in 26 units $31,200 $13,583 $17,617 Paint inside of 26 units $22,000 $16,341 $5,659 Paint outside of building $49,885 $0 $49,885 Management Fee 5% Project Management Fee $17,500 $12,600 $4,900 Total Estimated Costs $350,000 $252,680 $97,320 Agency has approved the costs listed in the "Completed Cost' column set forth above which total $252,680. No later than ten days after the date of the Third Amendment to Affordable Housing Rehabilitation Agreement, Agency shall reimburse Participant an amount equal to $47,109 for the completed work (the difference between $252,680 and the $205,571 Agency Rehabilitation Loan amount previously disbursed by Agency). Disbursements of the balance of 538/015610-0040 660579.03 a01/23/06 the Rehabilitation Loan shall be made in accordance with the Disbursement Procedures set forth in the Existing Housing Agreement. 538/015610-0040 660519.03 a01/23/06 -2- ATTACHMENT NO. 6 SECOND ALLONGE TO NOTE [Attached] 538/015610-0040 660579 03 a01/23/06 -3- SECOND ALLONGE TO NOTE This SECOND ALLONGE TO NOTE ("Second Allonge") is affixed to and forms a part of that certain Note dated September 13, 2001 and the Allonge to Note dated April 23, 2004, attached thereto (collectively, the "Note"), in the original principal amount of Three Hundred Fifty Thousand Dollars ($350,000), issued by La Quinta 34 LLC, a California limited liability company ("Original Maker"), whose interest under the Note was assigned to Mauka View, LLC, a California limited liability company ("Maker"), and payable to the La Quinta Redevelopment Agency ("Holder"). The Note is hereby endorsed and modified as follows: (a) Provided Maker is not otherwise in default of the Note or any of the Agency Agreements, upon completion of the Project, Agency shall forgive a portion of the Note Amount in the amount of Fifty -Eight Thousand Three Hundred Thirty -Three Dollars ($58,333) plus all interest accrued on the Note Amount as of that date. Provided Maker is not otherwise in default of the Note or any of the Agency Agreements, commencing on September 13, 2007, and on each one year anniversary thereafter, a portion of the Note Amount in the amount of Eleven Thousand Sixty -Seven Dollars ($11,067) plus all accrued interest on the Note Amount shall be forgiven. If any of the events of acceleration described in Paragraph 4 of the Note occur and Holder accelerates the Note, the Note Amount payable by Maker shall not include the amounts that were forgiven prior to date the event of acceleration occurred. (b) All references in the Note to the AHRA, the Agency Deed of Trust, the Agency Regulatory Agreement, and the Declaration shall be deemed to refer to such agreements as they may be amended from time to time. Except as expressly modified by this Second Allonge to Note, the Note shall remain unmodified and in full force and effect. [signatures on next page] 538/015610-0040 660579.03 a01/23/06 IN WITNESS WHEREOF, this Second Allonge to Note has been entered into as of this day of,�e, 2006. 95j/\:4�17ti MAUKA VIEW, LLC, a California limited liability company By: ames S. Sorenson, on behalf of the Sorenson Family 2001 Revocable Trust, Member "HOLDER' LA QUINTA REDEVELOPMENT AGENCY, a p dy orporate and politic p/o By: �r�SGkz Cs< Executive Director ATTEST: Agency Secretary APPROVED AS TO FORM: RUTAN & TUCKER LLP Atto y for the La Quinta Red opment Agency 538/015610-0040 660579.03 a01/23/06 -2- Document comparison done by DeltaView on Monday, January 23, 2006 09:07:51 Input: Document 1 cdocs://docsl/660579/2 Document 2 cdocs://docsl/660579/3 Rendering set IStandard Legend: Insertion Moved to Style change Format change Inserted cell Deleted cell Moved cell Split/Merged cell Padding cell Statistics: Count Insertions 57 Deletions 51 Moved from 0 Moved to 0 Style change 0 Format changed 1 0 Total changes 108 PLEASE COMPLETE THIS INFORMATION RECORDING REQUESTED BY: JUNE S. GREEK, City Clerk AND WHEN RECORDED MAIL TO: CITY OF LA QUINTA Attn: June Greek P. O. Box 1504 La Quinta, CA 92247-1504 DOO # 006-0141068 02/28/2006 08:00A Fee:NC Page 1 of 6 Recorded in Official Records County of Riverside Larry W. Ward Assessor, County Clerk & Recorder I 111 l I M S U PAGE SIZE DA PCOR NOCOR SMF MISC. A R L COPY LONG REFUND NCHG EXAM AMENDMENT TO REGULATORY AGREEMENT AND DECLARATION OF COVENANTS AND RESTRICTIONS MAUKA VIEW, LLC (Third Amendment) Title of Document THIS AREA FOR RECORDER'S USE ONLY THIS PAGE ADDED TO PROVIDE ADEQUATE SPACE FOR RECORDING INFORMATION RECORDED AT THE REQUEST OF AND WHEN RECORDED RETURN TO: La Quinta Redevelopment Agency 78-495 Calle Tampico La Quinta, CA 92253 Attn: Agency Secretary (SPACE ABOVE FOR RECORDER'S USE) This Amendment to Regulatory Agreement and Declaration of Covenants and Restrictions is recorded at the request and for the benefit of the La Quinta Redevelopment Agency and is exempt from the payment of a recording fee pursuant to Government Code Section 27383. AMENDMENT TO REGULATORY AGREEMENT AND DECLARATION OF COVENANTS AND RESTRICTIONS This AMENDMENT TO REGULATORY AGREEMENT AND DECLARATION OF COVENANTS AND RESTRICTIONS ("Amendment") is entered into as of this day of 2006, by and between the LA QUINTA REDEVELOPMENT AGENCY, a pu lic body, corporate and politic ("Agency"), and MAUKA VIEW, LLC, a California limited liability company ("Participant"). RECITALS A. Agency and Participant are parties to that certain Regulatory Agreement and Declaration of Covenants and Restrictions dated September 13, 2001, recorded on September 28, 2001, as Instrument No. 2001-474254 in the Official Records of Riverside, California, which places covenants on the use and operation of that certain real property more particularly described therein as the "Site" providing for the Site to be operated as a rental housing project with fourteen (14) units rented to moderate income households at an affordable rent ("Original Regulatory Agreement"). B. Participant and Agency desire to amend the Original Regulatory Agreement to provide for the release of certain parcels from the Original Regulatory Agreement, on the terms set forth herein. AGREEMENT NOW, THEREFORE, in consideration of the foregoing Recitals and for good and valuable consideration, the receipt and sufficiency of which is acknowledged by Agency and Participant, the parties hereto agree as follows: 1. Defined Terms. Unless expressly provided to the contrary, any capitalized terms contained in this Amendment which are not defined herein shall have the meaning given in the Original Regulatory Agreement. 538/015610-0040 660579.03 a01 /23/06 -1- 2. Release of Portion of Site from Regulatory Agreement Agency and Participant hereby release the following portion of the Site ("Released Parcels") from the terms and conditions of the Original Regulatory Agreement and agree that the Original Regulatory Agreement shall no longer constitute an encumbrance upon title to the Released Parcels: Lots 6 and 7 in Block 125 of Santa Carmelita at Vale La Quinta Unit No. 14, as shown by map recorded in Book 18, Page 82 of Maps, Records of Riverside County, California. In connection with the foregoing, all references to the term "Site" in the Original Regulatory Agreement shall be deemed to refer only to the remainder of the Site, which is described below ("Remainder Parcels"): Lots 1 to 11 inclusive in Block 126 of Santa Carmelita at Vale La Quinta, Unit No. 14, in the City of La Quinta, County of Riverside, State of California, as per Map recorded in Book 18 Pages 82 and 83 of Maps, in the Office of the County Recorder of said County. Exception therefrom those portions of Lots 1, 5, 6 and 11, deeded to the County of Riverside, by documents recorded March 23, 1978 as Instrument Nos. 55038 and 55039 of Official Records of Riverside County, California. Participant acknowledges and agrees that all fourteen (14) Restricted Units shall be located on the Remainder Parcels. 3. Term. Agency and Participant desire to modify the Original Regulatory Agreement to provide for the term to expire on the date that is thirty (30) years after the recordation of the Original Regulatory Agreement. In order to effectuate this modification, the words "the Release of Covenants for the Site in accordance with the AHRA" in the paragraph immediately preceding Section 1 of the Original Regulatory Agreement is hereby modified to read "this Agreement ...." 4. Agency Agreements. The references to the Agency Agreements in the Original Agreement shall be deemed to include all existing and future amendments to said agreements. 5. Full Force and Effect, Conflicts. Except as expressly set forth in this Amendment, all terms, conditions, and provisions of the Original Regulatory Agreement shall remain in full force and effect. If there is a conflict between the provisions of this Amendment and the provisions of the Original Regulatory Agreement, the provisions of this Amendment shall control. 6. Execution in Counterparts. This Amendment may be executed in several counterparts, and all so executed shall constitute one agreement binding on both parties hereto, notwithstanding that both parties are not signatories to the original or the same counterpart. [signatures on next page] 538/015610-0040 660579.03 a01/23/06 -2- IN WITNESS WHEREOF, Agency and Participant have entered into this Amendment as of the date first set forth above. ATTEST: Y Agency Secretary APPROVED AS TO FORM: RUTAN & TUCKER,, LI,P Atto s for e La Quinta Re opment Agency "AGENCY" LA QUINTA REDEVELOPMENT AGENCY, a p dy corporate and p tic Executive Director "PARTICIPANT" MAUKA VIEW, LLC, a California limited liability company By: Ames S. Sorenson, on behalf of the Sorenson Family 2001 Revocable Trust, Member 538/015610-0040 660579.03 a01/23/06 -3- State of California County of Riverside On February 8, 2006 before me, Phyllis Manley, Notary Public, personally appeared James S. Sorenson, personally known to me to be the person whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his authorized capacity, and that by his signature on the instrument the person or the entity upon behalf of which the person acted, executed the instrument. WITNESS my hand and official seal. (Seal) PHYLLIS MANLEY Cora► # 137M y Notary Public - Ccofornio CAI" Riverside County My Comm. Expires Oct 1 b 2006 STATE OF CALIFORNIA ) COUNTY OF RIVERSIDE ) ss. CITY OF LA QUINTA ) On February 13, 2006 , before me, Regenia Hensley, Notary Public, personally appeared THOMAS P. GENOVESE, personally known to me to be the person whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his authorized capacity, and that by his signature on the instrument the person or the entity upon behalf of which the person acted, executed the instrument. WITNESS my hand and official seal. REG , A HENSLEY Notary Public Commission # 1521423 Expiration: October 23, 2008 (Seal) REGENIA HENStEY Commission # 1521423 ••' Notary Public - CoBforrJo Riverskle County MyCorrm. Expires Oct 23, 2008 PLEASE COMPLETE THIS INFORMATION RECORDING REQUESTED BY: JUNE S. GREEK, City Clerk AND WHEN RECORDED MAIL TO: CITY OF LA QUINTA Attn: June Greek P. 0. Box 1504 La Quinta, CA 92247-1504 DOO # 006-0141069 02/28/2006 08:00A Fee:NC Page 1 of 8 Recorded in Official Records County of Riverside Larry W. Ward Assessor, County Clerk & Recorder I a M S U PAGE SIZE -- DA PCOR NOCOR SMF MISC. ' -- -- A R L COPY LONG REFUND NCHG EXAM PARTIAL RECONVEYANCE OF DEED OF TRUST AND PARTIAL RELEASE OF MEMORANDUM MAUKA VIEW, LLC (Third Amendment) Title of Document THIS AREA FOR RECORDER'S USE ONLY THIS PAGE ADDED TO PROVIDE ADEQUATE SPACE FOR RECORDING INFORMATION CO Lnm, RECORDED AT THE REQUEST OF AND WHEN RECORDED RETURN TO: La Quinta Redevelopment Agency 78-495 Calle Tampico La Quinta, CA 92253 Attn: Agency Secretary Space above this line for Recorder's use only This Partial Reconveyance of Deed of Trust and Partial Release of Memorandum is recorded at the request and for the benefit of the La Quinta Redevelopment Agency and is exempt from the payment of a recording fee pursuant to Government Code Section 27383. PARTIAL RECONVEYANCE OF DEED OF TRUST AND PARTIAL RELEASE OF MEMORANDUM This PARTIAL RECONVEYANCE OF DEED OF TRUST AND PARTIAL RELEASE OF MEMORANDUM ("Partial Reconveyance") is entered into as of this day of r=' ,1 G%, 20069 by and between the LA QUINTA REDEVELOPMENT AGENCY a ub�ic body, corporate and politic ("Agency"), and MAUKA VIEW, LLC, a p Y� � California limited liability company ("Owner"). RECITALS A. Owner is the owner of that certain real property located in the City of La Quinta, County of Riverside, State of California, more particularly described in Exhibit "A" attached hereto ("Released Parcels") and Exhibit "B" attached hereto ("Remainder Parcels"). The Remainder Parcels and the Released Parcels are collectively referred to herein as the "Site." B. Owner is the trustor, Agency is the beneficiary, and Orange Coast Title Company is the trustee, of that certain Deed of Trust With Assignment of Rents and Rider Attached Hereto dated September 13, 2001, recorded against the Site on September 28, 2001, as Instrument No. 2001-474253 in the Official Records of Riverside County, California, as modified by that certain Modification of Deed of Trust recorded against the Site on April 23, 2004, as Instrument No. 2004-301360 in the Official Records of Riverside County, California (collectively, the "Agency Deed of Trust"). C. On or about April 7, 2004, Agency and Owner entered into that certain Memorandum of Assignment and Assumption Agreement ("Memorandum") recorded on April 239 20041 as Instrument Number 2004-301361 in the Official Records of Riverside County, California, memorializing Owner's assumption of certain agreements relating to the Site, including the Agency Deed of Trust. D. Agency and Owner have agreed to reconvey the Agency Deed of Trust as to the Released Parcels and to release the Released Parcels from the Memorandum. 538/015610-0040 660579.03 a01/23/06 NOW, THEREFORE, Agency and Owner hereby agrees as follows: 1. Partial Reconveyance of Agency Deed of Trust. Effective upon the recordation of this Partial Reconveyance, Agency, as the current beneficiary and owner and holder of the Agency Deed of Trust hereby substitutes Agency as trustee under the Agency Deed of Trust, and Agency hereby accepts said appointment as trustee under the Agency Deed of Trust and, as successor trustee, pursuant to the request of said owner and holder and in accordance with the provisions of the Agency Deed of Trust, does hereby reconvey to the person or persons legally entitled thereto, all the estate, title and interest now held by it under the Agency Deed of Trust in and to the Released Parcels, being a portion of the premises described in the Agency Deed of Trust. Owner acknowledges and agrees that the foregoing reconveyance is a partial reconveyance and that nothing herein is intended or shall be construed to reconvey the Agency Deed of Trust as to the Remainder Parcels. 2. Release of Memorandum from Released Parcels. Effective upon the recordation of this Partial Reconveyance, the Released Parcels shall be released from the Memorandum and the Memorandum shall be removed as an encumbrance upon title to the Released Parcels. Owner acknowledges and agrees that the nothing herein is intended or shall be construed to release the Remainder Parcels from the Memorandum. [signatures on next page] 538/015610-0040 660579.03 a01/23/06 2 IN WITNESS WHEREOF, Agency and Owner have entered into this Partial Reconveyance as of the date set forth above. ATTEST: Agency Secretary APPROVED AS TO FORM: RUTAN & TUCKS , LLP Atto s r the La Quinta Red m opent Agency "AGENCY" LA QUINTA REDEVELOPMENT AGENCY, a pub y, orporate and P41t By: C,s f t---�- Executive Director "OWNER" MAUKA VIEW, LLC, a California limited liability company By: Ames S. Sorenson, on behalf of the Sorenson Family 2001 Revocable Trust, Member 538/015610-0040 660579.03 a01/23/06 —3— EXHIBIT "A" TO PARTIAL RECONVEYANCE LEGAL DESCRIPTION OF RELEASED PARCELS That certain property located in the City of La Quinta, County of Riverside, State of California, described as follows: LOTS 6 AND 7 IN BLOCK 125 OF SANTA CARMELITA AT VALE LA QUINTA UNIT NO. 14, AS SHOWN BY MAP RECORDED IN BOOK 18, PAGE 82 OF MAPS, RECORDS OF RIVERSIDE COUNTY, CALIFORNIA. 538/015610-0040 660579.03 a01/23/06 EXHIBIT "B" TO PARTIAL RECONVEYANCE LEGAL DESCRIPTION OF REMAINDER PARCELS That certain property located in the City of La Quinta, County of Riverside, State of California, described as follows: LOTS 1 TO 11 INCLUSIVE IN BLOCK 126 OF SANTA CARMELITA AT VALE LA QUINTA, UNIT NO. 14, IN THE CITY OF LA QUINTA, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 18 PAGES 82 AND 83 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY. EXCEPTION THEREFROM THOSE PORTIONS OF LOTS 1, 5, 6 AND 11, DEEDED TO THE COUNTY OF RIVERSIDE, BY DOCUMENTS RECORDED MARCH 23, 1978 AS INSTRUMENT NOS. 55038 AND 55039 OF OFFICIAL RECORDS OF RIVERSIDE COUNTY, CALIFORNIA. 538/015610-0040 660579.03 a01/23/06 State of California County of Riverside On February 8, 2006 before me, Phyllis Manley, Notary Public, personally appeared James S. Sorenson, personally known to me to be the person whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his authorized capacity, and that by his signature on the instrument the person or the entity upon behalf of which the person acted, executed the instrument. WITNESS my hand and official seal. (Seal) Com PHYLLIS # 3 8908 Notary PUW - Cd"""a Riverside County My Comm. Expkes Oct 16.2006 STATE OF CALIFORNIA COUNTY OF RIVERSIDE ) ss. CITY OF LA QUINTA ) On February 13, 2006 , before me, Regenia Hensley, Notary Public, personally appeared THOMAS P. GENOVESE, personally known to me to be the person whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his authorized capacity, and that by his signature on the instrument the person or the entity upon behalf of which the person acted, executed the instrument. WITNESS my hand and official seal. RE IA HENSLEY Notary Public Commission # 1521423 Expiration: October 23, 2008 (Seal) r,. REGENIA HENSLEY Commission 8 1521423 0ZLm Notory Public C4fornla Riverside County My CMM. EXPkes Get 23, 2008 PLEASE COMPLETE THIS INFORMATION RECORDING REQUESTED BY: JUNE S. GREEK, City Clerk AND WHEN RECORDED MAIL TO: CITY OF LA QUINTA Attn: June Greek P. 0. Box 1504 La Quinta, CA 92247-1504 DOO # 006-01410 0 02/28/2006 08:00A Fee:NC Page 1 of 6 Recorded in Official Records County of Riverside Larry W. Ward Assessor, County Clerk & Recorder M S U PAGE SIZE DA PCOR NOCOR SMF MISC. I / A R L COPY LONG REFUND NCHG EXAM AMENDMENT TO DECLARATION OF COVENANTS, CONDITIONS, AND RESTRICTIONS /j� AND AGREEMENT TO HOLD PROPERTY AS ON PARCEL MAUKA VIEW, LLC (Third Amendment) -!Mn Title of Document THIS AREA FOR RECORDER'S USE ONLY THIS PAGE ADDED TO PROVIDE ADEQUATE SPACE FOR RECORDING INFORMATION RECORDED AT THE REQUEST OF AND WHEN RECORDED RETURN TO: La Quinta Redevelopment Agency 78-495 Calle Tampico La Quinta, CA 92253 Attn: Agency Secretary (SPACE ABOVE FOR RECORDER'S USE) This Amendment to Declaration of Covenants, Conditions and Restrictions and Agreement to Hold Property as One Parcel is recorded at the request and for the benefit of the La Quinta Redevelopment Agency and is exempt from the payment of a recording fee pursuant to Government Code Section 27383. AMENDMENT TO DECLARATION OF COVENANTS, CONDITIONS, AND RESTRICTIONS AND AGREEMENT TO HOLD PROPERTY AS ONE PARCEL This AMENDMENT TO DECLARATION OF COVENANTS, CONDITIONS, AND RESTRICTIONS AND AGREEMENT TO HOLD PROPERTY AS ONE PARCEL ("Amendment") is entered into as of this , r=' day of , 2006, by and between the LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic ("Agency"), and MAUKA VIEW, LLC, a California limited liability company ("Declarant"). RECITALS A. Agency and Declarant are parties to that certain Declaration of Covenants, Conditions, and Restrictions and Agreement to Hold Property as One Parcel dated September 13, 2001, recorded on September 28, 2001, as Instrument Number 2001-474255 in the Official Records of Riverside County, California ("Original Declaration"), relating to that certain real property located in the City of La Quinta, County of Riverside, State of California, more particularly described therein as the "Property." The Original Declaration provides for the parcels comprising the Property to be held under common ownership. B. Declarant and Agency desire to amend the Original Declaration to provide for the release of certain parcels from the Original Declaration, on the terms set forth herein. AGREEMENT NOW, THEREFORE, in consideration of the foregoing Recitals and for good and valuable consideration, the receipt and sufficiency of which is acknowledged by Agency and Declarant, the parties hereto agree as follows: 1. Release of Portion of Property from Declaration. Agency and Declarant hereby release the following portion of the Property ("Released Parcels") from the terms and conditions 538/015610-0040 660579.03 a01/23/06 1 of the Original Declaration and agree that the Original Declaration shall no longer constitute an encumbrance upon title to the Released Parcels: Lots 6 and 7 in Block 125 of Santa Carmelita at Vale La Quinta Unit No. 14, as shown by map recorded in Book 18, Page 82 of Maps, Records of Riverside County, California. In connection with the foregoing, all references to the term "Property" in the Original Declaration shall be deemed to refer only to the remainder of the Property, which is described below, and such remainder property shall continue to be subject to the terms and conditions of the Original Declaration, as amended by this Amendment, including without limitation the requirement that the parcels be held under common ownership: Lots 1 to 11 inclusive in Block 126 of Santa Carmelita at Vale La Quinta, Unit No. 14, in the City of La Quinta, County of Riverside, State of California, as per Map recorded in Book 18 Pages 82 and 83 of Maps, in the Office of the County Recorder of said County. Exception therefrom those portions of Lots 1, 5, 6 and 11, deeded to the County of Riverside, by documents recorded March 23, 1978 as Instrument Nos. 55038 and 55039 of Official Records of Riverside County, California. 2. Full Force and Effect; Conflicts. Except as expressly set forth in this Amendment, all terms, conditions, and provisions of the Original Declaration shall remain in full force and effect. If there is a conflict between the provisions of this Amendment and the provisions of the Original Declaration, the provisions of this Amendment shall control. 3. Execution in Counterparts. This Amendment may be executed in several counterparts, and all so executed shall constitute one agreement binding on both parties hereto, notwithstanding that both parties are not signatories to the original or the same counterpart. [signatures on next page] 538/015610-0040 660579.03 a01/23/06 -2- IN WITNESS WHEREOF, Agency and Declarant have entered into this Amendment as of the date first set forth above. ATTEST: Agency Secretary APPROVED ASJO F km: RUTAN &TUCKFR,4 LLP- Attonqsqior the La Quinta Rede pment Agency "AGENCY" LA QUINTA REDEVELOPMENT AGENCY, a pub dy corporate and iti By: Executive Director "DECLARANT" MAUKA VIEW, LLC, a California limited liability company By: L XMes S. Sorenson, on behalf of the Sorenson Family 2001 Revocable Trust, Member 538/015610-0040 660579.03 a01/23/06 State of California County of Riverside On February 8, 2006 before me, Phyllis Manley, Notary Public, personally appeared James S. Sorenson, personally known to me to be the person whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his authorized capacity, and that by his signature on the instrument the person or the entity upon behalf of which the person acted, executed the instrument. WITNESS my hand and official seal. (Seal) STATE OF CALIFORNIA ) COUNTY OF RIVERSIDE ) ss. CITY OF LA QUINTA ) On February 13, 2006 , before me, Regenia Hensley, Notary Public, personally appeared THOMAS P. GENOVESE, personally known to me to be the person whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his authorized capacity, and that by his signature on the instrument the person or the entity upon behalf of which the person acted, executed the instrument. WITNESS my hand and official seal. REG -IA HENSLEY Note ry Public Commission # 1521423 Expiration: October 23, 2008 (Seal) REGENIA HENSLEY Commission # 1521423 Notary Public - Colifornla Riverside County MyC2 . Ev'WSQ0a DOC # 2006-0431954 06/15/2006 08:00A Fee:11.00 Page 1 of 7 r Recorded in Official Records PLEASE COMPLETE THIS INFORMATION RF.0 r1 ��E(� County of Riverside RECORDING REQUESTED BY: .,. Larry W. Ward 200 II�AI Assessor, County Clerk & Recorder JUNE S. GREEK, City Clerk cJL1Y 28 P� � � (i ITY r ,, T 1�111111111111111111111111111111111111111111111111lilt (7� LA CL,1 ! 1A AND WHEN RECORDED MAIL TO: �' �. Ui f it,C CITY OF LA QUINTA Attn: June Greek P. O. Box 1504 La Quinta, CA 92247-1504 M SI U PAGE SIZE DA PCOR NOCOR SMF MISC. A R L COPY LONG 1 REFUND NCHG I EXAM RELEASE OF CONSTRUCTION COVENANTS Mauka View, LLC Title of Document THIS AREA FOR RECORDER'S USE ONLY THIS PAGE ADDED TO PROVIDE ADEQUATE SPACE FOR RECORDING INFORMATION M L Recording Requested By And When Recorded Return To: La Quinta Redevelopment Agency 78-495 Calle Tampico La Quinta„ CA 92253 Attn: Executive Director [NOTE: RECORD AS PARTIAL RELEASE OF AGREEMENT] (Space Above Line for Recorder's Use Only) (Exempt from Recording Fee per Gov. Code 6103) RELEASE OF CONSTRUCTION COVENANTS WHEREAS, MAUKA VIEW, LLC, a California limited liability company, is the owner of fee title to that certain real property legally described in Attachment No. 1 attached hereto (the "Site") and incorporated herein by reference; and WHEREAS, by an Affordable Housing Rehabilitation Agreement (hereinafter referred to as the "Agreement") dated September 13, 2001, by and between Participant's predecessor and the La Quinta Redevelopment Agency, a public body corporate and politic ("Agency"), as amended, Participant has redeveloped and rehabilitated the Site in accordance with the Agreement; and WHEREAS, pursuant to Section 6.5 of the Agreement, promptly after completion of all rehabilitation work by Participant upon the Site, and upon request by Participant, Agency shall furnish Participant with a Release of Construction Covenants in such form as to permit it to be recorded in the Official Records of the County of Riverside; and WHEREAS, the issuance by Agency of the Release of Construction Covenants shall be conclusive evidence that Participant has complied with the terms of the Agreement pertaining to the rehabilitation of the Site; and WHEREAS, Participant has requested that Agency furnish Participant with the Release of Construction Covenants; and WHEREAS, Agency has conclusively determined that the rehabilitation of the Site has been satisfactorily completed as required by the Agreement; NOW, THEREFORE: 1. As provided in the Agreement, Agency does hereby certify that rehabilitation of the Site has been fully and satisfactorily performed and completed, and that such rehabilitation is in full compliance with said Agreement. 538/015610-0040 713411.01 a05/24/06 -1- 2. This Release of Construction Covenants shall not constitute evidence of Participant's compliance with the following agreements, the provisions of which shall continue to run with the land until termination thereof in accordance with the terms thereof- (i) Deed of Trust With Assignment of Rents and Rider Attached Hereto dated September 13, 2001, recorded on September 28, 2001, as Instrument No. 2001-474253 in the Official Records of Riverside County, California ("Official Records"), as modified by that certain Modification of Deed of Trust recorded on April 23, 2004, as Instrument No. 2004- 301360 in the Official Record. (ii) Declaration of Covenants, Conditions, and Restrictions and Agreement to Hold Property as One Parcel dated September 13, 2001, recorded on September 28, 2001, as Instrument Number 2001-474255 in the Official Records, as amended by that certain Amendment to Declaration of Covenants, Conditions, and Restrictions and Agreement to Hold Property as One Parcel dated February 13, 2006, recorded on February 28, 2006, as Instrument Number 2006-0141070 in the Official Records. (iii) Regulatory Agreement and Declaration of Covenants and Restrictions dated September 13, 2001, recorded on September 28, 2001, as Instrument No. 2001-474254 in the Official Records, as amended by that certain Amendment to Regulatory Agreement and Declaration of Covenants and Restrictions dated February 13, 2006, recorded on February 28, 2006, as Instrument Number 2006-0141068 in the Official Records. 3. This Release of Construction Covenants shall not constitute evidence of compliance with or satisfaction of any. obligation of Participant to any holder of a mortgage, or any insurer of a mortgage, securing money loaned to finance construction work on the Site, or any part thereof. 4. This Release of Construction Covenants is not a Notice of Completion as referred to in California Civil Code Section 3093. 5. Except as stated herein, nothing contained in this instrument shall modify in any way any other provisions of the Agreement or any other provisions of any agreements or documents referenced therein. IN WITNESS WHEREOF, Agency has executed this Release of Construction Covenants as of this&o day of IY` , 2006. LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and poli By: Executive Director 538/015610-0040 713411.01 a05/24/06 -2- CONSENT TO RECORDATION MAUKA VIEW, LLC, owner of the fee interest in the real property legally described in Attachment No. 1 hereto, hereby consents to the recordation of the foregoing Release of Construction Covenants against said real property. MAUKA VIEW, LLC, a California limited liability company By: 'Tames S. Sorenson, on behalf of the Sorenson Family 2001 Revocable Trust, Member 538/015610-0040 713411.01 a05/24/06 -3- ATTACHMENT NO. 1 LEGAL DESCRIPTION OF SITE That certain real property located in the City of La Quinta, County of Riverside, State of California, described as follows: LOTS 1 TO 11 INCLUSIVE IN BLOCK 126 OF SANTA CARMELITA AT VALE LA QUINTA, UNIT NO. 14, IN THE CITY OF LA QUINTA, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 18 PAGES 82 AND 83 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY. EXCEPTION THEREFROM THOSE PORTIONS OF LOTS 1, 5, 6 AND 11, DEEDED TO THE COUNTY OF RIVERSIDE, BY DOCUMENTS RECORDED MARCH 23, 1978 AS INSTRUMENT NOS. 55038 AND 55039 OF OFFICIAL RECORDS OF RIVERSIDE COUNTY, CALIFORNIA. 538/015610-0040 713411.01 a05/24/06 CONSENT TO RECORDATION MAUKA VIEW, LLC, owner of the fee interest in the real property legally described in Attachment No. 1 hereto, hereby consents to the recordation of the foregoing Release of Construction Covenants against said real property. MAUKA VIEW, LLC, a California limited liability company By: r ames S. Sorenson, on behalf of the Sorenson Family 2001 Revocable Trust, Member 538/015610-0040 713411.01 a05/24/06 -3- STATE OF CALIFORNIA ) • ) ss. COUNTY OF On V,-*) '52004 before me, appeared 7�fi o n-�a S G -d N'tf,, ' /fib/i a- le- personally personally wn to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/ -aye subscribed to the within instrument and acknowledged to me that he/shekkcy executed the same in his/kek+wir authorized capacity(ies), and that by his/l 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. MSRAok 77 r► HEnrsLEv ' a 15M423Not Public,-:Cffomw County ;E 23,2M STATE OF CALIFORNIA ) ss. COUNTY OF�1-14e-ys I ) On Yo, 3 -Roo0 before me,J�nc. S. -t _�_•�\0 personally appeared Ja.rv%c-5 S. 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. ?'SF.1 -�o .1 — 4) - Not ublic [SEAL] 710—MMYOC -& f ontrrtrNlon R t1477�b NOW P.N*- CaMlbmb omm.EjtG$Jd26 200d 538/015610-0040 713411.01 a05/24/06 —4— 6' DOC # 2014-0451836 ;. RECORDING REQUESTED BY 11/25/2014 03:17 PM Fees: $0.00 FIRST AMERICAN TITLE INSURANCE Co. Page 1 of 7 NNnONAL COMMERCIAL SERVICES Recorded in Official Records County of Riverside Larry W. Ward Recording Requested By Assessor, County Clerk & Recorder And When Recorded Mail To: La Quinta Housing. Authority —This document was electronically submitted to the County of Riverside for recording- 78-495 Calle Tampico Receipted by: MHARTMAN La Quinta, CA 92253 Attn: City Clerk AP N: 773-071-017-5 AILS— 6 93o%.� (Exempt from Recording Fee Per Gov. Code § 6103 and 27383) ASSUMPTION AND CONSENT AGREEMENT This ASSUMPTION AND CONSENT AGREEMENT ("Assumption Agreement"), is made as of November 18, 2014 by and between the LA QUINTA HOUSING AUTHORITY, a public body, corporate and politic ("Authority"), and MIKE KRANTZ, a married man as his sole and separate property ("Krantz"). WITNESSETH: A. Krantz has acquired and now owns fee title to that certain real property located in the City of La Quinta, County of Riverside, State of California described in Exhibit "A" attached hereto and made a part hereof (the "Site"). B. On or about September 13, 2001, the former La Quinta Redevelopment Agency ("Agency"), and La Quinta 34 LLC, a California limited liability company ("LQ34"), entered into that certain Affordable Housing Rehabilitation Agreement, as amended by that certain First Amendment to Affordable Housing Rehabilitation Agreement dated December 17, ' 2002 (collectively, the "Original Housing Agreement"). The Original Housing Agreement provides for LQ34 to rehabilitate that certain real property identified therein as the "Site" (hereinafter, the "Original Site"). C. Pursuant to the Original Housing Agreement, the Agency agreed to provide a loan to LQ34 (the "Agency Loan"). The Agency Loan is evidenced by that certain Note dated September 13, 2001 (the "-Original Note"). The Original Note is secured by that certain Deed of Trust .with Assignment of Rents and Rider Attached Hereto (the °Original Agency Deed of Trust") dated September 13, 2001, and recorded on September 28, 2001, as Instrument No. 2001-474253, . in the Official Records of the County of Riverside (the "Official Records"). D. Pursuant to the Original Housing Agreement, the Agency and LQ34 entered into that certain Regulatory Agreement and Declaration of Covenants and Restrictions dated September 13, 2001, and recorded on September 28, 2001, as Instrument No. 2001-474254, in the Official Records (the "Original Agency Regulatory Agreement"). The Original Agency Regulatory Agreement places covenants on the use and operation of the Original Site to ensure that the Original Site is operated as a 882/015610-0040 7476681.4 al1/18/14 rental housing project with fourteen (14) units to be rented and occupied by moderate income households at affordable rents. E. On or about April 6, 2004, (i) LQ34 assigned its interests in and to the Original Housing Agreement, Original Note, Original Agency Deed of Trust, and Original Agency Regulatory Agreement to Mauka View, LLC, a California limited liability company ("Mauka"); (ii) the Agency and Mauka entered into that certain Second Amendment to Affordable Housing Rehabilitation Agreement (the "Second Amendment to Housing Agreement"); and (iii) Agency and Mauka executed that certain Memorandum of Assignment and Assumption Agreement, which was recorded on April 23, 2004, as Instrument No. 2004-301361, in the Official Records, for purposes of providing record notice to all persons of the assignment described in clause (i) of this Recital E. F. Pursuant to the Second Amendment to Housing Agreement, Mauka and Agency entered into (i) that certain Allonge to Note (the "First Allonge"); and (ii) that certain Modification of Deed of Trust (the "Modification"). The Modification was recorded on April 23, 2004, as Instrument No. 2004-301360, in the Official Records. G. On or about February 7, 2006, Agency and Mauka entered into that certain Third Amendment to Affordable Housing Rehabilitation Agreement (the "Third Amendment to Housing Agreement"), pursuant to which, among other things, the parties agreed to release portions of the Original Site from the Original Housing Agreement, Original Agency Regulatory Agreement, Original Agency Deed of Trust, and Original Memorandum. The portions of the Original Site that were not released by the Third Amendment constitute the Site. H. Pursuant to the Third Amendment to Housing Agreement, Mauka and Agency entered into (i) that certain Amendment to Regulatory Agreement and Declaration of Covenants and Restrictions, releasing the aforementioned released portions of the Original Site from the Original Agency Regulatory Agreement ("Amendment No. 1 to Regulatory Agreement'), and (ii) that certain Second Allonge to Note (the "Second Allonge"). The Amendment No. 1 to Regulatory Agreement was recorded on February 28, 2006, as Instrument No. 2006-0141068, in the Official Records. I. The Original Housing Agreement, as modified by the Second Amendment to Housing Agreement and the Third Amendment to Housing Agreement, is hereinafter referred to as the "Housing Agreement." The Original Agency Regulatory Agreement, as modified by Amendment No. 1 to Regulatory Agreement, is hereinafter referred to as the "Agency Regulatory Agreement". The Original Agency Deed of Trust, as modified by the Modification, is hereinafter referred to as the "Agency Deed of Trust." The Original Note, as modified by the First Allonge and Second Allonge, is hereinafter referred to as the "Note." 882/015610-0040 7476681.4 al1/18/14 2 r =� J. Any capitalized terms contained in this Agreement which are not defined herein shall have the' meaning given in the Housing Agreement, unless expressly provided to the contrary. K. On or about March 8, 2007, Mauka (i) sold the Site to Pat A. Dolce and Lora Dean Dolce, Husband and Wife as Joint Tenants ("Dolce"), and (ii) Dolce assigned all of its interests in and to the Housing Agreement, Note, Agency Deed of Trust, and Agency Regulatory Agreement (collectively, the "Agency Agreements") pursuant to that certain Assignment and Assumption Agreement by and among the Agency, Mauka, and Dolce, which was recorded on March 12, 2007, as Instrument No. 2007-0166709, in the Official Records. L. On June 28, 2011, the Governor signed Assembly Bill 26 ("ABx1 26") and Assembly Bill 27 ("ABx1 27") from the 2011-12 First Extraordinary Session of the California Legislature. ABx1 26 immediately suspended all redevelopment agency activities, except continued performance of "enforceable obligations," and set forth a process to dissolve redevelopment agencies and end redevelopment in California. ABx1 27 provided a "voluntary alternative redevelopment program," which would have allowed redevelopment agencies to remain in existence and continue redevelopment, if remittance payments were made to cover the State of California's budget shortfall for fiscal year 2011-12 and were made in subsequent fiscal years to cover State costs. A lawsuit was filed, challenging the constitutionality of both ABx1 26 and 27. The California Supreme Court upheld the constitutionality of ABx1 26, revising the effective dates of certain provisions, and struck down as unconstitutional ABx1 27. (California Redevelopment Assn. v. Matosantos (2011) 53 CalAth 231 ("CRA Case'). ABx1 26 is chapter 5, Statutes 2011, First Extraordinary Session, which added Part 1.8 (suspension provisions) and Part 1.85 (dissolution provisions) of Division 24 of the Health and Safety Code. Under the CRA Case, all redevelopment agencies dissolved February 1, 2012. Pursuant to Health and Safety Code section 34176(b)(2), added by Part 1.85 of Division 24, and Authority Resolution No. 2012-02, Authority elected to be the "housing successor" to the Agency, enabling Authority to retain the housing assets and functions previously performed by the Agency, and 'allowing the Authority to enforce affordability covenants and related activities pursuant to applicable provision of the Community Redevelopment Law (Part 1 of Division 24 of the Health and Safety Code). Administration of the Agency Agreements is a housing function of the Agency that was transferred to Authority. M. The Agency Agreements require (i) Authority approval of any transfer or sale of any interest in the Site, and (ii) the assumption by any proposed purchaser of all of the Agency Agreements. N. Authority has agreed to consent to the transfer of the Site to Krantz, and to the assumption by Krantz of the Agency Agreements, subject to the terms and conditions set forth in this Assignment Agreement. 882/015610-0040 7476681.4 a11/18/14 3 NOW THEREFORE, in consideration of the foregoing Recitals, which are incorporated herein by this reference, and for other valuable consideration, the sufficiency of which is hereby acknowledged, Krantz and Authority agree as follows: 1. Effective Date. As used in this Assignment Agreement, the "Effective Date" shall be June 12, 2013, which is the date Krantz acquired fee title to the Site from Dolce. 2. Consent bV Authority. As of the Effective Date, Authority consents to the acquisition and ownership of the Site by Krantz. Such consent by Authority shall not constitute a consent to any further or subsequent sale, conveyance or transfer by Krantz of the Site, or any part thereof, or any interest therein. 3. Assumption by Krantz. As of the Effective Date, Krantz assumes and agrees to be bound by all of the Agency Agreements. Krantz shall fully and faithfully pay, perform and discharge, as and when payment, performance and discharge are due, all of the obligations of Dolce under the Agency Agreements, and each of them. 4. Legal Effect. Except as modified by this Agreement, the Agency Agreements are unchanged and, as so modified, the Agency Agreements shall remain in full force and effect. The Agency Deed of Trust (as modified by this Assignment Agreement) shall secure the Note, all extensions, renewals and modifications thereof, all substitutions therefor, and all other indebtedness and obligations recited in the Agency Deed of Trust. 5. Entire Agreement. This Assignment Agreement contains the entire agreement between Authority and Krantz with respect to the subject matter hereof and supersedes all prior agreements, understandings, offers and negotiations, oral or written, with respect thereto. This Assignment Agreement shall bind and inure to the benefit of Authority and Krantz and their respective personal representatives, heirs, successors and assigns. This Assignment Agreement shall be governed and construed in accordance with the internal laws of the State of California without regard to conflict of law principles. [End — Signature page follows] 882/015610-0040 4 7476681_4 all/18/14 i IN WITNESS WHEREOF, Authority and Krantz have executed this Assignment Agreement as of the date first hereinabove written. 882/015610-0040 7476681.4 al1/18/14 rJ "Authority" LA QUINTA HOUSING AUTHORITY, a public body, corporate olitic Frahk,YSp&K;kcek, Executive Director "Krantz" MIKE KRANTZ, a married man as his sole and separate prgperty_ EM STATE OF CALIFORNIA ) ) ' ss. COUNTY OF RIVERSIDE ) On Noueo4er 117 , 0-0/1I, before me,-Te-re,,;a---1T)0t'KP.S0r1 , Notary Public, personally appeared FRANK J. SPEVACEK who proved to me on the basis of satisfactory evidence to be the person whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his authorized capacity, and that by his signature on the instrument the person or the entity upon behalf of which the person acted, executed the instrument. certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. Witness my hand and official seal. Notary Public [SEAL] TERESA THOMPSON 4A"1 Commission # 2030796 Notary Public - Californiaza Riverside County My Comm. Ex ires Jun 24, 2017 STATE OF CALIFORNIA ) ) ss. COUNTY OF 0 M"';t ) On Vo\kWL�,tY Z4 , 201LA , before me, rl L6 i'y , Notary Public, personally appeared MIKE KRANTZ who 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. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. Witness my hand and official seal. MELANIE ROUNTREE otary Public SEA' . Commission # 1982222 [SEAL] a LNotary Public - California z z Orange County r My Comm. Expires Jun 16, 2016 882/015610-0040 7476681.4 a11/18/14 7 N4 EXHIBIT "A" All of that certain property- located in the City of La Quinta, County of Riverside, State of California, described as follows: LOTS 1 TO 11 INCLUSIVE IN BLOCK 126 OF SANTA CARMELITA AT VALE LA QUINTA, UNIT NO. 14, IN THE CITY OF LA QUINTA, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 18 PAGES 82 AND 83 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY. EXCEPTION THEREFROM THOSE PORTIONS OF LOTS 1, 5, 6 AND 11, DEEDED TO THE COUNTY OF RIVERSIDE, BY DOCUMENTS RECORDED MARCH 23, 1978 AS INSTRUMENT NOS. 55038 AND 55039 OF OFFICIAL RECORDS OF RIVERSIDE COUNTY, CALIFORNIA ASSESSOR PARCEL NO. 773-071-017-5 882/015610-0040 7476681.4 al1/18/14 6 RECORDING REQUESTED By FIRST AMERICAN.TITLE INSURA[yE 00. NATIONAL COMMERCIAL SEES Recording Requested By And When Recorded Mail To. - La Quinta Housing Authority 78-495 Calle Tampico La Quinta, CA 92253 Attn: City Clerk DOC # 2014-0451837 11/25/2014 03:17 PM Fees: $97.00 Page 1 of 10 Recorded in- Official Records County of Riverside Larry W. Ward Assessor, County Clerk & Recorder "This document was electronically submitted to the County of Riverside for recording*" Receipted by: MHARTMAN APN: 773-071-017-5 (Space above for Recorder's use) yvc' S - 69.31F6S- (Exempt from Recording Fee Per Gov. Code § 6103 and 27383) ASSIGNMENT, ASSUMPTION, CONSENT AND MODIFICATION AGREEMENT This ASSIGNMENT, ASSUMPTION, CONSENT, AND MODIFICATION AGREEMENT ("Assignment Agreement"), is made as of November 18, 2014 by and among the LA QUINTA HOUSING AUTHORITY, a public body, corporate and politic ("Authority"), MIKE KRANTZ, a married man as his sole and separate property ("Krantz"), and BARRY SAYWITZ PROPERTIES TWO, LP, a California limited partnership ("Saywitz"). WI TNESSETH: A. Krantz is the owner in fee of that certain real property located in the City of La Quinta, County of Riverside, State of California described in Exhibit "A" attached hereto and made a part hereof (the "Site"). B. On or about September 13, 2001, the former La Quinta Redevelopment Agency ("Agency") and La Quinta 34 LLC, a California limited liability company ("104"), entered into that certain Affordable Housing Rehabilitation Agreement, as amended by that certain First Amendment to Affordable Housing Rehabilitation Agreement dated December 17, 2002. (collectively, the "Original Housing Agreement"). The Original Housing Agreement provides for LQ34 to rehabilitate that certain real property identified therein as the "Site" (hereinafter, the "Original Site"). C. Pursuant to the Original Housing Agreement, the Agency agreed to provide a loan to.. LQ34 in the amount of Three Hundred Fifty Thousand Dollars ($350,000) (the "Agency Loan"). The Agency Loan is evidenced by that certain Note dated September 13, 2001 (the "Original Note"). The Original Note is secured by that certain Deed of Trust with Assignment of Rents and Rider Attached Hereto (the "Original Agency Deed of Trust") dated September 13, 2001, and recorded on September 28, 2001, as Instrument No. 2001-474253, in the Official Records of the County of Riverside (the "Official Records"). D. Pursuant to the Original Housing Agreement, the Agency and LQ34 entered into that certain Regulatory Agreement and Declaration of Covenants and Restrictions dated September 13, 2001, and recorded on September 28, 2001, as Instrument No. 2001-474254, in the Official Records (the "Original Agency Regulatory 882/015610-0040 7699412.3 aI1/18/14 1 Agreement"). The Original Agency Regulatory Agreement places covenants on the use and operation of the Original Site to ensure that the Original Site is operated as a rental housing project with fourteen (14) units to be rented and occupied by moderate income households at affordable rents. E. On or about April 6, 2004, (i) LQ34 assigned its interests in and to the Original Housing Agreement, Original Note, Original Agency Deed of Trust, and Original Agency Regulatory Agreement to Mauka View, LLC, a California limited liability company ("Mauka"); (ii) the Agency and Mauka entered into that certain Second Amendment to Affordable Housing Rehabilitation Agreement (the "Second Amendment to Housing Agreement'); and (iii) Agency and Mauka executed that certain Memorandum of Assignment and Assumption Agreement, which was recorded on April 23, 2004, as Instrument No. 2004-301361, in the Official Records, for purposes of providing record notice to all persons of the assignment described in clause (i) of this Recital E. F. Pursuant to the Second Amendment to Housing Agreement, Mauka and Agency entered into (i) that certain Allonge to Note (the "First Allonge"); and (ii) that certain Modification of Deed of Trust (the "Modification"). The Modification was recorded on April 23, 2004, as Instrument No. 2004-301360, in the Official Records. G. On or about February 7, 2006, Agency and Mauka entered into that certain Third Amendment to Affordable Housing Rehabilitation Agreement (the "Third Amendment to Housing Agreement"), pursuant to which, among other things, the parties agreed to release portions of the Original Site from the Original Housing Agreement, Original Agency Regulatory Agreement, Original Agency Deed of Trust, and Original Memorandum. The portions of the Original Site that were not released by the Third Amendment constitute the.Site. H. Pursuant to the Third Amendment to Housing Agreement, Mauka and Agency entered into (i) that certain Amendment to Regulatory Agreement and Declaration of Covenants and Restrictions, releasing the aforementioned released portions of the Original Site from the Original Agency Regulatory Agreement ("Amendment No. 1 to Regulatory Agreement"), and (ii) that certain Second Allonge to Note ("Second Allonge"). The Amendment No. 1 to Regulatory Agreement was recorded on February 28, 2006, as Instrument No. 2006-0141068, in the Official Records. I. The Original Housing Agreement, as modified by the Second Amendment to Housing Agreement and the Third Amendment to Housing Agreement, is hereinafter referred to as the "Housing Agreement." The Original Agency Regulatory Agreement, as modified by Amendment No. 1 to Regulatory Agreement, is hereinafter referred to as the "Agency Regulatory Agreement". The Original Agency Deed of Trust, as modified by the Modification is hereinafter referred to as the "Agency Deed of Trust." The Original Note, as modified by the First Allonge and Second Allonge, is hereinafter referred to as the "Note." 882/015610-0040 2 '699412.3 al1/18/14 J. Pursuant to the Second Allonge, (i) upon Mauka's completion of the Project, and provided Mauka was not then in default under any of the Housing Agreement, Agency Regulatory Agreement, Agency Deed of Trust, or Note (collectively, the "Agency Agreements"), the Agency agreed to forgive a portion of the "Note Amount" (as that term is defined in the Note) in the amount of Fifty -Eight Thousand Three Hundred Thirty -Three Dollars ($58,333) plus all interest accrued on the Note Amount as of that date, and (ii) commencing on September 13, 2007 and on each one year anniversary thereafter, provided Mauka was not then in default of any of the Agency Agreements, the Agency agreed to forgive a portion of the Note Amount in the amount of Eleven Thousand Sixty -Seven Dollars ($11,067) plus all accrued interest on the Note Amount K. Any capitalized terms contained in this Agreement which are not defined herein shall have the meaning given in the Housing Agreement, unless expressly provided to the contrary. L. On or about March 8, 2007, Mauka (i) sold the Site to Pat A. Dolce and Lora Dean Dolce, Husband and Wife as Joint Tenants ("Dolce"), and (ii) Dolce assigned all of its interests in and to the Agency Agreements pursuant to that certain Assignment and Assumption Agreement by and among the Agency, Mauka, and Dolce, which was recorded on March 12, 2007, as Instrument No. 2007-0166709, in the Official Records. M. On June 28, 2011, the Governor signed Assembly Bill 26 ("ABxl 26") and Assembly Bill 27 ("ABxl 27") from the 2011-12 First Extraordinary Session of the California Legislature. ABx1 26 immediately suspended all redevelopment agency activities, except continued performance of "enforceable obligations," and set forth a process to dissolve redevelopment agencies and end redevelopment in California. ABx1 27 provided a "voluntary alternative redevelopment program," which would have allowed redevelopment agencies to remain in existence and continue redevelopment, if remittance payments were made to cover the State of California's budget shortfall for fiscal year 2011-12 and were made in subsequent fiscal years to cover State costs. A lawsuit was filed,- challenging the constitutionality of both ABx1 26 and 27. The California Supreme Court upheld the constitutionality of ABx1 26, revising the effective dates of certain provisions, and struck down as unconstitutional ABx1 27. (California Redevelopment Assn. v. Matosantos (2011) 53 CalAt" 231 ("CRA Case'). ABx1 26 is chapter 5, Statutes 2011, First Extraordinary Session, which added Part 1.8 (suspension provisions) and Part 1.85 (dissolution provisions) of Division 24 of the Health and Safety Code. Under the CRA Case, all redevelopment agencies dissolved February 1, 2012. Pursuant to Health and Safety Code section 34176(b)(2), added by Part 1.85 of Division 24, and Authority Resolution No. 2012-02, Authority elected to be the "housing successor' to the Agency, enabling Authority to retain the housing assets and functions previously performed by the Agency, and allowing the Authority to enforce affordability covenants and related activities pursuant to applicable provision of the Community Redevelopment Law (Part 1 of Division 24 of the Health and Safety Code). Administration of the Agency Agreements is a housing function of the Agency that was transferred to Authority. 882/015610-0040 3 7699412.3 all/18/14 N. During the ownership of the Site by Dolce, the Project was not operated and maintained in compliance with the Agency Agreements. As a result, neither the Agency nor Authority forgave any portion of the Note Amount in 2007, 2008, 20.09, 2010, 2011, 2012, or 2013 pursuant to the Second Allonge. O. On or about June 14, 2013, Dolce sold the Site to Krantz. On or about the same date hereof, Krantz executed that certain Assumption and Consent Agreement by and between Authority and Krantz, pursuant to which Krantz retroactively assumed all of Dolce's interests in and to the Agency Agreements. P. On September 13, 2014, Authority forgave a portion of the Note Amount in the amount of Eleven Thousand Sixty=Seven Dollars ($11,067) pursuant to the Second Allonge. As a result of the Second Allonge, as of the date of this Agreement, the outstanding balance on the Note is Two Hundred Eighty Thousand Six Hundred Dollars ($280,600). Q. The Agency Agreements require (i) Authority approval of any transfer or sale of any interest in the Site, and (ii) the assumption by any proposed purchaser of all of the Agency Agreements. R. Saywitz is acquiring the Property from Krantz and has met all of Authority's requirements to qualify therefor, and Authority will consent to such acquisition provided that Krantz assigns to Saywitz, and Saywitz assumes from Krantz, all of Krantz's obligations under the Agency Agreements, as set forth in this Agreement .NOW THEREFORE, in consideration of the foregoing Recitals, which are incorporated herein by this reference, and for other valuable consideration, the sufficiency of which is hereby acknowledged, Saywitz, Krantz, and Authority agree as follows: 1. Effective Date. As used in this Assignment Agreement, the "Effective Date" shall be November 18, 2014. . . 2. Assignment. Effective upon the Effective Date, Krantz hereby assigns and transfers to Saywitz all of Krantz's rights, duties, and obligations under the Agency Agreements. 3. Assumption. As of the Effective Date, Saywitz hereby accepts the assignment and transfer by Krantz of all of Krantz's rights, duties, and obligations under the Agency Agreements. Saywitz further assumes and agrees to timely keep, fulfill and perform all of the terms, covenants and conditions required to be kept, performed and fulfilled by Krantz under the Agency Agreements to the same extent as if Saywitz had been the original party to the Agency Agreements 882/015610-0040 7699412.3 al1/18/14 4 4. Consent by Authority. As of the Effective Date, Authority consents to the transfer of the Site by Krantz to Saywitz. Such consent by Authority shall not constitute a consent to any further or subsequent sale, conveyance or transfer by Saywitz of the Site, or any part thereof, or any interest therein. 5. Modifications. Notwithstanding anything in the Agency Agreements to the contrary, in connection with Saywitz's income verification of each proposed tenant of a "Restricted Unit" pursuant to Section 3.4 of the Agency Regulatory Agreement, Saywitz shall provide to Authority for Authority's review and approval, prior to entering into a lease agreement with each such proposed tenant, copies of (i) all of the information and documentation submitted to Saywitz by such proposed tenant and utilized by Saywitz in determining that such proposed tenant qualifies as an "Eligible Tenant," and (ii) the "Income Computation and Certification" form prepared by Saywitz for such proposed tenant (as those terms are defined in the Agency Regulatory Agreement). Authority shall approve or disapprove such proposed tenant within one (1) "Business Day" after Authority's receipt from Saywitz of a complete submittal for such proposed tenant. As used herein, the term "Business Day" shall mean a day on which the City of La Quinta is open for business. 6. Legal Effect. Except as modified by this Agreement, the Agency Agreements are unchanged and, as so modified, the Agency Agreements shall remain in full force and effect. The Agency Deed of Trust (as modified by this Assignment Agreement) shall secure the Note, all extensions, renewals and modifications thereof, all substitutions therefor, and all other indebtedness and obligations recited in the Agency Deed of Trust. 7. Entire Agreement. This Assignment Agreement contains the entire agreement between Authority, Saywitz, and Krantz with respect to the subject matter hereof and supersedes all prior agreements, understandings, offers and negotiations, oral or written, with respect thereto. This Assignment Agreement shall bind and inure to the benefit of Authority, Saywitz, and Krantz and their respective personal representatives, heirs, successors and assigns. This Assignment Agreement shall be governed and construed in accordance with the internal laws of the State of California without regard to conflict of law principles. [End — Signature page follows] 882/015610-0040 7699412.3 a11/18/14 IN WITNESS WHEREOF, Authority, Saywitz, and Krantz have executed this Assignment Agreement as of the date first hereinabove written. "Authority" LA QUINTA HOUSING AUTHORITY, a public dy, corporate a is By: ank J. pe ek, Executive Director 7!T signed �� "Krantz" Go unterPart MIKE KRANTZ, a married man as his sole and separat By: Mike antz "Saywitz" BARRY SAYWITZ PROPERTIES TWO, LP, a California limited partnership 22 Its: 882/015610-0040 7699412.3 all/18/14 IN WITNESS WHEREOF, Authority, Saywitz, and Krantz have executed this Assignment Agreement as of the date first hereinabove written. signed Ire Counterpart 882/015610-0040 7699412.3 al1/18/14 6 "Authority" LA QUINTA HOUSING AUTHORITY, a public body, corporate and politic In Frank J. Spevacek, Executive Director "Krantz" MIKE KRANTZ, a married man as his sole and separate property in Mike Krantz "Saywitz" BARRY SAYWITZ PROPERTIES TWO, LP, a California limited partnership By: Its: j3qrf� g,q Ldf z STATE OF CALIFORNIA ) ) ss. COUNTY OF RIVERSIDE ) On Noue�er `8 aol q , before me, cr,-s o�. omOoV1 , Notary Public, personally appeared FRANK J. SPEVACEK who proved to me on the basis of satisfactory evidence to be the person whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his authorized capacity, and that by his signature on the instrument the person or the entity upon behalf of which the person acted, executed the instrument. I certify. under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. Witness my hand and official seal. Notary Public [SEAL] TERESA THOMPSON Commission # 2030796 s �� sNotary Public - California z z z Riverside County My Comm. Expires Jun 24, 2017 STATE OF CALIFORNIA ) ss. COUNTY OF pMh, ) On Nov&hl ,%y before me, 141),v , Notary Public, personally appeared MIKE KRANTZ who 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. certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. Witness my hand and official seal.,�a MELANIE ROUNTREE I Notary Public [SEAL Commission # 1982222 c "--rise Notary Public - California D Orange County My Comm. Expires Jun 16, 2016 Q 882/015610-0040 7699412.3 all/18/14 MELANIE ROUNTREE Commission # 1982222 a=ee Notary Public - California z z Orange County D 1Av romm. Expires Jun 16, 2016 STATE OF CALIFORNIA ) ss. COUNTY OF C ) On MA f&.Mu , before me, a-V11.e V o-u-V`l-ce- Notary Public, personally appeared BARRY SAYWITZ who 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. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. Witness my hand and official seal. N'VUJ'1,19WyW 11y"v"10bL'1"� Notary Public [SEAL] MELANIE ROUNTREE Commission # 1982222 Notary Public - California z Z 4�- z Orange County r My Comm. Expires Jun 16, 2016 882/015610-0040 7699412.3 a11/18/14 9 EXHIBIT "A" LEGAL DESCRIPTION OF SITE All of that certain property located in the City of La Quinta, County of Riverside, State of California, described as follows: LOTS 1 TO 11 INCLUSIVE IN BLOCK 126 OF SANTA CARMELITA AT VALE LA QUINTA, UNIT NO. 14, IN THE CITY OF LA QUINTA, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 18 PAGES 82 AND 83 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY. EXCEPTION THEREFROM THOSE PORTIONS OF LOTS 1, 5, 6 AND 11, DEEDED TO THE COUNTY OF RIVERSIDE, BY DOCUMENTS RECORDED MARCH 23, 1978 AS INSTRUMENT NOS. 55038 AND 55039 OF OFFICIAL RECORDS OF RIVERSIDE COUNTY, CALIFORNIA ASSESSOR PARCEL NO. 773-071-017-5 882/015610-0040 7699412.3 al1/18/14 7 RECORDING REQUESTED BY . FIRST AMERICAN TITLE INSURANCE CO NATIONAL COMMERCIAL SERVICES Recording Requested By And When Recorded Mail To: La Quinta Housing Authority 78-495 Calle Tampico La Quinta, CA 92253 Attention: City Clerk DOC # 2014-0451838 11/25/2014 03:17 PM Fees: $73.00 Page 1 of 17 Recorded in Official Records County of Riverside Larry W. Ward Assessor, County Clerk & Recorder —This document was electronically submitted to the County of Riverside for recording— Receipted by: MHARTMAN APN: 773-071-017�5 [Exempt From Recording Fee NCS - 69js" Per Gov. Code §6103 and 27383] SUBORDINATION AGREEMENT NOTICE: THIS SUBORDINATION AGREEMENT RESULTS IN YOUR SECURITY INTEREST IN THE SITE BECOMING SUBJECT TO AND OF LOWER PRIORITY THAN THE LIEN OF SOME OTHER OR LATER SECURITY INSTRUMENTS. THIS SUBORDINATION AGREEMENT ("Agreement") is entered into as of November 18, 2014, by and among the LA QUINTA HOUSING AUTHORITY, a public body, corporate and politic ("Authority"), BARRY SAYWITZ PROPERTIES TWO, LP, a California 'limited partnership ("Participant"), and OPUS BANK, a . California commercial bank ("Lender").. RECITALS A. Participant owns fee title to that certain real property located in the City of La Quinta, County of Riverside, State of California described in Exhibit "A" attached hereto and made a part hereof (the "Site"). The Site is improved with a residential rental apartment development commonly known as the La Quinta Courtyard. B. On or about September 13, 2001, the former La Quinta Redevelopment Agency ("Agency") and La Quinta 34 LLC, a California limited liability company ("LQ34"), entered into that certain Affordable Housing Rehabilitation Agreement, as amended by that certain First Amendment to Affordable Housing Rehabilitation Agreement dated December 17, 2002 (collectively, the "Original Housing Agreement"). 'The Original Housing Agreement provides for LQ34 to rehabilitate that certain real property identified therein as the "Site" (hereinafter; the "Original Site"). C. Pursuant to the Original Housing. Agreement, the Agency agreed to provide a loan to LQ34 (the "Agency Loan"). The Agency Loan is evidenced by that certain Note dated September 13, 2001 (the "Original Note"). The Original Note is secured by that certain Deed of Trust with Assignment of Rents and Rider Attached Hereto (the "Original Agency Deed of Trust") dated September 13, 2001, and recorded. on September 28, -1- -- t 2001, as Instrument No. 2001-474253, in the Official Records of the County of Riverside (the "Official Records"). D. Pursuant to the Original Housing Agreement, the Agency and LQ34 entered into that certain Regulatory Agreement and Declaration of Covenants and Restrictions dated September 13, 2001, and recorded on September 28, 2001, as Instrument No. 2001-474254, in the Official Records (the "Original Agency Regulatory Agreement"). The Original Agency Regulatory Agreement places covenants on the use and operation of the Original Site to ensure that the Original Site is operated as a rental housing project with fourteen (14) units to be rented and occupied by moderate income households at affordable rents. E. On or about April 6, 2004, (i) LQ34 assigned its interests in and to the Original Housing Agreement, Original Note, Original Agency Deed of Trust, and Original Agency Regulatory Agreement to Mauka View, LLC, a California limited liability company ("Mauka"); (ii) the Agency and Mauka entered into that certain Second Amendment to Affordable Housing Rehabilitation Agreement (the "Second Amendment to Housing Agreement"); and (iii) Agency and Mauka executed that certain Memorandum of Assignment and Assumption Agreement, which was recorded on April 23, 2004, as Instrument No. 2004-301361, in the Official Records, for purposes of providing record notice to all persons of the assignment described in clause (i) of this Recital E. F. Pursuant to the Second Amendment to Housing Agreement, Mauka and Agency entered into (i) that certain .Allonge to Note (the "First Allonge"); and (ii) that certain Modification of Deed of Trust (the "Modification"). The Modification was recorded on April 23, 2004, as Instrument No. 2004-301360, in the Official Records. G. On or about February 7, 2006, Agency and Mauka entered into that certain Third Amendment to Affordable Housing Rehabilitation Agreement (the "Third Amendment to Housing Agreement"), pursuant to which, among other things, the parties agreed to release portions of the Original Site from the Original Housing Agreement, Original Agency Regulatory Agreement, Original Agency Deed of Trust, and Original Memorandum. The portions of the Original Site that were not released by the Third Amendment constitute the Site. H. Pursuant to the Third Amendment to Housing Agreement, Mauka and Agency entered into (i) that certain Amendment to Regulatory Agreement and Declaration of Covenants and Restrictions, releasing the aforementioned released portions of the Original Site from the Original Agency Regulatory Agreement ("Amendment No. 1 to Regulatory Agreement"), and (ii) that certain Second Allonge to Note ("Second Allonge"), pursuant to which the Agency agreed to annually forgive certain amounts due under the Original Note, as modified by the First Allonge, provided Mauka remained in compliance with the terms of (a) the Note, as modified by the First Allonge, (b) the Original Housing Agreement, as modified by the Second Amendment to Housing Agreement and the Third -2- Amendment to Housing Agreement (hereinafter, the "Housing Agreement"), (c) the Original Agency Deed of Trust, as modified by the Modification (hereinafter, the "Agency Deed of Trust"), and (d) the Original Agency Regulatory Agreement, as modified by Amendment No. 1 to Regulatory Agreement (hereinafter, the "Agency Regulatory Agreement"). The Amendment No. 1 to Regulatory Agreement was recorded on February 28, 2006, as Instrument No. 2006-0141068, in the Official Records. The Original Note, as modified by the'First Allonge and Second Allonge, is hereinafter referred to as the "Note." I. On or about March 8, 2007, Mauka (i) sold the Site to Pat A. Dolce and Lora Dean Dolce, Husband and Wife as Joint Tenants ("Dolce"), and (ii) Dolce assigned all of its interests in and to the Housing Agreement, Note, Agency Deed of Trust, and Agency Regulatory Agreement (collectively, the "Agency Agreements") pursuant to that certain Assignment and Assumption Agreement by and among the Agency, Mauka, and Dolce, which was recorded on March 12, 2007, as Instrument No. 2007-0166709, in the Official Records. J. On June 28, 2011, the Governor signed Assembly Bill 26 ("ABx1 26") and Assembly Bill 27 ("ABx1 27") from the 2011-12 First Extraordinary Session of the California Legislature. ABx1 26 immediately suspended all redevelopment agency activities, except continued performance of "enforceable obligations," and set forth a process to dissolve redevelopment agencies and end redevelopment in California. ABx1 27 provided a "voluntary alternative redevelopment program," which would have allowed redevelopment agencies to remain in existence and continue redevelopment, if remittance payments were made to cover the State of California's budget shortfall for fiscal year 2011-12 and were made in subsequent fiscal years to cover State costs. A lawsuit was filed, challenging the constitutionality of both ABx1 26 and 27. The California Supreme Court upheld the constitutionality of ABx1 26, revising the effective dates of certain provisions, and struck down as unconstitutional ABx1 27. (California Redevelopment Assn. v. Matosantos (2011) 53 CalAth 231 ("CRA Case'). ABx1 26 is chapter 5, Statutes 2011, First Extraordinary Session, which added Part 1.8 (suspension provisions) and Part 1.85 (dissolution provisions) of Division 24 of the Health and Safety Code. Under the CRA Case, all redevelopment agencies dissolved February 1, 2012. Pursuant to Health and Safety Code section 34176(b)(2), added by Part 1.85 of Division 24, and Authority Resolution No. 2012-02, Authority elected to be the "housing successor" to the Agency, enabling Authority to retain the housing assets and functions previously performed by the Agency, and allowing the Authority to enforce affordability covenants and related activities pursuant to applicable provision of the Community Redevelopment Law (Part 1 of Division 24 of the Health and Safety Code). Administration of the Agency Agreements is a housing function of the Agency that was transferred to Authority. -3- K. On or about June 12, 2013, Dolce sold the Site to Mike Krantz, a married man as his sole and separate property ("Krantz"). On or about the same date hereof, Krantz executed that certain Assumption and Consent Agreement by and between Authority and Krantz, pursuant to which Krantz retroactively assumed all of Dolce's interests in and to the Agency Agreements. L. Participant has acquired the Site from Krantz, and concurrently herewith is assuming all of Krantz's interests in and to the Agency Agreements pursuant to that certain Assignment, Assumption, Consent, and Modification Agreement by and among Authority, Krantz, and Participant. M. Participant has executed or is about to execute a deed of trust in.favor of Lender, encumbering the Site to secure a promissory note dated November, 20, 2014, for a sum not exceed Three Million One Hundred Thousand Dollars ($3,100,000) (the "Lender Loan") payable with interest and upon the terms and conditions described in such note (respectively, the "Lender Deed of Trust" and "Lender Note"). N. The Lender is willing to make the Lender Loan provided the Lender Deed of Trust is a lien or charge upon the Site prior and superior to the lien or charge of the Agency Deed of Trust and provided that the Authority will specifically and unconditionally subordinate the lien or charge of the Agency Deed of Trust to the lien or charge of the Lender Deed of Trust. O. It is the mutual benefit of the Lender, the Authority and Participant that the Lender make the Lender Loan to Participant. The Authority has agreed that the Lender Deed of Trust shall, when recorded, constitute a lien or charge upon the Site which is unconditionally prior and superior to the lien or charge of the Agency Deed of Trust, subject to the specific terms and provisions of this Agreement. NOW, THEREFORE, in consideration of the mutual benefits accruing to the Authority, Lender and Participant, and other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and in order to induce the Lender to make the Lender Loan, it is hereby declared, understood and agreed as follows: Subordination by Authority 1.1 Necessity of Subordination By executing this Agreement, Authority makes the finding set forth in Health and Safety Code Section 33334.14 that subordination is necessary and that Authority has obtained written commitments as set forth in this Agreement, consistent with Health and Safety Code Section 33334.14, to protect the Authority's investment in the event of a default. Therefore, the Authority hereby agrees to subordinate the lien of the Agency IN Deed of Trust to the Lender Deed of Trust on the terms set forth in this Agreement. This Agreement shall set forth the priority of liens between the parties and govern the terms and conditions of such subordination. 1.2 Subordination of Agency Deed of Trust to Lender Deed of Trust The Lender Deed of Trust (and any renewals or extensions of, or advances, including interest, thereunder) shall unconditionally be and remain at all times a lien or charge on the Slte, prior and superior to the lien or charge of the Agency Deed of Trust to all present and future indebtedness and obligations secured thereby, together with all rights and privileges of Agency thereunder, but subject to the terms and conditions of this Agreement. 1.3 Covenant of Authority The Authority declares, agrees and acknowledges that to Authority's actual knowledge, there is no breach, event of default or default existing under the Agency Deed of Trust or any circumstances, event, omission or failure of condition which would constitute such a breach, default, or event of default after notice or lapse of time, or both. 2. Reliance by Lender and Authority The Lender would not make the Lender Loan and the Authority would not have agreed to subordinate the Agency Deed of Trust without this Agreement and each of the undersigned understands that in reliance upon, and in consideration of, this subordination, specific loans and advances' are being and will be made and, as part and parcel thereof, specific monetary and other obligations are being and will be entered into which would not be made or entered into but for such reliance upon this subordination. 3. Rights of Authority, 3.1 Default Under Lender Deed of Trust In the event Participant defaults under the terms of the Lender Deed of Trust and as a result thereof the holder of the Lender Deed of Trust records a Notice of Default in the Official Records of the County of Riverside, the holder of the Lender Deed of Trust shall, concurrently with such recording, provide the Authority with a copy of such Notice of Default. Upon the earlier of (i) Authority's receipt of such Notice of Default, or (ii) the recordation of such Notice of Default, the parties hereto agree that Authority shall have each of the following rights so long as the Agency Deed of Trust or the AHA encumbers any portion of the Site or interest therein: -5.- (a) To cure the noticed default at any time prior to the foreclosure of the Lender Deed of Trust. (b) To negotiate with the Lender regarding the noticed default at any time prior to the foreclosure of the Lender Deed of Trust or other lien. 3.2 Disbursements Lender, in making disbursements of the proceeds of said Loan, is under no obligation or duty to, nor has Lender represented that it will, see to the application of such proceeds by the person or persons to whom disbursements thereof are made and any application or use of such proceeds for purposes other than those provided in the documents evidencing and securing such Loan shall not defeat the subordination herein made in whole or in part. 4. Miscellaneous 4.1 Entire.Agreement This Agreement shall be the whole and only agreement with regard to the matters set forth herein and shall supersede and cancel, but only insofar as would affect the priority between the Lender Deed of Trust and the Agency Deed of Trust, any prior agreement as to such subordination including, but not limited to, those provisions, if any, contained in the Agency Deed of Trust which provide for the subordination of the lien or charge thereof to another deed or deeds of trust or to another mortgage or mortgages, upon the Site. 4.2 Successors and Assigns This Agreement shall inure to' and bind the heirs, legatees, devisees, administrators, executors, successors and assigns of the parties hereto. 4.3 California Law This Agreement shall be construed according to the internal laws of the State of California without regard to conflict of law principles. In 4.4 Severability If any term, provision, condition or covenant of this Agreement or the application thereof to any party or circumstances shall, to any extent, be held invalid or unenforceable, the remainder of this instrument, or the application of such term, provision, condition or covenant to persons or circumstances other than those as to whom or which it is held invalid or unenforceable shall not be affected thereby, and each term and provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law. 4.5 Notice Any notice, demand, request, consent, approval or communication that any party desires or is required to give to another party or any other person must be in writing and may be given by personal delivery, by mailing the same by registered or certified mail, return receipt requested, postage prepaid, or by a reputable same day or overnight delivery service that provides a receipt showing date and time of delivery, to the party to whom the notice is directed at the address of such party hereinafter set forth, or such other address and to such other persons as the parties may hereafter designate. Any such notice shall be deemed given (i) upon receipt if by personal delivery or by delivery service, or (ii) forty-eight (48) hours after deposit in the United States mail, if sent by mail pursuant to the foregoing. If to Authority: La Quinta Housing Authority 78-495 Calle Tampico La Quinta, CA 92253 Attention: City Clerk With copy to: Rutan & Tucker, LLP 611 Anton Boulevard, Suite 1400 Costa Mesa, CA 92626- 1998 Attn: William H. Ihrke If to Participant: Barry Saywitz Properties Two, LP 4740 Von Karman, Suite 100 Newport Beach, CA 92660 Attn: Barry Saywitz If to Lender: Opus Bank 19900 MacArthur Blvd., 14th Floor Irvine, CA 92612 Attn: Loan Servicing Department -7- 4.6 Attorneys' Fees In the event that any action, suit or other proceeding is brought to enforce the obligations under this Agreement, the prevailing party shall be entitled to receive all of such party's costs and expenses of suit; including attorneys' fees, expert witness fees, and all costs incurred in each and every action, suit or other proceeding, including any and all appeals or petitions therefrom. 4.7 Counterparts This Agreement may be executed in any number of counterparts, each of which shall be an original, but all of which shall constitute one and the same document. [End — Signature Page Follows] -8- IN WITNESS WHEREOF, the parties have executed this Subordination Agreement as of the date first written above. NOTICE: THIS SUBORDINATION AGREEMENT RESULTS IN YOUR SECURITY INTEREST IN THE SITE BECOMING SUBJECT TO AND OF LOWER PRIORITY THAN THE LIEN OF SOME OTHER OR LATER SECURITY INSTRUMENTS. ATTEST: "Authority" LA QUINTA HOUSING AU,THORITY, a public b dy, corpor politic By: Susan Maysels, Authori Secretary By: A tan AA -Wank J.`S a ek, Executive Director APPROVED AS TO FORM RUTAN & TUCKER, LLP 13 Authority Counsel Signed In Uounterpart "Participant" BARRY SAYWITZ PROPERTIES TWO, LP, a California limited partnership M Its: "Lender" OPUS BANK, a California commercial bank By: Its: in STATE OF CALIFORNIA ) ss. COUNTY OF RIVERSIDE ) On /y®Ueni6r N ap14, before me, -7 —T5 avnP.5on , Notary Public, personally appeared FRANK J. SPEVACEK who proved to me on the basis of satisfactory evidence to be the person whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his authorized capacity, and that by his signature on the instrument the person or the entity upon behalf of which the person acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. Witness my hand and official seal. Notary Public [SEAL] TERESA THOMPSON Commission # 2030796 Z .�;'d Notary Public - California z Z �� . Riverside County M Comm. Expires Jun 24, 2017 STATE OF CALIFORNIA ) ss. COUNTY OF ) On I I , before me, , Notary Public, personally appeared BARRY SAYWITZ who 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. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. Witness my hand and official seal. Notary Public [SEAL] IN WITNESS WHEREOF, the parties have executed this Subordination Agreement as of the date first written above. NOTICE: THIS SUBORDINATION AGREEMENT RESULTS IN YOUR SECURITY INTEREST IN THE SITE BECOMING SUBJECT TO AND OF LOWER PRIORITY THAN THE LIEN OF SOME OTHER OR LATER SECURITY INSTRUMENTS. ATTEST: By: Susan Maysels, Authority Secretary APPROVED AS TO FORM RUTAN & TUCKER, LLP Az Authority Counsel Signed In Counterpart in "Authority" LA QUINTA HOUSING AUTHORITY, a public body, corporate and politic Frank J. Spevacek, Executive Director "Participant" BARRY SAYWITZ PROPERTIES TWO, LP, a California limited partnership By: Its: Bar fi Says r Z "Lender" OPUS BANK, a California commercial bank By: Its: STATE OF CALIFORNIA ) ) ss. COUNTY OF RIVERSIDE ) On 7 , before me, , Notary Public, personally appeared FRANK J. SPEVACEK who proved to me on the basis of satisfactory evidence to be the person whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his authorized capacity, and that by his signature on the instrument the person or the entity upon behalf of which the person acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. Witness my hand and official seal. Notary Public [SEAL] STATE OF CALIFORNIA ) ss. COUNTY OF Dina ) On W voice►- %I I before me, Notary Public, personally appeared BARRY SAYWITZ who 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. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. Witness my hand and official seal. wzW;a. Notary Public [SEAL] MELANIE ROUNTREE :.... ":. Commission # 1982222 c ties Notary Public - California D a : -o• m Orange County My Comm. Expires Jun 16, 2016 IN WITNESS WHEREOF, the parties have executed this Subordination Agreement as of the date first written above. NOTICE: THIS SUBORDINATION AGREEMENT RESULTS IN YOUR SECURITY INTEREST IN THE SITE BECOMING SUBJECT TO AND OF LOWER PRIORITY THAN THE LIEN OF SOME OTHER OR LATER SECURITY INSTRUMENTS. ATTEST: "Authority" LA QUINTA HOUSING AUTHORITY, a public body, corporate and politic By: Susan Maysels, Authority Secretary By: APPROVED AS TO FORM RUTAN & TUCKER, LLP Authority Counsel Signed In Counterpart Frank J. Spevacek, Executive Director "Participant" BARRY SAYWITZ PROPERTIES TWO, LP, a California limited partnership By: Its: "Lender" OPUS BANK, a California commercial bank By: Its: lE IN WITNESS WHEREOF, the parties have executed this Subordination Agreement as of the date first written above. NOTICE: THIS SUBORDINATION AGREEMENT RESULTS IN YOUR SECURITY INTEREST IN THE SITE BECOMING SUBJECT TO AND OF LOWER PRIORITY THAN THE LIEN OF SOME OTHER OR LATER SECURITY INSTRUMENTS. ATTEST: "Authority" LA QUINTA HOUSING AUTHORITY, a public body, corporate and politic By: Susan Maysels, Authority Secretary By: APPROVED AS TO FORM RUTAN & TUCKER, LLP By: Authority Counsel Signed In Counterpart Frank J. Spevacek, Executive Director "Participant" BARRY SAYWITZ PROPERTIES TWO, LP, a California limited partnership By: Its: "Lender" OPUS BANK, a California commercial bank By: Its:y� f;oct�.,4wuv�r�i�cfioh.�u��tv�j'ut; �d3ana -gulmaker STATE OF CALIFORNIA ) ) ss. COUNTY OF 61-anje ) On QQQ before me, '66tq- Notary Public, personally appeared )<('a CP.�nfi� l a 1��� who proved to me on the basis of satisfactory evidence to be the person( ys) whose name(ADs are subscribed to the within instrument and acknowledged to me that h /she -they executed the same in his/her/their authorized capacity(); and that by his er% heir signatureo on the instrument the person(75 or the entity upon behalf of which the person(p�acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. Witness my hand and official seal. Notary Public [SEAL] RENEE pETTALLY Commission * 2058872 z "r Notary Public . California Orange County M Comm. E fires Feb 23, 2018. Under the provisions of Government code 27361.7, 1 certify under penalty of perjury that the Notary Seal on the document to which this statement is attached reads as follows: Name of Notary: Renee p al Commission Number: a058 /a County where Bond is filed:_Onq� �L PebDate Commission Expires. PLACE OF EXECUTION: SAN BERNARDINO DATE: SIGNATURE: PRINTED NAME- R. Walla A.. r EXHIBIT "A" LEGAL DESCRIPTION OF SITE All of that certain property located in the City of La Quinta, County of Riverside, State of California, described as follows: LOTS 1 TO 11 INCLUSIVE IN BLOCK 126 OF SANTA CARMELITA AT VALE LA QUINTA, UNIT NO. 14, IN THE CITY OF LA QUINTA, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 18 PAGES 82 AND 83 OF MAPS_, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY. EXCEPTION THEREFROM THOSE PORTIONS OF LOTS 1, 5, 6 AND 1.1, DEEDED TO THE COUNTY OF RIVERSIDE, BY DOCUMENTS RECORDED MARCH 23, 1978 AS INSTRUMENT NOS. 55038 AND 55039 OF OFFICIAL RECORDS OF RIVERSIDE COUNTY, CALIFORNIA ASSESSOR PARCEL NO. 773-071-017-5 RECORDING REQUESTED BY FIRST AMERICAN TITLE INSURANCE CO. NATIONAL COMMERCIAL SERVICES Recording Requested By And When Recorded Mail To: La Quinta Housing Authority 78-495 Calle Tampico La Quinta, CA 92253 Attention: City Clerk DOC # 2014-0451838 11/25/2014 03:17 PM Fees: $73.00 Page 1 of 17 Recorded in Official Records County of Riverside Larry W. Ward Assessor, County Clerk & Recorder "This document was electronically submitted to the County of Riverside for recording" Receipted by: MHARTMAN APN: 773-071-017-5 [Exempt From Recording Fee ivCS — 69300 ` Per Gov. Code §6103 and 27383] SUBORDINATION AGREEMENT NOTICE: THIS SUBORDINATION AGREEMENT RESULTS IN YOUR SECURITY INTEREST IN THE SITE BECOMING SUBJECT TO AND OF LOWER PRIORITY THAN THE LIEN OF SOME OTHER OR LATER SECURITY INSTRUMENTS. THIS SUBORDINATION AGREEMENT ("Agreement") is entered into as of November 18, 2014, by and among the LA QUINTA HOUSING AUTHORITY, a public body, corporate and politic ("Authority"), BARRY SAYWITZ PROPERTIES TWO, LP, a California limited partnership ("Participant"), and OPUS BANK, a California commercial bank ("Lender"). RECITALS A. Participant owns fee title to that certain real property located in the City of La Quinta, County of Riverside, State of California described in Exhibit "A" attached hereto and made a part hereof (the "Site"). The Site is improved with a residential rental apartment development commonly known as the La Quinta Courtyard. B. On or about September 13, 2001, the former La Quinta Redevelopment Agency ("Agency") and La Quinta 34 LLC, a California limited liability company ("LQ34"), entered into that certain Affordable Housing Rehabilitation Agreement, as amended by that certain First Amendment to Affordable Housing Rehabilitation Agreement dated December 17, 2002 (collectively, the "Original Housing Agreement'). The Original Housing Agreement provides for LQ34 to rehabilitate that certain real property identified therein as the "Site" (hereinafter, the "Original Site"). C. Pursuant to the Original Housing Agreement, the Agency agreed to provide a loan to LQ34 (the "Agency Loan"). The Agency Loan is evidenced by that certain Note dated September 13, 2001 (the "Original Note"). The Original Note is secured by that certain Deed of Trust with Assignment of Rents and Rider Attached Hereto (the "Original Agency Deed of Trust') dated September 13, 2001, and recorded on September 28, -1- DOC #2014-0451838 Page 2 of 17 11/25/2014 03:17 PM 2001, as Instrument No. 2001-474253, in the Official Records of the County of Riverside (the "Official Records"). D. Pursuant to the Original Housing Agreement, the Agency and LQ34 entered into that certain Regulatory Agreement and Declaration of Covenants and Restrictions dated September 13, 2001, and recorded on September 28, 2001, as Instrument No. 2001-474254, in the Official Records (the "Original Agency Regulatory Agreement"). The Original Agency Regulatory Agreement places covenants on the use and operation of the Original Site to ensure that the Original Site is operated as a rental housing project with fourteen (14) units to be rented and occupied by moderate income households at affordable rents. E. On or about April 6, 2004, (i) LQ34 assigned its interests in and to the Original Housing Agreement, Original Note, Original Agency Deed of Trust, and Original Agency Regulatory Agreement to Mauka View, LLC, a California limited liability company ("Mauka"); (ii) the Agency and Mauka entered into that certain Second Amendment to Affordable Housing Rehabilitation Agreement (the "Second Amendment to Housing Agreement"); and (iii) Agency and Mauka executed that certain Memorandum of Assignment and Assumption Agreement, which was recorded on April 23, 2004, as Instrument No. 2004-301361, in the Official Records, for purposes of providing record notice to all persons of the assignment described in clause (i) of this Recital E. F. Pursuant to the Second Amendment to Housing Agreement, Mauka and Agency entered into (i) that certain Allonge to Note (the "First Allonge"); and (ii) that certain Modification of Deed of Trust (the "Modification"). The Modification was recorded on April 23, 2004, as Instrument No. 2004-301360, in the Official Records. G. On or about February 7, 2006, Agency and Mauka entered into that certain Third Amendment to Affordable Housing Rehabilitation Agreement (the "Third Amendment to Housing Agreement'), pursuant to which, among other things, the parties agreed to release portions of the Original Site from the Original Housing Agreement, Original Agency Regulatory Agreement, Original Agency Deed of Trust, and Original Memorandum. The portions of the Original Site that were not released by the Third Amendment constitute the Site. H. Pursuant to the Third Amendment to Housing Agreement, Mauka and Agency entered into (i) that certain Amendment to Regulatory Agreement and Declaration of Covenants and Restrictions, releasing the aforementioned released portions of the Original Site from the Original Agency Regulatory Agreement ("Amendment No. 1 to Regulatory Agreement'), and (ii) that certain Second Allonge to Note ("Second Allonge"), pursuant to which the Agency agreed to annually forgive certain amounts due under the Original Note, as modified by the First Allonge, provided Mauka remained in compliance with the terms of (a) the Note, as modified by the First Allonge, (b) the Original Housing Agreement, as modified by the Second Amendment to Housing Agreement and the Third -2- DOC #2014-0451838 Page 3 of 17 11/25/2014 03:17 PM Amendment to Housing Agreement (hereinafter, the "Housing Agreement"), (c) the Original Agency Deed of Trust, as modified by the Modification (hereinafter, the "Agency Deed of Trust"), and (d) the Original Agency Regulatory Agreement, as modified by Amendment No. 1 to Regulatory Agreement (hereinafter, the "Agency Regulatory Agreement"). The Amendment No. 1 to Regulatory Agreement was recorded on February 28, 2006, as Instrument No. 2006-0141068, in the Official Records. The Original Note, as modified by the First Allonge and Second Allonge, is hereinafter referred to as the "Note." I. On or about March 8, 2007, Mauka (i) sold the Site to Pat A. Dolce and Lora Dean Dolce, Husband and Wife as Joint Tenants ("Dolce"), and (ii) Dolce assigned all of its interests in and to the Housing Agreement, Note, Agency Deed of Trust, and Agency Regulatory Agreement (collectively, the "Agency Agreements") pursuant to that certain Assignment and Assumption Agreement by and among the Agency, Mauka, and Dolce, which was recorded on March 12, 2007, as Instrument No. 2007-0166709, in the Official Records. J. On June 28, 2011, the Governor signed Assembly Bill 26 ("ABx1 26") and Assembly Bill 27 ("ABx1 27") from the 2011-12 First Extraordinary Session of the California Legislature. ABx1 26 immediately suspended all redevelopment agency activities, except continued performance of "enforceable obligations," and set forth a process to dissolve redevelopment agencies and end redevelopment in California. ABx1 27 provided a "voluntary alternative redevelopment program," which would have allowed redevelopment agencies to remain in existence and continue redevelopment, if remittance payments were made to cover the State of California's budget shortfall for fiscal year 2011-12 and were made in subsequent fiscal years to cover State costs. A lawsuit was filed, challenging the constitutionality of both ABx1 26 and 27. The California Supreme Court upheld the constitutionality of ABx1 26, revising the effective dates of certain provisions, and struck down as unconstitutional ABx1 27. (California Redevelopment Assn. v. Matosantos (2011) 53 Cal.4th 231 ("CRA Case'). ABx1 26 is chapter 5, Statutes 2011, First Extraordinary Session, which added Part 1.8 (suspension provisions) and Part 1.85 (dissolution provisions) of Division 24 of the Health and Safety Code. Under the CRA Case, all redevelopment agencies dissolved February 1, 2012. Pursuant to Health and Safety Code section 34176(b)(2), added by Part 1.85 of Division 24, and Authority Resolution No. 2012-02, Authority elected to be the "housing successor" to the Agency, enabling Authority to retain the housing assets and functions previously performed by the Agency, and allowing the Authority to enforce affordability covenants and related activities pursuant to applicable provision of the Community Redevelopment Law (Part 1 of Division 24 of the Health and Safety Code). Administration of the Agency Agreements is a housing function of the Agency that was transferred to Authority. -3- DOC #2014-0451838 Page 4 of 17 11/25/2014 03:17 PM K. On or about June 12, 2013, Dolce sold the Site to Mike Krantz, a married man as his sole and separate property ("Krantz"). On or about the same date hereof, Krantz executed that certain Assumption and Consent Agreement by and between Authority and Krantz, pursuant to which Krantz retroactively assumed all of Dolce's interests in and to the Agency Agreements. L. Participant has acquired the Site from Krantz, and concurrently herewith is assuming all of Krantz's interests in and to the Agency Agreements pursuant to that certain Assignment, Assumption, Consent, and Modification Agreement by and among Authority, Krantz, and Participant. M. Participant has executed or is about to execute a deed of trust in favor of Lender, encumbering the Site to secure a promissory note dated November, 20, 2014, for a sum not exceed Three Million One Hundred Thousand Dollars ($3,100,000) (the "Lender Loan") payable with interest and upon the terms and conditions described in such note (respectively, the "Lender Deed of Trust" and "Lender Note"). N. The Lender is willing to make the Lender Loan provided the Lender Deed of Trust is a lien or charge upon the Site prior and superior to the lien or charge of the Agency Deed of Trust and provided that the Authority will specifically and unconditionally subordinate the lien or charge of the Agency Deed of Trust to the lien or charge of the Lender Deed of Trust. O. It is the mutual benefit of the Lender, the Authority and Participant that the Lender make the Lender Loan to Participant. The Authority has agreed that the Lender Deed of Trust shall, when recorded, constitute a lien or charge upon the Site which is unconditionally prior and superior to the lien or charge of the Agency Deed of Trust, subject to the specific terms and provisions of this Agreement. NOW, THEREFORE, in consideration of the mutual benefits accruing to the Authority, Lender and Participant, and other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and in order to induce the Lender to make the Lender Loan, it is hereby declared, understood and agreed as follows: 1. Subordination by Authorit 1.1 Necessity of Subordination By executing this Agreement, Authority makes the finding set forth in Health and Safety Code Section 33334.14 that subordination is necessary and that Authority has obtained written commitments as set forth in this Agreement, consistent with Health and Safety Code Section 33334.14, to protect the Authority's investment in the event of a default. Therefore, the Authority hereby agrees to subordinate the lien of the Agency ME DOC #2014-0451838 Page 5 of 17 11/25/2014 03:17 PM Deed of Trust to the Lender Deed of Trust on the terms set forth in this Agreement. This Agreement shall set forth the priority of liens between the parties and govern the terms and conditions of such subordination. 1.2 Subordination of Agency Deed of Trust to Lender Deed of Trust The Lender Deed of Trust (and any renewals or extensions of, or advances, including interest, thereunder) shall unconditionally be and remain at all times a lien or charge on the Slte, prior and superior to the lien or charge of the Agency Deed of Trust to all present and future indebtedness and obligations secured thereby, together with all rights and privileges of Agency thereunder, but subject to the terms and conditions of this Agreement. 1.3 Covenant of Authority The Authority declares, agrees and acknowledges that to Authority's actual knowledge, there is no breach, event of default or default existing under the Agency Deed of Trust or any circumstances, event, omission or failure of condition which would constitute such a breach, default, or event of default after notice or lapse of time, or both. 2. Reliance by Lender and Authority The Lender would not make the Lender Loan and the Authority would not have agreed to subordinate the Agency Deed of Trust without this Agreement and each of the undersigned understands that in reliance upon, and in consideration of, this subordination, specific loans and advances are being and will be made and, as part and parcel thereof, specific monetary and other obligations are being and will be entered into which would not be made or entered into but for such reliance upon this subordination. 3. Rights of Authority 3.1 Default Under Lender Deed of Trust In the event Participant defaults under the terms of the Lender Deed of Trust and as a result thereof the holder of the Lender Deed of Trust records a Notice of Default in the Official Records of the County of Riverside, the holder of the Lender Deed of Trust shall, concurrently with such recording, provide the Authority with a copy of such Notice of Default. Upon the earlier of (i) Authority's receipt of such Notice of Default, or (ii) the recordation of such Notice of Default, the parties hereto agree that Authority shall have each of the following rights so long as the Agency Deed of Trust or the AHA encumbers any portion of the Site or interest therein: -5- DOC #2014-0451838 Page 6 of 17 11/25/2014 03:17 PM (a) To cure the noticed default at any time prior to the foreclosure of the Lender Deed of Trust. (b) To negotiate with the Lender regarding the noticed default at any time prior to the foreclosure of the Lender Deed of Trust or other lien. 3.2 Disbursements Lender, in making disbursements of the proceeds of said Loan, is under no obligation or duty to, nor has Lender represented that it will, see to the application of such proceeds by the person or persons to whom disbursements thereof are made and any application or use of such proceeds for purposes other than those provided in the documents evidencing and securing such Loan shall not defeat the subordination herein made in whole or in part. 4. Miscellaneous 4.1 Entire Agreement This Agreement shall be the whole and only agreement with regard to the matters set forth herein and shall supersede and cancel, but only insofar as would affect the priority between the Lender Deed of Trust and the Agency Deed of Trust, any prior agreement as to such subordination including, but not limited to, those provisions, if any, contained in the Agency Deed of Trust which provide for the subordination of the lien or charge thereof to another deed or deeds of trust or to another mortgage or mortgages, upon the Site. 4.2 Successors and Assigns This Agreement shall inure to and bind the heirs, legatees, devisees, administrators, executors, successors and assigns of the parties hereto. 4.3 California Law This Agreement shall be construed according to the internal laws of the State of California without regard to conflict of law principles. 4 DOC #2014-0451838 Page 7 of 17 11/25/2014 03:17 PM 4.4 Severability If any term, provision, condition or covenant of this Agreement or the application thereof to any party or circumstances shall, to any extent, be held invalid or unenforceable, the remainder of this instrument, or the application of such term, provision, condition or covenant to persons or circumstances other than those as to whom or which it is held invalid or unenforceable shall not be affected thereby, and each term and provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law. 4.5 Notice Any notice, demand, request, consent, approval or communication that any party desires or is required to give to another party or any other person must be in writing and may be given by personal delivery, by mailing the same by registered or certified mail, return receipt requested, postage prepaid, or by a reputable same day or overnight delivery service that provides a receipt showing date and time of delivery, to the party to whom the notice is directed at the address of such party hereinafter set forth, or such other address and to such other persons as the parties may hereafter designate. Any such notice shall be deemed given (i) upon receipt if by personal delivery or by delivery service, or (ii) forty-eight (48) hours after deposit in the United States mail, if sent by mail pursuant to the foregoing. If to Authority: La Quinta Housing Authority 78-495 Calle Tampico La Quinta, CA 92253 Attention: City Clerk With copy to: Rutan & Tucker, LLP 611 Anton Boulevard, Suite 1400 Costa Mesa, CA 92626- 1998 Attn: William H. Ihrke If to Participant: Barry Saywitz Properties Two, LP 4740 Von Karman, Suite 100 Newport Beach, CA 92660 Attn: Barry Saywitz If to Lender: Opus Bank 19900 MacArthur Blvd., 14th Floor Irvine, CA 92612 Attn: Loan Servicing Department -7- DOC #2014-0451838 Page 8 of 17 11/25/2014 03:17 PM 4.6 Attorneys' Fees In the event that any action, suit or other proceeding is brought to enforce the obligations under this Agreement, the prevailing party shall be entitled to receive all of such party's costs and expenses of suit, including attorneys' fees, expert witness fees, and all costs incurred in each and every action, suit or other proceeding, including any and all appeals or petitions therefrom. 4.7 Counterparts This Agreement may be executed in any number of counterparts, each of which shall be an original, but all of which shall constitute one and the same document. [End — Signature Page Follows] 10 DOC #2014-0451838 Page 9 of 17 11/25/2014 03:17 PM IN WITNESS WHEREOF, the parties have executed this Subordination Agreement as of the date first written above. NOTICE: THIS SUBORDINATION AGREEMENT RESULTS IN YOUR SECURITY INTEREST IN THE SITE BECOMING SUBJECT TO AND OF LOWER PRIORITY THAN THE LIEN OF SOME OTHER OR LATER SECURITY INSTRUMENTS. ATTEST: By: Susan Maysels, APPROVED AS TO FORM RUTAN & TUCKER, LLP Authority Counsel Signed In Counterpart "Authority" LA QUINTA HOUSING public bqdy, corpoEWe; ry By: "Participant" ITY, a politic Executive Director BARRY SAYWITZ PROPERTIES TWO, LP, a California limited partnership Its.. "Lender" OPUS BANK, a California commercial bank Its: IE DOC #2014-0451838 Page 10 of 17 11/25/2014 03:17 PM STATE OF CALIFORNIA ) ) ss. COUNTY OF RIVERSIDE ) On Noyem6r 14 ao(4, before me, -UL c MOvyiPSon , Notary Public, personally appeared FRANK J. SPEVACEK who proved to me on the basis of satisfactory evidence to be the person whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his authorized capacity, and that by his signature on the instrument the person or the entity upon behalf of which the person acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. Witness my hand and official seal. [SEAL] Notary Public TERESA THOMPSON t Commission * 2030796 Z a llotary Public - CaliforniazRiverside County 3 _ Ny Comm. Expires Jun 24. 2017 t STATE OF CALIFORNIA ) ss. COUNTY OF ) On I , before me, , Notary Public, personally appeared BARRY SAYWITZ who 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. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. Witness my hand and official seal. Notary Public [SEAL] DOC #2014-0451838 Page 11 of 17 11/25/2014 03:17 PM IN WITNESS WHEREOF, the parties have executed this Subordination Agreement as of the date first written above. NOTICE: THIS SUBORDINATION AGREEMENT RESULTS IN YOUR SECURITY INTEREST IN THE SITE BECOMING SUBJECT TO AND OF LOWER PRIORITY THAN THE LIEN OF SOME OTHER OR LATER SECURITY INSTRUMENTS. ATTEST: By: Susan Maysels, Authority Secretary APPROVED AS TO FORM RUTAN & TUCKER, LLP in Authority Counsel Signed In Counterpart 10 "Authority" LA QUINTA HOUSING AUTHORITY, a public body, corporate and politic am Frank J. Spevacek, Executive Director "Participant" BARRY SAYWITZ PROPERTIES TWO, LP, a California limited partnership Its: "Lender" OPUS BANK, bank Its: a California commercial DOC #2014-0451838 Page 12 of 17 11/25/2014 03:17 PM STATE OF CALIFORNIA ) ) ss. COUNTY OF RIVERSIDE ) On before me, , Notary Public, personally appeared FRANK J. SPEVACEK who proved to me on the basis of satisfactory evidence to be the person whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his authorized capacity, and that by his signature on the instrument the person or the entity upon behalf of which the person acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. Witness my hand and official seal. Notary Public [SEAL] STATE OF CALIFORNIA ) ) ss. COUNTY OF nrar%�b ) before me, �«it �1 On Val," Z , Notary Public, personally appeared BARRY SAYWITZ who 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. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. Witness my hand and official seal Notary Nublic [SEAL] MELANIE ROUNTREE -%e�1,5 :A Commission # 1982222 z a =ce ., Notary Public - California z Orange County My Comm. Expires Jun 16, 2016 DOC #2014-0451838 Page 13 of 17 11/25/2014 03:17 PM IN WITNESS WHEREOF, the parties have executed this Subordination Agreement as of the date first written above. NOTICE: THIS SUBORDINATION AGREEMENT RESULTS IN YOUR SECURITY INTEREST IN THE SITE BECOMING SUBJECT TO AND OF LOWER PRIORITY THAN THE LIEN OF SOME OTHER OR LATER SECURITY INSTRUMENTS. ATTEST: By: Susan Maysels, Authority Secretary APPROVED AS TO FORM RUTAN & TUCKER, LLP Authority Counsel Signed In Counterpart "Authority" LA QUINTA HOUSING AUTHORITY, a public body, corporate and politic In Frank J. Spevacek, Executive Director "Participant" BARRY SAYWITZ PROPERTIES TWO, LP, a California limited partnership In Its: "Lender" OPUS BANK, a California commercial bank By: Its: W DOC #2014-0451838 Page 14 of 17 11/25/2014 03:17 PM IN WITNESS WHEREOF, the parties have executed this Subordination Agreement as of the date first written above. NOTICE: THIS SUBORDINATION AGREEMENT RESULTS IN YOUR SECURITY INTEREST IN THE SITE BECOMING SUBJECT TO AND OF LOWER PRIORITY THAN THE LIEN OF SOME OTHER OR LATER SECURITY INSTRUMENTS. ATTEST: IN Susan Maysels, Authority Secretary APPROVED AS TO FORM RUTAN & TUCKER, LLP an Authority Counsel Signed In Counterpart IRM "Authority" LA QUINTA HOUSING AUTHORITY, a public body, corporate and politic IN Frank J. Spevacek, Executive Director "Participant" BARRY SAYWITZ PROPERTIES TWO, LP, a California limited partnership Its: "Lender" OPUS BANK, a California commercial bank n (\ By: Its: vP i 0 a Sana 4amaker ojo r DOC #2014-0451838 Page 15 of 17 11/25/2014 03:17 PM STATE OF CALIFORNIA ) ) ss. COUNTY OF 61-31) j = ) On �jOJ )0 1 a0 iLA I , before me, Q ✓I to -.L. L4 , Notary Public, personally appeared )eCd cA-nrti Ut"CA or who proved to me on the basis of satisfactory evidence to be the person(o whose nameV)os are subscribed to the within instrument and acknowledged to me that h /sh they executed the same in his/her/their authorized capacity(jegy, and that by his er% heir signaturew on the instrument the person(cA or the entity upon behalf of which the person(p' acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. Witness my hand and official seal. [SEAL] Commission 0 2058872 Notary Public - California Orange County Notary Public DOC #2014-0451838 Page 16 of 17 11/25/2014 03:17 PM Under the provisions of Government code 27361.7, 1 certify under penalty of perjury that the Notary Seal on the document to which this statement is attached reads as follows: Name of Notary: Renee Pejjalll Commission Number: a65883c) County where Bond is filed: V df')G%(f) Date Commission Expires: PLACE OF EXECUTION DATE: /)' a 5 ` I SIGNATURE: PRINTED NAME: R. Walla Pe SAN BERNARDINO DOC #2014-0451838 Page 17 of 17 11/25/2014 03:17 PM EXHIBIT "A" LEGAL DESCRIPTION OF SITE All of that certain property located in the City of La Quinta, County of Riverside, State of California, described as follows: LOTS 1 TO 11 INCLUSIVE IN BLOCK 126 OF SANTA CARMELITA AT VALE LA QUINTA, UNIT NO. 14, IN THE CITY OF LA QUINTA, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 18 PAGES 82 AND 83 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY. EXCEPTION THEREFROM THOSE PORTIONS OF LOTS 1, 59 6 AND 11, DEEDED TO THE COUNTY OF RIVERSIDE, BY DOCUMENTS RECORDED MARCH 23, 1978 AS INSTRUMENT NOS. 55038 AND 55039 OF OFFICIAL RECORDS OF RIVERSIDE COUNTY, CALIFORNIA ASSESSOR PARCEL NO. 773-071-017-5