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Vista Dunes Housing Partners (CORE)/Afford Hous Agree 07AFFORDABLE HOUSING AGREEMENT BY AND BETWEEN LA QUINTA REDEVELOPMENT AGENCY AND THE SOUTHERN CALIFORNIA HOUSING DEVELOPMENT CORPORATION 882/015610-0047 715762.07 .03/06/07 TABLE OF CONTENTS Page I. [100] SUBJECT OF AGREEMENT............................................................................I A. [101] Purpose of Agreement.............................................................................I B. [102] The Redevelopment Plan......................................................................... I C. [103] The Project Area.....................................................................................2 D. [104] The Site...................................................................................................2 E. [105] Parties to the Agreement.........................................................................2 1. [106] The Agency.................................................................................2 2. [107] SCHDC.......................................................................................2 F. [108] Definitions ..............................................................................................3 1. [109] Prohibition Against Change in Ownership, Management and Control of SCHDC and Prohibition Against Transfer of the Site........................................................................................................7 G. [110] Representations by SCHDC....................................................................8 H. [111] Representations by the Agency................................................................9 II. [200] SALE OF PROJECT........................................................................................ I I A. [201] Purchase Price.......................................................................................12 B. [202] Deposit..................................................................................................12 C. [203] Payment of Closing Portion of the Purchase Price.................................13 D. [204] Tax Credits; Tax Credit Regulatory Agreement.....................................13 E. [205] Evidence of Financing...........................................................................15 F. [206] Acquisition of the Site Pursuant to Grant Deed......................................16 G. [207] Escrow..................................................................................................16 H. [208] Conveyance of Title and Delivery of Possession...................................17 I. [209] Conditions to Close of Escrow..............................................................18 1. [210] Agency's Conditions to Closing.................................................18 2. [211] SCHDC's Conditions to Closing................................................18 3. [212] Waiver.......................................................................................19 4. [213] Failure of Conditions Precedent; Termination ............................19 J. [214] Condition of Title..................................................................................20 K. [215] Title Insurance......................................................................................21 L. [216] Taxes and Assessments.........................................................................21 M. [217] Conveyance Free of Possession.............................................................21 N. [218] Document Review; Inspections; Condition of Project ............................22 I. [219] Document Review.....................................................................22 2. [220] Inspections.................................................................................22 3. [221 ] "As Is.........................................................................................23 4. [222] Indemnity.................................................................................. 23 5. [223] Release and Waiver...................................................................23 6. [224] Definitions.................................................................................24 7. [225] Materiality................................................................................. 24 III. [300] DEVELOPMENT OF THE SITE.....................................................................25 882/015610-0047 71576207 a03/06/07 -i- Page IV. [400) USE OF THE PROJECT..................................................................................26 A. [401 ] Affordable Housing...............................................................................26 B. [402] Uses In Accordance with Redevelopment Plan; Nondiscrimination........................................................................................... 26 C. [403] Indemnity; Insurance Requirements......................................................27 D. [404] Local, State and Federal Laws...............................................................29 E. [405] Taxes and Assessments.........................................................................29 F. [406] Limitation on Encumbrances.................................................................29 G. [407] Maintenance of the Project....................................................................30 H. [408] Effect of Violation of the Terms and Provisions of this Agreement....................................................................................................... 30 V. [500] DEFAULTS AND REMEDIES........................................................................30 C. [501 ] Defaults -- General................................................................................30 D. [502] Legal Actions........................................................................................31 1. [503] Specific Performance.................................................................31 2. [504] Institution of Legal Actions; Attorney's Fees .............................31 3. [505] Applicable Law.........................................................................31 4. [506] Acceptance of Service of Process...............................................31 E. [507] Rights and Remedies Are Cumulative...................................................31 F. [508] Inaction Not a Waiver of Default...........................................................32 G. [509) Termination...........................................................................................32 1. [510] Termination by SCHDC............................................................32 2. [511 ] Termination by the Agency........................................................32 VI. [600] GENERAL PROVISIONS...............................................................................33 A. [601] Notices, Demands and Communications Between Parties......................33 B. [602] Conflicts of Interest...............................................................................33 C. [603] Enforced Delay; Extension of Times of Performance ............................33 D. [604] Non -Liability of Officials and Employees of the Agency ......................34 E. [605] Interpretation; Entire Agreement, Waivers; Attachments .......................34 F. [606] Time of Essence....................................................................................34 G. [607] No Brokers............................................................................................34 H. [608J Maintenance of Books and Records.......................................................35 I. [609] Right to Inspect.....................................................................................35 J. [610] Binding Effect of Agreement.................................................................35 K. [611] Severability...........................................................................................35 L. [612] Counterparts..........................................................................................35 M. [613] Amendments to this Agreement............................................................35 '82/015610-0047 715762.07.03/06/07 -11- Pace ATTACHMENTS 1 Site Map 2 Legal Description 3 Schedule of Performance 4 Grant Deed 5 Agency Note 6 Agency Deed of Trust 7 Agency Regulatory Agreement 8 Project Proforma 9 Bill of Sale 10 Assignment and Release 11 Memorandum of Affordable Housing Agreement 882/015610-0047 71576207 a03/06/07 -13Y AFFORDABLE HOUSING AGREEMENT This AFFORDABLE HOUSING AGREEMENT ("Agreement") is entered into as of the day of /, Je , 2007 ("Effective Date") by and between LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic (the "Agency") and THE SOUTHERN CALIFORNIA HOUSING DEVELOPMENT CORPORATION, a California non- profit public benefit corporation ("SCHDC"). The Agency and SCHDC (collectively referred to as the "Parties") hereby agree as follows: I. [1001 SUBJECT OF AGREEMENT A. r1011 Purpose ofAereement The purpose of this Agreement is to effectuate the Redevelopment Plan for the La Quinta Redevelopment Project Area No. 2 (the "Project Area") by providing for (i) the improvement by the Agency of certain property situated within the Project Area and referred to herein as the "Site" (as hereinafter defined) with a multi -family housing development, consisting of not less than eighty (80) residential dwelling units (the "Housing Development"); (ii) the conveyance of the Site and Housing Development to SCHDC; and (iii) SCHDC's ownership, operation and management of the Site and Housing Development as an affordable rental housing development restricted for rental and occupancy by Eligible Tenants at an Affordable Rent. As used herein, the term "Unit" refers to each of the 80 rental dwelling units comprising the Housing Development, and the term "Units" refers to all of the 80 rental dwelling units comprising the Housing Development. The Units are subject to the Agency Regulatory Agreement. The Agency financial assistance in this Agreement shall be utilized to effectuate a portion of the Agency's overall affordable housing program pursuant to the requirements of California Health and Safety Code Section 33334.2 to expend twenty percent (20%) of its increment funds to improve, increase and preserve the community's supply of low- and moderate -income housing. The conveyance to SCHDC of the Site and the Housing Development and the occupancy of the Housing Development by households of limited incomes, all as provided in this Agreement, are in the vital and best interests of the City of La Quinta (the "City") and the health, safety and welfare of its residents, and in accord with the public purposes and provisions of applicable state and local laws and requirements under which the Project has been undertaken. B. r 1021 The Redevelopment Plan This Agreement is subject to the provisions of the Redevelopment Plan for the Project Area (the "Redevelopment Plan") which was approved and adopted by Ordinance No. 139 of the City Council of the City of La Quinta on the 16th day of May, 1989. Said ordinance and Redevelopment Plan are fully incorporated herein by reference. Any amendment hereafter to the Redevelopment Plan (as so approved and adopted) which changes the uses or development permitted on the Site as proposed in this Agreement, or 882/015610-0047 _ 715762.07 a03/06/07 -1 otherwise changes the restrictions or controls that apply to the Site, or otherwise affects SCHDC's obligations or rights with respect to the Site, shall not apply to the Site without the written consent of SCHDC. Amendments to the Redevelopment Plan applying to other property in the Project Area shall not require the consent of SCHDC. C. [1031 The Proiect Area The Project Area is located in the City and is generally bounded by Washington Street, the northern corporate boundary, Jefferson Street and Avenue 50. The exact boundaries are as set out in the Redevelopment Plan. D. [1041 The Site The "Site" is currently owned by the Agency and consists of approximately 9.7 acres of that certain real property located at 78990 Miles Avenue within the Project Area in the City of La Quinta, County of Riverside. The Site is depicted on the Site Map, which is attached hereto and incorporated herein as Attachment No. 1. The legal description of the Site is provided on Attachment No. 2, which is attached hereto and incorporated herein by this reference. E. j 1051 Parties to the Agreement 1. f1061 The Agency The 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 (Health & Safety Code § 33000 et seq.). The principal office of the Agency is located at 78-495 Calle Tampico, La Quinta, California 92253, or such other address as Agency shall hereafter designate in writing to SCHDC. "Agency", as used in this Agreement, includes the La Quinta Redevelopment Agency and any and all assignees of or successors to its rights, powers and responsibilities. 2. f 1071 SCHDC "SCHDC" is The Southern California Housing Development Corporation, a California non-profit public benefit corporation. The principal office and mailing address of SCHDC for purposes of this Agreement is 9065 Haven Avenue, Suite 100, Rancho Cucamonga, CA 91730, Attn: President. By executing this Agreement, each person signing on behalf of SCHDC warrants and represents to the Agency that SCHDC has the full power and authority to enter into this Agreement, that all authorizations required to make this Agreement binding upon SCHDC have been obtained, and that the person or persons executing this Agreement on behalf of SCHDC are fully authorized to do so. Whenever the term "SCHDC" is used in this Agreement, such term shall include any and all nominees, assignees, or successors in interest as herein provided. "2/015610-0047 _ 715762 07 a03/06/07 -2 F. f 1081 Definitions. "50% Very Low Income Household" shall mean a household whose annual income does not exceed fifty percent (50%) of AMI adjusted for family size. "Affiliate" shall mean any person or entity directly or indirectly, through one or more intermediaries, controlling, controlled by or under common control with SCHDC which, if SCHDC is a partnership or limited liability company, shall include each of the constituent members or partners, respectively thereof. The term "control" as used in the immediately preceding sentence, means, with respect to a person that is a corporation, the right to the exercise, directly or indirectly, of more than fifty percent (50%) of the voting rights attributable to the shares of the controlled corporation, and, with respect to a person that is not a corporation, the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of the controlled person. "Affordable Rent" shall mean the amount of monthly rent, including a reasonable utility allowance, that does not exceed the maximum allowable rent to be charged by SCHDC and paid by Eligible Tenants occupying the Units as determined pursuant to Health and Safety Code Section 50053(b), as of the Effective Date, and the regulations promulgated pursuant to or incorporated therein, including, without limitation, any applicable regulations promulgated pursuant to Health and Safety Code Section 50093. "Agency Deed of Trust" shall mean that certain Deed of Trust With Assignment of Rents substantially in the form attached hereto and incorporated herein as Attachment No. 6. which secures the Agency Note and SCHDC's performance of its obligations under the Agency Regulatory Agreement. The Agency Deed of Trust shall be recorded against the Site at the Closing. "Agency Note" shall mean that certain Promissory Note substantially in the form attached hereto and incorporated herein as Attachment No. 5. The Agency Note sets forth SCHDC's obligation to pay Agency the Residential Receipts Portion of the Purchase Price from SCHDC's residual receipts from operating the Project, and shall be delivered by SCHDC to the Agency at the Closing. "Agency Regulatory Agreement" shall mean that certain Regulatory Agreement and Declaration of Covenants and Restrictions substantially in the form attached hereto and incorporated herein as Attachment No.7. The Agency Regulatory Agreement sets forth SCHDC's obligations concerning the ownership, operation, and management of the Project. The Agency Regulatory Agreement shall be recorded against the Site at the Closing. "Agency Title Policy" shall have the meaning ascribed in Section 215 hereof. "Agency's Conditions to Closing" shall have the meaning ascribed in Section 210 hereof. "AMI" shall mean the median family income for the Riverside County area promulgated and published annually by the California Department of Housing and Community Development ("HCD") pursuant to Title 25, Section 6932 of the California Code of Regulations. 882/015610-0067 _ 715762.07 a03/06/07 _3 If HCD ceases annually to publish median incomes, the parties will agree upon an adequate substitute manner for determining area -wide median income. "Annual Financial Statement" shall mean the financial statements prepared by SCHDC for each calendar year, including a balance sheet, income statement, statement of retained earnings, statement of cash flow, and footnotes thereto, prepared in accordance with generally accepted accounting principals consistently applied, as audited by an independent certified public accountant. "Assignment" shall mean a general assignment of Agency's entitlements and approvals substantially in the form attached hereto and incorporated herein as Attachment No. 10. "Bill of Sale" shall mean a bill of sale substantially in the form attached hereto and incorporated herein as Attachment No. 9. "Builder" shall have the meaning ascribed in Section 300 hereof. "CEQA" shall mean the California Environmental Quality Act, Public Resources Code Section 21000 et seq., as amended. "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. "Close of Escrow" shall have the meaning ascribed in Section 207.3 hereof. "Closing" or "Closing Date" shall have the meaning ascribed in Section 207.3 hereof. "Closing Portion of Purchase Price" shall have the meaning ascribed in Section 207.2 hereof. "Days" shall mean calendar days and the statement of any time period herein shall be calendar days, and not business days, unless otherwise specified. "Deposit" shall have the meaning ascribed in Section 202 hereof. "Effective Date" shall mean the later of the dates this Agreement is executed on behalf of Agency and SCHDC. "Eligible Tenant" shall mean a household which qualifies as a "very low income household," an "extremely low income household" (as those terms are described in California Health and Safety Code Sections 50105 and 50106), or a 50% Very Low Income Household. "Escrow" shall have the meaning ascribed in Section 207 hereof. "Escrow Agent" shall have the meaning ascribed in Section 207 hereof. se2/01561M0a7 _ 715762.07 a03/WO7 -4 "Evidence of Financing" shall have the meaning ascribed in Section 205 hereof. "Executive Director" shall mean the individual duly appointed to the position of Executive Director of Agency, or his or her authorized designee. Whenever an administrative action is required by Agency to implement the terms of this Agreement, the Agency Executive Director, or his or her authorized designee, shall have authority to act on behalf of Agency, except with respect to matters reserved for Agency Board determination. "Grant Deed" shall have the meaning ascribed in Section 206 hereof. "Hazardous Materials" shall have the meaning ascribed in Section 224 hereof. "Housing Development" shall have the meaning ascribed in Section 101 hereof. "Initial Tax Credit Application" shall have the meaning ascribed in Section 204 hereof. "Institutional Lender" shall mean any of the following institutions having assets or deposits in the aggregate of not less than One Hundred Million Dollars ($100,000,000): a California chartered bank; a bank created and operated under and pursuant to the laws of the United States of America; an "incorporated admitted insurer" (as that term is used in Section 1100.1 of the California Insurance Code); a "foreign (other state) bank" (as that term is defined in Section 1700(l) of the California Financial Code); a federal savings and loan association (Cal. Fin. Code Section 8600); a commercial finance lender (within the meaning of Section 2600 et seq. of the California Financial Code); a "foreign (other nation) bank" provided it is licensed to maintain an office in California, is licensed or otherwise authorized by another state to maintain an agency or branch office in that state, or maintains a federal agency or federal branch in any state (Section 1716 of the California Financial Code); a bank holding company or a subsidiary of a bank holding company which is not a bank (Section 3707 of the California Financial Code); a trust company, savings and loan association, insurance company, investment banker; college or university; pension or retirement fund or system, either governmental or private, or any pension or retirement fund or system of which any of the foregoing shall be trustee, provided the same be organized under the laws of the United States or of any state thereof, and a Real Estate Investment Trust, as defined in Section 856 of the Internal Revenue Code of 1986, as amended, provided such trust is listed on either the American Stock Exchange or the New York Stock Exchange. "Management Unit" shall mean the one (1) unit in the Housing Development that may be occupied by on -site management. "Memorandum" shall mean the Memorandum of Affordable Housing Agreement substantially in the form attached hereto and incorporated herein as Attachment No. 11. "Moderate Income Household" shall have the meaning as set forth in Health and Safety Code Section 50093, or any successor statute. "Outside Closing Date" shall mean August 1, 2008. "2/015610-0047 _ 715762.07.03106/07 _5 "Project" shall have the meaning ascribed in Section 200 hereof. "Project Proforma" shall mean the financial information referred to in Section 205 of this Agreement and attached hereto and incorporated herein as Attachment No. 8 and is SCHDC's best estimate of the costs of ongoing operations based on the information available to SCHDC as of the Effective Date. The Project Proforma shall not undergo material change without the prior approval of Agency's Executive Director, which approval shall not be unreasonably withheld (a material change is one or more change(s) that causes the Net Operating Income as shown on Project Proforma to increase or decrease by a cumulative amount of two percent (2%) or more from what is shown in Attachment No. 8. "Property Documents" shall have the meaning ascribed in Section 219 hereof. "Purchase Price" shall have the meaning ascribed in Section 201 hereof. "Qualified Tax Credit Investor" shall mean a person or entity who (i) is an experienced limited partner and investor in multifamily housing developments receiving low income housing tax credits issued by the State of California or the United States federal government and (ii) has obtained or is contractually obligated to obtain a limited partnership or limited liability company membership interest in the Project whereby it will receive 90 percent or more of the Tax Credits obtained in connection with the Project. Agency shall have the right to reasonable prior approval of the identity of the Qualified Tax Credit Investor and of the terms and conditions of the limited partnership agreement or other agreement specifying the terms and conditions, including but not limited to terms and conditions concerning timing and amounts of cash contributions toward Project costs in return for an interest in the owner of the Project and the right to receive Tax Credits. "Residual Receipts Portion of the Purchase Price" shall have the meaning ascribed in Section 201 hereof. 211 hereof. "SCHDC's Conditions to Closing" shall have the meaning ascribed in Section "SCHDC Title Policy" shall have the meaning ascribed in Section 215 hereof. "Schedule of Performance" shall mean that certain Schedule attached hereto and incorporated herein as Attachment No. 3. "Second Tax Credit Application" shall have the meaning ascribed in Section 204 hereof. "Tax Credit Program" shall mean the low-income housing tax credit program authorized pursuant to Internal Revenue Code Section 42, California Health and Safety Code Sections 50199.6-50199.19, Revenue and Taxation Code Sections 17057.5, 17058, 23610.4, 23610.5, and applicable federal and State regulations such as 4 California Administrative Code Sections 10300-10340. 882/015610-0047 _ 715762.07 a03/06/07 -6 "Tax Credits" shall refer to the low income housing tax credits granted by TCAC for the Project pursuant to Section 42 of the Internal Revenue Code and/or California Revenue and Taxation Code, Sections 17057.5, 17058, 23610.4, 23610.5 and California Health and Safety Code Section 50199, et seq. "Tax Credit Regulatory Agreement" shall mean that certain regulatory agreement to be recorded against the Site as a condition of the receipt by the Project of an allocation by TCAC of nine percent (9%) Tax Credits. hereof. "TCAC" shall mean the California Tax Credit Allocation Committee. "Third Tax Credit Application" shall have the meaning ascribed in Section 204 "Title Company" shall mean Chicago Title Company. "Unit" and "Units" shall have the meaning ascribed in Section 101 hereof. 1. f 1091 Prohibition Against Change in Ownership, Management and Control of SCHDC and Prohibition Against Transfer of the Site The qualifications and identity of SCHDC are of particular interest to the Agency. It is because of these qualifications and identity that the Agency has entered into this Agreement with SCHDC. Consequently, no person, whether a voluntary or involuntary successor of SCHDC, shall acquire any rights or powers under this Agreement nor shall SCHDC assign all or any part of this Agreement, the Project, the Site, or the Agency Regulatory Agreement without the prior written approval of the Agency. A voluntary or involuntary sale or transfer of any interest in SCHDC or the Site during the term of this Agreement shall be deemed to constitute an assignment or transfer for the purposes of this Section 109, and the written approval of the Agency shall be required prior to effecting such an assignment or transfer. Any purported transfer, voluntarily or by operation of law, except with the prior written consent of the Agency, shall render this Agreement absolutely null and void and shall confer no rights whatsoever upon any purported assignee or transferee. During the term of this Agreement and the Agency Regulatory Agreement, SCHDC shall not, except as permitted by this Agreement, assign or attempt to assign this Agreement or any rights or duties herein, nor make any total or partial sale, transfer, conveyance, or assignment of the whole or any part of the Site or the Project, without the prior written approval of the Agency. Notwithstanding any other provision of this Agreement to the contrary, Agency approval of an assignment of this Agreement or transfer of the Site or the Project, or any interest therein shall not be required in connection with: (a) the conveyance or dedication of any portion of the Site to the City of La Quinta, or other appropriate governmental agency, including public utilities, where the granting of such easements permits or facilitates the operation of the Project on the Site; (b) any assignment of this Agreement or transfer of the Site, or any of the improvements located thereon, to a limited liability company in which SCHDC has a greater than fifty percent (50%) ownership and management interest; (c) any assignment of this Agreement, or transfer of the Site and any of the improvements located thereon, to a limited partnership in which SCHDC or an Affiliate of SCHDC which is also a non-profit public benefit 882/015610-0047 715762.07 a 3/06/07 corporation is the general partner (a "Limited Partnership"); (d) the leasing of individual rental Units within the Housing Development provided that such leasing is in accordance with the terms of this Agreement; (e) transfers resulting from the death or mental or physical incapacity of an individual; (f) transfers in trust for the benefit of a spouse, children, grandchildren, or other family member, or for charitable purposes; (g) transfers of stock in a publicly -held corporation or of the beneficial interest in any publicly -held partnership or real estate investment trust; (h) the admission of the Qualified Tax Credit Investor to the Limited Partnership; (i) a transfer by the Qualified Tax Credit Investor to an entity that has the same general partner or managing member as the Qualified Tax Credit Investor; 0) the removal by the Qualified Tax Credit Investor of the general partner of the Limited Partnership for a default under the partnership agreement for the Limited Partnership, provided the replacement general partner is reasonably satisfactory to Agency; (k) a sale by the Qualified Tax Credit Investor of credits in syndication; (1) the encumbrance of the limited partner interest by the Qualified Tax Credit Investor as collateral to finance its capital contribution to the Limited Partnership; or (m) the exercise by the general partner of the Limited Partnership of any option to purchase or right of first refusal to purchase the Limited Partnership or all of the limited partner's interest in the Limited Partnership at the conclusion of the tax credit period.. Notwithstanding anything in this Section 109 to the contrary, in the absence of specific written agreement by Agency, no transfer or assignment by SCHDC or any successor in interest to SCHDC, whether or not requiring the approval by Agency, shall be effective unless and until the transferor and transferee execute and deliver to Agency an assignment and assumption agreement in a form and with content reasonably acceptable to Agency's legal counsel. This Section 109 shall not be applicable to the leasing of individual Units to Eligible Tenants in accordance with this Agreement and no assignment and assumption agreement shall be required in connection therewith. G. f 1101 Representations by SCHDC SCHDC represents and warrants to the Agency as follows: 1. SCHDC is duly established and in good standing under the laws of the State of California and has duly authorized, executed and delivered this Agreement and any and all other agreements and documents required to be executed and delivered by SCHDC in order to carry out, give effect to, and consummate the transactions contemplated by this Agreement. This Agreement is enforceable against SCHDC in accordance with its terms. 2. SCHDC does not have any contingent obligations or contractual agreements which will materially adversely affect the ability of SCHDC to carry out its obligations hereunder. 3. There are no pending or, so far as is known to SCHDC, threatened, legal proceedings to which SCHDC is or may be made a party to or to which it or any of its property is or may become subject, which have not been fully disclosed in the material submitted to the Agency, which will materially adversely affect the ability of SCHDC to carry out its obligations hereunder. E62/01561a0047 _ 115762 07.03/06/07 -g 4. There is no action or proceeding pending or, to SCHDC's best knowledge, threatened, looking toward the dissolution or liquidation of SCHDC and there is no action or proceeding pending or, to SCHDC's best knowledge, threatened by or against SCHDC which could affect the validity and enforceability of the terms of this Agreement, or adversely affect the ability of SCHDC to carry out its obligations hereunder. 5. The execution and delivery of this Agreement and all other documents to be executed by SCHDC 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 SCHDC is bound. 6. The execution and delivery of this Agreement and all other documents to be executed by SCHDC 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 SCHDC. 7. No representation, warranty, or covenant of SCHDC in this Agreement, or in any document or certificate famished or to be famished 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. 8. All financial information delivered to Agency, including, without limitation, information relating to the financial condition of SCHDC, 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. SCHDC shall notify Agency in writing of any material changes to such information delivered to the Agency. 9. SCHDC has, and will as required by its obligations hereunder, dedicate, allocate and otherwise make available, sufficient financial and other resources to perform its obligations under this Agreement. Each of the foregoing items 1 to 9, inclusive, shall be deemed to be an ongoing representation and warranty and shall survive the close of escrow for the Site. SCHDC shall advise the Agency in writing if there is any change material pertaining to any matters set forth or referenced in the foregoing items 1 to 9, inclusive. IA The Agency represents an4 warrants to SCHDC as follows: 1. Agency is a publi California Community Redevelopment I which has been authorized to transact Agency has full right, power and lawful the execution, performance, and delivery body, corporate and politic, existing pursuant to the w (California Health and Safety Code Section 33000), isiness pursuant to action of the City of La Quinta. .uthority to transfer the Project as provided herein and 1f this Agreement by Agency has been fully authorized 882/015610-0047 715762.07 a03/06/07 _9_ by all requisite actions on the part of Agency. The parties who have executed this Agreement on behalf of Agency are authorized to bind Agency by their signatures hereto. 2. Agency does not, as far as is known to Agency, have any contingent obligations or contractual agreements which will materially adversely affect the ability of Agency to carry out its obligations hereunder. 3. There are no pending or, so far as is known to Agency, threatened, legal proceedings to which Agency is or may be made a party or to which it or any of its property is or may become subject, which will materially adversely affect the ability of Agency to carry out its obligations hereunder. 4. There is no action or proceeding pending or, to Agency's knowledge, threatened, looking toward the dissolution or liquidation of Agency and there is no action or proceeding pending or, to Agency's knowledge, threatened by or against Agency which could affect the validity and enforceability of the terms of this Agreement, or adversely affect the ability of Agency to carry out its obligations hereunder. 5. To Agency's knowledge, the Site is not currently in violation of any law, ordinance, rule, regulation or requirement applicable to its use and operation. 6. Agency is not the subject of a bankruptcy proceeding. 7. To Agency's knowledge, no Hazardous Materials (as defined in Section 224 below) are now or have been released, used, or stored on or within any portion of the Site in violation of applicable laws or regulations governing the release, use, or storage of Hazardous Materials, and there has not been any federal, state, or local enforcement, clean-up, removal, remedial, or other governmental or regulatory actions instituted or completed affecting the Site. 8. To Agency's knowledge, the execution and delivery of this Agreement and all other documents to be executed by Agency pursuant to this Agreement will not constitute or result in any default or event that with notice or the lapse of time, or both, would be a default, breach, or violation of any other agreement, instrument, or arrangement by which Agency is bound. 9. To Agency's knowledge, the execution and delivery of this Agreement and all other documents to be executed by Agency pursuant to this Agreement and the consummation of the transactions contemplated herein will not violate any provision of or require any consent, authorization, or approval under any law or administrative regulation or any other order, award, judgment, writ, injunction or decree applicable to, or any governmental permit or license issued to Agency. 10. To Agency's knowledge, no representation, warranty, or covenant of Agency in this Agreement, or in any document or certificate famished or to be furnished to SCHDC 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. "2/015610-0047 -10- 715762 07 a03/06/07 Each of the foregoing items 1 to 10, inclusive, shall be deemed to be an ongoing representation and warranty and shall survive the close of escrow for the Site. The Agency shall advise SCHDC in writing if there is any change material pertaining to any matters set forth or referenced in the foregoing items 1 to 10, inclusive. As used in this Section 111, the term "knowledge" or "known" shall mean the actual (not constructive or imputed) knowledge of the Agency Executive Director, without any investigation or inquiry or duty of investigation or inquiry. II. (2001 SALE OF PROJECT Pursuant to the terms set forth herein, Agency shall sell to SCHDC and SCHDC shall purchase from Agency the Project. As used herein, the term "Project" shall mean and refer to all of the following: (a) The Site; (b) The Housing Development to be constructed by Agency on the Site, including all appurtenant structures and facilities; (c) All personal property belonging to Agency and located upon the Site; and (d) All appurtenances, rights (including reversionary rights), easements and privileges belonging to or running with the Site, including, without limitation, all of Agency's right, title and interest in and to any and all land lying in the bed of any street, road, cul-de-sac, alley or accessway, open or closed, existing, vacated or proposed, adjoining, adjacent to, or contiguous with the Site, and all water rights and other entitlements which Agency may own in conjunction with Agency's ownership of the Site, including all fixtures, trade fixtures, as well as the following items, if any, owned and/or leased by Agency and presently located in, on or upon the Site: electrical distribution systems (power panels, buss ducting, conduits, disconnects, lighting fixtures), telephone distribution systems, and wall coverings. In connection with Agency's sale to SCHDC of the Project, Agency shall, at the Closing, assign and be deemed to assign to SCHDC all of Agency's right, title, and interest in and to all entitlements, approvals, plans, specifications, contracts and agreements including, but not limited to, those between Agency and its contractors, subcontractors, engineers, architects and other consultants relating to the Site or the Housing Development, subject to any limitations which may be imposed by law or under any agreements with any governmental agency or authority or such contractors, subcontractors, engineers, architects and consultants, together with, on a non- exclusive basis, all of Agency's right, claims, actions, or causes of action against any of Agency's contractors, subcontractors, engineers, architects or other consultants relating to the preparation or production of such plans, specifications and other documents or to the construction of the Housing Development or based in any way on any work performed on or to the Site, including, without limitation, any and all warranties and guarantees with respect to the development of the Housing Development on the Site, including, without limitation, grading work performed in connection therewith, including all statutory, express or implied warranties and all rights of Agency as an additional insured or otherwise pertaining to insurance coverage maintained by or for the Agency prior to the Closing and covering the Site. In furtherance of the "2/015610-0047 -11- 715762.07 a03/06/07 foregoing, the Agency shall deliver to SCHDC an executed general assignment in the form and content attached hereto as Attachment No. 10. A. L011 Purchase Price. SCHDC shall pay to Agency the total of Twenty -Six Million Six Hundred Eight Thousand Seven Hundred Thirty -Four Dollars ($26,608,734) for the Project (the "Purchase Price"), which SCHDC shall fund in the following manner: (i) SCHDC shall obtain a conventional loan from an Institutional Lender in the amount of One Million Three Hundred Seventeen Thousand One Hundred Fifty -Two Dollars ($1,317,152) (the "Conventional Loan"). (ii) SCHDC shall obtain a reservation of Tax Credits in the amount of Eleven Million Three Hundred Twenty -Four Thousand One Hundred Fifty -Two Dollars ($11,324,751). (iii) SCHDC shall pay to Agency the remaining portions of the Purchase Price (i.e., the Purchase Price less the sum of the Conventional Loan and the Tax Credits for the Project), in the amount of Thirteen Million Nine Hundred Sixty -Six Thousand Eight Hundred Thirty -One Dollars ($13,966,831) (the "Residual Receipts Portion of the Purchase Price"), pursuant to the terms of the Agency Note. Notwithstanding the foregoing, the Executive Director shall have the authority, in his or her sole and absolute discretion, to accept payment of the Purchase Price in a manner that provides for funding from the foregoing sources in different amounts as those set forth above, provided that the total amount of the Purchase Price does not vary. In such event, the Agency shall modify the Agency Note to reflect the revised amount. B. 12021 Deposit. SCHDC shall deposit with Escrow Agent concurrently with the opening of Escrow the amount of Fifty Thousand Dollars ($50,000) (the "Deposit"). Escrow Agent shall place the Deposit in the highest interest -bearing account permitting immediate withdrawal without penalty in any federally or state chartered bank or financial institution generally used by Escrow Agent. If the Deposit is returned to SCHDC pursuant to the terms hereof, interest earned on the Deposit shall be paid to SCHDC at the time the Deposit is returned to SCHDC. If the sale is consummated and the Escrow closes, interest earned on the Deposit shall be applied to SCHDC's obligation to pay the Purchase Price. If this Agreement has not been terminated by SCHDC or Agency pursuant to the provisions hereof, a portion of the Deposit, in the amount of Twenty -Five Thousand Dollars ($25,000) (the "Release Amount"), shall become non-refundable and released by Escrow Agent to Agency on the date that is sixty (60) days after the Effective Date; provided, however, that in the event this Agreement is subsequently terminated as a result of an Agency default, the Deposit, including the Release Amount, shall be returned to SCHDC. Unless excused due to 882/015610-0047 -12- 715762 07 a03/06/07 Agency's default or failure to perform hereunder, in the event SCHDC defaults or fails to perform its obligations under this Agreement Agency shall be entitled to terminate this Agreement by written notice to SCHDC and to Escrow Agent and to receive and retain the Deposit, including the Release Amount, if such amount has been released to Agency, together with all interest thereon. In the event this Agreement is terminated by either Party by reason other than a default by the other Parry, Escrow Agent shall return to SCHDC the Deposit, less the Release Amount, if such amount has been released to Agency. In the event this Agreement has not been terminated and the Escrow closes as contemplated hereunder, the Deposit shall be applied towards the Purchase Price. C. 12031 Payment of Closing Portion of the Purchase Price. Prior to the Closing Date, and as one of Agency's Conditions to Closing, SCHDC shall deposit with Escrow Holder the Closing Portion of the Purchase Price. D. [2041 Tax Credits; Tax Credit Regulatory Agreement. SCHDC shall submit an application to TCAC for competitive nine percent (9%) tax credits as may be necessary to secure reservation of nine percent (9%) Tax Credits for the Project on or before the published TCAC first round submittal deadline for 2007 (the "Initial Tax Credit Application"), in the amount of Eleven Million Three Hundred Twenty -Four Thousand Seven Hundred Fifty -One Dollars ($11,324,751). SCHDC's qualification for and participation in the Tax Credit Program in accordance with the terms set forth in this Agreement is a condition to the performance of this Agreement by Agency and by SCHDC. In the event that Tax Credits are not awarded through the Initial Tax Credit Application, SCHDC shall submit a second application for competitive federal nine percent (9%) Tax Credits on or before the published TCAC second round submittal deadline for 2007 (the "Second Tax Credit Application"). In the event that SCHDC elects to submit the Second Tax Credit Application and Tax Credits are not awarded through the Second Tax Credit Application, SCHDC shall submit a third application to TCAC for competitive federal nine percent (9%) Tax Credits on or before the published TCAC first round submittal deadline for 2008 (the "Third Tax Credit Application"). SCHDC agrees to perform all of SCHDC's obligations under this Agreement and the Tax Credit Regulatory Agreement. In the event Agency is prevented by a final, non -appealable order of a court of competent jurisdiction in a lawsuit involving the Project, or by an applicable and binding published appellate opinion, or by a final, non -appealable order of a regulatory body having jurisdiction, from enforcing, for any reason, the affordability restrictions set forth in this Agreement, then in such event Agency shall be a third -party beneficiary under the Tax Credit Regulatory Agreement and shall have full authority to enforce any breach or default by SCHDC under the Tax Credit Regulatory Agreement in the same manner as though it were a breach or default hereunder. Without Agency's prior written consent, which consent may be withheld in Agency's sole and absolute discretion, SCHDC shall not consent to any amendment of or modification to the Tax Credit Regulatory Agreement which (i) shortens the term of the affordability restrictions on the Units in the Project to a term of less than fifty-five (55) years from the Effective Date of the Agency Regulatory Agreement or (ii) releases SCHDC from the 882/015610-0047 -13- 715762.07 a03/06/07 requirement that the Units be rented to Eligible Tenants in accordance with the Restricted Unit Matrix attached to the Agency Regulatory Agreement. Notwithstanding anything contained in this Agreement to the contrary, if and when the Site is subject to the requirements of the Tax Credit Program and there is a conflict between the requirements of the Tax Credit Program and the provisions set forth in this Agreement, then the provisions of the Tax Credit Program shall prevail. That notwithstanding, the fact that this Agreement and the Tax Credit Program provide for greater, lesser or different obligations or requirements shall not be deemed a conflict unless the applicable provisions are inconsistent and could not be simultaneously enforced or performed. Agency shall have no responsibilities with respect to SCHDC's performance of its obligations under the Tax Credit Program, nor shall Agency do anything or fail to do anything it is required by law or this Agreement to do which will adversely affect SCHDC's performance of its Tax Credit Program obligations. In order to assist Agency in performing its obligations and enforcing its rights under this Agreement (with respect to reviewing SCHDC's Evidence of Financing, insuring the continued affordability and maintenance of the Units, and obtaining payments due under the Agency Note), SCHDC agrees to promptly submit to Agency all of the following documents at such time as the same are submitted by SCHDC to the TCAC or other applicable body or when such documents are received by SCHDC, as applicable (any documents submitted prior to the Effective Date of this Agreement shall also have been submitted by SCHDC to Agency and reviewed by Agency prior to the Effective Date of this Agreement): i) Complete copies of SCHDC's applications to the TCAC for the preliminary reservation, final reservation, carryover allocation (if applicable), and placed -in- service credit award, and any amendments or modifications thereto (4 California Administrative Code §§ 10325(b)-(e) and 10345). ii) Complete copies of any correspondence or transmittals by the TCAC to SCHDC notifying SCHDC regarding the action(s) taken with respect to any of the applications referred to in clause (i). iii) A complete copy of the regulatory agreement between the TCAC and SCHDC (4 California Administrative Code § 10340(c)). (As more fully discussed in Section 3.11 of the Agency Regulatory Agreement, should Agency be prevented by a final order of a court of competent jurisdiction, applicable and binding appellate opinion, or regulatory body with jurisdiction from enforcing, for any reason, the affordability restrictions set forth in this Agreement, Agency shall be a third -party beneficiary under said agreement and shall have full authority to enforce any breach or default by SCHDC thereunder in the same manner as though it were a breach or default under this Agreement.) iv) Complete copies of all progress reports submitted by SCHDC to the TCAC prior to the issuance of tax credit allocations (4 California Administrative Code § 10340(d)) and the annual certifications and Project Status Reports submitted by SCHDC to the 882/015610-0047 -14- 715762.07 a03/06/07 TCAC subsequent to the issuance of tax credit allocations (4 California Administrative Code § 10340(e)). v) Complete copies of all correspondence or transmittals from the TCAC or other jurisdiction (such as the Internal Revenue Service) containing any notification regarding the Project's noncompliance with applicable provisions of the Tax Credit Program. In addition to the foregoing sources of funding for the Project, SCHDC shall diligently seek other sources of funding that are or may be available to help fund its purchase/acquisition of the Project. E. 12051 Evidence of Financing The financial projections for the Project are set forth in the Project Pro Forma (Attachment No. 8). Within the time set forth in the Schedule of Performance, and as a condition precedent to Agency's obligation to transfer the Project to SCHDC, SCHDC shall submit to the Executive Director evidence reasonably satisfactory to the Executive Director that SCHDC has, or will have, prior to the Close of Escrow, the financial capability necessary to acquire and operate the Project on the Site pursuant to this Agreement. Such evidence of financial capability (collectively, the "Evidence of Financing") shall include all of the following: A copy of an executed letter of commitment from an Institutional Lender to make the Conventional Loan that is subject only to the usual and customary conditions of the lender of the Convention Loan for similar loans, and provided such conditions have been approved by Agency, with such approval not to be unreasonably withheld, conditioned, or delayed. A true and correct copy of the preliminary reservation letter from TCAC, a copy of the letter of intent from the Qualified Tax Credit Investor reflecting the total amount of the syndication proceeds and the timing of the payment of such proceeds. A copy of SCHDC's most recently prepared Annual Financial Statement, and a copy of SCHDC's most recent internally prepared, unaudited financial statement, which shall include a balance sheet, income statement, statement of retained earnings, statement of cash flows, and footnotes thereto, prepared in accordance with generally accepted accounting principles consistently applied. The Executive Director shall complete his or her review of and approve or disapprove SCHDC's Evidence of Financing within the time set forth in Schedule of Performance. If the Executive Director shall disapprove such Evidence of Financing, he or she shall do so by written notice to SCHDC stating the reasons for such disapproval. In such event, SCHDC shall promptly resubmit its Evidence of Financing not less than thirty (30) days after receipt of the Executive Director's disapproval, the Executive Director shall reconsider such resubmittal within the same number of days allowed for the initial submittal, and the deadlines in Schedule of Performance shall be extended accordingly. '82/015610-0047 -15- 715762.07 a03/06/07 F. 12061 Acquisition of the Site Pursuant to Grant Deed. SCHDC shall acquire a fee simple title to the Site pursuant to a grant deed in the form attached hereto and incorporated herein as Attachment No. 4 ("Grant Deed'). G. [2071 Escrow 1. Opening of Escrow. Agency and SCHDC agree to open an escrow (the "Escrow") with Chicago Title (the "Escrow Agent"), by the time established therefor in Schedule of Performance. This Agreement constitutes Agency's and SCHDC's escrow instructions for the Agency's sale and SCHDC's purchase of the Project and a duplicate original of this Agreement shall be delivered to the Escrow Agent upon the opening of the Escrow. The Escrow Agent is hereby empowered to act under this Agreement, and the Escrow Agent, upon indicating within five (5) days after the opening of the Escrow its acceptance of the provisions of this Section 207, in writing, delivered to the Agency and SCHDC, shall carry out its duties as Escrow Agent hereunder. In the event of any conflict or inconsistency between any additional escrow instructions required by the Escrow Agent and the provisions of this Agreement, as between the parties hereto, the provisions of this Agreement shall supersede and control. Any amendment of the escrow instructions set forth or described herein shall be in writing and signed by both Agency and SCHDC. At the time of any authorized amendment to the escrow instructions, the Escrow Agent shall agree, by signing below an appropriate statement on such an amendment, to carry out its duties as Escrow Agent under such an amendment. All communications from the Escrow Agent to Agency or SCHDC shall be in writing and directed to the addresses and in the manner established in Section 601 of this Agreement for notices, demands, and communications between Agency and SCHDC. 2. Deposits Into Escrow. Agency and SCHDC shall deposit the following documents and pay into the Escrow the following fees, charges and costs promptly after the Escrow Agent has notified the Agency of the total amount of such fees, charges and costs, but not earlier than two (2) days prior to Scheduled date for the Closing: a. SCHDC shall deposit the "Closing Portion of the Purchase Price," which, for purposes of this Agreement, shall be the Purchase Price less the sum of (i) the Deposit; and (ii) the Residual Receipts Portion of the Purchase Price; b. Agency and SCHDC shall each pay one-half of the Escrow fee; C. Agency shall pay the costs, if any, of drawing the Grant Deed; d. Agency shall pay recording fees, if any; e. Agency and SCHDC shall pay their respective notary fees; f. Agency shall pay the premium for SCHDC Title Policy up to the amount set forth in Section 215 and SCHDC shall pay for its portion, if any, as set forth in Section 215. 882/015610-0047 -16- 71576207 a03/06/07 g. Agency shall pay for any transfer tax and any state, county or city documentary stamps. h. Agency shall deposit with the Escrow Agent the fully executed Grant Deed, and Agency and SCHDC, as applicable, shall deposit the fully executed Agency Deed of Trust, Agency Regulatory Agreement, and Memorandum or executed counterparts thereof. 3. Escrow Officer Obligations. The Escrow Officer shall notify the Agency and SCHDC when all outstanding documents, including the Grant Deed, the Agency Deed of Trust, the Agency Regulatory Agreement, and the Memorandum have been executed and submitted to Escrow by the applicable party. Upon confirmation by the Escrow Agent that all of the Agency's Conditions to Closing and all of SCHDC's Conditions to Closing have been satisfied, or waived by the appropriate party, the Escrow Agent shall record the following documents in the following order of recordation: (1) Grant Deed, (2) Agency Regulatory Agreement, (3) deed of trust securing the Conventional Loan, (4) Agency Deed of Trust, and (5) Memorandum. The date such documents are recorded shall be referred to herein as the "Close of Escrow" or the "Closing Date." All funds received in the Escrow shall be deposited by the Escrow Agent, with other escrow funds of the Escrow Agent in an interest-eaming general escrow account or accounts with any state or national bank doing business in the State of California. Such funds may be transferred to any other general escrow account or accounts. All disbursements shall be made by check of the Escrow Agent. Any amendment to these escrow instructions shall be in writing and signed by the Agency. At the time of any amendment, the Escrow Agent shall agree to carry out its duties as Escrow Agent under such amendment. The liability of the Escrow Agent in the capacity of escrow holder with respect to the Agency is limited to performance of the obligations imposed under it under Sections 202, 207, 213, 215, and 216 of this Agreement. H. r2081 Conveyance of Title and Delivery of Possession Provided that SCHDC is not in default under this Agreement and all of Agency's Conditions to Closing and SCHDC's Conditions to Closing have occurred, and subject to any mutually agreed upon extensions of time, the Closing shall occur, and Agency shall convey to SCHDC title to the Project on or before the later of (i) the date that is thirty-five (35) days after Agency formally accepts the completed Housing Development from the Builder, provided Agency has obtained labor and materials releases from all subcontractors who performed work on the Housing Development, or (ii) ninety (90) days after SCHDC is awarded the Tax Credits. The Agency and SCHDC agree to perform all acts necessary to conveyance of title on or before the Outside Closing Date. Possession shall be delivered to SCHDC concurrently with the conveyance of title at the Close of Escrow, except that limited access may be permitted before the Close of Escrow 882/015610-0047 -17- 715762.07 a03/06/07 as permitted in Section 220 of this Agreement. SCHDC shall accept title and possession on said date. I. [2091 Conditions to Close of Escrow f2101 Agency's Conditions to Closing The Agency's obligation to convey the Project to SCHDC and the closing of the Escrow shall, in addition to any other condition set forth herein in favor of the Agency, be conditional and contingent upon the satisfaction, or waiver by the Agency in its sole and absolute discretion, or before the Outside Closing Date, of each and all of the following conditions (collectively, "Agency's Conditions to Closing"); a. SCHDC shall have deposited into Escrow the Closing Portion of the Purchase Price and all other sums and documents required of SCHDC by this Agreement; b. SCHDC shall have delivered to Agency or deposited into Escrow the Agency Note, the Agency Deed of Trust, duly executed and acknowledged by SCHDC, the Agency Regulatory Agreement, duly executed and acknowledged by SCHDC, and the Memorandum, duly executed and acknowledged by SCHDC; C. SCHDC shall have executed and delivered to Agency the Agency Note. d. SCHDC shall have submitted to the Executive Director the evidence of insurance required pursuant to Section 403 of this Agreement; e. SCHDC shall have submitted to the Executive Director SCHDC's Evidence of Financing, in accordance with Section 205 herein, and the Executive Director shall have approved the same; f. On the Closing Date, the Title Company shall be irrevocably committed to issue the Agency Title Policy, if elected by Agency; g. Escrow Agent holds and will deliver to Agency the instruments and funds to be delivered to Agency under this Agreement; and Agreement. h. SCHDC is not in material default of any term or condition of this 2. [2111 SCHDC's Conditions to Closing SCHDC's obligation to purchase the Project from Agency and the closing of the Escrow shall, in addition to any other condition set forth herein in favor of SCHDC, be conditional and contingent upon the satisfaction, or waiver by SCHDC in its sole and absolute discretion, on or before the Outside Closing Date, of each and all of the following conditions (collectively, "SCHDC's Conditions to Closing"). 982/015610-0047 _ 18_ 715762.07 s03/06/07 a. Agency has deposited into Escrow the Grant Deed, duly executed and acknowledged by Agency, and all other sums and documents required of Agency by this Agreement; b. Agency shall have deposited into Escrow the Agency Deed of Trust, duly executed and acknowledged by Agency, the Agency Regulatory Agreement, duly executed and acknowledged by Agency, and the Memorandum, duly executed and acknowledged by Agency; C. On the Closing Date, the Title Company shall be irrevocably committed to issue the SCHDC Title Policy insuring that fee title to the Site is vested in SCHDC; d. Escrow Agent holds and will deliver to SCHDC the instruments and funds to be delivered to SCHDC under this Agreement; e. SCHDC has approved the environmental condition of the Site; f. SCHDC has approved the Documents pursuant to Section 219 below; g. Agency shall have completed construction of the Housing Development, as evidenced by City's issuance of a certificate of occupancy for the same; Bill of Sale; Assignment; and Agreement. h. Agency shall have executed and delivered to Escrow Agent the i. Agency shall have executed and delivered to Escrow Agent the j. Agency is not in material default of any term or condition of this 3. L 121 Waiver Agency may at any time or times, at its election, waive any of the conditions set forth in Section 210 above to its obligations hereunder, but any such waiver shall be effective only if contained in a writing signed by Agency and delivered to SCHDC. SCHDC may at any time or times, at its election, waive any of the conditions set forth in Section 211 above to its obligations hereunder, but any such waiver shall be effective only if contained in a writing signed by SCHDC and delivered to Agency. 4. [2131 Failure of Conditions Precedent: Termination In the event that by the Outside Closing Date each of the conditions set forth in Section 210 is not fulfilled, or waived by Agency pursuant to Section 212, Agency may, at its option, terminate this Agreement and the Escrow opened hereunder, thereby releasing the parties from further obligations hereunder. In the event that by the Outside Closing Date each of the 882/015610-0047 -19- 715762 07 a09/06/07 conditions set forth in Section 211 are not fulfilled, or waived by SCHDC pursuant to Section 212, SCHDC may, at its option, terminate this Agreement and the Escrow opened hereunder, thereby releasing the parties from further obligations hereunder. In the event this Agreement is terminated, all documents and funds delivered by SCHDC to Agency or Escrow Agent shall be returned immediately to SCHDC and all documents and funds delivered by Agency to SCHDC or Escrow Agent shall be returned immediately to Agency. Notwithstanding the foregoing and subject to Section 202 hereof, (i) in the event the Release Amount has been released to Agency, SCHDC shall not be entitled to the return of such amount; and (ii) in the event this Agreement has been terminated as a result of SCHDC's default, Agency shall be entitled to the receipt of the Deposit, including all interest thereon. Nothing in this Section 213 shall be construed as releasing any party from liability for any default of its obligations hereunder or breach of its representations and warranties under this Agreement occurring prior to the termination of this Agreement and/or the Escrow to be opened hereunder. J. [2141 Condition of Title The Agency shall convey to SCHDC fee simple title to the Project free and clear of all recorded liens, encumbrances, encroachments, assessments, leases and taxes except the provisions of the Grant Deed, the Agency Deed of Trust, the Agency Regulatory Agreement, the Memorandum, the standard printed conditions and exceptions contained in the ALTA standard owner's policy of title insurance that is regularly issued by the Title Company in transactions similar to the one contemplated by this Agreement, as approved by SCHDC pursuant to this Section 214. Within five (5) days after the Effective Date, Agency shall cause the Title Company to deliver to SCHDC a standard preliminary title report with respect to the Project, together with legible copies of the documents underlying the exceptions set forth in the Title Report and, as soon as possible thereafter, a plotting of all plottable easements and items (collectively, the "Title Report"). SCHDC shall have the right to reasonably approve or disapprove the condition of title as reflected in the Title Report; provided, however, that SCHDC hereby approves the Redevelopment Plan and the lien of current non -delinquent real property taxes and assessments, if any. SCHDC shall have fifteen (15) business days from the date of receipt of the Title Report pursuant to this Section 214 to give written notice to Agency of its approval or disapproval of any the title exceptions set forth in the Title Report. SCHDC's failure to give written approval of the Title Report within such time limit shall be deemed approval of the Title Report by SCHDC. If SCHDC notifies Agency of its disapproval of any of the title exceptions in the Title Report (the "Disapproved Exceptions"), Agency shall have the right, but not the obligation, to remove any such Disapproved Exceptions within ten (10) business days after receiving written notice of SCHDC's disapproval or provide assurances satisfactory to SCHDC that such Disapproved Exception(s) will be removed on or before conveyance of the Project. If Agency cannot or in its sole discretion does not elect to remove any of the Disapproved Exceptions within that period, SCHDC shall have ten (10) business days after the expiration of such ten (10) business days to either give Agency written notice that it elects to proceed with the conveyance of the Project subject to the Disapproved Exceptions or to give Agency written notice that it elects to terminate this Agreement. Agency's failure to notify SCHDC of its election to remove or not to remove the Disapproved Exceptions shall be deemed Agency's election not to remove the Disapproved Exceptions. SCHDC's failure to give written notice of "2/015610.0047 _20- 715762 07 a03/06/07 its election to proceed with the conveyance or to terminate this Agreement after Agency elects or is deemed to have elected not to remove the Disapproved Exceptions shall be deemed its election to proceed subject to the Disapproved Exceptions. SCHDC shall have the right to approve or disapprove any exceptions reported by the Title Company after SCHDC has approved the condition of title for the Project (which are not created by SCHDC). Agency shall not voluntarily create any new exceptions to title following the date of this Agreement. K. 12151 Title Insurance Concurrently with recordation of the Grant Deed, the Escrow Agent shall instruct the Title Company to provide and deliver to SCHDC an ALTA owner's policy of title insurance that does not require a survey, issued by the Title Company and insuring that the title to the Site is vested in SCHDC, or its assignee, as applicable, in the condition required by Section 214 of this Agreement (the "SCHDC Title Policy"). The Title Company shall provide the Agency with a copy of SCHDC Title Policy and SCHDC Title Policy shall be in the amount of the Purchase Price. The Agency shall pay the title insurance premium attributable to SCHDC Title Policy. The Title Company shall, if requested by SCHDC, increase the amount of SCHDC Title Policy or provide SCHDC with an extended policy, coverages, or endorsements. SCHDC shall pay the portion of the premium associated with such extended or additional coverages or endorsements. At Agency's election, Agency may obtain from the Title Company an ALTA lender's policy of title insurance that does not require a survey, together with such endorsements as may be reasonably requested by Agency with liability in the amount of the Agency Note, covering the Project, showing title vested in SCHDC, and insuring the validity and priority of, respectively, the Agency Deed of Trust, Agency Regulatory Agreement, and Memorandum (the "Agency Title Policy"). L. [2161 Taxes and Assessments Ad valorem taxes and assessments, if any, on the Project, and taxes upon this Agreement or any rights hereunder, levied, assessed or imposed for any period commencing prior to conveyance of title shall be bome by the Agency. All ad valorem taxes and assessments levied or imposed for any period commencing after close of the Escrow shall be paid by SCHDC. M. [2171 Conveyance Free of Possession The Project shall be conveyed free of any possession or right of possession by any person except that of SCHDC and the easements and other encumbrances of record (subject to SCHDC's right to review the condition of title pursuant to Section 214). 882/015610-00a7 -21- 715762.07 a03/06/07 N. [2181 Document Review: Inspections; Condition of Proiect [2191 Document Review. (a) Within fifteen (15) days after the Effective Date, Agency shall make available to SCHDC for its review, true, correct and legible copies of those of the following items which are in Agency's possession or control or in the possession or control of an agent of Agency, which relate to the Site and/or Project (collectively, and with all other items made available pursuant to the provisions of this Section 219, the "Property Documents"). Any Property Documents which Agency has received from any third party will be made available to SCHDC without any representation or warranty: (i) a current waiting list for the Project (if applicable); (ii) current ad valorem and personal property tax bills for the Site, and any copies of such bills for the last two tax years; (iii) any and all environmental reports, preliminary environ- mental assessments, soil tests and studies concerning the Site. (b) Agency agrees to allow SCHDC, its authorized agents and representatives, to inspect and make copies, at its own expense, of all Property Documents. (c) SCHDC's obligations hereunder shall be conditioned upon SCHDC's written approval of all Property Documents within the time set forth in the Schedule of Performance. SCHDC's failure to give its written approval of all Property Documents shall be deemed to be disapproval thereof, and, in such event, the rights of the parties are set forth in Section 213 above. [2201 Inspections. SCHDC shall conduct SCHDC's own investigation of the Site, including but not limited to its physical condition, the soils and toxic conditions of the Site and all other matters which in SCHDC's judgment affect or influence SCHDC's proposed use of the Site and SCHDC's willingness to acquire the Project pursuant to this Agreement. SCHDC's investigation may include, without limitation, the preparation by a duly licensed soils engineer of a soils report for the Site. Within thirty (30) days after the Effective Date, SCHDC shall provide written notice to the Agency of SCHDC's determinations concerning the suitability of the physical condition of the Site. If, in SCHDC's reasonable judgment, the physical condition of the Site is unsuitable for the use or uses to which the Site will be put, then SCHDC shall have the option either to (a) take any action necessary to place the Site in a condition suitable for operation of the Project, at no cost to the Agency; or (b) terminate this Agreement pursuant to the provisions of Section 213 hereof. If SCHDC has not notified the Agency of its determinations concerning the suitability of the physical condition of the Site by the close of such thirty (30) day period, SCHDC shall be deemed to have waived its right to terminate this Agreement pursuant to this Section. "2/015610-0047 -22- 715762.07 a03/06/07 3. j2211 "As Is". The Agency has provided or will provide (in compliance with Section 219) SCHDC with all information of which it has actual knowledge concerning the physical condition of the Site, including, without limitation, information about any "Hazardous Materials," as defined in Section 224 below. SCHDC acknowledges and agrees that any portion of the Site and Project that it acquires from the Agency pursuant to this Agreement shall be purchased "AS IS" "WHERE IS" "WITH ALL FAULTS," in its physical condition as of the Closing, with no warranties of any kind or nature, express or implied, including, without limitation, warranties of fitness for a particular purpose or warranties of habitability, except those wan•anties set forth in Section 111.7 above, as to the physical condition thereof, the presence or absence of any latent or patent condition thereon or therein, including, without limitation, any Hazardous Materials thereon or therein, and any other matters affecting the Project. 4. f2221 Indemnity. SCHDC agrees, from and after the date of recordation of the Grant Deed, to defend, indemnify, protect and hold harmless the Agency and its officers, beneficiaries, employees, agents, attorneys, representatives, legal successors and assigns (collectively, the "Indemnities") from, regarding and against any and all liabilities, obligations, orders, decrees, judgments, liens, demands, actions, "Environmental Response Actions" (as defined in Section 224 below), claims, losses, damages, fines, penalties, expenses, "Environmental Response Costs" (as defined in Section 224 below) or costs of any kind or nature whatsoever, together with fees (including, without limitation, reasonable attorneys' fees and experts' and consultants' fees), occurring during and caused by SCHDC's use and occupancy of the Project, and resulting from or in connection with the actual or claimed generation, storage, handling, transportation, use, presence, placement, migration and/or release of Hazardous Materials at, on, in, beneath or from the Project, unless caused by the negligence or willful misconduct of Indemnities. SCHDC's defense, indemnification, protection and hold harmless obligations herein shall include, without limitation, the duty to respond to any governmental inquiry, investigation, claim or demand regarding the Hazardous Materials, at SCHDC's sole cost. Notwithstanding the foregoing, the Agency agrees to indemnify, defend, and hold SCHDC harmless for, from, and against any and all claims, demands, liabilities, costs, expenses, Environmental Response Actions, Environmental Response Costs, damages, cause or causes or action of any nature whatsoever arising from any misrepresentation or breach of the warranty set forth in Section 111.7 above, or otherwise resulting from or in connection with the generation, storage, handling, transportation, use, and/or release of Hazardous Materials at, on, in, beneath, or from the Project by the Agency or during the Agency's ownership or possession of the Project. 5. [2231 Release and Waiver. Subject to the exceptions set forth in Section 222 above, SCHDC hereby releases and waives all rights, causes of action and claims SCHDC has or may have in the future against the Indemnities arising out of or in connection with any Hazardous Materials at, on, in, beneath or from the Site or Project. In furtherance of the intentions set forth herein, SCHDC acknowledges that it is familiar with Section 1542 of the Civil Code of the State of California which provides as follows: 882/015610-0047 -23- 715762.07 a03/06/07 "A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED THIS SETTLEMENT WITH THE DEBTOR." SCHDC hereby waives and relinquishes any right or benefit which it has or may have under Section 1542 of the Civil Code of the State of California or any similar provision of the statutory or non -statutory law of any other applicable jurisdiction to the full extent that it may lawfully waive all such rights and benefits pertaining to the subject matter of this Section 223. SCHDC's Initials: 6. [2241 Definitions. a. As used in this Agreement, the term "Environmental Response Actions" means any and all activities, data compilations, preparation of studies or reports, interaction with environmental regulatory agencies, obligations and undertakings associated with environmental investigations, removal activities, remediation activities or responses to inquiries and notice letters, as may be sought, initiated or required in connection with any local, state or federal governmental or private party claims, including any claims by SCHDC. b. As used in this Agreement, the term "Environmental Response Costs" means any and all costs associated with Environmental Response Actions including, without limitation, any and all fines, penalties and damages. C. As used in this Agreement, the term "Hazardous Materials" means any substance, material or waste which is (1) defined as a "hazardous waste," "hazardous material," "hazardous substance," "extremely hazardous waste," or "restricted hazardous waste" under any provision of California law; (2) petroleum; (3) asbestos; (4) polychlorinated biphenyls; (5) radioactive materials; (6) designated as a "hazardous substance" pursuant to Section 311 of the Clean Water Act, 33 U.S.C. Section 1251 et seq. (33 U.S.C. Section 1321) or listed pursuant to Section 307 of the Clean Water Act (33 U.S.C. Section 1317); (7) defined as a "hazardous substance" pursuant to the Resource Conservation and Recovery Act, 42 U.S.C. Section 6901 et seq. (42 U.S.C. Section 6903) or its implementing regulations; (8) defined as a "hazardous substance" pursuant to Section 101 of the Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C. Section 9601 et seq. (42 U.S.C. Section 9601); or (9) determined by a California, federal or local governmental authority to be capable of posing a risk of injury to health, safety or property. 7. f2251 Materiality. SCHDC acknowledges and agrees that the defense, indemnification, protection and hold harmless obligations of SCHDC for the benefit of the Agency set forth in this Agreement are a material element of the consideration to the Agency for the performance of its obligations under this Agreement, and that the Agency would not have entered this Agreement unless SCHDC's obligations were as provided for herein. 882/015610-0047 -24- 715762.07 a03/06/07 III. [3001 DEVELOPMENT OF THE SITE In August 2006, the Agency selected a builder (the "Builder") to develop the Housing Development in accordance with plans and specifications prepared by Agency (the "Project Plans"). Agency contemplates completion of construction by Spring 2008. SCHDC acknowledges that SCHDC has reviewed and approved the Project Plans. Agency shall require the Builder to develop the Project in compliance with the Project Plans and all applicable laws, ordinances, and regulations, including applicable labor and wage standards. Agency shall obtain the approval of SCHDC, which approval shall not be unreasonably withheld, conditioned, or delayed, prior to authorizing any change order that substantially alters the design or construction of the Housing Development as set forth in the Project Plans. During construction of the Housing Development, SCHDC shall have the right to enter the Site and the Project and make visual inspections thereof. Agency shall have the right, but not the obligation, to require that a representative of Builder or Agency accompany SCHDC during any such inspection. SCHDC shall hold Agency harmless from any bodily injury or related damages arising out of the activities of SCHDC as referred to in this Section 300. Agency shall provide SCHDC with progress reports, on at least a monthly basis, concerning the development of the Housing Development. After Builder completes construction of the Housing Development and prior to the Closing, SCHDC may perform a walk-thru inspection of the Housing Development with a representative(s) of the Agency to determine whether the Housing Development has been constructed substantially in conformance with the Project Plans. If SCHDC reasonably determines that the Housing Development has not been constructed in substantial conformance with the Project Plans, subject to any change orders approved by SCHDC pursuant to this Section 300, and that such deviations will cause operation of the Project to be infeasible, SCHDC may terminate this Agreement without further liability. In such event, SCHDC shall be entitled to a return of the Deposit, including the Release Amount. Within thirty (30) days after the Project has been completed, Agency shall provide to SCHDC a copy of the as -built plans for the Project. SCHDC acknowledges that the Project will be developed with energy efficient facilities, and that prior to conveying the Project and Site to SCHDC Agency intends to submit an application to the local gas and electric utility providers for solar energy credits. In the event that any such credits are sent to or received by SCHDC, SCHDC shall promptly deliver the credits to the Agency. SCHDC further agrees that any rebates applied for during the course of construction of the Project by the Agency and/or by a representative of the Agency, including, without limitation, rebates for the use or installation of environmentally friendly techniques or equipment, are the sole property of the Agency, and SCHDC shall promptly deliver to the Agency any rebate funds upon SCHDC's receipt thereof. "2/015610-0047 715762 07 a03/06/07 -25- IV. 14001 USE OF THE PROJECT A. [4011 Affordable Housing SCHDC hereby covenants and agrees, for itself and its successors and assigns, to use and maintain the Project during the term of the Agency Regulatory Agreement only as a rental apartment housing project with eighty (80) apartment dwelling units (the "Units"), with each such Unit (other than the Management Unit) to be rented to and occupied by Eligible Tenants at an Affordable Rent, all as more fully described in the Agency Regulatory Agreement. The Management Unit shall be rented to and occupied by a Moderate Income Household at a rent that is affordable to such household, as determined pursuant to Health and Safety Code Section 50093. B. [4021 Uses In Accordance with Redevelopment Plan: Nondiscrimination SCHDC covenants and agrees for itself, its successors, its assigns, and every successor in interest to the Project or any part thereof that SCHDC and such successors and assignees, shall devote the Project to the uses specified in the Redevelopment Plan, the Grant Deed, the Agency Regulatory Agreement, and this Agreement for the periods of time specified therein. The foregoing covenants shall run with the land. SCHDC covenants by and for itself and any successors in interest that there shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Project, nor shall SCHDC itself or any person claiming under or though it establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the Project. The foregoing covenants shall run with the land. SCHDC shall refrain from restricting the rental, sale or lease of the Project on the basis of race, color, creed, religion, sex, marital status, national origin or ancestry of any person. All such deeds, leases or contracts shall contain or be subject to substantially the following nondiscrimination or nonsegregation clauses: 1. In deeds: "The grantee herein covenants by and for himself or herself, his or her heirs, executors, administrators and assigns, and all persons claiming under or through his or her heirs, executors, administrators and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of, any person or group of persons on account of race, color, creed, religion, sex, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land herein conveyed, nor shall the grantee himself or herself or any person claiming under or though him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees in the land herein conveyed. The foregoing covenants shall run with the land." 882/015610-0047 _26_ 715762.07 a03/06/07 2. In leases: "The lessee herein covenants by and for himself or herself, his or her heirs, executors, administrators and assigns, and all persons claiming under or through him or her, and this lease is made and accepted upon and subject to the following conditions: "There shall be no discrimination against or segregation or any person or group of persons on account of race, color, creed, religion, sex, marital status, ancestry or national origin in the leasing, subleasing, transferring, use, occupancy, tenure or enjoyment of the premises herein leased nor shall the lessee himself or herself, or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, sublessees, subtenants or vendees in the premises herein leased." 3. In contracts: "There shall be no discrimination against or segregation of, any person, or group of persons on account of race, color, creed, religion, sex, marital status, ancestry or national origin, in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the premises, nor shall the transferee himself or herself or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the premises." The covenants established in this Agreement and the deeds of conveyance for the Site shall, without regard to technical classification and designation, be binding for the benefit and in favor of the Agency, its successors and assigns, the City and any successor in interest to the Site, together with any property acquired by SCHDC pursuant to this Agreement, or any part thereof. The covenants against racial discrimination shall remain in effect in perpetuity. C. j4031 Indemnity. Insurance Requirements SCHDC shall indemnify, defend, and hold harmless the Agency and the City, and their respective officers, officials, employees, agents, and representatives, from all claims or suits for, and damages to, property and injuries to persons, including accidental death (including expert witness fees, attorneys fees, and costs), which may be caused by any of SCHDC's activities under this Agreement. Commencing with Effective Date hereof and ending on the expiration date of the Agency Regulatory Agreement, SCHDC shall procure and maintain, at its sole cost and expense, in a form and content satisfactory to the Executive Director, the following policies of insurance: A policy of commercial general liability insurance written on a per occurrence basis in an amount not less than: (A) for death and bodily injury, either (i) a combined single limit of Three Million Dollars ($3,000,000.00) or (ii) Three Million Dollars ($3,000,000) per person and Three Million Dollars ($3,000,000.00) per occurrence, and Three Million Dollars ($3,000,000.00) in the aggregate, and (B) for property damage, Three Million Dollars ($3,000,000.00) per occurrence. A policy of worker's compensation insurance in such amount as will fully comply with the laws of the State of California and which shall indemnify, insure, and provide legal defense for both SCHDC and Agency against any loss, claim or damage arising from any injuries "2/015610-0047 _27_ 715762 07 a03/D6/07 or occupational diseases occurring to any worker employed by or any persons retained by SCHDC in the course of carrying out the work or services contemplated in this Agreement. A policy of comprehensive automobile liability insurance written on a per occurrence basis in an amount not less than either (i) bodily injury liability limits of Three Million Dollars ($3,000,000.00) per person and Three Million Dollars ($3,000,000.00) per occurrence, and property damage liability limits of Three Million Dollars ($3,000,000.00) per occurrence and Three Million Dollars ($3,000,000.00) in the aggregate or (ii) combined single limit liability of Three Million Dollars ($3,000,000.00). Said policy shall include coverage for owned, non -owned, leased, and hired cars. With respect to the Housing Development and other improvements and any fixtures and furnishings to be owned by SCHDC on the Site, insurance against fire, extended coverage, vandalism, and malicious mischief, and such other additional perils, hazards, and risks as now are or may be included in the standard "all risk" form in general use in Riverside County, California, with the standard form fire insurance coverage in an amount equal to full actual replacement cost thereof, as the same may change from time to time. The above insurance policy or policies shall include coverage for earthquakes to the extent generally and commercially available at commercially reasonable rates, if such insurance is generally obtained for rental apartment projects of this size and type in the counties of Los Angeles, Orange County, Riverside, and San Bernardino. Agency shall be a loss payee under such policy or policies and such insurance shall contain a replacement cost endorsement. Notwithstanding anything in this Section 403 to the contrary, the all-risk coverage required pursuant to this paragraph shall not be required to be procured until, and such procurement shall be a condition to, the Closing. The following additional requirements shall apply to all of the above policies of insurance: All of the above policies of insurance shall be primary insurance and, except the worker's compensation insurance, shall name Agency, City, and their respective officers, officials, members, employees, agents, and representatives as additional insureds, using a pre- 2004 additional insured endorsement form. The insurer shall waive all rights of subrogation and contribution it may have against Agency, City, and their officers, officials, members, employees, agents, and representatives, and their respective insurers. All of said policies of insurance shall provide that said insurance may not be amended or cancelled without providing thirty (30) days' prior written notice to Agency and City. In the event any of said policies of insurance are cancelled, SCHDC 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, SCHDC shall provide the Executive Director with Certificates of Insurance or appropriate insurance binders evidencing the above insurance coverages and said Certificates of Insurance or binders shall be subject to the reasonable approval of the Executive Director. Upon the request of the Executive Director, SCHDC shall provide Agency with complete copies of each Policy of Insurance required by this Agreement. The policies of insurance required by this Agreement shall be satisfactory only if issued by companies licensed and admitted to do business in California, rated "A" or better in the most recent edition of Best Rating Guide, The Key Rating Guide or in the Federal Register, and 662/015610-0047 -28- 715762 07 a03/06/07 only if they are of a financial category Class VII or better. Notwithstanding the foregoing, in the event that the policies required hereunder are not available from such insurers at commercially reasonable rates, the Executive Director shall have the authority, in his or her sole and absolute discretion, to waive one or more of such requirements provided the proposal policies will adequately protect the Agency's interests hereunder. Agency may reasonably require coverage increases, provided that the percentage increase in coverage shall not be required to exceed the percentage increase in the Consumer Price Index published by the United States Department of Labor, Bureau of Labor Statistics, for Urban Wage Earners and Clerical Workers, Los Angeles -Riverside -Orange County Average, All Items (1984 = 100) (the "Index"), from and after the date of this Agreement, or, if said Index is discontinued, such official index as may then be in existence and which is most nearly equivalent to said Index (the "CPI Adjustment"). Unless otherwise approved in advance by the Executive Director, the insurance to be provided by SCHDC 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. SCHDC agrees that the provisions of this Section shall not be construed as limiting in any way the extent to which SCHDC may be held responsible for the payment of damages to any persons or property resulting from SCHDC's activities or the activities of any person or persons for which SCHDC is otherwise responsible. D. L41 Local. State and Federal Laws SCHDC shall perform under this Agreement and carry out its performance under this Agreement in conformity with all applicable federal and state laws and local ordinances as to the Project, provided, however, SCHDC and its contractors, successors, assigns, transferees, and lessees are not waiving their rights to contest any such laws, rules or standards. E. [4051 Taxes and Assessments After the conveyance of title by Agency to SCHDC or its assignee, and subject to its right to claim exemption under California Revenue & Taxation Code Section 214(g), SCHDC shall pay prior to delinquency all real estate taxes and assessments on the Project for any period subsequent to the conveyance of title and possession, so long as SCHDC retains any ownership interest therein. SCHDC shall remove or have removed any levy or attachment made on the Project or any part thereof, or assure the satisfaction thereof within a reasonable time but in any event prior to any sale or transfer of all or any portions thereof. Notwithstanding the above, SCHDC shall have the right to contest the validity or amounts of any tax, assessment, or encumbrance available to SCHDC in respect thereto, and nothing herein shall limit the remedies available to SCHDC in respect thereto. F. [4061 Limitation on Encumbrances Except as otherwise permitted by this Agreement, including but not limited to clause (d) of Section 109, SCHDC shall not mortgage the Project or any portion thereof or any interest therein, any other mortgages or conveyances for financing that encumber the Project or 882/015610-0047 -29- 715762.07 a03/06/07 any portion thereof, without the prior written approval of the Executive Director, which approval shall not be unreasonably withheld G. f4071 Maintenance of the Project SCHDC shall maintain the Project in conformity with the La Quinta Municipal Code and the requirements of the Agency Regulatory Agreement, and shall keep the Project free from any graffiti and from any accumulation of debris or waste materials. SCHDC shall also maintain the landscaping planted on the Site by Builder, Agency, and/or Agency's contractors in a healthy and attractive condition. If, at any time, SCHDC fails to maintain the Project or any portion thereof, and said condition is not corrected as soon as reasonably possible after written notice from the Agency, either the Agency or the City may enter the Project or applicable portion thereof to perform the necessary maintenance thereon and SCHDC shall pay such costs as are reasonably incurred for such maintenance plus a fifteen percent (15%) administrative fee. This covenant shall run with the land and shall remain in effect for the term of the Redevelopment Plan. H. f4081 Effect of Violation of the Terms and Provisions of this Agreement The Agency is deemed the beneficiary of the terms and provisions of this Agreement and of the covenants running with the land, for and in its own rights and for the purposes of protecting the interests of the community and other parties, public or private, in whose favor and for whose benefit this Agreement and the covenants running with the land have been provided. The Agreement and the covenants shall run in favor of the Agency, without regard to whether the Agency has been, remains or is an owner of any land or interest therein in the Project or in the Project Area. The Agency shall have the right, if this Agreement or covenants are breached, to exercise all rights and remedies, and to maintain any actions or suits at law or in equity or other property proceedings to enforce the curing of such breaches to which it or any other beneficiaries of this Agreement and covenants may be entitled. V. [5001 DEFAULTS AND REMEDIES C. r5011 Defaults -- General Subject to the extensions of time set forth in Section 603, failure or delay by either party to perform any term or provision of this Agreement constitutes a default under this Agreement. If either party defaults with regard to any of the provisions of this Agreement, the non -defaulting party shall serve written notice of such default upon the defaulting party. If the default is not cured or commenced to be cured by the defaulting party within thirty (30) days after service of the notice of default (or within such other period as is set forth herein), the non - defaulting party shall be entitled to pursue whatever remedies to which such party is entitled under this Agreement. 882/01561 D-0047 _30- 715762 07 a03/06/07 D. f5021 Legal Actions [5031 Specific Performance The non -defaulting party, upon expiration of applicable notice and cure periods, shall be permitted, but not obligated, to commence an action for specific performance of the terms of this Agreement, or to cure, correct or remedy any default hereunder or to obtain any other legal or equitable remedy consistent with the purpose of this Agreement. In this regard, SCHDC specifically acknowledges that Agency is entering into this Agreement for the purpose of assisting in the redevelopment of the Site and the provision of affordable housing and not for the purpose of enabling SCHDC to speculate in land. Agency shall also have the right to pursue damages for SCHDC's defaults but in no event shall SCHDC be entitled to damages of any kind from Agency, except for damages for out-of-pocket losses resulting from non-performance by Agency of its covenants under this Agreement but excluding economic loss, lost profits, or any other economic or consequential damages of any kind. 2. L5041 Institution of Legal Actions: Attorney's Fees Any legal actions must be instituted in the Superior Court of the County of Riverside, State of California, or in the Federal District Court in the Central District of California. In the event of any litigation between the parties hereto, the prevailing party shall be entitled to receive, in addition to the relief granted, its reasonable attorney's fees and costs and such other costs incurred in investigating the action and prosecuting the same, including costs for expert witnesses, costs on appeal, and for discovery. 3. f5051 Applicable Law The internal laws of the State of California, without regard to conflicts of law, shall govern the interpretation and enforcement of this Agreement. 4. [5061 Acceptance of Service of Process In the event that any legal action is commenced by SCHDC against the Agency, service of process on the Agency shall be made by personal service upon the Executive Director or in such other manner as may be provided by law. In the event that any legal action is commenced by the Agency against SCHDC, service of process on SCHDC shall be made by personal service upon any officer or director of SCHDC and shall be valid whether made within or without the State of California or in such other manner as may be provided by law. E. f5071 Rights and Remedies Are Cumulative Except as otherwise expressly stated in this Agreement, the rights and remedies of the parties are cumulative, and the exercise by either party of one or more of such rights or remedies shall not preclude the exercise by it, at the same or different times, of any other rights or remedies for the same default or any other default by the other party. 882/015610-0047 -31- 715762.07 e03/06/07 F. j5081 Inaction Not a Waiver of Default Any failures or delays by either patty in asserting any of its rights and remedies as to any default shall not operate as a waiver of any default or of any such rights or remedies, or deprive either such party of its right to institute and maintain any actions or proceedings which it may deem necessary to protect, assert or enforce any such rights or remedies. G. [5091 Termination [5101 Termination by SCHDC In the event that prior to the Close of Escrow: b. Agency is in material default of this Agreement, and any such failure is not cured within thirty (30) days, or for those defaults which cannot reasonably be cured within thirty (30) days, commenced to be cured within said thirty (30) day period and thereafter diligently prosecuted to completion, after written demand by SCHDC; or C. the Agency fails to satisfy any or all of SCHDC's Conditions to Close by the time established therefor in Schedule of Performance; then, at the option of SCHDC, upon written notice thereof to the Agency, all provisions of this Agreement shall terminate and be of no further force and effect; thereafter, subject to Section 202 hereof, neither the Agency nor SCHDC shall have any further rights against or liability to the other with respect to this Agreement; provided, however, that nothing in this Section 510 shall be construed as releasing any party from liability for any default of its obligations hereunder or breach of its representations and warranties under this Agreement occurring prior to the termination of this Agreement and/or the Escrow to be opened hereunder. 2. L 11 Termination by the Agency In the event that prior to the Close of the Escrow: a. SCHDC (or any successor in interest) assigns or attempts to assign the Agreement or any rights therein or in the Project in violation of this Agreement; or b. There is a change in the ownership of SCHDC contrary to the provisions of Section 109 hereof; or C. SCHDC does not submit certificates of insurance or Evidence of Financing as required by this Agreement, in the manner and by the dates respectively provided in this Agreement therefor, or is otherwise in material default hereof, and such default or failure is not be cured within thirty (30) days, or for those defaults which cannot reasonably be cured within thirty (30) days, commenced to be cured within said thirty (30) day period and thereafter diligently prosecuted to completion, after the date of written demand therefor by the Agency; or d. SCHDC fails to satisfy any or all of Agency's Conditions to Close by the time established therefor in Schedule of Performance; 882/015610-0047 -32- 715762.07 e03/06/07 then, at the option of the Agency, upon such written notice thereof to SCHDC as may be set forth above, this Agreement shall be terminated, and thereafter, subject to Section 202 hereof, neither parry shall have any further rights or liability against the other under this Agreement; provided, however, that nothing in this Section 511 shall be construed as releasing any party from liability for any default of its obligations hereunder or breach of its representations and warranties under this Agreement occurring prior to the termination of this Agreement and/or the Escrow to be opened hereunder. VI. [6001 GENERAL PROVISIONS A. f6011 Notices Demands and Communications Between Parties Written notices, demands and communications between the Agency and SCHDC shall be sufficiently given if (i) delivered by hand, (ii) delivered by reputable same -day or overnight messenger service that provides a receipt showing date and time of delivery, or (iii) deposited in the United States mail, registered or certified, postage prepaid, return receipt requested, to the principal offices of the Agency and SCHDC at the addresses specified in Section 106 and 107, respectively. Such written notices, demands and communications may be sent in the same manner to such other addresses as either party may from time to time designate by mail as provided in this Section 601. A notice signed by legal counsel for a party and delivered to the other party in accordance with this Section shall be deemed notice delivered by the parry on whose behalf such legal counsel is acting. Any written notice, demand, or communication shall be deemed received immediately if delivered by hand or delivered by messenger in accordance with the preceding paragraph, and shall be deemed received on the third (3rd) day from the date it is postmarked if delivered by registered or certified mail in accordance with the preceding paragraph. B. f6021 Conflicts of Interest No member, officer, official, or employee of the Agency shall have any personal interest, direct or indirect, in this Agreement, nor shall any member, official or employee participate in any decision relating to the Agreement which affects his personal interests or the interests of any corporation, partnership or association in which he is directly or indirectly interested. C. [6031 Enforced Delav� Extension of Times of Performance In addition to specific provisions of this Agreement, performance by either party hereunder shall not be deemed to be in default, and all performance and other dates specified in this Agreement shall be extended, where delays or defaults are due to: war; insurrection; strikes; lockouts; riots; floods; earthquakes; fires; casualties; acts of God; acts of the public enemy; epidemics; quarantine restrictions; freight embargoes; lack of transportation; governmental restrictions or priority; litigation; unusually severe weather; inability to secure necessary labor, materials or tools; delays of any contractor; subcontractor or supplier; acts or omissions of the other party; acts or failures to act of the City of La Quinta, or the Agency, or any other public or governmental agency or entity (except that the acts or failures to act of the Agency shall not excuse performance by the Agency); or any other causes beyond the control or without the "2/015610-0047 -33- 715762.07 a03/06/07 default of the party claiming an extension of time to perform. Notwithstanding anything to the contrary in this Agreement, an extension of time for any such cause shall be for the period of the enforced delay and shall commence to run from the time of the commencement of the cause, if notice by the party claiming such extension is sent to the other party within thirty (30) days after the commencement of the cause. Times of performance under this Agreement may also be extended in writing by the mutual agreement of Agency and SCHDC. The Agency Executive Director shall also have the authority on behalf of Agency to administratively approve extensions of time not to exceed a cumulative total of one (1) year. Notwithstanding the foregoing portion of this Section 603, SCHDC is not entitled pursuant to this Section 603 to an extension of time to perform because of economic or market conditions. D. [6041 Non -Liability of Officials and Employees of the Agency No member, official or employee of the Agency or the City shall be personally liable to SCHDC, or any successor in interest, in the event of any default or breach by the Agency or the City or for any amount which may become due to SCHDC or its successors, or on any obligations under the terms of this Agreement. E. [6051 InteMr-etation• Entire Agreement, Waivers. Attachments The terms of this Agreement shall be construed in accordance with the meaning of the language used and shall not be construed for or against either party by reason of the authorship of this Agreement or any other rule of construction that might otherwise apply. This Agreement integrates all of the terms and conditions mentioned herein or incidental hereto, and supersedes all negotiations or previous agreements between the parties or their predecessors in interest with respect to all or any part of the subject matter hereof. All waivers of the provisions of this Agreement must be in writing by the appropriate authorities of the Agency and SCHDC, and all amendments hereto must be in writing by the appropriate authorities of the Agency and SCHDC. Except as otherwise expressly provided, in any circumstance where under this Agreement either party is required to approve or disapprove any matter, approval shall not be unreasonably withheld. The exhibits and attachments to this Agreement are incorporated herein and made a part hereof. F. [6061 Time of Essence Time is of the essence in the performance of this Agreement. G. f6071 No Brokers Agency and SCHDC each represent and warrant to the other that it has not retained any real estate broker, agent, or finder in connection with this Agreement or the disposition or conveyance of the Site as set forth herein, and each shall indemnify, defend, and 882/015610-0047 -34- 715762 07 a03/06/07 hold harmless the other from and against any claim or lawsuit (including attorneys fees) for the payment of any real estate commission or finder's or broker's fees arising out of this Agreement to the extent caused by the acts or omissions of the Agency or SCHDC as the case may be. H. [6081 Maintenance of Books and Records SCHDC shall prepare and maintain all books, records, and reports necessary to substantiate SCHDC's compliance with the terms of this Agreement. I. j6091 Right to Inspect After the Closing Date, Agency shall have the right, upon not less than twenty- four (24) hours' notice, at all reasonable times during business hours, to inspect the books and records of SCHDC pertinent to the purposes of this Agreement. Said right of inspection shall not extend to documents privileged under attorney -client or other such privileges. J. f 6101 Binding Effect of Agreement This Agreement shall be binding upon and shall inure to the benefit of the parties hereto, their legal representatives, successors, and assigns. This Agreement shall likewise be binding upon and obligate the Project and the successors in interest, owner or owners thereof, and all of the tenants, lessees, sublessees, and occupants of such Project. K. [6111 Severability Wherever possible, each provision of this Agreement shall be interpreted in such a manner as to be effective and valid under applicable law. If, however, any provision of this Agreement shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Agreement. L. [6121 Counterparts This Agreement may be executed in counterparts, each of which, when this Agreement shall have been signed by all the parties hereto, shall be deemed to be an original, and such counterparts shall constitute one and the same instrument. M. j6131 Amendments to this Agreement SCHDC and the Agency agree to mutually consider reasonable requests for amendments to this Agreement which may be made by either of the Parties hereto, the TCAC, the Institutional Lender providing the Conventional Loan, or financial consultants to the Agency, provided such requests are consistent with this Agreement and would not substantially alter the basic business terms included herein. The Agency's Executive Director shall have the authority to approve, on behalf of the Agency, amendments to this Agreement that would not substantially alter the basic business terms or substantially increase the cost or risk of this Agreement to the Agency. All other amendments shall require the action of the Agency Board. All amendments, 882/015610-0047 -35- 715762.07 a03/06/07 including those authorized to be approved by the Agency's Executive Director, shall be in writing and shall be signed by authorized representatives of Agency and SCHDC. [end — signature page and attachments follow] 882/015610-0047 -36- ns762.07 a03/06/07 IN WITNESS WHEREOF, the Agency and SCHDC have signed this Agreement on the respective dates set forth below. LA QUINTA REDEVELOPMENT AGENCY, a py D Y WrpuraLc�3 u i� Dated: 12007 Its: Executive Director Agency Secrets \ APPROVED AS TO FORM: RUTA & C L P Attorneys for the La Vinta Redevelopment Agency THE SOUTHERN CALIFORNIA HOUSING DEVELOPMENT CORPORATION, a California nonprofit public benefit corporation Dated: 2007 By Its: "2/015610-0047 71576207 a03/06/07 .37 IN WITNESS WHEREOF, the Agency and SCHDC have signed this Agreement on the respective dates set forth below. LA QUINTA REDEVELOPMENT AGENCY, a public body corporate and politic By: Dated: 2007 Its: Executive Director ATTEST: Agency Secretary APPROVED AS TO FORM: RUTAN & TUCKER, LLP Attorneys for the La Quinta Redevelopment Agency THE SOUTHERN CALIFORNIA HOUSING DEVELOPMENT CORPORATION, a California nonpr fit public benefit corporation Dated: 12007 By: Its: ryc PlC2�if 882/015610-0047 -37- 715762.07 a03/06/07 ATTACHMENT NO. 1 SITE MAP [SEE FOLLOWING PAGE] 882/015610-0047 ATTACHMENT NO. 1 715762.07 a03/06/07 ATTACHMENT NO. 1 SITE MAP o�rtU��rrv,= zoom ............... c f '2 wrta Dr_ - � $Era+ee : Camino Rosa da I park PaHire% Fodxs Cir I w Nariand Dr Cantu 2 t Galva POO ` CamesCk Irwin Or: Ocot11M7 DF . .Ij t dtottl Gr ..Lowe Or ktb* Gir , k ' Cade fiesta Verde Ia era Or 6%' paatelion Drt_ Alden Or Nolan Cir, pLjttt 5onr�sa- __, o Mlies Ave ---- -- Krtsteq� Kara [ i Inane Dr Ondy CtDeai. i r7 T+xdlaYrt F �y Kaye VfWet.sprhvCt Wei Cta C#unrr# le VicoNa, i5r: Club l C3escrt Stream Ur : .. 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Posep Del -fa �20if7 McDQuest, 6m. - _ CM?N AVTE@ ATTACHMENT NO.2 LEGAL DESCRIPTION All of that certain real property in the City of La Quinta, County of Riverside, State of California, described as follows: That portion of the Southeast quarter of the Northeast quarter of Section 19, Township 6 South, Range 7 East, San Bernardino Base and Meridian, described as follows: Commencing at the Southeast comer of the Northeast quarter of said Section 19; Thence South 89' 33' 05" West, on the Southerly line of the Northeast quarter of said Section, 330 feet, to the true point of beginning; thence South 89' 33' 05" West, on said Southerly line of the Northeast quarter, 330 feet; Thence North 0° 13' 40" West, 1,324.57 feet, to the Northerly line of the Southeast quarter of Northeast quarter of said Section 19; thence North 891 34' 05" East, on said Northerly line, 330 feet; thence South 0° 13' 40" East, 1,324.47 feet to the true point of beginning; Excepting therefrom the Southerly 50 feet conveyed to the County of Riverside by Deeds recorded August 30, 1933 in Book 133, Page(s) 292 and Book 134, Page(s) 298 respectively, of Official Records, Riverside County Records. Also excepting therefrom that portion of described in the deeds to the City of La Quinta, recorded 02-17-1999, as Instrument No. 62425 and 62426, Official Records. Excepting therefrom the mobile home located thereon. 882/015610-0007 ATTACHMENT NO. 2 715762 07 a03/06/07 ATTACHMENT NO.3 SCHEDULE OF PERFORMANCE ACTIVITY TIME FRAME 1. Agency and SCHDC open Escrow. Within five (5) business days after Effective Section 207 Date. 2. SCHDC provides evidence of insurance to Within ten (10) days after Effective Date. Agency. Section 403 3. Agency approves or disapproves Within fifteen (15) days after submittal. SCHDC's evidence of insurance. (Section 403) 4. SCHDC submits Initial Tax Credit On or before the published TCAC first round Application to TCAC. (Section 204) submittal deadline for 2007. 5. SCHDC submits Second Tax Credit Application to TCAC (if applicable). On or before the published TCAC second round submittal deadline for 2007. Section 204 6. SCHDC submits Third Tax Credit On or before the published TCAC first round Application to TCAC (if applicable). submittal deadline for 2008. (Section 204) 7. Agency makes available to SCHDC Within fifteen (15) days after the Effective copies of the Property Documents. Date. (Section 219) 8. SCHDC approves or disapproves the Within fifteen (15) days after SCHDC's Property Documents. (Section 219) receipt thereof. 9. SCHDC provides evidence of property Within thirty (30) days prior to Close of insurance to Agency. (Section 403) Escrow. 10. Agency approves or disapproves Within fifteen (15) days after submittal. SCHDC's evidence of property insurance. Section 403 11. SCHDC submits Evidence of Financing to Within sixty (60) days prior to Close of Agency. Section 205 Escrow. 12. Agency approves or disapproves Within fifteen (15) days after submittal. SCHDC's Evidence of Financing. Section 205) ATTACHMENT NO. 3 882/015610-0047 Page 1 of 3 71576207 a03/06/07 g ACTIVITY TIME FRAME 13. SCHDC executes and delivers to Agency Within ten (10) days prior to the Close of or Escrow Agent Grant Deed, Agency Escrow Regulatory Agreement, Agency Deed of Trust and Memorandum. (Section 210) 14. Agency executes and delivers to Escrow Within ten (10) days prior to Close of Agent Grant Deed, Agency Regulatory Escrow. Agreement, Agency Deed of Trust, Memorandum and Bill of Sale. (Section 211 15. SCHDC executes and delivers to Agency Within ten (10) days prior to Close of Agency Note. Section 210 Escrow. 16. Agency executes and delivers to SCHDC Within ten (10) days prior to Close of Assignment. Section 211 Escrow. 17. Agency and SCHDC close Escrow on On or before the latest of the following: (i) Agency's transfer of title to Project to within ten (10) business days after all of the SCHDC. (Section 208) Agency's Conditions to Close and SCHDC's Conditions to Close have been satisfied or waived by the appropriate Parry; (ii) the date that is thirty-five (35) days after Agency formally accepts the completed Housing Development from the Builder, provided Agency has obtained labor and materials releases from all subcontractors who performed work on the Housing Develop- ment, or (iii) ninety (90) days after SCHDC is awarded the Tax Credits 18. SCHDC obtains Agency Executive Within ninety (90) days prior to issuance of Director's approval of Property Manager. certificate of occupancy for Project by City. (Agency Regulatory Agreement, Section 5.2 19. SCHDC or Property Manager submits for Within ninety (90) days prior to issuance of Executive Director's review and approval, certificate of occupancy for Project by City. a marketing and management plan for the Project. (Agency Regulatory Agreement, Section 5.2) ATTACHMENT NO. 3 "2/015610.0047 Page 2 of 3 715762.07 a03/06/07 g ACTIVITY TIME FRAME 20. SCHDC sets aside Operating Reserve and At Close of Escrow. provides evidence thereof to Agency Executive Director. (Agency Regulatory Agreement, Section 5.5) 21. SCHDC submits to Agency an accounting On or before April 15 of each year subsequent of the Capital Replacement Reserve. to Close of Escrow. (Agency Regulatory Agreement, Section 5.6 22. SCHDC submits annual report pursuant to Not later than the September 1 following the Health and Safety Code Section 33418 to June 30 end of each fiscal year for term of the Agency. (Agency Regulatory Agreement, Declaration. Section 3.7) It is understood that the foregoing Schedule is subject to all of the terms and conditions of the text of the Agreement. The summary of items of performance in the Schedule is not intended to supersede or modify any more complete description in the text; in the event of any conflict or inconsistency between this Schedule and the text of the Agreement, the text of the Agreement shall govern. ATTACHMENT NO. 3 882/0i561M047 Page 3 of 3 715762.07 a03/06/07 g ATTACHMENT NO.4 GRANT DEED [SEE FOLLOWING PAGES] 882/015610-0047 ATTACHMENT NO.4 715762 07 a03/06/07 RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: The Southern California Housing Development Corporation 9065 Haven Ave., Suite 100 Rancho Cucamonga, CA 91730 Attn: President In accordance with Section 11932 of the California Revenue and Taxation Code, Grantor has declared the amount of the transfer tax which is due by a separate statement which is not being recorded with this Grant Deed. GRANT DEED FOR A VALUABLE CONSIDERATION, receipt of which is hereby acknowledged, the LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic, organized and existing under the California Community Redevelopment Law (Health & Safety Code Section 33000 et seq.) (the "Grantor"), hereby grants to THE SOUTHERN CALIFORNIA HOUSING DEVELOPMENT CORPORATION, a California nonprofit public benefit corporation ("Grantee"), that certain real property ("Property") located in the City of La Quinta, County of Riverside, State of California, described in the legal description attached hereto as Exhibit "A" and incorporated herein by this reference, subject to all matters of record, and is further subject to the following: A. Reservation of Subsurface Rights. Grantor excepts and reserves from the conveyance herein described all interest of the Grantor in oil, gas, hydrocarbon substances, and minerals of every kind and character lying more than five hundred (500) feet below the surface, together with the right to drill into, through, and across, and to use and occupy all parts of the Property lying more than five hundred (500) feet below the surface thereof for any and all purposes incidental to the exploration for and production of oil, gas, hydrocarbon substances, or minerals from the Property or other lands, but without, however, any right to use the surface of the Property or any portion of the Property within five hundred (500) feet below the surface of the Property for such exploration. B. Conveyance in Accordance With Redevelopment Plan. The Property is conveyed in accordance with and subject to the Redevelopment Plan for Project Area No. 2 ("Redevelopment Plan"), a copy of which is on file with the City Clerk of the City of La Quinta, California. All uses on the Property shall conform to the uses permitted by the Redevelopment Plan. The foregoing shall remain in effect until the expiration of the Redevelopment Plan. ATTACHMENT NO.4 "2/015610-0047 Page 1 Of 6 715762 07.03/06/07 g C. Nondiscrimination. Grantee, on behalf of itself and its successors and assigns to all or any portion of the Property, covenants and agrees as follows: 1. There shall be no discrimination against, or segregation of, any persons, or group of persons, on account of race, color, creed, religion, sex, marital status, ancestry, or national origin in the sale, lease, or rental or in the use, occupancy, or enjoyment of the Property, nor shall the grantee itself, or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy of tenants, lessees, subtenants, sublessees, or vendees of the Property or any portion thereof, The foregoing covenants shall run with the land and shall remain in effect in perpetuity. 2. The grantee shall refrain from restricting the rental, sale, or lease of any portion of the Property, or contracts relating to the Property, on the basis of race, color, creed, religion, sex, marital status, age, ancestry, or national origin of any person. All such deeds, leases or contracts shall contain or be subject to substantially the following nondiscrimination or nonsegregation clauses: a. In deeds: "The grantee herein covenants by and for itself, its heirs, executors, administrators, and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex, marital status, age, ancestry, or national origin in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the land herein conveyed, nor shall the grantee itself, or any persons claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy of tenants, lessees, subtenants, sublessees, or vendees in the land herein conveyed. The foregoing covenants shall run with the land." b. In leases: "The lessee herein covenants by and for itself, its heirs, executors, administrators, and assigns, and all persons claiming under or through it, and this lease is made and accepted upon and subject to the following conditions: `That there shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex, marital status, age, ancestry, or national origin in the leasing, subleasing, transferring, use, occupancy, tenure, or enjoyment of the land herein leased, nor shall the lessee itself, or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy of tenants, lessees, sublessees, subtenants, or vendees in the land herein leased."' C. In contracts pertaining to the realty: "There shall be no discrimination against or segregation of any persons or group of persons on account of race, color, creed, religion, sex, marital status, age, ancestry, or national origin in the sale, lease, transfer, use, occupancy, tenure, or enjoyment of land, nor shall the transferee itself, or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy of tenants, lessees, subtenants, sublessees, or vendees of land." The foregoing nondiscrimination covenants shall remain in effect in perpetuity. ATTACHMENT NO.4 882/015610-0047 Page 2 of6 715762.07 a03106/07 g D. Covenants Run With The Land. All covenants contained in this Grant Deed shall be covenants running with the land. E. Covenants for Benefit of Grantor. All covenants set forth in this Grant Deed, without regard to technical classification or designation, shall be binding for the benefit of the Grantor, and such covenants shall run in favor of Grantor for the entire period during which such covenants shall be in force and effect, without regard to whether the Grantor is or remains an owner of any land or interest therein to which such covenants relate. Grantor, in the event of any breach of any such covenants, shall have the right to exercise all the rights and remedies and to maintain any actions at law or equity or other property proceedings to enforce the curing of such breach. ATTEST: Agency Secretary APPROVED AS TO FORM: RUTAN & TUCKER, LLP Agency Counsel "Grantor" LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic 0 Executive Director "Grantee" THE SOUTHERN CALIFORNIA HOUSING DEVELOPMENT CORPORATION, a California nonprofit public benefit corporation Name: Its: ATTACHMENT NO.4 882/015610-0047 Page 3 of 6 71576207 a03/0&07 g STATE OF CALIFORNIA COUNTY OF On personally appeared ss before me, Notary Public, personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. Witness my hand and official seal. [SEAL] STATE OF CALIFORNIA COUNTY OF On personally appeared Notary Public ) ss before me, Notary Public, personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. Witness my hand and official seal. Notary Public [SEAL] ATTACHMENT NO. 4 882/0156104047 Page 4 of 6 715762 07 a03/06/07 g STATE OF CALIFORNIA ) ss COUNTY OF ) On personally appeared before me, personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. Witness my hand and official seal. Notary Public [SEAL] ATTACHMENT NO.4 882/015610-0047 Page 5 of 6 ns7ezo7 aovaa6/o� g EXHIBIT "A" LEGAL DESCRIPTION OF PROPERTY The land referred to is situated in the City of La Quinta, State of California, County of Riverside, City of La Quinta and is described as follows: That portion of the Southeast quarter of the Northeast quarter of Section 19, Township 6 South, Range 7 East, San Bernardino Base and Meridian, described as follows: Commencing at the Southeast comer of the Northeast quarter of said Section 19; Thence South 89' 33' 05" West, on the Southerly line of the Northeast quarter of said Section, 330 feet, to the true point of beginning; thence South 891 33' 05" West, on said Southerly line of the Northeast quarter, 330 feet; Thence North 0° 13' 40" West, 1,324.57 feet, to the Northerly line of the Southeast quarter of Northeast quarter of said Section 19; thence North 89' 34' 05" East, on said Northerly line, 330 feet; thence South 0° 13' 40" East, 1,324.47 feet to the true point of beginning; Excepting therefrom the Southerly 50 feet conveyed to the County of Riverside by Deeds recorded August 30, 1933 in Book 133, Page(s) 292 and Book 134, Page(s) 298 respectively, of Official Records, Riverside County Records. Also excepting therefrom that portion of described in the deeds to the City of La Quinta, recorded 02-17-1999, as Instrument No. 62425 and 62426, Official Records. Excepting therefrom the mobile home located thereon. ATTACHMENT NO.4 '82/015610-0047 Page 6 of 6 715762.07 a03/06/07 g ATTACHMENT NO.5 PROMISSORY NOTE [SEE FOLLOWING DOCUMENT] 71576 .07.03 0 ATTACHMENT NO. 5 715762.W e03/06/07 ATTACHMENT NO.5 PROMISSORY NOTE Loan Amount: $13,966,831 1200 La Quinta, California FOR VALUE RECEIVED, THE SOUTHERN CALIFORNIA HOUSING DEVELOPMENT CORPORATION, a California nonprofit public benefit corporation (`Borrower"), promises to pay to the LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic ("Agency"), or order, the principal sum of Thirteen Million Nine Hundred Sixty -Six Thousand Eight Hundred Thirty -One Dollars ($13,966,831), plus interest on the outstanding principal balance, in accordance with the terms and conditions set forth herein. This Note evidences the obligation of Borrower to Agency for the repayment of certain funds (the "Agency Loan") loaned to Borrower by Agency pursuant to that certain Affordable Housing Agreement between the Agency and Borrower dated for identification purposes only as of , 2007 (the "Agreement"), incorporated herein, in connection with the acquisition of real property located at 78990 Miles Avenue within the Project Area in the City of La Quinta, County of Riverside (the "Property") improved with an affordable multifamily housing development (the "Project"). All capitalized terms unless otherwise defined herein shall have the same meaning as set forth in the Agreement. Reference is also made to the following additional agreements and documents, of even date herewith, involving Agency and Borrower and/or pertaining to the Property: (i) Deed of Trust with Assignment of Rents by and between Borrower as Trustor, Agency as beneficiary, and Chicago Title Company as Trustee, and recorded in the Office of the Riverside County Recorder ("Agency Deed of Trust"). The Agency Deed of Trust secures repayment of this Note and performance under the Agreement and Agency Regulatory Agreement. (ii) Regulatory Agreement and Declaration of Covenants and Restrictions, by and between Borrower and Agency, for the benefit of Agency, and recorded in the Office of the Riverside County Recorder ("Agency Regulatory Agreement"). 1. Definitions. "Affiliate" shall mean any person or entity directly or indirectly, through one or more intermediaries, controlling, controlled by or under common control with Borrower which, if Borrower is a partnership or limited liability company, shall include each of the constituent members or general partners, respectively, thereof The term "control" as used in the immediately preceding sentence, means, with respect to a person that is a corporation, the right to the exercise, directly or indirectly, of more than 50% of the voting rights attributable to the shares of the controlled corporation, and, with respect to a person that is not a corporation, the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of the controlled person. ATTACHMENT NO. 5 "2/015610-0047 Page 1 of 16 715762 07 a03/06/07 g "Agency Agreements" mean, collectively, the Agreement, the Agency Deed of Trust, and the Agency Regulatory Agreement. "Annual Financial Statement" means the financial statements prepared by Borrower for each calendar year during the period from the date of this Note until the Maturity Date, including a balance sheet, income statement, statement of retained earnings, statement of cash flows, and footnotes thereto, prepared in accordance with generally accepted accounting principles consistently applied, as audited by an independent certified public accountant. "Applicable Percentage" shall mean sixty percent (60%). "Approved Budget" shall have the meaning ascribed in Section 3.13 of the Agency Regulatory Agreement. "Assignment" means any voluntary or involuntary conveyance, disposition, assignment, encumbrance (other than a Refinancing as defined below or the creation of the Senior Financing or any other Project Loan permitted by the Agreement), sublease, sale or transfer of the Property, including, without limitation, any transfer by Borrower of all or any portion of its rights under or interest in the Project or the Property, any unpermitted change of ownership or control of Borrower, any foreclosure of Borrower's interest in the Project or the Property, whether by judicial proceedings, or by virtue of any power contained in a deed of trust, indenture or other instrument creating a lien against the Project or the Property, or any assignment of Borrower's estate in the Project or the Property through, or in lieu of, foreclosure or other appropriate and bona fide proceedings in the nature thereof; provided, however, that the term "Assignment" as used herein shall not include any permitted transfer as set forth in Section 10 hereof or in Section 109 of the Agreement. "Capital Improvements" means all work and improvements with respect to the Property for which costs and expenses may be capitalized in accordance with GAAP. "CPI" means the Consumer Price Index published by the United States Department of Labor, Bureau of Labor Statistics, for Urban Wage Earners and Clerical Workers, Los Angeles - Riverside -Orange County Average, All Items (1984=100), or, if said index is discontinued, such official index as may then be in existence and which is most nearly equivalent to said index. "Debt Service" means scheduled debt service (including impounds, expenses, and other amounts payable) on the Senior Financing. "Developer Fee" means the portion of the Nine Hundred Thousand Dollar ($900,000) developer fee set forth in the Pro Forma which is to be paid to Borrower, which portion is in a cumulative amount not to exceed Four Hundred Fifty Thousand Dollars ($450,000), bearing interest at the applicable federal rate, and disbursed pursuant to the following: (i) Borrower shall be entitled to a portion of the Developer Fee in the amount of Two Hundred Twenty -Five Thousand Dollars ($225,000) upon the syndication of the Tax Credits; and (ii) Borrower shall be entitled to a portion of the Developer Fee in the amount of Two Hundred Twenty -Five Thousand Dollars ($225,000) at the time all Units in the project have been leased to, and are accepted by, Eligible Tenants. The remaining portion of the Nine Hundred Thousand Dollar ($900,000) ATTACHMENT NO. 5 882/015610-0007 Page 2 of 16 ns762 07 a03/06/07 g developer fee set forth in the Pro Forma (i.e., the remaining S450,000) shall be deemed to be the Agency's portion of such fee. "Fiscal Year" means the fiscal year of Borrower, which is the calendar year. "GAAP" means generally accepted accounting principles as in effect from time to time, consistently applied. "Maturity Date" shall have the meaning set forth in Section 2.4 hereof. "Minor Assignment" shall mean any lease of an individual unit in the Project for occupancy by a residential subtenant and in the ordinary course of business for operation of the Project. "Net Operating Income" means, for the applicable period of time, (i) the amount, if any, by which Operating Income for such period exceeds Operating Expenses paid by Borrower during such period; and, provided there is such an excess, less (ii) the Partnership Management Fee. "Net Proceeds" shall mean (a) the proceeds received, directly or indirectly, by Borrower or any Affiliate or constituent member or partner, or majority shareholder, of Borrower as a result of an Assignment, including, without limitation, cash, the amount of any monetary lien or encumbrance assumed or taken subject to by the assignee, the fair market value of any non -cash consideration, including the present value of any promissory note received as part of the proceeds of such Assignment (such present value to be determined based upon a discount rate reasonably satisfactory to Agency), the entire condemnation award or compensation payable to Borrower or any Affiliate or constituent member or partner, or majority shareholder, of Borrower in connection with a condemnation or taking in eminent domain of any part of the Property or the Project or any interest therein, all insurance proceeds or awards payable to Borrower or any Affiliate or constituent member or partner or majority shareholder of Borrower in connection with any damage to or destruction of the Property or the Project or any part thereof; less (b) the sum of (i) the actual, documented and reasonable expenses of effecting such Assignment, including reasonable brokerage commissions, title insurance premiums, documentary transfer taxes, and reasonable attorneys' fees, in each case actually paid in connection with the Assignment (provided that no deduction shall be allowed for payments to an Affiliate of the person or entity making the Assignment which are in excess of the amount that would be paid for the same or equivalent services in an arms' length transaction between unrelated parties acting reasonably), (ii) the costs incurred by Borrower to repair or rebuild the Project in the event of any damages, destruction, or condemnation of all or any portion of the Project, and (iii) the amount of any Net Proceeds of the Assignment, casualty or condemnation paid (excluding voluntary payments) towards the then -outstanding balance of the Senior Financing and/or any Project Loan being refinanced. Notwithstanding anything above which is or appears to be to the contrary, the permissible deductions for purposes of calculating the Net Proceeds shall not include any foreign, U.S., state or local income taxes, franchise taxes, or other taxes based on income. ATTACHMENT NO. 5 "2/015610-0047 Page 3 of 16 715762.07 a03/06/07 g "Net Refinancing Proceeds" shall mean the gross face amount of any Project Loan obtained in connection with such Refinancing, after: (a) payment of the actual, documented and reasonable expenses of such Refinancing, including escrow fees, title policy expenses, legal expenses, survey fees, recording fees, commissions, or other usual and reasonable expenses of any such Refinancing (provided, that no deduction shall be allowed for payments in connection with such Refinancing which are in excess of the amounts that would be paid for the same or equivalent services in an arms' length transaction between unrelated parties acting reasonably); and (b) deduction of amounts repaid (excluding voluntary payments) in connection with the Refinancing towards amounts outstanding under the Senior Financing. "Operating Expenses" means, for the applicable period of time, all costs and expenses reasonably incurred by Borrower in the ordinary course of the management, ownership, and/or operation of the Property by Borrower, including the funding of reasonable reserves and all of the following: (a) the cost of utilities supplied to and used for the Property not paid by the tenants thereof, including trash removal, electricity, water, sewer and gas; (b) the cost of all insurance required for the Property to satisfy the requirements contained in Senior Loan Documents; (c) ad valorem tax and assessments payments; (d) to the extent included in the Approved Budget and not paid for out of the Capital Replacement Reserve, the following fees, costs and expenses: maintenance and repair expenses and services, including material and labor, including charges for public services such as sewer charges, license and permit fees, goods, commodities, materials and equipment, and including all contract repairs and services and maintenance and repair of all fumiture, furnishings and fixtures; painting, cleaning; pest control; gardening; rubbish removal; graffiti removal; advertising, marketing and promotion; leasing commissions; accounting, audit and legal expense attributable to the Property; and office expenses incurred in operation of the Property; (e) salaries, wages, rent payment or allocation, and other compensation due and payable to the employees or agents of the Borrower employed on -site in connection with the maintenance, administration or operation of the Property, together with all withholding taxes, insurance premiums, social security payments and other payroll taxes or payments required in connection with such employees; (f) costs of security services supplied to the Property, if any; (g) payment of an asset management fee, on an annual basis in an amount not to exceed Five Thousand Dollars ($5,000), increasing annually by three percent (3%) of the then -current amount; (h) payment of a fee, on an annual basis, to cover the cost of coordinating the social services required pursuant to the Management Plan in an amount not to exceed Nineteen Thousand Two Hundred Dollars ($19,200), increasing annually by three percent (3%) of the then -current amount; (i) payment of a property management fee, on an annual basis, in an amount not to exceed Thirty -Eight Thousand Four Hundred Dollars ($38,400) per unit per month, increasing annually by the percentage increase in area median income for the County of Riverside for the period in question; 0) payment of a fee, on an annual basis, to cover the cost of administering and accounting for the affordability requirements set forth in the Agency Regulatory Agreement in an amount not to exceed Nine Thousand Five Hundred Dollars ($9,500), increasing annually by three percent (3%); (k) payment of Borrower's annual contribution to the Capital Replacement Reserve; and (1) payment of Debt Service. Operating Expenses shall not include any expenses for Capital Improvements, except for Capital Improvements allowed in the Approved Budget, approved by any lender providing Senior Financing, or approved, with such approval not to be unreasonably withheld or delayed, by the Executive Director. Operating Expenses shall be calculated on a cash basis. ATTACHMENT NO. 5 "2/015610-0047 Page 4 of 16 715762 07 a03/06/07 g Operating Expenses shall not include (aa) repairs or replacements paid from insurance proceeds received by the Borrower, or (bb) depreciation of buildings or other similar non -cash items of expense. "Operating Income" means, for the applicable period of time, all proceeds received by Borrower from the operation of the Property and from any and all sources resulting from or attributable to the operation of the Property, including, without limitation, all rentals, parking receipts, laundry income received by Borrower, forfeited Security Deposits, and all expense reimbursements paid to Borrower by tenants of the Property. Operating Income shall be calculated on a cash basis. Operating Income excludes insurance proceeds and/or condemnation proceeds, and all interest earned and paid on required reserve account. "Partnership Management Fee" means the fee paid to Borrower not to exceed Five Thousand Dollars ($5,000) per year, which amount shall be adjusted annually by the CPI. "Project Loan" means a loan secured by an encumbrance on the Property, the Project, or any portion thereof. "Refinancing" shall mean creation or substantial modification of a Project Loan "Senior Financing" means any loan obtained by Borrower with respect to the Project secured by a deed of trust recorded against the Property in a position senior to that of the Agency Deed of Trust in accordance with and as permitted by the terms of the Agreement. "Senior Loan Documents" means any and all agreements and documents related to any Senior Financing. "Term" shall mean the time from the date of this Note until the earlier to occur of: (i) the Maturity Date; (ii) repayment in full of all principal and interest due hereunder; or (iii) such other date, as agreed to in writing by the Agency, upon which the Agency releases all of its rights under the Agreement, the Agency Regulatory Agreement, the Agency Deed of Trust and this Note. 2. Interest and Repavment. 2.1 Basic Interest Rate. Except as provided in section 2.5 below, the disbursed and unpaid principal balance of the Agency Loan shall bear interest at a rate of one percent (1%) (the "Basic Interest Rate"). 2.2 Payment Dates and Amounts. (a) Principal and Interest Pants. Interest and principal payments on this Note shall be payable annually on April 15" of each year during the Term, in an amount equal to the Applicable Percentage multiplied by the Net Operating Income for the calendar year immediately preceding such annual payment date. In the event that there is no Net Operating Income available for payment of principal and interest for any calendar year, then interest shall continue to accrue on the Agency Loan during such year. On or before each April 15`° during the Term, regardless as to whether any payment of principal and interest is remitted, Borrower shall ATTACHMENT NO. 5 "2/015610-0047 Page 5 of 16 715762.07 a03/06/07 g provide Agency with an accounting documenting the calculation of Net Operating Income for the previous calendar year. (b) Payments Due in the Event of Refinancing of Senior Financing or Transfer of Project. If Borrower refinances all or part of the Senior Financing, any Net Refinancing Proceeds of that Refinancing shall be payable to Agency no later than the closing and recording of the Refinancing and all such sums paid shall be applied to the outstanding balance of the Agency Loan. If Borrower transfers all of part of the Project as provided in Section 109 of the Agreement, or any casualty or condemnation occurs to the Project, any Net Proceeds of that transfer shall be payable to Agency no later than the date of close of escrow or other consummation of the transfer and applied to the outstanding principal and interest due on the Agency Loan. (c) Interest First. All payments shall be applied first to accrued interest and thereafter to principal. 2.3 Financial Statements. On the April 15s' of the calendar year following the year in which this Note is originated as evidenced by the date hereof, and on each April 15t° thereafter throughout the Term, Borrower shall submit to Agency its Annual Financial Statement for the preceding year. Net Operating Income shall be calculated by Borrower for each year beginning in the first year any of the Units are rented to and occupied by Eligible Tenants (and certified by an authorized officer of Borrower) and reported by Borrower to Agency annually for each calendar year no later than April 15`h of the following calendar year on forms specified and provided by Agency from time to time. All calculations and records shall be based upon Borrower's Annual Financial Statement and shall be subject to audit by Agency. In connection with any audit, Borrower shall provide to Agency for inspection and copying any records, receipts, account books, ledgers, checks, or other documents or other evidence reasonably requested by Agency for the purpose of verifying Borrower's calculation of Net Operating Income, and shall promptly pay to Agency any further amount due but not paid as a result of any miscalculation by Borrower. Agency shall promptly pay Borrower any overpayments made by Borrower as shown by such audit. 2.4 Maturity Date. The outstanding principal balance of this Note, together with any outstanding interest due thereon and any other sums payable under this Note, shall be due and payable in full on the date that is fifty-five (55) years from the Note Date (the "Maturity Date"). 2.5 Default Rate. Any amounts (including but not limited to amounts of principal and interest on the Agency Loan) which Borrower does not pay when otherwise due under the terms of this Note, shall bear interest at the rate of the lesser of ten percent (10%) or the maximum rate allowed per law per annum ("Default Rate"), simple interest, from the date which is ten (10) days after such amount would otherwise be due until the date paid. 3. Acceleration. The entire outstanding principal balance of the Note, together with any outstanding interest and other amounts payable thereunder, shall, at the election of Agency and upon notice ATTACHMENT NO. 5 882/015610-0047 Page 6 Of 16 715762.07 a03/06/07 g to Borrower thereof, become immediately due and payable without presentment, demand, protest or other notice of any kind, all of which are hereby waived by Borrower, if: (a) Notwithstanding the payment terms set forth in Section 2 above, upon the occurrence of any "Event of Default" as set forth in Section 10 below; or (b) Borrower sells or transfers the Property, including, without limitation, lease (other than leases of individual Units to residential tenants in the ordinary course of business), exchange or other disposition of the Property or any interest therein, whether voluntary or involuntary, except a sale or transfer which under federal law would not, by itself, permit the holder to exercise a due on sale or due on encumbrance clause, and except as permitted by the Agreement; or (c) Borrower refinances the lien of the Agency Deed of Trust or any lien or encumbrance to which the Agency Deed of Trust is subordinate for a loan amount in excess of the then current loan balance secured by such lien or encumbrance, unless the Net Refinancing Proceeds are paid to Agency in an amount not to exceed any amounts due Agency under the Agency Loan. 4. Prepayment: Application of Payments. At any time after the Note Date, Borrower may prepay all or a portion of the unpaid principal amount of the Agency Loan and accrued interest and any other sums outstanding without penalty or premium. All payments, including any prepayments or funds received upon acceleration pursuant to Section 3 above, shall be applied first toward any outstanding costs of collection or other amounts (excluding Agency Loan principal or interest thereon) due under this Note or the Agreement, then toward outstanding interest accrued at the Default Rate, if any, then toward outstanding interest accrued at the Basic Interest Rate, if any, and finally toward the remaining principal balance under the Note. 5. Security and Source of Payment Borrower's obligations under this Note, the Agreement and the Agency Regulatory Agreement shall be secured by the Agency Deed of Trust. The Agency Loan and this Note shall constitute a nonrecourse obligation of Borrower, and neither Borrower nor any partner, member, or shareholder thereof shall have any personal liability for repayment. However, nothing contained in the foregoing limitation of liability shall (a) limit or impair the enforcement against all such security for this Note of all the rights and remedies of the Agency, or (b) be deemed in any way to impair the right of the Agency to assert the unpaid principal amount of this Note as a demand for money within the meaning and intendment of Section 431.70 of the California Code of Civil Procedure or any successor provision thereto. The foregoing limitation of liability is intended to apply only to the obligation for the repayment of the principal of, and payment of interest on this Note; nothing contained therein is intended to relieve the Borrower and, if Borrower is a partnership, limited liability company, or corporation, any general partner, member, or shareholder of Borrower, of liability for damages caused to ATTACHMENT NO. 5 882/015610-0047 Page 7 Of 16 715762.07 a03/06/07 g Agency or Agency as a result of (i) fraud or willful misrepresentation; (ii) the failure to pay taxes, assessments or other charges which may create liens on the real property described in the Agency Agreements that are payable or applicable prior to any foreclosure under the Deed of Trust (to the full extent of such taxes, assessments or other charges); (iii) the retention of any rental income or other income arising with respect to the Project collected by Borrower after an Event of Default to the full extent of the rental income or other income retained and collected by Borrower after the giving of any such notice, and not used to pay Operating Expenses of the Project; (iv) the misapplication of any proceeds under any insurance policies or awards resulting from condemnation or the exercise of the power of eminent domain or by reason of damage, loss or destruction to any portion of the Project; and (v) breach of any environmental covenant or representation made by the Borrower relating to the Project. 6. Obligation of Borrower Unconditional. The obligation of Borrower to repay the Agency Loan and all accrued interest thereon shall be absolute and unconditional, and until such time as all of the outstanding principal of and interest on this Note shall have been fully paid, Borrower agrees that it: (a) will use the funds solely for the purposes set forth herein; and (b) will not terminate or suspend any payment or obligations under this Note, the Agreement, or any other document executed hereunder or in connection herewith for any cause, including without limitation, any acts or circumstances that may constitute failure of consideration, commercial frustration of purpose, or any duty, liability or obligation arising out of or in connection with this Note, the Agreement or any document executed hereunder or in connection herewith. Purpose of Agency Loan. The Agency Loan proceeds shall be used by Borrower as provided in the Agreement and for such other uses previously approved in writing by Agency. In no event shall Borrower use or otherwise invest the proceeds of the Agency Loan except as expressly provided in this Note. 8. Covenants of Borrower. As additional consideration for the making of the Agency Loan by Agency, Borrower covenants as follows: 8.1 Compliance with Agreement Agency Regulatory Agreement and Deed of Trust. Borrower shall comply with all of its obligations under the Agreement, Agency Regulatory Agreement and the Agency Deed of Trust. Any amounts payable by Borrower under the Agreement, Agency Regulatory Agreement or the Agency Deed of Trust (other than amounts also payable hereunder) shall be deemed added to the principal amount of the Agency Loan payable hereunder. 8.2 Other Loans. Borrower shall comply with all monetary and non -monetary covenants associated with any loan secured by an interest in the Property or the Project. Borrower shall provide to Agency a copy of any notice of default within five business days after receiving any notice of a default or alleged default of such covenants by Borrower, and Borrower shall promptly cure any such default and cooperate in permitting Agency, to the extent Agency in its sole discretion elects to do so, to cure or assist in curing the default. Any cost or ATTACHMENT NO. 5 "2/015610-0047 Page 8 of 16 715762 07 a03106/07 g expenditure incurred by Agency in providing or assisting in such a cure shall be deemed added to the outstanding principal amount of the Agency Loan. 8.3 Payment of Partnership Management Fee. Borrower shall not make any payments of the Partnership Management Fee unless and until Operating Income exceeds Operating Expenses. 9. Assignment of this Note. This Note shall be assignable by Borrower in compliance with Section 109 of the Agreement. Notwithstanding anything which may be or appear to be herein to the contrary, no purported assignment of this Note and/or the Agency Loan shall be effective if such assignment would violate the terms, conditions and restrictions of any Governmental Regulations. Agency's consent to such assignment shall be expressly conditioned upon (a) the assignee's execution of such documents as required by Agency including, without limitation, any and all documents deemed necessary by Agency to provide for said assignee's assumption of all of the obligations of Borrower hereunder and under the Agency Agreements, and (b) Agency's approval of the financial and credit worthiness of such proposed assignee. 10. Events of Default and Remedies. 10.1 Borrower Events of Default. The occurrence of any of the following shall, after the giving of any notice described therein, constitute an event of default by Borrower hereunder ("Event of Default"): (a) The failure of Borrower to pay or perform any monetary covenant or obligation under the terms of this Note without curing such failure within ten (10) days after receipt of written notice of such default from Agency (or from any party authorized by Agency to deliver such notice as identified by Agency in writing to Borrower); (b) The failure of Borrower to perform any non -monetary covenant or obligation under this Note without curing such failure within thirty (30) days after receipt of written notice of such default from Agency (or from any party authorized by Agency to deliver such notice as identified by Agency in writing to Borrower) specifying the nature of the event or deficiency giving rise to the default and the action required to cure such deficiency. Provided, however, that if any default with respect to a non -monetary obligation is such that it cannot be cured within a 30-day period, it shall be deemed cured if Borrower commences the cure within said 30-day period and diligently prosecutes such cure to completion thereafter. Notwithstanding anything herein to the contrary, the herein described notice requirements and cure periods shall not apply to any Event of Default described in Sections 10.1(d) through 10.1(i) below; (c) The failure of Borrower to perform any covenant or obligation under the Agreement, Agency Deed of Trust or Agency Regulatory Agreement, unless the default is cured within the applicable cure period (if any). (d) The material falsity of any representation or breach of any representation or warranty made by Borrower under the terms of this Note, the Agreement, the Agency Regulatory Agreement or the Agency Deed of Trust; ATTACHMENT NO. 5 882/015610-0047 Page 9 of 16 71576107 &orro6im g (e) Borrower or any constituent member or general partner, or majority shareholder, of Borrower shall (1) apply for or consent to the appointment of a receiver, trustee, liquidator or custodian or the like of its property, (ii) fail to pay or admit in writing its inability to pay its debts generally as they become due, (iii) make a general assignment for the benefit of creditors, (iv) be adjudicated a bankrupt or insolvent or (v) commence a voluntary petition that is not withdrawn within ten (10) days of the filing thereof or answer seeking an arrangement with creditors or an order for relief or seeking to take advantage of any insolvency law or file an answer admitting the material allegations of a petition filed against it in any bankruptcy or insolvency proceeding; (f) If without the application, approval or consent of Borrower, a proceeding shall be instituted in any court of competent jurisdiction, under any law relating to bankruptcy, in respect of Borrower or any constituent member or general partner or majority shareholder of Borrower, for an order for relief or an adjudication in bankruptcy, a composition or arrangement with creditors, a readjustment of debts, the appointment of a trustee, receiver, liquidator or custodian or the like of Borrower or of all or any substantial part of Borrower's assets, or other like relief in respect thereof under any bankruptcy or insolvency law, and, if such proceeding is being contested by Borrower, in good faith, the same shall (i) result in the entry of an order for relief or any such adjudication or appointment, or (ii) continue undismissed, or pending and unstayed, for any period of ninety (90) consecutive days; (g) Voluntary cessation of the operation of the Project for a continuous period of more than thirty (30) days or the involuntary cessation of the operation of the Project for a continuous period of more than sixty (60) days; (h) A transfer in violation of Section 109 of the Agreement; or (i) Subject to the notice and cure provisions set forth in the Agreement, Borrower shall be in default under any of the terms of the Senior Financing, junior financing, other financing, or any other secured or unsecured obligation relating to the Project, unless the default is cured within the cure period, if any, applicable thereto under the terms and obligation which is in default. 10.2 Agency Remedies. Upon the occurrence and during the continuance of an Event of Default hereunder, Agency may, in its sole discretion, take any one or more of the following actions: (a) By notice to Borrower, except in the case of a default by Borrower under Section 10.1(d) or Section 10.1(e) in which event no notice pursuant to this Note shall be required, declare the entire then unpaid principal balance of the Agency Loan immediately due and payable, and the same shall become due and payable without further demand, protest or further notice of any kind, all of which are expressly waived. Upon such declaration, outstanding principal and (to the extent permitted by law) interest and any other sums outstanding in connection with the Agency Loan shall thereafter bear interest at the Default Rate, payable from the date of such declaration until paid in full; ATTACHMENT NO. 5 882/015610-0047 Pa a 10 of 16 ns762.07 a03/06/07 g (b) Subject to the nonrecourse provisions of Section 5 above, take any and all actions and do any and all things which are allowed, permitted or provided by law, in equity or by statute, in the sole discretion of Agency, to collect the amounts then due and thereafter to become due hereunder, to exercise its rights under the Agency Deed of Trust, and to enforce performance and observance of any obligation, agreement or covenant of the Borrower under this Note, the Agreement or under any other document executed in connection herewith; (c) Subject to the nonrecourse provisions of Section 5 above, upon the occurrence of an Event of Default which is occasioned by Borrower's failure to pay money, Agency may, but shall not be obligated to, make such payment. If such payment is made by Agency, Borrower shall deposit with Agency, upon written demand therefor, such sum plus interest at the Default Rate. In either case, the Event of Default with respect to which any such payment has been made by Agency shall not be deemed cured until such repayment (as the case may be) has been made by Borrower. Until repaid, such amounts shall have the security afforded disbursements under this Note; or (d) Subject to the nonrecourse provisions of Section 5 above, upon the occurrence of an Event of Default described in Section 10.1(e) or 10.1(f) hereof, Agency shall be entitled and empowered by intervention in such proceedings or otherwise to file and prove a claim for the whole amount owing and unpaid on the Agency Loan and, in the case of commencement of any judicial proceedings, to file such proof of claim and other papers or documents as may be necessary or advisable in the judgment of Agency and its counsel to protect the interests of Agency and to collect and receive any monies or other property in satisfaction of its claim. 10.3 No Remedy Exclusive. No remedy herein conferred upon or reserved to Agency intended to be exclusive of any other available remedy or remedies, but each such remedy shall be cumulative and shall be in addition to every other remedy given under this Note or now existing at law or in equity or by statute; and may be exercised in such number, at such times and in such order as Agency may determine in its sole discretion. No delay or omission to exercise any right or power upon the occurrence of any Event of Default hereunder shall impair any such right or power or shall be construed to be a waiver thereof, but any such right and power may be exercised from time to time and as often as may be deemed expedient by Agency. In order to entitle Agency to exercise any right or remedy reserved to it under this Note, no notice shall be required except as expressly provided herein. 11. Agreement to Pay Attorneys' Fees and Expenses. In the event that Agency brings an action or files a proceeding in connection with the enforcement of its rights under this Note, as a consequence of any breach by Borrower of its obligations hereunder, the prevailing party in such action or proceeding shall be entitled to have its reasonable attorneys' fees and out-of-pocket expenditures paid by the losing party. The attorneys' fees so recovered shall include fees for prosecuting or defending any appeal and shall be awarded for any supplemental proceedings until the final judgment is satisfied in full. In addition to the foregoing award of attorneys' fees, the prevailing party in any lawsuit on this Note shall also be entitled to its attorneys' fees incurred in any post judgment proceedings to collect or enforce the judgment. In addition to the foregoing, Borrower agrees to pay or ATTACHMENT NO. 5 882/015610.0047 Page 11 of 16 715762 07 a03/0&07 g reimburse Agency, upon demand by Agency, for all costs incurred by Agency in connection with enforcement of this Note, including without limitation, reasonable attorneys' fees and costs, if there shall be filed by or against Borrower any proceedings under any federal or state bankruptcy or insolvency laws, whether Agency is a creditor in such proceedings or otherwise. 12. Conflict of Interest- No Individual Liability. No official or employee of Agency shall have any personal interest, direct or indirect, in this Note, nor shall any official or employee of Agency participate in any decision relating to this Note which affects such official's or employee's pecuniary interest in any corporation, partnership or association in which such official or employee is directly or indirectly interested. No official or employee of Agency shall be personally liable in the event of a breach of this Note by Agency. 13. Amendments Chances and Modifications. This Note may not be amended, changed, modified, altered or terminated without the prior written consent of the parties hereto. 14. Notices. All notices, demands, requests, elections, approvals, disapprovals, consents or other communications given under this Note shall be in writing and shall be given by personal delivery, certified mail, return receipt requested, or overnight guaranteed delivery service and addressed as follows: To Agency La Quinta Redevelopment Agency 78-495 Calle Tampico La Quinta, CA 92253 Attention: Executive Director Copy to: Rutan & Tucker, LLP 611 Anton Boulevard, Suite 1400 Costa Mesa, CA 92626 Attention: M. Katherine Jenson, City Attorney To Borrower: Southern California Housing Development Corporation 9065 Haven Avenue, Suite 100 Rancho Cucamonga, CA 91730 Attn: President Copy to: Law Office of Edward A. Hopson 655A North Mountain Avenue Upland, CA 91786 Attn: Edward A. Hopson, Esq. ATTACHMENT NO. 5 "2/015610-0047 pa e 12 of 16 715762.07 a03/06/07 g Any Notice shall be deemed received immediately if delivered by hand and shall be deemed received on the third day from the date it is postmarked if delivered by registered or certified mail. A notice signed by legal counsel for a party and delivered to the other party in accordance with this Section shall be deemed notice delivered by the party on whose behalf such legal counsel is acting. 15. Severability. The invalidity or unenforceability of any one or more provisions of this Note will in no way affect any other provisions. 16. Interpretation. Whenever the context requires, all words used in the singular will be construed to have been used in the plural, and vice versa, and each gender will include any other gender. The captions of the paragraphs of this Note are for convenience only and do not define or limit any terms or provisions. Time is of the essence in the performance of this Note by Borrower. Each of Borrower and Agency has been represented by counsel in the negotiation of this Note, and no provision of this Note shall be interpreted in favor of or against either of Borrower or Agency on account of relative responsibilities in drafting. Notwithstanding any other provision of this Note, nothing herein or in this Note shall be deemed to require Borrower to pay interest in an amount in excess of any applicable usury law or other legal limitation on interest, and the terms of this Note shall be interpreted to require in each instance the lesser of (a) the amount stated in this Note, and (b) the maximum applicable legal limit. 17. No Waiver: Consents. Any waiver by Agency must be in writing and will not be construed as a continuing waiver. No waiver will be implied from any delay or failure by Agency to take action on account of any default of Borrower. Consent by Agency to any act or omission by Borrower will not be construed to be a consent to any other or subsequent act or omission or to waive the requirements for Agency's consent to be obtained in any future or other instance. 18. Governing Law. This Note shall be governed by the internal laws of the State of California without regard to conflict of law principles. 19. Representations and Warranties of Borrower. Borrower hereby warrants and represents to Agency that: 19.1 Organization and Standing. Borrower is a California legal entity, duly organized, qualified to operate in California and validly existing and in good standing under all applicable laws, and has all requisite power and authority to enter into and perform its obligations under this ATTACHMENT NO. 5 882/015610-0047 Page 13 of 16 715762.07 a03/06/07 g Note, the Agreement, the Agency Deed of Trust, the Agency Regulatory Agreement and all other documents executed in connection herewith. 19.2 Enforceability. This Note and all other instruments to be executed by Borrower in connection with the Agency Loan constitute the legal, valid and binding obligation of Borrower, without joinder of any other party. 19.3 Authorization and Consents. The execution, delivery and performance of this Note and all other instruments to be executed in connection herewith is consistent with the operating agreement, partnership agreement or articles and bylaws governing Borrower and have been duly authorized by all necessary action of Borrower's members, partners, directors, officers and shareholders. 19.4 Due and Valid Execution. This Note and all other instruments to be executed in connection herewith, will, as of the date of their execution, have been duly and validly executed by Borrower. 19.5 Licenses. Borrower will obtain and maintain all material licenses, permits, consents and approvals required by all applicable governmental authorities to own and operate the Project. 19.6 Litigation and Compliance. To the best of Borrower's knowledge, there are no suits, other proceedings or investigations pending or threatened against, or affecting the business or the properties of Borrower (other than those as have been previously disclosed in writing to Agency) which could materially impair its ability to perform its obligations under this Note, nor is Borrower in violation of any laws or ordinances which could materially impair Borrower's ability to perform its obligations under this Note. 19.7 Default. To Borrower's current actual knowledge, there are no facts now in existence which would, with the giving of notice or the lapse of time, or both, constitute an "Event of Default" hereunder, as described in Section 10. 19.8 No Violations. To the best of Borrower's knowledge, the execution and delivery of this Note, the Agreement and all other documents executed or given thereunder, and the performances hereunder and thereunder by Borrower, as applicable, will not constitute a breach of or default under any instrument or agreement to which Borrower may be a party nor, to the best of Borrower's knowledge, will the same constitute a breach of or violate any law or governmental regulation. 20. Approvals. Any review or approval of any matter by the Agency or any Agency official or employee under this Note shall be solely for the benefit of Agency, and neither Borrower nor any other person shall rely upon such review or approval as an indication of the wisdom, soundness, safety, appropriateness, or presence or absence of any matter. Without limiting the generality of the foregoing, except as may be otherwise provided in the Agreement, Borrower and not Agency shall be solely responsible for assuring compliance with laws, the suitability of the Property for ATTACHMENT NO. 5 882/015610-0047 Page 14 of 16 715762.07 a03/06/07 g the Project, the adequacy of the plans, and the safety of the Project construction site, the completed Project, and the operation thereof. 21. Good Faith and Fair Dealing. Borrower agrees to perform all of its obligations and the actions required of Borrower hereunder in good faith and in accordance with fair dealing. 22. Waiver. Subject to Section 5, Borrower agrees that it will still be liable for repayment of this Note, even if the holder hereof does not follow the procedures of presentment, protest, demand, diligence, notice of dishonor and of nonpayment, which requirements are hereby waived. Failure of Agency or other holder hereof to exercise any right or remedy hereunder shall not constitute a waiver of any future or other default. No acceptance of a past due installment or indulgence granted from time to time shall be construed to be a waiver of, or to preclude the exercise of, the right to insist upon prompt payment thereafter or to impose late charges retroactively or prospectively, or to waiver or preclude the exercise of, the right to insist upon prompt payment thereafter or to impose late charges retroactively or prospectively, or to waive or preclude the exercise of any other rights which Agency may have. [End — Signature Page Follows] ATTACHMENT NO. 5 "2/015610-0047 Page 15 of 16 715762.07.03106/07 g IN WITNESS WHEREOF, Borrower has executed this Note as of the date and year first above written. THE SOUTHERN CALIFORNIA HOUSING DEVELOPMENT CORPORATION, a California nonprofit public benefit corporation By: Its: Richard J. Whittingham, CFO ATTACHMENT NO. 5 "2/015610-0047 Page 16 of 16 715762 07 a03/06/07 g ATTACHMENT NO.6 AGENCY DEED OF TRUST [SEE FOLLOWING DOCUMENT] 9av62.07.0310 ATTACHMENT NO. 6 715762.07 e03/Ob/07 Recording Requested By And When Recorded Return to: La Quinta Redevelopment Agency 78-495 Calle Tampico La Quinta, CA 92253 Attn: Executive Director SPACE ABOVE THIS LINE FOR RECORDER'S USE EXEMPT FROM RECORDING FEE PER GOV. CODE § 27383 DEED OF TRUST WITH ASSIGNMENT OF RENTS AND RIDERS ATTACHED HERETO NOTE: RIDERS ATTACHED TO THIS DEED OF TRUST CONTAINING TERMS INCLUDING SECURITY AGREEMENT AND FIXTURE FILING. This DEED OF TRUST WITH ASSIGNMENT OF RENTS AND RIDERS ATTACHED HERETO ("Deed of Trust"), is made , between THE SOUTHERN CALIFORNIA HOUSING DEVELOPMENT CORPORATION, a California nonprofit public benefit corporation, herein called TRUSTOR, whose address is 9065 Haven Avenue, Suite 100, Rancho Cucamonga, CA 91730, Chicago Title Company, a California corporation, herein called TRUSTEE, and LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic, herein called BENEFICIARY. WITNESSETH: That Trustor grants to Trustee in trust, with power of sale, Truster's estate, dated on or about the date hereof, in that property in the City of La Quinta, County of Riverside, State of California, described in Exhibit "A" (the "Property"), together with the rents, issues and profits thereof, subject, however, to the right, power and authority hereinafter given to and conferred upon Beneficiary to collect and apply such rents, issues and profits for the purpose of securing (1) payment of the sum of THIRTEEN MILLION NINE HUNDRED SIXTY-SIX THOUSAND EIGHT HUNDRED THIRTY-ONE DOLLARS ($13,966,831), with interest thereon according to the terms of a promissory note or notes of even date herewith made by Truster, payable to order of Beneficiary, and extensions or renewals thereof; (2) the performance of each agreement of Truster incorporated by reference or contained herein; and (3) payment of additional sums and interest thereon which may hereafter be loaned to Truster, or its successors or assigns, when evidenced by a promissory note or notes reciting that they are secured by this Deed of Trust. To protect the security of this Deed of Trust, and with respect to the Property above described, Truster 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 SiWyou 506 762 Amador 133 438 Lassen 192 367 Riverside 3778 347 Solana 1287 621 Butte 1330 513 Los Angeles T-3878 874 Sacramento 5039 124 Sonoma 2067 427 Calaveras 185 338 Madero 911 136 San Benito 300 405 Stanislaus 1970 56 Colon 323 391 Marin 1849 122 San Bernardino 6213 768 Sutter 655 585 Contra Costa 4684 1 Mariposa 90 453 San Francisco A-804 596 Tebama 457 183 Del Norte 101 549 Mendocino 667 99 San Joaquin 2855 283 Trinity 108 595 El Dorado 704 635 Mewed 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 Clam 6626 664 Yolo 769 16 Imperial 1189 701 Napa 704 742 Santa Cruz 1638 607 Yuba 398 693 ATTACHMENT NO. 6 882/015610-0047 Page 1 Of 10 71576207 a03/06/07 g COUNTY BOOK PAGE COUNTY BOOK PAGE COUNTY BOOK PAGE COUNTY BOOK PAGE 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 RIDERS ATTACHED TO THIS DEED OF TRUST STATE OF CALIFORNIA COUNTY OF Signature of Trustor } THE SOUTHERN CALIFORNIA HOUSING } DEVELOPMENT CORPORATION, a California nonprofit public benefit corporation On before me, personally appeared personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose names(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signatures(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. Signature (This area for official notarial seal) By: Richard J. Whittingham, CFO ATTACHMENT NO. 6 '82/015610-0047 Page 2 of 10 715762 07 a03/06/07 g 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, Truster 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 in 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 in 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 Tmstor. 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 securty 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 many suit brought by Beneficiary to foreclose this Deed. 4) To pay: at least ten (10) days before delinquency all taxes and assessments affecting said property, including assessments on appurtenant water stock; when due, all encumbrances, charges and hens, with interest, on said property or any part thereof, which appear to be prior or superior hereto; all costs, fees and expenses of this Trust. Should Tmstor fail to make any payment in to do any act as berein provided, then Beneficiary or Trustee, but without obligation so to do and without notice to or demand upon Truster and without releasing Truster from any obligation hereof, may: make or do the same in such manner and to such extent as either may deem necessary to protect the security hereof, Beneficiary or Trustee being authorized to enter upon said property for such purposes; appear in and defend any action or proceeding purporting to affect the security hereof or the rights or powers of Beneficiary or Trustee, pay, purchase, contest or compromise any encumbrance, charge or 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 or her reasonable fees 5) To pay immediately and without demand all sums so expended by Beneficiary or Trustee, with interest from the date of expenditure at the amount allowed by law in effect at the date hereof, and to pay for any statement provided for by law in effect at the date hereof regarding the obligation secured hereby any amount demanded by the Beneficiary not to exceed the maximum allowed by law at the time when said statement is demanded. 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 seemed hereby after its due date, Beneficiary does not waive its right either to require prompt payment when due of all other sums so secured or to declare default for failure so to pay. 3) That at any time or from time to time, without liability therefor and without 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, orjom 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 trudrf ilness thereof. The Grantee in such reconveyance may be described as "the person or persons legally entitled thereto". 5) That as additional security, Truster 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 Truster the right, prior to any default by Truster in payment of any indebtedness secured hereby or in the performance of any agreement hereunder, to collect and retain such rents, issues and prefits as they become due and payable. Upon any such default (beyond any applicable cure period, and during the continuance of such default), Beneficiary may at 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 its own ATTACHMENT NO. 6 882/015610-0047 Page 3 of 10 715762.07 a03/06/07 g time we for or otherwise collect such rents, issues, and profits, including those past due and unpaid, and apply the same, less costs and expenses of operation and collection, including reasonable attorney's fees, upon any indebtedness secured hereby, and in such order as Beneficiary may determine The entering upon and taking possession of said property, the collecting of such rents, issues and profits and the application thereof as aforesaid, shall not cure or waive any default or notice of default hereunder or invalidate any act done pursuant to such notice. 6) That upon default by Truster 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 in 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 Truster, 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 a 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 Truster, 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 seemed 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, esmte, rights, powers and duties. Said instrument must contain the name of the original Truster, Trustee and Beneficiary hereunder, the book and page where this Deed is recorded and the time and address of the new Trustee. 8) That this Deed applies to, inures to the benefit of, and binds all parties hereto, then heirs, legatees, devisees, administrators, executors, successors and assigns. The term Beneficiary shall mean the owner and holder, including pledgees, of the note secured bereby, whether or not named as Beneficiary herein. In this Deed whenever the context so requires, the masculine gander 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 Trost or of any action or proceeding in which Truster, 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 a 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, m cancel said note or notes above mentioned, an all other evidences of indebtedness secured by said Deed of Trost 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 Trot, all the estate now held by you under the same. 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 roust be delivered to the Trustee for cancellation before reconveyance will be made. ATTACHMENT NO. 6 882/015610-0047 Page 4 of 10 715762 07 a03/06/07 g LEGAL DESCRIPTION OF PROPERTY All of that certain real property in the City of La Quinta, County of Riverside, State of California, described as follows: That portion of the Southeast quarter of the Northeast quarter of Section 19, Township 6 South, Range 7 East, San Bernardino Base and Meridian, described as follows: Commencing at the Southeast corner of the Northeast quarter of said Section 19; Thence South 89' 33' 05" West, on the Southerly line of the Northeast quarter of said Section, 330 feet, to the true point of beginning; thence South 89' 33' 05" West, on said Southerly line of the Northeast quarter, 330 feet; Thence North 0° 13' 40" West, 1,324.57 feet, to the Northerly line of the Southeast quarter of Northeast quarter of said Section 19; thence North 89' 34' 05" East, on said Northerly line, 330 feet; thence South 0° 13' 40" East, 1,324.47 feet to the true point of beginning; Excepting therefrom the Southerly 50 feet conveyed to the County of Riverside by Deeds recorded August 30, 1933 in Book 133, Page(s) 292 and Book 134, Page(s) 298 respectively, of Official Records, Riverside County Records. Also excepting therefrom that portion of described in the deeds to the City of La Quinta, recorded 02-17-1999, as Instrument No. 62425 and 62426, Official Records. Excepting therefrom the mobile home located thereon. ATTACHMENT NO. 6 "2/015610-0047 Page 5 of 10 715762 07 a03/06/07 g RIDER TO DEED OF TRUST WITH ASSIGNMENT OF RENTS This RIDER TO DEED OF TRUST WITH ASSIGNMENT OF RENTS ("Rider") is executed this day of by THE SOUTHERN CALIFORNIA HOUSING DEVELOPMENT CORPORATION, a California nonprofit public benefit corporation, herein "Trustor," in favor of the LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic, herein `Beneficiary," the same parties to that certain form Deed of Trust With Assignment of Rents, of even date hereto, to which this Rider is attached. This Rider is made a part of and is incorporated into said Deed of Trust. This Rider shall supersede any conflicting term or provision of the form Deed of Trust to which it is attached. Reference is made to (i) that certain Promissory Note by and between Trustor and Beneficiary, dated on or about the date set forth above, the repayment of which by 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. ProppM 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 Agency Note; b. Payment and performance of all obligations of Trustor under this Deed of Trust; C. Payment and performance of all obligations of Trustor under the Agency Agreements. d. Payment and performance of all future advances and other obligations of Trustor or any other person, firm, or entity with the approval of Trustor, may agree to pay and/or perform (whether as principal, surety or guarantor) for the benefit of Beneficiary, when the obligation is evidenced by a writing which recites that it is secured by this Deed of Trust; and e. All modifications, extensions and renewals of any of the obligations secured hereby, however evidenced. Trustor's grant hereunder is subject to the nonrecourse provisions in Section 5 of the Agency Note, which are incorporated herein by this reference as though set forth in full. ATTACHMENT NO. 6 "2/015610-0047 Page 6 Of 10 n5762 07 a03/06/07 g 3. Obligations. The term "obligations" is used herein in its broadest and most comprehensive sense and shall be deemed to include, without limitation, all interest and charges, prepayment charges, late charges and fees at any time accruing or assessed on any of the Secured Obligations. 4. Incorporation. All terms of the Agency Note, Agency Agreements, and the Secured Obligations are incorporated herein by this reference. All persons who may have or acquire an interest in the Property shall be deemed to have notice of the terms of all of the foregoing documents. 5. Mortgagee -in -Possession. Neither the assignment of rents set forth in the Deed of Trust nor the exercise by Beneficiary of any of its rights or remedies hereunder shall be deemed to make Beneficiary a "mortgagee -in -possession" or otherwise liable in any manner with respect to the Property, unless Beneficiary, in person or by agent, assumes actual possession thereof. Nor shall appointment of a receiver for the Property by any court at the request of Beneficiary or by agreement with Trustor, or the entering into possession of the Property by such receiver, be deemed to make Beneficiary a "mortgagee -in -possession" or otherwise liable in any manner with respect to the Property. 6. No Cure. In the event Beneficiary collects and receives any rents under the Deed of Trust upon any default hereof, such collection or receipt shall in no way constitute a curing of the default, except if and to the extent the same are sufficient to cure all monetary defaults and no other defaults then exist. 7. Possession Unon Default. Upon the occurrence of and during the continuation of a default, Beneficiary, after having given notice and the applicable cure periods having expired with the default having not been cured (hereinafter, a "default"), may, at its option, without any action on its part being required and without in any way waiving such default, take possession of the Property in accordance with applicable law and have, hold, manage, lease and operate the same, on such terms and for such period of time as Beneficiary may deem proper, and, subject to the rights of any senior lienholders, may collect and receive all rents and profits, with full power to make, from time to time, all commercially reasonable alterations, renovations, repairs or replacements thereto as may seem proper to Beneficiary, and to apply such rents and profits to the payment of (a) the cost of all such alterations, renovations, repairs and replacements, and all costs and expenses incident to taking and retaining possession of the Property, and the management and operation thereof, and keeping the same properly insured; (b) all taxes, charges, claims, assessments, and any other liens which may be prior in lien or payment of the Agency Note, and premiums for insurance, with interest on all such items; and (c) the indebtedness secured hereby, together with all costs and attorney's fees, in such order or priority as to any of such items as Beneficiary in its sole discretion may determine, any statute, law, custom or use to the contrary notwithstanding. Any amounts received by Beneficiary or its agents in the performance of any acts prohibited by the terms of this assignment, including, but not limited to, any amounts received in connection with any cancellation, modification or amendment of any lease prohibited by the terms of this assignment and any rents and profits received by Trustor after the occurrence of a default shall be held by Trustor as trustee for Beneficiary and all such amounts shall be accounted for to Beneficiary and shall not be commingled with other funds of the Trustor. Any person receiving any portion of such trust funds shall receive the same in trust ATTACHMENT NO. 6 882/015610-0047 Page 7 of 10 715762.07 a03/06/07 g for Beneficiary as if such person had actual or constructive notice that such funds were impressed with a trust in accordance therewith. 8. Receiver. In addition to any and all other remedies of Beneficiary set forth under this Deed of Trust or permitted at law or in equity, if a default shall have occurred and not have been cured within any applicable cure period, Beneficiary, to the extent permitted by law and without regard to the value, adequacy or occupancy of the security for the Note and other sums secured hereby, shall be entitled as a matter of right if it so elects to the appointment of a receiver to enter upon and take possession of the Property and to collect all rents and profits and apply the same as the court may direct, and such receiver may be appointed by any court of competent jurisdiction by ex parte application and without notice, notice of hearing being hereby expressly waived. The expenses, including receiver's fees, attorneys' fees, costs and agent's compensation, incurred pursuant to the power herein contained shall be secured by this Deed of Trust. 9. Notice to Beneficiary. Notices to Beneficiary shall be sent to Beneficiary addressed to: La Quinta Redevelopment Agency 78-495 Calle Tampico La Quinta, CA 92263 Attn: Executive Director [SIGNATURE ON NEXT PAGE] ATTACHMENT NO. 6 882/015610-0047 Page 8 of 10 715762.07 a03/06/07 g IN WITNESS WHEREOF, Trnstor has executed this Rider on the date of Trustor's acknowledgment herein below, to be effective for all purposes as of the day and year first set forth above. TRUSTOR: THE SOUTHERN CALIFORNIA HOUSING DEVELOPMENT CORPORATION, a California nonprofit public benefit corporation M Richard J. Whittingham, CFO ATTACHMENT NO. 6 882/015611-0047 Page 9 of 10 715762.07 a03/06/07 g STATE OF CALIFORNIA ) ss. COUNTY OF ) On before me, , personally appeared , personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. Witness my hand and official seal. Notary public [SEAL) ATTACHMENT NO. 6 '82/015610-0047 Page 10 of 10 715762.07 a03/06/07 g ATTACHMENT NO.7 REGULATORY AGREEMENT AND DECLARATION OF COVENANTS AND RESTRICTIONS [SEE FOLLOWING DOCUMENT] se2/015e10-7 ATTACHMENT NO. 7 715762.07 a0303/06/07 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 ?7383) 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 ("Effective Date"), by and between LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic ("Agency") and THE SOUTHERN CALIFORNIA HOUSING DEVELOPMENT CORPORATION, a California nonprofit public benefit corporation ("Developer"). RECITALS: A. Developer is the owner of fee title to that certain real property more particularly described in Exhibit "A", attached hereto and incorporated by reference herein (the "Site"). B. Pursuant to an Affordable Housing Agreement by and between Developer and Agency dated (the "AHA"), Agency provided financial assistance to Developer in the sum of Thirteen Million Nine Hundred Sixty -Six Thousand Eight Hundred Thirty -One Dollars ($13,966,831) (the "Agency Loan") for the purpose of assisting Developer to acquire the Site, which has been improved with an affordable rental apartment complex containing eighty (80) units (the "Project"). The AHA requires Developer to enter into this Agreement, which provides, among other requirements, that with the exception of the Management Unit, all of the apartment units within the Project be rented to and occupied by "Eligible Tenants" (as that tern is defined in Section 1.9 below). The AHA is incorporated herein as if fully set forth. C. Reference is also made to the following documents, of even date herewith: (i) Promissory Note by Developer as 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 and Riders attached hereto, by and between Developer as trustor and Agency as beneficiary, and recorded in the Office of the Riverside County Recorder ("Agency Deed of Trust"). The Agency Deed of Trust secures (a) repayment of the Agency Note, and (b) performance of Developer's obligations hereunder. ATTACHMENT NO. "2/015610-0047 pa e 1 of 45 n5762 07.03/06/07 g The Agency Note and the Agency Deed of Trust are referred to herein collectively as the "Agency Agreements" The Agency Agreements are incorporated herein as if fully set forth. D. To assist Developer with acquiring the Project, Developer has obtained low income housing tax credits from the Tax Credit Allocation Committee (the "TCAC") pursuant to Section 42 of the Internal Revenue Code and/or California Revenue and Taxation Code, Sections 17057.5, 17058, 23610.4, 23610.5 and California Health and Safety Code Section 50199, et seq. (the "Tax Credits"). In connection with obtaining the Tax Credits, Developer has entered into, or will enter into, with TCAC a regulatory agreement to be recorded in the Official Records of the County of Riverside (the "Tax Credit Regulatory Agreement'). E. Pursuant to the AHA and the Agency Agreements, Developer has agreed to own, operate, manage, and maintain the affordable rental housing project constructed on the Site by Agency, with all of the units thereon except the Management Unit restricted to rental to and occupancy by Eligible Tenants. F. Agency and Developer now desire to place restrictions upon the use and operation of the Site, in order to ensure that the Site shall be operated continuously, for a period of fifty- five (55) years from the Effective Date, as an affordable rental apartment complex in accordance with the terms hereof. AGREEMENT: NOW, THEREFORE, the Developer and Agency declare, covenant and agree, by and for themselves, their heirs, executors, administrators, successors and assigns, and all persons claiming under or through them, that, commencing upon the Effective Date and continuing for a period of fifty-five (55) years following the Effective Date, as follows: 1.0 DEFINITIONS. 1.1 "50% Very Low Income Household" shall mean a household whose annual income does not exceed fifty percent (50%) of AMI, adjusted for family size. 1.2 Affiliate. As used in this Agreement, the term "Affiliate" shall mean any person or entity directly or indirectly, through one or more intermediaries, controlling, controlled by or under common control with Developer which, if Developer is a partnership or limited liability company, shall include each of the constituent members or general partners, respectively, thereof. The term "control' as used in the immediately preceding sentence, means, with respect to a person that is a corporation, the right to the exercise, directly or indirectly, of more than 50% of the voting rights attributable to the shares of the controlled corporation, and, with respect to a person that is not a corporation, the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of the controlled person. 1.3 Affordable Rent. As used in this Agreement, the term "Affordable Rent' shall mean the amount of monthly rent, including a reasonable utility allowance, that does not exceed the maximum allowable rent to be charged by Developer and paid by Very Low Income Households, 50% Very Low Income Households, or Extremely Low Income Households occupying the Units as determined pursuant to Health and Safety Code Section 50053(b), as of ATTACHMENT NO. 7 882/015610-0047 Page 2 Of45 715762.07 a03/0&07 g the Effective Date, and the regulations promulgated pursuant to or incorporated therein, including, without limitation, any applicable regulations promulgated pursuant to Health and Safety Code Section 50093. Subject to Section 3.11 herein, the tenant utility allowance shall be determined by the Executive Director. 1.4 AMI. As used in this Agreement, the term "AMI" or "Area Median Income" shall mean the median family income for the Riverside County area promulgated and published annually by the California Department of Housing and Community Development ("HCD") pursuant to Title 25, Section 6932 of the California Code of Regulations. If HCD ceases annually to publish median incomes, the parties will agree upon an adequate substitute manner for determining AMI. 1.5 Approved Budget. As used in this Agreement, the term "Approved Budget" has the meaning ascribed in Section 3.13 of this Agreement. 1.6 Capital Improvements. As used in this Agreement, the term "Capital Improvements" means all work and improvements with respect to the Site for which costs and expenses may be capitalized in accordance with generally accepted accounting principles in effect from time to time, consistently applied. 1.7 Cash Flow. As used in this Agreement, the term "Cash Flow" means, for the applicable period, Net Operating Income less Debt Service. 1.8 CPI. As used in this Agreement, the term "CPI" means the Consumer Price Index published by the United States Department of Labor, Bureau of Labor Statistics, for Urban Wage Earners and Clerical Workers, Los Angeles -Riverside -Orange County Average, All Items (1984=100), or, if the CPI is discontinued, such official index as may then be in existence and which is most nearly equivalent to the CPI. 1.9 Debt Service. As used in this Agreement, the term "Debt Service" means scheduled debt service (including impounds, expenses, and other amounts payable) on any loan that is senior to the Agency Loan. 1.10 Eligible Tenant. As used in this Agreement, the term "Eligible Tenant" shall mean a household which qualifies as a Very Low Income Household, an Extremely Low Income Household, or a 50% Very Low Income Household. 1.11 Executive Director. As used in this Agreement, the term "Executive Director" shall mean the individual duly appointed to the position of Executive Director of Agency, or his or her authorized designee. Whenever an administrative action is required by Agency to implement the terms of this Agreement, the Executive Director, or his or her authorized designee, shall have authority to act on behalf of Agency, except with respect to matters reserved for Agency Board determination. 1.12 Extremely Low Income Household. As used in this Agreement, the term "Extremely Low Income Household" shall have the meaning as set forth in Health and Safety Code Section 50106, or successor statute, adjusted for family size. ATTACHMENT NO. 7 882/015610-W7 Page 3 of 45 715762.07 a03/06/07 g 1.13 Management Unit. As used in this Agreement, the term "Management Unit' shall have the meaning ascribed in Section 2.6 hereof. 1.14 Moderate Income Household. As used in this Agreement, the term "Moderate Income Household" shall have the meaning as set forth in Health and Safety Code Section 50093, or any successor statute, adjusted for family size. 1.15 Net Operating Income. As used in this Agreement, the term "Net Operating Income" shall have the meaning ascribed thereto in the Agency Note. 1.16 Operating Expenses. As used in this Agreement, the term "Operating Expenses" shall have the meaning ascribed thereto in the Agency Note. 1.17 Operating Income. As used in this Agreement, the term "Operating Income" shall have the meaning ascribed thereto in the Agency Note. 1.18 _Qualified Tax Credit Investor. As used in this Agreement, the term "Qualified Tax Credit Investor" shall mean a person or entity who (i) is an experienced limited partner and investor in multifamily housing developments receiving low income housing tax credits issued by the State of California or the United States federal government and (ii) has obtained or is contractually obligated to obtain a limited partnership or limited liability company membership interest in the Project whereby it will receive 90 percent or more of the Tax Credits obtained in connection with the Project. Agency shall have the right to reasonable prior approval of the identity of the Qualified Tax Credit Investor and of the terms and conditions of the limited partnership agreement or other agreement specifying the terms and conditions, including but not limited to terms and conditions concerning timing and amounts of cash contributions toward Project development costs in return for an interest in the owner of the Project and the right to receive Tax Credits. 1.19 Restricted Unit Matrix. As used in this Agreement, the term "Restricted Unit Matrix" shall mean that certain affordability matrix attached hereto and incorporated herein as Exhibit "F". 1.20 Tax Credit Program. As used in this Agreement, the term "Tax Credit Program" shall mean the low-income housing tax credit program authorized pursuant to Internal Revenue Code Section 42, California Health and Safety Code Sections 50199.6-50199.19, Revenue and Taxation Code Sections 17057.5, 17058, 23610.4, 23610.5, and applicable federal and State regulations such as 4 California Administrative Code Sections 10300-10340. 1.21 Tax Credits. As used in this Agreement, the term "Tax Credits" shall mean the low income housing tax credits granted by TCAC for the Project pursuant to the Tax Credit Program. 1.22 Tax Credit Regulatoryy Agreement. As used in this Agreement, the term "Tax Credit Regulatory Agreement' shall mean that certain regulatory agreement to be recorded against the Site as a condition of the receipt by the Project of an allocation by TCAC of nine percent (9%) Tax Credits. ATTACHMENT NO. 7 882/015610-0047 Page 4 of 45 71576207 a03/06/07 g 1.23 TCAC. As used in this Agreement, "TCAC" shall mean the California Tax Credit Allocation Committee. 1.24 Unit. As used in this Agreement, the term "Unit" or "unit" shall mean a rental apartment dwelling unit on the Site. 1.25 Very Low Income Household. As used in this Agreement, the term "Very Low Income Household" shall have the meaning as set forth in Health and Safety Code Section 50105, or any successor statute, adjusted for family size. 2.0 RESIDENTIAL RENTAL PROPERTY. 2.1 Residential Use. Without the Agency's prior written consent, which consent may be given or withheld in its sole and absolute discretion, none of the Units in the Project will at any time be utilized on a transient basis or will ever be used as a hotel, motel, dormitory, fraternity house, sorority house, rooming house, nursing home, hospital, sanitarium, or trailer court or park, nor shall the Units be used for day care facilities or as a place of business except as may otherwise be allowed by applicable law. 2.2 Conversion of Units. No part of the Project will at any time be owned by a cooperative housing corporation, nor shall the Developer take any steps in connection with the conversion to such ownership or uses to condominiums, or to any other form of ownership, without the prior written approval of Agency which approval may be given or withheld in its sole and absolute discretion. 2.3 No Preference. All of the Units will be available for rental in accordance with the terms of this Agreement, and the Developer shall not give preference to any particular class or group of Eligible Tenants in renting the Units in the Project, except as provided in Section 3.4 below. 2.4 Resident Manager Unit. Notwithstanding anything to the contrary in this Agreement, one (1) of the Units may be occupied by on -site management (the "Management Units"). The Management Unit shall be restricted for rental to and occupancy by a Moderate Income Household at an affordable rent, as determined pursuant to Health and Safety Code Section 50053. As of the Effective Date, affordable rent, including a reasonable utility allowance, for a Moderate Income Household is no more than the product of thirty percent (30%) of one hundred ten percent (110%) of AMI adjusted for family size appropriate for the Unit. 2.5 Liability of Developer. Developer and any manager it employs shall not incur any liability under this Agreement as a result of fraud or intentional misrepresentation by a tenant. 3.0 OCCUPANCY OF RESTRICTED UNITS BY ELIGIBLE TENANTS. Developer hereby represents, warrants, and covenants as follows: ATTACHMENT NO. 7 "2/015610-0047 Pa e 5 Of 45 715762.07 a03/06/07 g 3.1 Occupancy Levels. Except as expressly provided herein, throughout the term of this Agreement, the Units shall be continuously occupied or held vacant and available for occupancy by Eligible Tenants. 3.2 Occupancy By Eligible Tenant. A Unit occupied by an Eligible Tenant who qualified as an Eligible Tenant at the commencement of the occupancy shall be treated as occupied by an Eligible Tenant throughout their tenancy. A Unit previously occupied by an Eligible Tenant and then vacated shall be considered occupied by an Eligible Tenant until the Unit is reoccupied, provided Developer uses its best efforts to re -lease the vacant Unit to an Eligible Tenant. Any vacated Unit shall be held vacant until re -leased to an Eligible Tenant. Developer shall take any or all of the following actions, as necessary, to locate Eligible Tenants for the Project: (i) notification to the City of the available Unit; (ii) advertisement of the available Unit in a newspaper of general circulation in the City; and (iii) contacting and notifying the Riverside County Housing Authority in writing of the available Unit. 3.3 Income Computation and Certification. Immediately prior to an Eligible Tenant's occupancy of a Unit, Developer shall obtain an Income Computation and Certification Form in the form attached hereto and incorporated herein as Exhibit "B", or on a similar form required by TCAC (the "TCAC Income Certification form") if the TCAC Income Certification Form requires inclusion of the same information as required in Exhibit "B", from each such Eligible Tenant dated no more than 90 days prior to the date of initial occupancy in the Project by such Eligible Tenant. In addition, Developer shall provide such further information as may be reasonably required in the future by the Agency for purposes of verifying a tenant's status as an Eligible Tenant, provided the same is reasonably available to Developer without unreasonable expense in connection with obtaining the same. Developer shall use good faith efforts to verify that the income provided by an applicant is accurate by taking the following steps as a part of the verification process: (i) obtain three (3) pay stubs for the most recent pay periods; (ii) obtain a written verification of income and employment from the applicant's current employer; (iii) obtain an income verification form from the Social Security Administration, California Department of Social Services, and/or California Employment Development Department if the applicant receives assistance from any of said agencies; (iv) if an applicant is unemployed or did not file a tax return for the previous calendar year, obtain other evidence and/or verification of such applicant's total income received during the calendar year from any source, taxable or nontaxable, or such other information as is satisfactory to the Agency. Developer shall maintain in its records each Income Computation and Certification Form obtained pursuant to this section for a minimum of five (5) years. 3.4 Rental Priority. During the term of this Agreement, Developer shall use its reasonable commercial efforts to lease the Units to credit -worthy Eligible Tenants in the following order of priority: (i) displaced persons entitled to a preference pursuant to California Health and Safety Code Section 33411.3 or successor statute; and (ii) other persons meeting the eligibility requirements of this Agreement. Developer shall, and Agency may, maintain a list (the "Housing List") of persons who have notified Developer and/or Agency of their desire to rent a Unit in the Project and who have incomes which would qualify them as an Eligible Tenant, and Developer shall offer to rent units on the above -referenced priority basis; provided, however, that Developer shall not be required to prequalify persons on the Housing List. Should multiple tenants be equally eligible (as to income, credit history, and other nondiscriminatory criteria) and ATTACHMENT NO. 7 882/015610-0047 Page 6 of 45 715762.07 .03/06/07 g qualified to rent a unit, Developer shall rent available Units to Eligible Tenants on a first -come, first -served basis. 3.5 Recertification. Within sixty (60) days prior to the first anniversary date of the occupancy of a Unit by an Eligible Tenant, and on each anniversary date thereafter, Developer shall recertify the income of such Eligible Tenant by obtaining a completed Income Recertification Form, in the form attached hereto and incorporated herein as Exhibit "C", based upon the current income of each known occupant of the Unit; provided, however, that if the TCAC Regulatory Agreement, or a regulatory agreement required to be entered into by Developer as a condition to obtaining tax-exempt bonds to finance the Project, requires Developer to obtain a recertification form which requires inclusion of the same information as required in Exhibit "C", then Developer shall not be deemed to be in default hereunder if during the term of the TCAC Regulatory Agreement or bond regulatory agreement (as applicable) Developer obtains from each Eligible Tenant the TCAC recertification form or the recertification form required pursuant to the bond regulatory agreement. 3.6 Determination of Affordable Rent. All Units shall be rented at an Affordable Rent. 3.6.1 Rent Schedule and Utility Allowance. Subject to Section 3.11 hereof, Agency will establish maximum monthly allowances for utilities and services to be used by the Developer in calculating Affordable Rent. Developer shall submit to Executive Director for review and approval the Affordable Rent proposed by Developer for all of the Units. The Executive Director shall approve such proposal if it complies with the terms of this Agreement. The maximum monthly rent must be recalculated by Developer and reviewed and approved by the Agency annually. 3.6.2 A_diustment of Affordable Rent. Affordable Rent may change as changes in the applicable gross rent amounts, the income adjustments, or the monthly allowance for utilities and services warrant. Any increase in rents is subject to the provisions of outstanding leases. Developer must provide households occupying the Units not less than thirty (30) days prior written notice before implementing any rent increase. 3.7 Certification of Continuing Program Compliance. During the term of this Agreement, on or before each April 1 following the Term Commencement Date, Developer shall annually advise the Agency of the occupancy of the Project during the preceding calendar year by delivering a Certification of Continuing Program Compliance in the form attached hereto and incorporated herein as Exhibit "E", stating (i) the Units of the Project which have been rented to and are occupied by Eligible Tenants and (ii) that to the knowledge of Developer either (a) no unremedied default has occurred under this Agreement, or (b) a default has occurred, in which event the Certification shall describe the nature of the default and set forth the measures being taken by the Developer to remedy such default. Developer shall pay to Agency an annual fee pursuant to Health and Safety Code Section 33418(c) which shall not exceed FIVE HUNDRED DOLLARS (5500) as such amount shall be permitted to increase by the CPI from and after the date of this Agreement, or, if the CPI is discontinued, such official index as may then be in existence and which is most nearly equivalent to the CPI. ATTACHMENT NO. 7 882/015610-0047 Page 7 of 45 715762.07 a03/06/07 g 3.8 Maintenance of Records. Developer shall maintain complete and accurate records pertaining to the Units, and shall permit any duly authorized representative of the Agency, upon twenty-four (24) hours prior notice and during business hours, to inspect the books and records of Developer pertaining to the Project including, but not limited to, those records pertaining to the occupancy of the Units. 3.9 Reliance on Tenant Representations. Each tenant lease shall contain a provision to the effect that Developer has relied on the income certification and supporting information supplied by the tenant in determining qualification for occupancy of the unit, and that any material misstatement in such certification (whether or not intentional) will be cause for immediate termination of such lease. Each such lease shall also include the lease rider attached hereto and incorporated herein as Exhibit "D" and shall state that occupation of the Unit is subject to the income restrictions described in this Agreement. 3.10 Remedy For Excessive Rent Charge. 3.10.1 Subject to Section 2.4 hereof, it shall constitute a default for Developer to charge or accept for any Unit rent amounts in excess of the amount provided for in Section 3.6 of this Agreement. In the event that Developer charges or receives such higher rental amounts, in addition to any other remedy Agency shall have for such default, Developer shall be required to pay to Agency an amount equal to two (2) times the entire amount of rent received in excess of the amount permitted pursuant to this Agreement. For purposes of this Section 3.10.1, the term "rent" shall not include Section 8 payments Developer receives in connection with the renting of any of the Units. 3.10.2 Subject to Section 2.4 hereof, and except as otherwise provided in this Agreement, it shall constitute a default for Developer to knowingly (or without investigation as required herein) initially rent any Unit to a tenant who is not an Eligible Tenant. In the event Developer violates this Section, in addition to any other equitable remedy Agency shall have for such default, Developer, for each separate violation, shall be required to pay to Agency an amount equal to (i) two times the greater of (A) the total rent Developer received from such ineligible tenant, or (B) the total rent Developer was entitled to receive for renting that Unit, plus (ii) any relocation expenses incurred by Agency or the City of La Quinta as a result of Developer having rented to such ineligible person. 3.10.3 It shall constitute a default for Developer to knowingly (or without investigation as required herein) rent a Unit in violation of the leasing preference requirements of Section 3.4 of this Agreement. In the event Developer violates this Section, in addition to any other equitable remedy Agency shall have for such default, Developer, for each separate violation, shall be required to pay Agency an amount equal to two (2) months of rental charges. The terms of this Section shall not apply if Developer rents to an ineligible person as a result of such person's fraud or misrepresentation. 3.10.4 Notwithstanding anything herein to the contrary and subject to Section 3.10.5 below, in the event Developer violates more than one provision of this Section 3.10 in the rental of a specific unit to a specific individual, Developer shall be required to pay to Agency for each such violation the amount listed under the subsection above (e.g., either 3.10.1, 3.10.2, or ATTACHMENT NO. 7 882/015610-0047 Page 8 of45 71576207 a03/06/07 g 3.10.3) that results in the largest payment amount by Developer to the Agency under this Section 3.10, but not the amounts required pursuant to the other subsections, and upon Developer's payment thereof, the default under this Section 3.10 shall be deemed cured with respect to the default for which such penalty is assessed, except to the extent such violation continues after Developer's payment hereunder, in which event the amounts required to be paid pursuant to this Section 3.10 shall apply. THE PARTIES HERETO AGREE THAT THE AMOUNTS SET FORTH IN SECTION 3.10 (THE "DAMAGE AMOUNTS") CONSTITUTE A REASON- ABLE APPROXIMATION OF THE ACTUAL DAMAGES THAT AGENCY WOULD SUFFER DUE TO THE DEFAULTS BY DEVELOPER SET FORTH IN SECTIONS 3.10.1 THROUGH 3.10.3, CONSIDERING ALL OF THE CIRCUMSTANCES EXISTING ON THE EFFECTIVE DATE OF THIS AGREEMENT, INCLUDING THE RELATIONSHIP OF THE DAMAGE AMOUNTS TO THE RANGE OF HARM TO AGENCY AND ACCOMPLISH- MENT OF AGENCY'S PURPOSE OF ASSISTING IN THE PROVISION OF AFFORDABLE HOUSING TO ELIGIBLE TENANTS THAT REASONABLY COULD BE ANTICIPATED AND THE ANTICIPATION THAT PROOF OF ACTUAL DAMAGES WOULD BE COSTLY OR INCONVENIENT. THE AMOUNTS SET FORTH IN THIS SECTION 3.10 SHALL BE THE SOLE MONETARY DAMAGES REMEDY FOR THE DEFAULTS SET FORTH IN THIS SECTION 3.10, BUT NOTHING IN THIS SECTION 3.10 SHALL BE INTERPRETED TO LIMIT AGENCY'S REMEDY FOR SUCH DEFAULT TO SUCH A DAMAGES REMEDY AND IN THAT REGARD AGENCY MAY DECLARE A DEFAULT UNDER THE TERMS OF THE AGENCY NOTE OR OTHER OF THE AGENCY AGREEMENTS. IN PLACING ITS INITIAL AT THE PLACES PROVIDED HEREINBELOW, EACH PARTY SPECIFICALLY CONFIRMS THE ACCURACY OF THE STATEMENTS MADE ABOVE AND THE FACT THAT EACH PARTY HAS BEEN REPRESENTED BY COUNSEL WHO HAS EXPLAINED THE CONSEQUENCES OF THE LIQUIDATED DAMAGES PROVISION AT OR PRIOR TO THE TIME EACH EXECUTED THIS AGREEMENT. DEVELOPER'S INITIALS: AGENCY'S INITIALS: 3.10.5 Notwithstanding anything herein to the contrary, in the event Developer violates Section 3.10.1 hereof, to the extent the tenant from whom Developer charged excess rent still resides in the Project at the time Agency discovers this violation, or Developer knows the location of such tenant, Developer shall, in lieu of paying damages to Agency as described in Section 3.10.1 and 3.10.4 above, refund the tenant the entire amount of excess rent charged to such tenant, calculated with interest at the lesser of the maximum legal rate or ten percent (10%). Developer shall provide evidence to Agency that such payment has been made, within thirty (30) days after Agency provides notice to Developer of the default hereunder. ATTACHMENT NO. 7 882/015610-0047 Page 9 of 45 71576107 a03/06/07 g 3.11 Tax Credit Regulatory Agreement. Developer agrees to perform all of Developer's obligations under this Agreement and the Tax Credit Regulatory Agreement. In the event Agency is prevented by a final, non -appealable order of a court of competent jurisdiction in a lawsuit involving the Project, or by an applicable and binding published appellate opinion, or by a final, non -appealable order of a regulatory body having jurisdiction, from enforcing, for any reason, the affordability restrictions set forth in this Agreement or in the AHA, then in such event Agency shall be a third -party beneficiary under the Tax Credit Regulatory Agreement and shall have full authority to enforce any breach or default by Developer under the Tax Credit Regulatory Agreement in the same manner as though it were a breach or default hereunder. Without Agency's prior written consent, which consent may be withheld in Agency's sole and absolute discretion, Developer shall not consent to any amendment of or modification to the Tax Credit Regulatory Agreement which (i) shortens the term of the affordability restrictions on the Units in the Project to a term of less than fifty-five (55) years from the Effective Date or (ii) releases Developer from the requirement that the Units be rented to Eligible Tenants in accordance with the Restricted Unit Matrix. Notwithstanding anything contained in this Agreement to the contrary, if and when the Site is subject to the requirements of the Tax Credit Program and there is a conflict between the requirements of the Tax Credit Program and the provisions set forth in this Agreement, then the provisions of the Tax Credit Program shall prevail. That notwithstanding, the fact that this Agreement and the Tax Credit Program provide for greater, lesser or different obligations or requirements shall not be deemed a conflict unless the applicable provisions are inconsistent and could not be simultaneously enforced or performed. 3.12 Annual Statements. As soon as available, and in any event not later than one hundred twenty (120) days after the close of each fiscal year of Developer, financial statements of Developer, including a profit and loss statement, and a consolidated statement of changes in financial position of Developer as at the close of and for such fiscal year, all in reasonable detail, certified by an officer or partner of Developer and, upon request of Agency, if total Operating Expenses for such year exceed the total amount set forth in the Approved Budget by more than ten percent (10%), accompanied by a compilation report prepared by a firm of certified public accountants, and in a format, each reasonably acceptable to the Executive Director. 3.13 Pro Forma Budget. As soon as available and in any event not later than November I' of each calendar year beginning with the year of recordation hereof, Developer shall provide Agency, for the Executive Director's approval, with a detailed projection of Operating Income and budgets of estimated Operating Expenses for the immediately succeeding calendar year (the "Pro Forma Budget") and a detailed cash flow projection for the next succeeding year. Developer shall also submit to Agency on request additional detail, information and assumptions used in the preparation of the Pro Forma Budget. Within fifteen (15) days following its receipt of the Pro Forma Budget, Agency shall deliver to Developer its written approval or disapproval thereto, which approval shall not be unreasonably withheld. If Agency disapproves the Pro Forma Budget, it shall set forth its reasons with reasonable specificity. If Agency fails to indicate either its approval or disapproval of the Pro Forma Budget within such period, then Agency shall be deemed to have approved the Pro Forma Budget as submitted by Developer. ATTACHMENT NO. 7 "2/015610-0047 Page 10 of 45 715762 07 a03/06/07 g Once the Pro Forma Budget is approved or deemed approved by Agency, such approved Pro Forma Budget shall become the "Approved Budget' for the entire applicable calendar year. Developer shall use commercially reasonable efforts to operate the Site during such calendar year within the Approved Budget; provided, however, that Developer shall not be required to obtain the approval of Agency for any deviation from the Approved Budget so long as the total Operating Expenses and expenditures for Capital Improvements paid or incurred during such calendar year do not exceed the originally budgeted amount thereof in the Approved Budget by more than five percent (5%) in the aggregate. To the extent required hereunder, any request by Developer to deviate from the Approved Budget shall be submitted to Agency in writing with an explanation thereof and shall be accompanied by supporting information for the request; provided, however, that in the event of an emergency threatening persons or property, Developer shall use its good faith efforts to give prior verbal notice to Agency of unbudgeted expenses that are necessary to avoid damage or injury to persons or property, and in any event shall notify Agency, in writing, of the nature of the emergency and the amount of the expenses, within ten (10) days after such expenses have been incurred. Agency shall reasonably respond to any such request within fifteen (15) days of the receipt of same and if Agency fails to do so, such request shall be deemed to be approved. 4.0 MAINTENANCE. 4.1 Maintenance Obligation. Developer agrees to and shall maintain all interior and exterior improvements, including landscaping, on the Site in a first class condition and repair (and, as to landscaping, in a healthy condition) and in accordance with all of the permits and approvals for the Project, and all other applicable laws, rules, ordinances, orders, and regulations of all federal, state, county, municipal, and other governmental agencies and bodies having or claiming jurisdiction and all their respective departments, bureaus, and officials. Agency places prime importance on quality maintenance to protect its investment and to ensure that all Agency - assisted affordable housing projects within the City are not allowed to deteriorate due to below - average maintenance. Normal wear and tear of the Site improvements will be acceptable to Agency assuming Developer agrees to perform all necessary Site improvements to assure the Site is maintained in good condition. Maintenance requirements shall include that: (a) no improperly maintained landscaping shall be visible from public rights -of -way, including (i) no lawns with grasses in excess of six (6) inches in height, (ii) no trees, shrubbery, lawns, and other plant life dying from lack of water or other necessary maintenance, (iii) no trees, hedges, or shrubbery grown uncontrolled without proper pruning, (iv) no vegetation so overgrown as to be likely to harbor rats or vermin, and (v) no dead, decayed, or diseased trees, weeds, and/or other vegetation; (b) no yard areas shall be left unmaintained, including (i) no broken or discarded furniture, appliances, or other household equipment stored in yard areas for periods exceeding one (1) week, (ii) no packing boxes, lumber, trash, dirt, or other debris stored in yards for periods exceeding one (1) week in areas visible from public property or neighboring properties, (iii) no unscreened trash cans, bins, or containers stored for unreasonable periods in areas visible from public property or neighboring properties, and (iv) no vehicles parked or stored in areas other than approved parking areas; (c) no buildings may be left in an unmaintained condition, including (i) no violations of state law, Uniform Codes, or City ordinances, (ii) no condition that constitutes an unsightly appearance that detracts from the aesthetics or property value of the subject property or constitutes a private or public nuisance, (iii) no broken windows or chipped, cracked, or peeling paint, (iv) no conditions constituting hazards and/or inviting trespassers or ATTACHMENT NO. 7 882/015610-0047 Page 11 of 45 715762 07 a03/0&07 g malicious mischief, and (v) no graffiti or accumulation of waste or debris. Developer shall make all repairs and replacements necessary to keep the improvements in good condition and repair and shall promptly eliminate all graffiti and replace dead and diseased plants and landscaping with comparable approved materials. In the event that Developer breaches any of the covenants contained in this Section and Developer does not commence to cure such breach within five (5) business days after written notice from Agency (with respect to graffiti, debris, waste material, landscaping, and general maintenance) or thirty (30) days after written notice from Agency (with respect to building improvements), and after commencing the cure to diligently prosecute such cure to completion, then Agency, in addition to whatever other remedy it may have at law or in equity, shall have the right, but not the obligation, to enter upon the Site and perform all acts and work necessary to protect, maintain, and preserve the improvements and landscaped areas on the Site, and to attach a lien on the Site, or to assess the Site, in the amount of the expenditures arising from such acts and work of protection, maintenance, and preservation by Agency and/or costs of such cure, including a fifteen percent (15%) administrative charge, which amount shall be promptly paid by Developer to Agency upon demand. 4.2 Lien. If the costs incurred pursuant to Section 4.1 are not reimbursed within thirty (30) days after Developer's receipt of notice thereof, or if Developer fails to timely pay other sums required to be paid to Agency under this Agreement when due (after notice and an opportunity to cure, as set forth in Section 10 or Section I 1 (as applicable)), the same shall be deemed delinquent, and the amount thereof shall bear interest thereafter at a rate of ten percent (10%) per annum until paid. Any and all delinquent amounts, together with said interest, costs and reasonable attorney's fees, shall be a lien and charge, with power of sale, upon the property interests of Developer, and the rents, issues and profits of such property. Agency may bring an action at law against Developer to pay any such sums or foreclose the lien against Developer's property interests. Any such lien may be enforced by sale by the Agency following recordation of a Notice of Default of Sale given in the manner and time required by law as in the case of a deed of trust; such sale to be conducted in accordance with the provisions of Section 2924, et SeMc ., of the California Civil Code, applicable to the exercise of powers of sale in mortgages and deeds of trust, or in any other manner permitted by law. No lien recorded by Agency pursuant to this Section 4.2 shall defeat or render invalid the lien of any senior mortgage or deed of trust. 5.0 MANAGEMENT. 5.1 Marketing Plan. Prior to the Effective Date hereof, Developer shall have submitted for the approval of the Executive Director, which approval shall not unreasonably be withheld, a plan for marketing the rental of the Units (the "Marketing Plan"). The Marketing Plan shall include affirmative marketing procedures and requirements. The Marketing Plan shall include a plan for publicizing the availability of the Units within the City in a manner which gives notice to residents of the City, such as notices in any Agency sponsored newsletter, newspaper advertising in local newspapers and notices in City offices and community centers. 5.2 Lone Term Management of the Project. Prior to the Effective Date hereof, Developer shall have submitted for the reasonable approval of the Executive Director a "Management Plan" which sets forth in detail the identity and the duties of the person or entity retained by Developer to operate and manage the Project (the "Property Manager"), the ATTACHMENT NO. 7 882/015610-0047 Pa e 12 of 45 n5762 07 a03/06/07 g management staffing policies (i.e., what staff is on site, how they are supervised) tenant selection criteria, the tenant selection and income certification process, tenant orientation, tenant relations, tenant complaints, routine maintenance, emergencies, a security system and crime prevention program, the procedures for determining Affordable Rent and for the collection of rent, occupancy limits and the procedures for monitoring of occupancy levels, the procedures for eviction of tenants, the rules and regulations of the Project and manner of enforcement, the initial standard lease form, and other matters relevant to the management of the Project. The Management Plan shall require the Property Manager to apply for the Crime Free Multi -Housing Program through the City of La Quinta Police Department. Developer may from time to time submit amendments and modifications to the Management Plan for the reasonable approval of the Executive Director. The management of the Project shall be in compliance with the Management Plan. 5.3 Gross Mismanaeement. In the event of "Gross Mismanagement" (as that term is defined below) of the Project, Agency shall have the authority to require that such Gross Mismanagement cease immediately, and further to require the immediate replacement of the manager. Agency shall provide written notice to Developer of the event(s) of Gross Mismanagement occurring and Developer shall have five (5) business days after receipt of such notice to commence to cure, correct, or remedy the event(s) of Gross Mismanagement identified in the Agency's notice and to notify the Agency's Executive Director of the steps taken to effect such cure, correction, or remedy, and upon commencing such cure, correction, or remedy to thereafter diligently prosecute such cure, correction, or remedy to completion. For purposes of this Agreement the term "Gross Mismanagement" shall mean management of the Project in a manner which materially violates the terms and/or intention of this Agreement to operate an affordable rental housing complex of the highest standard, and shall include, but is not limited to, the following: 5.3.1 Knowingly leasing a Unit to an ineligible tenant or tenants whose income exceeds the prescribed levels; 5.3.2 Knowingly allowing the tenants to exceed permitted occupancy levels without taking immediate steps to stop such overcrowding; 5.3.3 Knowingly allowing a tenant to sublease his or her Unit at a rent that exceeds an Affordable Rent; 5.3.4 Failing to timely maintain the Project and the Site in the manner required by this Agreement or failing to submit materially complete reports; 5.3.5 Failing to timely submit the reports as required by this Agreement; 5.3.6 Fraud in connection with any document or representation relating to this Agreement or embezzlement of Project monies; and 5.3.7 Failing to fully cooperate with law enforcement in its attempts to maintain a crime -free environment on the Site. ATTACHMENT NO. 7 882/015610-0047 Page 13 of 45 715762.07 a03/06/07 g 5.4 Lease Approval. The initial form lease agreement to be used by Developer for the rental of any of the Units ("Lease Agreement'), and any changes to such form Lease Agreement regarding the provisions required by this Agreement, including, but not limited to, the provisions required by Section 3.9, to be included in the form Lease Agreement, shall be reasonably approved in advance by Agency's Executive Director prior to the initial use of the lease form and prior to the first use of the changed form. The form Lease Agreement shall include a Crime Free Lease Addendum in the form recommended by the Riverside County Sheriffs Department. 5.5 Operating Reserve. Developer shall, or shall cause the Property Manager to, set aside in a separate interest -bearing trust account the sum of One Hundred Seven Thousand Dollars ($107,000) ("Operating Reserve") and shall provide evidence reasonably satisfactory to Agency's Executive Director of compliance herewith, and shall thereafter retain such amount in the Operating Reserve, to cover shortfalls between Operating Income and actual Project costs. In the event that Developer's permanent lender, TCAC regulations or approvals or the Qualified Tax Credit Investor, reasonably requires a different type of account for the Operating Reserve or requires different terms for such account, Developer shall request Agency's Executive Director's approval, which approval shall not be unreasonably withheld, to modify the requirements of this paragraph to meet such requirements. Following the first anniversary date of the City's issuance of the certificate of occupancy for the Project on the Site, Developer may request release of the Operating Reserve to Developer and cancellation of the Operating Reserve upon written request to Agency's Executive Director accompanied by an audited financial statement evidencing sufficient Project income showing, to the reasonable satisfaction of Agency's Executive Director, that the Operating Reserve is no longer required. 5.6 Capital Replacement Reserve. Developer shall, or shall cause the Property Manager to, annually set aside a minimum of Five Hundred Dollars ($500) per unit per year (for example, for 80 units, the annual amount would be $40,000) into a capital replacement reserve account (the "Capital Replacement Reserve"). Funds in the Capital Replacement Reserve shall be used solely for Capital Improvements. As Capital Improvements become necessary, the Capital Replacement Reserve shall be the first source of payment therefor. Not less than once per year, Developer, at its expense, shall submit to Agency an accounting for the Capital Replacement Reserve. The non -availability of funds in the Capital Replacement Reserve does not in any manner relieve Developer of the obligation to undertake necessary capital repairs and improvements and to continue to maintain the Site in the manner prescribed in this Agreement. Notwithstanding anything herein to the contrary, in the event the permanent lender for the Project requires the establishment of a capital reserve to fund Capital Improvements, and such requirements are consistent with, and at least as stringent as those set forth herein, then during the term of the documents governing such loan, Developer shall not be deemed in default hereunder if Developer is in compliance with such condition. ATTACHMENT NO. 7 882/015610-0047 Page 14 of 45 715762 07 a03/06/07 g 6.0 COMPLIANCE WITH LAWS ENVIRONMENTAL MATTERS. 6.1 Compliance With Laws. Developer shall comply with (i) all ordinances, regulations and standards of the City, Agency, County of Riverside, any regional governmental entity, State of California, and federal government applicable to the Site; (ii) all rules and regulations of any assessment district of the City with jurisdiction over the Site; and (iii) all applicable labor standards of California law and federal law; and (iv) the requirements of California law and federal law with respect to the employment of undocumented workers or illegal aliens. 6.2 Waiver and Release. Subject to Section 222 of the AHA, which requires the Agency to indemnify Developer in certain, specified circumstances, Developer hereby waives, releases, acquits, and forever discharges Agency, its officers, officials, members, employees, agents, and representatives, and their respective heirs, successors, personal representatives, and assigns, of and from any liability for the physical or environmental condition of the Site, or for removal or remediation of Hazardous Materials, or repair or alteration of the physical condition of the Site or Project. Developer accepts and approves the physical and environmental condition of the Site in its "AS IS" 'WHERE IS" "WITH ALL FAULTS" condition. 6.2.2 Definitions. For the purposes of this Agreement, unless the context otherwise specifies or requires, the following terms shall have the meanings herein specified: 6.2.2.1 The term "Hazardous Materials" shall mean any substance, material, or waste which is or becomes regulated by any local governmental authority, the County of Riverside, the State of California, a regional governmental authority, or the United States Government, including, but not limited to, any material or substance which is (i) defined as a "hazardous waste," "extremely hazardous waste," or "restricted hazardous waste" under Section 25115, 25117 or 25122.7, or listed pursuant to Section 25140 of the California Health and Safety Code, Division 20, Chapter 6.5 (Hazardous Waste Control Law)), (ii) defined as a "hazardous substance" under Section 25316 of the California Health and Safety Code, Division 20, Chapter 6.8 (Carpenter -Presley -Tanner Hazardous Substance Account Act), (iii) defined as a "hazardous material," "hazardous substance," or "hazardous waste" under Section 25501 of the California Health and Safety Code, Division 20, Chapter 6.95 (Hazardous Materials Release Response Plans and Inventory), (iv) defined as a "hazardous substance" under Section 25281 of the California Health and Safety Code, Division 20, Chapter 6.7 (Underground Storage of Hazardous Substances), (v) petroleum, (vi) friable asbestos, (vii) polychlorinated biphenyls, (viii) listed under Article 9 or defined as "hazardous" or "extremely hazardous" pursuant to Article 11 of Title 22 of the California Administrative Code, Division 4, Chapter 20, (ix) designated as "hazardous substances" pursuant to Section 311 of the Clean Water Act (33 U.S.C. 4317), (x) defined as a "hazardous waste" pursuant to Section 1004 of the Resource Conservation and Recovery Act, 42 U.S.C. 6901 et sec. (42 U.S.C. 6903) or (xi) defined as "hazardous substances" pursuant to Section 101 of the Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C. 9601 et seq. 6.2.2.2 The term "Hazardous Materials Contamination" shall mean the contamination (whether presently existing or hereafter occurring) of the improvements, facilities, soil, groundwater, air or other elements on, in or of the Site by Hazardous Materials, or the ATTACHMENT NO. 7 882/015610-0047 Page 15 of 45 715762.07 a03/06/07 g contamination of the buildings, facilities, soil, groundwater, air or other elements on, in or of any other property as a result of Hazardous Materials at any time emanating from the Site. 6.2.2.3 The term "Governmental Requirements" shall mean all past, present and future laws, ordinances, statutes, codes, rules, regulations, orders and decrees of the United States, the state, the county, the city, or any other political subdivision in which the Site is located, and any other state, county city, political subdivision, agency, instrumentality or other entity exercising jurisdiction over the Site. 6.2.3 Indemnity. Developer shall save, protect, defend, indemnify and hold harmless Agency and the City and their respective officers, officials, members, employees, agents, and representatives from and against any and all liabilities, suits, actions, claims, demands, penalties, damages (including, without limitation, penalties, fines and monetary sanctions), losses, costs or expenses (including, without limitation, consultants' fees, investigation and laboratory fees, reasonable attorneys' fees and remedial and response costs) (the foregoing are hereinafter collectively referred to as "Liabilities") which may now or in the future be incurred or suffered by Agency or City or their respective officers, officials, members, employees, agents, or representatives by reason of, resulting from, in connection with, or existing in any manner whatsoever as a direct or indirect result of (i) Developer's placement on or under the Site of any Hazardous Materials or Hazardous Materials Contamination after the Effective Date, (ii) the escape, seepage, leakage, spillage, discharge, emission or release from the Site of any Hazardous Materials or Hazardous Materials Contamination after the Effective Date, or (iii) any Liabilities incurred under any Governmental Requirements relating to the acts described in the foregoing clauses (i) and (ii); provided, however, that the same shall not apply to acts or omissions following Agency's or City's conduct of a foreclosure sale or acceptance of a deed in lieu thereof. 6.3 Duty to Prevent Hazardous Material Contamination. Developer shall take commercially reasonable action to prevent the release of any Hazardous Materials into the environment. Such precautions shall include compliance with all Governmental Requirements with respect to Hazardous Materials. In addition, Developer shall install and utilize such equipment and implement and adhere to such procedures as are consistent with the standards generally applied by apartment complexes in Riverside County, California as respects the disclosure, storage, use, removal, and disposal of Hazardous Materials. 6.4 Obligation of Developer to Remediate Premises. Notwithstanding the obligation of Developer to indemnify Agency, City, and their respective officers, officials, members, employees, agents, and representatives pursuant to Section 6.2.3, Developer shall, at its sole cost and expense, promptly take (i) all actions required by any federal, state, regional, or local governmental agency or political subdivision or any Governmental Requirements and (ii) all actions necessary to make full economic use of the Site for the purposes contemplated by this Agreement and the AHA, which requirements or necessity arise from the presence upon, about or beneath the Site, prior to Agency's or City's conduct of a foreclosure sale or acceptance of a deed in lieu thereof, of any Hazardous Materials or Hazardous Materials Contamination for which Developer is responsible. Such actions shall include, but not be limited to, the investigation of the environmental condition of the Site, the preparation of any feasibility studies or reports and the performance of any cleanup, remedial, removal or restoration work. ATTACHMENT NO. 7 882/015610-0047 Page16 of45 715762,07 a03/0 O7 6.5 Environmental Inquiries. Developer, when it has received any notices of violation, notices to comply, citations, inquiries, clean-up or abatement orders, or cease and desist orders related to Hazardous Materials or Hazardous Materials Contamination, or when Developer is required to report to any governmental agency any violation or potential violation of any Governmental Requirement pertaining to Hazardous Materials or Hazardous Materials Contamination, shall concurrently notify Agency's Executive Director, and provide to him/her a copy or copies, of the environmental permits, disclosures, applications, entitlements or inquiries relating to the Site, the notices of violation, notices to comply, citations, inquiries, clean-up or abatement orders, cease and desist orders, reports filed pursuant to self -reporting requirements, and reports filed or applications made pursuant to any Governmental Requirement relating to Hazardous Materials and underground tanks, and Developer shall report to the Executive Director, as soon as possible after each incident, any unusual, potentially important incidents. In the event of a responsible release of any Hazardous Materials into the environment, Developer shall, as soon as possible after it becomes aware of the release, furnish to the Executive Director a copy of any and all reports relating thereto and copies of all correspondence with governmental agencies relating to the release. Upon request of the Executive Director, Developer shall 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. Developer, for the term of this Agreement, shall procure and keep in full force and effect or cause to be procured and kept in full force and effect for the mutual benefit of Developer and Agency, and shall provide Agency evidence reasonably acceptable to Agency's Executive Director, insurance policies meeting the minimum requirements set forth below: 7.1.1 Commercial General Liability insurance with respect to the Site and the operations of or on behalf of Developer, in an amount not less than Three Million Dollars ($3,000,000) per occurrence combined single limit including products, completed operations, contractual, bodily injury, personal injury, death and property damage liability per occurrence, subject to such increases in amount as Agency may reasonably require from time to time; provided, that the percentage increase in coverage shall not be required to exceed the percentage increase in the CPI (the "CPI Adjustment"). Unless otherwise approved in advance by the Agency Executive Director, the insurance to be provided by Developer may provide for a deductible or self -insured retention of not more than Ten Thousand Dollars ($10,000), with such maximum amount to increase at the same rate as the periodic increases in the minimum amount of total insurance coverage set forth above. 7.1.2 With respect to the improvements and any fixtures and furnishings to be owned by Developer on the Site, insurance against fire, extended coverage, vandalism, and malicious mischief, and such other additional perils, hazards, and risks as now are or may be included in the standard "all risk" form in general use in Riverside County, California, with the standard form fire insurance coverage in an amount equal to full actual replacement cost thereof, ATTACHMENT NO. 7 882/015610-0047 Page 17 of 45 715762.07 a03/06/07 g as the same may change from time to time. The above insurance policy or policies shall include coverage for earthquakes to the extent generally and commercially available at commercially reasonable rates, if such insurance is generally obtained for rental apartment projects of this size and type in the counties of Los Angeles, Orange County, Riverside, and San Bernardino. 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 carved by Developer shall meet the following requirements and contain the following endorsements, provisions, or clauses (as applicable): 7.2.1 The policies shall be written by responsible and solvent insurance companies licensed in the State of California and having policyholders' rating of A or better in the most recent addition of `Best's Key Rating Guide -- Property and Casualty." Notwithstanding the foregoing, in the event that the policies required hereunder are not available from such insurers at commercially reasonable rates, the Executive Director shall have the authority, in his or her sole and absolute discretion, to waive one or more of such requirements, provided the proposed policies will adequately protect the Agency's interests hereunder. A copy of each paid -up policy evidencing such insurance (appropriately authenticated by the insurer) or a certificate of the insurer, certifying that such policy has been issued, providing the coverage required herein, and containing the provisions specified herein, shall be delivered to Agency on or prior to the date of this Agreement, and thereafter, upon renewals, not less than thirty (30) days prior to the expiration of coverage. Agency may, at any time, and from time to time, inspect and/or copy any and all insurance policies required to be procured by Developer hereunder. In no event shall the limits of any policy be considered as limiting the liability of Developer hereunder. 7.2.2 The insurer shall not cancel or materially alter the coverage provided by such policy in a manner adverse to the interest of the insured without first giving Agency a minimum of thirty (30) days prior written notice by certified mail, return receipt requested; and 7.2.3 A waiver by the insurer of any right to subrogation against Agency and City, and their respective officers, officials, members, employees, agents, and representatives, which arises or might arise by reason of any payment under such policy or policies or by reason of any act or omission of Agency or City or their respective officers, officials, members, employees, agents, or representatives. 7.2.4 The Agency and the City and their respective officers, officials, members, employees, agents, and representatives shall be named as additional insureds on the Commercial General Liability policies. 7.2.5 Coverage provided by these policies shall be primary and non- contributory to any insurance carried by the Agency or City or their respective officers, officials, members, employees, agents, or representatives. 7.2.6 Failure to comply with reporting provisions shall not affect coverage provided to Agency and its officers, officials, members, employees, agents, or representatives. ATTACHMENT NO. 7 '82/015610-0047 Page 18 of 45 715762 07 a03/06/07 g 7.3 Failure to Procure Insurance. If Developer fails to procure and maintain the above -required insurance despite its availability, then Agency, in addition to any other remedy which Agency may have hereunder for Developer's failure to procure, maintain, and/or pay for the insurance required herein, may (but without any obligation to do so) at any time or from time to time, after thirty (30) days written notice to Developer, procure such insurance and pay the premiums therefor, in which event Developer shall immediately repay Agency all sums so paid by Agency together with interest thereon at the maximum legal rate. 8.0 OBLIGATION TO REPAIR. 8.1 Obligation to Repair and Restore Damage Due to casuaav t overea Dy mswauco. Subject to Section 8.3 below, if the Project shall be totally or partially destroyed or rendered wholly or partly uninhabitable by fire or other casualty required to be insured against by Developer, subject to its compliance with any procedures required by a senior lien holder, Developer shall promptly proceed to obtain insurance proceeds and take all steps necessary to begin reconstruction and, immediately upon receipt of insurance proceeds, to promptly and diligently commence the repair or replacement of the Project to substantially the same condition as the Project is required to be maintained in pursuant to this Agreement, whether or not the insurance proceeds are sufficient to cover the actual cost of repair, replacement, or restoration, and Developer shall complete the same as soon as possible thereafter so that the Project can continue to be operated and occupied as an affordable housing project in accordance with this Agreement. Subject to extensions of time for "Enforced Delay" events (as defined in Section 22 of this Agreement) occurring after the casualty event, in no event shall the repair, replacement, or restoration period exceed fifteen (15) months from the date Developer obtains insurance proceeds, unless the Agency Executive Director, in his or her sole and absolute discretion, approves a longer period of time. Agency shall cooperate with Developer, at no expense to Agency, in obtaining any governmental permits required for the repair, replacement, or restoration and, upon issuance of such permits Agency shall promptly release control of any insurance proceeds within Agency's control. If, however, the then -existing laws of any other governmental agencies with jurisdiction over the Site do not permit the repair, replacement, or restoration, Developer may elect not to repair, replace, or restore the Project by giving notice to Agency (in which event Developer shall be entitled to all insurance proceeds but Developer shall be required to remove all debris from the Site) or Developer may reconstruct such other improvements on the Site as are consistent with applicable land use regulations and approved by the City, Agency, and the other governmental agency or agencies with jurisdiction. In such event, the Agency Agreements, including this Agreement, shall automatically terminate and Agency shall cooperate to remove the Agency Agreements from title. If Developer fails to obtain insurance as required by this Agreement (and Agency has not procured such insurance and charged Developer for the cost), Developer shall be obligated to reconstruct and repair any partial or total damage to the Project and improvements located on the site in accordance with this Section 8.1. 8.2 Continued Operations. During any period of repair, Developer shall continue, or cause the continuation of, the operation of the apartment complex on the Site to the extent reasonably practicable from the standpoint of prudent business management. ATTACHMENT NO. 7 882/01561M047 Page 19 Of 45 715762.07 a03/06/07 g 8.3 Damage or Destruction Due to Cause Not Required to be Covered by Insurance. If the improvements comprising the Project are completely destroyed or substantially damaged by a casualty for which Developer is not required to (and has not) insured against, then Developer shall not be required to repair, replace, or restore such improvements and may elect not to do so by providing Agency with written notice of election not to repair, replace, or restore within ninety (90) days after such substantial damage or destruction. In such event, (i) Developer shall remove all debris from the Site, and (ii) the Agency Agreements, including this Agreement, shall automatically terminate and Agency shall cooperate to remove the Agency Agreements from title. As used in this Section 8.3, "substantial damage" caused by a casualty not required to be (and not) covered by insurance shall mean damage or destruction which is fifty percent (50%) or more of the replacement cost of the improvements comprising the Project. In the event Developer does not timely elect not to repair, replace, or restore the improvements as set forth in the first sentence of this Section 8.3, Developer shall be conclusively deemed to have waived its right not to repair, replace, or restore the improvements and thereafter Developer shall promptly commence and complete the repair, replacement, or restoration of the damaged or destroyed improvements in accordance with Section 8.1 above and continue operation of the apartment complex during the period of repair (if practicable) in accordance with Section 8.2 above. 9.0 LIMITATION ON TRANSFERS 9.1 Sale or Transfer of the Project. Developer covenants that during the term of this Agreement Developer shall not assign this Agreement or transfer the Site or any of its interests therein except as provided in this Section 9.0. 9.2 Transfer Defined. As used in this Article 9.0, the term "Transfer" shall include any assignment, hypothecation, mortgage, pledge, conveyance, or encumbrance of this Agreement, the Site, or the improvements thereon. A Transfer shall also include the transfer to any person, entity, or group of persons or entities acting in concert of more than twenty-five percent (25%) (in the aggregate) of the present ownership and/or control of any person or entity constituting Developer, taking all transfers into account on a cumulative basis. In the event any entity constituting Developer, or the constituent partners or members of Developer or any successor of Developer, is a corporation or trust, such transfer shall refer to the transfer of the issued and outstanding capital stock of such corporation, or of beneficial interests of such trust; in the event that any entity constituting Developer, or the constituent partners of Developer or any successor of Developer is a limited or general partnership, such transfer shall refer to the transfer of more than twenty-five percent (25%) of such limited or general partnership interest; in the event that any entity constituting Developer, or the constituent members of Developer or any successor of Developer is a limited liability company, such transfer shall refer to the transfer of more than twenty-five percent (25%) of such membership interest; in the event that any entity constituting Developer, or the constituent partners of Developer or any successor of Developer is a joint venture, such transfer shall refer to the transfer of more than twenty-five percent (25%) of the ownership and/or control of any such joint venture partner, taking all transfers into account on a cumulative basis. 9.3 Agency Anyroval of Transfer Required. Except as set forth below, Developer shall not Transfer this Agreement or any of Developer's rights hereunder, or any interest in the ATTACHMENT NO. 7 "2/015610-0047 Page 20 of 45 715762.07.03/06/07 g 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) transfers to a limited liability company in which Developer has a greater than fifty percent (50%) ownership and management interest; (b) transfers to a limited partnership in which Developer or an Affiliate of Developer which is also a non-profit public benefit corporation is the general partner (the "Limited Partnership"); (c) the leasing of individual rental units on the Site provided that such leasing is in accordance with the terms of this Agreement; (d) transfers resulting from the death or mental or physical incapacity of an individual; (e) transfers in trust for the benefit of a spouse, children, grandchildren, or other family member, or for charitable purposes; (f) transfers of stock in a publicly -held corporation or of the beneficial interest in any publicly -held partnership or real estate investment trust;. (g) the conveyance or dedication of portions of the Site to the City or other governmental entity, or the granting of easements or permits to facilitate the development of the Site; (h) the transfer of the limited partner interests of the Limited Partnership to the Qualified Tax Credit Investor; (i) the transfer by the Qualified Tax Credit Investor to an entity that has the same general partner or managing member as the Qualified Tax Credit Investor; (j) the removal by the Qualified Tax Credit Investor of the general partner of the Limited Partnership for a default under the partnership agreement, provided the replacement general partner is reasonably satisfactory to Agency; (k) sale by the Qualified Tax Credit Investor of credits in syndication; ATTACHMENT NO. 7 '82/015610-0047 Page 21 of 45 715762 07.03/06/07 g (1) encumbrance of the limited partner interest by the Qualified Tax Credit Investor as collateral to finance its capital contribution to the Limited Partnership; or (m) exercise by the general partner of Developer of any option to purchase or right of first refusal to purchase the Limited Partnership or all of the limited partner's interest in the Limited Partnership at the conclusion of the tax credit period. 9.4 Assignment and Assumption Agreement. In the absence of specific written agreement by Agency, no Transfer by Developer of all or any portion of its interest in the Site or this Agreement, whether or not requiring the approval by Agency, shall be deemed to relieve Developer or any successor party from the obligation to timely complete construction of the Project. In addition, no attempted Transfer of any of Developer's obligations hereunder shall be effective unless and until Developer and the transferee or successor parry execute and deliver to Agency a binding assignment and assumption agreement in a form reasonably approved by Agency's legal counsel. 9.5 Permitted Transferee. A "Permitted Transferee" under this Agreement shall be a transferee or assignee that either, (i) has been approved by the Agency Executive Director or (ii) is a transferee of a Transfer not requiring the approval of the Agency Executive Director pursuant to the terms of this Agreement, and in both the cases described in the foregoing clauses (i) and (ii) has executed and delivered to the Agency Executive Director an assignment and assumption agreement pursuant to Section 9.4. 10.0 EVENTS OF DEFAULT BY DEVELOPER. Subject to extensions of time pursuant to the terms of Section 22, the occurrence of one or more of any of the following events shall constitute an "Event of Default" by Developer hereunder if Developer shall have not cured, corrected, or remedied such failure within, unless a shorter or longer cure period is provided for specific defaults elsewhere in this Agreement, thirty (30) days following the service on Developer of a written notice from Agency specifying the failure complained of, or if it is not practicable to cure or remedy such failure within such thirty (30) day period (which impracticality shall not apply to monetary defaults), within such longer period as shall be reasonable under the circumstances provided that Developer has commenced to cure within the same thirty (30) day period and has diligently prosecuted such cure to completion: 10.1 Developer shall abandon or surrender the Site; or 10.2 Developer is in default of the Agency Note and has not cured such default within the cure period applicable to such default as set forth in the Agency Note; or 10.3 Developer is in material default of any of the covenants, terms or provisions of this Agreement or any of the Agency Agreements; or ATTACHMENT NO. 7 "2/015610-0047 Page 22 of 45 715762.07 a03/06/07 g 10.4 Developer voluntarily files or has involuntarily filed against it any petition under any bankruptcy or insolvency act or law and the same has not been dismissed within sixty (60) days thereafter; or 10.5 Developer is adjudicated a bankrupt; or 10.6 Developer makes a general assignment for the benefit of creditors in violation of the terms of this Agreement or any of the Agency Agreements. 10.7 Developer is in default, beyond any applicable cure period, of either of the following: (i) any senior indebtedness encumbering the Site, or (ii) the Tax Credit Regulatory Agreement and the other party has not waived the default. Notwithstanding anything herein to the contrary, whenever the Agency shall deliver any notice or demand to the Developer with respect to any breach or default by the Developer of the terms hereunder, the Agency shall at the same time deliver a copy of such notice or demand to the Qualified Tax Credit Investor. The Qualified Tax Credit Investor (insofar as the rights of the Agency are concerned) shall have the right, at its option, within thirty (30) days after the receipt of the notice, to cure or remedy or commence to cure or remedy any such default. Such cure period shall run concurrently with the Developer's cure period described in this Article 10.0. 11.0 REMEDIES OF AGENCY. hi the event Developer defaults in the performance or observance of any covenant, agreement or obligation of Developer pursuant to this Agreement, and if such default remains uncured for a period of thirty (30) days after written notice thereof shall have been given by Agency (or such lesser period as may apply under Section 4.1), or, in the event said default cannot be cured within said time period, Developer has failed to commence to cure such default within the applicable time period and diligently prosecute said cure to completion, then Agency may declare an "Event of Default" to have occurred hereunder, and, at its option, may take one or more of the following steps: 11.1 With respect to (i) the physical condition of the Site, or (ii) Developer's Gross Mismanagement of the Project, enter the Site and correct or cause to be corrected said default and charge the costs thereof (including costs incurred by Agency in enforcing this provision) to the account of Developer, which charge shall be due and payable within thirty (30) days after presentation by Agency of a statement of all or part of said costs, and if such bill is not timely paid then to (A) place a lien on the Site for said amount due plus interest at the maximum legal rate, or (B) foreclose with respect to Agency's lien on the Site for said amount due plus interest at the maximum legal rate; 11.2 Correct or cause to be corrected said default and pay the costs thereof (including costs incurred by Agency in enforcing this provision) from the proceeds of any insurance; 11.3 Exercise its right to maintain any and all actions or proceedings at law or suits in equity to compel Developer to correct or cause to be corrected said default, or to foreclose as a result thereof, including without limitation exercise of Agency's rights under the Agency Deed of Trust; ATTACHMENT NO. 7 882/015610-0047 Page 23 of 45 715762.07 a03/06/0'/ g 11.4 Have a receiver appointed to take possession of Developer's interest in the Site, with power in said receiver to administer Developer's interest in the Site, to collect all funds available to Developer in connection with its operation and maintenance of the Site, and to perform all other actions consistent with Developer's obligations under this Agreement as the court deems proper; 11.5 Terminate this Agreement by written notice to Developer and seek repayment of any remaining principal and accrued interest then owing on the Agency Note; 11.6 With respect to a default for which foreclosure would be an available remedy, exercise the right to foreclose, or, during the period which is five (5) days prior to the foreclosure sale date, exercise the right to purchase the Project from Developer, for a purchase price equal to the appraised value of the Site less (i) the outstanding amount due under any senior indebtedness, (ii) the amount due under the Agency Note, (iii) any delinquent taxes and assessments owing on the Site, and (iv) any reasonable costs incurred by Agency to effect the curing of a default and purchase of the Project, including but not limited to escrow fees and attorney's fees. Except as otherwise expressly stated in this Agreement, the rights and remedies of the parties are cumulative, and the exercise by any party of one or more of its rights or remedies shall not preclude the exercise by it, at the same or different times, of any other rights or remedies for the same default or any other default by another party. 12.0 NONDISCRIMINATION. 12.1 Antidiscrimination. There shall be no discrimination against or segregation of any person, or group of persons, on account of race, color, creed, religion, sex, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Site, or any part thereof, nor shall Developer, or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the Site, or any part thereof (except as permitted by this Agreement). 12.2 Anti -Discrimination Clauses in Aereements. Developer agrees for itself and any successor in interest that Developer shall refrain from restricting the rental, sale, or lease of any portion of the Site, or contracts relating to the Site, on the basis of race, color, creed, religion, sex, marital status, ancestry, or national origin of any person. All such deeds, leases or contracts shall contain or be subject to substantially the following nondiscrimination or nonsegregation clauses: 12.2.1 In deeds: "The grantee herein covenants by and for itself, its heirs, executors, administrators, and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex, marital status, ancestry, or national origin in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the land herein conveyed, nor shall the grantee itself, or any persons claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, ATTACHMENT NO. 7 882/015610-0047 Page 24 of 45 715762 07 a03/06/07 g 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 itself, its heirs, executors, administrators, and assigns, and all persons claiming under or through them, and this lease is made and accepted upon and subject to the following conditions: "That there shall be no discrimination against or segregation of any person or group of persons on account of status, race, color, creed, religion, sex, marital status, ancestry, or national origin in the leasing, subleasing, transferring, use, occupancy, tenure, or enjoyment of the land herein leased, nor shall the lessee itself, or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy of tenants, lessees, sublessees, subtenants, or vendees in the land herein leased." 12.2.3 In contracts: "There shall be no discrimination against or segregation of any persons or group of persons on account of status, race, color, creed, religion, sex, marital status, ancestry, or national origin in the sale, lease, transfer, use, occupancy, tenure, or enjoyment of land, nor shall the transferee itself, or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy of tenants, lessees, subtenants, sublessees, or vendees of land." 13.0 COVENANTS TO RUN WITH THE LAND. Developer hereby subjects the Site to the covenants, reservations, and restrictions set forth in this Agreement. Agency and Developer hereby declare their express intent that all such covenants, reservations, and restrictions shall be deemed covenants running with the land, and shall pass to and be binding upon the Developer's successors in title to the Site; provided, however, that on the termination of this Agreement said covenants, reservations and restrictions shall automatically expire. All covenants established in this Agreement shall, without regard to technical classification or designation, be binding for the benefit of the Agency, and such covenants shall run in favor of the Agency for the entire term of this Agreement, without regard to whether the Agency is or remains an owner of any land or interest therein to which such covenants relate. Each and every contract, deed or other instrument hereafter executed covering or conveying the Site or any portion thereof shall conclusively be held to have been executed, delivered and accepted subject to such covenants, reservations, and restrictions, regardless of whether such covenants, reservations, and restrictions are set forth in such contract, deed or other instrument. Agency and Developer hereby declare their understanding and intent that the burden of the covenants set forth herein touch and concern the land in that Developer's legal interest in the Site is rendered less valuable thereby. Agency and Developer further hereby declare their understanding and intent that the benefit of such covenants touch and concern the land by enhancing and increasing the enjoyment and use of the Project by Eligible Tenants, the intended ATTACHMENT NO. 7 882/015610-0047 Page 25 of 45 715762.07 .03/06/07 g beneficiaries of such covenants, reservations, and restrictions, and by furthering the public purposes for which the Agency was formed. Developer, in exchange for the Agency entering into the AHA, hereby agrees to hold, sell, and convey the Site subject to the terms of this Agreement. Developer also grants to the Agency the right and power to enforce the terms of this Agreement against the Developer and all persons having any right, title or interest in the Site or any part thereof, their heirs, successive owners and assigns. The covenants set forth in this Agreement shall remain in effect for a period terminating on the earliest of (i) fifty-five (55) years following the Effective Date; (ii) foreclosure by Agency with respect to the Site; and (iii) foreclosure by a senior lender. 14.0 INDEMNIFICATION. Developer agrees for itself and its successors and assigns to indemnify, defend, and hold harmless Agency, City, and their respective officers, officials, members, employees, agents, and representatives from and against any loss, liability, claim, or judgment relating in any manner to the Project excepting only any such loss, liability, claim or judgment arising out of the intentional wrongdoing or gross negligence of Agency, City, or their respective officers, officials, members, employees, agents, or representatives, except with respect to those actions described in the last sentence of Section 222 of the AHA. 15.0 UTILITIES AND TAXES Developer, while in possession of the Site, and each successor or assign of Developer while in possession of the Site, shall remain fully obligated for the payment of (i) real and personal property taxes and assessments in connection with the Site, subject to Developer's right to claim exemptions under California Revenue & Taxation Code Section 214(g), and (ii) all charges for all utilities serving the Site for which Developer is responsible. 16.0 ATTORNEYS' FEES. In the event that a parry to this Agreement brings an action against the other parry hereto by reason of the breach of any condition, covenant, representation or warranty in this Agreement, or otherwise arising out of this Agreement, the prevailing party in such action shall be entitled to recover from the other expert witness fees, and its reasonable attorney's fees and costs. Attorney's fees shall include attorney's fees on any appeal, and in addition a party entitled to attorney's fees shall be entitled to all other reasonable costs for investigating such action, including the conducting of discovery. 17.0 AMENDMENTS. The Developer and the Agency agree to mutually consider reasonable requests for amendments to this Agreement which may be made by either of the parties hereto, lending institutions, the Qualified Tax Credit Investor or financial consultants to the Agency, provided such requests are consistent with this Agreement and would not substantially alter the basic business terms included herein. The Agency's Executive Director shall have the authority to ATTACHMENT NO. 7 "2/015610-0047 Page 26 of 45 71576107 a03106/07 g approve, on behalf of the Agency, amendments to this Agreement that would not substantially alter the basic business terms or substantially increase the risk to the Agency. All other amendments shall require the action of the Agency Board. All amendments, including those authorized to be approved by the Agency's Executive Director, shall be in writing and shall be signed by authorized representatives of Agency and Developer. 18.0 NOTICE. Formal notices, demands, and communications between Agency and Developer shall be sufficiently given if (i) personally delivered, (ii) delivered by a reputable same -day or overnight courier services that provides a receipt showing date and time of delivery, (iii) delivered by United States mail, registered or certified, postage prepaid, return receipt requested, or (iv) delivered by facsimile transmission, provided the original of the faxed communication is delivered within twenty-four (24) hours by one of methods described in clauses (i), (ii), or (iii) of the foregoing. Delivery shall be made to the following addresses: If to Agency: La Quinta Redevelopment Agency 78-495 Calle Tampico La Quinta, CA 92253 Attn: Executive Director Fax: (760) 777-7101 With a copy to: Rutan & Tucker, LLP 611 Anton Boulevard, Suite 1400 Costa Mesa, CA 92626 Attn: M. Katherine Jenson, Esq. Fax: (714)546-9035 If to Developer: The Southern California Housing Development Corporation 9065 Haven Avenue, Suite 100 Rancho Cucamonga, CA 91730 Attn: Executive Director With a copy to: Law Office of Edward A. Hopson 655A North Mountain Avenue Upland, CA 91786 Attn: Edward A. Hopson, Esq. Notices that are personally delivered, delivered by messenger/courier, or by fax (provided there is compliance with the terms of clause (iv) above) shall be deemed effective upon receipt. Notices delivered by mail shall be deemed effective upon the earlier of actual receipt by the addressee thereof or the expiration of forty-eight (48) hours after depositing in the United States Postal System in the manner described in this Section. Such written notices, demands, and communications may be sent in the same manner to such other addresses as a party may from time to time designate by mail. ATTACHMENT NO. 7 882/015610-0047 Page 27 of 45 715762.07 a03/06107 g Written notices, demands and communications between the Agency and the Developer shall be sufficiently given if (i) delivered by hand, (ii) delivered by reputable same -day or overnight messenger service that provides a receipt showing date and time of delivery, or (iii) dispatched by registered or certified mail, postage prepaid, return receipt requested, to the principal offices of the Agency and the Developer at the addresses set forth above. Such written notices, demands and communications may be sent in the same manner to such other addresses as either party may from time to time designate by mail as provided above. A notice signed by legal counsel for a party and delivered to the other party in accordance with this Section shall be deemed notice delivered by the party on whose behalf such legal counsel is acting. Any written notice, demand, or communication shall be deemed received immediately if delivered by hand or delivered by messenger in accordance with the preceding paragraph, and shall be deemed received on the third (3rd) day from the date it is postmarked if delivered by registered or certified mail in accordance with the preceding paragraph. 19.0 NONLIABILITY OF AGENCY OFFICIALS. No officer, official, member, employee, agent, or representative of Agency shall be personally liable to Developer, or any successor in interest, in the event of any default or breach by Agency or for any amount which may become due to Developer or successor or on any obligations under the terms of this Agreement or any of the Agency Agreements. 20.0 TRANSACTIONS WITH AFFILIATES. Developer shall have the right to enter into contracts with subsidiaries, and Affiliates for the purpose of providing management, cleaning, maintenance and repair services, insurance policies and other purposes related to the operation of the Site, provided that all such costs and charges are competitive with the costs, charges, rent and other sums which would be paid by or to, as the case may be, an unrelated third parry. Agency acknowledges and agrees that Developer may act as its own general contractor or may engage a third party licensed contractor for the constructions of any improvements on the Site and that will be entitled in so doing to earn a commercially reasonable fee. 21.0 SEVERABILITY/WAIVER/INTEGRATION/INTERPRETATION: ENTIRE AGREEMENT. 21.1 Severabilitv. If any provision of this Agreement shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining portions hereof shall not in any way be affected or impaired thereby. 21.2 Waiver. 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 Developer, as applicable. No delay or omission by either party hereto in exercising any right or power accruing upon the compliance or failure of performance by the other party hereto under the provisions of this Agreement shall impair any such right or power or be construed to be a waiver thereof. A waiver by either party hereto of a breach of any of the covenants, conditions or agreements hereof to be performed by the other party shall not invalidate this Agreement nor ATTACHMENT NO. 7 '82/015610-0047 Page 28 of 45 715762.07.03/06/07 g shall it be construed as a waiver of any succeeding breach of the same or other covenants, agreements, restrictions or conditions hereof. 21.3 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. 21.4 Interpretation. The terms of this Agreement shall be construed in accordance with the meaning of the language used and shall not be construed for or against either party by reason of the authorship of this Agreement or any other rule of construction that might otherwise apply. 21.5. Entire Agreement. This Agreement integrates all of the tetras and conditions mentioned herein or incidental hereto, and supersedes all negotiations or previous agreements between the parties or their predecessors -in -interest with respect to all or any part of the subject matter hereof. 22.0 ENFORCED DELAY; EXTENSIONS OF TIME. Performance by a party hereunder shall not be deemed to be in default where delays or defaults are due to war; insurrection; strikes; lock -outs; riots; floods; earthquakes; fires; casualties; supernatural causes; acts of the public enemy; epidemics; quarantine restrictions; freight embargoes; lack of transportation; governmental restrictions or priority litigation; unusually severe weather; inability to secure necessary labor, materials or tools; acts of the other party; acts or the failure to act of a public or governmental agency or entity (except that acts or the failure to act of Agency or City shall not excuse performance by Agency or City unless the act or failure is caused by the acts or omissions of Developer); or any other causes beyond the reasonable control or without the fault of the party claiming an extension of time to perform. In the event of such a delay (herein "Enforced Delay"), the party delayed shall continue to exercise reasonable diligence to minimize the period of the delay. An extension of time for any such cause shall be limited to the period of the Enforced Delay, and shall commence to run from the time of the commencement of the cause, provided notice by the party claiming such extension is sent to the other party within fifteen (15) days after the sending parry has knowledge, or should have obtained knowledge, of the commencement of the cause. The following shall not be considered as events or causes beyond the control of Developer, and shall not entitle Developer to an extension of time to perform: (i) Developer's failure to obtain financing for the Project (except as a result of an omission or breach by Agency), (ii) Developer's failure to negotiate agreements with prospective tenants or users for the Project, or (iii) interest rates or economic or market conditions. Times of performance under this Agreement may also be extended by mutual written agreement by Agency and Developer. The Agency Executive Director shall also have the authority on behalf of Agency to administratively approve extensions of time not to exceed a cumulative total of one (1) year. 23.0 THIRD PARTY BENEFICIARY. The City of La Quinta is deemed a third parry beneficiary of the terms and covenants contained in this Agreement and has the right, but not the obligation, to enforce the terms and covenants contained herein. ATTACHMENT NO. 7 892/015610-0067 Page 29 of 45 71576207 a03/06/07 g 24.0 FUTURE ENFORCEMENT. The parties hereby agree that should the Agency cease to exist as an entity at any time during the term of this Agreement, the City of La Quinta shall have the right to enforce all of the terms and conditions herein, unless the Agency had previously specified another entity to enforce this Agreement. 25.0 GOVERNING LAW. This Agreement shall be governed by the internal laws of the State of California without regard to conflicts of law. 26.0 NO MERGER. The covenants, terms, and provisions of this Agreement shall not merge with any grant deed or other instrument pertaining to the conveyance of any interest in real property. 27. COUNTERPARTS. This Agreement may be executed in any number of counterparts, each of which shall constitute one original and all of which shall be one and the same instrument. [End - Signature Page Follows] ATTACHMENT NO. 7 882/015610-0047 Pa e 30 of 45 715762.07 a03/06/07 g IN WITNESS WHEREOF, the Agency and Developer have executed this Regulatory Agreement and Declaration of Covenants and Restrictions by duly authorized representatives on the date first written hereinabove. "AGENCY" LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic Date: By. ATTEST: By: Secretary APPROVED AS TO FORM RUTAN & TUCKER, LLP By: Attorneys for the La Quinta Redevelopment Agency Date: Thomas Genovese Executive Director "DEVELOPER" THE SOUTHERN CALIFORNIA HOUSING DEVELOPMENT CORPORATION, a California nonprofit public benefit corporation signature printed name ATTACHMENT NO. 7 "2/015610-0047 Page 31 of 45 715762.07 a03/06/07 g STATE OF CALIFORNIA ) ss. COUNTY OF ) On before me, , personally appeared , personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. Witness my hand and official seal. Notary Public [SEAL] STATE OF CALIFORNIA ) ss. COUNTY OF ) On before me, , personally appeared , personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/ber/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. Witness my hand and official seal. Notary Public [SEAL] ATTACHMENT NO. 7 "2/0 156 1 0.0047 Page 32 of45 715762.07 a03/06107 g EXHIBIT "A" LEGAL DESCRIPTION OF SITE All of that certain real property in the City of La Quinta, County of Riverside, State of California, described as follows: That portion of the Southeast quarter of the Northeast quarter of Section 19, Township 6 South, Range 7 East, San Bernardino Base and Meridian, described as follows: Commencing at the Southeast comer of the Northeast quarter of said Section 19; Thence South 89' 33' 05" West, on the Southerly line of the Northeast quarter of said Section, 330 feet, to the true point of beginning; thence South 89' 33' 05" West, on said Southerly line of the Northeast quarter, 330 feet; Thence North 0° 13' 40" West, 1,324.57 feet, to the Northerly line of the Southeast quarter of Northeast quarter of said Section 19; thence North 89' 34' 05" East, on said Northerly line, 330 feet; thence South 0° 13' 40" East, 1,324.47 feet to the true point of beginning; Excepting therefrom the Southerly 50 feet conveyed to the County of Riverside by Deeds recorded August 30, 1933 in Book 133, Page(s) 292 and Book 134, Page(s) 298 respectively, of Official Records, Riverside County Records. Also excepting therefrom that portion of described in the deeds to the City of La Quinta, recorded 02-17-1999, as Instrument No. 62425 and 62426, Official Records. Excepting therefrom the mobile home located thereon. ATTACHMENT NO. 7 882/015610-0067 Page 33 of 45 715762.07 a03/06/07 g EXHIBIT `B" INCOME COMPUTATION AND CERTIFICATION FORM [See following pages] ATTACHMENT NO. 7 982/015610-0047 Page 34 of45 715762.07 a03/06/07 g CITY OF LA QUINTA REDEVELOPMENT AGENCY 78 495 Calle Tampico, La Quinta, CA 92253 INCOME COMPUTATION AND CERTIFICATION FORM (Affordable Housing Eligibility for Renter Occupied Unit PART I. PROPERTY FINANCED WITH GOVERNMENT ASSISTANCE Property PART H. TENANT HOUSEHOLD INFORMATION Date of Birth Soc. Sec. # Relationship TOTAL NUMBER OF PERSONS IN HOUSEHOLD: (Please list information on other household members below) Mailing Address: Telephone Numbers: Work (_—) Home(_) PART HI. GROSS HOUSEHOLD INCOME Complete the following, attach copies of required verification as specified below. Attach a note explaining any significant changes in household income between the previous year and the current year. INFORMATION IS REQUIRED FOR ALL MEMBERS OF THE HOUSEHOLD AGE 18 OR OLDER REGARDLESS OF WHETHER THEY CONTRIBUTE TO THE COSTS OF THE HOUSEHOLD. If you are not required to file a tax return, please indicate this in Part V by your signature. ANN INCOME ANN INCOME INCOME SOURCES for owner otbers in hshld VERIFICATIONS (needed for file) A. Employment earnings Last tax return & last 3 pay stubs, employer verification B. Self-employment earnings Last 2 tax returns & current financial stint C. Social Security (OASDI) Annual award letter D. Supplemental Security Income (SSD Annual award letter E. Public assistance (AFDC, general Current benefit statement assistance, unemployment, etc.) F. Pension (s) Annual award letter, year end stint, W-2 G. Interest income Last 2 statements for all accounts H. Investment income (stocks, bonds, real estate, etc.) Last 2 statements for all accounts I. Room rental Rental agreement, copies of checks, etc. J. Other income (list type/source) ATTACHMENT NO. 7 "2/015610-0047 Page 35 of45 715762 07 a03/06/07 g K. TOTAL INCOME (sum of A thin J) / 12 months = mo. income PART IV. PROPERTY STATUS Will this property be your primary residence? Will someone other than the individuals listed above be occupying this property? If yes - Name of occupants: Telephone Number: My/our housing expenses are as follows: 1. Monthly tenant rent_ 2. Average monthly utilities Mailing Address: PART V. TENANT CERTIFICATION I/We understand that after the initial eligibility determination, completion of monitoring forms is required on an annual basis. I/We certify that Uwe have disclosed all information pertaining to my/our application and that the information presented in the foregoing Sections I through IV is true and accurate to the best of my (our) knowledge. Tenant Date Tenant For more information regarding this application, please contact management staff at (760) Comments: FOR OFFICE USE ONLY Information verified Income category Maximum allowable annual income L_% of median) Applicant's annual income gross monthly max housing costs Management ATTACHMENT NO. 7 882/015610-0047 Page 36 of 45 715762.07.03/06/07 g Date EXHIBIT "C INCOME RECERTIFICATION FORM [See following pages] ATTACHMENT NO. 7 882/015610-0047 Page 37 of 45 715762 07 a03/06/07 g LA QUINTA REDEVELOPMENT AGENCY 78-495 Calle Tampico, La Quinta, CA 92253 INCOME RECERTIFICATION FORM (Renter Occupied Unit) PART I. GENERAL INFORMATION 1. Property Owner Name 2. Renter Name 3. Property Address La Quinta, CA 92253 (Please include P.O. Box No. if applicable) 4. Has there been a change in ownership of this property during the preceding 12 month period? Yes ( ) No ( ) (If yes, please explain)_ PART II. UNIT INFORMATION 5. Number of Bedrooms 6. Number of Occupants Names: PART III. AFFIDAVIT OF RENTER 1 , and 1, as renters of units assisted pursuant to the La Quinta Redevelopment Agency's (the "Agency") Affordable Housing Program (the "Program"), do hereby represent and warrant that the following computation includes all income (Uwe) anticipate receiving for the 12-month period commencing on January 1, 20_ (including the renter(s) and all family members of the renters): (a) amount of wages, salaries, overtime pay, commissions, fees, tips and bonuses, and payments in lieu of earnings, such as unemployment and disability compensation, worker's compensation and severance pay (before payroll deduction) (b) net income from business or profession or rental of property (without deduction for repayment of debts or expansion of business)_ (c) interest and dividends (d) periodic receipts such as social security, annuities, pensions, retirement funds, insurance policies, disability or death benefits, alimony, child support, regular contributions or gifts from persons not occupying unit (e) public assistance allowance or grant plus excess of maximum allowable for shelter or utilities over the actual allowance for such purposes ATTACHMENT NO. 7 "V015610-0047 Page 38 of 45 715762.07 a03/06/07 g (f) regular and special pay and allowances of a member of armed services (whether or not living in the dwelling) who is head of the family or spouse Subtotal (a) through (0 _ LESS: Portion of above items which are income of a family member who is less than 18 years old or a full-time student TOTAL ELIGIBLE INCOME NOTE: The following items are not considered income: casual or sporadic gifts; amounts specifically for or in reimbursement of medical expenses; lump sum payment such as inheritances, insurance payments, capital gains and settlement for personal or property losses; educational scholarships paid directly to the student or educational institution; government benefits to a veteran for education; special pay to a serviceman head of family away from home and under hostile fire; foster child care payments; value of coupon allotments for purpose of food under Food Stamp Act of 1964 which is in excess of amount actually charged the eligible household; relocation payments under Title II of Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970; payments received pursuant to participation in the following programs: VISTA, Service Leaming Programs, and Special Volunteer Programs, SCORE, ACE, Retired Senior Volunteer Program, Foster Grandparent Program, Older American Community Services Program, and National Volunteer Program to Assist Small Business Experience. 2. This affidavit is made with the knowledge that it will be relied upon by the Landlord and the Agency to determine maximum income for eligibility and (I/we) warrant that all information set forth in this Part III is true, correct and complete and based upon information (I/we) deem reliable and that the estimate contained in paragraph 1 is reasonable and based upon such investigation as the undersigned deemed necessary. 3. (I/We) will assist the Landlord and the Agency in obtaining any information or documents required to verify the statements made in this Part III and have attached hereto a copy of our federal income tax return for the last year (20__). 4. (I/We) acknowledge that (Uwe) have been advised that the making of any misrepresentation or misstatement in this affidavit will constitute a material breach of (my/our) agreement with the Landlord to rent the unit and will additionally enable the Agency to initiate and pursue all applicable legal and equitable remedies with respect to the unit and to me/us. B. (My/Our) monthly housing expenses are limited to the following: 1. Base rent 2. Average Monthly Utilities 3. Other (explain) (I/We) understand that completion of monitoring forms is required on an annual basis and agree to notify the La Quinta Redevelopment Agency in writing of any change in ownership or rental of the unit. (I/We) do hereby swear under penalty of perjury that the foregoing statements are true and correct. Date Renter(s) ATTACHMENT NO. 10 882/015610-0047 Page 39 of 45 715762.07 a03/06/07 g EXHIBIT "D" LEASE RIDER [See following page] ATTACHMENT NO. 7 "2/015610-0047 Page 40 of 45 715762 07 a03/06/07 g _(Project Name)_ AFFORDABLE HOUSING PROJECT Lease Rider RESIDENT: (if there is more than one adult occupant, each person must sign the rider) LEASE DATE: UNIT NO.: The undersigned tenant(s) hereby certify and agree as follows: 1. Income Certification. The attached income certification is true, correct and complete. I/we agree to provide a similar certification annually upon request during the term of my occupancy. 2. Employer Verification. The landlord or property manager has my permission to verify my/our income from any sources of income Uwe receive. 3. False Statements. If the income certification and/or lease application submitted by me/us is false, or if Uwe fail to provide annual certifications, the landlord or property manager will have the right to terminate my/our lease and recover possession of my/our Unit. I/we understand that the landlord and property manager are relying on this income certification in accepting me/us as a tenant, and the landlord or property manager will be seriously harmed if my/our income does not qualify the Unit for the affordable housing program. 4. This rider shall be considered as part of my/our lease. Date: Tenant Tenant Tenant Tenant ATTACHMENT NO. "2/015610-0047 Pa e 41 of 45 715762.07 a03/06/07 g EXHIBIT "E" CERTIFICATION OF CONTINUING PROGRAM COMPLIANCE [See following page] ATTACHMENT NO. 7 "2/015610-0047 Page 42 of 45 715762 07 a03/06107 g CERTIFICATION OF CONTINUING PROGRAM COMPLIANCE The undersigned, being duly authorized to execute this certificate on behalf of owner of the Project, hereby represents and warrants that: 1. He/she has read and is thoroughly familiar with the provisions of the Affordable Housing Agreement between the La Quinta Redevelopment Agency and Coachella Valley Housing Coalition. 2. As of June 30, 20_, the following number of residential units in the Project (i) are currently occupied by tenants qualifying as Eligible Tenants at Affordable Rents; (ii) are currently occupied by Moderate Income Tenants; or (iii) are currently vacant and being held available for occupancy by Eligible Tenants and have been so held continuously since the date Eligible Tenants vacated such unit, as indicated: i. ii. iv. Units occupied by Eligible Tenants Units occupied by Moderate Income Tenants Vacant units Other (please explain) 3. The unit number, unit size, the tenant paid rental amount charged and collected, the number of occupants and the income of the occupants for each restricted unit in the Project is set forth on the attached list. All restricted units in the Project are rented at Affordable Rent. OWNER NAME Dated: , 20_ By: (Printed name and title) ATTACHMENT NO. 7 "2/015610-0047 Page 43 of 45 715762.07 a03/06/07 g EXHIBIT "F" RESTRICTED UNIT MATRIX INCOME LEVEL NO. OF UNITS Very Low Income Household 39 50% Very Low Income Household 31 Extremely Low Income Household 9 Moderate Income Household (Management Unit) 1 ATTACHMENT NO. 7 "21015610-0047 pa e 44 of 45 715762.07 e03/06/07 g ATTACHMENT NO.8 PROJECT PROFORMA [TO BE INSERTED] 882/015610-0047 ATTACHMENT NO. 8 71576207 a03/06/07 ATTACHMENT NO.9 BILL OF SALE [SEE FOLLOWING DOCUMENT] 882/015610-0047 ATTACHMENT NO.9 715762 07 a03/06/07 BILL OF SALE La Quinta Redevelopment Agency ("Seller"), for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, paid to it by Southern California Housing Development Corporation ("Purchaser"), has transferred, sold and assigned and by these presents does transfer, sell and assign unto Purchaser the following: Any and all personal property, if any, owned by Seller, described more specifically in that certain Affordable Housing Agreement dated between the parties identified above (the "Agreement"), which personal property is located upon or used in connection with the real property described in Schedule 1 hereto. Seller makes only those representations and warranties set forth in the Agreement concerning such personal property, and to the extent that there is any such personal property, such personal property is transferred, sold and assigned to Purchaser in accordance with the terms thereof. Executed as of this day of "Seller" LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic Its: Executive Director ATTEST: Secretary APPROVED AS TO FORM: RUTAN & TUCKER, LLP Attorneys for the La Quinta Redevelopment Agency ATTACHMENT NO. 9 "2/015610-0047 Page 1 of 2 715762 07 a03/D6/07 g SCHEDULE 1 LEGAL DESCRIPTION OF PROPERTY All of that certain real property in the City of La Quinta County of Riverside, State of California, described as follows: That portion of the Southeast quarter of the Northeast quarter of Section 19, Township 6 South, Range 7 East, San Bernardino Base and Meridian, described as follows: Commencing at the Southeast corner of the Northeast quarter of said Section 19; Thence South 89' 33' 05" West, on the Southerly line of the Northeast quarter of said Section, 330 feet, to the true point of beginning; thence South 89' 33' 05" West, on said Southerly line of the Northeast quarter, 330 feet; Thence North 0° 13' 40" West, 1,324.57 feet, to the Northerly line of the Southeast quarter of Northeast quarter of said Section 19; thence North 89134, 05" East, on said Northerly line, 330 feet; thence South 0° 13' 40" East, 1,324.47 feet to the true point of beginning; Excepting therefrom the Southerly 50 feet conveyed to the County of Riverside by Deeds recorded August 30, 1933 in Book 133, Page(s) 292 and Book 134, Page(s) 298 respectively, of Official Records, Riverside County Records. Also excepting therefrom that portion of described in the deeds to the City of La Quinta, recorded 02-17-1999, as Instrument No. 62425 and 62426, Official Records. Excepting therefrom the mobile home located thereon. ATTACHMENT NO. 9 "2/015610-0047 Page 2 of t 715762.07 a03/06/07 g ATTACHMENT NO. 10 ASSIGNMENT AND RELEASE (SEE FOLLOWING DOCUMENT) S82/015610-0047 715762.07 a03/06/07 ATTACHMENT NO. 10 ASSIGNMENT AND RELEASE This ASSIGNMENT AND RELEASE ("Assignment and Release") dated 200, is executed by La Quinta Redevelopment Agency, a public body, corporate and politic ("Assignor), in favor of The Southern California Housing Development Corporation, a California nonprofit public benefit corporation ("Assignee"). Assignor is the owner of that certain land (the "Site") located in the City of La Quinta, California, described more specifically on Schedule "1" hereto. The Site and the Housing Development thereon are being conveyed by Assignor to Assignee pursuant to a grant deed delivered concurrently herewith. Terms used herein but not defined shall have the meanings ascribed thereto in that certain Affordable Housing Agreement by and between Assignor and Assignee dated as of , 2007 (the "Affordable Housing Agreement"). Now, therefore, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Assignor and Assignee hereby agree as follows: 1. Subject to Section 2 below, Assignor hereby grants, assigns, transfers, conveys and delivers to Assignee, without warranty, all of Assignor's right, title, interest, benefits and privileges, if any, in and to all entitlements, approvals, maps, applications, plans, specifications, contracts and other documents relating to the Site, the Housing Development or the construction of the Housing Development on the Site between Agency and its contractors, subcontractors, engineers, architects and other consultants, as described more specifically in the Affordable Housing Agreement, as well as the following described property: (a) All construction, general contractor, subcontractor, engineering, consulting, architectural and other similar contracts and any and all amendments and modifications thereto, concerning the design or construction of all public improvements constructed upon or in connection with development of the Site as well as construction of the Housing Development on the Site (as such terms are defined in the Affordable Housing Agreement), and all warranties with respect thereto (including all statutory, express and implied warranties); (b) All architectural drawings, plans, specifications, soils tests, appraisals, engineering reports and similar materials relating to any or all of the Site and/or the Housing Development. (c) All of Assignor's rights, claims, actions, and causes of action against any of Assignor's general contractors, subcontractors, engineers, architects and consultants relating to or arising from preparation of the architectural drawings, plans, specifications, reports or similar materials relating to the development of the Site or construction of public improvements thereon or construction of the Housing Development, all of the plans and documents referred to in paragraphs 1 and 2 above, as well as all of the same relating to construction of the Housing Development, as well as all rights of Assignor as an additional insured or otherwise pertaining to ATTACHMENT NO. 10 882/015610-0047 715762.07 a03/06/07 Page 1 of 6 insurance coverage concerning such architects, engineers, general contractors, consultants and the Site. (d) All governmental entitlements, permissions, environmental clearances, authority to develop the Site and construct the Housing Development, rights, licenses and permits which relate to all or any of the Site, the Housing Development, or the operation thereof-, and (e) All general intangibles relating to the development or use of the Site and the Housing Development. 2. Notwithstanding anything to the contrary herein, the foregoing grants, assignments, transfers, conveyances, and deliveries are subject to any limitations which may be imposed by law or under any agreement with any governmental agency or authority or with the contractors, subcontractors, engineers, consultants, and architects referenced in Section 1 above. 3. In consideration of the foregoing assignment, Assignee, for itself and for its agents, successors and assigns, fully releases, acquits and discharges the Assignor and the City of La Quinta ("City") and the Assignor's and City's respective officers, officials, members, representatives, employees, attorneys and agents (all of the foregoing, collectively, the "Released Parties"), from all rights, claims, demands, actions or causes of action that Assignee has or may have against the Released Parties arising out of or related to the development, or physical condition, of the Housing Development, including, but not limited to, claims for damages, attorney's fees and costs, and expert witness fees and costs. ACKNOWLEDGMENT CONCERNING CIVIL CODE SECTION 1542 Waiver of Section 1542 of the Civil Code Assignee, on behalf of itself and its agents, successors, and assigns, expressly waives any and all rights under Section 1542 of the Civil Code of the State of California, or any other federal or state statutory rights or rules, or principles of common law or equity, or those of any jurisdiction, government, or political subdivision thereof, similar to Section 1542 (hereinafter referred to as a "Similar Provision"). Thus, Assignee may not invoke the benefits of Section 1542 or any Similar Provision in order to prosecute or assert in any manner claims released hereunder. Section 1542 provides as follows: A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH, IF KNOWN BY HIM, MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR. Assignee's initials: 4. The City shall be deemed an express third party beneficiary of the provisions of this Assignment and Release. ATTACHMENT NO. 10 882/015610-0047 715762 07 a03/06/07 Page 2 of 6 5. This Assignment and Release shall be construed according to its fair meaning and as if prepared by both parties hereto. 6. This Assignment and Release shall be governed by the internal laws of the State of California, without regard to conflict of law principles, and any question arising hereunder shall be construed or determined according to such law. The Superior Courts of the State of California in and for the County of Riverside, or such other appropriate court in such county, shall have exclusive jurisdiction of any litigation between the parties concerning this Assignment and Release. 7. This Assignment and Release may be executed in counterparts, each of which, when this Assignment and Release has been signed by all the parties hereto, shall be deemed an original, and such counterparts shall constitute one and the same instrument. 8. The person(s) executing this Assignment and Release on behalf of each of the parties hereto represent and warrant that (i) such party is duly organized and existing, (ii) they are duly authorized to execute and deliver this Assignment and Release on behalf of said party, (iii) by so executing this Assignment and Release such party is formally bound to the provisions of this Assignment and Release, and (iv) the entering into this Assignment and Release does not violate any provision of any other agreement to which such party is bound. [signatures on next page] ATTACHMENT NO. 10 "2/015610-0047 71576207 a03/06/07 Page 3 Of 6 IN WITNESS WHEREOF, Assignee and Assignor each hereby represent that they have read this Assignment and Release, understand it, and hereby execute this Assignment and Release to be effective as of the day and year first written above. ATTEST: Secretary APPROVED AS TO FORM: RUTAN & TUCKER, LLP Attorneys for the La Quinta Redevelopment Agency "Assignor" LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic By: Its: Executive Director "Assignee" THE SOUTHERN CALIFORNIA HOUSING DEVELOPMENT CORPORATION, a California nonprofit, public benefit corporation By: Its: ATTACHMENT NO. 10 "2/015610-0047 715762.07 a03/06/07 Page 4 of 6 SCHEDULEI LEGAL DESCRIPTION OF PROPERTY All of that certain real property in the City of La Quinta County of Riverside, State of California, described as follows: That portion of the Southeast quarter of the Northeast quarter of Section 19, Township 6 South, Range 7 East, San Bernardino Base and Meridian, described as follows: Commencing at the Southeast comer of the Northeast quarter of said Section 19; Thence South 89' 33' 05" West, on the Southerly line of the Northeast quarter of said Section, 330 feet, to the true point of beginning; thence South 89' 33' 05" West, on said Southerly line of the Northeast quarter, 330 feet; Thence North 00 13' 40" West, 1,324.57 feet, to the Northerly line of the Southeast quarter of Northeast quarter of said Section 19; thence North 89' 34' 05" East, on said Northerly line, 330 feet; thence South 00 13' 40" East, 1,324.47 feet to the true point of beginning; Excepting therefrom the Southerly 50 feet conveyed to the County of Riverside by Deeds recorded August 30, 1933 in Book 133, Page(s) 292 and Book 134, Page(s) 298 respectively, of Official Records, Riverside County Records. Also excepting therefrom that portion of described in the deeds to the City of La Quinta, recorded 02-17-1999, as Instrument No. 62425 and 62426, Official Records. Excepting therefrom the mobile home located thereon. ATTACHMENT NO. 10 '82/015610-0047 715762 07 ao3/06/07 Page 5 of 6 SCHEDULE2 [ATTACH SCHEDULE OF CONTRACTS TO BE ASSUMED BY ASSIGNEE] ATTACHMENT NO. 10 "2/015610-0047 715762.07 e03/06/07 Page 6 of 6 ATTACHMENT NO.11 MEMORANDUM OF AFFORDABLE HOUSING AGREEMENT [SEE ATTACHED DOCUMENT] 882/015610-0047 715762.07 a03/06/07 ATTACHMENT NO. 11 RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: La Quinta Redevelopment Agency 78-495 Calle Tampico La Quinta, CA 92253 Attn: Executive Director (Space Above For Recorder's Use) This Memorandum of Affordable Housing Agreement is recorded at the request and for the benefit of the La Quinta Redevelopment Agency and is exempt from the payment of a recording fee pursuant to Government Code § 27383. MEMORANDUM OF AFFORDABLE HOUSING AGREEMENT This MEMORANDUM OF AFFORDABLE HOUSING AGREEMENT ("Memoran- dum") is entered into this _ day of 2007, by and between the LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic ("Agency"), and SOUTHERN CALIFORNIA HOUSING DEVELOPMENT CORPORATION, a California nonprofit public benefit corporation ("SCHDC"). This Memorandum is made with reference to the following: 1. On or about the date of this Memorandum, SCHDC acquired from Agency fee title to that certain real property located in the City of La Quinta, County of Riverside, State of California, more particularly described in the legal description attached hereto as Exhibit "A" and incorporated herein by this reference (the "Property"). 2. On or about , Agency and SCHDC entered into that certain Affordable Housing Agreement which provides for Agency to develop the Property and to subsequently convey the Property to SCHDC for SCHDC's ownership, operation and maintenance thereof as an affordable rental housing project. The definitions of all terms contained in the Affordable Housing Agreement shall apply to this Memorandum. 3. The Affordable Housing Agreement provides for Agency and SCHDC to enter into this Memorandum and to record the same in the Official Records of the County of Riverside to provide notice to all persons of the existence of said Affordable Housing Agreement and to cause the Affordable Housing Agreement to run with the Property and be binding on SCHDC and SCHDC's successors -in -interest as to the Property. 4. 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. ATTACHMENT NO. 11 "2/015610-0047 71576207 a03/06/07 Page I of 4 IN WITNESS WHEREOF, Agency and SCHDC have entered into this Memorandum as of the date first set forth above. ATTEST: Secretary APPROVED AS TO FORM: RUTAN & TUCKER, LLP Attorneys for the La Quinta Redevelopment Agency "Agency" LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic In Its: Executive Director "SCHDC" THE SOUTHERN CALIFORNIA HOUSING DEVELOPMENT CORPORATION, a California nonprofit, public benefit corporation M Its: ATTACHMENT NO. 11 882/015610-0047 715762.07 a03/06/07 Page 2 of 4 STATE OF CALIFORNIA ) ) ss. COUNTY OF RIVERSIDE ) On before me, , personally appeared , personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. Witness my hand and official seal. Notary Public [SEAL] STATE OF CALIFORNIA ) ) ss. COUNTY OF RIVERSIDE ) On before me, , personally appeared , personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. Witness my hand and official seal. Notary Public [SEAL] ATTACHMENT NO. 11 "2/015610-0047 715762.07 a03/06/07 Page 3 of 4 EXHIBIT "A" LEGAL DESCRIPTION OF PROPERTY All of that certain real property in the City of La Quinta, County of Riverside, State of California, described as follows: That portion of the Southeast quarter of the Northeast quarter of Section 19, Township 6 South, Range 7 East, San Bernardino Base and Meridian, described as follows: Commencing at the Southeast comer of the Northeast quarter of said Section 19; Thence South 89' 33' 05" West, on the Southerly line of the Northeast quarter of said Section, 330 feet, to the true point of beginning; thence South 891 33' 05" West, on said Southerly line of the Northeast quarter, 330 feet; Thence North 0° 13' 40" West, 1,324.57 feet, to the Northerly line of the Southeast quarter of Northeast quarter of said Section 19; thence North 89' 34' 05" East, on said Northerly line, 330 feet; thence South 00 13' 40" East, 1,324.47 feet to the true point of beginning; Excepting therefrom the Southerly 50 feet conveyed to the County of Riverside by Deeds recorded August 30, 1933 in Book 133, Page(s) 292 and Book 134, Page(s) 298 respectively, of Official Records, Riverside County Records. Also excepting therefrom that portion of described in the deeds to the City of La Quinta, recorded 02-17-1999, as Instrument No. 62425 and 62426, Official Records. Excepting therefrom the mobile home located thereon. ATTACHMENT NO. 11 882/0156IM047 Page 4 of 4 715762 07 a03/WO7 g SOURCES & USES OF FUNDS 12112/2006 11:37 Project Name: Mats Dune's Courtyard Homes Project Address: La Quints, CA Developer: SoCal Housing 121712006 SOURCES: PERMANENT USES: Permanent Loan $1,317,152 Acquisition Costs/Closing $0 LIHTC - 9% $11,324,751 Architecture/Fees & Permits $1,695,000 FHLB AHP Loan $0 Construction Cost $22,470,000 Deferred Dev Fee $0 Indirect Construction/Legal $1,005,007 La Quints RDA Loan $13,966,831 Developer's Fee $900,000 Rent -Up Costs/Reserves $347,742 Financing Costs $190,986 TOTAL $26,608,734 $26,608,734 DEVELOPMENT COSTS Project Name: Mats Durres Courtyard Homes Project Address: Le Qulahk CA Developer. SoCal Housing o7-oeo20oa Number of Dwelling Unite: 8o Gross Bldg Area (sQ 83,800 TOTAL $ PER $ PER 8F % OF COST UNIT BUILDING TOTAL 1. ACQUISITION COSTS: Pwmaw Pdwitirl Vaue $0 $0.00 $0.00 0.00% C064 On% - $0 $0.00 $0.00 0.00% eraser FM $0 $0.00 Saw 0.00% Hdit cm 0.00 .00 0.00% TOTAL ACQUISITION COSTS $0 $0.00 $0.00 0.00% 2. FEESIPERMITS a STUDIES 9uming Feea9mnlwCFD $1,005,OOD $13.312.50 $12.71 4.00% sw"Y&G, vvwM $35,000 $437.50 $0.42 0.13% Emimmnnla DowmeMdmM RWK $10,000 $125.00 $0.12 0.04% Arch.4 U4roWne Feu Door $650,000 $6.876.00 $0.56 2.07% Ramlumsaec S35.00D $437.50 $0.42 0.13% Subtot9C $585.000 $7.312.50 $6.98 2.20% TOTAL FEESIPERMITS B STUDIES $1,695,000 $21.187.50 $20.23 6.37% 3 DIRECT CONSTRUCTION COSTS: See Clewinwammlmm $D $0.00 WOO 0.00% ReWwft Owsrudw-UMM $14,910,000 3180,375.00 $177.92 56.03% Landscsoni;Common,wm $519,369 $8,491.90 $5.20 1.95% Dun lmprovaTne n $2.130.641 $28.633.01 $25.43 8.01% FUNIp-Garwas $0 $0.00 $0.00 0.00% Off- M mprewmads $0 $0.00 $0.00 0.00% CWredar CwWrgeTwy 5% $817193 $10.214,91 $9.75 3.07% Subtotal: $18.377.193 $229,714.91 $219.30 09.00% 0aneaae1 OvwNw a Prey 111.672.807 $19.660.22 $18.77 5.91% Subtotal, $19,960.000 $249,375.00 $238.07 74.98% Genets Condlons $1,000,000 $12,600.00 $11.93 3.70% PeMmmae Bond S450.000 $5.025.00 $5.37 1.09% Suldolof $21.400.000 $267,500.00 $255.37 80.42% CanaMdm CWireemy 5% $1.070,1500 $13.375.00 12.n 4.02% TOTAL DIRECT CONSTRUCTION COSTS $22,470.000 $280,875.00 5288.14 84.45% 4. INDIRECT CONSTRUCTION COSTS Duaopera Fee $900.000 $11,250.00 $10.74 3.38% Dsv*"M CoauUM $350,ODO $4.375.00 $4.10 1.32% Cmamull nMansW $825.007 $7.812.59 $7.45 2.35% Buudan RN obit l,a w $0 $0.00 $0.00 0.00% NOW East, Tam $0 $0.00 $0.00 0.00% Lager - Orortamnal $o $0.00 $0.00 0.00% La9M-Syntllneon $30,D00 $375.00 $0.36 0.11% Puawnpni" SO $0.00 $0.00 0.00% Reocaon $0 $0.00 $0.00 0.00% It bed Comtum Coax CWJne 0 30.00 AO 0.00% TOTAL INDIRECT CONSTRUCTION COSTS $1,005,007 $23,812.50 $22.73 7.10% 5. RENT -UP COSTS WMaSngAdmMOq ETpema $50,000 $625.00 $0.60 0.10% Lesse-p Reserve $0 $0.00 $0.00 0.00% Capealrad RapMromeM Reserve $40,000 $500.00 $0.48 0.16% Caplabad 0pembg Reserve $107,742 $1,346.77 IIIM 0.40% Common Alas FembNres $150000 $1876.00 1.79 0.58% TOTAL RENT-UPWRIfETING COSTS $347.742 54,348.77 $4.16 1.31% . FINANCING COSTS Canfauabn Lora IM $0 $0.00 $0.00 0.00% Conarvdm Linn Fees $0 $0.00 $0.00 0.00% Appra%aN4ana1 StwN $10,000 $126.00 $0A2 0.04% L,nder Lpa $25,000 $312.60 $0.30 0.00% PwmemM Lam FoeaCbeh9 Cons $13,172 $154.64 $0.16 0.05% Tax CnmAfawkl Fm $112,814 $1,410.18 $1.35 0.42% Bond W lee Card $o $0.130 $0.00 0.00% Predewbgmnt Loan Cww $0 $0.00 $0.00 0.00% The and Re-dhq(C-VJP-.) $30000 376.00 .38 0.11% TOTAL FINANCING COSTS $190,988 $2,987.32 52.28 0.72% 7. SUBTOTAL DEVELOPMENT COSTS 528,808,734 $332,609.18 $317.63 100.00% TOTAL LAND COSTS 0 0.00 0.00 0.00% TOTAL DEVELOPMENT COSTS $4608,734 $33y608.18 $317.53 100.00% Conseucdon estimates am Subject to change and maybe wilsed due to el16tiemord Issues, Changes In construction standards, architectural and engineering requirements, and now unforsew Clrcumstaneee. RENT SCHEDULE Project Name: Vista Dunes Cou►Ward Homes Project Address: La Quints, CA Developer Name: SoCal Housing 07-Dea2006 ;500 Unit Type Percent Median Monthly Gross Rent Monthly Utility Allow. Monthly Net Rent Number of Units Total Monthly Rent Total Annual Rent ($) Total # of Bdrrm BEDROOM 30% $323 $24 $299 2 $598 $7,176 2 credit units =1.5 45% $485 $24 $461 4 $1,844 $22,128 4 ons/bdrm) 50% $539 $24 $515 6 $3.090 $37,080 6 60% $647 $24 $623 0 $0 $0 0 12 D BEDROOM 30% $388 $31 $357 4 $1,428 $17,136 8 credit units = 1.5 45% $582 $31 $551 16 $8,816 $105,792 32 onsftrm) 50% $647 $31 $616 20 $12,320 $147,840 40 60% $776 $31 $745 0 $0 $0 0 40 tEE BEDROOM 30% $449 $38 $411 3 $1,233 $14,796 9 creditunits = 1.5 45% $673 $38 $635 11 $6,985 $83,820 33 onwbdrm) 50% $748 $38 $710 13 $9,230 $110,760 39 60% $897 $38 $869 0 $0 $0 0 27 JAGER Exempt $0 $0 $0 1 $0 $0 3 TOTAL 80 $45,544 $546,528 176 30% 9 11.26% 46% 31 38.75% 60% 39 48.75% 60% 0 0.00% Mgr 1 1.25% 80 100% OPERATING EXPENSES Project Name: V/sta Dunes Courtyard Homes Project Address: Le QuirNe, CA Developer: SoCa/Housing 07-Deo-2008 ANNUAL MONTHLY PER UNIT UNITING. %TOTAL 80 1. MANAGEMENT Contract Management Fee $§§,4QQ $3.2Q0.QQ0 TOTAL MANAGEMENT $35,400 $3,20U.Uu $4BU.UU $4U.UO 9.96% 2. ADMINISTRATION Marketing $2.400 $200.00 $30.00 $2.60 0.62% Audit $9,500 $791.67 $118.75 $9.90 2.47% Legal $3,000 $250.00 $37.50 $3.13 0.78% Office Evensea 112,000 $1QQQ.QQ $160.QQ3 TOTAL ADMINISTRATION $26,900 $2,241.07 $336.25 uu.trl 6.99Yo 3. SALARIES AND BENEFITS O"Ita Manager/Asst Manager $35,000 $2.916.67 $437.50 $36.46 9.10% Maintenance Personnel $30,000 $2,500.00 $375.00 $31.25 7.80% Janitorial Personnel $0 $0.00 $0.00 $0.D0 0.000/6 Case Manager $o $0.00 $0.00 $0.D0 0,00% Housekeepers $0 $0.00 $0.00 $0.DO 0.00% Payroll Tse, Ins & Wkr. Comp. 122.Z50 89 .83 5 91 TOTAL SALARIES $87,75U $71312.50 $110 6. 1.41 22.81% 4. MAINTENANCE Supplies $6,000 $500.00 $76.00 $5.25 1.56% Repairs Contract l Maintenance $6,000 $600.00 $75.00 $6.25 1.56% Pest Control $6.000 $500.00 $75.00 $8.25 1.56% Grounds Contract $24.000 $2,000.00 $300.00 $25.00 6.24% Tumover Cats $9,000 $750.00 $112.50 $9.38 2.34% Elavetor(s) . TOTAL MAINTENANCE 991,6105 $4,250.00 Iffif 11003 13.26% 5. UTILITIES NOT PAID BY TENANTS ' Trash Rernoval $9,600 $800.00 $120.00 $10.D0 2.50% Eleariciy $30,000 $2,500.00 $375.00 $31.25 7.80% Water/Sever $38,400 $3,2D0.00 $480.00 $40.00 9.98% Gas $14,400 JJ,NQ,Q0 $180.00 115.QQ 4 TOTAL UTILITIES 2,400 $7,700.00 $1, 5.00 .25 24.02% 6. INSURANCE Property & Liability Insurance 2 00 0 0 4 TOTAL INSURANCE $24,D00 $2,000. .00 $25.00 6.24% 7. TAXES42ESERVES Real Estate Tares $5,000 $416.67 $62.50 $5.21 1.30% Replacement Reserves 119,902 $3,333.53111.67 1 TOTALTAXES $45,000 $3,750.00 $552.50 $46.1RI 11.7ulyo 8. OTHER EmergenuyMonitoring $0 $0.00 $0.00 $0.00 0.00% Support SerAws $19,200 $1,600.00 $240.00 $20.00 4.99% Security Service 0 Jg.0Q 10-09 JQ.00 TOTAL OTHER $19,200 $116UU.00 .00 $ZU.U0 4.9 TOTAL OPERATING EXPENSES $384,660 $32,054 $4,808.13 $400.68 100.00% d5 N h 0N01( w OO lam! ��yy p $gym v:-1 ?n§dg 'T 005 v, OO N7 1 $ f: 9 8§ V ry� asp gip^"QSm Og $ 8 $ Si 9 to a Oa m ' g lei � � $ s $ms wsa R god �6 oo ss YhW RM$jb f g8§§ v'�ofa .�.om $ OO $!0 1 R ry mm 1n� Q Q$ OQN(V OO W yN� 9 9 c {� fJ$ g m ryOZiM NN ry Ip 00 kill s s 91 OR mm 1 A gg ss gg PIR CL y9 $$ All. 1 1 111 1 � ISM 5 PHI o0 oo v I s p Q 8100 pm1 $� 1I YZ log&1a� 11$$$aEE OO g00 Q 00 N p p N 111 Yj � ;28V1 0 9 00 goo $ OO } O 0v y 8H§1 W» N 00 Zoo oc uP � a ��. u Q SSA ing � tl:F oo yo0 9 00 HIE 00 goo 1 00 1$ i S � I p ilk ^dfi QOH i00 00 iI H Q ^^m8§m8 Y�YOa C�li ;,;�fld�fldl?? » Y �x76 Go yIy g$ TS� y� 9 n0% uioo iiN.r q ?�' 00 8n 0 p 8 y, N a o -08 dgoo S oo 21 N _ bi Fi pp �Np y p Cql gunjS �"( � NOONYi $fiR EmSOO s 00 ZS0 pmm N (� 40 L{ {qy •ql N qWq~ W » q� qM » Rag y� q�lpO m (V q NA�SS {� f NOY v ��}{O �q�( 00 C1 QS V R �q m N O A P N IV 0a O 0 N ;;o$ oa _ _ o m ��dif{, my N2pp5 a o 'n, $ joo �» 0 y"y yy� pp y3M ryry N ��jj 1OI�4o(!sS $ � pall A R$pp Q 92 10 O E g25 » y Sg o ry �~� lV N 1Q HQ J OP 0011� q00 'S^pT1j, N 00 00 ffi Y1 �» » Ymi O 2WNN`f � Md Rai N +Y Dk19 o0N Soo @ S oo 9 o 46 7i. 73 9 9 1 pg- 00 00 goo 9 00 is k3§§ y Q� G sW $ AN fj $j FS HS $ OggI NOg Y{00 FuZJ pn a -M N HE OOH goo 1 00 ���{{{ !!!��pb ,f}_`{,r aP QP y� P' TI fl 9 Ill M i »r I MA oo MOo 1 73 00 0�a r gall `R u13 OopQ goo m 00 pSn « « f1 ^ gas{ g '� yypy e66 0o goo g yip Oo 38 4 p 8 $n $ d�g �7�rr I� ^ HE oo ROO g oO rg g yl p Sp4 g Dag Ou $� yyggQ M�f 25 oo �o i OO ig $ I y Y N ^ »�g ihM 09Mpp OO 900 9 00 99 g QQ p 3 � gg M OR tt ^ O w Q ^� 99 pZ wv14R 00 Roo 00 Q %r 23 yF gg g� man?F g�� gg�$� A6H oo go- S oo Srrtt 3 4 F �»il� �55 �V � oo 'oo � oo ••� i'L e � 8 R»gg MM gs@ w$p@ ^ Gg i4 0000 Oo Fn M !R 99 ❑8 ya 'uj»S p 81g¢ @ 25b gg w�g we cRoo ofg oe gSS u` ^ Sa N Jngg 00 g00 mmV DO g P q$2 g w 8{ N-$ W p gpW aryQ oryffi q[m1 M f ^ » Q Q!9 MOg 00 g00 g 00 g Q $ �$3 ESE as x,Y2Si 00 00 I I 1 9 M g S '' $ pE� Af �yZOO y4y 0 dry gis of 9 9 ' «o $I= »$ g �ag$g{ 00 goo oo g$g $ g n^ $g� OOZ e»cc oo � I w»^-ORE 2� yy�� « AMENDED AND RESTATED AFFORDABLE HOUSING AGREEMENT by and between LA QUINTA REDEVELOPMENT AGENCY and NATIONAL COMMUNITY RENAISSANCE OF CALIFORNIA 882/015610.A047 848399 07 al0/30/07 TABLE OF CONTENTS Page I. [1001 SUBJECT OF AGREEMENT...............................................................................3 A. [ 101 ] Purpose of Agreement................................................................................ 3 B. [102] The Redevelopment Plan ........................................................................... 3 C. [103] The Project Area........................................................................................4 D. [104] The Site......................................................................................................4 E. [105] Parties to the Agreement............................................................................4 1. [106] The Agency....................................................................................4 2. [107] National CORE..............................................................................4 F. [108] Definitions..................................................................................................4 1. 1 109] Prohibition Against Change in Ownership, Management and Control of National CORE and Prohibition Against Transferof the Site................................................................................... 9 G. [1101 Representations by National CORE ......................................................... 10 H. [1111 Representations by the Agency................................................................12 II. [200] SALE OF PROJECT............................................................................................ 13 A. [2011 National CORE Consideration................................................................. 14 B. [202] Tax Credits; Tax Credit Regulatory Agreement ...................................... 15 C. [203] Evidence of Financing............................................................................. 16 D. [204] Acquisition of the Site Pursuant to Grant Deed ....................................... 17 E: [2051 Escrow......................................................................................................17 1. [206] Opening of Escrow...................................................................... 17 2. [207] Deposits Into Escrow...................................................................17 3. [208] Escrow Officer Obligations......................................................... 18 F. [209] Conveyance of Title and Delivery of Possession .................................... 19 G. [210] Conditions to Closing.............................................................................. 19 1. [211] Agency's Conditions to Closing .................................................. 19 2. [212] National CORE's Conditions to Closing ..................................... 20 3. [213] Waiver..........................................................................................21 4. [2141 Intentionally Omitted................................................................... 21 H. [215] Condition of Title..................................................................................... 21 I. [216] Title Insurance......................................................................................... 21 J. [217] Taxes and Assessments............................................................................ 22 K. [218] Conveyance Free of Possession............................................................... 22 L. [219] Document Review; Inspections; Condition of Partially ConstructedProject............................................................................................. 22 1. [220] Document Review........................................................................22 2. [221] Intentionally Omitted...................................................................23 3. [222] "As Is............................................................................................ 23 4. [223] Indemnity.....................................................................................23 5. [2241 Release and Waiver...................................................................... 24 6. [2251 Definitions....................................................................................24 7. [226] Materiality....................................................................................25 882/015610A047 848399 07.10/30107 '1� Page III. [300] DEVELOPMENT OF THE SITE; ADDITIONAL FINANCING FOR THEPROJECT ............................................................................................................... 25 A. [301 ] Selection of Builder; Review and Approval of Project Plans ................. 25 B. [3021 Completion of Construction..................................................................... 25 C. [303] Energy Efficiency Rebates.......................................................................25 D. [304] Additional Financing for the Project........................................................26 E. [305] Disbursement of Agency Construction Financing ................................... 26 F. [306] Release of Remaining Portions of Capital Contribution and Additional Equity Contributions........................................................................ 26 G. [307] Permanent Loan Closing.......................................................................... 27 IV. [400] USE OF THE PROJECT.....................................................................................28 A. [4011 Affordable Housing................................................................................. 28 B. [402] Uses In Accordance with Redevelopment Plan; Nondiscrimination.............................................................................................. 28 C. [403] Indemnity; Insurance Requirements........................................................ 29 D. [4041 Local, State and Federal Laws................................................................. 31 E. [405] Taxes and Assessments............................................................................ 32 F. [406] Limitation on Encumbrances................................................................... 32 G. [407] Maintenance of the Project...................................................................... 32 H. [408] Effect of Violation of the Terms and Provisions of this Agreement.......................................................................................................... 32 V. [5001 DEFAULTS AND REMEDIES.......................................................................... 33 A. [501 ] Defaults — General................................................................................... 33 B. [502] Legal Actions...........................................................................................33 1. [503] Specific Performance................................................................... 33 2. [5041 Institution of Legal Actions; Attorney's Fees .............................. 33 3. [505] Applicable Law............................................................................34 4. [5061 Acceptance of Service of Process ................................................ 34 C. [507] Rights and Remedies Are Cumulative..................................................... 34 D. [5081 Inaction Not a Waiver of Default............................................................. 34 VI. [600] GENERAL PROVISIONS.................................................................................. 34 A. [601 ] Notices, Demands and Communications Between Parties ...................... 34 B. [602] Conflicts of Interest.................................................................................. 35 C. [603] Enforced Delay; Extension of Times of Performance ............................. 35 D. [604] Non -Liability of Officials and Employees of the Agency.......................35 E. [6051 Interpretation; Entire Agreement, Waivers; Attachments ....................... 36 F. [606] Time of Essence....................................................................................... 36 G. [607] No Brokers............................................................................................... 36 H. [608] Maintenance of Books and Records........................................................ 36 I. [609] Right to Inspect..... ................................................................................... 36 J. [610] Binding Effect of Agreement................................................................... 37 K. [611] Severability..............................................................................................37 L. [612] Counterparts.............................................................................................37 887/015610 N 47 848399 07 a10/30/07 -11- Page M. [613] Amendments to this Agreement............................................................... 37 N. [614] Permanent Lender Third Party Beneficiary Rights .................................. 37 ATTACHMENTS 1 Site Map 2 Legal Description 3 Schedule of Performance 4 Grant Deed 5 Agency Note 6 Agency Construction Deed of Trust 7 Agency Regulatory Agreement 8 Project Proforma 9 Bill of Sale 10 Assignment and Release 11 Memorandum of Affordable Housing Agreement and Notice of Reversion of Title 882/015610-0047 84839907 aI0/30/07 $1� AMENDED AND RESTATED AFFORDABLE HOUSING AGREEMENT This AMENDED AND RESTATED AFFORDABLE HOUSING AGREEMENT ("Agreement") is entered into as of the 31 st day of October, 2007 by and between LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic (the "Agency"), and NATIONAL COMMUNITY RENAISSANCE OF CALIFORNIA, a California non-profit public benefit corporation ("National CORE"). The foregoing parties (collectively referred to as the "Parties") hereby agree as follows: RECITALS A. National CORE (formerly known as The Southern California Housing Development Corporation) and the Agency entered into that certain Affordable Housing Agreement dated as of March 8, 2007 (the "Initial Agreement"). Subsequent thereto, the Agency began construction of the Housing Development. B. On June 6, 2007, Vista Dunes Housing Partners, L.P., a California limited partnership (the "Limited Partnership") of which the general partner is Vista Dunes GP, LLC, a California limited liability company, the manager of which is Southern California Housing Development Corporation of the Inland Empire ("National CORE-IE"), an entity affiliated with National CORE, was advised by the TCAC of the TCAC's award of 9% Tax Credits to the Limited Partnership for the Project. C. National CORE, on behalf of the Limited Partnership, has received an offer from Hudson Housing Capital LLC ("Hudson"), to be the investor in the Limited Partnership and in connection therewith to make a total capital contribution to the Limited Partnership of approximately Three Million Two Hundred Thousand Dollars ($3,200,000). D. In order to permit the Limited Partnership to claim and take advantage of the award of Tax Credits, the Limited Partnership must own the Project at the time that it is "placed in service." Under the Initial Agreement, the Agency would place the Project in service. E. Further, the Limited Partnership received "readiness to proceed" points under its TCAC application. The requirement for such points, in the absence of a construction loan, is for the Tax Credit Investor to be admitted to the Limited Partnership and make an initial contribution of funds by November 2, 2007. Hudson is not willing to be admitted, and make a capital contribution, to the Limited Partnership unless and until the Limited Partnership owns the Project. F. As a result of all of the foregoing, the Parties have agreed to amend and restate the Initial Agreement to provide, among other things, for the following: • At the Closing, which is anticipated to occur on approximately October 31, 2007, Agency will sell the partially completed Housing Development to National CORE. 882/015610-0047 848399.07 a10/30/07 -1- • The consideration for the sale of the partially completed Housing Development under these modified terms will be the total amount of Agency expenditures to construct the Housing Development as of the date of the Closing, which amount, along with other financing Agency is providing to National CORE pursuant to the terms hereof, is represented in the Agency Note, Agency Deed of Trust, and Regulatory Agreement. • National CORE's payment of the consideration to Agency will be paid pursuant to the terms of the Agency Note, which will be secured by the Agency Construction Deed of Trust. • At the Closing, the Agency will assign its construction contract to National CORE. Notwithstanding the foregoing, the Agency will retain its role as construction manager, and will be responsible to ensure that construction of the Housing Development is completed in accordance with the approved plans and specifications and budget therefore, a copy of which is attached to this Agreement as Attachment No. 13. • At the Closing, the Agency and National CORE will enter into an agreement that requires National CORE to convey to the City, as the Agency's successor, fee title to the Site and Housing Development on the 55th anniversary of the Permanent Loan Closing, conditioned on National Core acquiring the Housing Development from the Partnership at the close of the fifteen (15) year tax credit period commencing on the Permanent Loan Closing Date. The parties contemplate that concurrently with or immediately subsequent to the Closing National CORE will sell the Site and partially completed Housing Development to the Limited Partnership. The Limited Partnership will fund a minimum of Two Million Seventeen Thousand Eight Hundred Eighty Dollars ($2,017,880) from the proceeds of the capital contribution to be made by the Tax Credit investor, and a minimum of One Million Three Hundred Seventeen Thousand One Hundred Fifty -Two Dollars ($1,317,152) in construction loan proceeds of the permanent loan, towards the cost to complete the Housing Development. After expenditure by the Limited Partnership of all of the capital contribution funds allocated to construction and construction loan funds, Agency will then provide to National CORE funding under the Agency Note in the amount of approximately One Million Nine Hundred Ten Thousand Sixty -Seven Dollars ($1,910,067), which funding shall be used to complete construction of the Housing Development after Closing. Such additional funding will be secured by the Agency Construction Deed of Trust. Upon operation of the Project in accordance with the terms hereof for a period of five (5) continuous years after the Permanent Loan Closing, Agency shall cancel the Agency Note and reconvey the Agency Construction Deed of Trust. G. The Parties now desire to enter into this Amended and Restated Affordable Housing Agreement to accomplish all of the foregoing, all as more particularly set forth herein. 8821015610-0047 848399 07 A0130107 -2- NOW, THEREFORE, in consideration of the foregoing Recitals, which are incorporated herein by this reference, and for other good and valuable consideration, the receipt of which is hereby acknowledged, the Parties hereto agree as follows: I. [1001 SUBJECT OF AGREEMENT A. [loll PurposeofAereement. The Recitals are incorporated into this Agreement. The purpose of this Agreement is to effectuate the Redevelopment Plan for the La Quinta Redevelopment Project Area No. 2 (the "Project Area") by providing for (i) the improvement by the Agency of certain property situated within the Project Area and referred to herein as the "Site" (as hereinafter defined) with a multi- family housing development, consisting of not less than eighty (80) residential dwelling units (the "Housing Development"); (ii) the conveyance of the Site and Housing Development to National CORE; and (iii) the ownership, operation and management of the Site and Housing Development as an affordable rental housing development restricted for rental and occupancy by Eligible Tenants at an Affordable Rent. As used herein, the term "Unit" refers to each of the 80 rental dwelling units comprising the Housing Development, and the term "Units" refers to all of the 80 rental dwelling units comprising the Housing Development. The Units are subject to the Agency Regulatory Agreement. The Agency financial assistance in this Agreement shall be utilized to effectuate a portion of the Agency's overall affordable housing program pursuant to the requirements of California Health and Safety Code Section 33334.2 to expend twenty percent (20%) of its increment funds to improve, increase and preserve the community's supply of low- and moderate -income housing. The conveyance to National CORE of the Site and the Housing Development and the occupancy of Units in the Housing Development by households of limited incomes, all as provided in this Agreement, are in the vital and best interests of the City of La Quints (the "City") and the health, safety and welfare of its residents, and in accord with the public purposes and provisions of applicable state and local laws and requirements under which the Project has been undertaken. B. 10[ 21 The Redevelopment Plan. This Agreement is subject to the provisions of the Redevelopment Plan for the Project Area (the "Redevelopment Plan") which was approved and adopted by Ordinance No. 139 of the City Council of the City of La Quinta on the 16th day of May, 1989. Said ordinance and Redevelopment Plan are fully incorporated herein by reference. Any amendment hereafter to the Redevelopment Plan (as so approved and adopted) which changes the uses or development permitted on the Site as proposed in this Agreement, or otherwise changes the restrictions or controls that apply to the Site, or otherwise affects National CORE's obligations or rights with respect to the Site, shall not apply to the Site without the written consent of National CORE. Amendments to the Redevelopment Plan applying to other property in the Project Area shall not require the consent of National CORE. 882/015610.0047 848399.07 a10/30/07 -3- C. 11031 The Proiect Area. The Project Area is located in the City and is generally bounded by Washington Street, the northern corporate boundary, Jefferson Street and Avenue 50. The exact boundaries are as set out in the Redevelopment Plan. D. [1041 The Site. The "Site" is currently owned by the Agency and consists of approximately 9.7 acres of that certain real property located at 78990 Miles Avenue within the Project Area in the City of La Quinta, County of Riverside. The Site is depicted on the Site Map, which is attached hereto and incorporated herein as Attachment No. 1. The legal description of the Site is provided on Attachment No. 2, which is attached hereto and incorporated herein by this reference. E. 101 51 Parties to the Agreement. 11061 The Agency. The Agency is the La Quinta Redevelopment Agency, a public body, corporate and politic, exercising governmental functions and powers and organized and existing under the Community Redevelopment Law of the State of California (Health & Safety Code § 33000 et seq.). The principal office of the Agency is located at 78-495 Calle Tampico, La Quinta, California 92253, or such other address as Agency shall hereafter designate in writing to National CORE. "Agency", as used in this Agreement, includes any and all assignees of or successors to its rights, powers and responsibilities. 2. 11071 National CORE. "National CORE" is National Community Renaissance of California, a California non-profit public benefit corporation. The principal office and mailing address of National CORE for purposes of this Agreement is 9065 Haven Avenue, Suite 100, Rancho Cucamonga, CA 91730, Attn: President. By executing this Agreement, each person signing on behalf of National CORE warrants and represents to the Agency that National CORE has the full power and authority to enter into this Agreement, that all authorizations required to make this Agreement binding upon National CORE have been obtained, and that the person or persons executing this Agreement on behalf of National CORE are fully authorized to do so. Whenever the term "National CORE" is used in this Agreement, such term shall include any and all nominees, assignees, or successors in interest as herein provided. [1081 Definitions. "50% Very Low Income Household" shall mean a household whose annual income does not exceed fifty percent (50%) of AMI adjusted for family size. 98L015610A047 848399 07.10130107 4- "Affiliate" shall mean any person or entity directly or indirectly, through one or more intermediaries, controlling, controlled by or under common control with such person which, if such person is a partnership or limited liability company, shall include each of the constituent members or partners, respectively thereof. The term "control" as used in the immediately preceding sentence, means, with respect to a person that is a corporation, the right to the exercise, directly or indirectly, of more than fifty percent (50%) of the voting rights attributable to the shares of the controlled corporation, and, with respect to a person that is not a corporation, the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of the controlled person. "Affordable Rent" shall mean the amount of monthly rent, including a reasonable utility allowance, that does not exceed the maximum allowable rent to be charged to and paid by Eligible Tenants occupying the Units as determined pursuant to Health and Safety Code Section 50053(b), as of the Closing, and the regulations promulgated pursuant to or incorporated therein, including, without limitation, any applicable regulations promulgated pursuant to Health and Safety Code Section 50093. "Agency Construction Deed of Trust" shall mean that certain deed of trust with assignment of rents substantially in the form attached hereto and incorporated herein as Attachment No. 61 which secures the Agency Note and performance of the obligations under the Agency Regulatory Agreement. The Agency Construction Deed of Trust shall be recorded against the Site at the Closing. "Agency Construction Financing" shall have the meaning ascribed in Section 304 hereof. "Agency Loan" shall mean the loan the Agency has agreed to provide to National CORE, which shall be comprised of the Purchase Price and the Agency Construction Financing. "Agency Note" shall mean that certain Promissory Note substantially in the form attached hereto and incorporated herein as Attachment No. 5. The Agency Note sets forth National CORE's obligation to pay the Agency Loan. "Agency Regulatory Agreement" shall mean that certain Regulatory Agreement and Declaration of Covenants and Restrictions substantially in the form attached hereto and incorporated herein as Attachment No. 7. The Agency Regulatory Agreement sets forth National CORE's obligations concerning the ownership, operation, and management of the Project. The Agency Regulatory Agreement shall be recorded against the Site at the Closing. "Agency Title Policy" shall have the meaning ascribed in Section 215 hereof. "Agency's Conditions to Closing" shall have the meaning ascribed in Section 210 hereof. "Agreement to Convey Fee Title" shall mean an agreement to be entered into by and between the Agency and National CORE, pursuant to which National CORE is obligated to (i) exercise its option to acquire the Site and Housing Development from the Limited Partnership at the close of the fifteen (15) year tax credit period commencing on the Closing Date, as set 882/015610-0047 848399.07.10/30107 -5- forth in Section 8.02 of that certain Amended and Restated Agreement of Limited Partnership entered into by and between National CORE and the Partnership, and (ii) convey fee title to the Site and Housing Development to the City, as the Agency's successor, on the fifty-fifth (55th) anniversary of the Permanent Loan Closing. "AMI" shall mean the median family income for the Riverside County area promulgated and published annually by the California Department of Housing and Community Development ("HCD") pursuant to Title 25, Section 6932 of the California Code of Regulations. If HCD ceases annually to publish median incomes, the parties will agree upon an adequate substitute manner for determining area -wide median income. "Annual Financial Statement" shall mean the financial statements prepared by National CORE for each calendar year, including a balance sheet, income statement, statement of retained earnings, statement of cash flow, and footnotes thereto, prepared in accordance with generally accepted accounting principals consistently applied, as audited by an independent certified public accountant. "Assignment" shall mean a general assignment of Agency's entitlements and approvals substantially in the form attached hereto and incorporated herein as Attachment No. 10. "Bill of Sale" shall mean a bill of sale substantially in the form attached hereto and incorporated herein as Attachment No. 9. "Budget" shall mean that budget attached hereto and incorporated herein as Attachment No. 13, which sets forth the costs and sources of funds to construct the Project. "Builder" shall have the meaning ascribed in Section 300 hereof. "Capital Contribution" shall mean the equity contribution to be made to the Limited Partnership by the Tax Credit Investor, at the Closing, in an amount not less than Two Million Seven Hundred Fifteen Thousand One Hundred Thirty -Three Dollars ($2,715,133). "CEQA" shall mean the California Environmental Quality Act, Public Resources Code Section 21000 et seq., as amended. "City" shall mean the City of La Quinta, a municipal corporation, having its offices at 78-495 Calle Tampico, La Quinta, CA 92253. The City is not a party to this Agreement and shall have no obligations hereunder. The City shall, however, be deemed a third party beneficiary of all of the provisions herein in its favor. "Closing" or "Closing Date" shall have the meaning ascribed in Section 207.3 hereof. "Days" shall mean calendar days and the statement of any time period herein shall be calendar days, and not business days, unless otherwise specified. 887/015610-0047 848399.07 a10130/07 -6- "Eligible Tenant" shall mean a household which qualifies as a "very low income household," an "extremely low income household" (as those terms are described in California Health and Safety Code Sections 50105 and 50106), or a 50% Very Low Income Household. . "Escrow" shall have the meaning ascribed in Section 207 hereof. "Escrow Agent" shall have the meaning ascribed in Section 207 hereof. "Evidence of Financing" shall have the meaning ascribed in Section 205 hereof. "Executive Director" shall mean the individual duly appointed to the position of Executive Director of Agency, or his or her authorized designee. Whenever an administrative action is required by Agency to implement the terms of this Agreement, the Agency Executive Director, or his or her authorized designee, shall have authority to act on behalf of Agency, except with respect to matters reserved for Agency Board determination. "Grant Deed" shall have the meaning ascribed in Section 206 hereof. "Hazardous Materials" shall have the meaning ascribed in Section 224 hereof. "Housing Development" shall have the meaning ascribed in Section 101 hereof. "Institutional Lender" shall mean any of the following institutions having assets or deposits in the aggregate of not less than One Hundred Million Dollars ($100,000,000): a California chartered bank; a bank created and operated under and pursuant to the laws of the United States of America; an "incorporated admitted insurer" (as that term is used in Section 1100.1 of the California Insurance Code); a "foreign (other state) bank" (as that term is defined in Section 1700(1) of the California Financial Code); a federal savings and loan association (Cal. Fin. Code Section 8600); a commercial finance lender (within the meaning of Section 2600 et seq. of the California Financial Code); a "foreign (other nation) bank" provided it is licensed to maintain an office in California, is licensed or otherwise authorized by another state to maintain an agency or branch office in that state, or maintains a federal agency or federal branch in any state (Section 1716 of the California Financial Code); a bank holding company or a subsidiary of a bank holding company which is not a bank (Section 3707 of the California Financial Code); a trust company, savings and loan association, insurance company, investment banker; college or university; pension or retirement fund or system, either governmental or private, or any pension or retirement fund or system of which any of the foregoing shall be trustee, provided the same be organized under the laws of the United States or of any state thereof, and a Real Estate Investment Trust, as defined in Section 856 of the Internal Revenue Code of 1986, as amended, provided such trust is listed on either the American Stock Exchange or the New York Stock Exchange. "Management Unit" shall mean the one (1) unit in the Housing Development that may be occupied by on -site management. "Memorandum" shall mean the Memorandum of Affordable Housing Agreement substantially in the form attached hereto and incorporated herein as Attachment No. 11. 882/015610-0047 848399 07 a10/30/07 -7- "Moderate Income Household" shall have the meaning as set forth in Health and Safety Code Section 50093, or any successor statute. "National CORE" shall mean National Community Renaissance of California, a California nonprofit public benefit corporation. "National CORE Consideration" shall have the meaning ascribed in Section 201 hereof. "National CORE Construction Fund" shall have the meaning ascribed in Section 304 hereof. "National CORE Construction Loan" shall have the meaning ascribed in Section 203 hereof. "National CORE's Conditions to Closing" shall have the meaning ascribed in Section 211 hereof "National CORE Title Policy" shall have the meaning ascribed in Section 215 hereof. "Partially Constructed Project" shall have the meaning ascribed in Section 200 hereof "Partnership Agreement" shall mean the Amended and Restated Agreement of Limited Partnership dated as of October 1, 2007. "Permanent Lender" shall mean U.S. Bank, a national banking association or other Institutional Lender. "Permanent Loan" shall mean the permanent loan to be provided by the Permanent Lender to the Limited Partnership, in the amount of One Million Three Hundred Seventeen Thousand One Hundred Fifty -Two Dollars ($1,317,152). "Permanent Loan Closing" shall mean the date the Permanent Lender provides to the Limited Partnership the Permanent Loan, as described in Section 307 hereof. "Project" shall have the meaning ascribed in Section 200 hereof. "Project Proforma" shall mean the financial information referred to in Section 205 of this Agreement and attached hereto and incorporated herein as Attachment No. 8 and is National CORE's best estimate of the costs of ongoing operations based on the information available to National CORE as of the Closing Date. The Project Proforma shall not undergo material change without the prior approval of Agency's Executive Director, which approval shall not be unreasonably withheld (a material change is one or more change(s) that causes the Net Operating Income as shown on Project Proforma to increase or decrease by a cumulative amount of two percent (2%) or more from what is shown in Attachment No. 8. 8821015610-0047 848399.07.10/30107 -8- "Property Documents" shall have the meaning ascribed in Section 219 hereof. "Schedule of Performance" shall mean that certain Schedule attached hereto and incorporated herein as Attachment No. 3. "Site" shall mean the land underlying the Project. "Tax Credit Investor" shall mean Hudson Vista Dunes, LLC, a Delaware limited liability company or another Affiliate of Hudson Housing Capital LLC. "Tax Credit Program" shall mean the low-income housing tax credit program authorized pursuant to Internal Revenue Code Section 42, California Health and Safety Code Sections 50199.6-50199.19, Revenue and Taxation Code Sections 17057.5, 17058, 23610.4, 23610.5, and applicable federal and State regulations such as 4 California Administrative Code Sections 10300-10340. "Tax Credits" shall refer to the reservation of Low Income Housing Tax Credits awarded by TCAC to the Limited Partnership for the Project as confirmed by the Preliminary Reservation Letter from TCAC to the Limited Partnership dated June 6, 2007, reserving an initial amount of Twelve Million One Hundred Seventy Thousand Four Hundred Twelve Dollars ($12,170,412) in annual Federal 9% Tax Credits for the Project. "Tax Credit Regulatory Agreement" shall mean that certain regulatory agreement to be recorded against the Site as a condition of the receipt by the Project of an allocation by TCAC of the Tax Credits. "TCAC" shall mean the California Tax Credit Allocation Committee. "Title Company" shall mean Chicago Title Company. "Unit" and "Units" shall have the meaning ascribed in Section 101 hereof. 1. [1091 PIohibition Against Change in Ownerghin Management ant] The qualifications and identity of National CORE are of particular interest to the Agency. It is because of these qualifications and identity that the Agency has entered into this Agreement with National CORE. Consequently, no person, whether a voluntary or involuntary successor of National CORE, shall acquire any rights or powers under this Agreement nor shall National CORE assign all or any part of this Agreement, the Project, the Site, or the Agency Regulatory Agreement without the prior written approval of the Agency. A voluntary or involuntary sale or transfer of any interest in National CORE or the Site during the term of this Agreement shall be deemed to constitute an assignment or transfer for the purposes of this Section 109, and the written approval of the Agency shall be required prior to effecting such an assignment or transfer. Any purported transfer, voluntarily or by operation of law, except with the prior written consent of the Agency, shall be null and void and shall confer no rights whatsoever upon any purported assignee or transferee. During the term of this Agreement and the Agency Regulatory Agreement, National CORE shall not, except as permitted by this 892/011610-0047 949399.07 a10/30/07 -9- Agreement, assign or attempt to assign this Agreement or any rights or duties herein, nor make any total or partial sale, transfer, conveyance, or assignment of the whole or any part of the Site or the Project, without the prior written approval of the Agency. Notwithstanding any other provision of this Agreement to the contrary, Agency approval of an assignment of this Agreement or transfer of the Site or the Project, or any interest therein shall not be required in connection with: (a) the conveyance or dedication of any portion of the Site to the City of La Quinta, or other appropriate governmental agency, including public utilities, where the granting of such easements permits or facilitates the operation of the Project on the Site; (b) any assignment of this Agreement or transfer of the Site, or any of the improvements located thereon, by National CORE to a limited liability company in which National CORE or its Affiliates has a greater than fifty percent (50%) ownership and management interest; (c) any assignment of this Agreement, or transfer of the Site and any of the improvements located thereon, by National CORE to the Limited Partnership; (d) the leasing of individual rental Units within the Housing Development provided that such leasing is in accordance with the terms of this Agreement; (e) transfers resulting from the death or mental or physical incapacity of an individual; (f) transfers in trust for the benefit of a spouse, children, grandchildren, or other family member, or for charitable purposes; (g) transfers of stock in a publicly -held corporation or of the beneficial interest in any publicly -held partnership or real estate investment trust; (h) the admission of the Tax Credit Investor to the Limited Partnership; (i) a transfer by the Tax Credit Investor to an entity that is an Affiliate of Hudson Housing Capital, LLC; 0) the removal by the Tax Credit Investor of the general partner of the Limited Partnership for a default under the Partnership Agreement, provided the replacement general partner is reasonably satisfactory to Agency; (k) a sale by the Tax Credit Investor of credits in syndication; (1) the encumbrance of the limited partner interest by the Tax Credit Investor as collateral to finance its capital contribution to the Limited Partnership; (m) the exercise by the general partner of the Limited Partnership or by National CORE of any option to purchase or right of first refusal to purchase the Limited Partnership or all of the limited partner's interest in the Limited Partnership at the conclusion of the tax credit period or (n) the execution of a mortgage secured by the Site and Housing Development in favor of National CORE (as the beneficiary thereof). Notwithstanding anything in this Section 109 to the contrary, in the absence of specific written agreement by Agency, no transfer or assignment by National CORE or any successor in interest to National CORE, whether or not requiring the approval by Agency, shall be effective unless and until the transferor and transferee execute and deliver to Agency an assignment and assumption agreement in a form and with content reasonably acceptable to Agency's legal counsel. This Section 109 shall not be applicable to the leasing of individual Units to Eligible Tenants in accordance with this Agreement and no assignment and assumption agreement shall be required in connection therewith. G. [1101 Representations by National CORE. National CORE represents and warrants to the Agency as follows: 1. National CORE is duly established and in good standing under the laws of the State of California and has duly authorized, executed and delivered this Agreement and any 182/015610-0047 848399 07 e10/30/07 -1 0- and all other agreements and documents required to be executed and delivered by National CORE in order to carry out, give effect to, and consummate the transactions contemplated by this Agreement. This Agreement is enforceable against National CORE in accordance with its terms. 2. National CORE does not have any contingent obligations or contractual agreements which will materially adversely affect the ability of National CORE to carry out its obligations hereunder. 3. There are no pending or, so far as is known to National CORE, threatened, legal proceedings to which National CORE is or may be made a party to or to which it or any of its property is or may become subject, which have not been fully disclosed in the material submitted to the Agency, which will materially adversely affect the ability of National CORE to carry out its obligations hereunder. 4. There is no action or proceeding pending or, to National CORE `s best knowledge, threatened, looking toward the dissolution or liquidation of National CORE and there is no action or proceeding pending or, to National CORE `s best knowledge, threatened by or against National CORE which could affect the validity and enforceability of the terms of this Agreement, or adversely affect the ability of National CORE to cant' but its obligations hereunder. 5. The execution and delivery of this Agreement and all other documents to be executed by National CORE pursuant to this Agreement will not constitute or result in any default or event that with notice or the lapse of time, or both, would be a default, breach, or violation of any other agreement, instrument, or arrangement by which National CORE is bound. 6. The execution and delivery of this Agreement and all other documents to be executed by National CORE pursuant to this Agreement and the consummation of the transactions contemplated herein will not violate any provision of or require any consent, authorization, or approval under any law or administrative regulation or any other order, award, judgment, writ, injunction or decree applicable to, or any governmental permit or license issued to National CORE. 7. No representation, warranty, or covenant of National CORE in this Agreement, or in any document or certificate furnished or to be furnished to Agency pursuant to this Agreement, contains or will contain any untrue statement of a material fact or omits or will omit to state a material fact necessary to make the statements contained herein or therein not misleading. 8. All financial information delivered to Agency, including, without limitation, information relating to the financial condition of National CORE , the Site, and the Project accurately represents such financial condition and has been prepared in accordance with accepted accounting principles consistently applied, unless otherwise noted in such information. National CORE shall notify Agency in writing of any material changes to such information delivered to the Agency. 882/015610-0047 948399.07 a10/30107 - l 1- 9. National CORE has, and will as required by its obligations hereunder, dedicate, allocate and otherwise make available, sufficient financial and other resources to perform its obligations under this Agreement. Each of the foregoing items 1 to 9, inclusive, shall be deemed to be an ongoing representation and warranty and shall survive the Closing. National CORE shall advise the Agency in writing if there is any change material pertaining to any matters set forth or referenced in the foregoing items 1 to 9, inclusive. H. f 1111 Representations by the Agency. The Agency represents and warrants to National CORE as follows: 1. Agency is a public body, corporate and politic, existing pursuant to the California Community Redevelopment Law (California Health and Safety Code Section 33000), which has been authorized to transact business pursuant to action of the City of La Quinta. Agency has full right, power and lawful authority to transfer the Project as provided herein and the execution, performance, and delivery of this Agreement by Agency has been fully authorized by all requisite actions on the part of Agency. The parties who have executed this Agreement on behalf of Agency are authorized to bind Agency by their signatures hereto. 2. Agency does not, as far as is known to Agency, have any contingent obligations or contractual agreements which will materially adversely affect the ability of Agency to carry out its obligations hereunder. 3. There are no pending or, so far as is known to Agency, threatened, legal proceedings to which Agency is or may be made a party or to which it or any of its property is or may become subject, which will materially adversely affect the ability of Agency to carry out its obligations hereunder. 4. There is no action or proceeding pending or, to Agency's knowledge, threatened, looking toward the dissolution or liquidation of Agency and there is no action or proceeding pending or, to Agency's knowledge, threatened by or against Agency which could affect the validity and enforceability of the terms of this Agreement, or adversely affect the ability of Agency to carry out its obligations hereunder. 5. To Agency's knowledge, the Site is not currently in violation of any law, ordinance, rule, regulation or requirement applicable to its use and operation. 6. Agency is not the subject of a bankruptcy proceeding. 7. To Agency's knowledge, no Hazardous Materials (as defined in Section 224 below) are now or have been released, used, or stored on or within any portion of the Site in violation of applicable laws or regulations governing the release, use, or storage of Hazardous Materials, and there has not been any federal, state, or local enforcement, clean-up, removal, remedial, or other governmental or regulatory actions instituted or completed affecting the Site. 8821015610-0047 848399.07 a10130107 -12- 8. To Agency's knowledge, the execution and delivery of this Agreement and all other documents to be executed by Agency pursuant to this Agreement will not constitute or result in any default or event that with notice or the lapse of time, or both, would be a default, breach, or violation of any other agreement, instrument, or arrangement by which Agency is bound. 9. To Agency's knowledge, the execution and delivery of this Agreement and all other documents to be executed by Agency pursuant to this Agreement and the consummation of the transactions contemplated herein will not violate any provision of or require any consent, authorization, or approval under any law or administrative regulation or any other order, award, judgment, writ, injunction or decree applicable to, or any governmental permit or license issued to Agency. 10. To Agency's knowledge, no representation, warranty, or covenant of Agency in this Agreement, or in any document or certificate furnished or to be fumished to National CORE pursuant to this Agreement, contains or will contain any untrue statement of a material fact or omits or will omit to state a material fact necessary to make the statements contained herein or therein not misleading. Each of the foregoing items I to 10, inclusive, shall be deemed to be an ongoing representation and warranty and shall survive the Closing. The Agency shall advise National CORE in writing if there is any change material pertaining to any matters set forth or referenced in the foregoing items I to 11, inclusive. As used in this Section I11, the term "knowledge" or "known" shall mean the actual (not constructive or imputed) knowledge of the Agency Executive Director, without any investigation or inquiry or duty of investigation or inquiry. Il. [2001 SALE OF PROJECT Pursuant to the terms set forth herein, Agency shall sell to National CORE and National CORE shall purchase from Agency the Partially Constructed Project. As used herein, the term "Partially Constructed Project" shall mean and refer to all of the following: (a) The Housing Development in such condition of completion as exists as of the date of Closing, including all appurtenant structures and facilities, all plans and specifications, all work in progress, all contracts in progress, all entitlements, and all material stockpiled on and/or present on the Site as of the Closing; (b) All personal property belonging to Agency and located upon the Site; and (c) All appurtenances, rights (including reversionary rights), easements and privileges belonging to or running with the Site, including, without limitation, all of Agency's right, title and interest in and to any and all land lying in the bed of any street, road, cul-de-sac, alley or accessway, open or closed, existing, vacated or proposed, adjoining, adjacent to, or contiguous with the Site, and all water rights and other entitlements which Agency may own in conjunction with Agency's ownership of the Site, including all fixtures, trade fixtures, as well as the following items, if any, owned and/or leased by Agency and presently located in, on or upon the 182/0156 1 "047 848399 07 al0/30/07 -13- Site: electrical distribution systems (power panels, buss ducting, conduits, disconnects, lighting fixtures), telephone distribution systems, and wall coverings. In connection with Agency's sale of the Partially Constructed Project to National CORE, Agency shall, at the Closing, assign and be deemed to assign to National CORE all of Agency's right, title and interest in and to that certain Agreement executed by and between the Agency and Davis Reed Construction Inc. (the "Contractor"), for the construction of the Housing Development (the "Construction Contract') and all entitlements, approvals, plans and specifications, for the Partially Constructed Project owned by Agency, subject to any limitation which may be imposed by law. At the Closing, Agency shall also assign, on a nonexclusive basis, all of its respective right, claim, actions or causes of action against the Contractor and any subcontractors, engineers, architects or other consultants of the Agency or any third party acting as an agent of either entity relating to the preparation or production of such plans, specifications and other documents or to the construction to date on or to the Housing Development or based in any way upon any work performed to the date of Closing on or to the Site including, without limitation, any and all warranties and guarantees with respect to the development of the Housing Development on the Site, including, without limitation, grading work performed in connection therewith, including all statutory, express or implied warranties and all rights of the Agency as an additional insured or otherwise pertaining to insurance coverage maintained by or for the Agency prior to Closing and covering the Site. In furtherance of the foregoing, at the Closing the Agency shall deliver to National CORE an executed general assignment in the form and content attached hereto as Attachment No. 10. National CORE and Agency acknowledge and agree that Agency shall act as the Construction Manager under the Construction Contract. In said capacity, Agency shall, using the plans, specifications, contracts and other materials assigned and transferred to National CORE, oversee the completion of construction of the Housing Development in compliance with all such plans and specifications and project budget. The Agency agrees to fund all construction costs required to complete construction of the Housing Development in excess of the National CORE Construction Fund, in accordance with Section 304. National CORE agrees to execute any documents or instruments which may be required to implement the executory provisions hereof, and further agrees that the Agency retains the nonexclusive right, claims, actions or causes of action against the Contractor and any of such subcontractors, engineers, architects and other consultants relating to construction of the Housing Development occurring prior to Closing or based in any way on any work performed on or to the Site by such persons and entities. A. j2011 National CORE Consideration. The consideration to be paid by National CORE for the Partially Constructed Project shall be the sum of all of the Agency's costs incurred in connection with construction of the Housing Development prior to the Closing, which is estimated to be approximately Nineteen Million Two Hundred "twenty -Three Thousand Nineteen Dollars ($19,223,019) (the "National CORE Consideration"). The National CORE Consideration shall be paid by National CORE to Agency pursuant to the terms of the Agency Note. Agency shall insure that all obligations paid or due as calculated by Agency as of the Closing Date will be paid by the Agency prior to or concurrently with Closing. As may be 882/01i6M0047 -14- 848399.07 a10/30/07 necessary, Agency shall retain the responsibility to pay any such sums following Closing. In particular, Agency agrees to pay to the Contractor, upon completion of the Project, the retainage in the amount of One Million Seven Hundred Fifty -Two Thousand Five Thousand Seventy - Three Dollars owed to the Contractor as of the date of this Agreement. B. [2021 Tax Credits; Tax Credit Regulatory Agreement. National CORE submitted an application to TCAC for competitive nine percent (9%) tax credits and obtained a reservation of 2007 Tax Credit from TCAC in an initial amount of approximately Twelve Million Dollars ($12,000,000). National CORE shall be responsible for obtaining TCAC's approval to convert the nine percent (9%) tax credits to four percent (4%) tax credits. Such approval shall be one of the Agency's Conditions to Closing. National CORE shall be responsible to require and ensure that the Limited Partnership performs all of its obligations under the Tax Credit Regulatory Agreement. In the event Agency is prevented by a final, non -appealable order of a court of competent jurisdiction in a lawsuit involving the Project, or by an applicable and binding published appellate opinion, or by a final, non -appealable order of a regulatory body having jurisdiction, from enforcing, for any reason, the affordability restrictions set forth in this Agreement, then in such event Agency shall be a third -party beneficiary under the Tax Credit Regulatory Agreement and shall have full authority to enforce any breach or default by National CORE or the Limited Partnership under the Tax Credit Regulatory Agreement in the same manner as though it were a breach or default hereunder. Without Agency's prior written consent, which consent may be withheld in Agency's sole and absolute discretion, National CORE shall not consent to any amendment of or modification to the Tax Credit Regulatory Agreement which (i) shortens the term of the affordability restrictions on the Units in the Project to a term of less than fifty-five (55) years from the Permanent Loan Closing or (ii) releases the Limited Partnership from the requirement that the Units be rented to Eligible Tenants in accordance with the Restricted Unit Matrix attached to the Agency Regulatory Agreement. Notwithstanding anything contained in this Agreement to the contrary, when the Site is subject to the requirements of the Tax Credit Program and there is a conflict between the requirements of the Tax Credit Program and the provisions set forth in this Agreement, then the provisions of the Tax Credit Program shall prevail. That notwithstanding, the fact that this Agreement and the Tax Credit Program provide for greater, lesser or different obligations or requirements shall not be deemed a conflict unless the applicable provisions are inconsistent and could not be simultaneously enforced or performed. Agency shall have no responsibilities with respect to National CORE's or the Limited Partnership's performance of its obligations under the Tax Credit Program, nor shall Agency do anything or fail to do anything it is required by law or this Agreement to do which will adversely affect National CORE or the Limited Partnership's performance of its Tax Credit Program obligations. 882/015610-0047 849399 07 .10/30/07 -15- In order to assist Agency in performing its obligations and enforcing its rights under this Agreement (with respect to insuring the continued affordability and maintenance of the Units), National CORE agrees to promptly submit to Agency all of the following documents at such time as the same are submitted by National CORE or the Limited Partnership to the TCAC or other applicable body or when such documents are received by National CORE or the Limited Partnership, as applicable: i) Complete copies of National CORE's or the Limited Partnership's applications to the TCAC for the carryover allocation, and placed -in-service credit award, and any amendments or modifications thereto (4 California Administrative Code §§ 10325(b)-(e) and 10345). ii) Complete copies of any correspondence or transmittals by the TCAC to National CORE or the Limited Partnership notifying National CORE or the Limited Partnership regarding the: action(s) taken with respect to the Tax Credits. iii) A complete copy of the Tax Credit Regulatory Agreement between the TCAC and the Limited Partnership (4 California Administrative Code § 10340(c)). (As more fully discussed in Section 3.11 of the Agency Regulatory Agreement, should Agency be prevented by a final order of a court of competent jurisdiction, applicable and binding appellate opinion, or regulatory body with jurisdiction from enforcing, for any reason, the affordability restrictions set forth in this Agreement, Agency shall be a third -party beneficiary under said agreement and shall have full authority to enforce any breach or default by National CORE or the Limited Partnership thereunder in the same manner as though it were a breach or default under this Agreement.) iv) Complete copies of all progress reports submitted by National CORE or the Limited Partnership to the TCAC prior to the issuance of tax credit allocations (4 California Administrative Code § 10340(d)) and the annual certifications and Project Status Reports submitted by National CORE or the Limited Partnership to the TCAC subsequent to the issuance of tax credit allocations (4 California Administrative Code § 10340(e)). v) Complete copies of all correspondence or transmittals from the TCAC or other jurisdiction (such as the Internal Revenue Service) containing any notification regarding the Project's noncompliance with applicable provisions of the Tax Credit Program. C. [2031 Evidence of Financing. The financial projections for the Project are set forth in the Project Pro Forma (Attachment No. 8). National CORE has submitted to the Executive Director evidence reasonably satisfactory to the Executive Director that National CORE has the financial capability necessary to acquire and operate the Project on the Site pursuant to this Agreement. Such evidence of financial capability (collectively, the "Evidence of Financing") includes all of the following: Evidence that National CORE or the Limited Partnership has (i) obtained (a) the Capital Contribution, and (b) a commitment for a construction loan which coverts into the Permanent 882/0156 1 M047 84839907 a]0/30/07 -16- Loan in the amount of One Million Three Hundred Seventeen Thousand One Hundred Fifty -Two Dollars ($1,317,152) (the "National CORE Construction Loan"), and (ii) deposited the Capital Contribution with Escrow Agent. A copy of an executed letter of commitment from the Permanent Lender to make the Permanent Loan that is subject only to the usual and customary conditions of the lender of the Permanent Loan for similar loans, which conditions have been approved by Agency. A true and correct copy of the preliminary reservation letter from TCAC, a copy of the Partnership Agreement reflecting the total amount of the syndication proceeds and the timing of the payment of such proceeds. D. [2041 Acquisition of the Site Pursuant to Grant Deed. National CORE shall acquire a fee simple title to the Site pursuant to a grant deed in the form attached hereto and incorporated herein as Attachment No. 4 ("Grant Deed"). E. [2051 Escrow. L2061 Opening of Escrow. Within the time set forth in the Schedule of Performance Agency and National CORE shall open an escrow (the "Escrow") with Four Seasons Escrow (the "Escrow Agent"). This Agreement constitutes Agency's and National CORE's escrow instructions for the Agency's sale and National CORE's purchase of the Partially Constructed Project and a duplicate original of this Agreement shall be delivered to the Escrow Agent. The Escrow Agent is hereby empowered to act under this Agreement, and the Escrow Agent has accepted its obligations under the provisions of this Section 207, in writing, delivered to the Agency. In the event of any conflict or inconsistency between any additional escrow instructions required by the Escrow Agent and the provisions of this Agreement, as between the parties hereto, the provisions of this Agreement shall supersede and control. Any amendment of the escrow instructions set forth or described herein shall be in writing and signed by both Agency and National CORE. At the time of any authorized amendment to the escrow instructions, the Escrow Agent shall agree, by signing below an appropriate statement on such an amendment, to carry out its duties as Escrow Agent under such an amendment. All communications from the Escrow Agent to Agency or National CORE shall be in writing and directed to the addresses and in the manner established in Section 601 of this Agreement for notices, demands, and communications between Agency and National CORE. 2. [2071 Deposits Into Escrow. Agency and National CORE shall deposit the following documents and pay into the Escrow the following fees, charges and costs promptly after the Escrow Agent has notified the Agency of the total amount of such fees, charges and costs, but not earlier than two (2) days prior to Scheduled date for the Closing: a. Agency and National CORE shall each pay one-half of the Escrow fee; 882/01500-0047 84839907 al 0/30/07 -17- Contribution; b. Agency shall pay the costs, if any, of drawing the Grant Deed; C. National CORE shall deposit with the Escrow Agent the Capital d. Agency shall pay recording fees, if any; e. Agency and National CORE shall pay their respective notary fees; f. Agency shall pay the premium for the National CORE Title Policy up to the amount set forth in Section 215 and National CORE shall pay for its portion, if any, as set forth in Section 215. g. Agency shall pay for any transfer tax and any state, county or city documentary stamps. h. Agency shall deposit with the Escrow Agent the fully executed Grant Deed, and Agency and National CORE, as applicable, shall deposit the fully executed Agency Construction Deed of Trust, Agency Regulatory Agreement, and Memorandum or executed counterparts thereof. [2081 Escrow Officer Obli ag tions. The Escrow Officer shall notify the Agency and National CORE when all outstanding documents, including the Grant Deed, the Agency Deed of Trust, the Agency Regulatory Agreement, and the Memorandum have been executed and submitted to Escrow by the applicable parry. a. Upon confirmation by the Escrow Agent that all of the Agency's Conditions to Closing and all of National CORE's Conditions to Closing have been satisfied, or waived by the appropriate party, the Escrow Agent shall record the following documents in the following order of recordation: (1) Grant Deed, (2) Agency Regulatory Agreement, (3) Agency Construction Deed of Trust, (4) deed of trust securing the National CORE Construction Loan, and (5) subordination agreement in a form acceptable to Agency's legal counsel, and (6) Memorandum. The date such documents are recorded shall be referred to herein as the "Closing Date." b. All funds received in the Escrow shall be deposited by the Escrow Agent, with other escrow funds of the Escrow Agent in an interest -earning general escrow account or accounts with any state or national bank doing business in the State of California. Such funds may be transferred to any other general escrow account or accounts. All disbursements shall be made by check or wire from the Escrow Agent. C. Escrow Agent shall not release any funds from the Capital Contribution or from any subsequent equity contributions as described in Section 306 hereof unless jointly instructed to do so by the Limited Partnership and the Agency. 182/015610-0047 848399,07 a] 0130/07 _ 18 d. Any amendment to these escrow instructions shall be in writing and signed by the Agency and National CORE. At the time of any amendment, the Escrow Agent shall agree to carry out its duties as Escrow Agent under such amendment. e. The liability of the Escrow Agent in the capacity of escrow holder with respect to the Agency is limited to performance of the obligations imposed under it under Sections 202, 207, 213, 215, and 216 of this Agreement. F. 20( 91 Conveyance of Title and Delivery of Possession. Provided that National CORE is not in default under this Agreement, as amended, and all of Agency's Conditions to Closing and National CORE's Conditions to Closing have occurred, and subject to any mutually agreed upon extensions of time, the Closing shall occur, and Agency shall convey title to the Partially Constructed Project to National CORE. Agency and National CORE agree to perform all acts necessary to conveyance of title on or before such date. Possession shall be delivered to National CORE concurrently with the conveyance of title at the Closing and National CORE shall accept title and possession on said date. G. [2101 Conditions to Closing. Ll 11 Agency's Conditions to Closing. The Agency's obligation to convey the Partially Constructed Project to National CORE and the closing of the Escrow shall, in addition to any other condition set forth herein in favor of the Agency, be conditional and contingent upon the satisfaction, or waiver by the Agency in its sole and absolute discretion, of each and all of the following conditions (collectively, "Agency's Conditions to Closing"); a. National CORE shall have deposited into Escrow all sums and documents required of National CORE by this Agreement including, without limitation, the Capital Contribution; b. National CORE shall have delivered to Agency or deposited into Escrow the Agency Note, the Agency Construction Deed of Trust, duly executed and acknowledged by National CORE, the Agency Regulatory Agreement, duly executed and acknowledged by National CORE, the Agreement to Convey Fee Title, duly executed and acknowledged by National CORE, and the Memorandum, duly executed and acknowledged by National CORE; C. National CORE shall have executed and delivered to Agency the Agency Note. d. National CORE shall have submitted to the Executive Director the evidence of insurance required pursuant to Section 403 of this Agreement; 88v0] sa 1 M047 948399.07 a10/30107 -19- C. National CORE shall have submitted to the Executive Director National CORE's Evidence of Financing, in accordance with Section 205 herein, and the Executive Director shall have approved the same; f. National CORE shall have provided Agency with documentation from TCAC evidencing TCAC's approval of the conversion of the Tax Credits from nine percent (9%) tax credits to four percent (4%) tax credits; g. National CORE shall have provided evidence satisfactory to Agency that the National CORE Construction Loan shall fund at the Closing; h. On the Closing Date, the Title Company shall be irrevocably committed to issue the Agency Title Policy, if elected by Agency; i. Escrow Agent holds and will deliver to Agency the instruments and funds to be delivered to Agency under this Agreement; j. National CORE is not in material default of any term or condition of this Agreement; and 2. L2121 National CORE's Conditions to Closine. National CORE's obligation to purchase the Partially Constructed Project from Agency and the closing of the Escrow shall, in addition to any other condition set forth herein in favor of National CORE, be conditional and contingent upon the satisfaction, or waiver by National CORE in its sole and absolute discretion, of each and all of the following conditions (collectively, "National CORE's Conditions to Closing"). a. Agency has deposited into Escrow the Grant Deed, duly executed and acknowledged by Agency, and all other sums and documents required of Agency by this Agreement; b. Agency shall have deposited into Escrow the Agency Construction Deed of Trust, duly executed and acknowledged by Agency, the Agency Regulatory Agreement, duly executed and acknowledged by Agency, and the Memorandum, duly executed and acknowledged by Agency; C. On the Closing Date, the Title Company shall be irrevocably committed to issue the National CORE Title Policy insuring that fee title to the Site is vested in National CORE; d. Escrow Agent holds and will deliver to National CORE the instruments and funds to be delivered to National CORE under this Agreement; e. National CORE has approved the environmental condition of the Site; 882/015610-0047 _20_ 848399 07 a10/30/07 f. National CORE has approved the Documents pursuant to Section 219 below; g. Agency shall have executed and delivered to Escrow Agent the Bill of Sale; h. Agency shall have executed and delivered to Escrow Agent the Assignment; i. Agency is not in material default of any term or condition of this Agreement; and j. Agency shall have assigned to National CORE (a) the Construction Contract, and (b) a budget showing costs incurred by or on behalf of the Agency to the date of Closing in connection with construction of the Housing Development and showing as well costs anticipated to complete the Housing Development according to the plans and specifications therefor, reasonably separated into categories normally and customarily used to describe the component works of construction in progress. 3. [2131 Waiver. Agency may at any time or times, at its election, waive any of the conditions set forth in Section 211 above to its'obligations hereunder, but any such waiver shall be effective only if contained in a writing signed by Agency and delivered to National CORE. National CORE may at any time or times, at its election, waive any of the conditions set forth in Section 212 above to its obligations hereunder, but any such waiver shall be effective only if contained in a writing signed by National CORE and delivered to Agency. 4. jr2141 Intentionally Omitted. H. [2151 Condition of Title. The Agency shall convey to National CORE fee simple title to the Project free and clear of all recorded liens, encumbrances, encroachments, assessments, leases and taxes except the provisions of the Grant Deed, the Agency Construction Deed of Trust, the Agency Regulatory Agreement, the Memorandum, the standard printed conditions and exceptions contained in the ALTA standard owner's policy of title insurance that is regularly issued by the Title Company in transactions similar to the one contemplated by this Agreement, as approved by National CORE pursuant to this Section 215. [2161 Title Insurance. Concurrently with recordation of the Grant Deed, the Escrow Agent shall instruct the Title Company to provide and deliver to National CORE an ALTA owner's policy of title insurance that does not require a survey, issued by the Title Company and insuring that the title to the Site is vested in National CORE, or its assignee, as applicable, in the condition required by Section 214 of this Agreement (the "National CORE Title Policy"). The Title Company shall aev015610-0047 849399 07 .10130107 -21- provide the Agency with a copy of National CORE Title Policy and National CORE Title Policy shall be in the amount of the Purchase Price. The Agency shall pay the title insurance premium attributable to National CORE Title Policy. The Title Company shall, if requested by National CORE, increase the amount of National CORE Title Policy or provide National CORE with an extended policy, coverages, or endorsements. National CORE shall pay the portion of the premium associated with such extended or additional coverages or endorsements. At Agency's election, Agency may obtain from the Title Company an ALTA lender's policy of title insurance that does not require a survey, together with such endorsements as may be reasonably requested by Agency with liability in the amount of the Agency Note, covering the Project, showing title vested in National CORE, and insuring the validity and priority of, respectively, the Agency Construction Deed of Trust, Agency Regulatory Agreement, and Memorandum (the "Agency Title Policy"). J. [2171 Taxes and Assessments. Ad valorem taxes and assessments, if any, on the Project, and taxes upon this Agreement or any rights hereunder, levied, assessed or imposed for any period commencing prior to conveyance of title shall be home by the Agency. All ad valorem taxes and assessments levied or imposed for any period commencing after close of the Escrow shall be paid by National CORE. K. [2181 Conveyance Free of Possession. The Project shall be conveyed free of any possession or right of possession by any person except that of National CORE and the easements and other encumbrances of record, and except for the Agency's rights to enter the Site to perform its duties as Construction Manager under the Construction Contract. L. [2191 Document Review• Inspections• Condition of Partially Constructed Project. r2201 Document Review. Agency has made available to National CORE for its review, true, correct and legible copies of those of the following items which are in Agency's possession or control or in the possession or control of an agent of Agency, which relate to the Site and/or Project (collectively, and with all other items made available pursuant to the provisions of this Section 219, the "Property Documents"). Any Property Documents which Agency has received from any third party has been made available to National CORE without any representation or warranty: (i) a current waiting list for the Project (if applicable); (ii) current ad valorem and personal property tax bills for the Site, and any copies of such bills for the last two tax years; 882/015610.0047 -22- 84839907 a[0/30/07 (iii) any and all environmental reports, preliminary environ- mental assessments, soil tests and studies concerning the Site. 2. [2211 Intentionally Omitted. [2221 "As Is". The Agency has provided (in compliance with Section 219) National CORE with all information of which it has actual knowledge concerning the physical condition of the Site, including, without limitation, information about any "Hazardous Materials," as defined in Section 224 below. National CORE acknowledges and agrees that any portion of the Site and Partially Constructed Project that it acquires from the Agency pursuant to this Agreement shall be purchased "AS IS" "WHERE IS" "WITH ALL FAULTS," in its physical condition as of the Closing, with no warranties of any kind or nature, express or implied, including, without limitation, warranties of fitness for a particular purpose or warranties of habitability, except those warranties set forth in Section H 1.7 above, as to the physical condition thereof, the presence or absence of any latent or patent condition thereon or therein, including, without limitation, any Hazardous Materials thereon or therein, and any other matters affecting the Partially Constructed Project. 4. j2231 Indemnity. National CORE agrees, with respect to matters arising from and after the Closing Date, to defend, indemnify, protect and hold harmless the Agency and its officers, beneficiaries, employees, agents, attorneys, representatives, legal successors and assigns (collectively, the "Indemnities") from, regarding and against any and all liabilities, obligations, orders, decrees, judgments, liens, demands, actions, "Environmental Response Actions" (as defined in Section 224 below), claims, losses, damages, fines, penalties, expenses, "Environmental Response Costs" (as defined in Section 224 below) or costs of any kind or nature whatsoever, together with fees (including, without limitation, reasonable attorneys' fees and experts' and consultants' fees), occurring during and caused by the National CORE's use and occupancy of the Site, Project or Partially Constructed Project and resulting from or in connection with the actual or claimed generation, storage, handling, transportation, use, presence, placement, migration and/or release of Hazardous Materials at, on, in, beneath or from the Site, Project or Partially Constructed Project unless caused by the negligence or willful misconduct of Indemnities. National CORE's defense, indemnification, protection and hold harmless obligations herein shall include, without limitation, the duty to respond to any governmental inquiry, investigation, claim or demand regarding the Hazardous Materials, at National CORE's sole cost. Notwithstanding the foregoing, the Agency agrees to indemnify, defend, and hold National CORE harmless for, from, and against any and all claims, demands, liabilities, costs, expenses, Environmental Response Actions, Environmental Response Costs, damages, cause or causes or action of any nature whatsoever arising from any misrepresentation or breach of the warranty set forth in Section 111.7 above, or otherwise resulting from or in connection with the generation, storage, handling, transportation, use, and/or release of Hazardous Materials at, on, in, beneath, or from the Site, Project or Partially Constructed Project by the Agency or during the Agency's ownership or possession of the Site or Project. "V015610-0047 -23- 84R39907.10/30/07 5. [2241 Release and Waiver. Subject to the exceptions set forth in Section 222 above, National CORE hereby releases and waives all rights, causes of action and claims National CORE has or may have in the future against the Indemnities arising out of or in connection with any Hazardous Materials at, on, in, beneath or from the Site or Project. In furtherance of the intentions set forth herein, National CORE acknowledge that it is familiar with Section 1542 of the Civil Code of the State of California which provides as follows: "A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED THIS SETTLEMENT WITH THE DEBTOR." National CORE hereby waives and relinquishes any right or benefit which it has or may have under Section 1542 of the Civil Code of the State of California or any similar provision of the statutory or non -statutory law of any other applicable jurisdiction to the full extent that it may lawfully waive all such rights and benefits pertaining to the subject matter of this Section 223. National CORE's Initials: 6. [2251 Definitions. a. As used in this Agreement, the tern "Environmental Response Actions" means any and all activities, data compilations, preparation of studies or reports, interaction with environmental regulatory agencies, obligations and undertakings associated with environmental investigations, removal activities, remediation activities or responses to inquiries and notice letters, as may be sought, initiated or required in connection with any local, state or federal governmental or private party claims, including any claims by National CORE. b. As used in this Agreement, the term "Environmental Response Costs" means any and all costs associated with Environmental Response Actions including, without limitation, any and all fines, penalties and damages. C. As used in this Agreement, the term "Hazardous Materials" means any substance, material or waste which is (1) defined as a "hazardous waste," "hazardous material," "hazardous substance," "extremely hazardous waste," or "restricted hazardous waste" under any provision of Califomia law; (2) petroleum; (3) asbestos; (4) polychlorinated biphenyls; (5) radioactive materials; (6) designated as a "hazardous substance" pursuant to Section 311 of the Clean Water Act, 33 U.S.C. Section 1251 et seq. (33 U.S.C. Section 1321) or listed pursuant to Section 307 of the Clean Water Act (33 U.S.C. Section 1317); (7) defined as a "hazardous substance" pursuant to the Resource Conservation and Recovery Act, 42 U.S.C. Section 6901 et seq. (42 U.S.C. Section 6903) or its implementing regulations; (8) defined as a "hazardous substance" pursuant to Section 101 of the Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C. Section 9601 et seq. (42 U.S.C. Section 9601); or (9) 882/015610-0047 -24- 848399 07 a10/10/07 determined by a California, federal or local governmental authority to be capable of posing a risk of injury to health, safety or property. [2261 Materiality. National CORE acknowledges and agrees that the defense, indemnification, protection and hold harmless obligations of National CORE for the benefit of the Agency set forth in this Agreement are a material element of the consideration to the Agency for the performance of its obligations under this Agreement, and that the Agency would not have entered this Agreement unless National CORE's obligations were as provided for herein. III. [3001 DEVELOPMENT OF THE SITE; ADDITIONAL FINANCING FOR THE PROJECT A. [3011 Selection of Builder; Review and Approval of Project Plans. In August 2006, the Agency selected the Contractor to develop the Housing Development in accordance with plans and specifications prepared by Agency (the "Project Plans"). The parties contemplate that construction will be completed by Spring 2008. National CORE acknowledges that it has reviewed and approved the Project Plans. The Agency shall be responsible to ensure that the Contractor is developing the Project in compliance with the Project Plans and all applicable laws, ordinances, and regulations, including applicable labor and wage standards. After Closing, the Agency shall obtain the approval of National CORE and the Limited Partnership prior to authorizing any change order that substantially alters the design or construction of the Housing Development as set forth in the Project Plans. B. [3021 Completion of Construction. The Agency, acting as the Construction Manager for the Project, covenants and agrees that it shall oversee, construction of the Housing Development on behalf of National CORE and the Limited Partnership, with such construction to be completed no later than April 30, 2008. Further, the Agency, acting as the Construction Manager, covenants and agrees that the construction of the Housing Development shall be completed in good and workmanlike fashion and in accordance with the Project Plans, with such changes thereto, if any, as may be required by the Agency and/or the City. Agency, as the Construction Manager, also agrees to use reasonable commercial efforts to ensure that construction of the Housing Development is completed in accordance with and at a cost not to exceed the budget for such construction as delivered to National CORE by the Agency at Closing, subject to such additions and modifications as may be permitted by the Agency and the City. Within thirty (30) days after the Project has been completed, the Agency shall provide to National CORE a copy of the as -built plans for the Project. C. [3031 Energy Efficiency Rebates. National CORE acknowledges that the Project is being developed with energy efficient facilities, and that prior to completion of construction of the Project, Agency intends to submit an application to the local gas and electric utility providers for solar energy credits and rebates for BB21015610-0047 B4B399 07 a10/30/07 -25- the use of or installation of environmentally friendly techniques or equipment. Such credits and/or rebates are not being sold or transferred to National CORE by the Agency, which retains full right, title and interest therein, which shall survive the Closing and transfer of the Partially Constructed Project to National CORE. The Agency will apply for such credits/rebate post - Closing in its name. In the event that any such credits or proceeds therefrom are received by National CORE or the Limited Partnership, National CORE shall promptly deliver such credits or proceeds therefrom, less any income tax required to be paid thereon by the Limited Partnership or its partners or beneficial owners, to the Agency. D. [3041 Additional Financing for the Project. The parties acknowledge and agree that not less than Two Million Seventeen Thousand Eight Hundred Eighty Dollars ($2,017,880) of the Capital Contribution and all portions of the National CORE Construction Loan (collectively, the "National CORE Construction Fund") shall be used only to fund the remaining construction activities necessary to complete the Project. After the National CORE Construction Fund has been depleted and applied towards completion of the Housing Development, the Agency agrees to fund all remaining amounts required to complete the construction of the Housing Development out of Agency Loan proceeds (the "Agency Construction Financing"). E. [3051 Disbursement of Agency Construction Financing. Subject to the provisions of Section 304, portions of the Agency Construction Financing shall be disbursed by the Agency directly to the Contractor to complete construction of the Housing Development, upon the Contractor's presentation to the Agency invoices for portions of work completed and the Agency's approval of such invoices. F. [306] Release of Remaining Portions of Capital Contribution and Additional Equity Contributions. At the Closing, Escrow Agent shall on behalf of the Limited Partnership disburse to National CORE (i) a portion of the Capital Contribution in the amount of Three Hundred Seventy Thousand Seven Hundred Fifty -Three Dollars ($370,753) for purposes of reimbursing National CORE for costs incurred by National CORE related to financing National CORE's acquisition and completion of the Housing Development; and (ii) a portion of the Capital Contribution in the amount of One Hundred Thousand Dollars ($100,000) as a portion of the developer fee to be paid to National CORE. Upon the completion of construction of the Housing Development, as evidenced by the City's issuance of the final certificate of occupancy therefor, the parties shall instruct Escrow Agent to on behalf of the Limited Partnership disburse to National CORE a portion of the Capital Contribution in the amount of Two Hundred Twenty -Six Thousand Five Hundred Dollars ($226,500) to reimburse National CORE for costs incurred by National CORE related to marketing and leasing the Units in the Housing Development, funding the capital replacement reserve for the Housing Development, and furnishing the common areas within the Housing Development. At the time the National CORE Construction Loan is converted to the Permanent Loan, the parties contemplate that the Tax Credit Investor will contribute to the Limited Partnership 8821015610-0047 -26- M8399 07 a10130/07 additional equity in the approximate amount of Four Hundred Fifty -Six Thousand One Hundred Ninety Dollars ($456,190). The parties shall instruct the Escrow Agent to disburse to National CORE (a) a portion of such funds in an amount up to One Hundred Six Thousand One Hundred Ninety Dollars ($106,190) to fund the operating reserve for the Housing Development; and (b) a portion of such funds in an amount up to Three Hundred Fifty Thousand Dollars ($350,000) as the remaining portion of the developer fee to be paid to National CORE. To the extent any funds remain from such additional equity, all of such funds shall be deposited into the capital replacement reserve for the Housing Development. G. r3071 Permanent Loan Closine. National CORE shall cause the Limited Partnership to satisfy all conditions to funding imposed by the Permanent Lender within one hundred fifty (150) days after the City issues the last certificate of occupancy for the Project. The date on which the Permanent Lender funds and records the Permanent Loan is hereinafter referred to as the "Permanent Loan Closing." The parties hereto acknowledge and agree that the parties shall take all such actions as may be necessary to satisfy in a timely manner the following conditions precedent to the Permanent Loan Closing: (a) At the Permanent Loan Closing, title to the Project shall be subject to the following recorded instruments in the following order of recordation: (1) Agency Regulatory Agreement, (2) Agency Construction Deed of Trust, (3) Memorandum, (4) deed of trust securing the Permanent Loan, and (5) a Tax Credit Regulatory Agreement (the order of recordation of the Tax Credit Regulatory Agreement and the deed of trust securing the Conventional Loan shall be subject to the requirements of TCAC and the Permanent Lender). National CORE shall, at its expense, cause the Title Company to furnish Agency at the Permanent Loan Closing with either an ALTA lender's policy of title insurance or an update to any policy which Agency may then have received, in the amount of the Agency Note, showing title of the Project in the manner required by the provisions hereof and insuring the priority of the Agency Deed of Trust, as required to satisfy the provisions hereof. (b) National CORE shall have complied with the provisions of this Agreement, and shall not be in default under any agreement between National CORE and Agency. (c) National CORE shall have made provision to insure the Project in amounts and as required by the applicable provisions of this Agreement, as amended, the Agency Regulatory Agreement, the Agency Construction Deed of Trust and the deed of trust securing the Permanent Loan. (d) The provisions hereof shall survive the Closing, or transfer of title of the Project from Agency to National CORE, and Permanent Loan Closing. 892M 1561 M047 848399.07 W/30M7 -27- IV. 14001 USE OF THE PROJECT A. 40L It Affordable Housing. National CORE hereby covenants and agrees, for itself and its successors and assigns, to use and maintain the Project during the term of the Agency Regulatory Agreement only as a rental apartment housing project with eighty (80) apartment dwelling units (the "Units"), with each such Unit (other than the Management Unit) to be rented to and occupied by Eligible Tenants at an Affordable Rent, all as more fully described in the Agency Regulatory Agreement. The Management Unit shall be rented to and occupied by a Moderate Income Household at a rent that is affordable to such household, as determined pursuant to Health and Safety Code Section 50093. B. [4021 Uses In Accordance with Redevelopment Plan Nondiscrimination. National CORE covenants and agrees for itself, its successors, its assigns, and every successor in interest to the Project or any part thereof that National CORE and such successors and assignees, shall devote the Project to the uses specified in the Redevelopment Plan, the Grant Deed, the Agency Regulatory Agreement, and this Agreement for the periods of time specified therein. The foregoing covenants shall run with the land. National CORE covenants by and for itself and any successors in interest that there shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Project, nor shall National CORE itself or any person claiming under or though it establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the Project. The foregoing covenants shall nm with the land. National CORE shall refrain from restricting the rental, sale or lease of the Project on the basis of race, color, creed, religion, sex, marital status, national origin or ancestry of any person. All such deeds, leases or contracts shall contain or be subject to substantially the following nondiscrimination or nonsegregation clauses: 1. In deeds: "The grantee herein covenants by and for himself or herself, his or her heirs, executors, administrators and assigns, and all persons claiming under or through his or her heirs, executors, administrators and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of, any person or group of persons on account of race, color, creed, religion, sex, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land herein conveyed, nor shall the grantee himself or herself or any person claiming under or though him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees in the land herein conveyed. The foregoing covenants shall run with the land." 8821015610-0047 _28. 848399 07 a10/30/0] 2. In leases: "The lessee herein covenants by and for himself or herself, his or her heirs, executors, administrators and assigns, and all persons claiming under or through him or her, and this lease is made and accepted upon and subject to the following conditions: "There shall be no discrimination against or segregation or any person or group of persons on account of race, color, creed, religion, sex, marital status, ancestry or national origin in the leasing, subleasing, transferring, use, occupancy, tenure or enjoyment of the premises herein leased nor shall the lessee himself or herself, or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, sublessees, subtenants or vendees in the premises herein leased." 3. In contracts: "There shall be no discrimination against or segregation of, any person, or group of persons on account of race, color, creed, religion, sex, marital status, ancestry or national origin, in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the premises, nor shall the transferee himself or herself or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the premises." The covenants established in this Agreement and the deeds of conveyance for the Site shall, without regard to technical classification and designation, be binding for the benefit and in favor of the Agency, its successors and assigns, the City and any successor in interest to the Site, together with any property acquired by National CORE pursuant to this Agreement, or any part thereof. The covenants against racial discrimination shall remain in effect in perpetuity. C. [4031 Indemnity: Insurance Requirements. National CORE shall indemnify, defend, and hold harmless the Agency and the City, and their respective officers, officials, employees, agents, and representatives, from all claims or suits for, and damages to, property and injuries to persons, including accidental death (including expert witness fees, attorneys fees, and costs), which may be caused by any of National CORE's activities under this Agreement. Commencing with the Closing Date and ending on the expiration date of the Agency Regulatory Agreement, National CORE shall procure and maintain, at its sole cost and expense, in a form and content satisfactory to the Executive Director, the following policies of insurance: A policy of commercial general liability insurance written on a per occurrence basis in an amount not less than: (A) for death and bodily injury, either (i) a combined single limit of Three Million Dollars ($3,000,000.00) or (ii) Three Million Dollars ($3,000,000) per person and Three Million Dollars ($3,000,000.00) per occurrence, and Three Million Dollars ($3,000,000.00) in the aggregate, and (B) for property damage, Three Million Dollars ($3,000,000.00) per occurrence. A policy of worker's compensation insurance in such amount as will fully comply with the laws of the State of California and which shall indemnify, insure, and provide legal 882YO 15610-0047 848399 07.10/30/07 -29- defense for both National CORE and Agency against any loss, claim or damage arising from any injuries or occupational diseases occurring to any worker employed by or any persons retained by National CORE in the course of carrying out the work or services contemplated in this Agreement. A policy of comprehensive automobile liability insurance written on a per occurrence basis in an amount not less than either (i) bodily injury liability limits of Three Million Dollars ($3,000,000.00) per person and Three Million Dollars ($3,000,000.00) per occurrence, and property damage liability limits of Three Million Dollars ($3,000,000.00) per occurrence and Three Million Dollars ($3,000,000.00) in the aggregate or (ii) combined single limit liability of Three Million Dollars ($3,000,000.00). Said policy shall include coverage for owned, non -owned, leased, and hired cars. With respect to the Housing Development and other improvements and any fixtures and furnishings to be owned by National CORE on the Site, insurance against fire, extended coverage, vandalism, and malicious mischief, and such other additional perils, hazards, and risks as now are or may be included in the standard "all risk" form in general use in Riverside County, California, with the standard forth fire insurance coverage in an amount equal to full actual replacement cost thereof, as the same may change from time to time. The above insurance policy or policies shall include coverage for earthquakes to the extent generally and commercially available at commercially reasonable rates, if such insurance is generally obtained for rental apartment projects of this size and type in the counties of Los Angeles, Orange County, Riverside, and San Bernardino. Agency shall be a loss payee under such policy or policies and such insurance shall contain a replacement cost endorsement. Notwithstanding anything in this Section 403 to the contrary, the all-risk coverage required pursuant to this paragraph shall not be required to be procured until, and such procurement shall be a condition to, the Closing. Commencing as of the Closing, and continuing until the Permanent Loan Closing, the National CORE shall be required to obtain and maintain such policy or policies of course of construction insurance, to supplement insurance provided by the Builder, to insure the National CORE and the Agency, as an additional insured, against damage to the improvements comprising the Housing Development while under construction and also against damage, injury or death to persons or property occurring on the Site. The following additional requirements shall apply to all of the above policies of insurance: All of the above policies of insurance shall be primary insurance and, except the worker's compensation insurance, shall name Agency, City, and their respective officers, officials, members, employees, agents, and representatives as additional insureds, using a pre- 2004 additional insured endorsement form. The insurer shall waive all rights of subrogation and contribution it may have against Agency, City, and their officers, officials, members, employees, agents, and representatives, and their respective insurers. All of said policies of insurance shall provide that said insurance may not be amended or cancelled without providing thirty (30) days' prior written notice to Agency and City. In the event any of said policies of insurance are cancelled, National CORE shall, prior to the cancellation date, submit new evidence of insurance in conformance with this Section to the Executive Director. Not later than the Closing Date, 883/015610-0047 819399 07 al0/30/07 -30- National CORE shall provide the Executive Director with Certificates of Insurance or appropriate insurance binders evidencing the above insurance coverages and said Certificates of Insurance or binders shall be subject to the reasonable approval of the Executive Director. Upon the request of the Executive Director, National CORE shall provide Agency with complete copies of each Policy of Insurance required by this Agreement. The policies of insurance required by this Agreement shall be satisfactory only if issued by companies licensed and admitted to do business in California, rated "A" or better in the most recent edition of Best Rating Guide, The Key Rating Guide or in the Federal Register, and only if they are of a financial category Class VII or better. Notwithstanding the foregoing, in the event that the policies required hereunder are not available from such insurers at commercially reasonable rates, the Executive Director shall have the authority, in his or her sole and absolute discretion, to waive one or more of such requirements provided the proposal policies will adequately protect the Agency's interests hereunder. Agency may reasonably require coverage increases, provided that the percentage increase in coverage shall not be required to exceed the percentage increase in the Consumer Price Index published by the United States Department of Labor, Bureau of Labor Statistics, for Urban Wage Earners and Clerical Workers, Los Angeles -Riverside -Orange County Average, All Items (1984 = 100) (the "Index"), from and after the date of this Agreement, or, if said Index is discontinued, such official index as may then be in existence and which is most nearly equivalent to said Index (the "CPI .Adjustment"). Unless otherwise approved in advance by the Executive Director, the insurance to be provided by National CORE may provide for a deductible or self - insured retention of not more than Ten Thousand Dollars ($10,000), with such maximum amount to increase at the same rate as the periodic increases in the minimum amount of total insurance coverage set forth above. National CORE agrees that the provisions of this Section shall not be construed as limiting in any way the extent to which National CORE may be held responsible for the payment of damages to any persons or property resulting from National CORE's activities or the activities of any person or persons for which National CORE is otherwise responsible. To the extent that compliance with the terms and provisions of the Partnership Agreement requires National CORE to provide greater amounts of insurance, National CORE shall provide such insurance required by the provisions of the Partnership Agreement, and Agency shall be named as an additional insured under the policies with such higher liability limits. D. [4041 Local, State and Federal Laws. National CORE shall perform under this Agreement and carry out its performance under this Agreement in conformity with all applicable federal and state laws and local ordinances as to the Project, provided, however, National CORE and its contractors, successors, assigns, transferees, and lessees are not waiving their rights to contest any such laws, rules or standards. :82/015610-0047 48399 07 a10/30/07 -31- E. 14051 Taxes and Assessments. After the conveyance of title by Agency to National CORE or its assignee, and subject to its right to claim exemption under California Revenue & Taxation Code Section 214(g), National CORE shall pay prior to delinquency all real estate taxes and assessments on the Project for any period subsequent to the conveyance of title and possession, so long as National CORE retains any ownership interest therein. National CORE shall remove or have removed any levy or attachment made on the Project or any part thereof, or assure the satisfaction thereof within a reasonable time but in any event prior to any sale or transfer of all or any portions thereof. Notwithstanding the above, National CORE shall have the right to contest the validity or amounts of any tax, assessment, or encumbrance available to National CORE in respect thereto, and nothing herein shall limit the remedies available to National CORE in respect thereto. F. [4061 Limitation on Encumbrances. Except as otherwise permitted by this Agreement, including but not limited to clause (n) of Section 109, National CORE shall not mortgage the Project or any portion thereof or any interest therein, any other mortgages or conveyances for financing that encumber the Project or any portion thereof, without the prior written approval of the Executive Director, which approval shall not be unreasonably withheld. G. [4071 Maintenance of the Project. National CORE shall maintain the Project in conformity with the La Quinta Municipal Code and the requirements of the Agency Regulatory Agreement, and shall keep the Project free from any graffiti and from any accumulation of debris or waste materials. National CORE shall also maintain the landscaping planted on the Site by Builder, Agency, and/or Agency's contractors in a healthy and attractive condition. If, at any time, National CORE fails to maintain the Project or any portion thereof, and said condition is not corrected as soon as reasonably possible after written notice from the Agency, either the Agency or the City may enter the Project or applicable portion thereof to perform the necessary maintenance thereon and National CORE shall pay such costs as are reasonably incurred for such maintenance plus a fifteen percent (15%) administrative fee. This covenant shall run with the land and shall remain in effect for the term of the Redevelopment Plan. H. L4081 Effect of Violation of the Terms and Provisions of this Agreement. The Agency is deemed the beneficiary of the terms and provisions of this Agreement and of the covenants running with the land, for and in its own rights and for the purposes of protecting the interests of the community and other parties, public or private, in whose favor and for whose benefit this Agreement and the covenants running with the land have been provided. The Agreement and the covenants shall run in favor of the Agency, without regard to whether the Agency has been, remains or is an owner of any land or interest therein in the Project or in the Project Area. The Agency shall have the right, if this Agreement or covenants are breached, to exercise all rights and remedies, and to maintain any actions or suits 8921015610-0047 948399.07 a] 0130/07 -32- at law or in equity or other property proceedings to enforce the curing of such breaches to which it or any other beneficiaries of this Agreement and covenants may be entitled. V. 15001 DEFAULTS AND REMEDIES A. L011 Defaults —General. Subject to the extensions of time set forth in Section 603, failure or delay by any Party to perform any term or provision of this Agreement constitutes a default under this Agreement. If any Party defaults with regard to any of the provisions of this Agreement, the non -defaulting Party shall serve written notice of such default upon the defaulting Party. If the default is not cured or commenced to be cured by the defaulting Party within thirty (30) days after service of the notice of default (or within such other period as is set forth herein), the non - defaulting Party shall be entitled to pursue whatever remedies to which such Party is entitled under this Agreement. Notwithstanding anything herein to the contrary, whenever any Party hereto shall deliver any notice or demand to National CORE with respect to any breach or default by National CORE of the terms hereunder, the Agency shall at the same time deliver a copy of such notice or demand to the Limited Partnership and Tax Credit Investor. The Limited Partnership and Tax Credit Investor (insofar as the rights of the Agency are concerned) shall have the right, at its option, within thirty (30) days after the receipt of the notice, to cure or remedy or commence to cure or remedy any such default. Such cure period shall run concurrently with National CORE's cure period described in this Section 501. B. [5021 Legal Actions. [5031 Specific Performance. The non -defaulting party, upon expiration of applicable notice and cure periods, shall be permitted, but not obligated, to commence an action for specific performance of the terns of this Agreement, or to cure, correct or remedy any default hereunder or to obtain any other legal or equitable remedy consistent with the purpose of this Agreement. In this regard, National CORE specifically acknowledges that Agency is entering into this Agreement for the purpose of assisting in the redevelopment of the Site and the provision of affordable housing and not for the purpose of enabling National CORE to speculate in land. Agency shall also have the right to pursue damages for National CORE's defaults but in no event shall National CORE be entitled to damages of any kind from Agency, except for damages for out-of-pocket losses resulting from non-performance by Agency of its covenants under this Agreement but excluding economic loss, lost profits, or any other economic or consequential damages of any kind. 2. [5041 Institution of Legal Actions; Attorney's Fees. Any legal actions must be instituted in the Superior Court of the County of Riverside, State of California, or in the Federal District Court in the Central District of California. In the event of any litigation between the parties hereto, the prevailing party shall be entitled to receive, in addition to the relief granted, its reasonable attorney's fees and costs and 882/01561MOO 848399 07 a1050N7 -33- IN WITNESS WHEREOF, the Parties have signed this Agreement on the respective dates set forth below. LA QUINTA REDEVELOPMENT AGENCY, a public body rate and p h / By. Dated: i /�/3// 2007 Its: Executive Director Agency APPROVED AS TO FORM: RUTAN & TUCKER, LP t orne s for the s for the L�uinta Redevelopment Agency NATIONAL COMMUNITY RENAISSANCE OF CALIFORNIA, a California nonprofit public benefit corporation By: Dated: 2007 Its: 8821015610A047 848399 07 al O130/07 -38- IN WITNESS WHEREOF, the Parties have signed this Agreement on the respective dates set forth below. APPROVED AS TO FORM: RU N & U R, LP At(oriiey6 for the Ldfiuinta Redevelopment Agency LA QUINTA REDEVELOPMENT AGENCY, a public body bod� to ad poli 'c Executive Director NATIONAL COMMUNITY RENAISSANCE OF CALIFORNIA, a California nonprofit public benefit corporation By: Dated: 2007 Its: 8921015610-0047 _38_ 948399 07 .10/30/07 IN WITNESS WHEREOF, the Parties have signed this Agreement on the respective dates set forth below. Dated: , 2007 ATTEST: Agency Secretary APPROVED AS TO FORM: RUTAN & TUCKER, LLP Attorneys for the La Quinta Redevelopment Agency Dated: I o 3 2007 LA QUINTA REDEVELOPMENT AGENCY, a public body corporate and politic By: Its: Executive Director NATIONAL COMMUNITY RENAISSANCE OF CALIFORNIA, a California nonprofit public benefit co oration By: Its: 1 Wh ttmnnhan1,CPA Chief Financial Officer 882/015610-0047 -38- 948399 06 a10/30/07 ATTACHMENT NO. 1 SITE MAP [SEE FOLLOWING PAGE] 882/01561"047 ATTACHMENT NO. 1 949399.07 a10l30/M ATTACHMENT NO. 1 SITE MAP ' Fred Warin br OE�6 Ott— p _ Sanib Or. G?r¢ina Rcsada r �' ; ism. PBr1t wrt es C W Harland tit Canterra Ck Calle P01111 � � � < .:w CaMeg Ctr' Irmn ar : Cane t , Sg, t CtGMiw Or B,radfetd �# i lawe Ot t0 Ver Catde iC Alden C#r, Noun Cir tadera Dr ' Dandelion Dri. . u MIles Ave _ _ Krrstep art � w Grady Ct la,_f-' . i = t og Kaye Ct Violet (t Demt)1i" Ct Cn r- Victoria flr. .. �8 CIOcountry ip.. _. ` �. w Desert Stream Dr Sierra Vls _ [ria Or 4 Ashley Pi. i iu wtt4a.,Y+ rJd ' .Pa_seo Delitey b4wQcrest, tau. W+ 07NAYTE@ ATTACHMENT NO.2 LEGAL DESCRIPTION All of that certain real property in the City of La Quinta, County of Riverside, State of California, described as follows: That portion of the Southeast quarter of the Northeast quarter of Section 19, Township 6 South, Range 7 East, San Bernardino Base and Meridian, described as follows: Commencing at the Southeast corner of the Northeast quarter of said Section 19; Thence South 89' 33' 05" West, on the Southerly line of the Northeast quarter of said Section, 330 feet, to the true point of beginning; thence South 89' 33' 05" West, on said Southerly line of the Northeast quarter, 330 feet; Thence North 0° 13' 40" West, 1,324.57 feet, to the Northerly line of the Southeast quarter of Northeast quarter of said Section 19; thence North 89' 34' 05" East, on said Northerly line, 330 feet; thence South 0° 13' 40" East, 1,324.47 feet to the true point of beginning; Excepting therefrom the Southerly 50 feet conveyed to the County of Riverside by Deeds recorded August 30, 1933 in Book 133, Page(s) 292 and Book 134, Page(s) 298 respectively, of Official Records, Riverside County Records. Also excepting therefrom that portion of described in the deeds to the City of La Quinta, recorded 02-17-1999, as Instrument No. 62425 and 62426, Official Records. Excepting therefrom the mobile home located thereon. 882/015610-0047 ATTACHMENT NO. 2 948399 07 a10/30/07 ATTACHMENT NO.3 SCHEDULE OF PERFORMANCE ACTIVITY TIME FRAME 1. Agency and National CORE open Within three days after the date hereof. Escrow. Section 207 2. National CORE submits Initial Tax Credit Completed. Application to TCAC. Section 204 3. Agency makes available to National Completed. CORE copies of the Property Documents. (Section 219)_ 4. National CORE approves or disapproves Completed. the Property Documents. Section 219 5. National CORE provides evidence of Completed. insurance to, and obtains approval from, Agency. (Section 403) 6. Agency approves or disapproves National Completed. CORE's evidence of insurance. (Section 403 7. National CORE submits Evidence of Completed. Financing to A enc . Section 205 8. Agency approves or disapproves National Completed. CORE's Evidence of Financing. (Section 205 9. National CORE executes and delivers to At Closing. Agency or Escrow Agent Grant Deed, Agency Regulatory Agreement, Agency Construction Deed of Trust and Memorandum; National CORE deposits into Escrow the Capital Contribution. (Section 210 10. Agency executes and delivers to Escrow At Closing. Agent Grant Deed, Agency Regulatory Agreement, Agency Construction Deed of Trust, Memorandum and Bill of Sale. (Section 211) _ 94839 07a[0a] ATTACHMENT NO. 3 8a8399 07 a10/30/07 ACTIVITY TIME FRAME 11. National CORE executes and delivers to At Closing. Agency the Agency Note. Section 210 12. Agency executes and delivers to National At Closing. CORE Assignment. Section 211 13. Agency and National CORE close Escrow At Closing. on Agency's transfer of title to partially constructed Project to National CORE. (Section 208) _ 14. National CORE provides evidence of property insurance to Agency. (Section On or before the date the first certificate of occupancy has been issued by the City. 403 15. Agency approves or disapproves National Within fifteen (15) days after submittal. CORE's evidence of property insurance. Section 403 16. National CORE obtains Agency Within ninety (90) days prior to issuance of Executive Director's approval of Property first certificate of occupancy for Project by Manager. (Agency Regulatory City. Agreement, Section 5.2 17. National CORE or Property Manager Within ninety (90) days prior to issuance of submits for Executive Director's review certificate of occupancy for Project by City. and approval, a marketing and management plan for the Project. (Agency Regulatory Agreement, Section 5.2 19. Construction of the Project is completed. By Aril 30, 2008. 20. All conditions and all actions necessary to Within one hundred fifty (150) days after the close the Permanent Loan have been taken City issues the last certificate of occupancy and satisfied. for the Project. 21. National CORE sets aside Operating On or before the date the close of the Reserve and provides evidence thereof to Permanent Loan. Agency Executive Director. (Agency Regulatory Agreement, Section 5.5 882/015610-0047 _ 848399 07 M W0/07 _2 22. National CORE submits to Agency an accounting of the Capital Replacement Reserve. (Agency Regulatory Agreement, 23. National CORE submits annual report pursuant to Health and Safety Code Section 33418 to Agency. (Agency FRAME On or before April 15 of each year subsequent to the date the City issues the first certificate of occupancy for the Project. Not later than the September 1 following the June 30 end of each fiscal year for term of the Declaration. It is understood that the foregoing Schedule is subject to all of the terms and conditions of the text of the Agreement. 882/015610-0047 _ 948399.07.10/30/07 _3 ATTACHMENT NO.4 GRANT DEED [SEE FOLLOWING PAGES] S82/050 48399.0707 .1a10/30/0] ATTACHMENT NO. 4 8 RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: Vista Dunes Housing Partners, L.P., c/o National Community Renaissance of California 9065 Haven Ave., Suite 100 Rancho Cucamonga, CA 91730 Attn: President In accordance with Section 11932 of the California Revenue and Taxation Code, Grantor has declared the amount of the transfer tax which is due by a separate statement which is not being recorded with this Grant Deed. GRANT DEED FOR A VALUABLE CONSIDERATION, receipt of which is hereby acknowledged, the LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic, organized and existing under the California Community Redevelopment Law (Health & Safety Code Section 33000 et seq.) (the "Grantor"), hereby grants to NATIONAL COMMUNITY RENAISSANCE OF CALIFORNIA, a California nonprofit public benefit corporation ("Grantee"), that certain real property ("Property") located in the City of La Quinta, County of Riverside, State of Califomia, described in the legal description attached hereto as Exhibit "A" and incorporated herein by this reference, subject to all matters of record, and is further subject to the following: A. Reservation of Subsurface Rights. Grantor excepts and reserves from the conveyance herein described all interest of the Grantor in oil, gas, hydrocarbon substances, and minerals of every kind and character lying more than five hundred (500) feet below the surface, together with the right to drill into, through, and across, and to use and occupy all parts of the Property lying more than five hundred (500) feet below the surface thereof for any and all purposes incidental to the exploration for and production of oil, gas, hydrocarbon substances, or minerals from the Property or other lands, but without, however, any right to use the surface of the Property or any portion of the Property within five hundred (500) feet below the surface of the Property for such exploration. B. Conveyance in Accordance With Redevelopment Plan. The Property is conveyed in accordance with and subject to the Redevelopment Plan for Project Area No. 2 ("Redevelopment Plan'), a copy of which is on file with the City Clerk of the City of La Quinta, California. All uses on the Property shall conform to the uses permitted by the Redevelopment Plan. The foregoing shall remain in effect until the expiration of the Redevelopment Plan. 882/015610-W47 843412.06 a] 0/30/07 C. Nondiscrimination. Grantee, on behalf of itself and its successors and assigns to all or any portion of the Property, covenants and agrees as follows: 1. 'I'here shall be no discrimination against, or segregation of, any persons, or group of persons, on account of race, color, creed, religion, sex, marital status, ancestry, or national origin in the sale, lease, or rental or in the use, occupancy, or enjoyment of the Property, nor shall the grantee itself, or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy of tenants, lessees, subtenants, sublessees, or vendees of the Property or any portion thereof, The foregoing covenants shall run with the land and shall remain in effect in perpetuity. 2. The grantee shall refrain from restricting the rental, sale, or lease of any portion of the Property, or contracts relating to the Property, on the basis of race, color, creed, religion, sex, marital status, age, ancestry, or national origin of any person. All such deeds, leases or contracts shall contain or be subject to substantially the following nondiscrimination or nonsegregation clauses: a. In deeds: "The grantee herein covenants by and for itself, its heirs, executors, administrators, and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex, marital status, age, ancestry, or national origin in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the land herein conveyed, nor shall the grantee itself, or any persons claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy of tenants, lessees, subtenants, sublessees, or vendees in the land herein conveyed. The foregoing covenants shall run with the land." b. In leases: "The lessee herein covenants by and for itself, its heirs, executors, administrators, and assigns, and all persons claiming under or through it, and this lease is made and accepted upon and subject to the following conditions: `That there shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex, marital status, age, ancestry, or national origin in the leasing, subleasing, transferring, use, occupancy, tenure, or enjoyment of the land herein leased, nor shall the lessee itself, or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy of tenants, lessees, sublessees, subtenants, or vendees in the land herein leased."' C. In contracts pertaining to the realty: "There shall be no discrimination against or segregation of any persons or group of persons on account of race, color, creed, religion, sex, marital status, age, ancestry, or national origin in the sale, lease, transfer, use, occupancy, tenure, or enjoyment of land, nor shall the transferee itself, or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy of tenants, lessees, subtenants, sublessees, or vendees of land." The foregoing nondiscrimination covenants shall remain in effect in perpetuity. "VOI56IM047 843412M a] MOM -2- D. Covenants Run With The Land. All covenants contained in this Grant Deed shall be covenants running with the land. E. Covenants for Benefit of Grantor. All covenants set forth in this Grant Deed, without regard to technical classification or designation, shall be binding for the benefit of the Grantor, and such covenants shall run in favor of Grantor for the entire period during which such covenants shall be in force and effect, without regard to whether the Grantor is or remains an owner of any land or interest therein to which such covenants relate. Grantor, in the event of any breach of any such covenants, shall have the right to exercise all the rights and remedies and to maintain any actions at law or equity or other property proceedings to enforce the curing of such breach. ATTEST: Agency Secretary APPROVED AS TO FORM: RUTAN & TUCKER, LLP Agency Counsel "Grantor" LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic Thomas Genovese Its: Executive Director "Grantee" NATIONAL COMMUNITY RENAISSANCE OF CALIFORNIA, a California nonprofit public benefit corporation In Its: 992/015610-0047 94341E 06 a10130/07 -3- STATE OF CALIFORNIA ) ss COUNTY OF ) On before me, Notary Public, 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 COUNTY OF On personally appeared Notary Public ss before me, , Notary Public, personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. Witness my hand and official seal. Notary Public [SEAL] 112/015610-0047 813412.06.10/30/07 -4- EXHIBIT "A" LEGAL DESCRIPTION OF PROPERTY The land referred to is situated in the City of La Quinta, State of California, County of Riverside, City of La Quinta and is described as follows: That portion of the Southeast quarter of the Northeast quarter of Section 19, Township 6 South, Range 7 East, San Bernardino Base and Meridian, described as follows: Commencing at the Southeast comer of the Northeast quarter of said Section 19; Thence South 89' 33' 05" West, on the Southerly line of the Northeast quarter of said Section, 330 feet, to the true point of beginning; thence South 89' 33' 05" West, on said Southerly line of the Northeast quarter, 330 feet; Thence North 0° 13' 40" West, 1,324.57 feet, to the Northerly line of the Southeast quarter of Northeast quarter of said Section 19; thence North 89' 34' 05" East, on said Northerly line, 330 feet; thence South 0° 13' 40" East, 1,324.47 feet to the true point of beginning; Excepting therefrom the Southerly 50 feet conveyed to the County of Riverside by Deeds recorded August 30, 1933 in Book 133, Page(s) 292 and Book 134, Page(s) 298 respectively, of Official Records, Riverside County Records. Also excepting therefrom that portion of described in the deeds to the City of La Quinta, recorded 02-17-1999, as Instrument No. 62425 and 62426, Official Records. Excepting therefrom the mobile home located thereon. E82/015610-0047 843412,06 a10/30/07 EXHIBIT "A" ATTACHMENT NO.5 AGENCY NOTE [SEE FOLLOWING PAGES] 88z/01561a0047 84839907 a10/30/07 ATTACHMENT NO. 5 AGENCY NOTE October 31, 2007 ("Note Date") $24,000,000 ("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 TWENTY-FOUR MILLION DOLLARS ($24,000,000,000) ("Note Amount"), or such lesser amount which shall from time to time be owing hereunder pursuant to the terms hereof. The principal sum hereof shall be disbursed pursuant to the terms and conditions set forth herein and in that certain Amended and Restated Affordable Housing Agreement by and among Maker and Holder, dated October 31, 2007 ("AHA"), pertaining to Maker's acquisition of certain real property defined in the AHA as the "Site" and improved with a partially complete affordable housing development and Maker's completion of construction and subsequent operation thereof. Reference is also made to the following additional agreements and documents, of even date herewith, involving Maker and Holder and/or pertaining to the Site: (i) Construction Deed of Trust with Assignment of Rents and Rider Attached Thereto by and between Maker as Trustor, Holder as beneficiary, and Chicago Title Company as Trustee, and recorded in the Office of the Riverside County Recorder ("Agency Deed of Trust"). The Agency Deed of Trust secures, in part, repayment of this Note. (ii) Regulatory Agreement and Declaration of Covenants and Restrictions, by and between Maker and Holder, for the benefit of Holder, and recorded in the Office of the Riverside County Recorder ("Agency Regulatory Agreement"). The AHA, Agency Deed of Trust, and Agency Regulatory Agreement are referred to herein collectively as the "Agency Agreements." The Agency Agreements are incorporated herein as though fully set forth. Except as otherwise provided herein, the defined terms used in this Note shall have the same meaning as set forth in the AHA. 1. Purpose of Loan. The loan evidenced by this Note is a loan for the purpose of assisting Maker with Maker's costs for acquiring the Site and completing construction of the Project thereon in accordance with the AHA. 2. Principal Amount. The principal amount of this loan shall be TWENTY-FOUR MILLION DOLLARS ($24,000,000) ("Loan Amount"). No interest shall accrue on the outstanding principal amount. Disbursement of Agency Loan. 3.1 The Agency Loan shall be disbursed in accordance with the terms of the AHA. 883/01561 M047 958817,01 a10/30107 -1- extent of the rental income or other income retained and collected by Maker after the giving of any such notice, and not used to pay Operating Expenses of the Housing Development; (iv) the misapplication of an), proceeds under any insurance policies or awards resulting from condemnation or the exercise of the power of eminent domain or by reason of damage, loss or destruction to any portion of the Project; and (v) breach of any environmental covenant or representation made by the Maker relating to the Housing Development. 6. Waivers by Maker. Maker and all endorsers, guarantors and persons liable or to become liable on this Note waive presentment, protest and demand, notice of protest, demand and dishonor and nonpayment of this Note and any and all other notices or matters of a like nature, and consent to any and all renewals and extensions near the time of payment hereof and agree further that at any time and from time to time without notice, the terms of payment herein may be modified or the security described in any documents securing this Note released in whole or in part, or increased, changed or exchanged by agreement between Holder and any owner of the premises affected by said documents securing this Note, without in any way affecting the liability of any party to this Note or any persons liable or to become liable with respect to any indebtedness evidenced hereby. 7. Severability. The unenforceability or invalidity of any provision or provisions of this Note as to any persons or circumstances shall not render that provision or those provisions unenforceable or invalid as to any other provisions or circumstances, and all provisions hereof, in all other respects, shall remain valid and enforceable. 8. Modifications. Neither this Note nor any term hereof may be waived, amended, discharged, modified, changed or terminated orally; nor shall any waiver of any provision hereof be effective except by an instrument in writing signed by Maker and Holder. No delay or omission on the part of Holder in exercising any right hereunder shall operate as a waiver of such right or of any other right under this Note. 9. No Waiver by Holder. No waiver of any breach, default or failure of condition under the terms of this Note shall be implied from any failure of the Holder of this Note to take, or any delay be implied from any failure by the Holder in taking action with respect to such breach, default or failure from any prior waiver of any similar or unrelated breach, default or failure. 10. Nonassignability. Maker may only Transfer (as that term is defined in the AHA) this Note in accordance with provisions and restrictions pertaining to a transfer of the AHA as set forth in the AHA. Holder may freely Transfer Holder's interest in this Note in any manner, at Holder's sole discretion; provided, that at the time of such Transfer Holder also transfers the AHA to such transferee. 11. 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. 12. Time of Essence. Time is of the essence in the performance of the obligations and provisions set forth in this Note. sazims61 war 658917 Ul a10/30/07 -3- IN WITNESS WHEREOF, Maker has executed this Note as of the Note Date. Holder: LA QUINTA REDEVELOPMENT AGENCY, a public body corporate and politic By: Dated: .2007 Its: ATTEST: Agency Secretary APPROVED AS TO FORM: RUTAN & TUCKER, LLP Attorneys for the La Quinta Redevelopment Agency Executive Director Maker: NATIONAL COMMUNITY RENAISSANCE OF CALIFORNIA, a California nonprofit public benefit corporation By: Dated: 2007 Its: 882/01561D-0047 858817 01 al0/30/07 -4- ATTACHMENT NO.6 AGENCY CONSTRUCTION DEED OF TRUST [SEE FOLLOWING PAGES] 882/07570-0047 ATTACHMENT NO. 6 848399.07 0/30/07 Recording Requested By And When Recorded Return to: La Quints Redevelopment Agency 78-495 Calle Tampico La Quinta, CA 92253 Attn: Executive Director SPACE ABOVE THIS LINE FOR RECORDER'S USE EXEMPT FROM RECORDING FEE PER GOV. CODE § 27383 CONSTRUCTION DEED OF TRUST WITH ASSIGNMENT OF RENTS AND RIDERS ATTACHED HERETO NOTE: RIDERS ATTACHED TO THIS DEED OF TRUST CONTAINING TERMS INCLUDING SECURITY AGREEMENT AND FIXTURE FILING. This CONSTRUCTION DEED OF TRUST WITH ASSIGNMENT OF RENTS AND RIDERS ATTACHED HERETO ("Deed of Trust"), is made October 31, 2007, between NATIONAL COMMUNITY RENAISSANCE OF CALIFORNIA, a California nonprofit public benefit corporation, herein called TRUSTOR, whose address is 9065 Haven Avenue, Suite 100, Rancho Cucamonga, CA 91730, Chicago Title Company, a California corporation, herein called TRUSTEE, and LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic, herein called BENEFICIARY. WITNESSETH: That Trustor grants to Trustee in trust, with power of sale, 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 in Exhibit "A" (the "Property"), together with the rents, issues and profits thereof, subject, however, to the right, power and authority hereinafter given to and conferred upon Beneficiary to collect and apply such rents, issues and profits for the purpose of securing (1) payment of the sum of TWENTY-FOUR MILLION DOLLARS ($24,000,000), 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 TMAOr, or its successors or assigns, when evidenced by a promissory note or notes reciting that they are secured by this Deed of Trust. To protect the security of this Deed of Trust, and with respect to the Property above described, Trustor expressly makes each and all of the agreements, and adopts and agrees to perform and be bound by each and all of the terms and provisions set forth in subdivision A, and it is mutually agreed that each and all of the terms and provisions set forth in subdivision B of the fictitious deed of trust recorded in Orange County August 17, 1964, and in all other counties August 18, 1964, in the book and at the page of Official Records in the office of the county recorder of the county where said property is located, noted below opposite the name of such county, namely: COUNTY BOOK PAGE COUNTY BOOK PAGE COUNTY BOOK PAGE COUNTY BOOK PAGE Alameda 1288 556 Kings 858 713 Placer 1028 379 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 Solana 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 4694 1 Mariposa 90 453 San Francisco A-904 596 Tchama 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 Mona 69 302 Santa Barbara 2065 881 Ventura 2607 237 Humboldt 801 83 Monterey 357 239 Santa Clara 6626 664 Yolo 769 16 Imperial 1189 701 Napa 704 742 Santa Cruz 1638 607 Yuba 398 693 Inyo 165 672 Nevada 363 94 Shasta 800 633 882/015610-0047 843410 07 a10I30/07 ' I - COUNTY BOOK PAGE COUNTY BOOK PAGE COUNTY BOOK PAGE COUNTY BOOK PAGE Kem 3756 690 Orange 7182 18 San Diego SERIES 5 Book 1964, Page 149774 shall inure to and bind the parties hereto, with respect to the property above described. Said agreements, terms and provisions contained in said subdivisions A and B (identical in all counties, and printed on pages 3 and 4 hereof) are by the within reference thereto, incorporated herein and made a part of this Deed of Trust for all purposes as fully as if set forth at length herein, and Beneficiary may charge for a statement regarding the obligation secured hereby, provided the charge therefor does not exceed the maximum allowed by law. The undersigned Trustor, requests that a copy of any notice of default and any notice of sale hereunder be mailed to him at his address hereinbefore set forth. SEE RIDERS ATTACHED TO THIS DEED OF TRUST STATE OF CALIFORNIA COUNTY OF On _ before me, personally appeared , personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose names(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signatures(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. Signature (This area for official notarial seal) Signature of Trustor NATIONAL COMMUNITY RENAISSANCE OF CALIFORNIA, a California nonprofit public benefit corporation M Its: 882/01561 O-Oo47 943410.07 a10/30/07 -2- DO NOT RECORD The following is a copy of Subdivisions A and B of the fictitious Deed of Trust recorded in each comfy in California as stated in the foregoing Dced 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, Truster 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 cast of evidence of title and allomcy'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 my part thereof, which appear to be prior or superior hereto; all costs, fees and expenses of this Trust. Should Truster fad to make my payment or to do my act as herein provided, then Beneficiary or Trustee, but without obligation so to do and without notice to or demand upon Trustor and without releasing Truster from my obligation hereof, may: make or do the same in such manner and to such extent as either may deem necessary to protect the security hereof, Beneficiary or Trustee being authorized to enter upon said property for such purposes; appear in and defend my ration or proceeding purporting to affect the security hereof or the rights or powers of Beneficiary or Trustee; pay, purchase, contest or compromise my encumbrance, charge or hen which in the judgment of either appears to be prior or superior hereto; and, in exercising; my such powers, pay necessary expenses, employ counsel and pay his or her reasonable fees. 5) To pay immediately and without demand all sums so expended by Beneficiary or Trustee, with interest from the date of expenditure at the amount allowed by law in effect at the date hereof, and to pay for any statement provided for by law in effect at the date hereof regarding the obligation secured hereby my 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• II That my award in connection with my condemnation for public use of or injury in said property or my 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 its right either to require prompt payment when due of all other sums so secured or to declare default for failure so to pay. 3) That at my 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 my person for payment of the indebtedness secured hereby, Trustee may: reconvey my part of said property; consent to the making of my map or plat thereof; join in granting any easement thereon, or join in my extension agreement or my 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 reconveymce of my matters or facts shall be conclusive proof of the truthfulness thereof, The Grantee in such reconveymee 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 Truster the right, prior to any default by Trustor in payment of my indebtedness secured hereby or in the performance of my agreement hereunder, to collect and retain such rents, issues and profits as they become due and payable. Upon my such default (beyond my applicable cure period, and during the continuance of such default), Beneficiary may a my time without nonce, 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 my part thereof, in its own 8821015610-W47 843410.07 a1040/07 -3- time sue for or otherwise collect such rents, issues, and profits, including those past due and unpaid, and apply the same, less costs and expenses of operation and collection, including reasonable attorney's fees, upon any indebtedness secured hereby, and in such order u 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 in 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 properly 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. Tmstee 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 in 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 in 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 Tmstec 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 in 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 Dud of Trust, all the estate now held by you under the same. Dated Please mail Deed of Trust, Now and Reeonvcyance to Do Not lose or destroy this Dud of Trust OR THE NOTE which it secures. Both must be delivered to the Trustee for cancellation before ruonveyance will be made 882/0156IM047 843410.07.10130/07 �4� LEGAL DESCRIPTION OF PROPERTY All of that certain real property in the City of La Quinta, County of Riverside, State of California, described as follows: That portion of the Southeast quarter of the Northeast quarter of Section 19, Township 6 South, Range 7 East, San Bernardino Base and Meridian, described as follows: Commencing at the Southeast comer of the Northeast quarter of said Section 19; Thence South 890 33' 05" West, on the Southerly line of the Northeast quarter of said Section, 330 feet, to the true point of beginning; thence South 89' 33' 05" West, on said Southerly line of the Northeast quarter, 330 feet; Thence North 0° 13' 40" West, 1,324.57 feet, to the Northerly line of the Southeast quarter of Northeast quarter of said Section 19; thence North 89' 34' 05" East, on said Northerly line, 330 feet; thence South 0° 13' 40" East, 1,324.47 feet to the true point of beginning; Excepting therefrom the Southerly 50 feet conveyed to the County of Riverside by Deeds recorded August 30, 1933 in Book 133, Page(s) 292 and Book 134, Page(s) 298 respectively, of Official Records, Riverside County Records. Also excepting therefrom that portion of described in the deeds to the City of La Quinta, recorded 02-17-1999, as Instrument No. 62425 and 62426, Official Records. Excepting therefrom the mobile home located thereon. 88710156104047 843410 07 a10/30107 -5- RIDER TO CONSTRUCTION DEED OF TRUST WITH ASSIGNMENT OF RENTS This RIDER TO CONSTRUCTION DEED OF TRUST WITH ASSIGNMENT OF RENTS ("Rider") is executed this 31st day of October, 2007, by NATIONAL COMMUNITY RENAISSANCE OF CALIFORNIA, a California nonprofit public benefit corporation, herein "Trustor," in favor of the LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic, herein `Beneficiary," the same parties to that certain form Construction Deed of Trust With Assignment of Rents, of even date hereto, to which this Rider is attached. This Rider is made a part of and is incorporated into said Deed of Trust. This Rider shall supersede any conflicting term or provision of the form Deed of Trust to which it is attached. Reference is made to (i) that certain Promissory Note by and between Trustor and Beneficiary, dated on or about the date set forth above, the repayment of which by Truster is secured by this Deed of Trust ("Agency Note"), and (ii) to the Agency Agreements which are described in the Agency Note. The parties hereto agree: 1. Propert . 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 Agency Note; b. Payment and performance of all obligations of Trustor under this Deed of Trust; C. Payment and performance of all obligations of Trustor under the Agency Agreements. d. Payment and performance of all future advances and other obligations of Trustor or any other person, firm, or entity with the approval of Truster, may agree to pay and/or perform (whether as principal, surety or guarantor) for the benefit of Beneficiary, when the obligation is evidenced by a writing which recites that it is secured by this Deed of Trust; and e. All modifications, extensions and renewals of any of the obligations secured hereby, however evidenced. Trustor's grant hereunder is subject to the nonrecourse provisions in Section 5 of the Agency Note, which are incorporated herein by this reference as though set forth in full. 88210156IM047 843410 07 OW30/07 -6- 3. Obligations. The term "obligations" is used herein in its broadest and most comprehensive sense and shall be deemed to include, without limitation, all interest and charges, prepayment charges, late charges and fees at any time accruing or assessed on any of the Secured Obligations. 4. Incorporation. All terms of the Agency Note, Agency Agreements, and the Secured Obligations are incorporated herein by this reference. All persons who may have or acquire an interest in the Property shall be deemed to have notice of the terms of all of the foregoing documents. 5. Mortgagee -in -Possession. Neither the assignment of rents set forth in the Deed of Trust nor the exercise by Beneficiary of any of its rights or remedies hereunder shall be deemed to make Beneficiary a "mortgagee -in -possession" or otherwise liable in any manner with respect to the Property, unless Beneficiary, in person or by agent, assumes actual possession thereof. Nor shall appointment of a receiver for the Property by any court at the request of Beneficiary or by agreement with Trustor, or the entering into possession of the Property by such receiver, be deemed to make Beneficiary a "mortgagee -in -possession" or otherwise liable in any manner with respect to the Property. 6. No Cure. In the event Beneficiary collects and receives any rents under the Deed of Trust upon any default hereof, such collection or receipt shall in no way constitute a curing of the default, except if and to the extent the same are sufficient to cure all monetary defaults and no other defaults then exist. 7. Possession Upon Default. Upon the occurrence of and during the continuation of a default, Beneficiary, after having given notice and the applicable cure periods having expired with the default having not been cured (hereinafter, a "default"), may, at its option, without any action on its part being required and without in any way waiving such default, take possession of the Property in accordance with applicable law and have, hold, manage, lease and operate the same, on such terms and for such period of time as Beneficiary may deem proper, and, subject to the rights of any senior lienholders, may collect and receive all rents and profits, with full power to make, from time to time, all commercially reasonable alterations, renovations, repairs or replacements thereto as may seem proper to Beneficiary, and to apply such rents and profits to the payment of (a) the cost of all such alterations, renovations, repairs and replacements, and all costs and expenses incident to taking and retaining possession of the Property, and the management and operation thereof, and keeping the same properly insured; (b) all taxes, charges, claims, assessments, and any other liens which may be prior in lien or payment of the Agency Note, and premiums for insurance, with interest on all such items; and (c) the indebtedness secured hereby, together with all costs and attorney's fees, in such order or priority as to any of such items as Beneficiary in its sole discretion may determine, any statute, law, custom or use to the contrary notwithstanding. Any amounts received by Beneficiary or its agents in the performance of any acts prohibited by the terms of this assignment, including, but not limited to, any amounts received in connection with any cancellation, modification or amendment of any lease prohibited by the terms of this assignment and any rents and profits received by Trustor after the occurrence of a default shall be held by Trustor as trustee for Beneficiary and all such amounts shall be accounted for to Beneficiary and shall not be commingled with other funds of the Trustor. Any person receiving any portion of such trust funds shall receive the same in trust 8'21015610-0047 843410 07 a10/30/07 -7- for Beneficiary as if such person had actual or constructive notice that such funds were impressed with a trust in accordance therewith. 8. Receiver. In addition to any and all other remedies of Beneficiary set forth under this Deed of Trust or permitted at law or in equity, if a default shall have occurred and not have been cured within any applicable cure period, Beneficiary, to the extent permitted by law and without regard to the value, adequacy or occupancy of the security for the Note and other sums secured hereby, shall be entitled as a matter of right if it so elects to the appointment of a receiver to enter upon and take possession of the Property and to collect all rents and profits and apply the same as the court may direct, and such receiver may be appointed by any court of competent jurisdiction by ex parte application and without notice, notice of hearing being hereby expressly waived. The expenses, including receiver's fees, attorneys' fees, costs and agent's compensation, incurred pursuant to the power herein contained shall be secured by this Deed of Trust. 9. Notice to Beneficiary. Notices to Beneficiary shall be sent to Beneficiary addressed to: La Quinta Redevelopment Agency 78-495 Calle Tampico La Quinta, CA 92263 Attn: Executive Director [SIGNATURE ON NEXT PAGE] "2/01561M047 143410 07 .10/30/07 -8- IN WITNESS WHEREOF, Truster has executed this Rider on the date of Trustor's acknowledgment herein below, to be effective for all purposes as of the day and year first set forth above. TRUSTOR: NATIONAL COMMUNITY RENAISSANCE OF CALIFORNIA, a California nonprofit public benefit corporation Its: "2/015610-0047 843410 07 a1000/07 -9- State of California County of On _ before me, (insert name and title or the officer) personally appeared personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument, and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. Signature (Seal) "2/0156IM047 843410 07 a10/30107 -to- ATTACHMENT NO.7 AGENCY REGULATORY AGREEMENT [SEE FOLLOWING PAGES] "2/01 49399 07 - 0/307 .10/30/07 ATTACHMENT NO. 7 RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: La Quinta Redevelopment Agency 78-495 Calle Tampico La Quinta, CA 92253 Attn: Executive Director (Space Above This Line for Recorder's Office Use Only) (Exempt from Recording Fee per Gov. Code 27383) REGULATORY AGREEMENT AND DECLARATION OF COVENANTS AND RESTRICTIONS This REGULATORY AGREEMENT AND DECLARATION OF COVENANTS AND RESTRICTIONS ("Agreement") is made and entered into this 29th day of October, 2007 ("Effective Date"), by and between the LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic ("Agency"), and NATIONAL COMMUNITY RENAISSANCE OF CALIFORNIA, a California nonprofit public benefit corporation ("Developer"). RECITALS: A. Developer is the owner of fee title to that certain real property more particularly described in Exhibit "A", attached hereto and incorporated by reference herein (the "Site"). B. On or about March 8, 2007, Agency and Developer (under its former name, The Southern California Housing Development Corporation) entered into an Affordable Housing Agreement (the "Original AHA"). C. On or about October 31, 2007, Agency and Developer entered into that certain Amended and Restated Affordable Housing Agreement (the "AHA") which replaced, in its entirety, the Original AHA. D. Pursuant to the AHA, Agency agreed to provide financial assistance to Developer in an amount up to Twenty -Four Million Dollars ($24,000,000) (the "Agency Loan") for the purpose of assisting Developer to acquire the Site, and to complete thereon construction of an affordable rental apartment complex containing eighty (80) units (the "Project"). The AHA requires Developer to enter into this Agreement, which provides, among other requirements, that, upon completion of construction of the Project, all of the apartment units within the Project (with the exception of the Management Unit) shall thereafter be rented to and occupied by "Eligible Tenants" (as that term is defined in Section 1.9 below). The AHA is incorporated herein as if fully set forth. E. - Reference is also made to the following documents, of even date herewith: (i) Promissory Note by Developer as Borrower in favor of Agency as lender ("Agency Note"). The Agency Note evidences the Agency Loan. 682/D15610-0047 _ 843409,07 a10/30/07 -1 (ii) Construction Deed of Trust with Assignment of Rents and Riders attached hereto, by and between Developer as trustor and Agency as beneficiary, and recorded in the Office of the Riverside County Recorder ("Agency Deed of Trust"), The Agency Deed of Trust secures (a) repayment of the Agency Note, and (b) performance of Developer's obligations hereunder. The Agency Note and the Agency Deed of Trust are referred to herein collectively as the "Agency Agreements." The Agency Agreements are incorporated herein as if fully set forth. F. Developer has obtained an award of 9% low income housing tax credits from the Tax Credit Allocation Committee (the "TCAC") pursuant to Section 42 of the Internal Revenue Code (the "Tax Credits"). In connection with obtaining the Tax Credits, Developer has entered into, or will enter into, with TCAC, a regulatory agreement to be recorded in the Official Records of the County of Riverside encumbering title to the Project (the "Tax Credit Regulatory Agreement"). G. Pursuant to the AHA and the Agency Agreements, Developer has agreed to complete construction of the Project and thereafter to own, operate, manage, and maintain the Project with all of the units thereon except the Management Unit restricted to rental to and occupancy by Eligible Tenants. H. Agency and Developer now desire to place restrictions upon the use and operation of the Site, in order to ensure that the Site shall be operated continuously, for a period of fifty- five (55) years commencing on the date of the "Permanent Loan Closing" (as that term is defined in the AHA) (with such date referred to herein after as the "Permanent Loan Closing Date"), as an affordable rental apartment complex in accordance with the terms hereof. AGREEMENT: NOW, THEREFORE, the Developer and Agency declare, covenant and agree, by and for themselves, their heirs, executors, administrators, successors and assigns, and all persons claiming under or through them, that, commencing upon the Effective Date and continuing for a period of fifty-five (55) years following the Permanent Loan Closing Date, as follows: 1.0 DEFINITIONS. 1.1 "50% Very Low Income Household" shall mean a household whose annual income does not exceed fifty percent (501/o) of AMI, adjusted for family size. 1.2 Affiliate. As used in this Agreement, the term "Affiliate" shall mean any person or entity directly or indirectly, through one or more intermediaries, controlling, controlled by or under common control with such person which, if such person is a partnership or limited liability company, shall include each of the constituent members or general partners, respectively, thereof. The term "control" as used in the immediately preceding sentence, means, with respect to a person that is a corporation, the right to the exercise, directly or indirectly, of more than 50% of the voting rights attributable to the shares of the controlled corporation, and, with respect to a person that is not a corporation, the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of the controlled person. :'M15610-0047 43409.07 a10/70/07 -2- 1.3 Affordable Rent. As used in this Agreement, the term "Affordable Rent' shall mean the amount of monthly rent, including a reasonable utility allowance, that does not exceed the maximum allowable rent to be charged by Developer and paid by Very Low Income Households, 50% Very Low Income Households, or Extremely Low Income Households occupying the Units as determined pursuant to Health and Safety Code Section 50053(b), as of the Effective Date, and the regulations promulgated pursuant to or incorporated therein, including, without limitation, any applicable regulations promulgated pursuant to Health and Safety Code Section 50093. Subject to Section 3.11 herein, the tenant utility allowance shall be determined by the Executive Director. 1.4 AMI. As used in this Agreement, the term "AMP' or "Area Median Income" shall mean the median family income for the Riverside County area promulgated and published annually by the California Department of Housing and Community Development ("HCD") pursuant to Title 25, Section 6932 of the California Code of Regulations. If HCD ceases annually to publish median incomes, the parties will agree upon an adequate substitute manner for determining AMI. 1.5 Approved Budget. As used in this Agreement, the term "Approved Budget' has the meaning ascribed in Section 3.13 of this Agreement. 1.6 Capital Improvements. As used in this Agreement, the term "Capital Improvements" means all work and improvements with respect to the Site for which costs and expenses may be capitalized in accordance with generally accepted accounting principles in effect from time to time, consistently applied. 1.7 Cash Flow. As used in this Agreement, the term "Cash Flow" means, for the applicable period, Net Operating Income less Debt Service. 1.8 CPI. As used in this Agreement, the term "CPI" means the Consumer Price Index published by the United States Department of Labor, Bureau of Labor Statistics, for Urban Wage Earners and Clerical Workers, Los Angeles -Riverside -Orange County Average, All Items (1984=100), or, if the CPI is discontinued, such official index as may then be in existence and which is most nearly equivalent to the CPI. 1.9 Debt Service. As used in this Agreement, the term "Debt Service" means scheduled debt service (including impounds, expenses, and othcr amounts payable) on any loan that is senior to the Agency Loan. 1.10 Eligible Tenant. As used in this Agreement, the term "Eligible Tenant' shall mean a household which qualifies as a Very Low Income Household, an Extremely Low Income Household, or a 50% Very Low Income Household. 1.11 Executive Director. As used in this Agreement, the term "Executive Director" shall mean the individual duly appointed to the position of Executive Director of Agency, or his or her authorized designee. Whenever an administrative action is required by Agency to implement the terms of this Agreement, the Executive Director, or his or her authorized designee, shall have authority to act on behalf of Agency, except with respect to matters reserved for Agency Board determination. "2/015610-0047 84340907 a10/30/07 '3' 1.12 Extremely Low Income Household. As used in this Agreement, the term "Extremely Low Income Household" shall have the meaning as set forth in Health and Safety Code Section 50106, or successor statute, adjusted for family size. 1.13 Management Unit. As used in this Agreement, the term "Management Unit" shall have the meaning ascribed in Section 2.6 hereof. 1.14 Moderate Income Household. As used in this Agreement, the term "Moderate Income Household" shall have the meaning as set forth in Health and Safety Code Section 50093, or any successor statute, adjusted for family size. 1.15 Net Okeratin¢ Income. As used in this Agreement, the term "Net Operating Income" shall have the meaning ascribed thereto in the Agency Note. 1.16 Operating Expenses. As used in this Agreement, the term "Operating Expenses" shall have the meaning ascribed thereto in the Agency Note. 1.17 Operating Income. As used in this Agreement, the term "Operating Income" shall have the meaning ascribed thereto in the Agency Note. 1.18 Permanent Loan Closing Date. As used in this Agreement, the term "Permanent Loan Closing Date" shall have the meaning ascribed in Recital F hereof. 1.19 Restricted Unit Matrix. As used in this Agreement, the term "Restricted Unit Matrix" shall mean that certain affordability matrix attached hereto and incorporated herein as Exhibit "F". 1.20 Tax Credit Investor. As used in this Agreement, the term "Tax Credit Investor" shall mean an Affiliate of Hudson Housing Capital, LLC, a Delaware limited liability company 1.21 Tax Credit Program. As used in this Agreement, the term "Tax Credit Program" shall mean the low-income housing tax credit program authorized pursuant to Internal Revenue Code Section 42, California Health and Safety Code Sections 50199.6-50199.19, Revenue and Taxation Code Sections 17057.5, 17058, 23610.4, 23610.5, and applicable federal and State regulations such as 4 California Administrative Code Sections 10300-10340. 1.22 Tax Credits. As used in this Agreement, the term "Tax Credits" shall mean the low income housing tax credits granted by TCAC for the Project pursuant to the Tax Credit Program. 1.23 Tax Credit Regulatory Agreement. As used in this Agreement, the term "Tax Credit Regulatory Agreement" shall mean that certain regulatory agreement to be recorded against the Site as a condition of the receipt by the Project of an allocation by TCAC of nine percent (9%) Tax Credits. 1.24 TCAC. As used in this Agreement, "TCAC" shall mean the California Tax Credit Allocation Committee. 192/015610-0047 143409.07 A0/30107 "4" 1.25 Unit. As used in this Agreement, the term "Unit" or "unit" shall mean a rental apartment dwelling unit on the Site. 1.26 Very Low Income Household. As used in this Agreement, the term "Very Low Income Household" shall have the meaning as set forth in Health and Safety Code Section 50105, or any successor statute, adjusted for family size. 2.0 RESIDENTIAL RENTAL PROPERTY. 2.1 Residential Use. Without the Agency's prior written consent, which consent may be given or withheld in its sole and absolute discretion, none of the Units in the Project will at any time be utilized on a transient basis or will ever be used as a hotel, motel, dormitory, fraternity house, sorority house, rooming house, nursing home, hospital, sanitarium, or trailer court or park, nor shall the Units be used for day care facilities or as a place of business except as may otherwise be allowed by applicable law. 2.2 Conversion of Units. No part of the Project will at any time be owned by a cooperative housing corporation, nor shall the Developer take any steps in connection with the conversion to such ownership or uses to condominiums, or to any other form of ownership, without the prior written approval of Agency which approval may be given or withheld in its sole and absolute discretion. 2.3 No Preference. All of the Units will be available for rental in accordance with the terms of this Agreement, and the Developer shall not give preference to any particular class or group of Eligible Tenants in renting the Units in the Project, except as provided in Section 3.4 below. 2.4 Resident Manager Unit. Notwithstanding anything to the contrary in this Agreement, one (1) of the Units may be occupied by on -site management (the "Management Units"). The Management Unit shall be restricted for rental to and occupancy by a Moderate Income Household at an affordable rent, as determined pursuant to Health and Safety Code Section 50053. As of the Effective Date, affordable rent, including a reasonable utility allowance, for a Moderate Income Household is no more than the product of thirty percent (30%) of one hundred ten percent (110%) of AMI adjusted for family size appropriate for the Unit. 2.5 Liability of Developer. Developer and any manager it employs shall not incur any liability under this Agreement as a result of fraud or intentional misrepresentation by a tenant. 3.0 OCCUPANCY OF RESTRICTED UNITS BY ELIGIBLE TENANTS. Developer hereby represents, warrants, and covenants as follows: 3.1 Occupancy Levels. Except as expressly provided herein, throughout the term of this Agreement, the Units shall be continuously occupied or held vacant and available for occupancy by Eligible Tenants. 882/0156 IOA047 843409.07 a10130/07 -5- 3.2 Occupancy By Eligible Tenant. A Unit occupied by an Eligible Tenant who qualified as an Eligible Tenant at the commencement of the occupancy shall be treated as occupied by an Eligible Tenant throughout their tenancy. A Unit previously occupied by an Eligible Tenant and then vacated shall be considered occupied by an Eligible Tenant until the Unit is reoccupied, provided Developer uses its best efforts to re -lease the vacant Unit to an Eligible Tenant. Any vacated Unit shall be held vacant until re -leased to an Eligible Tenant. Developer shall take any or all of the following actions, as necessary, to locate Eligible Tenants for the Project: (i) notification to the City of the available Unit; (ii) advertisement of the available Unit in a newspaper of general circulation in the City; and (iii) contacting and notifying the Riverside County Housing Authority in writing of the available Unit. 3.3 Income Computation and Certification. Immediately prior to an Eligible Tenant's occupancy of a Unit, Developer shall obtain an Income Computation and Certification Form in the form attached hereto and incorporated herein as Exhibit "B", or on a similar form required by TCAC (the "TCAC Income Certification form") if the TCAC Income Certification Form requires inclusion of the same information as required in Exhibit `B", from each such Eligible Tenant dated no more than 90 days prior to the date of initial occupancy in the Project by such Eligible Tenant. In addition, Developer shall provide such further information as may be reasonably required in the future by the Agency for purposes of verifying a tenant's status as an Eligible Tenant, provided the same is reasonably available to Developer without unreasonable expense in connection with obtaining the same. Developer shall use good faith efforts to verify that the income provided by an applicant is accurate by taking the following steps as a part of the verification process: (i) obtain three (3) pay stubs for the most recent pay periods; (ii) obtain a written verification of income and employment from the applicant's current employer; (iii) obtain an income verification form from the Social Security Administration, California Department of Social Services, and/or California Employment Development Department if the applicant receives assistance from any of said agencies; (iv) if an applicant is unemployed or did not file a tax return for the previous calendar year, obtain other evidence and/or verification of such applicant's total income received during the calendar year from any source, taxable or nontaxable, or such other information as is satisfactory to the Agency. Developer shall maintain in its records each Income Computation and Certification Form obtained pursuant to this section for a minimum of five (5) years. 3.4 Rental Priority. During the term of this Agreement, Developer shall use its reasonable commercial efforts to lease the Units to credit -worthy Eligible Tenants in the following order of priority: (i) displaced persons entitled to a preference pursuant to California Health and Safety Code Section 33411.3 or successor statute; and (ii) other persons meeting the eligibility requirements of this Agreement. Developer shall, and Agency may, maintain a list (the "Housing List") of persons who have notified Developer and/or Agency of their desire to rent a Unit in the Project and who have incomes which would qualify them as an Eligible Tenant, and Developer shall offer to rent units on the above -referenced priority basis; provided, however, that Developer shall not be required to prequalify persons on the Housing List. Should multiple tenants be equally eligible (as to income, credit history, and other nondiscriminatory criteria) and qualified to rent a unit, Developer shall rent available Units to Eligible Tenants on a first -come, first -served basis. BBL015610-0047 84340907 a]0/30/07 -6- 3.5 Recertification. Within sixty (60) days prior to the first anniversary date of the occupancy of a Unit by an Eligible Tenant, and on each anniversary date thereafter, Developer shall recertify the income of such Eligible Tenant by obtaining a completed Income Recertification Form, in the form attached hereto and incorporated herein as Exhibit "C" based upon the current income of each known occupant of the Unit; provided, however, that if the TCAC Regulatory Agreement, or a regulatory agreement required to be entered into by Developer as a condition to obtaining tax-exempt bonds to finance the Project, requires Developer to obtain a recertification form which requires inclusion of the same information as required in Exhibit "C", then Developer shall not be deemed to be in default hereunder if during the tern of the TCAC Regulatory Agreement or bond regulatory agreement (as applicable) Developer obtains from each Eligible Tenant the TCAC recertification form or the recertification form required pursuant to the bond regulatory agreement. 3.6 Determination of Affordable Rent. All Units shall be rented at an Affordable Rent. 3.6.1 Rent Schedule and Utility Allowance. Subject to Section 3.11 hereof, Agency will establish maximum monthly allowances for utilities and services to be used by the Developer in calculating Affordable Rent. Developer shall submit to Executive Director for review and approval the Affordable Rent proposed by Developer for all of the Units. The Executive Director shall approve such proposal if it complies with the terms of this Agreement. The maximum monthly rent must be recalculated by Developer and reviewed and approved by the Agency annually. 3.6.2 Adiustment of Affordable Rent. Affordable Rent may change as changes in the applicable gross rent amounts, the income adjustments, or the monthly allowance for utilities and services warrant. Any increase in rents is subject to the provisions of outstanding leases. Developer must provide households occupying the Units not less than thirty (30) days prior written notice before implementing any rent increase. 3.7 Certification of Continuine Program Compliance. During the term of this Agreement, on or before each April 1 following the Term Commencement Date, Developer shall annually advise the Agency of the occupancy of the Project during the preceding calendar year by delivering a Certification of Continuing Program Compliance in the form attached hereto and incorporated herein as _Exhibit "E", stating (i) the Units of the Project which have been rented to and are occupied by Eligible Tenants and (ii) that to the knowledge of Developer either (a) no unremedied default has occurred under this Agreement, or (b) a default has occurred, in which event the Certification shall describe the nature of the default and set forth the measures being taken by the Developer to remedy such default. Developer shall pay to Agency an annual fee pursuant to Health and Safety Code Section 33418(c) which shall not exceed FIVE HUNDRED DOLLARS ($500) as such amount shall be permitted to increase by the CPI from and after the date of this Agreement, or, if the CPI is discontinued, such official index as may then be in existence and which is most nearly equivalent to the CPI. 3.8 Maintenance of Records. Developer shall maintain complete and accurate records pertaining to the Units, and shall permit any duly authorized representative of the Agency, upon twenty-four (24) hours prior notice and during business hours, to inspect the books and records 8'2"15610-0047 84340907 a]0/30107 -7" of Developer pertaining to the Project including, but not limited to, those records pertaining to the occupancy of the Units. 3.9 Reliance on Tenant Representations. Each tenant lease shall contain a provision to the effect that Developer has relied on the income certification and supporting information supplied by the tenant in determining qualification for occupancy of the unit, and that any material misstatement in such certification (whether or not intentional) will be cause for immediate termination of such lease. Each such lease shall also include the lease rider attached hereto and incorporated herein as Exhibit "D" and shall state that occupation of the Unit is subject to the income restrictions described in this Agreement. 3.10 Remedy For Excessive Rent Charge. 3.10.1 Subject to Section 2.4 hereof, it shall constitute a default for Developer to charge or accept for any Unit rent amounts in excess of the amount provided for in Section 3.6 of this Agreement. In the event that Developer charges or receives such higher rental amounts, in addition to any other remedy Agency shall have for such default, Developer shall be required to pay to Agency an amount equal to two (2) times the entire amount of rent received in excess of the amount permitted pursuant to this Agreement. For purposes of this Section 3.10.1, the term "rent" shall not include Section 8 payments Developer receives in connection with the renting of any of the Units. 3.10.2 Subject to Section 2.4 hereof, and except as otherwise provided in this Agreement, it shall constitute a default for Developer to knowingly (or without investigation as required herein) initially rent any Unit to a tenant who is not an Eligible Tenant. In the event Developer violates this Section, in addition to any other equitable remedy Agency shall have for such default, Developer, for each separate violation, shall be required to pay to Agency an amount equal to (i) two times the greater of (A) the total rent Developer received from such ineligible tenant, or (B) the total rent Developer was entitled to receive for renting that Unit, plus (ii) any relocation expenses incurred by Agency or the City of La Quinta as a result of Developer having rented to such ineligible person. 3.10.3 It shall constitute a default for Developer to knowingly (or without investigation as required herein) rent a Unit in violation of the leasing preference requirements of Section 3.4 of this Agreement. In the event Developer violates this Section, in addition to any other equitable remedy Agency shall have for such default, Developer, for each separate violation, shall be required to pay Agency an amount equal to two (2) months of rental charges. The terms of this Section shall not apply if Developer rents to an ineligible person as a result of such person'sfraud or misrepresentation. 3.10.4 Notwithstanding anything herein to the contrary and subject to Section 3.10.5 below, in the event Developer violates more than one provision of this Section 3.10 in the rental of a specific unit to a specific individual, Developer shall be required to pay to Agency for each such violation the amount listed under the subsection above (e.g., either 3.10.1, 3.10.2, or 3.10.3) that results in the largest payment amount by Developer to the Agency under this Section 3.10, but not the amounts required pursuant to the other subsections, and upon Developer's payment thereof, the default under this Section 3.10 shall be deemed cured with respect to the sa2ro16610-0047 a43409.07 ai 0/30/07 -8- default for which such penalty is assessed, except to the extent such violation continues after Developer's payment hereunder, in which event the amounts required to be paid pursuant to this Section 3.10 shall apply. THE PARTIES HERETO AGREE THAT THE AMOUNTS SET FORTH IN SECTION 3.10 (THE "DAMAGE AMOUNTS") CONSTITUTE A REASON- ABLE APPROXIMATION OF THE ACTUAL DAMAGES THAT AGENCY WOULD SUFFER DUE TO THE DEFAULTS BY DEVELOPER SET FORTH IN SECTIONS 3.10.1 THROUGH 3.10.3, CONSIDERING ALL OF THE CIRCUMSTANCES EXISTING ON THE EFFECTIVE DATE OF THIS AGREEMENT, INCLUDING THE RELATIONSHIP OF THE DAMAGE AMOUNTS TO THE RANGE OF HARM TO AGENCY AND ACCOMPLISH- MENT OF AGENCY'S PURPOSE OF ASSISTING IN THE PROVISION OF AFFORDABLE HOUSING TO ELIGIBLE TENANTS THAT REASONABLY COULD BE ANTICIPATED AND THE ANTICIPATION THAT PROOF OF ACTUAL DAMAGES WOULD BE COSTLY OR INCONVENIENT. THE AMOUNTS SET FORTH IN THIS SECTION 3.10 SHALL BE THE SOLE MONETARY DAMAGES REMEDY FOR THE DEFAULTS SET FORTH IN THIS SECTION 3.10, BUT NOTHING IN THIS SECTION 3.10 SHALL BE INTERPRETED TO LIMIT AGENCY'S REMEDY FOR SUCH DEFAULT TO SUCH A DAMAGES REMEDY AND IN THAT REGARD AGENCY MAY DECLARE A DEFAULT UNDER THE TERMS OF THE Agency NOTE OR OTHER OF THE Agency AGREEMENTS. IN PLACING ITS INITIAL AT THE PLACES PROVIDED HEREINBELOW, EACH PARTY SPECIFICALLY CONFIRMS THE ACCURACY OF THE STATEMENTS MADE ABOVE AND THE FACT THAT EACH PARTY HAS BEEN REPRESENTED BY COUNSEL WHO HAS EXPLAINED THE CONSEQUENCES OF THE LIQUIDATED DAMAGES PROVISION AT OR PRIOR TO THE TIME EACH EXECUTED THIS AGREEMENT. DEVELOPER'S INITIALS: AGENCY'S INITIALS: 3.10.5 Notwithstanding anything herein to the contrary, in the event Developer violates Section 3.10.1 hereof, to the extent the tenant from whom Developer charged excess rent still resides in the Project at the time Agency discovers this violation, or Developer knows the location of such tenant„ Developer shall, in lieu of paying damages to Agency as described in Section 3.10.1 and 3.10.4 above, refund the tenant the entire amount of excess rent charged to such tenant, calculated with interest at the lesser of the maximum legal rate or ten percent (10%). Developer shall provide evidence to Agency that such payment has been made, within thirty (30) days after Agency provides notice to Developer of the default hereunder. 3.11 Tax Credit Regulatory Agreement. Developer agrees to perform all of Developer's obligations under this Agreement and the Tax Credit Regulatory Agreement. In the event Agency is prevented by a final, non -appealable order of a court of competent jurisdiction in a lawsuit involving the Project, or by an applicable and binding published appellate opinion, 882/015610-0047 $43409.07 ❑0/30/07 -9- or by a final, non -appealable order of a regulatory body having jurisdiction, from enforcing, for any reason, the affordability restrictions set forth in this Agreement or in the AHA, then in such event Agency shall be a third -party beneficiary under the Tax Credit Regulatory Agreement and shall have full authority to enforce any breach or default by Developer under the Tax Credit Regulatory Agreement in the same manner as though it were a breach or default hereunder. Without Agency's prior written consent, which consent may be withheld in Agency's sole and absolute discretion, Developer shall not consent to any amendment of or modification to the Tax Credit Regulatory Agreement which (i) shortens the term of the affordability restrictions on the Units in the Project to a term of less than fifty-five (55) years from the Effective Date or (ii) releases Developer from the requirement that the Units be rented to Eligible Tenants in accordance with the Restricted Unit Matrix. Notwithstanding anything contained in this Agreement to the contrary, if and when the Site is subject to the requirements of the Tax Credit Program and there is a conflict between the requirements of the Tax Credit Program and the provisions set forth in this Agreement, then the provisions of the Tax Credit Program shall prevail. That notwithstanding, the fact that this Agreement and the Tax. Credit Program provide for greater, lesser or different obligations or requirements shall not be deemed a conflict unless the applicable provisions are inconsistent and could not be simultaneously enforced or performed. 3.12 Annual Statements. As soon as available, and in any event not later than one hundred twenty (120) days after the close of each fiscal year of Developer, financial statements of Developer, including a profit and loss statement, and a consolidated statement of changes in financial position of Developer as at the close of and for such fiscal year, all in reasonable detail, certified by an officer or partner of Developer and, upon request of Agency, if total Operating Expenses for such year exceed the total amount set forth in the Approved Budget by more than ten percent (10%), accompanied by a compilation report prepared by a firm of certified public accountants, and in a format, each reasonably acceptable to the Executive Director. 3.13 Pro Forma Budget. As soon as available and in any event not later than November 1'` of each calendar year beginning with the year of recordation hereof, Developer shall provide Agency, for the Executive Director's approval, with a detailed projection of Operating Income and budgets of estimated Operating Expenses for the immediately succeeding calendar year (the "Pro Forma Budget") and a detailed cash flow projection for the next succeeding year. Developer shall also submit to Agency on request additional detail, information and assumptions used in the preparation of the Pro Forma Budget. Within fifteen (15) days following its receipt of the Pro Forma Budget, Agency shall deliver to Developer its written approval or disapproval thereto, which approval shall not be unreasonably withheld. If Agency disapproves the Pro Forma Budget, it shall set forth its reasons with reasonable specificity. If Agency fails to indicate either its approval or disapproval of the Pro Forma Budget within such period, then Agency shall be deemed to have approved the Pro Forma Budget as submitted by Developer. Once the Pro Forma Budget is approved or deemed approved by Agency, such approved Pro Forma Budget shall become the "Approved Budget" for the entire applicable calendar year. Developer shall use commercially reasonable efforts to operate the Site during such calendar 8 9210156 1 O-W47 843409.07 a10/30/07 -10- year within the Approved Budget; provided, however, that Developer shall not be required to obtain the approval of Agency for any deviation from the Approved Budget so long as the total Operating Expenses and expenditures for Capital Improvements paid or incurred during such calendar year do not exceed the originally budgeted amount thereof in the Approved Budget by more than five percent (5%) in the aggregate. To the extent required hereunder, any request by Developer to deviate from the Approved Budget shall be submitted to Agency in writing with an explanation thereof and shall be accompanied by supporting information for the request; provided, however, that in the event of an emergency threatening persons or property, Developer shall use its good faith efforts to give prior verbal notice to Agency of unbudgeted expenses that are necessary to avoid damage or injury to persons or property, and in any event shall notify Agency, in writing, of the nature of the emergency and the amount of the expenses, within ten (10) days after such expenses have been incurred. Agency shall reasonably respond to any such request within fifteen (15) days of the receipt of same and if Agency fails to do so, such request shall be deemed to be approved. 4.0 MAINTENANCE, 4.1 Maintenance Obligation. Developer agrees to and shall maintain all interior and exterior improvements, including landscaping, on the Site in a first class condition and repair (and, as to landscaping, in a healthy condition) and in accordance with all of the permits and approvals for the Project, and all other applicable laws, rules, ordinances, orders, and regulations of all federal, state, county, municipal, and other governmental agencies and bodies having or claiming jurisdiction and all their respective departments, bureaus, and officials. Agency places prime importance on quality maintenance to protect its investment and to ensure that all Agency - assisted affordable housing projects within the City are not allowed to deteriorate due to below - average maintenance. Normal wear and tear of the Site improvements will be acceptable to Agency assuming Developer agrees to perform all necessary Site improvements to assure the Site is maintained in good condition. Maintenance requirements shall include that: (a) no improperly maintained landscaping shall be visible from public rights -of -way, including (i) no lawns with grasses in excess of six (6) inches in height, (ii) no trees, shrubbery, lawns, and other plant life dying from lack of water or other necessary maintenance, (iii) no trees, hedges, or shrubbery grown uncontrolled without proper pruning, (iv) no vegetation so overgrown as to be likely to harbor rats or vermin, and (v) no dead, decayed, or diseased trees, weeds, and/or other vegetation; (b) no yard areas shall be left unmaintained, including (i) no broken or discarded furniture, appliances, or other household equipment stored in yard areas for periods exceeding one (1) week, (ii) no packing boxes, lumber, trash, dirt, or other debris stored in yards for periods exceeding one (1) week: in areas visible from public property or neighboring properties, (iii) no unscreened trash cans, bins, or containers stored for unreasonable periods in areas visible from public property or neighboring properties, and (iv) no vehicles parked or stored in areas other than approved parking areas; (c) no buildings may be left in an unmaintained condition, including (i) no violations of state law, Uniform Codes, or City ordinances, (ii) no condition that constitutes an unsightly appearance that detracts from the aesthetics or property value of the subject property or constitutes a private or public nuisance, (iii) no broken windows or chipped, cracked, or peeling paint, (iv) no conditions constituting hazards and/or inviting trespassers or malicious mischief, and (v) no graffiti or accumulation of waste or debris. Developer shall make all repairs and replacements necessary to keep the improvements in good condition and repair and shall promptly eliminate all graffiti and replace dead and diseased plants and landscaping "21015610 OO -11- 84340907 a10/30/07 with comparable approved materials. In the event that Developer breaches any of the covenants contained in this Section and Developer does not commence to cure such breach within five (5) business days after written notice from Agency (with respect to, graffiti, debris, waste material, landscaping, and general maintenance) or thirty (30) days after written notice from Agency (with respect to building improvements), and after commencing the cure to diligently prosecute such cure to completion, then Agency, in addition to whatever other remedy it may have at law or in equity, shall have the right, but not the obligation, to enter upon the Site and perform all acts and work necessary to protect, maintain, and preserve the improvements and landscaped areas on the Site, and to attach a lien on the Site, or to assess the Site, in the amount of the expenditures arising from such acts and work of protection, maintenance, and preservation by Agency and/or costs of such cure, including a fifteen percent (15%) administrative charge, which amount shall be promptly paid by Developer to Agency upon demand. 4.2 Lien. If the costs incurred pursuant to Section 4.1 are not reimbursed within thirty (30) days after Developer's receipt of notice thereof, or if Developer fails to timely pay other sums required to be paid to Agency under this Agreement when due (after notice and an opportunity to cure, as set forth in Section 10 or Section 11 (as applicable)), the same shall be deemed delinquent, and the amount thereof shall bear interest thereafter at a rate of ten percent (10%) per annum until paid. Any and all delinquent amounts, together with said interest, costs and reasonable attorney's fees, shall be a lien and charge, with power of sale, upon the property interests of Developer, and the rents, issues and profits of such property. Agency may bring an action at law against Developer to pay any such sums or foreclose the lien against Developer's property interests. Any such lien may be enforced by sale by the Agency following recordation of a Notice of Default of Sale given in the manner and time required by law as in the case of a deed of trust; such sale to be conducted in accordance with the provisions of Section 2924, et seg., of the California Civil Code, applicable to the exercise of powers of sale in mortgages and deeds of trust, or in any other manner permitted by law. No lien recorded by Agency pursuant to this Section 4.2 shall defeat or render invalid the lien of any senior mortgage or deed of trust. 5.0 MANAGEMENT 5.1 Marketing, Plan. Prior to the date the City issues a certificate of occupancy for any of the Units, Developer shall have submitted for the approval of the Executive Director, which approval shall not unreasonably be withheld, a plan for marketing the rental of the Units (the "Marketing Plan"). The Marketing Plan shall include affirmative marketing procedures and requirements. The Marketing Plan shall include a plan for publicizing the availability of the Units within the City in a manner which gives notice to residents of the City, such as notices in any Agency sponsored newsletter, newspaper advertising in local newspapers and notices in City offices and community centers. 5.2 Lone Term Management of the Proiect. Prior to the date the City issues a certificate of occupancy for any of the Units, Developer shall have submitted for the reasonable approval of the Executive Director a "Management Plan" which sets forth in detail the identity and the duties of the person or entity retained by Developer to operate and manage the Project (the "Property Manager"), the management staffing policies (i.e., what staff is on site, how they are supervised) tenant selection criteria, the tenant selection and income certification process, ea2i015610-0047 943409.01 aionoio2 -12- tenant orientation, tenant relations, tenant complaints, routine maintenance, emergencies, a security system and crime prevention program, the procedures for determining Affordable Rent and for the collection of rent, occupancy limits and the procedures for monitoring of occupancy levels, the procedures for eviction of tenants, the rules and regulations of the Project and manner of enforcement, the initial standard lease form, and other matters relevant to the management of the Project. The Management Plan shall require the Property Manager to apply for the Crime Free Multi -Housing Program through the City of La Quinta Police Department. Developer may from time to time submit amendments and modifications to the Management Plan for the reasonable approval of the Executive Director. The management of the Project shall be in compliance with the Management Plan. 5.3 Gross Mismana eg ment. In the event of "Gross Mismanagement" (as that term is defined below) of the Project, Agency shall have the authority to require that such Gross Mismanagement cease immediately, and further to require the immediate replacement of the manager. Agency shall provide written notice to Developer of the event(s) of Gross Mismanagement occurring and Developer shall have five (5) business days after receipt of such notice to commence to cure, correct, or remedy the event(s) of Gross Mismanagement identified in the Agency's notice and to notify the Agency's Executive Director of the steps taken to effect such cure, correction, or remedy, and upon commencing such cure, correction, or remedy to thereafter diligently prosecute such cure, correction, or remedy to completion. For purposes of this Agreement the term "Gross Mismanagement" shall mean management of the Project in a manner which materially violates the terms and/or intention of this Agreement to operate an affordable rental housing complex of the highest standard, and shall include, but is not limited to, the following: 5.3.1 Knowingly leasing a Unit to an ineligible tenant or tenants whose income exceeds the prescribed levels; 5.3.2 Knowingly allowing the tenants to exceed permitted occupancy levels without taking immediate steps to stop such overcrowding; 5.3.3 Knowingly allowing a tenant to sublease his or her Unit at a rent that exceeds an Affordable Rent; 5.3.4 Failing to timely maintain the Project and the Site in the manner required by this Agreement or failing to submit materially complete reports; 5.3.5 Failing to timely submit the reports as required by this Agreement; 5.3.6 Fraud in connection with any document or, representation relating to this Agreement or embezzlement of Project monies; and 5.3.7 Failing to fully cooperate with law enforcement in its attempts to maintain a crime -free environment on the Site. 5.4 Lease Approval. The initial form lease agreement to be used by Developer for the rental of any of the Units ("Lease Agreement"), and any changes to such form Lease Agreement regarding the provisions required by this Agreement, including, but not limited to, the provisions 882/015610-0047 -13- 843409.07 a10130M required by Section 3.9, to be included in the form Lease Agreement, shall be reasonably approved in advance by Agency's Executive Director prior to the initial use of the lease form and prior to the first use of the changed form. The form Lease Agreement shall include a Crime Free Lease Addendum in the form recommended by the Riverside County Sheriffs Department. 5.5 Operating Reserve. Developer shall, or shall cause the Property Manager to, set aside in a separate interest -bearing trust account the sum of One Hundred Six Thousand One Hundred Ninety Dollars ($107,000) ("Operating Reserve") and shall provide evidence reasonably satisfactory to Agency's Executive Director of compliance herewith, and shall thereafter retain such amount in the Operating Reserve, to cover shortfalls between Operating Income and actual Project costs. In the event that Developer's permanent lender, TCAC regulations or approvals or the Tax Credit Investor, reasonably requires a different type of account for the Operating Reserve or requires different terms for such account, Developer shall request Agency's Executive Director's approval, which approval shall not be unreasonably withheld, to modify the requirements of this paragraph to meet such requirements. Following the first anniversary date of the City's issuance of the certificate of occupancy for the Project on the Site, Developer may request release of the Operating Reserve to Developer and cancellation of the Operating Reserve upon written request to Agency's Executive Director accompanied by an audited financial statement evidencing sufficient Project income showing, to the -reasonable satisfaction of Agency's Executive Director, that the Operating Reserve is no longer required. 5.6 vital Replacement Reserve. Developer shall, or shall cause the Property Manager to, annually set aside a minimum of Three Hundred Nine Dollars ($309) per unit per year (for example, for 80 units, the annual amount would be $40,000) into a capital replacement reserve account (the "Capital Replacement Reserve"). Funds in the Capital Replacement Reserve shall be used solely for Capital Improvements. As Capital Improvements become necessary, the Capital Replacement Reserve shall be the first source of payment therefor. Not less than once per year, Developer, at its expense, shall submit to Agency an accounting for the Capital Replacement Reserve. The non -availability of funds in the Capital Replacement Reserve does not in any manner relieve Developer of the obligation to undertake necessary capital repairs and improvements and to continue to maintain the Site in the manner prescribed in this Agreement. Notwithstanding anything herein to the contrary, in the event the permanent lender for the Project requires the establishment of a capital reserve to fund Capital Improvements, and such requirements are consistent with, and at least as stringent as those set forth herein, then during the term of the documents governing such loan, Developer shall not be deemed in default hereunder if Developer is in compliance with such condition. 6.0 COMPLIANCE WITH LAWS; ENVIRONMENTAL MATTERS. 6.1 Compliance With Laws. Developer shall comply with (i) all ordinances, regulations and standards of the City, Agency, County of Riverside, any regional governmental entity, State of California, and federal government applicable to the Site; (ii) all rules and IHV015610-0047 843409.07 at 0//30/D7 -14- regulations of any assessment district of the City with jurisdiction over the Site; and (iii) all applicable labor standards of California law and federal law; and (iv) the requirements of California law and federal law with respect to the employment of undocumented workers or illegal aliens. 6.2 Waiver and Release. Subject to Section 222 of the AHA, which requires the Agency to indemnify Developer in certain, specified circumstances, Developer hereby waives, releases, acquits, and forever discharges Agency, its officers, officials, members, employees, agents, and representatives, and their respective heirs, successors, personal representatives, and assigns, of and from any liability for the physical or environmental condition of the Site, or for removal or remediation of hazardous Materials, or repair or alteration of the physical condition of the Site or Project. Developer accepts and approves the physical and environmental condition of the Site in its "AS IS" 'WHERE IS" "WITH ALL FAULTS" condition. 6.2.2 Definitions. For the purposes of this Agreement, unless the context otherwise specifies or requires, the following terms shall have the meanings herein specified: 6.2.2.1 The term "Hazardous Materials" shall mean any substance, material, or waste which is or becomes regulated by any local governmental authority, the County of Riverside, the State of California, a regional governmental authority, or the United States Government, including, but not limited to, any material or substance which is (i) defined as a "hazardous waste," "extremely hazardous waste," or "restricted hazardous waste" under Section 25115, 25117 or 25122.7, or listed pursuant to Section 25140 of the California Health and Safety Code, Division 20, Chapter 6.5 (Hazardous Waste Control Law)), (ii) defined as a "hazardous substance" under Section 25316 of the California Health and Safety Code, Division 20, Chapter 6.8 (Carpenter -Presley -Tanner Hazardous Substance Account Act), (iii) defined as a "hazardous material," "hazardous substance," or "hazardous waste" under Section 25501 of the California Health and Safety Code, Division 20, Chapter 6.95 (Hazardous Materials Release Response Plans and Inventory), (iv) defined as a "hazardous substance" under Section 25281 of the Califomia Health and Safety Code, Division 20, Chapter 6.7 (Underground Storage of Hazardous Substances), (v) petroleum, (vi) friable asbestos, (vii) polychlorinated biphenyls, (viii) listed under Article 9 or defined as "hazardous" or "extremely hazardous" pursuant to Article 11 of Title 22 of the California Administrative Code, Division 4, Chapter 20, (ix) designated as "hazardous substances" pursuant to Section 311 of the Clean Water Act (33 U.S.C. 1317), (x) defined as a "hazardous waste" pursuant to Section 1004 of the Resource Conservation and Recovery Act, 42 U.S.C. 6901 et 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 sue. 6.2.2.2 The term "Hazardous Materials Contamination" shall mean the contamination (whether presently existing or hereafter occurring) of the improvements, facilities, soil, groundwater, air or other elements on, in or of the Site by Hazardous Materials, or the contamination of the buildings, facilities, soil, groundwater, air or other elements on, in or of any other property as a result of Hazardous Materials at any time emanating from the Site. 6.2.2.3 The term "Governmental Requirements" shall mean all past, present and future laws, ordinances, statutes, codes, rules, regulations, orders and decrees of the 882/015610-0047 -15- 843409 07 a10/30/D7 United States, the state, the county, the city, or any other political subdivision in which the Site is located, and any other state, county city, political subdivision, agency, instrumentality or other entity exercising jurisdiction over the Site. 6.2.3 Indemnity. Developer shall save, protect, defend, indemnify and hold harmless Agency and the City and their respective officers, officials, members, employees, agents, and representatives from and against any and all liabilities, suits, actions, claims, demands, penalties, damages (including, without limitation, penalties, fines and monetary sanctions), losses, costs or expenses (including, without limitation, consultants' fees, investigation and laboratory fees, reasonable attorneys' fees and remedial and response costs) (the foregoing are hereinafter collectively referred to as "Liabilities") which may now or in the future be incurred or suffered by Agency or City or their respective officers, officials, members, employees, agents, or representatives by reason of, resulting from, in connection with, or existing in any manner whatsoever as a direct or indirect result of (i) Developer's placement on or under the Site of any Hazardous Materials or Hazardous Materials Contamination after the Effective Date, (ii) the escape, seepage, leakage, spillage, discharge, emission or release from the Site of any Hazardous Materials or Hazardous Materials Contamination after the Effective Date, or (iii) any Liabilities incurred under any Governmental Requirements relating to the acts described in the foregoing clauses (i) and (ii); provided, however, that the same shall not apply to acts or omissions following Agency's or City's conduct of a foreclosure sale or acceptance of a deed in lieu thereof. 6.3 Duty to Prevent Hazardous Material Contamination. Developer shall take commercially reasonable action to prevent the release of any Hazardous Materials into the environment. Such precautions shall include compliance with all Governmental Requirements with respect to Hazardous Materials. In addition, Developer shall install and utilize such equipment and implement and adhere to such procedures as are consistent with the standards generally applied by apartment complexes in Riverside County, California as respects the disclosure, storage, use, removal, and disposal of Hazardous Materials. 6.4 Obligation of Developer to Remediate Premises. Notwithstanding the obligation of Developer to indemnify Agency, City, and their respective officers, officials, members, employees, agents, and representatives pursuant to Section 6.2.3, Developer shall, at its sole cost and expense, promptly take (i) all actions required by any federal, state, regional, or local governmental agency or political subdivision or any Governmental Requirements and (ii) all actions necessary to make full economic use of the Site for the purposes contemplated by this Agreement and the AHA, which requirements or necessity arise from the presence upon, about or beneath the Site, prior to Agency's or City's conduct of a foreclosure sale or acceptance of a deed in lieu thereof, of any Hazardous Materials or Hazardous Materials Contamination for which Developer is responsible. Such actions shall include, but not be limited to, the investigation of the environmental condition of the Site, the preparation of any feasibility studies or reports and the performance of any cleanup, remedial, removal or restoration work. 6.5 Environmental Inquiries. Developer, when it has received any notices of violation, notices to comply, citations, inquiries, clean-up or abatement orders, or cease and desist orders related to Hazardous Materials or Hazardous Materials Contamination, or when Developer is required to report to any governmental agency any violation or potential violation 882/015610,0047 843409 07 aI0/30/07 -16- of any Governmental Requirement pertaining to Hazardous Materials or Hazardous Materials Contamination, shall concurrently notify Agency's Executive Director, and provide to him/her a copy or copies, of the environmental permits, disclosures, applications, entitlements or inquiries relating to the Site, the notices of violation, notices to comply, citations, inquiries, clean-up or abatement orders, cease and desist orders, reports filed pursuant to self -reporting requirements, and reports filed or applications made pursuant to any Governmental Requirement relating to Hazardous Materials and underground tanks, and Developer shall report to the Executive Director, as soon as possible after each incident, any unusual, potentially important incidents. In the event of a responsible release of any Hazardous Materials into the environment, Developer shall, as soon as possible after it becomes aware of the release, furnish to the Executive Director a copy of any and all reports relating thereto and copies of all correspondence with governmental agencies relating to the release. Upon request of the Executive Director, Developer shall 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. Developer, for the term of this Agreement, shall procure and keep in full force and effect or cause to be procured and kept in full force and effect for the mutual benefit of Developer and Agency, and shall provide Agency evidence reasonably acceptable to Agency's Executive Director, insurance policies meeting the minimum requirements set forth below: 7.1.1 Commercial General Liability insurance with respect to the Site and the operations of or on behalf of Developer, in an amount not less than Three Million Dollars ($3,000,000) per occurrence combined single limit including products, completed operations, contractual, bodily injury, personal injury, death and property damage liability per occurrence, subject to such increases in amount as Agency may reasonably require from time to time; provided, that the percentage increase in coverage shall not be required to exceed the percentage increase in the CPI (the "CPI Adjustment"). Unless otherwise approved in advance by the Agency Executive Director, the insurance to be provided by Developer may provide for a deductible or self -insured retention of not more than Ten Thousand Dollars ($10,000), with such maximum amount to increase at the same rate as the periodic increases in the minimum amount of total insurance coverage set forth above. 7.1.2 With respect to the improvements and any fixtures and furnishings to be owned by Developer on the Site, insurance against fire, extended coverage, vandalism, and malicious mischief, and such other additional perils, hazards, and risks as now are or may be included in the standard "all risk" form in general use in Riverside County, California, with the standard form fire insurance coverage in an amount equal to full actual replacement cost thereof, as the same may change from time to time. The above insurance policy or policies shall include coverage for earthquakes to the extent generally and commercially available at commercially reasonable rates, if such insurance is generally obtained for rental apartment projects of this size and type in the counties of Los Angeles, Orange County, Riverside, and San Bernardino. 882101561P0047 843409 07 M O/30107 -17- Agency shall be a loss payee under such policy or policies and such insurance shall contain a replacement cost endorsement. 7.2 Policy Requirements. All policies of insurance required to be carried by Developer shall meet the following requirements and contain the following endorsements, provisions, or clauses (as applicable): 7.2.1 The policies shall be written by responsible and solvent insurance companies licensed in the State of California and having policyholders' rating of A or better in the most recent addition of `Best's Key Rating Guide -- Property and Casualty." Notwithstanding the foregoing, in the event that the policies required hereunder are not available from such insurers at commercially reasonable rates, the Executive Director shall have the authority, in his or her sole and absolute discretion, to waive one or more of such requirements, provided the proposed policies will adequately protect the Agency's interests hereunder. A copy of each paid -up policy evidencing such insurance (appropriately authenticated by the insurer) or a certificate of the insurer, certifying that such policy has been issued, providing the coverage required herein, and containing the provisions specified herein, shall be delivered to Agency on or prior to the date of this Agreement, and thereafter, upon renewals, not less than thirty (30) days prior to the expiration of coverage. Agency may, at any time, and from time to time, inspect and/or copy any and all insurance policies required to be procured by Developer hereunder. In no event shall the limits of any policy be considered as limiting the liability of Developer hereunder. 7.2.2 The insurer shall not cancel or materially alter the coverage provided by such policy in a manner adverse to the interest of the insured without first giving Agency a minimum of thirty (30) days prior written notice by certified mail, return receipt requested; and 7.2.3 A waiver by the insurer of any right to subrogation against Agency and City, and their respective officers, officials, members, employees, agents, and representatives, which arises or might arise by reason of any payment under such policy or policies or by reason of any act or omission of Agency or City or their respective officers, officials, members, employees, agents, or representatives. 7.2.4 The Agency and the City and their respective officers, officials, members, employees, agents, and representatives shall be named as additional insureds on the Commercial General Liability policies. 7.2.5 Coverage provided by these policies shall be primary and non- contributory to any insurance carried by the Agency or City or their respective officers, officials, members, employees, agents, or representatives. 7.2.6 Failure to comply with reporting provisions shall not affect coverage provided to Agency and its officers, officials, members, employees, agents, or representatives. 7.3 Failure to Procure Insurance. If Developer fails to procure and maintain the above -required insurance despite its availability, then Agency, in addition to any other remedy which Agency may have hereunder for Developer's failure to procure, maintain, and/or pay for the insurance required herein, may (but without any obligation to do so) at any time or from time :82/015610-0047 43409.07 a10/30107 -1 s- to time, after thirty (30) days written notice to Developer, procure such insurance and pay the premiums therefor, in which event Developer shall immediately repay Agency all sums so paid by Agency together with interest thereon at the maximum legal rate. 8.0 OBLIGATION TO REPAIR. 8.1 Obligation to Repair and Restore Damage Due to Casualty Covered by Insurance. Subject to Section 8.3 below, if the Project shall be totally or partially destroyed or rendered wholly or partly uninhabitable by fire or other casualty required to be insured against by Developer, subject to its compliance with any procedures required by a senior lien holder, Developer shall promptly proceed to obtain insurance proceeds and take all steps necessary to begin reconstruction and, immediately upon receipt of insurance proceeds, to promptly and diligently commence the repair or replacement of the Project to substantially the same condition as the Project is required to be maintained in pursuant to this Agreement, whether or not the insurance proceeds are sufficient to cover the actual cost of repair, replacement, or restoration, and Developer shall complete the same as soon as possible thereafter so that the Project can continue to be operated and occupied as an affordable housing project in accordance with this Agreement. Subject to extensions of time for "Enforced Delay" events (as defined in Section 22 of this Agreement) occurring after the casualty event, in no event shall the repair, replacement, or restoration period exceed fifteen (15) months from the date Developer obtains insurance proceeds, unless the Agency Executive Director, in his or her sole and absolute discretion, approves a longer period of time. Agency shall cooperate with Developer, at no expense to Agency, in obtaining any governmental permits required for the repair, replacement, or restoration and, upon issuance of such permits Agency shall promptly release control of any insurance proceeds within Agency's control. If, however, the then -existing laws of any other governmental agencies with jurisdiction over the Site do not permit the repair, replacement, or restoration, Developer may elect not to repair, replace, or restore the Project by giving notice to Agency (in which event Developer shall be entitled to all insurance proceeds but Developer shall be required to remove all debris from the Site) or Developer may reconstruct such other improvements on the Site as are consistent with applicable land use regulations and approved by the City, Agency, and the other governmental agency or agencies with jurisdiction. In such event, the Agency Agreements, including this Agreement, shall automatically terminate and Agency shall cooperate to remove the Agency Agreements from title. If Developer fails to obtain insurance as required by this Agreement (and Agency has not procured such insurance and charged Developer for the cost), Developer shall be obligated to reconstruct and repair any partial or total damage to the Project and improvements located on the site in accordance with this Section 8.1. 8.2 Continued Operations. During any period of repair, Developer shall continue, or cause the continuation of, the operation of the apartment complex on the Site to the extent reasonably practicable from the standpoint of prudent business management. 8.3 Damage or Destruction Due to Cause Not Required to be Covered by Insurance. If the improvements comprising the Project are completely destroyed or substantially damaged by a casualty for which Developer is not required to (and has not) insured against, then Developer shall not be required to repair, replace, or restore such improvements and may elect 882/015610.0047 843409 07 a10/30/07 ' 19- not to do so by providing Agency with written notice of election not to repair, replace, or restore within ninety (90) days after such substantial damage or destruction. In such event, (i) Developer shall remove all debris from the Site, and (ii) the Agency Agreements, including this Agreement, shall automatically terminate and Agency shall cooperate to remove the Agency Agreements from title. As used in this Section 8.3, "substantial damage" caused by a casualty not required to be (and not) covered by insurance shall mean damage or destruction which is fifty percent (50%) or more of the replacement cost of the improvements comprising the Project. In the event Developer does not timely elect not to repair, replace, or restore the improvements as set forth in the first sentence of this Section 8.3, Developer shall be conclusively deemed to have waived its right not to repair, replace, or restore the improvements and thereafter Developer shall promptly commence and complete the repair, replacement, or restoration of the damaged or destroyed improvements in accordance with Section 8.1 above and continue operation of the apartment complex during the period of repair (if practicable) in accordance with Section 8.2 above. 9.0 LIMITATION ON TRANSFERS 9.1 Sale or Transfer of the Project. Developer covenants that during the term of this Agreement Developer shall not assign this Agreement or transfer the Site or any of its interests therein except as provided in this Section 9.0. 9.2 Transfer Defined. As used in this Article 9.0, the term "Transfer" shall include any assignment, hypothecation, mortgage, pledge, conveyance, or encumbrance of this Agreement, the Site, or the improvements thereon. A Transfer shall also include the transfer to any person, entity, or group of persons or entities acting in concert of more than twenty-five percent (25%) (in the aggregate) of the present ownership and/or control of any person or entity constituting Developer, taking all transfers into account on a cumulative basis. In the event any entity constituting Developer, or the constituent partners or members of Developer or any successor of Developer, is a corporation or trust, such transfer shall refer to the transfer of the issued and outstanding capital stock of such corporation, or of beneficial interests of such trust; in the event that any entity constituting Developer, or the constituent partners of Developer or any successor of Developer is a limited or general partnership, such transfer shall refer to the transfer of more than twenty-five percent (25%) of such limited or general partnership interest; in the event that any entity constituting Developer, or the constituent members of Developer or any successor of Developer is a limited liability company, such transfer shall refer to the transfer of more than twenty-five percent (25%) of such membership interest; in the event that any entity constituting Developer, or the constituent partners of Developer or any successor of Developer is a joint venture, such transfer shall refer to the transfer of more than twenty-five percent (25%) of the ownership and/or control of any such joint venture partner, taking all transfers into account on a cumulative basis. 9.3 Agency Approval of Transfer Required. Except as set forth below, Developer shall not Transfer this Agreement or any of Developer's rights hereunder, or any interest in the Site or in the improvements thereon, directly or indirectly, voluntarily or by operation of law, without the prior written approval of Agency, which approval shall not be unreasonably withheld, conditioned, or delayed, and any such purported Transfer without such approval shall be null and void. In addition to the foregoing and notwithstanding anything in this Section to the 882/015610-0047 943409.07.10/30/07 -20- contrary, so long as the Project is encumbered by a deed of trust (other than a deed of trust the beneficiary of which is the Agency), any proposed transferee or assignee must also receive the prior written consent of the beneficiary of such deed of trust, if required by such deed of trust, before Agency shall approve such transfer or assignment; provided, however, that such consent of beneficiary shall not obligate Agency to approve such Transfer. Notwithstanding the foregoing, the following types of transfers shall not require Agency approval but as with all Transfers shall be subject to Section 9.4: (a) transfers to a limited liability company in which Developer has a greater than fifty percent (50%) ownership and management interest; (b) transfers to a limited partnership in which Developer or an Affiliate of Developer which is also a non-profit public benefit corporation is the general partner (the "Limited Partnership"); (c) the leasing of individual rental units on the Site provided that such leasing is in accordance with the terms of this Agreement; (d) transfers resulting from the death or mental or physical incapacity of an individual; (e) transfers in trust for the benefit of a spouse, children, grandchildren, or other family member, or for charitable purposes; (f) transfers of stock in a publicly -held corporation or of the beneficial interest in any publicly -held partnership or real estate investment trust; (g) the conveyance or dedication of portions of the Site to the City or other governmental entity, or the granting of easements or permits to facilitate the development of the Site; (h) the transfer of the limited partner interests of the Limited Partnership to the Tax Credit Investor; (i) the transfer by the Tax Credit Investor to an Affiliate of Hudson Housing Capital, LLC; (j) the removal by the Tax Credit Investor of the general partner of the Limited Partnership for a default under the partnership agreement, provided the replacement general partner is reasonably satisfactory to Agency; (k) sale by the Tax Credit Investor of credits in syndication; (1) encumbrance of the limited partner interest by the Tax Credit Investor as collateral to finance its capital contribution to the Limited Partnership; "2/015610-0047 84340907 a10/30/07 -21- (m) exercise by the general partner of Developer of any option to purchase or right of first refusal to purchase the Limited Partnership or all of the limited partner's interest in the Limited Partnership at the conclusion of the tax credit period; or (n) transfer by Agency of its general partnership interest in the Limited Partnership. 9.4 Assignment and Assumption Agreement. In the absence of specific written agreement by Agency, no Transfer by Developer of all or any portion of its interest in the Site or this Agreement, whether or not requiring the approval by Agency, shall be deemed to relieve Developer or any successor party from the obligation to timely complete construction of the Project. In addition, no attempted Transfer of any of Developer's obligations hereunder shall be effective unless and until Developer and the transferee or successor party execute and deliver to Agency a binding assignment and assumption agreement in a form reasonably approved by Agency's legal counsel. 9.5 Permitted Transferee. A "Permitted Transferee" under this Agreement shall be a transferee or assignee that either, (i) has been approved by the Agency Executive Director or (ii) is a transferee of a Transfer not requiring the approval of the Agency Executive Director pursuant to the terms of this Agreement, and in both the cases described in the foregoing clauses (i) and (ii) has executed and delivered to the Agency Executive Director an assignment and assumption agreement pursuant to Section 9.4. 10.0 EVENTS OF DEFAULT BY DEVELOPER Subject to extensions of time pursuant to the terms of Section 22, the occurrence of one or more of any of the following events shall constitute an "Event of Default" by Developer hereunder if Developer shall have not cured, corrected, or remedied such failure within, unless a shorter or longer cure period is provided for specific defaults elsewhere in this Agreement, thirty (30) days following the service on Developer of a written notice from Agency specifying the failure complained of, or if it is not practicable to cure or remedy such failure within such thirty (30) day period (which impracticality shall not apply to monetary defaults), within such longer period as shall be reasonable under the circumstances provided that Developer has commenced to cure within the same thirty (30) day period and has diligently prosecuted such cure to completion: 10.1 Developer shall abandon or surrender the Site; or 10.2 Developer is in default of the Agency Note and has not cured such default within the cure period applicable to such default as set forth in the Agency Note; or 10.3 Developer is in material default of any of the covenants, terms or provisions of this Agreement or any of the Agency Agreements; or 10.4 Developer voluntarily files or has involuntarily filed against it any petition under any bankruptcy or insolvency act or law and the same has not been dismissed within sixty (60) days thereafter; or BB2/01561M047 84340907 a10/30/07 -22- 10.5 Developer is adjudicated a bankrupt; or 10.6 Developer makes a general assignment for the benefit of creditors in violation of the terms of this Agreement or any of the Agency Agreements. 10.7 Developer is in default, beyond any applicable cure period, of either of the following: (i) any senior indebtedness encumbering the Site, or (ii) the Tax Credit Regulatory Agreement and the other party has not waived the default. Notwithstanding anything herein to the contrary, whenever the Agency shall deliver any notice or demand to the Developer with respect to any breach or default by the Developer of the terms hereunder, the Agency shall at the same time deliver a copy of such notice or demand to the Tax Credit Investor. The Tax Credit Investor (insofar as the rights of the Agency are concerned) shall have the right, at its option, within thirty (30) days after the receipt of the notice, to cure or remedy or commence to cure or remedy any such default. Such cure period shall run concurrently with the Developer's cure period described in this Article 10.0. 11.0 REMEDIES OF AGENCY. In the event Developer defaults in the performance or observance of any covenant, agreement or obligation of Developer pursuant to this Agreement, and if such default remains uncured for a period of thirty (30) days after written notice thereof shall have been given by Agency (or such lesser period as may apply under Section 4.1), or, in the event said default cannot be cured within said time period, Developer has failed to commence to cure such default within the applicable time period and diligently prosecute said cure to completion, then Agency may declare an "Event of Default" to have occurred hereunder, and, at its option, may take one or more of the following steps: 11.1 With respect to (i) the physical condition of the Site, or (ii) Developer's Gross Mismanagement of the Project, enter the Site and correct or cause to be corrected said default and charge the costs thereof (including costs incurred by Agency in enforcing this provision) to the account of Developer, which charge shall be due and payable within thirty (30) days after presentation by Agency of a statement of all or part of said costs, and if such bill is not timely paid then to (A) place a lien on the Site for said amount due plus interest at the maximum legal rate, or (B) foreclose with respect to Agency's lien on the Site for said amount due plus interest at the maximum legal rate; 11.2 Correct or cause to be corrected said default and pay the costs thereof (including costs incurred by Agency in enforcing this provision) from the proceeds of any insurance; 11.3 Exercise its right to maintain any and all actions or proceedings at law or suits in equity to compel Developer to correct or cause to be corrected said default, or to foreclose as a result thereof, including without limitation exercise of Agency's rights under the Agency Deed of Trust; 11.4 Have a receiver appointed to take possession of Developer's interest in the Site, with power in said receiver to administer Developer's interest in the Site, to collect all funds available to Developer in connection with its operation and maintenance of the Site, and to "2/015610M47 843409.07 a10/30/07 -23- perform all other actions consistent with Developer's obligations under this Agreement as the court deems proper; 11.5 Terminate this Agreement by written notice to Developer and seek repayment of any remaining principal and accrued interest then owing on the Agency Note; 11.6 With respect to a default for which foreclosure would be an available remedy, exercise the right to foreclose, or, during the period which is five (5) days prior to the foreclosure sale date, exercise the right to purchase the Project from Developer, for a purchase price equal to the appraised value of the Site less (i) the outstanding amount due under any senior indebtedness, (ii) the amount due under the Agency Note, (iii) any delinquent taxes and assessments owing on the Site, and (iv) any reasonable costs incurred by Agency to effect the curing of a default and purchase of the Project, including but not limited to escrow fees and attorney's fees. Except as otherwise expressly stated in this Agreement, the rights and remedies of the parties are cumulative, and the exercise by any party of one or more of its rights or remedies shall not preclude the exercise by it, at the same or different times, of any other rights or remedies for the same default or any other default by another party. 12.0 NONDISCRIMINATION. 12.1 Antidiscrimination. There shall be no discrimination against or segregation of any person, or group of persons, on account of race, color, creed, religion, sex, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Site, or any part thereof, nor shall Developer, or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the Site, or any part thereof (except as permitted by this Agreement). 12.2 Anti -Discrimination Clauses in Agreements. Developer agrees for itself and any successor in interest that Developer shall refrain from restricting the rental, sale, or lease of any portion of the Site, or contracts relating to the Site, on the basis of race, color, creed, religion, sex, marital status, ancestry, or national origin of any person. All such deeds, leases or contracts shall contain or be subject to substantially the following nondiscrimination or nonsegregation clauses: 12.2.1 In deeds: "The grantee herein covenants by and for itself, its heirs, executors, administrators, and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex, marital status, ancestry, or national origin in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the land herein conveyed, nor shall the grantee itself, or any persons claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy of tenants, lessees, subtenants, sublessees, or vendees in the land herein conveyed. The foregoing covenants shall run with the land." 861'015610-0047 843409 07 a1 Or0/07 -24- 12.2.2 In leases: "The lessee herein covenants by and for itself, its heirs, executors, administrators, and assigns, and all persons claiming under or through them, and this lease is made and accepted upon and subject to the following conditions: "That there shall be no discrimination against or segregation of any person or group of persons on account of status, race, color, creed, religion, sex, marital status, ancestry, or national origin in the leasing, subleasing, transferring, use, occupancy, tenure, or enjoyment of the land herein leased, nor shall the lessee itself, or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection„ location, number, use, or occupancy of tenants, lessees, sublessees, subtenants, or vendees in the land herein leased." 12.2.3 In contracts: "There shall be no discrimination against or segregation of any persons or group of persons on account of status, race, color, creed, religion, sex, marital status, ancestry, or national origin in the sale, lease, transfer, use, occupancy, tenure, or enjoyment of land, nor shall the transferee itself, or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy of tenants, lessees, subtenants, sublessees, or vendees of land." 13.0 COVENANTS TO RUN WITH THE LAND Developer hereby subjects the Site to the covenants, reservations, and restrictions set forth in this Agreement. Agency and Developer hereby declare their express intent that all such covenants, reservations, and restrictions shall be deemed covenants running with the land, and shall pass to and be binding upon the Developer's successors in title to the Site; provided, however, that on the termination of this Agreement said covenants, reservations and restrictions shall automatically expire. All covenants established in this Agreement shall, without regard to technical classification or designation, be binding for the benefit of the Agency, and such covenants shall run in favor of the Agency for the entire term of this Agreement, without regard to whether the Agency is or remains an owner of any land or interest therein to which such covenants relate. Each and every contract, deed or other instrument hereafter executed covering or conveying the Site or any portion thereof shall conclusively be held to have been executed, delivered and accepted subject to such covenants, reservations, and restrictions, regardless of whether such covenants, reservations, and restrictions are set forth in such contract, deed or other instrument. Agency and Developer hereby declare their understanding and intent that the burden of the covenants set forth herein touch and concern the land in that Developer's legal interest in the Site is rendered less valuable thereby. Agency and Developer further hereby declare their understanding and intent that the benefit of such covenants touch and concern the land by enhancing and increasing the enjoyment and use of the Project by Eligible Tenants, the intended beneficiaries of such covenants, reservations, and restrictions, and by furthering the public purposes for which the Agency was formed. 1821015610-0047 843409 07 a10/30/07 -25- Developer, in exchange for the Agency entering into the AHA, hereby agrees to hold, sell, and convey the Site subject to the terms of this Agreement. Developer also grants to the Agency the right and power to enforce the terms of this Agreement against the Developer and all persons having any right, title or interest in the Site or any part thereof, their heirs, successive owners and assigns. The covenants set forth in this Agreement shall remain in effect for a period terminating on the earliest of (i) fifty-five (55) years following the Permanent Loan Closing Date; (ii) foreclosure by Agency with respect to the Site; and (iii) foreclosure by a senior lender. 14.0 INDEMNIFICATION. Developer agrees for itself and its successors and assigns to indemnify, defend, and hold harmless Agency, City, and their respective officers, officials, members, employees, agents, and representatives from and against any loss, liability, claim, or judgment relating in any manner to the Project excepting only any such loss, liability, claim, or judgment arising out of the intentional wrongdoing or gross negligence of Agency, City, or their respective officers, officials, members, employees, agents, or representatives, except with respect to those actions described in the last sentence of Section 222 of the AHA. 15.0 UTILITIES AND TAXES Developer, while in possession of the Site, and each successor or assign of Developer while in possession of the Site, shall remain fully obligated for the payment of (i) real and personal property taxes and assessments in connection with the Site, subject to Developer's right to claim exemptions under California Revenue & Taxation Code Section 214(g), and (ii) all charges for all utilities serving the Site for which Developer is responsible. 16.0 ATTORNEYS' FEES. In the event that a party to this Agreement brings an action against the other party hereto by reason of the breach of any condition, covenant, representation or warranty in this Agreement, or otherwise arising out of this Agreement, the prevailing party in such action shall be entitled to recover from the other expert witness fees, and its reasonable attorney's fees and costs. Attorney's fees shall include attorney's fees on any appeal, and in addition a party entitled to attorney's fees shall be entitled to all other reasonable costs for investigating such action, including the conducting of discovery. 17.0 AMENDMENTS. The Developer and the Agency agree to mutually consider reasonable requests for amendments to this Agreement which may be made by either of the parties hereto, lending institutions, the Tax Credit Investor or financial consultants to the Agency, provided such requests are consistent with this Agreement and would not substantially alter the basic business terms included herein. The Agency's Executive Director shall have the authority to approve, on behalf of the Agency, amendments to this Agreement that would not substantially alter the basic business terns or substantially increase the risk to the Agency. All other amendments shall require the action of the Agency Board. All amendments, including those authorized to be 882/01561 M047 M 1409 07 a10130/07 -26- approved by the Agency's Executive Director, shall be in writing and shall be signed by authorized representatives of Agency and Developer. 18.0 NOTICE. Formal notices, demands, and communications between Agency and Developer shall be sufficiently given if (i) personally delivered, (ii) delivered by a reputable same -day or overnight courier services that provides a receipt showing date and time of delivery, (iii) delivered by United States mail, registered or certified, postage prepaid, return receipt requested, or (iv) delivered by facsimile transmission, provided the original of the faxed communication is delivered within twenty-four (24) hours by one of methods described in clauses (i), (ii), or (iii) of the foregoing. Delivery shall be made to the following addresses: If to Agency: La Quinta Redevelopment Agency 78-495 Calle Tampico La Quinta, CA 92253 Attn: Executive Director Fax: (760) 777-7101 With a copy to: Rutan & Tucker, LLP 611 Anton Boulevard, Suite 1400 Costa Mesa, CA 92626 Attn: M. Katherine Jenson, Esq. Fax: (714) 546-9035 If to Developer: National Community Renaissance of California 9065 Haven Avenue, Suite 100 Rancho Cucamonga, CA 91730 Attn: Chief Executive Officer Fax: ( ) With a copy to: Hudson Housing Capital, LLC 630 Fifth Avenue, Suite 2850 New York, NY 10111 Attn: Joseph A. Macari Fax: (212) 218-4467 With a copy to: Law Office of Edward A. Hopson 655A North Mountain Avenue Upland, CA 91786 Attn: Edward A. Hopson, Esq. Notices that are personally delivered, delivered by messenger/courier, or by fax (provided there is compliance with the terms of clause (iv) above) shall be deemed effective upon receipt. Notices delivered by mail shall be deemed effective upon the earlier of actual receipt by the addressee thereof or the expiration of forty-eight (48) hours after depositing in the United States Postal System in the manner described in this Section. Such written notices, demands, and "2/01561 M047 843409 07 a10/30107 -27- communications may be sent in the same manner to such other addresses as a party may from time to time designate by mail. Written notices, demands and communications between the Agency and the Developer shall be sufficiently given if (i) delivered by hand, (ii) delivered by reputable same -day or overnight messenger service that provides a receipt showing date and time of delivery, or (iii) dispatched by registered or certified mail, postage prepaid, return receipt requested, to the principal offices of the Agency and the Developer at the addresses set forth above. Such written notices, demands and communications may be sent in the same manner to such other addresses as either party may from time to time designate by mail as provided above. A notice signed by legal counsel for a party and delivered to the other party in accordance with this Section shall be deemed notice delivered by the party on whose behalf such legal counsel is acting. Any written notice, demand, or communication shall be deemed received immediately if delivered by hand or delivered by messenger in accordance with the preceding paragraph, and shall be deemed received on the third (3rd) day from the date it is postmarked if delivered by registered or certified mail in accordance with the preceding paragraph. 19.0 NONLIABILITY OF AGENCY OFFICIALS. No officer, official, member, employee, agent, or representative of Agency shall be personally liable to Developer, or any successor in interest, in the event of any default or breach by Agency or for any amount which may become due to Developer or successor or on any obligations under the terms of this Agreement or any of the Agency Agreements. 20.0 TRANSACTIONS WITH AFFILIATES. Developer shall have the right to enter into contracts with subsidiaries, and Affiliates for the purpose of providing management, cleaning, maintenance and repair services, insurance policies and other purposes related to the operation of the Site, provided that all such costs and charges are competitive with the costs, charges, rent and other sums which would be paid by or to, as the case may be, an unrelated third party. 21.0 SEVERABILITY/WAIVER/INTEGRATION/INTERPRETATION: ENTIRE AGREE- MENT. 21.1 Severability. If any provision of this Agreement shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining portions hereof shall not in any way be affected or impaired thereby. 21.2 Waiver. All waivers of the provisions of this Agreement, unless specified otherwise herein, must be in writing and signed by the appropriate authorities of Agency and Developer, as applicable. No delay or omission by either party hereto in exercising any right or power accruing upon the compliance or failure of performance by the other party hereto under the provisions of this Agreement shall impair any such right or power or be construed to be a waiver thereof. A waiver by either party hereto of a breach of any of the covenants, conditions or agreements hereof to be performed by the other party shall not invalidate this Agreement nor ea2i01sei0.0oa7 847009 09 .i 0/30/07 -28- shall it be construed as a waiver of any succeeding breach of the same or other covenants, agreements, restrictions or conditions hereof. 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. 21.4 Interpretation. The terms of this Agreement shall be construed in accordance with the meaning of the language used and shall not be construed for or against either party by reason of the authorship of this Agreement or any other rule of construction that might otherwise apply. 21.5. Entire Agreement. This Agreement integrates all of the terms and conditions mentioned herein or incidental hereto, and supersedes all negotiations or previous agreements between the parties or their predecessors -in -interest with respect to all or any part of the subject matter hereof. 22.0 ENFORCED DELAY; EXTENSIONS OF TIME. Performance by a party hereunder shall not be deemed to be in default where delays or defaults are due to war; insurrection; strikes; lock -outs; riots; floods; earthquakes; fires; casualties; supernatural causes; acts of the public enemy; epidemics; quarantine restrictions; freight embargoes; lack of transportation; governmental restrictions or priority litigation; unusually severe weather; inability to secure necessary labor, materials or tools; acts of the other party; acts or the failure to act of a public or governmental agency or entity (except that acts or the failure to act of Agency or City shall not excuse performance by Agency or City unless the act or failure is caused by the acts or omissions of Developer); or any other causes beyond the reasonable control or without the fault of the parry claiming an extension of time to perform. In the event of such a delay (herein "Enforced Delay"), the party delayed shall continue to exercise reasonable diligence to minimize the period of the delay. An extension of time for any such cause shall be limited to the period of the Enforced Delay, and shall commence to run from the time of the commencement of the cause, provided notice by the party claiming such extension is sent to the other party within fifteen (15) days after the sending party has knowledge, or should have obtained knowledge, of the commencement of the cause. The following shall not be considered as events or causes beyond the control of Developer, and shall not entitle Developer to an extension of time to perform: (i) Developer's failure to obtain financing for the Project (except as a result of an omission or breach by Agency), (ii) Developer's failure to negotiate agreements with prospective tenants or users for the Project, or (iii) interest rates or economic or market conditions. Times of performance under this Agreement may also be extended by mutual written agreement by Agency and Developer. The Agency Executive Director shall also have the authority on behalf of Agency to administratively approve extensions of time not to exceed a cumulative total of one (1) year. 23.0 THIRD PARTY BENEFICIARY. The City of La Quinta is deemed a third party beneficiary of the terms and covenants contained in this Agreement and has the right, but not the obligation, to enforce the terms and covenants contained herein. 88D015610-0047 -29- 843409.07.10130/07 24.0 FUTURE ENFORCEMENT. The parties hereby agree that should the Agency cease to exist as an entity at any time during the term of this Agreement, the City of La Quints shall have the right to enforce all of the terms and conditions herein, unless the Agency had previously specified another entity to enforce this Agreement. 25.0 GOVERNING LAW. This Agreement shall be governed by the internal laws of the State of California without regard to conflicts of law. 26.0 NO MERGER. The covenants, terms, and provisions of this Agreement shall not merge with any grant deed or other instrument pertaining to the conveyance of any interest in real property. 27. COUNTERPARTS. This Agreement may be executed in any number of counterparts, each of which shall constitute one original and all of which shall be one and the same instrument. [End - Signature Page Follows] "2101561C4047 843400.07 00/30/07 -30- IN WITNESS WHEREOF, the Agency and Developer have executed this Regulatory Agreement and Declaration of Covenants and Restrictions by duly authorized representatives on the date first written hereinabove. "AGENCY" LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic By Date: ATTEST: By: Secretary APPROVED AS TO FORM: RUTAN & TUCKER, LLP By: Attorneys for the La Quinta Redevelopment Agency Date: Thomas Genovese Executive Director "DEVELOPER" NATIONAL COMMUNITY RENAISSANCE OF CALIFORNIA, a nonprofit public benefit corporation Its: :8I/ms610-0047 43409 07 W/30/07 -31- 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] 887ro1561 M047 843409 07 a 1 O/30/07 -32- 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] :wise M047 -33- 843409 07 .10130107 EXHIBIT "A" LEGAL DESCRIPTION OF SITE All of that certain real property in the City of La Quinta, County of Riverside, State of California, described as follows: That portion of the Southeast quarter of the Northeast quarter of Section 19, Township 6 South, Range 7 East, San Bernardino Base and Meridian, described as follows: Commencing at the Southeast corner of the Northeast quarter of said Section 19; Thence South 89' 33' 05" West, on the Southerly line of the Northeast quarter of said Section, 330 feet, to the true point of beginning; thence South 89' 33' 05" West, on said Southerly line of the Northeast quarter, 330 feet; Thence North 0° 13' 40" West, 1,324.57 feet, to the Northerly line of the Southeast quarter of Northeast quarter of said Section 19; thence North 89° 34' 05" East, on said Northerly line, 330 feet; thence South 0° 13' 40" East, 1,324.47 feet to the true point of beginning; Excepting therefrom the Southerly 50 feet conveyed to the County of Riverside by Deeds recorded August 30, 1933 in Book 133, Page(s) 292 and Book 134, Page(s) 298 respectively, of Official Records, Riverside County Records. Also excepting therefrom that portion of described in the deeds to the City of La Quinta, recorded 02-17-1999, as Instrument No. 62425 and 62426, Official Records. Excepting therefrom the mobile home located thereon. 89V015610,0047 943409.07.10/30107 EXHIBIT "A" EXHIBIT `B" INCOME COMPUTATION AND CERTIFICATION FORM [See following pages] 8130907.103 EXHIBIT "B" 843409 07 a10/30(07 CITY OF LA QUINTA REDEVELOPMENT AGENCY 78-495 Calle Tampico, La Quinta, CA 92253 INCOME COMPUTATION AND CERTIFICATION FORM (Affordable Housing Eligibility for Renter Occupied Unit PART I. PROPERTY FINANCED WITH GOVERNMENT ASSISTANCE Property Address: PART II. TENANT HOUSEHOLD INFORMATION Date of Birth Soc. See. # Relationship TOTAL NUMBER OF PERSONS IN HOUSEHOLD: (Please list information on other household members below) Mailing Address: Telephone Numbers: Work (� Home PART III. GROSS HOUSEHOLD INCOME Complete the following, attach copies of required verification as specified below. Attach a note explaining any significant changes in household income between the previous year and the current year. INFORMATION IS REQUIRED FOR ALL MEMBERS OF THE HOUSEHOLD AGE 18 OR OLDER REGARDLESS OF WHETHER THEY CONTRIBUTE TO THE COSTS OF THE HOUSEHOLD. If you are not required to ,file a tax return, please indicate this in Part V by your signature. ANN INCOME ANN INCOME INCOME SOURCES for owner others in hshld VERIFICATIONS (needed for file) A. Employment earnings Last tax return & last 3 pay stubs, employer verification B. Self-employment earnings Last 2 tax returns & current financial stmt C. Social Security (OASDI) Annual award letter D. Supplemental Security Income (SSI) Annual award letter E. Public assistance (AFDC, general Current benefit statement assistance, unemployment, etc.) F. Pension (s) Annual award letter, year end stint, W-2 G. Interest income Last 2 statements for all accounts H. Investment income (stocks, bonds, real estate, etc.) Last 2 statements for all accounts 1. Room rental Rental agreement, copies of checks, etc. J. Other income (list type/source) EXHIBIT "B" 882/015610-0047 843409 07 .10/30107 Page I of K. TOTAL INCOME (sum of A thru I) / l2 months = mo. income PART IV. PROPERTY STATUS Will this property be your primary residence? Will someone other than the individuals listed above be occupying this property? If yes - Name of occupants: Telephone Number: My/our housing expenses are as follows: 1. Monthly tenant rent __ 2. Average monthly utilities Mailing Address: PART V. TENANT CERTIFICATION I/We understand that after the initial eligibility determination, completion of monitoring forms is required on an annual basis. I/We certify that Uwe have disclosed all information pertaining to my/our application and that the information presented in the foregoing Sections I through IV is true and accurate to the best of my (our) knowledge. Tenant Tenant For more information regarding this application, please contact management staff at (760) Comments: FOR OFFICE USE ONLY Information verified Income category Maximum allowable annual income (__%o of median) Applicant's annual income gross monthly max housing costs Management Staff EXHIBIT "B" 882/015610-0047 Page 2 of 2 843409.07.10130/07 g Date EXHIBIT "C" INCOME RECERTIFICATION FORM [See following pages] "21015610-0047 843409 07 .1000l07 EXHIBIT "C" LA QUINTA REDEVELOPMENT AGENCY 78-495 Calle Tampico, La Quinta, CA 92253 INCOME RECERTIFICATION FORM (Renter Occupied Unit) PART I. GENERAL INFORMATION 1. Property Owner Name 2. Renter Name 3. Property Address La Quinta, CA 92253 (Please include P.O. Box No, if applicable) 4. Has there been a change in ownership of this property during the preceding 12 month period? Yes ( 1 No (If yes, please explain) _ PART II. UNIT INFORMATION 5. Number of Bedrooms 6. Number of Occupants Names: PART III. AFFIDAVIT OF RENTER 1, _, and I, , as renters of units assisted pursuant to the La Quinta Redevelopment Agency's (the "Agency") Affordable Housing Program (the "Program"), do hereby represent and warrant that the following computation includes all income (I/we) anticipate receiving for the 12-month period commencing on January 1, 20_ (including the renters) and all family members of the renters): (a) amount of wages, salaries, overtime pay, commissions, fees, tips and bonuses, and payments in lieu of earnings, such as unemployment and disability compensation, worker's compensation and severance pay (before payroll deduction) (b) net income from business or profession or rental of property (without deduction for repayment of debts or expansion of business) (c) interest and dividends (d) periodic receipts such as social security, annuities, pensions, retirement funds, insurance policies, disability or death benefits, alimony, child support, regular contributions or gifts from persons not occupying unit (e) public assistance allowance or grant plus excess of maximum allowable for shelter or utilities over the actual allowance for such purposes EXHIBIT "C" 862M 15610-0047 Page 1 of 2 94340907.1apa0/07 g (f) regular and special pay and allowances of a member of armed services (whether or not living in the dwelling) who is head of the family or spouse Subtotal (a) through (f) LESS: Portion of above items which are income of a family member who is less than 18 years old or a full-time student TOTAL ELIGIBLE INCOME NOTE: The following items are not considered income: casual or sporadic gifts; amounts specifically for or in reimbursement of medical expenses; lump sum payment such as inheritances, insurance payments, capital gains and settlement for personal or property losses; educational scholarships paid directly to the student or educational institution; government benefits to a veteran for education; special pay to a serviceman head of family away from home and under hostile fire; foster child care payments; value of coupon allotments for purpose of food under Food Stamp Act of 1964 which is in excess of amount actually charged the eligible household; relocation payments under Title II of Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970; payments received pursuant to participation in the following programs: VISTA, Service Learning Programs, and Special Volunteer Programs, SCORE, ACE, Retired Senior Volunteer Program, Foster Grandparent Program, Older American Community Services Program, and National Volunteer Program to Assist Small Business Experience. 2. This affidavit is made with the knowledge that it will be relied upon by the Landlord and the Agency to determine maximum income for eligibility and (Uwe) warrant that all information set forth in this Part III is true, correct and complete and based upon information (I,twe) deem reliable and that the estimate contained in paragraph 1 is reasonable and based upon such investigation as the undersigned deemed necessary. 3. (I/We) will assist the Landlord and the Agency in obtaining any information or documents required to verify the statements made in this Part III and have attached hereto a copy of our federal income tax return for the last year (20__). 4. (I/We) acknowledge that (Uwe) have been advised that the making of any misrepresentation or misstatement in this affidavit will constitute a material breach of (my/our) agreement with the Landlord to rent the unit and will additionally enable the Agency to initiate and pursue all applicable legal and equitable remedies with respect to the unit and to me/us. B. (My/Our) monthly housing expenses are limited to the following: Base rent 2. Average Monthly Utilities 3. Other (explain) (I/We) understand that completion of monitoring forms is required on an annual basis and agree to notify the La Quinta Redevelopment Agency in writing of any change in ownership or rental of the unit. (I/We) do hereby swear under penalty of perjury that the foregoing statements are true and correct. Date Renter(s) EXHIBIT "C" ea2/01561 047 843409,07.10/3o47 Page 2 of 2 EXHIBIT "D" LEASE RIDER [See following page] 882/0156IM047 EXHIBIT "D" 943409 07 ai0/30/07 _(Project Name)_ AFFORDABLE HOUSING PROJECT Lease Rider RESIDENT: (if there is more than one adult occupant, each person must sign the rider) LEASE DATE: UNIT NO.: The undersigned tenant(s) hereby certify and agree as follows: Income Certification. The attached income certification is true, correct and complete. I/we agree to provide a similar certification annually upon request during the term of my occupancy. 2. Employer Verification. The landlord or property manager has my permission to verify my/our income from any sources of income I/we receive. 3. False Statements. If the income certification and/or lease application submitted by me/us is false, or if I/we fail to provide annual certifications, the landlord or property manager will have the right to terminate my/our lease and recover possession of my/our Unit. I/we understand that the landlord and property manager are relying on this income certification in accepting me/us as a tenant, and the landlord or property manager will be seriously harmed if my/our income does not qualify the Unit for the affordable housing program. 4. This rider shall be considered as part of my/our lease. Date: Tenant Tenant Tenant Tenant EXHIBIT "D" 882/015610-0047 84340907 a 10/30/07 Page I of 1 EXHIBIT "E" CERTIFICATION OF CONTINUING PROGRAM COMPLIANCE [See following page] 682/015610-0041 n43409 07.10/30/07 EXHIBIT "E" CERTIFICATION OF CONTINUING PROGRAM COMPLIANCE The undersigned, being duly authorized to execute this certificate on behalf of _, owner of the Project, hereby represents warrants that: 1. He/she has read and is thoroughly familiar with the provisions of the Affordable Housing Agreement between the La Quinta Redevelopment Agency and National Community Renaissance of California. 2. As of June 30, 20_, the following number of residential units in the Project (i) are currently occupied by tenants qualifying as Eligible Tenants at Affordable Rents; (ii) are currently occupied by Moderate Income Tenants; or (iii) are currently vacant and being held available for occupancy by Eligible Tenants and have been so held continuously since the date Eligible Tenants vacated such unit, as indicated: i. Units occupied by Eligible Tenants ii. Units occupied by Moderate Income Tenants in. Vacant units iv. Other (please explain) 3. The unit number, unit size, the tenant paid rental amount charged and collected, the number of occupants and the income of the occupants for each restricted unit in the Project is set forth on the attached list. All restricted units in the Project are rented at Affordable Rent. Dated: • ./► u370 ►1 C (Printed name and title) EXHIBIT "E" 1 B21015610-0047 843409.07.1040/07 Page I of 1 EXHIBIT "F" RESTRICTED UNIT MATRIX INCOME LEVEL NO, OF UNITS Very Low Income Household 39 50% Very Low Income Household 31 Extremely Low Income Household 9 Moderate Income Household (Management Unit) 1 :43 O'907.100/30/07 EXHIBIT "F" ATTACHMENT NO. S PROJECT PROFORMA [SEE FOLLOWING PAGES] 47 /4839907 a1030 ATTACHMENT NO. 8 878399 07 a10/30/07 882/01561"047 848399 07 al0130/07 ATTACHMENT NO. 9 BILL OF SALE [SEE FOLLOWING PAGES] 882/015610-0047 84839907 e10/30/07 ATTACHMENT NO. 9 BILL OF SALE La Quinta Redevelopment Agency ("Seller"), for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, paid to it by National Community Renaissance of California ("Purchaser"), has transferred, sold and assigned and by these presents does transfer, sell and assign unto Purchaser the following: Any and all personal property, if any, owned by Seller, described more specifically in that certain Amended and Restated Affordable Housing Agreement dated between the parties identified above (the "Agreement'), which personal property is located upon or used in connection with the real property described in Schedule 1 hereto. Seller makes only those representations and warranties set forth in the Agreement concerning such personal property, and to the extent that there is any such personal property, such personal property is transferred, sold and assigned to Purchaser in accordance with the terms thereof. Executed as of this _ day of "Seller" LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic La Its: Executive Director ATTEST: Secretary APPROVED AS TO FORM: RUTAN & TUCKER, LLP Attorneys for the La Quinta Redevelopment Agency 892/015610-0047 948399 07 .10/30/07 1 SCHEDULEI LEGAL DESCRIPTION OF PROPERTY All of that certain real property in the City of La Quinta County of Riverside, State of California, described as follows: That portion of the Southeast quarter of the Northeast quarter of Section 19, Township 6 South, Range 7 East, San Bernardino Base and Meridian, described as follows: Commencing at the Southeast comer of the Northeast quarter of said Section 19; Thence South 89' 33' 05" West, on the Southerly line of the Northeast quarter of said Section, 330 feet, to the true point of beginning; thence South 89° 33' 05" West, on said Southerly line of the Northeast quarter, 330 feet; Thence North 0° 13' 40" West, 1,324.57 feet, to the Northerly line of the Southeast quarter of Northeast quarter of said Section 19; thence North 89' 34' 05" East, on said Northerly line, 330 feet; thence South 0° 13' 40" East, 1,324.47 feet to the true point of beginning; Excepting therefrom the Southerly 50 feet conveyed to the County of Riverside by Deeds recorded August 30, 1933 in Book 133, Page(s) 292 and Book 134, Page(s) 298 respectively, of Official Records, Riverside County Records. Also excepting therefrom that portion of recorded 02-17-1999, as Instrument No. therefrom the mobile home located thereon. described in the deeds to the City of La Quinta, 62425 and 62426, Official Records. Excepting 882/015610-0047 848399 07 a10130107 -2- ATTACHMENT NO. 10 ASSIGNMENT AND RELEASE [SEE FOLLOWING PAGES] 887/035610-0047 ATTACHMENT NO. 10 U8399,07 a10/30/07 ASSIGNMENT AND RELEASE This ASSIGNMENT AND RELEASE ("Assignment and Release") dated 2007, is executed by La Quinta Redevelopment Agency, a public body, corporate and politic ("Assignor), in favor of National Community Renaissance of California, a California nonprofit public benefit corporation ("Assignee"). Assignor is the owner of that certain land (the "Site") located in the City of La Quinta, California, described more specifically on Schedule "1" hereto. The Site and the partially completed Housing Development thereon are being conveyed by Assignor to Assignee pursuant to a grant deed delivered concurrently herewith. Terms used herein but not defined shall have the meanings ascribed thereto in that certain Affordable Housing Agreement by and between Assignor and Assignee dated as of 2007 (the "Affordable Housing Agreement"). Now, therefore, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Assignor and Assignee hereby agree as follows: 1. Subject to Section 2 below, Assignor hereby grants, assigns, transfers, conveys and delivers to Assignee, without warranty, all of Assignor's right, title, interest, benefits and privileges, if any, in and to all entitlements, approvals, maps, applications, plans, and specifications, relating to the Housing Development or the construction of the Housing Development on the Site that are owned by Agency, as well as the following described property: (a) That certain Agreement executed by and between the Agency and Davis Reed Construction Inc., the general contractor for the Housing Development, and any and all amendments and modifications thereto, and all warranties with respect thereto (including all statutory, express and implied warranties); (b) All architectural drawings, plans, specifications, soils tests, appraisals, engineering reports and similar materials relating to any or all of the Site and/or the Housing Development. (c) All of Assignor's rights, claims, actions, and causes of action against any of Assignor's general contractors, subcontractors, engineers, architects and consultants relating to or arising from preparation of the architectural drawings, plans, specifications, reports or similar materials relating to the development of the Site or construction of public improvements thereon or construction of the Housing Development, all of the plans and documents referred to in paragraphs 1 and 2 above, as well as all of the same relating to construction of the Housing Development, as well as all rights of Assignor as an additional insured or otherwise pertaining to insurance coverage concerning such architects, engineers, general contractors, consultants and the Site. (d) All governmental entitlements, permissions, environmental clearances, authority to develop the Site and construct the Housing Development, rights, licenses and 882101561M047 856277 04.10/30107 _ 1 _ permits which relate to all or any of the Site, the Housing Development, or the operation thereof; and (e) All general intangibles relating to the development or use of the Site and the Housing Development. 2. Notwithstanding anything to the contrary herein, the foregoing grants, assignments, transfers, conveyances, and deliveries are subject to any limitations which may be imposed by law or under any agreement with any governmental agency or authority or with the contractors, subcontractors, engineers, consultants, and architects referenced in Section 1 above. 3. In consideration of the foregoing assignment, Assignee, for itself and for its agents, successors and assigns, fully releases, acquits and discharges the Assignor and the City of La Quinta ("City") and the Assignor's and City's respective officers, officials, members, representatives, employees, attorneys and agents (all of the foregoing, collectively, the "Released Parties"), from all rights, claims, demands, actions or causes of action that Assignee has or may have against the Released Parties arising out of or related to the development, or physical condition, of the Housing Development, including, but not limited to, claims for damages, attorney's fees and costs, and expert witness fees and costs. ACKNOWLEDGMENT CONCERNING CIVIL CODE SECTION 1542 Waiver of Section 1542 of the Civil Code Assignee, on behalf of itself and its agents, successors, and assigns, expressly waives any and all rights under Section 1542 of the Civil Code of the State of California, or any other federal or state statutory rights or rules, or principles of common law or equity, or those of any jurisdiction, government, or political subdivision thereof, similar to Section 1542 (hereinafter referred to as a "Similar Provision"). Thus, Assignee may not invoke the benefits of Section 1542 or any Similar Provision in order to prosecute or assert in any manner claims released hereunder. Section 1542 provides as follows: A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH, IF KNOWN BY HIM OR HER, MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR. Assignee's initials: 4. The City shall be deemed an express third party beneficiary of the provisions of this Assignment and Release. 5. This Assignment and Release shall be construed according to its fair meaning and as if prepared by both parties hereto. 9821015610-0047 856277 04.10/30/07 -2- 6. This Assignment and Release shall be governed by the internal laws of the State of California, without regard to conflict of law principles, and any question arising hereunder shall be construed or determined according to such law. The Superior Courts of the State of California in and for the County of Riverside, or such other appropriate court in such county, shall have exclusive jurisdiction of any litigation between the parties concerning this Assignment and Release. 7. This Assignment and Release may be executed in counterparts, each of which, when this Assignment and Release has been signed by all the parties hereto, shall be deemed an original, and such counterparts shall constitute one and the same instrument. 8. The person(s) executing this Assignment and Release on behalf of each of the parties hereto represent and warrant that (i) such party is duly organized and existing, (ii) they are duly authorized to execute and deliver this Assignment and Release on behalf of said party, (iii) by so executing this Assignment and Release such party is formally bound to the provisions of this Assignment and Release, and (iv) the entering into this Assignment and Release does not violate any provision of any other agreement to which such party is bound. [signatures on next page] 893/015610-0 47 es62TLoa aID130i07 -3- IN WITNESS WHEREOF, Assignee and Assignor each hereby represent that they have read this Assignment and Release, understand it, and hereby execute this Assignment and Release to be effective as of the day and year first written above. "Assignor" LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic By: Its: ATTEST: Secretary APPROVED AS TO FORM: RUTAN & TUCKER, LLP Attorneys for the La Quinta Redevelopment Agency Executive Director "Assignee" NATIONAL COMMUNITY RENAISSANCE OF CALIFORNIA, a California nonprofit, public benefit corporation By: Its: 862/015610-0047 856277 04.10/30/07 -4- SCHEDULE 1 LEGAL DESCRIPTION OF PROPERTY All of that certain real property in the City of La Quinta County of Riverside, State of California, described as follows: That portion of the Southeast quarter of the Northeast quarter of Section 19, Township 6 South, Range 7 East, San Bernardino Base and Meridian, described as follows: Commencing at the Southeast comer of the Northeast quarter of said Section 19; Thence South 89' 33' 05" West, on the Southerly line of the Northeast quarter of said Section, 330 feet, to the true point of beginning; thence South 89' 33' 05" West, on said Southerly line of the Northeast quarter, 330 feet; Thence North 0° 13' 40" West, 1,324.57 feet, to the Northerly line of the Southeast quarter of Northeast quarter of said Section 19; thence North 89' 34' 05" East, on said Northerly line, 330 feet; thence South 0° 13' 40" East, 1,324.47 feet to the true point of beginning; Excepting therefrom the Southerly 50 feet conveyed to the County of Riverside by Deeds recorded August 30, 1933 in Book 133, Page(s) 292 and Book 134, Page(s) 298 respectively, of Official Records, Riverside County Records. Also excepting therefrom that portion of recorded 02-17-1999, as Instrument No. therefrom the mobile home located thereon. described in the deeds to the City of La Quinta, 62425 and 62426, Official Records. Excepting 8821015610-0047 85627704.10/30/07 SCHEDULE 1 ATTACHMENT NO.11 MEMORANDUM OF AFFORDABLE HOUSING AGREEMENT [SEE FOLLOWING PAGES] 8e2/0156104047 ATTACHMENT NO. 11 949399 07 .10/30107 RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: La Quinta Redevelopment Agency 78-495 Calle Tampico La Quinta, CA 92253 Attn: Executive Director (Space Above For Recorder's Use) This Memorandum of Affordable Housing Agreement is recorded at the request and for the benefit of the La Quints, Redevelopment Agency and is exempt from the payment of a recording fee pursuant to Government Code § 27383. MEMORANDUM OF AFFORDABLE HOUSING AGREEMENT This MEMORANDUM OF AFFORDABLE HOUSING AGREEMENT ("Memoran- dum") is entered into this _ day of , 2007, by and between the LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic ("Agency"), and NATIONAL COMMUNITY RENAISSANCE OF CALIFORNIA, a California nonprofit public benefit corporation ("National CORE"). This Memorandum is made with reference to the following: 1. On or about the date of this Memorandum, National CORE acquired from Agency fee title to that certain real property located in the City of La Quinta, County of Riverside, State of California, more particularly described in the legal description attached hereto as Exhibit "A" and incorporated herein by this reference (the "Property"). 2. On or about , Agency and National CORE entered into that certain Amended and Restated Affordable Housing Agreement which provides for Agency to convey the Property and partially developed apartment complex thereon to National CORE for National CORE's completion, ownership, operation and maintenance thereof as an affordable rental housing project. The definitions of all terns contained in the AHA shall apply to this Memorandum. 4. The AHA provides for Agency and National CORE to enter into this Memorandum and to record the same in the Official Records of the County of Riverside to provide notice to all persons of the existence of said AHA and the City's reversionary interest, and to cause the AHA to run with the Property and be binding on National CORE and National CORE's successors -in -interest as to the Property. 5. This Memorandum may be executed in several counterparts, and all so executed shall constitute one agreement binding on both parties hereto, notwithstanding that both parties are not signatories to the original or the same counterpart. 887J015610-0047 8483W07 a10/30/07 -1- IN WITNESS WHEREOF, Agency and National CORE have entered into this Memorandum as of the date first set forth above. ATTEST: Secretary APPROVED AS TO FORM: RUTAN & TUCKER, LLP Attorneys for the La Quinta Redevelopment Agency "Agency" LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic an Its: Executive Director "National CORE" THE SOUTHERN CALIFORNIA HOUSING DEVELOPMENT CORPORATION, a California nonprofit, public benefit corporation an Its: 892/015610.WV 948399 07 00/30/07 STATE OF CALIFORNIA ) ) ss. COUNTY OF RIVERSIDE ) On before me, , personally appeared personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. Witness my hand and official seal. Notary Public [SEAL] STATE OF CALIFORNIA ) ) ss. COUNTY OF RIVERSIDE ) On before me, , personally appeared personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. Witness my hand and official seal. Notary Public [SEAL] BavOI5610-0047 848399.07 al0/30/07 _3_ CHICAGO TITLE INSURANCE COMPANY Indemnity No. 77044321 Order No 77044321 Date: October 26, 2007 Project Name: Vista Dunes INDEMNITY AGREEMENT THIS INDEMNITY AGREEMENT (hereinafter referred to as this "Agreement') is executed this day of October, 2007, by La Quints. Redevelopment Agency, a Public Body, Corporate and Politic, organized and existing under the California Community Redevelopment Law (hereinafter referred to as "INDEMNI TOR") for the benefit of THE ABOVE TITLE INSURANCE COMPANY, a corporation, and CHICAGO TITLE COMPANY (hereinafter referred to as "COMPANY"), 1. This Agreement covers any part, parcel, or subdivision of the real property (hereinafter referred to as the "Real Property") in the County of , State of , described as: See Exhibit "A " attached hereto 2. Certain works of improvement have been or will be commenced upon the Real Property or for the benefit thereof; by or on behalf of Indemnitor, which may thereafter result in Mechanics' Liens, and actions to enforce said Mechanics' Liens, being filed or recorded against the Real Property. INDEMNTTOR hereby represents to COMPANY that all costs, charges, expenses and bills for labor, material, and services will be paid before the expiration of the respective times for recording claims of lien arising out of such works of improvement, performed by or on behalf of Indemnitor, and that, where applicable, a notice of completion will be properly recorded in accordance with any and all legal requirements thereof. 3. INDEMNITOR (whether as owner of, part owner of, or having an interest in the Real Property or in a corporation, partnership, joint venture or other entity which is the owner of, part owner of, or has an interest in the Real Property or as contractor for a work of improvement thereon, or otherwise) has an interest in the issuance of, and desires COMPANY from time to time to issue, policies of title insurance, or endorsements thereof, covering the Real Property or lots or portions thereof, insuring against loss which may be sustained by reason of Mechanics' Liens, or without exception as to Mechanics' Liens, arising out of such works of improvement performed by or on behalf of Indemnitor or insuring holders of mortgages or deeds of trust against loss by reason of the priority of any such Mechanics' Liens over said mortgages or deeds of trust. 4. Nothing herein shall be construed as an obligation on the part of COMPANY to issue any of the policies or insurance mentioned in this Agreement. However, if COMPANY does issue any such policies or insurance or issue hold harmless or indemnity letters to induce other title insurance companies to issue title insurance policies, then INDEMNITOR shall be deemed to have concurrently given the assurances and made the agreements therein set forth for the benefit of COMPANY 5. In order to induce COMPANY to issue and in consideration of the issuance by COMPANY of such policies of title insurance and endorsements as it may be willing to issue, INDEMNITOR promises and agrees to hold harmless, protect and indemnify COMPANY from and against any and all liabilities, losses, damages, expenses, charges, and fees, including but not limited to attorneys' fees and expenses of litigation, which it may sustain, under each and every policy or policies of title insurance or endorsements thereof which it may at any time issue, resulting directly or indirectly from any Mechanics' Liens, or claims thereof, affecting the Real Property or any portion or portions thereof covered by such policy or policies and arising out of any such work or works of improvement performed by or on behalf of Indemnitor, and to pay all costs, expenses and attorneys' fees incurred in the enforcement of this Agreement. 6. It is understood and agreed that COMPANY may rely upon this Agreement in issuing any policy, policies or endorsements covering all or any portion of the Real Property, whether or not INDEMNITOR is the person ordering the same, regardless of any change in ownership of or the title to the Real Property or any portion thereof or any change in the nature of INDEMNITOR's interest in the same or in any such work of improvement; that the issuance of any such policy or policies or endorsements in the manner desired by 1NDEMNITOR may cause COMPANY to deem it necessary or expedient for practical business reasons to issue other policies or endorsements covering the Real Property, without showing therein, as matters not insured against, Mechanics' Liens or actions based thereon, arising out of or in connection with the works of improvements referred to in Paragraph 2 hereof; and therefore the obligations of INDEMNITOR hereunder shall not be limited to policies initially issued covering the Real Property or portions thereof but shall apply also to any policy or policies of title insurance subsequently issued covering the Real Property or portions thereof, provided, however, that INDEMNITOR may, at any time, deliver written notice to COMPANY of INDEMNITOR's election to exclude from the future application of this Agreement any of the Real Property upon which COMPANY has not issued a policy or endorsement in reliance upon this Agreement. INDEMNTTOR's election shall be effective on the fifth (5th) business day following receipt by COMPANY of the above -referenced notice. 7. INDEMNITOR agrees that it is directly and primarily liable to COMPANY and that the obligations of INDEMNITOR hereunder are independent of the obligations of any other indemnitor or third party owing to COMPANY. If more than one person signs this Agreement as INDEMNITOR, the obligation hereunder shall be joint and several. INDEMNITOR agrees that any release which may be given by COMPANY to any other indemnitor or third party shall not release INDEMNITOR from the payment and performance of its obligations under this Agreement. As a condition to the payment and performance by INDEMNITOR of its obligations under this Agreement, COMPANY shall not be requited to, and INDEMNITOR hereby waives any and all rights to require COMPANY to prosecute or seek to enforce any remedies against any other indemnitor or third party, or with respect to any security interests, liens or encumbrances granted to COMPANY by any other indemnitor or third party. INDEMNITOR also agrees that its obligations under this Agreement shall not be impaired or affected by any modification, supplement, or amendment to any policy, policies or endorsements issued regarding the Real Property, nor by release or other alteration of any security pledged by any other indemnitor or third party, nor by any agreements or arrangements whatsoever with any other indemnitor or third party. 8. Without affecting any of INDEMNTTOR's obligations owing to COMPANY under this Agreement, INDEMNITOR hereby agrees that COMPANY may elect, in its sole and absolute discretion, to retain legal counsel of its choice on behalf of COMPANY's Insureds in connection with any claims, disputes, demands, or actions made or arising in connection with the subject matter of this Indemnity or any policy or policies of title insurance or endorsements thereof issued covering the Real Property, and COMPANY may, in its sole and absolute discretion, settle or compromise say such claim, dispute, demand or action on such terms and in such a manner as COMPANY deems appropriate. COMPANY is under no obligation to accept INDEMNTTOR's selection of counsel. At COMPANY's option it may suggest to its Insureds that counsel recommended by INDEMNITOR be retained for the defense of the Insureds. INDEMNITOR agrees to underwrite the fees, costs and expenses associated with the defense of the Insureds. Any counsel selected by the INDEMNITOR to represent COMPANY's Insureds must be acceptable to the Insureds and be independent counsel free of any conflict of interest 9. In the event that any Mechanics' Liens or claims thereof arising out of any such work of improvement performed by or on behalf of Indemnitor shall be filed against the Real Property or any action shall be commenced to foreclose such liens, INDEMNUOR agrees within twenty (20) days thereafter to cause such Mechanics' Liens to be released of record and any such actions dismissed, or to record a bond effective to release the Real Property from the lien and from any action to foreclose such lien and to do such other acts as COMPANY may require; and should INDEMNITOR fail to do so, COMPANY is authorized but not obligated to advance and pay such amounts as shall, in COMPANY's sole and absolute discretion, be deemed necessary to procure releases of such claims or liens and satisfactions of any judgments of foreclosure rendered in such actions, or otherwise necessary for the protection of COMPANY s insured and itself, and INDEMNITOR agrees to reimburse COMPANY on demand for all amounts so advanced, with interest at the maximum legal rate from the date advanced by COMPANY until the date of reimbursement by INDEMNITOR. 10.1NDEMNITOR is presently informed of the condition and status of the Real Property and of all other circumstances which a diligent inquiry would reveal and which bear upon the risk of liability of INDEMNITOR under this Agreement. INDENDUOR hereby covenants that it will continue to keep itself informed of the condition and status of the Real Property, the status of other indemnitors, if any, and of all other circumstances which bear upon the risk of liability of INDEMNITOR under this Agreement. Absent a written request for such information by INDEMNITOR to COMPANY, INDEMNITOR hereby waives its right, if any, to require COMPANY to disclose to it any information which COMPANY may now or hereafter acquire concerning such condition or circumstances including, but not limited to, the release of or revocation by any other indemnitor. 11. INDEMNITOR hereby waives any defense arising by reason of any claim or defense based upon an election of remedies by COMPANY, which, in any manner impairs, affects, reduces, releases, destroys and/or extinguishes INDEMNTTOR's subrogation rights, reimbursement rights, and/or any other rights of INDEMNITOR to proceed against any other indemnitor or against any other third party or security, INDEMNITOR waives all presentments, demands for performance, notices of non-performance, protests, notices of protest, notices of dishonor, notices of default, notice of acceptance of this Agreement, and notices of the existence, creation, or issuance of any new or additional policy or policies of title insurance, and of endorsements thereof, regarding the Real Property, and all other notices or formalities to which INDEMNTTOR may be entitled. 12. INDEMNITOR hereby agrees that COMPANY shall have and is granted the right, at any time or times, but it is under no obligation, to examine the books, accounts and records of INDEMNITOR pertaining to any such works of improvement on the Real Property, and rNDEMNITOR agrees to, upon request, furnish to COMPANY all receipted bills or other evidence of payment for work or materials furnished for said works of improvement and such further assurances as may be requited by COMPANY for its protection from liability. Any bank, depository, materialmen, supply house, or any other person, firm or corporation doing business with INDEMNITOR when requested by COMPANY is authorized to furnish to COMPANY any and all information requested, including, but not limited to, the status of the work minder the contracts being performed by the INDEMNITOR, the condition of the performance of such contract, the payment of accounts, the financial condition of the INDEMNITOR, and the status of any loan with INDEMNITOR. The COMPANY is further authorized to make abstracts or copies of any such materials for the confidential use of the COMPANY. 13. In this Agreement the term "Mechanics' Liens" shall refer to any and ail of the liens granted by statute or otherwise to mechanics, materialmen, contractors, subcontractors, lessors of equipment, artisan, architects, engineers, land surveyors, machinists, builders, and all other persons or laborers of every class which have performed labor upon, bestowed skills, or other necessary services on, or furnished materials in connection with any work of improvement upon the Real Property by or on behalf of Indemnitor.Whenever the context so requires, the singular number includes the plural, and, where more than one person is included as INDEMNITOR, the obligations hereunder shall be joint and several. 14. This Agreement shall be binding upon the successors and assigns of INDEMNITOR and shall inure to the benefit of COMPANY's successors and assigns. The death, the incapacity, the lack of authority, the disability, and/or the dissolution of INDEMNITOR or any other indemnitor shall not terminate or otherwise impair COMPANY's rights under this Agreement. 15. INDEMNITOR agrees that this agreement is not intended to give any benefits, rights, privileges, actions, or remedies to any person, partnership, firm, or corporation other than COMPANY and INDEMNITOR under any theory of law. 16. INDEMNITOR ACKNOWLEDGES THAT HERT IS EXECUTING THIS AGREEMENT BECAUSE OF THE BENEFITS DIRECTLY OR INDIRECTLY ACCRUING TO HE/IT BY REASON OF THE ISSUANCE OF TEE SAID POLICIES. In witness w pfthe undersigned INDEMNITOR has executed this Agreement thisgx'4� day of , 2007. INDEMNITOR: LA QUINTA REDEVELOPMENT AGENCY, A public bodycorporateand politic Dated: 2007 / Its: Executive Director APPROVED AS TO FORM: RUTAN & TUCKER, LLP A omeys for the inta Redevelopment Agency In witness the undersigned INDEMNITOR has executed this Agreement this.3/ day ofM, , 2007. INDEMNITOR: LA QUINTA REDEVELOPMENT AGENCY, A public body corporate and politic Dated: %f / 2007 By: l core LZiOrGaC Its: Executive Director APPROVED AS TO FORM: A & C LLP Attomeys or the La Q to Redevelopment Agency THAT PORTION OF THE SOUTHEAST QUARTER OF THE NORTHEAST QUARTER OF SECTION 19, TOWNSHIP 5 SOUTH, RANGE 7 EAST, SAN BERNARDINO MERIDIAN, IN TEE CITY OF LA QUINTA, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, DESCRIBED AS FOLLOWS: COMMENCING AT THE SOUTHEAST CORNER OF THE NORTHEAST QUARTER OF SAID SECTION 19, THENCE SOUTH 890 33' 05" WEST, ON THE SOUTHERLY LINE OF THE NORTHEAST QUARTER OF SAID SECTION, 330 FEET, TO THE TRUE POINT OF BEGINNING? THENCE SOUTH 89- 33' 05- WEST, ON SAID SOUTHERLY LINE OF THE NORTHEAST QUARTER, 330 FEET; THENCE NORTH 0" 13' 40" WBST, 1,324.57 FEET, TO THE NORTHERLY LINE OF THE SOUTHEAST QUARTER OF NORTHEAST QUARTER OF SAID SECTION 19; THENCE NORTH 89" 34' 05" EAST, ON SAID NORTHERLY LINE, 330 FEET; THENCE SOUTH 0° 13' 40" BAST, 1,324.47 FEET TO THE TRUE POINT OF BEGINNING; EXCEPTING THEREFROM THE SOUTHERLY 50 FEET CONVEYED TO THE COUNTY OF RIVERSIDE BY DEEDS RECORDED AUGUST 30, 1933 IN BOOK 133, PAGE 292 AND BOOK 134, PAGE 290 RESPECTIVELY, OF OFFICIAL RECORDS, RIVERSIDE COUNTY RECORDS. ALSO EXCEPTING THEREFROM THAT PORTION DESCRIBED IN THE DEEDS TO THE CITY OF LA QUINTA, RECORDED FEBRUARY, 17, 1992, AS INSTRUMENT NOS. 62425 AND 62426, BOTH OF OFFICIAL RECORDS. T IA. Recording Requested Ny CHICAGO TITLE COMPANY RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: La Quinta Redevelopment Agency 78-495 Calle Tampico La Quinta, CA 92253 Attn: Executive Director DOC # 2007-0669200 10/31/2007 08:00i1 Fee:NC Page 1 of 8 Recorded in Official Records County of Riverside Larry W. Ward Assessor, County Clerk 8 Recorder IIIIII IIIIIII IIII 111111111111111111111111111111111111111 S R U I PAGE I SIZE FDA MISC LONG RFD COPY M A L 465 426 PCOR NCOR SMF CH EXAM T: CTY ;R1) This Memorandum of Affordable Housing Agreement is recorded at the request and for the benefit of the La Quinta Redevelopment Agency and is exempt from the payment of M a recording fee pursuant to Government Code § 27383. MEMORANDUM OF AFFORDABLE HOUSING AGREEMENT This MEMORANDUM OF AFFORDABLE HOUSING AGREEMENT ("Memoran- dum") is entered into this 31 day of October, 2007, by and between the LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic ("Agency"), and NATIONAL COMMUNITY RENAISSANCE OF CALIFORNIA, a California nonprofit public benefit corporation ("National CORE"). This Memorandum is made with reference to the following: 1. On or about the date of this Memorandum, National CORE acquired from Agency fee title to that certain real property located in the City of La Quinta, County of Riverside, State of California, more particularly described in the legal description attached hereto as Exhibit "A" and incorporated herein by this reference (the "Property"). 2. On or about October 31, 2007 Agency and National CORE entered into that certain Amended and Restated Affordable Housing Agreement which provides for Agency to convey the Property and partially developed apartment complex thereon to National CORE for National CORE's completion, ownership, operation and maintenance thereof as an affordable rental housing project. 3. The definitions of all terms contained in the AHA shall apply to this Memorandum. 4. The AHA provides for Agency and National CORE to enter into this Memorandum and to record the same in the Official Records of the County of Riverside to provide notice to all persons of the existence of said AHA and the City's reversionary interest, and to cause the AHA to run with the Property and be binding on National CORE and National CORE's successors -in -interest as to the Property. 5. This Memorandum may be executed in several counterparts, and all so executed shall constitute one agreement binding on both parties hereto, notwithstanding that both parties are not signatories to the original or the same counterpart. 882/015610-0047 848399 07 .10/30/07 -1- IN WITNESS WHEREOF, Agency and National CORE have entered into this Memorandum as of the date first set forth above. ATTEST: Secretary APPROVED AS TO FORM: RUTAN & TUCKER, LL�P,,� (— Attorneys for the uinta Redevelopment Agency "Agency" LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic Un Its: Executive Director "National CORE" NATIONAL COMMUNITY RENAISSANCE OF CALIFORNIA, a California nonprofit, public benefit corporation Its: 882/015610-0047 _ 848399.07 a]0/30/07 _2 IN WITNESS WHEREOF, Agency and National CORE have entered into this Memorandum as of the date first set forth above. APPROVED AS TO FORM: RUTAN & TUCKER, LLP 4 Attorneys for the LVQu Ia Redevelopment Agency "Agency" LA QUINTA REDEVELOPMENT AGENCY, a public body, and By: a0 f Its: Executive Director "National CORE" NATIONAL COMMUNITY RENAISSANCE OF CALIFORNIA, a California nonprofit, public benefit corporation Its: 182/015611-003i _ 148399 01 , I0/30107 -� IN WITNESS WHEREOF, Agency and National CORE have entered into this Memorandum as of the date first set forth above. ATTEST: Secretary APPROVED AS TO FORM: RUTAN & TUKR, LLP Attorneys for the L uinta Redevelopment Agency "Agency" LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic go Its: Executive Director "National CORE" THE SOUTHERN CALIFORNIA HOUSING DEVELOPMENT CORPORATION, a California nonprofit, public benefit corporation By: Its: Richard ,L Whi CPA hle4 Flnanclal Officer "2/015610-0047 84839907 al0/30/07 -2- IN WITNESS WHEREOF, Agency and National CORE have entered into this Memorandum as of the date first set forth above. ATTEST: Secretary APPROVED AS TO FORM: RUTAN & TUCKER, LLP Attorneys for the La Quinta Redevelopment Agency "Agency" LA QUI TTA REDEVELOPMENT AGENCY, a public body, corporate and politic M Its: Executive Director "National CORE" NATIONAL COMMUNITY RENAISSANCE OF CALIFORNIA, a California nonprofit, public benefit corpora By: Richard J. Whittingham, CPA Its: Chief Financial Officer 88V015610-0047 _ 948399.06 a10/30/07 _2 CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT State of California 1 County of fiz41 'dr-76,rc(rna J} On IG13V _ before me, tNlrni(n �tc(ii�o�z, i11d�otvV �u�l.� ate Name end I I ai cef (e g "Jane Doe. tary Pubho-) personally appeared _ J! rtd 2 lzl J , U41L f /vY1C /vi)yl Name(e) of ner(s) l% personally known to me ❑ (or proved to me on the basis of satisfactory evidence) MONICA RODRIGUEZ Commisgon - 1571975 olmito be the person(s) whose name(s) is/are subscribed to the NotaryRi�ramC until within instrument and acknowledged to me that 10san 6ernarIM County g My Comm.6gtkesApr22,zo 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. Place Notary Seal Above Signature L%,�/ ) � Sgnature of fW,c- OPTIONAL Though the information below is not required by law, it may prove valuable to persons relying on the document and could prevent fraudulent removal and reattachment of this form to another document. Description of Attached Document Title or Type of Document: _ 03 i Document Date: Io 3GZG9t Number of Pages: Signer(s) Other Than Named Above: Capacity(ies) Claimed by Signer(s) Signer's Name: J- tthiftnat/wnn Signer's Name: ❑ Individual ❑ Individual k Corporate Officer — Title(s): CLt) ❑ Corporate Officer — Title(s): ❑ Partner —❑ Limited ❑ General ❑ Partner —❑ Limited ❑ General ❑ Attorney in Fact ' ❑ Attorney in Fact ❑ Trustee Top of thumb here ❑ Trustee ❑ Guardian or Conservator ' `• ❑ Guardian or Conservator ❑ Other: ❑ Other: Signer Is Representing: Signer Is Representing: 14L _ 0 2006 National Notary Association • 9350 De Soto Ave , P.O Box 2402 • Chatsworth, CA 91313-2402 Item No. 5907 v609 Reorder: Cell Toll -Free 1.600-676.6827 STATE OF CALIFORNIA ) ) ss. COUNTY OF RIVERSIDE ) I �� p On lot 3l 0&-001 before me, .i Q �� w 0 � h— )<— personally appeared �ean asap P- r�A V n AQ I , perso lly kno n 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. PF1rit1! MANILY CorrrMMM # 16977% ► ow Pub1c - calan. Mverme county *CornM SOM Oc116, 201 [SEAL] STATE OF CALIFORNIA ) ) ss. COUNTY OF RIVERSIDE ) QULO- -ram Notary Publi On _ before me, , personally appeared personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. Witness my hand and official seal. Notary Public [SEAL] 882/015610-0047 148399 07 a 10/30/07 _3 _ EXHIBIT A THAT PORTION OF THE SOUTHEAST QUARTER OF THE NORTHEAST QUARTER OF SECTION 19, TOWNSHIP 5 SOUTH, RANGE 7 EAST, SAN BERNARDINO MERIDIAN, IN THE CITY OF LA QUINTA, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, DESCRIBED AS FOLLOWS: COMMENCING AT THE SOUTHEAST CORNER OF THE NORTHEAST QUARTER OF SAID SECTION 19; THENCE SOUTH 890 33' 05" WEST, ON THE SOUTHERLY LINE OF THE NORTHEAST QUARTER OF SAID SECTION, 330 FEET, TO THE TRUE POINT OF BEGINNING; THENCE SOUTH 890 33' 05" WEST, ON SAID SOUTHERLY LINE OF THE NORTHEAST QUARTER, 330 FEET; THENCE NORTH 00 13' 40" WEST, 1,324.57 FEET, TO THE NORTHERLY LINE OF THE SOUTHEAST QUARTER OF NORTHEAST QUARTER OF SAID SECTION 19; THENCE NORTH 890 34' 05" EAST, ON SAID NORTHERLY LINE, 330 FEET; THENCE SOUTH 00 13' 40" EAST, 1,324.47 FEET TO THE TRUE POINT OF BEGINNING; EXCEPTING THEREFROM THE SOUTHERLY 50 FEET CONVEYED TO THE COUNTY OF RIVERSIDE BY DEEDS RECORDED AUGUST 30, 1933 IN BOOK 133, PAGE 292 AND BOOK 134, PAGE 298 RESPECTIVELY, OF OFFICIAL RECORDS, RIVERSIDE COUNTY RECORDS. ALSO EXCEPTING THEREFROM THAT PORTION DESCRIBED IN THE DEEDS TO THE CITY OF LA QUINTA, RECORDED FEBRUARY, 17, 1999, AS INSTRUMENT NOS. 62425 AND 62426, BOTH OF OFFICIAL RECORDS. 0 Recording Requested 8y CHICAGO TITLE COMPANY Recording Requested By And When Recorded Return to: La Quinta Redevelopment Agency 78-495 Calle Tampico La Quinta, CA 92253 Attn: Executive Director DOC # 2007-0669199 10/31/2007 08:00R,Fee:NC Page 1 of 10 Recorded in Official Records County of Riverside Larry W. Ward Assessor, County Clerk & Recorder 11111111111111111111111111111 IN 1111111111111111111111 U I PAGE SIZE I uN I MIDI. ] WIVUI nry i w�, 465 I 426 I PCORI NCORI SMF CTY I UNI CONSTRUCTION DEED OF TRUST WITH ASSIGNMENT OF RENTS AND RIDERS ATTACHED HERETO NOTE: RIDERS ATTACHED TO THIS DEED OF TRUST CONTAINING INCLUDING SECURITY AGREEMENT AND FIXTURE FILING. �V TERM im This CONSTRUCTION DEED OF TRUST WITH ASSIGNMENT OF RENTS AND RIDERS ATTACHED HERETO ("Deed of Trust"), is made October 31, 2007, between NATIONAL COMMUNITY RENAISSANCE OF CALIFORNIA, a California nonprofit public benefit corporation, herein called TRUSTOR, whose address is 9065 Haven Avenue, Suite 100, Rancho Cucamonga, CA 91730, Chicago Title Company, a California corporation, herein called TRUSTEE, and LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic, herein called BENEFICIARY. WITNESSETH: That Trustor grants to Trustee in trust, with power of sale, 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 in Exhibit "A" (the "Property"), together with the rents, issues and profits thereof, subject, however, to the right, power and authority hereinafter given to and conferred upon Beneficiary to collect and apply such rents, issues and profits for the purpose of securing (1) payment of the sum of TWENTY-FOUR MILLION DOLLARS ($24,000,000), 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 its successors or assigns, when evidenced by a promissory note or notes reciting that they are secured by this Deed of Trust. To protect the security of this Deed of Trust, and with respect to the Property above described, Trustor expressly makes each and all of the agreements, and adopts and agrees to perform and be bound by each and all of the terms and provisions set forth in subdivision A, and it is mutually agreed that each and all of the terms and provisions set forth in subdivision B of the fictitious deed of trust recorded in Orange County August 17, 1964, and in all other counties August 18, 1964, in the book and at the page of Official Records in the office of the county recorder of the county where said property is located, noted below opposite the name of such county, namely: COUNTY BOOK PAGE COUNTY BOOK PAGE COUNTY BOOK PAGE COUNTY BOOK PAGE Alameda 1288 556 Kings 858 713 Placer 1028 379 Sierra 38 187 Alpine 3 130-31 Lake 437 110 Plumas 166 1307 Slskiyou 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 Calavems 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 800 633 882/015610-0047 843410 07 al 0/30/07 _ I COUNTY BOOK PAGE COUNTY BOOK PAGE COUNTY BOOK PAGE COUNTY BOOK PAGE 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 therel'or does not exceed the maximum allowed by law. The undersigned Trustor, requests that a copy of any notice of default and any notice of sale hereunder be mailed to him at his address hereinbefore set forth. SEE RIDERS ATTACHED TO THIS DEED OF TRUST STATE OF CALIFORNIA COUNTY OF On before me, _ personally appeared , personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose names(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signatures(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. Signature (This area for official notarial seal) Signature ofTrustor NATIONAL COMMUNITY RENAISSANCE OF CALIFORNIA, a California nonprofit public benefit corporation By: Its: Richard J. Whittingham, CPA 887/01561M047 843410.06 a10/16/07 -2- DO NOT RECORD The following is a copy of Subdivisions A and B of the fictitious Deed of Trust recorded in each county in California as stated in the foregoing Deed of Trust and incorporated by reference in said Deed of Trust as being a part thereof as if set forth at length therein. A. To protect the security of this Deed of Trust, Trustor agrees: 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 budding 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, prone 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 many 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 bens, with interest, on said property or any part thereof, which appear to be prior or superior hereto; all costs, fees and expenses of this Trust Should Trustor fail to make any payment or to do any act as herein provided, then Beneficiary or Trustee, but without obligation so to do and without notice to or demand upon Trustor and without releasing Trustor from any obligation hereof, may: make or do the same in such manner and to such extent as either may deem necessary to protect the security hereof, Beneficiary or Trustee being authorized to enter upon said property for such purposes; appear in and defend any action or proceeding purporting to affect the security hereof or the rights or powers of Beneficiary or Trustee; pay, purchase, contest or compromise any encumbrance, charge or lien which in thejudgment of either appears to be prior or superior hereto; and, in exercising any such powers, pay necessary expenses, employ counsel and pay his or her reasonable fees. 5) To pay immediately and without demand all sums so expended by Beneficiary or Trustee, with interest from the date of expenditure at the amount allowed by law in effect at the date hereof, and to pay for any statement provided for by law in effect at the date hereof regarding the obligation secured hereby any amount demanded by the Beneficiary not to exceed the maximum allowed by law at the time when said statement is demanded. 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 its right either to require prompt payment when due of all other sums so secured or to declare default for failure so to pay. 3) That at any time or from time to time, without liability therefor and without 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, Tmstor hereby gives to and confers upon Beneficiary the right, power and authority, during the continuance of these Trusts, to collect the rents, issues and profits of said property, reserving unto Trustor the right, prior to any default by Trustor in payment of any indebtedness secured hereby or in the performance of any agreement hereunder, to collect and retain such rents, issues and profits as they become due and payable Upon any such default (beyond any applicable cure period, and during the continuance of such default), Beneficiary may at 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 its own 882/015610-0047 843410 07 alo/30/07 -3- name sue for or otherwise collect such rents, issues, and profits, including those past due and unpaid, and apply the same, less costs and expenses of operation and collection, including reasonable attorney's fees, upon any indebtedness secured hereby, and in such order as Beneficiary may determine. The entering upon and taking possession of said property, the collecting of such rents, issues and profits and the application thereof as aforesaid, shall not cure or waive any default or notice of default hereunder or invalidate any act done pursuant to such notice. 6) That upon default by Trustor in payment of any indebtedness secured hereby or to 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 seemed 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 wnveyance from the Trustee predecessor, succeed to all its title, estate, rights, powers and duties. Said instrument must contain the time of the original Truster, Trustee and Beneficiary hereunder, the book and page where this Deed is recorded and the time 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 parry 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 mad 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 8821015610-0047 843410 07 a10/30/07 -4- EXHIBIT A THAT PORTION OF THE SOUTHEAST QUARTER OF THE NORTHEAST QUARTER OF SECTION 19, TOWNSHIP 5 SOUTH, RANGE 7 EAST, SAN BERNARDINO MERIDIAN, IN THE CITY OF LA QUINTA, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, DESCRIBED AS FOLLOWS: COMMENCING AT THE SOUTHEAST CORNER OF THE NORTHEAST QUARTER OF SAID SECTION 19; THENCE SOUTH 890 33' 05" WEST, ON THE SOUTHERLY LINE OF THE NORTHEAST QUARTER OF SAID SECTION, 330 FEET, TO THE TRUE POINT OF BEGINNING; THENCE SOUTH 890 33' 05" WEST, ON SAID SOUTHERLY LINE OF THE NORTHEAST QUARTER, 330 FEET; THENCE NORTH 0° 13' 40" WEST, 1,324.57 FEET, TO THE NORTHERLY LINE OF THE SOUTHEAST QUARTER OF NORTHEAST QUARTER OF SAID SECTION 19; THENCE NORTH 893 34' 05" EAST, ON SAID NORTHERLY LINE, 330 FEET; THENCE SOUTH 00 13' 40" EAST, 1,324.47 FEET TO THE TRUE POINT OF BEGINNING; EXCEPTING THEREFROM THE SOUTHERLY 50 FEET CONVEYED TO THE COUNTY OF RIVERSIDE BY DEEDS RECORDED AUGUST 30, 1933 IN BOOK 133, PAGE 292 AND BOOK 134, PAGE 298 RESPECTIVELY, OF OFFICIAL RECORDS, RIVERSIDE COUNTY RECORDS. ALSO EXCEPTING THEREFROM THAT PORTION DESCRIBED IN THE DEEDS TO THE CITY OF LA QUINTA, RECORDED FEBRUARY, 17, 1999, AS INSTRUMENT NOS. 62425 AND 62426, BOTH OF OFFICIAL RECORDS. -- 5- RIDER TO CONSTRUCTION DEED OF TRUST WITH ASSIGNMENT OF RENTS This RIDER TO CONSTRUCTION DEED OF TRUST WITH ASSIGNMENT OF RENTS ("Rider") is executed this 31st day of October, 2007, by NATIONAL COMMUNITY RENAISSANCE OF CALIFORNIA, a California nonprofit public benefit corporation, herein "Trustor," in favor of the LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic, herein `Beneficiary," the same parties to that certain form Construction Deed of Trust With Assignment of Rents, of even date hereto, to which this Rider is attached. This Rider is made a part of and is incorporated into said Deed of Trust. This Rider shall supersede any conflicting term or provision of the form Deed of Trust to which it is attached. Reference is made to (i) that certain Promissory Note by and between Trustor and Beneficiary, dated on or about the date set forth above, the repayment of which by 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. Provelly. 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 Agency Note; b. Payment and performance of all obligations of Trustor under this Deed of Trust; C. Payment and performance of all obligations of Trustor under the Agency Agreements. d. Payment and performance of all future advances and other obligations of Trustor or any other person, firm, or entity with the approval of Trustor, may agree to pay and/or perform (whether as principal, surety or guarantor) for the benefit of Beneficiary, when the obligation is evidenced by a writing which recites that it is secured by this Deed of Trust; and e. All modifications, extensions and renewals of any of the obligations secured hereby, however evidenced. Trustor's grant hereunder is subject to the nonrecourse provisions in Section 5 of the Agency Note, which are incorporated herein by this reference as though set forth in full. 882/015610-0047 943410 07 a] 0/30/07 -6- 3.. Obligations. The term "obligations" is used herein in its broadest and most comprehensive sense and shall be deemed to include, without limitation, all interest and charges, prepayment charges, late charges and fees at any time accruing or assessed on any of the Secured Obligations. 4. Incorporation. All terms of the Agency Note, Agency Agreements, and the Secured Obligations are incorporated herein by this reference. All persons who may have or acquire an interest in the Property shall be deemed to have notice of the terms of all of the foregoing documents. 5. Mortgagee -in -Possession. Neither the assignment of rents set forth in the Deed of Trust nor the exercise by Beneficiary of any of its rights or remedies hereunder shall be deemed to make Beneficiary a "mortgagee -in -possession" or otherwise liable in any manner with respect to the Property, unless Beneficiary, in person or by agent, assumes actual possession thereof. Nor shall appointment of a receiver for the Property by any court at the request of Beneficiary or by agreement with Trustor, or the entering into possession of the Property by such receiver, be deemed to make Beneficiary a "mortgagee -in -possession" or otherwise liable in any manner with respect to the Property. 6. No Cure. In the event Beneficiary collects and receives any rents under the Deed of Trust upon any default hereof, such collection or receipt shall in no way constitute a curing of the default, except if and to the extent the same are sufficient to cure all monetary defaults and no other defaults then exist. 7. Possession Upon Default. Upon the occurrence of and during the continuation of a default, Beneficiary, after having given notice and the applicable cure periods having expired with the default having not been cured (hereinafter, a "default"), may, at its option, without any action on its part being required and without in any way waiving such default, take possession of the Property in accordance with applicable law and have, hold, manage, lease and operate the same, on such terms and for such period of time as Beneficiary may deem proper, and, subject to the rights of any senior lienholders, may collect and receive all rents and profits, with full power to make, from time to time, all commercially reasonable alterations, renovations, repairs or replacements thereto as may seem proper to Beneficiary, and to apply such rents and profits to the payment of (a) the cost of all such alterations, renovations, repairs and replacements, and all costs and expenses incident to taking and retaining possession of the Property, and the management and operation thereof, and keeping the same properly insured; (b) all taxes, charges, claims, assessments, and any other liens which may be prior in lien or payment of the Agency Note, and premiums for insurance, with interest on all such items; and (c) the indebtedness secured hereby, together with all costs and attorney's fees, in such order or priority as to any of such items as Beneficiary in its sole discretion may determine, any statute, law, custom or use to the contrary notwithstanding. Any amounts received by Beneficiary or its agents in the performance of any acts prohibited by the terms of this assignment, including, but not limited to, any amounts received in connection with any cancellation, modification or amendment of any lease prohibited by the terms of this assignment and any rents and profits received by Truster 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 Truster. Any person receiving any portion of such trust funds shall receive the same in trust 882/015610-0047 843410 07 a10/30/07 -7- for Beneficiary as if such person had actual or constructive notice that such funds were impressed with a trust in accordance therewith. 8. Receiver. In addition to any and all other remedies of Beneficiary set forth under this Deed of Trust or permitted at law or in equity, if a default shall have occurred and not have been cured within any applicable cure period, Beneficiary, to the extent permitted by law and without regard to the value, adequacy or occupancy of the security for the Note and other sums secured hereby, shall be entitled as a matter of right if it so elects to the appointment of a receiver to enter upon and take possession of the Property and to collect all rents and profits and apply the same as the court may direct, and such receiver may be appointed by any court of competent jurisdiction by ex parte application and without notice, notice of hearing being hereby expressly waived. The expenses, including receiver's fees, attorneys' fees, costs and agent's compensation, incurred pursuant to the power herein contained shall be secured by this Deed of Trust. 9. Notice to Beneficiary. Notices to Beneficiary shall be sent to Beneficiary addressed to: La Quinta Redevelopment Agency 78-495 Calle Tampico La Quinta, CA 92263 Attn: Executive Director [SIGNATURE ON NEXT PAGE] 882/015610-0047 843410.07 a10/30/07 -8- IN WITNESS WHEREOF, Trustor has executed this Rider on the date of Trustor's acknowledgment herein below, to be effective for all purposes as of the day and year first set forth above. TRUSTOR: NATIONAL COMMUNITY RENAISSANCE OF CALIFORNIA, a California nonprofit public benefit corporation By: Its: Richard J. Whittingham C.PA Chief Financial Officer 8821015610-0047 843410.06 a10A6/077 -9- State of California _ County of dpi. On -- 007 before me, A)66 %7CI'Y%/) jleZ /olOL/ 1 (insert name and title of the officer) / �Q �Lr personally appeared personally known to me (or proved to me cn the basigJof satisfactory evidence) to be the person($) whose name(s) is/are subscribed to the within instrument, and acknowledged to me that he/shekkey executed the same in hisnter#12eir authorized capacity(ies), and that by his/herltbeir signature(p) on the instrument the person(p'), or the entity upon behalf of which the person(, acted, executed the instrument. WITNESS my hand and official seal. G Signature 182/015610-0047 843410.07 a]0/30/07 -10- 9MY Wry1HIIDA HERNANDEZ NOTARYAPURK-CAL60RNa N BAN BERNARDINO CWM CON, Ev. July B, 2011 (Seal) w.'PARecording Requested by CHICA ,r1 TITLE COMPAtJV RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: La Quinta Redevelopment Agency 78-495 Calle Tampico La Quinta, CA 92253 Attn: Executive Director DOC # 2007-0669198 10/31/2007 08:00ii Fee:NC Page 1 of 48 Recorded in Official Records County of Riverside Larry IJ. Ward Assessor, County Clerk 8 Recorder 111111111111111111111111111113 11111I 111111111111111 S R U PAGE SIZE I DA I MISC LONG RFD COPY M A I L 465 1 426 PCOR NCOR SMF CH EXAM V T: CTY UNI xempt om ecor mg Fee per Gov. Code, 27383) REGULATORY AGREEMENT AND DECLARATION OF COVENANTS AND RESTRICTIONS This REGULATORY AGREEMENT AND DECLARATION OF COVENANTS AND In RESTRICTIONS ("Agreement') is made and entered into this 29th day of October, 2007 ("Effective Date"), by and between the LA QUINTA REDEVELOPMENT AGENCY, a public m body, corporate and politic ("Agency"), and NATIONAL COMMUNITY RENAISSANCE OF �- CALIFORNIA, a California nonprofit public benefit corporation ("Developer"). 7" RECITALS: L` A. Developer is the owner of fee title to that certain real property more particularly described in Exhibit "A", attached hereto and incorporated by reference herein (the "Site"). B. On or about March 8, 2007, Agency and Developer (under its former name, The Southern California Housing Development Corporation) entered into an Affordable Housing Agreement (the "Original AHA"). C. On or about October 31, 2007, Agency and Developer entered into that certain Amended and Restated Affordable Housing Agreement (the "AHA") which replaced, in its entirety, the Original AHA. D. Pursuant to the AHA, Agency agreed to provide financial assistance to Developer in an amount up to Twenty -Four Million Dollars ($24,000,000) (the "Agency Loan") for the purpose of assisting Developer to acquire the Site, and to complete thereon construction of an affordable rental apartment complex containing eighty (80) units (the "Project'). The AHA requires Developer to enter into this Agreement, which provides, among other requirements, that, upon completion of construction of the Project, all of the apartment units within the Project (with the exception of the Management Unit) shall thereafter be rented to and occupied by "Eligible Tenants" (as that term is defined in Section 1.9 below). The AHA is incorporated herein as if fully set forth. E. Reference is also made to the following documents, of even date herewith: (i) Promissory Note by Developer as Borrower in favor of Agency as lender ("Agency Note"). The Agency Note evidences the Agency Loan. 882/015610-0047 843409 07 a10/30/07 -1' (ii) Construction Deed of Trust with Assignment of Rents and Riders attached hereto, by and between Developer as trustor and Agency as beneficiary, and recorded in the Office of the Riverside County Recorder ("Agency Deed of Trust"). The Agency Deed of Trust secures (a) repayment of the Agency Note, and (b) performance of Developer's obligations hereunder. The Agency Note and the Agency Deed of Trust are referred to herein collectively as the "Agency Agreements." The Agency Agreements are incorporated herein as if fully set forth. F. Developer has obtained an award of 9% low income housing tax credits from the Tax Credit Allocation Committee (the "TCAC") pursuant to Section 42 of the Internal Revenue Code (the "Tax Credits"). In connection with obtaining the Tax Credits, Developer has entered into, or will enter into, with TCAC, a regulatory agreement to be recorded in the Official Records of the County of Riverside encumbering title to the Project (the "Tax Credit Regulatory Agreement"). G. Pursuant to the AHA and the Agency Agreements, Developer has agreed to complete construction of the Project and thereafter to own, operate, manage, and maintain the Project with all of the units thereon except the Management Unit restricted to rental to and occupancy by Eligible Tenants. H. Agency and Developer now desire to place restrictions upon the use and operation of the Site, in order to ensure that the Site shall be operated continuously, for a period of fifty- five (55) years commencing on the date of the "Permanent Loan Closing" (as that term is defined in the AHA) (with such date referred to herein after as the "Permanent Loan Closing Date"), as an affordable rental apartment complex in accordance with the terms hereof. AGREEMENT: NOW, THEREFORE, the Developer and Agency declare, covenant and agree, by and for themselves, their heirs, executors, administrators, successors and assigns, and all persons claiming under or through them, that, commencing upon the Effective Date and continuing for a period of fifty-five (55) years following the Permanent Loan Closing Date, as follows: 1.0 DEFINITIONS. 1.1 "50% Very Low Income Household" shall mean a household whose annual income does not exceed fifty percent (50%) of AMI, adjusted for family size. 1.2 Affiliate. As used in this Agreement, the term "Affiliate" shall mean any person or entity directly or indirectly, through one or more intermediaries, controlling, controlled by or under common control with such person which, if such person is a partnership or limited liability company, shall include each of the constituent members or general partners, respectively, thereof. The term "control" as used in the immediately preceding sentence, means, with respect to a person that is a corporation, the right to the exercise, directly or indirectly, of more than 50% of the voting rights attributable to the shares of the controlled corporation, and, with respect to a person that is not a corporation, the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of the controlled person. 882/015610-0047 843409 07 a10/30/07 1.3 Affordable Rent. As used in this Agreement, the term "Affordable Rent' shall mean the amount of monthly rent, including a reasonable utility allowance, that does not exceed the maximum allowable rent to be charged by Developer and paid by Very Low Income Households, 50% Very Low Income Households, or Extremely Low Income Households occupying the Units as determined pursuant to Health and Safety Code Section 50053(b), as of the Effective Date, and the regulations promulgated pursuant to or incorporated therein, including, without limitation, any applicable regulations promulgated pursuant to Health and Safety Code Section 50093. Subject to Section 3.11 herein, the tenant utility allowance shall be determined by the Executive Director. 1.4 AMI. As used in this Agreement, the term "AMP' or "Area Median Income" shall mean the median family income for the Riverside County area promulgated and published annually by the California Department of Housing and Community Development ("HCD") pursuant to Title 25, Section 6932 of the California Code of Regulations. If HCD ceases annually to publish median incomes, the parties will agree upon an adequate substitute manner for determining AMI. 1.5 Approved Budget. As used in this Agreement, the term "Approved Budget' has the meaning ascribed in Section 3.13 of this Agreement. 1.6 Capital Improvements. As used in this Agreement, the term "Capital Improvements" means all work and improvements with respect to the Site for which costs and expenses may be capitalized in accordance with generally accepted accounting principles in effect from time to time, consistently applied. 1.7 Cash Flow. As used in this Agreement, the term "Cash Flow" means, for the applicable period, Net Operating Income less Debt Service. 1.8 CPI. As used in this Agreement, the term "CPI" means the Consumer Price Index published by the United States Department of Labor, Bureau of Labor Statistics, for Urban Wage Earners and Clerical Workers, Los Angeles -Riverside -Orange County Average, All Items (1984=100), or, if the CPI is discontinued, such official index as may then be in existence and which is most nearly equivalent to the CPI. 1.9 Debt Service. As used in this Agreement, the term "Debt Service" means scheduled debt service (including impounds, expenses, and other amounts payable) on any loan that is senior to the Agency Loan. 1.10 Eligible Tenant. As used in this Agreement, the term "Eligible Tenant' shall mean a household which qualifies as a Very Low Income Household, an Extremely Low Income Household, or a 50% Very Low Income Household. 1.11 Executive Director. As used in this Agreement, the term "Executive Director" shall mean the individual duly appointed to the position of Executive Director of Agency, or his or her authorized designee. Whenever an administrative action is required by Agency to implement the terms of this Agreement, the Executive Director, or his or her authorized designee, shall have authority to act on behalf of Agency, except with respect to matters reserved for Agency Board determination. 882/015610-0047 843409 07 a10/30/07 1.12 Extremely Low Income Household. As used in this Agreement, the term "Extremely Low Income Household" shall have the meaning as set forth in Health and Safety Code Section 50106, or successor statute, adjusted for family size. 1.13 Management Unit. As used in this Agreement, the term "Management Unit" shall have the meaning ascribed in Section 2.6 hereof. 1.14 Moderate Income Household. As used in this Agreement, the term "Moderate Income Household" shall have the meaning as set forth in Health and Safety Code Section 50093, or any successor statute, adjusted for family size. 1.15 Net Operating Income. As used in this Agreement, the term "Net Operating Income" shall have the meaning ascribed thereto in the Agency Note. 1.16 Operating Expenses. As used in this Agreement, the term "Operating Expenses" shall have the meaning ascribed thereto in the Agency Note. 1.17 Operating Income. As used in this Agreement, the term "Operating Income" shall have the meaning ascribed thereto in the Agency Note. 1.18 Permanent Loan Closing Date. As used in this Agreement, the term "Permanent Loan Closing Date" shall have the meaning ascribed in Recital F hereof. 1.19 Restricted Unit Matrix. As used in this Agreement, the term "Restricted Unit Matrix" shall mean that certain affordability matrix attached hereto and incorporated herein as Exhibit "F". 1.20 Tax Credit Investor. As used in this Agreement, the term "Tax Credit Investor" shall mean an Affiliate of Hudson Housing Capital, LLC, a Delaware limited liability company 1.21 Tax Credit Program. As used in this Agreement, the term "Tax Credit Program" shall mean the low-income housing tax credit program authorized pursuant to Internal Revenue Code Section 42, California Health and Safety Code Sections 50199.6-50199.19, Revenue and Taxation Code Sections 17057.5, 17058, 23610.4, 23610.5, and applicable federal and State regulations such as 4 California Administrative Code Sections 10300-10340. 1.22 Tax Credits. As used in this Agreement, the term "Tax Credits" shall mean the low income housing tax credits granted by TCAC for the Project pursuant to the Tax Credit Program. 1.23 Tax Credit Regulatory Agreement. As used in this Agreement, the term "Tax Credit Regulatory Agreement" shall mean that certain regulatory agreement to be recorded against the Site as a condition of the receipt by the Project of an allocation by TCAC of nine percent (9%) Tax Credits. 1.24 TCAC. As used in this Agreement, "TCAC" shall mean the California Tax Credit Allocation Committee. 982/015610-0047 843409 07 a10/30/07 1.25 Unit. As used in this Agreement, the term "Unit" or "unit" shall mean a rental apartment dwelling unit on the Site. 1.26 Very Low Income Household. As used in this Agreement, the term "Very Low Income Household" shall have the meaning as set forth in Health and Safety Code Section 50105, or any successor statute, adjusted for family size. 2.0 RESIDENTIAL RENTAL PROPERTY. 2.1 Residential Use. Without the Agency's prior written consent, which consent may be given or withheld in its sole and absolute discretion, none of the Units in the Project will at any time be utilized on a transient basis or will ever be used as a hotel, motel, dormitory, fraternity house, sorority house, rooming house, nursing home, hospital, sanitarium, or trailer court or park, nor shall the Units be used for day care facilities or as a place of business except as may otherwise be allowed by applicable law. 2.2 Conversion of Units. No part of the Project will at any time be owned by a cooperative housing corporation, nor shall the Developer take any steps in connection with the conversion to such ownership or uses to condominiums, or to any other form of ownership, without the prior written approval of Agency which approval may be given or withheld in its sole and absolute discretion. 2.3 No Preference. All of the Units will be available for rental in accordance with the terms of this Agreement, and the Developer shall not give preference to any particular class or group of Eligible Tenants in renting the Units in the Project, except as provided in Section 3.4 below. 2.4 Resident Manager Unit. Notwithstanding anything to the contrary in this Agreement, one (1) of the Units may be occupied by on -site management (the "Management Units"). The Management Unit shall be restricted for rental to and occupancy by a Moderate Income Household at an affordable rent, as determined pursuant to Health and Safety Code Section 50053. As of the Effective Date, affordable rent, including a reasonable utility allowance, for a Moderate Income Household is no more than the product of thirty percent (30%) of one hundred ten percent (I 10%) of AMI adjusted for family size appropriate for the Unit. 2.5 Liability of Developer. Developer and any manager it employs shall not incur any liability under this Agreement as a result of fraud or intentional misrepresentation by a tenant. 3.0 OCCUPANCY OF RESTRICTED UNITS BY ELIGIBLE TENANTS. Developer hereby represents, warrants, and covenants as follows: 3.1 Occupancy Levels. Except as expressly provided herein, throughout the term of this Agreement, the Units shall be continuously occupied or held vacant and available for occupancy by Eligible Tenants. 882/015610-0047 _ 843409 07 a10/30/07 -5 3.2 Occupancy By Eligible Tenant. A Unit occupied by an Eligible Tenant who qualified as an Eligible Tenant at the commencement of the occupancy shall be treated as occupied by an Eligible Tenant throughout their tenancy. A Unit previously occupied by an Eligible Tenant and then vacated shall be considered occupied by an Eligible Tenant until the Unit is reoccupied, provided Developer uses its best efforts to re -lease the vacant Unit to an Eligible Tenant. Any vacated Unit shall be held vacant until re -leased to an Eligible Tenant. Developer shall take any or all of the following actions, as necessary, to locate Eligible Tenants for the Project: (i) notification to the City of the available Unit; (ii) advertisement of the available Unit in a newspaper of general circulation in the City; and (iii) contacting and notifying the Riverside County Housing Authority in writing of the available Unit. 3.3 Income Computation and Certification. Immediately prior to an Eligible Tenant's occupancy of a Unit, Developer shall obtain an Income Computation and Certification Form in the form attached hereto and incorporated herein as Exhibit "B", or on a similar form required by TCAC (the "TCAC Income Certification form") if the TCAC Income Certification Form requires inclusion of the same information as required in Exhibit `B", from each such Eligible Tenant dated no more than 90 days prior to the date of initial occupancy in the Project by such Eligible Tenant. In addition, Developer shall provide such further information as may be reasonably required in the future by the Agency for purposes of verifying a tenant's status as an Eligible Tenant, provided the same is reasonably available to Developer without unreasonable expense in connection with obtaining the same. Developer shall use good faith efforts to verify that the income provided by an applicant is accurate by taking the following steps as a part of the verification process: (i) obtain three (3) pay stubs for the most recent pay periods; (ii) obtain a written verification of income and employment from the applicant's current employer; (iii) obtain an income verification form from the Social Security Administration, California Department of Social Services, and/or California Employment Development Department if the applicant receives assistance from any of said agencies; (iv) if an applicant is unemployed or did not file a tax return for the previous calendar year, obtain other evidence and/or verification of such applicant's total income received during the calendar year from any source, taxable or nontaxable, or such other information as is satisfactory to the Agency. Developer shall maintain in its records each Income Computation and Certification Form obtained pursuant to this section for a minimum of five (5) years. 3.4 Rental Priority. During the term of this Agreement, Developer shall use its reasonable commercial efforts to lease the Units to credit -worthy Eligible Tenants in the following order of priority: (i) displaced persons entitled to a preference pursuant to California Health and Safety Code Section 33411.3 or successor statute; and (ii) other persons meeting the eligibility requirements of this Agreement. Developer shall, and Agency may, maintain a list (the "Housing List") of persons who have notified Developer and/or Agency of their desire to rent a Unit in the Project and who have incomes which would qualify them as an Eligible Tenant, and Developer shall offer to rent units on the above -referenced priority basis; provided, however, that Developer shall not be required to prequalify persons on the Housing List. Should multiple tenants be equally eligible (as to income, credit history, and other nondiscriminatory criteria) and qualified to rent a unit, Developer shall rent available Units to Eligible Tenants on a first -come, first -served basis. 882/015610-0047 843409.07 a10/30/07 -6- 3.5 Recertification. Within sixty (60) days prior to the first anniversary date of the occupancy of a Unit by an Eligible Tenant, and on each anniversary date thereafter, Developer shall recertify the income of such Eligible Tenant by obtaining a completed Income Recertification Form, in the form attached hereto and incorporated herein as Exhibit "C", based upon the current income of each known occupant of the Unit; provided, however, that if the TCAC Regulatory Agreement, or a regulatory agreement required to be entered into by Developer as a condition to obtaining tax-exempt bonds to finance the Project, requires Developer to obtain a recertification form which requires inclusion of the same information as required in Exhibit "C", then Developer shall not be deemed to be in default hereunder if during the term of the TCAC Regulatory Agreement or bond regulatory agreement (as applicable) Developer obtains from each Eligible Tenant the TCAC recertification form or the recertification form required pursuant to the bond regulatory agreement. 3.6 Determination of Affordable Rent. All Units shall be rented at an Affordable Rent. 3.6.1 Rent Schedule and Utility Allowance. Subject to Section 3.11 hereof, Agency will establish maximum monthly allowances for utilities and services to be used by the Developer in calculating Affordable Rent. Developer shall submit to Executive Director for review and approval the Affordable Rent proposed by Developer for all of the Units. The Executive Director shall approve such proposal if it complies with the terms of this Agreement. The maximum monthly rent must be recalculated by Developer and reviewed and approved by the Agency annually. 3.6.2 Adjustment of Affordable Rent Affordable Rent may change as changes in the applicable gross rent amounts, the income adjustments, or the monthly allowance for utilities and services warrant. Any increase in rents is subject to the provisions of outstanding leases. Developer must provide households occupying the Units not less than thirty (30) days prior written notice before implementing any rent increase. 3.7 Certification of Continuing Program Compliance. During the term of this Agreement, on or before each April 1 following the Term Commencement Date, Developer shall annually advise the Agency of the occupancy of the Project during the preceding calendar year by delivering a Certification of Continuing Program Compliance in the form attached hereto and incorporated herein as Exhibit "E", stating (i) the Units of the Project which have been rented to and are occupied by Eligible Tenants and (ii) that to the knowledge of Developer either (a) no unremedied default has occurred under this Agreement, or (b) a default has occurred, in which event the Certification shall describe the nature of the default and set forth the measures being taken by the Developer to remedy such default. Developer shall pay to Agency an annual fee pursuant to Health and Safety Code Section 33418(c) which shall not exceed FIVE HUNDRED DOLLARS ($500) as such amount shall be permitted to increase by the CPI from and after the date of this Agreement, or, if the CPI is discontinued, such official index as may then be in existence and which is most nearly equivalent to the CPI. 3.8 Maintenance of Records. Developer shall maintain complete and accurate records pertaining to the Units, and shall permit any duly authorized representative of the Agency, upon twenty-four (24) hours prior notice and during business hours, to inspect the books and records 882/015610-0047 843409 07 a10/30/07 -7- of Developer pertaining to the Project including, but not limited to, those records pertaining to the occupancy of the Units. 3.9 Reliance on Tenant Representations. Each tenant lease shall contain a provision to the effect that Developer has relied on the income certification and supporting information supplied by the tenant in determining qualification for occupancy of the unit, and that any material misstatement in such certification (whether or not intentional) will be cause for immediate termination of such lease. Each such lease shall also include the lease rider attached hereto and incorporated herein as Exhibit "D" and shall state that occupation of the Unit is subject to the income restrictions described in this Agreement. 3.10 Remedy For Excessive Rent Charge. 3.10.1 Subject to Section 2.4 hereof, it shall constitute a default for Developer to charge or accept for any Unit rent amounts in excess of the amount provided for in Section 3.6 of this Agreement. In the event that Developer charges or receives such higher rental amounts, in addition to any other remedy Agency shall have for such default, Developer shall be required to pay to Agency an amount equal to two (2) times the entire amount of rent received in excess of the amount permitted pursuant to this Agreement. For purposes of this Section 3.10.1, the term "rent" shall not include Section 8 payments Developer receives in connection with the renting of any of the Units. 3.10.2 Subject to Section 2.4 hereof, and except as otherwise provided in this Agreement, it shall constitute a default for Developer to knowingly (or without investigation as required herein) initially rent any Unit to a tenant who is not an Eligible Tenant. In the event Developer violates this Section, in addition to any other equitable remedy Agency shall have for such default, Developer, for each separate violation, shall be required to pay to Agency an amount equal to (i) two times the greater of (A) the total rent Developer received from such ineligible tenant, or (B) the total rent Developer was entitled to receive for renting that Unit, plus (ii) any relocation expenses incurred by Agency or the City of La Quinta as a result of Developer having rented to such ineligible person. 3.10.3 It shall constitute a default for Developer to knowingly (or without investigation as required herein) rent a Unit in violation of the leasing preference requirements of Section 3.4 of this Agreement. In the event Developer violates this Section, in addition to any other equitable remedy Agency shall have for such default, Developer, for each separate violation, shall be required to pay Agency an amount equal to two (2) months of rental charges. The terms of this Section shall not apply if Developer rents to an ineligible person as a result of such person's fraud or misrepresentation. 3.10.4 Notwithstanding anything herein to the contrary and subject to Section 3.10.5 below, in the event Developer violates more than one provision of this Section 3.10 in the rental of a specific unit to a specific individual, Developer shall be required to pay to Agency for each such violation the amount listed under the subsection above (e.g., either 3.10.1, 3.10.2, or 3.10.3) that results in the largest payment amount by Developer to the Agency under this Section 3.10, but not the amounts required pursuant to the other subsections, and upon Developer's payment thereof, the default under this Section 3.10 shall be deemed cured with respect to the 882/015610-0047 843409 07 a10/30/07 �8- default for which such penalty is assessed, except to the extent such violation continues after Developer's payment hereunder, in which event the amounts required to be paid pursuant to this Section 3.10 shall apply. THE PARTIES HERETO AGREE THAT THE AMOUNTS SET FORTH IN SECTION 3.10 (THE "DAMAGE AMOUNTS") CONSTITUTE A REASON- ABLE APPROXIMATION OF THE ACTUAL DAMAGES THAT AGENCY WOULD SUFFER DUE TO THE DEFAULTS BY DEVELOPER SET FORTH IN SECTIONS 3.10. t THROUGH 3.10.3, CONSIDERING ALL OF THE CIRCUMSTANCES EXISTING ON THE EFFECTIVE DATE OF THIS AGREEMENT, INCLUDING THE RELATIONSHIP OF THE DAMAGE AMOUNTS TO 'THE RANGE OF HARM TO AGENCY AND ACCOMPLISH- MENT OF AGENCY'S PURPOSE OF ASSISTING IN THE PROVISION OF AFFORDABLE HOUSING TO ELIGIBLE TENANTS THAT REASONABLY COULD BE ANTICIPATED AND THE ANTICIPATION THAT PROOF OF ACTUAL DAMAGES WOULD BE COSTLY OR INCONVENIENT. THE AMOUNTS SET FORTH IN THIS SECTION 3.10 SHALL BE THE SOLE MONETARY DAMAGES REMEDY FOR THE DEFAULTS SET FORTH IN THIS SECTION 3.10, BUT NOTHING IN THIS SECTION 3.10 SHALL BE INTERPRETED TO LIMIT AGENCY'S REMEDY FOR SUCH DEFAULT TO SUCH A DAMAGES REMEDY AND IN THAT REGARD AGENCY MAY DECLARE A DEFAULT UNDER THE TERMS OF THE Agency NOTE OR OTHER OF THE Agency AGREEMENTS. IN PLACING ITS INITIAL AT THE PLACES PROVIDED HEREINBELOW, EACH PARTY SPECIFICALLY CONFIRMS THE ACCURACY OF THE STATEMENTS MADE ABOVE AND THE FACT THAT EACH PARTY HAS BEEN REPRESENTED BY COUNSEL WHO HAS EXPLAINED THE CONSEQUENCES OF THE LIQUIDATED DAMAGES PROVISION AT OR PRIOR TO THE TIME EACH EXECUTED THIS AGREEMENT. DEVELOP INITIA AGENCY'S INITIALS: 3.10.5 Notwithstanding anything herein to the contrary, in the event Developer violates Section 3.10.1 hereof, to the extent the tenant from whom Developer charged excess rent still resides in the Project at the time Agency discovers this violation, or Developer knows the location of such tenant, Developer shall, in lieu of paying damages to Agency as described in Section 3.10.1 and 3.10.4 above, refund the tenant the entire amount of excess rent charged to such tenant, calculated with interest at the lesser of the maximum legal rate or ten percent (10%). Developer shall provide evidence to Agency that such payment has been made, within thirty (30) days after Agency provides notice to Developer of the default hereunder. 3.11 Tax Credit Regulatory Agreement. Developer agrees to perform all of Developer's obligations under this Agreement and the Tax Credit Regulatory Agreement. In the event Agency is prevented by a final, non -appealable order of a court of competent jurisdiction in a lawsuit involving the Project, or by an applicable and binding published appellate opinion, 882/015610-0047 843409 07 .10/30/07 -9- default for which such penalty is assessed, except to the extent such violation continues after Developer's payment hereunder, in which event the amounts required to be paid pursuant to this Section 3.10 shall apply. THE PARTIES HERETO AGREE THAT THE AMOUNTS SET FORTH IN SECTION 3.10 (THE "DAMAGE AMOUNTS") CONSTITUTE A REASON- ABLE APPROXIMATION OF THE ACTUAL DAMAGES THAT AGENCY WOULD SUFFER DUE TO THE DEFAULTS BY DEVELOPER SET FORTH IN SECTIONS 3.10.1 THROUGH 3.10.3, CONSIDERING ALL OF THE CIRCUMSTANCES EXISTING ON THE EFFECTIVE DATE OF THIS AGREEMENT, INCLUDING THE RELATIONSHIP OF THE DAMAGE AMOUNTS TO THE RANGE OF HARM TO AGENCY AND ACCOMPLISH- MENT OF AGENCY'S PURPOSE OF ASSISTING IN THE PROVISION OF AFFORDABLE HOUSING TO ELIGIBLE TENANTS THAT REASONABLY COULD BE ANTICIPATED AND THE ANTICIPATION THAT PROOF OF ACTUAL DAMAGES WOULD BE COSTLY OR INCONVENIENT. THE AMOUNTS SET FORTH IN THIS SECTION 3.10 SHALL BE THE SOLE MONETARY DAMAGES REMEDY FOR THE DEFAULTS SET FORTH IN THIS SECTION 3.10, BUT NOTHING IN THIS SECTION 3.10 SHALL BE INTERPRETED TO LIMIT AGENCY'S REMEDY FOR SUCH DEFAULT TO SUCH A DAMAGES REMEDY AND IN THAT REGARD AGENCY MAY DECLARE A DEFAULT UNDER THE TERMS OF THE Agency NOTE OR OTHER OF THE Agency AGREEMENTS. IN PLACING ITS INITIAL AT THE PLACES PROVIDED HEREINBELOW, EACII PARTY SPECIFICALLY CONFIRMS THE ACCURACY OF THE STATEMENTS MADE ABOVE AND THE FACT THAT EACH PARTY HAS BEEN REPRESENTED BY COUNSEL WHO HAS EXPLAINED THE CONSEQUENCES OF THE LIQUIDATED DAMAGES PROVISION AT OR PRIOR TO THE TIME EACH EXECUTED THIS AGREEMENT. DEVELOPER'S INITIALS: AGENCY'S INITIALS: 3.10.5 Notwithstanding anything herein to the contrary, in the event Developer violates Section 3.10.1 hereof, to the extent the tenant from whom Developer charged excess rent still resides in the Project at the time Agency discovers this violation, or Developer knows the location of such tenant, Developer shall, in lieu of paying damages to Agency as described in Section 3.10.1 and 3.10.4 above, refund the tenant the entire amount of excess rent charged to such tenant, calculated with interest at the lesser of the maximum legal rate or ten percent (101/0). Developer shall provide evidence to Agency that such payment has been made, within thirty (30) days after Agency provides notice to Developer of the default hereunder. 3.11 Tax Credit Regulatory Agreement. Developer agrees to perform all of Developer's obligations under this Agreement and the Tax Credit Regulatory Agreement. In the event Agency is prevented by a final, non -appealable order of a court of competent jurisdiction in a lawsuit involving the Project, or by an applicable and binding published appellate opinion, 882/015610-0047 943409 07 e10/30/07 -9- or by a final, non -appealable order of a regulatory body having jurisdiction, from enforcing, for any reason, the affordability restrictions set forth in this Agreement or in the AHA, then in such event Agency shall be a third -party beneficiary under the Tax Credit Regulatory Agreement and shall have full authority to enforce any breach or default by Developer under the Tax Credit Regulatory Agreement in the same manner as though it were a breach or default hereunder. Without Agency's prior written consent, which consent may be withheld in Agency's sole and absolute discretion, Developer shall not consent to any amendment of or modification to the Tax Credit Regulatory Agreement which (i) shortens the term of the affordability restrictions on the Units in the Project to a term of less than fifty-five (55) years from the Effective Date or (ii) releases Developer from the requirement that the Units be rented to Eligible Tenants in accordance with the Restricted Unit Matrix. Notwithstanding anything contained in this Agreement to the contrary, if and when the Site is subject to the requirements of the Tax Credit Program and there is a conflict between the requirements of the Tax Credit Program and the provisions set forth in this Agreement, then the provisions of the Tax Credit Program shall prevail. That notwithstanding, the fact that this Agreement and the Tax Credit Program provide for greater, lesser or different obligations or requirements shall not be deemed a conflict unless the applicable provisions are inconsistent and could not be simultaneously enforced or performed. 3.12 Annual Statements. As soon as available, and in any event not later than one hundred twenty (120) days after the close of each fiscal year of Developer, financial statements of Developer, including a profit and loss statement, and a consolidated statement of changes in financial position of Developer as at the close of and for such fiscal year, all in reasonable detail, certified by an officer or partner of Developer and, upon request of Agency, if total Operating Expenses for such year exceed the total amount set forth in the Approved Budget by more than ten percent (10%), accompanied by a compilation report prepared by a firm of certified public accountants, and in a format, each reasonably acceptable to the Executive Director. 3.13 Pro Forma Budget. As soon as available and in any event not later than November I" of each calendar year beginning with the year of recordation hereof, Developer shall provide Agency, for the Executive Director's approval, with a detailed projection of Operating Income and budgets of estimated Operating Expenses for the immediately succeeding calendar year (the "Pro Forma Budget") and a detailed cash flow projection for the next succeeding year. Developer shall also submit to Agency on request additional detail, information and assumptions used in the preparation of the Pro Forma Budget. Within fifteen (15) days following its receipt of the Pro Forma Budget, Agency shall deliver to Developer its written approval or disapproval thereto, which approval shall not be unreasonably withheld. If Agency disapproves the Pro Forma Budget, it shall set forth its reasons with reasonable specificity. If Agency fails to indicate either its approval or disapproval of the Pro Forma Budget within such period, then Agency shall be deemed to have approved the Pro Forma Budget as submitted by Developer. Once the Pro Forma Budget is approved or deemed approved by Agency, such approved Pro Forma Budget shall become the "Approved Budget" for the entire applicable calendar year. Developer shall use commercially reasonable efforts to operate the Site during such calendar 882/015610-0047 -10- 843409 07 a10/30/07 year within the Approved Budget; provided, however, that Developer shall not be required to obtain the approval of Agency for any deviation from the Approved Budget so long as the total Operating Expenses and expenditures for Capital Improvements paid or incurred during such calendar year do not exceed the originally budgeted amount thereof in the Approved Budget by more than five percent (5%) in the aggregate. To the extent required hereunder, any request by Developer to deviate from the Approved Budget shall be submitted to Agency in writing with an explanation thereof and shall be accompanied by supporting information for the request; provided, however, that in the event of an emergency threatening persons or property, Developer shall use its good faith efforts to give prior verbal notice to Agency of unbudgeted expenses that are necessary to avoid damage or injury to persons or property, and in any event shall notify Agency, in writing, of the nature of the emergency and the amount of the expenses, within ten (10) days after such expenses have been incurred. Agency shall reasonably respond to any such request within fifteen (15) days of the receipt of same and if Agency fails to do so, such request shall be deemed to be approved. 4.0 MAINTENANCE. 4.1 Maintenance Obli ag tion. Developer agrees to and shall maintain all interior and exterior improvements, including landscaping, on the Site in a first class condition and repair (and, as to landscaping, in a healthy condition) and in accordance with all of the permits and approvals for the Project, and all other applicable laws, rules, ordinances, orders, and regulations of all federal, state, county, municipal, and other governmental agencies and bodies having or claiming jurisdiction and all their respective departments, bureaus, and officials. Agency places prime importance on quality maintenance to protect its investment and to ensure that all Agency - assisted affordable housing projects within the City are not allowed to deteriorate due to below - average maintenance. Normal wear and tear of the Site improvements will be acceptable to Agency assuming Developer agrees to perform all necessary Site improvements to assure the Site is maintained in good condition. Maintenance requirements shall include that: (a) no improperly maintained landscaping shall be visible from public rights -of -way, including (i) no lawns with grasses in excess of six (6) inches in height, (ii) no trees, shrubbery, lawns, and other plant life dying from lack of water or other necessary maintenance, (iii) no trees, hedges, or shrubbery grown uncontrolled without proper pruning, (iv) no vegetation so overgrown as to be likely to harbor rats or vermin, and (v) no dead, decayed, or diseased trees, weeds, and/or other vegetation; (b) no yard areas shall be left unmaintained, including (i) no broken or discarded furniture, appliances, or other household equipment stored in yard areas for periods exceeding one (1) week, (ii) no packing boxes, lumber, trash, dirt, or other debris stored in yards for periods exceeding one (1) week in areas visible from public property or neighboring properties, (iii) no unscreened trash cans, bins, or containers stored for unreasonable periods in areas visible from public property or neighboring properties, and (iv) no vehicles parked or stored in areas other than approved parking areas; (c) no buildings may be left in an unrnaintained condition, including (i) no violations of state law, Uniform Codes, or City ordinances, (ii) no condition that constitutes an unsightly appearance that detracts from the aesthetics or property value of the subject property or constitutes a private or public nuisance, (iii) no broken windows or chipped, cracked, or peeling paint, (iv) no conditions constituting hazards and/or inviting trespassers or malicious mischief, and (v) no graffiti or accumulation of waste or debris. Developer shall make all repairs and replacements necessary to keep the improvements in good condition and repair and shall promptly eliminate all graffiti and replace dead and diseased plants and landscaping 882/015610-0047 84340907 a10/30/07 -11- with comparable approved materials. In the event that Developer breaches any of the covenants contained in this Section and Developer does not commence to cure such breach within five (5) business days after written notice from Agency (with respect to graffiti, debris, waste material, landscaping, and general maintenance) or thirty (30) days after written notice from Agency (with respect to building improvements), and after commencing the cure to diligently prosecute such cure to completion, then Agency, in addition to whatever other remedy it may have at law or in equity, shall have the right, but not the obligation, to enter upon the Site and perform all acts and work necessary to protect, maintain, and preserve the improvements and landscaped areas on the Site, and to attach a lien on the Site, or to assess the Site, in the amount of the expenditures arising from such acts and work of protection, maintenance, and preservation by Agency and/or costs of such cure, including a fifteen percent (15%) administrative charge, which amount shall be promptly paid by Developer to Agency upon demand. 4.2 Lien. If the costs incurred pursuant to Section 4.1 are not reimbursed within thirty (30) days after Developer's receipt of notice thereof, or if Developer fails to timely pay other sums required to be paid to Agency under this Agreement when due (after notice and an opportunity to cure, as set forth in Section 10 or Section 11 (as applicable)), the same shall be deemed delinquent, and the amount thereof shall bear interest thereafter at a rate of ten percent (10%) per annum until paid. Any and all delinquent amounts, together with said interest, costs and reasonable attorney's fees, shall be a lien and charge, with power of sale, upon the property interests of Developer, and the rents, issues and profits of such property. Agency may bring an action at law against Developer to pay any such sums or foreclose the lien against Developer's property interests. Any such lien may be enforced by sale by the Agency following recordation of a Notice of Default of Sale given in the manner and time required by law as in the case of a deed of trust; such sale to be conducted in accordance with the provisions of Section 2924, et sue., of the California Civil Code, applicable to the exercise of powers of sale in mortgages and deeds of trust, or in any other manner permitted by law. No lien recorded by Agency pursuant to this Section 4.2 shall defeat or render invalid the lien of any senior mortgage or deed of trust. 5.0 MANAGEMENT. 5.1 Marketing Plan. Prior to the date the City issues a certificate of occupancy for any of the Units, Developer shall have submitted for the approval of the Executive Director, which approval shall not unreasonably be withheld, a plan for marketing the rental of the Units (the "Marketing Plan"). The Marketing Plan shall include affirmative marketing procedures and requirements. The Marketing Plan shall include a plan for publicizing the availability of the Units within the City in a manner which gives notice to residents of the City, such as notices in any Agency sponsored newsletter, newspaper advertising in local newspapers and notices in City offices and community centers. 5.2 Long Term Management of the Project. Prior to the date the City issues a certificate of occupancy for any of the Units, Developer shall have submitted for the reasonable approval of the Executive Director a "Management Plan" which sets forth in detail the identity and the duties of the person or entity retained by Developer to operate and manage the Project (the "Property Manager"), the management staffing policies (i.e., what staff is on site, how they are supervised) tenant selection criteria, the tenant selection and income certification process, 882/0156IM047 -12- 843409 07 a10/30/07 tenant orientation, tenant relations, tenant complaints, routine maintenance, emergencies, a security system and crime prevention program, the procedures for determining Affordable Rent and for the collection of rent, occupancy limits and the procedures for monitoring of occupancy levels, the procedures for eviction of tenants, the rules and regulations of the Project and manner of enforcement, the initial standard lease form, and other matters relevant to the management of the Project. The Management Plan shall require the Property Manager to apply for the Crime Free Multi -Housing Program through the City of La Quinta Police Department. Developer may from time to time submit amendments and modifications to the Management Plan for the reasonable approval of the Executive Director. The management of the Project shall be in compliance with the Management Plan. 5.3 Gross Mismanagement. In the event of "Gross Mismanagement" (as that term is defined below) of the Project, Agency shall have the authority to require that such Gross Mismanagement cease immediately, and further to require the immediate replacement of the manager. Agency shall provide written notice to Developer of the event(s) of Gross Mismanagement occurring and Developer shall have five (5) business days after receipt of such notice to commence to cure, correct, or remedy the event(s) of Gross Mismanagement identified in the Agency's notice and to notify the Agency's Executive Director of the steps taken to effect such cure, correction, or remedy, and upon commencing such cure, correction, or remedy to thereafter diligently prosecute such cure, correction, or remedy to completion. For purposes of this Agreement the term "Gross Mismanagement" shall mean management of the Project in a manner which materially violates the terms and/or intention of this Agreement to operate an affordable rental housing complex of the highest standard, and shall include, but is not limited to, the following: 5.3.1 Knowingly leasing a Unit to an ineligible tenant or tenants whose income exceeds the prescribed levels; 5.3.2 Knowingly allowing the tenants to exceed permitted occupancy levels without taking immediate steps to stop such overcrowding; 5.3.3 Knowingly allowing a tenant to sublease his or her Unit at a rent that exceeds an Affordable Rent; 5.3.4 Failing to timely maintain the Project and the Site in the manner required by this Agreement or failing to submit materially complete reports; 5.3.5 Failing to timely submit the reports as required by this Agreement; 5.3.6 Fraud in connection with any document or representation relating to this Agreement or embezzlement of Project monies; and 5.3.7 Failing to fully cooperate with law enforcement in its attempts to maintain a crime -free environment on the Site. 5.4 Lease Approval. The initial form lease agreement to be used by Developer for the rental of any of the Units ("Lease Agreement"), and any changes to such form Lease Agreement regarding the provisions required by this Agreement, including, but not limited to, the provisions 882/015610-0047 -13- 843409 07 a10/30/07 required by Section 3.9, to be included in the form Lease Agreement, shall be reasonably approved in advance by Agency's Executive Director prior to the initial use of the lease form and prior to the first use of the changed form. The form Lease Agreement shall include a Crime Free Lease Addendum in the form recommended by the Riverside County Sheriffs Department. 5.5 Operating Reserve. Developer shall, or shall cause the Property Manager to, set aside in a separate interest -bearing trust account the sum of One Hundred Six Thousand One Hundred Ninety Dollars ($107,000) ("Operating Reserve") and shall provide evidence reasonably satisfactory to Agency's Executive Director of compliance herewith, and shall thereafter retain such amount in the Operating Reserve, to cover shortfalls between Operating Income and actual Project costs. In the event that Developer's permanent lender, TCAC regulations or approvals or the Tax Credit Investor, reasonably requires a different type of account for the Operating Reserve or requires different terms for such account, Developer shall request Agency's Executive Director's approval, which approval shall not be unreasonably withheld, to modify the requirements of this paragraph to meet such requirements. Following the first anniversary date of the City's issuance of the certificate of occupancy for the Project on the Site, Developer may request release of the Operating Reserve to Developer and cancellation of the Operating Reserve upon written request to Agency's Executive Director accompanied by an audited financial statement evidencing sufficient Project income showing, to the reasonable satisfaction of Agency's Executive Director, that the Operating Reserve is no longer required. 5.6 Capital Replacement Reserve. Developer shall, or shall cause the Property Manager to, annually set aside a minimum of Three Hundred Nine Dollars ($309) per unit per year (for example, for 80 units, the annual amount would be $40,000) into a capital replacement reserve account (the "Capital Replacement Reserve"). Funds in the Capital Replacement Reserve shall be used solely for Capital Improvements. As Capital Improvements become necessary, the Capital Replacement Reserve shall be the first source of payment therefor. Not less than once per year, Developer, at its expense, shall submit to Agency an accounting for the Capital Replacement Reserve. The non -availability of funds in the Capital Replacement Reserve does not in any manner relieve Developer of the obligation to undertake necessary capital repairs and improvements and to continue to maintain the Site in the manner prescribed in this Agreement. Notwithstanding anything herein to the contrary, in the event the permanent lender for the Project requires the establishment of a capital reserve to fund Capital Improvements, and such requirements are consistent with, and at least as stringent as those set forth herein, then during the term of the documents governing such loan, Developer shall not be deemed in default hereunder if Developer is in compliance with such condition. 6.0 COMPLIANCE WITH LAWS; ENVIRONMENTAL MATTERS. 6.1 Compliance With Laws. Developer shall comply with (i) all ordinances, regulations and standards of the City, Agency, County of Riverside, any regional governmental entity, State of California, and federal government applicable to the Site; (ii) all rules and 882/015610-0047 -14- 843409.07 a10/30/07 regulations of any assessment district of the City with jurisdiction over the Site; and (iii) all applicable labor standards of California law and federal law; and (iv) the requirements of California law and federal law with respect to the employment of undocumented workers or illegal aliens. 6.2 Waiver and Release. Subject to Section 222 of the AHA, which requires the Agency to indemnify Developer in certain, specified circumstances, Developer hereby waives, releases, acquits, and forever discharges Agency, its officers, officials, members, employees, agents, and representatives, and their respective heirs, successors, personal representatives, and assigns, of and from any liability for the physical or environmental condition of the Site, or for removal or remediation of Hazardous Materials, or repair or alteration of the physical condition of the Site or Project. Developer accepts and approves the physical and environmental condition of the Site in its "AS IS" 'WHERE IS" "WITH ALL FAULTS" condition. 6.2.2 Definitions. For the purposes of this Agreement, unless the context otherwise specifies or requires, the following terms shall have the meanings herein specified: 6.2.2.1 The term "Hazardous Materials" shall mean any substance, material, or waste which is or becomes regulated by any local governmental authority, the County of Riverside, the State of California, a regional governmental authority, or the United States Government, including, but not limited to, any material or substance which is (i) defined as a "hazardous waste," "extremely hazardous waste," or "restricted hazardous waste" under Section 25115, 25117 or 25122.7, or listed pursuant to Section 25140 of the California Health and Safety Code, Division 20, Chapter 6.5 (Hazardous Waste Control Law)), (ii) defined as a "hazardous substance" under Section 25316 of the California Health and Safety Code, Division 20, Chapter 6.8 (Carpenter -Presley -Tanner Hazardous Substance Account Act), (iii) defined as a "hazardous material," "hazardous substance," or "hazardous waste" under Section 25501 of the California Health and Safety Code, Division 20, Chapter 6.95 (Hazardous Materials Release Response Plans and Inventory), (iv) defined as a "hazardous substance" under Section 25281 of the California Health and Safety Code, Division 20, Chapter 6.7 (Underground Storage of Hazardous Substances), (v) petroleum, (vi) friable asbestos, (vii) polychlorinated biphenyls, (viii) listed under Article 9 or defined as "hazardous" or "extremely hazardous" pursuant to Article 11 of Title 22 of the California Administrative Code, Division 4, Chapter 20, (ix) designated as "hazardous substances" pursuant to Section 311 of the Clean Water Act (33 U.S.C. 1317), (x) defined as a "hazardous waste" pursuant to Section 1004 of the Resource Conservation and Recovery Act, 42 U.S.C.,6901 et se . (42 U.S.C.,6903) or (xi) defined as "hazardous substances" pursuant to Section 101 of the Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C., 9601 et M. 6.2.2.2 The term "Hazardous Materials Contamination" shall mean the contamination (whether presently existing or hereafter occurring) of the improvements, facilities, soil, groundwater, air or other elements on, in or of the Site by Hazardous Materials, or the contamination of the buildings, facilities, soil, groundwater, air or other elements on, in or of any other property as a result of Hazardous Materials at any time emanating from the Site. 6.2.2.3 The term "Governmental Requirements" shall mean all past, present and future laws, ordinances, statutes, codes, rules, regulations, orders and decrees of the 882/0156104047 -15- 843409 07 a10/30/07 United States, the state, the county, the city, or any other political subdivision in which the Site is located, and any other state, county city, political subdivision, agency, instrumentality or other entity exercising jurisdiction over the Site. 6.2.3 Indemnity. Developer shall save, protect, defend, indemnify and hold harmless Agency and the City and their respective officers, officials, members, employees, agents, and representatives from and against any and all liabilities, suits, actions, claims, demands, penalties, damages (including, without limitation, penalties, fines and monetary sanctions), losses, costs or expenses (including, without limitation, consultants' fees, investigation and laboratory fees, reasonable attorneys' fees and remedial and response costs) (the foregoing are hereinafter collectively referred to as "Liabilities") which may now or in the future be incurred or suffered by Agency or City or their respective officers, officials, members, employees, agents, or representatives by reason of, resulting from, in connection with, or existing in any manner whatsoever as a direct or indirect result of (i) Developer's placement on or under the Site of any Hazardous Materials or Hazardous Materials Contamination after the Effective Date, (ii) the escape, seepage, leakage, spillage, discharge, emission or release from the Site of any Hazardous Materials or Hazardous Materials Contamination after the Effective Date, or (iii) any Liabilities incurred under any Governmental Requirements relating to the acts described in the foregoing clauses (i) and (ii); provided, however, that the same shall not apply to acts or omissions following Agency's or City's conduct of a foreclosure sale or acceptance of a deed in lieu thereof. 6.3 Duty to Prevent Hazardous Material Contamination. Developer shall take commercially reasonable action to prevent the release of any Hazardous Materials into the environment. Such precautions shall include compliance with all Governmental Requirements with respect to Hazardous Materials. In addition, Developer shall install and utilize such equipment and implement and adhere to such procedures as are consistent with the standards generally applied by apartment complexes in Riverside County, California as respects the disclosure, storage, use, removal, and disposal of Hazardous Materials. 6.4 Obligation of Developer to Remediate Premises. Notwithstanding the obligation of Developer to indemnify Agency, City, and their respective officers, officials, members, employees, agents, and representatives pursuant to Section 6.2.3, Developer shall, at its sole cost and expense, promptly take (i) all actions required by any federal, state, regional, or local governmental agency or political subdivision or any Governmental Requirements and (ii) all actions necessary to make full economic use of the Site for the purposes contemplated by this Agreement and the AHA, which requirements or necessity arise from the presence upon, about or beneath the Site, prior to Agency's or City's conduct of a foreclosure sale or acceptance of a deed in lieu thereof, of any Hazardous Materials or Hazardous Materials Contamination for which Developer is responsible. Such actions shall include, but not be limited to, the investigation of the environmental condition of the Site, the preparation of any feasibility studies or reports and the performance of any cleanup, remedial, removal or restoration work. 6.5 Environmental Inquiries. Developer, when it has received any notices of violation, notices to comply, citations, inquiries, clean-up or abatement orders, or cease and desist orders related to Hazardous Materials or Hazardous Materials Contamination, or when Developer is required to report to any governmental agency any violation or potential violation 882/015610-0047 -16- 943409.07 a10/30/07 of any Governmental Requirement pertaining to Hazardous Materials or Hazardous Materials Contamination, shall concurrently notify Agency's Executive Director, and provide to him/her a copy or copies, of the environmental permits, disclosures, applications, entitlements or inquiries relating to the Site, the notices of violation, notices to comply, citations, inquiries, clean-up or abatement orders, cease and desist orders, reports filed pursuant to self -reporting requirements, and reports filed or applications made pursuant to any Governmental Requirement relating to Hazardous Materials and underground tanks, and Developer shall report to the Executive Director, as soon as possible after each incident, any unusual, potentially important incidents. In the event of a responsible release of any Hazardous Materials into the environment, Developer shall, as soon as possible after it becomes aware of the release, furnish to the Executive Director a copy of any and all reports relating thereto and copies of all correspondence with governmental agencies relating to the release. Upon request of the Executive Director, Developer shall 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. Developer, for the term of this Agreement, shall procure and keep in full force and effect or cause to be procured and kept in full force and effect for the mutual benefit of Developer and Agency, and shall provide Agency evidence reasonably acceptable to Agency's Executive Director, insurance policies meeting the minimum requirements set forth below: 7.1.1 Commercial General Liability insurance with respect to the Site and the operations of or on behalf of Developer, in an amount not less than Three Million Dollars ($3,000,000) per occurrence combined single limit including products, completed operations, contractual, bodily injury, personal injury, death and property damage liability per occurrence, subject to such increases in amount as Agency may reasonably require from time to time; provided, that the percentage increase in coverage shall not be required to exceed the percentage increase in the CPI (the "CPI Adjustment"). Unless otherwise approved in advance by the Agency Executive Director, the insurance to be provided by Developer may provide for a deductible or self -insured retention of not more than Ten Thousand Dollars ($10,000), with such maximum amount to increase at the same rate as the periodic increases in the minimum amount of total insurance coverage set forth above. 7.1.2 With respect to the improvements and any fixtures and furnishings to be owned by Developer on the Site, insurance against fire, extended coverage, vandalism, and malicious mischief, and such other additional perils, hazards, and risks as now are or may be included in the standard "all risk" form in general use in Riverside County, California, with the standard form fire insurance coverage in an amount equal to full actual replacement cost thereof, as the same may change from time to time. The above insurance policy or policies shall include coverage for earthquakes to the extent generally and commercially available at commercially reasonable rates, if such insurance is generally obtained for rental apartment projects of this size and type in the counties of Los Angeles, Orange County, Riverside, and San Bernardino. 882/015610-0047 -17- 843409 07 a10/30/07 Agency shall be a loss payee under such policy or policies and such insurance shall contain a replacement cost endorsement. 7.2 Policy Requirements. All policies of insurance required to be carried by Developer shall meet the following requirements and contain the following endorsements, provisions, or clauses (as applicable): 7.2.1 The policies shall be written by responsible and solvent insurance companies licensed in the State of California and having policyholders' rating of A or better in the most recent addition of `Best's Key Rating Guide -- Property and Casualty." Notwithstanding the foregoing, in the event that the policies required hereunder are not available from such insurers at commercially reasonable rates, the Executive Director shall have the authority, in his or her sole and absolute discretion, to waive one or more of such requirements, provided the proposed policies will adequately protect the Agency's interests hereunder. A copy of each paid -up policy evidencing such insurance (appropriately authenticated by the insurer) or a certificate of the insurer, certifying that such policy has been issued, providing the coverage required herein, and containing the provisions specified herein, shall be delivered to Agency on or prior to the date of this Agreement, and thereafter, upon renewals, not less than thirty (30) days prior to the expiration of coverage. Agency may, at any time, and from time to time, inspect and/or copy any and all insurance policies required to be procured by Developer hereunder. In no event shall the limits of any policy be considered as limiting the liability of Developer hereunder. 7.2.2 The insurer shall not cancel or materially alter the coverage provided by such policy in a manner adverse to the interest of the insured without first giving Agency a minimum of thirty (30) days prior written notice by certified mail, return receipt requested; and 7.2.3 A waiver by the insurer of any right to subrogation against Agency and City, and their respective officers, officials, members, employees, agents, and representatives, which arises or might arise by reason of any payment under such policy or policies or by reason of any act or omission of Agency or City or their respective officers, officials, members, employees, agents, or representatives. 7.2.4 The Agency and the City and their respective officers, officials, members, employees, agents, and representatives shall be named as additional insureds on the Commercial General Liability policies. 7.2.5 Coverage provided by these policies shall be primary and non- contributory to any insurance carried by the Agency or City or their respective officers, officials, members, employees, agents, or representatives. 7.2.6 Failure to comply with reporting provisions shall not affect coverage provided to Agency and its officers, officials, members, employees, agents, or representatives. 7.3 Failure to Procure Insurance. If Developer fails to procure and maintain the above -required insurance despite its availability, then Agency, in addition to any other remedy which Agency may have hereunder for Developer's failure to procure, maintain, and/or pay for the insurance required herein, may (but without any obligation to do so) at any time or from time 882/015610-0047 -1 g_ 843409.07 a10/30/07 to time, after thirty (30) days written notice to Developer, procure such insurance and pay the premiums therefor, in which event Developer shall immediately repay Agency all sums so paid by Agency together with interest thereon at the maximum legal rate. 8.0 OBLIGATION TO REPAIR. 8.1 Obligation to Repair and Restore Damage Due to Casualty Covered by Insurance. Subject to Section 8.3 below, if the Project shall be totally or partially destroyed or rendered wholly or partly uninhabitable by fire or other casualty required to be insured against by Developer, subject to its compliance with any procedures required by a senior lien holder, Developer shall promptly proceed to obtain insurance proceeds and take all steps necessary to begin reconstruction and, immediately upon receipt of insurance proceeds, to promptly and diligently commence the repair or replacement of the Project to substantially the same condition as the Project is required to be maintained in pursuant to this Agreement, whether or not the insurance proceeds are sufficient to cover the actual cost of repair, replacement, or restoration, and Developer shall complete the same as soon as possible thereafter so that the Project can continue to be operated and occupied as an affordable housing project in accordance with this Agreement. Subject to extensions of time for "Enforced Delay" events (as defined in Section 22 of this Agreement) occurring after the casualty event, in no event shall the repair, replacement, or restoration period exceed fifteen (15) months from the date Developer obtains insurance proceeds, unless the Agency Executive Director, in his or her sole and absolute discretion, approves a longer period of time. Agency shall cooperate with Developer, at no expense to Agency, in obtaining any governmental permits required for the repair, replacement, or restoration and, upon issuance of such permits Agency shall promptly release control of any insurance proceeds within Agency's control. If, however, the then -existing laws of any other governmental agencies with jurisdiction over the Site do not permit the repair, replacement, or restoration, Developer may elect not to repair, replace, or restore the Project by giving notice to Agency (in which event Developer shall be entitled to all insurance proceeds but Developer shall be required to remove all debris from the Site) or Developer may reconstruct such other improvements on the Site as are consistent with applicable land use regulations and approved by the City, Agency, and the other governmental agency or agencies with jurisdiction. In such event, the Agency Agreements, including this Agreement, shall automatically terminate and Agency shall cooperate to remove the Agency Agreements from title. If Developer fails to obtain insurance as required by this Agreement (and Agency has not procured such insurance and charged Developer for the cost), Developer shall be obligated to reconstruct and repair any partial or total damage to the Project and improvements located on the site in accordance with this Section 8.1. 8.2 Continued Okerations. During any period of repair, Developer shall continue, or cause the continuation of, the operation of the apartment complex on the Site to the extent reasonably practicable from the standpoint of prudent business management. 8.3 Damage or Destruction Due to Cause Not Required to be Covered by Insurance. If the improvements comprising the Project are completely destroyed or substantially damaged by a casualty for which Developer is not required to (and has not) insured against, then Developer shall not be required to repair, replace, or restore such improvements and may elect 882/015610-0047 -19- 943409 07 a10/30/07 not to do so by providing Agency with written notice of election not to repair, replace, or restore within ninety (90) days after such substantial damage or destruction. In such event, (i) Developer shall remove all debris from the Site, and (ii) the Agency Agreements, including this Agreement, shall automatically terminate and Agency shall cooperate to remove the Agency Agreements from title. As used in this Section 8.3, "substantial damage" caused by a casualty not required to be (and not) covered by insurance shall mean damage or destruction which is fifty percent (50%) or more of the replacement cost of the improvements comprising the Project. In the event Developer does not timely elect not to repair, replace, or restore the improvements as set forth in the first sentence of this Section 8.3, Developer shall be conclusively deemed to have waived its right not to repair, replace, or restore the improvements and thereafter Developer shall promptly commence and complete the repair, replacement, or restoration of the damaged or destroyed improvements in accordance with Section 8.1 above and continue operation of the apartment complex during the period of repair (if practicable) in accordance with Section 8.2 above. 9.0 LIMITATION ON TRANSFERS. 9.1 Sale or Transfer of the Project. Developer covenants that during the term of this Agreement Developer shall not assign this Agreement or transfer the Site or any of its interests therein except as provided in this Section 9.0. 9.2 Transfer Defined. As used in this Article 9.0, the term "Transfer" shall include any assignment, hypothecation, mortgage, pledge, conveyance, or encumbrance of this Agreement, the Site, or the improvements thereon. A Transfer shall also include the transfer to any person, entity, or group of persons or entities acting in concert of more than twenty-five percent (25%) (in the aggregate) of the present ownership and/or control of any person or entity constituting Developer, taking all transfers into account on a cumulative basis. In the event any entity constituting Developer, or the constituent partners or members of Developer or any successor of Developer, is a corporation or trust, such transfer shall refer to the transfer of the issued and outstanding capital stock of such corporation, or of beneficial interests of such trust; in the event that any entity constituting Developer, or the constituent partners of Developer or any successor of Developer is a limited or general partnership, such transfer shall refer to the transfer of more than twenty-five percent (25%) of such limited or general partnership interest; in the event that any entity constituting Developer, or the constituent members of Developer or any successor of Developer is a limited liability company, such transfer shall refer to the transfer of more than twenty-five percent (25%) of such membership interest; in the event that any entity constituting Developer, or the constituent partners of Developer or any successor of Developer is a joint venture, such transfer shall refer to the transfer of more than twenty-five percent (25%) of the ownership and/or control of any such joint venture partner, taking all transfers into account on a cumulative basis. 9.3 Agency Approval of Transfer Required. Except as set forth below, Developer shall not Transfer this Agreement or any of Developer's rights hereunder, or any interest in the Site or in the improvements thereon, directly or indirectly, voluntarily or by operation of law, without the prior written approval of Agency, which approval shall not be unreasonably withheld, conditioned, or delayed, and any such purported Transfer without such approval shall be null and void. In addition to the foregoing and notwithstanding anything in this Section to the 882/015610-0047 _20_ 843409.07 a10/30/07 contrary, so long as the Project is encumbered by a deed of trust (other than a deed of trust the beneficiary of which is the Agency), any proposed transferee or assignee must also receive the prior written consent of the beneficiary of such deed of trust, if required by such deed of trust, before Agency shall approve such transfer or assignment; provided, however, that such consent of beneficiary shall not obligate Agency to approve such Transfer. Notwithstanding the foregoing, the following types of transfers shall not require Agency approval but as with all Transfers shall be subject to Section 9.4: (a) transfers to a limited liability company in which Developer has a greater than fifty percent (50%) ownership and management interest; (b) transfers to a limited partnership in which Developer or an Affiliate of Developer which is also a non-profit public benefit corporation is the general partner (the "Limited Partnership"); (c) the leasing of individual rental units on the Site provided that such leasing is in accordance with the terms of this Agreement; (d) transfers resulting from the death or mental or physical incapacity of an individual; (e) transfers in trust for the benefit of a spouse, children, grandchildren, or other family member, or for charitable purposes; (f) transfers of stock in a publicly -held corporation or of the beneficial interest in any publicly -held partnership or real estate investment trust; (g) the conveyance or dedication of portions of the Site to the City or other governmental entity, or the granting of easements or permits to facilitate the development of the Site; (h) the transfer of the limited partner interests of the Limited Partnership to the Tax Credit Investor; (i) the transfer by the Tax Credit Investor to an Affiliate of Hudson Housing Capital, LLC; (j) the removal by the Tax Credit Investor of the general partner of the Limited Partnership for a default under the partnership agreement, provided the replacement general partner is reasonably satisfactory to Agency; (k) sale by the Tax Credit Investor of credits in syndication; (I) encumbrance of the limited partner interest by the Tax Credit Investor as collateral to finance its capital contribution to the Limited Partnership; 882/015610-0047 -2,1- 843409.07 a10/30/07 (m) exercise by the general partner of Developer of any option to purchase or right of first refusal to purchase the Limited Partnership or all of the limited partner's interest in the Limited Partnership at the conclusion of the tax credit period; or (n) transfer by Agency of its general partnership interest in the Limited Partnership. 9.4 Assignment and Assumption Agreement. In the absence of specific written agreement by Agency, no Transfer by Developer of all or any portion of its interest in the Site or this Agreement, whether or not requiring the approval by Agency, shall be deemed to relieve Developer or any successor party from the obligation to timely complete construction of the Project. In addition, no attempted Transfer of any of Developer's obligations hereunder shall be effective unless and until Developer and the transferee or successor party execute and deliver to Agency a binding assignment and assumption agreement in a form reasonably approved by Agency's legal counsel. 9.5 Permitted Transferee. A "Permitted Transferee" under this Agreement shall be a transferee or assignee that either, (i) has been approved by the Agency Executive Director or (ii) is a transferee of a Transfer not requiring the approval of the Agency Executive Director pursuant to the terms of this Agreement, and in both the cases described in the foregoing clauses (i) and (ii) has executed and delivered to the Agency Executive Director an assignment and assumption agreement pursuant to Section 9.4. 10.0 EVENTS OF DEFAULT BY DEVELOPER. Subject to extensions of time pursuant to the terms of Section 22, the occurrence of one or more of any of the following events shall constitute an "Event of Default" by Developer hereunder if Developer shall have not cured, corrected, or remedied such failure within, unless a shorter or longer cure period is provided for specific defaults elsewhere in this Agreement, thirty (30) days following the service on Developer of a written notice from Agency specifying the failure complained of, or if it is not practicable to cure or remedy such failure within such thirty (30) day period (which impracticality shall not apply to monetary defaults), within such longer period as shall be reasonable under the circumstances provided that Developer has commenced to cure within the same thirty (30) day period and has diligently prosecuted such cure to completion: 10.1 Developer shall abandon or surrender the Site; or 10.2 Developer is in default of the Agency Note and has not cured such default within the cure period applicable to such default as set forth in the Agency Note; or 10.3 Developer is in material default of any of the covenants, terms or provisions of this Agreement or any of the Agency Agreements; or 10.4 Developer voluntarily files or has involuntarily filed against it any petition under any bankruptcy or insolvency act or law and the same has not been dismissed within sixty (60) days thereafter; or 882/015610-0047 -22- 843409 07 a10/30/07 10.5 Developer is adjudicated a bankrupt; or 10.6 Developer makes a general assignment for the benefit of creditors in violation of the terms of this Agreement or any of the Agency Agreements. 10.7 Developer is in default, beyond any applicable cure period, of either of the following: (i) any senior indebtedness encumbering the Site, or (ii) the Tax Credit Regulatory Agreement and the other party has not waived the default. Notwithstanding anything herein to the contrary, whenever the Agency shall deliver any notice or demand to the Developer with respect to any breach or default by the Developer of the terms hereunder, the Agency shall at the same time deliver a copy of such notice or demand to the Tax Credit Investor. The Tax Credit Investor (insofar as the rights of the Agency are concerned) shall have the right, at its option, within thirty (30) days after the receipt of the notice, to cure or remedy or commence to cure or remedy any such default. Such cure period shall run concurrently with the Developer's cure period described in this Article 10.0. 11.0 REMEDIES OF AGENCY. In the event Developer defaults in the performance or observance of any covenant, agreement or obligation of Developer pursuant to this Agreement, and if such default remains uncured for a period of thirty (30) days after written notice thereof shall have been given by Agency (or such lesser period as may apply under Section 4.1), or, in the event said default cannot be cured within said time period, Developer has failed to commence to cure such default within the applicable time period and diligently prosecute said cure to completion, then Agency may declare an "Event of Default" to have occurred hereunder, and, at its option, may take one or more of the following steps: 11.1 With respect to (i) the physical condition of the Site, or (ii) Developer's Gross Mismanagement of the Project, enter the Site and correct or cause to be corrected said default and charge the costs thereof (including costs incurred by Agency in enforcing this provision) to the account of Developer, which charge shall be due and payable within thirty (30) days after presentation by Agency of a statement of all or part of said costs, and if such bill is not timely paid then to (A) place a lien on the Site for said amount due plus interest at the maximum legal rate, or (B) foreclose with respect to Agency's lien on the Site for said amount due plus interest at the maximum legal rate; 11.2 Correct or cause to be corrected said default and pay the costs thereof (including costs incurred by Agency in enforcing this provision) from the proceeds of any insurance; 11.3 Exercise its right to maintain any and all actions or proceedings at law or suits in equity to compel Developer to correct or cause to be corrected said default, or to foreclose as a result thereof, including without limitation exercise of Agency's rights under the Agency Deed of Trust; 11.4 Have a receiver appointed to take possession of Developer's interest in the Site, with power in said receiver to administer Developer's interest in the Site, to collect all funds available to Developer in connection with its operation and maintenance of the Site, and to 882/015610-0047 -23- 843409 07 a10/30/07 perform all other actions consistent with Developer's obligations under this Agreement as the court deems proper; 11.5 Terminate this Agreement by written notice to Developer and seek repayment of any remaining principal and accrued interest then owing on the Agency Note; 11.6 With respect to a default for which foreclosure would be an available remedy, exercise the right to foreclose, or, during the period which is five (5) days prior to the foreclosure sale date, exercise the right to purchase the Project from Developer, for a purchase price equal to the appraised value of the Site less (i) the outstanding amount due under any senior indebtedness, (ii) the amount due under the Agency Note, (iii) any delinquent taxes and assessments owing on the Site, and (iv) any reasonable costs incurred by Agency to effect the curing of a default and purchase of the Project, including but not limited to escrow fees and attorney's fees. Except as otherwise expressly stated in this Agreement, the rights and remedies of the parties are cumulative, and the exercise by any party of one or more of its rights or remedies shall not preclude the exercise by it, at the same or different times, of any other rights or remedies for the same default or any other default by another party. 12.0 NONDISCRIMINATION. 12.1 Antidiscrimination. There shall be no discrimination against or segregation of any person, or group of persons, on account of race, color, creed, religion, sex, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Site, or any part thereof, nor shall Developer, or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the Site, or any part thereof (except as permitted by this Agreement). 12.2 Anti -Discrimination Clauses in Agreements. Developer agrees for itself and any successor in interest that Developer shall refrain from restricting the rental, sale, or lease of any portion of the Site, or contracts relating to the Site, on the basis of race, color, creed, religion, sex, marital status, ancestry, or national origin of any person. All such deeds, leases or contracts shall contain or be subject to substantially the following nondiscrimination or nonsegregation clauses: 12.2.1 In deeds: "The grantee herein covenants by and for itself, its heirs, executors, administrators, and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex, marital status, ancestry, or national origin in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the land herein conveyed, nor shall the grantee itself, or any persons claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy of tenants, lessees, subtenants, sublessees, or vendees in the land herein conveyed. The foregoing covenants shall run with the land." 882/015610-0047 843409 07 a10/30/07 -L4- 12.2.2 In leases: "The lessee herein covenants by and for itself, its heirs, executors, administrators, and assigns, and all persons claiming under or through them, and this lease is made and accepted upon and subject to the following conditions: "That there shall be no discrimination against or segregation of any person or group of persons on account of status, race, color, creed, religion, sex, marital status, ancestry, or national origin in the leasing, subleasing, transferring, use, occupancy, tenure, or enjoyment of the land herein leased, nor shall the lessee itself, or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy of tenants, lessees, sublessees, subtenants, or vendees in the land herein leased." 12.2.3 In contracts: "There shall be no discrimination against or segregation of any persons or group of persons on account of status, race, color, creed, religion, sex, marital status, ancestry, or national origin in the sale, lease, transfer, use, occupancy, tenure, or enjoyment of land, nor shall the transferee itself, or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy of tenants, lessees, subtenants, sublessees, or vendees of land." 13.0 COVENANTS TO RUN WITH THE LAND. Developer hereby subjects the Site to the covenants, reservations, and restrictions set forth in this Agreement. Agency and Developer hereby declare their express intent that all such covenants, reservations, and restrictions shall be deemed covenants running with the land, and shall pass to and be binding upon the Developer's successors in title to the Site; provided, however, that on the termination of this Agreement said covenants, reservations and restrictions shall automatically expire. All covenants established in this Agreement shall, without regard to technical classification or designation, be binding for the benefit of the Agency, and such covenants shall run in favor of the Agency for the entire term of this Agreement, without regard to whether the Agency is or remains an owner of any land or interest therein to which such covenants relate. Each and every contract, deed or other instrument hereafter executed covering or conveying the Site or any portion thereof shall conclusively be held to have been executed, delivered and accepted subject to such covenants, reservations, and restrictions, regardless of whether such covenants, reservations, and restrictions are set forth in such contract, deed or other instrument. Agency and Developer hereby declare their understanding and intent that the burden of the covenants set forth herein touch and concern the land in that Developer's legal interest in the Site is rendered less valuable thereby. Agency and Developer further hereby declare their understanding and intent that the benefit of such covenants touch and concern the land by enhancing and increasing the enjoyment and use of the Project by Eligible Tenants, the intended beneficiaries of such covenants, reservations, and restrictions, and by furthering the public purposes for which the Agency was formed. 882/015610-0047 843409 07 a10/30/07 -25- Developer, in exchange for the Agency entering into the AHA, hereby agrees to hold, sell, and convey the Site subject to the terms of this Agreement. Developer also grants to the Agency the right and power to enforce the terms of this Agreement against the Developer and all persons having any right, title or interest in the Site or any part thereof, their heirs, successive owners and assigns. The covenants set, forth in this Agreement shall remain in effect for a period terminating on the earliest of (i) fifty-five (55) years following the Permanent Loan Closing Date; (ii) foreclosure by Agency with respect to the Site; and (iii) foreclosure by a senior lender. 14.0 INDEMNIFICATION. Developer agrees for itself and its successors and assigns to indemnify, defend, and hold harmless Agency, City, and their respective officers, officials, members, employees, agents, and representatives from and against any loss, liability, claim, or judgment relating in any manner to the Project excepting only any such loss, liability, claim, or judgment arising out of the intentional wrongdoing or gross negligence of Agency, City, or their respective officers, officials, members, employees, agents, or representatives, except with respect to those actions described in the last sentence of Section 222 of the AHA. 15.0 UTILITIES AND TAXES. Developer, while in possession of the Site, and each successor or assign of Developer while in possession of the Site, shall remain fully obligated for the payment of (i) real and personal property taxes and assessments in connection with the Site, subject to Developer's right to claim exemptions under California Revenue & Taxation Code Section 214(g), and (ii) all charges for all utilities serving the Site for which Developer is responsible. 16.0 ATTORNEYS' FEES. In the event that a party to this Agreement brings an action against the other party hereto by reason of the breach of any condition, covenant, representation or warranty in this Agreement, or otherwise arising out of this Agreement, the prevailing party in such action shall be entitled to recover from the other expert witness fees, and its reasonable attorney's fees and costs. Attorney's fees shall include attorney's fees on any appeal, and in addition a party entitled to attorney's fees shall be entitled to all other reasonable costs for investigating such action, including the conducting of discovery. 17.0 AMENDMENTS. The Developer and the Agency agree to mutually consider reasonable requests for amendments to this Agreement which may be made by either of the parties hereto, lending institutions, the Tax Credit Investor or financial consultants to the Agency, provided such requests are consistent with this Agreement and would not substantially alter the basic business terms included herein. The Agency's Executive Director shall have the authority to approve, on behalf of the Agency, amendments to this Agreement that would not substantially alter the basic business terms or substantially increase the risk to the Agency. All other amendments shall require the action of the Agency Board. All amendments, including those authorized to be 882/015610-0047 -26- 8434W07 a10/30107 approved by the Agency's Executive Director, shall be in writing and shall be signed by authorized representatives of Agency and Developer. 18.0 NOTICE. Formal notices, demands, and communications between Agency and Developer shall be sufficiently given if (i) personally delivered, (ii) delivered by a reputable same -day or overnight courier services that provides a receipt showing date and time of delivery, (iii) delivered by United States mail, registered or certified, postage prepaid, return receipt requested, or (iv) delivered by facsimile transmission, provided the original of the faxed communication is delivered within twenty-four (24) hours by one of methods described in clauses (i), (ii), or (iii) of the foregoing. Delivery shall be made to the following addresses: If to Agency: La Quinta Redevelopment Agency 78-495 Calle Tampico La Quinta, CA 92253 Attn: Executive Director Fax: (760) 777-7101 With a copy to: Rutan & Tucker, LLP 611 Anton Boulevard, Suite 1400 Costa Mesa, CA 92626 Attn: M. Katherine Jenson, Esq. Fax: (714) 546-9035 If to Developer: National Community Renaissance of California 9065 Haven Avenue, Suite 100 Rancho Cucamonga, CA 91730 Attn: Chief Executive Officer Fax: (fov)483—Z94S With a copy to: Hudson Housing Capital, LLC 630 Fifth Avenue, Suite 2850 New York, NY 10111 Attn: Joseph A. Macari Fax: (212) 218-4467 With a copy to: Law Office of Edward A. Hopson 655A North Mountain Avenue Upland, CA 91786 Attn: Edward A. Hopson, Esq. Notices that are personally delivered, delivered by messenger/courier, or by fax (provided there is compliance with the terms of clause (iv) above) shall be deemed effective upon receipt. Notices delivered by mail shall be deemed effective upon the earlier of actual receipt by the addressee thereof or the expiration of forty-eight (48) hours after depositing in the United States Postal System in the manner described in this Section. Such written notices, demands, and 882/015610-0047 -2,]- 843409.07 al0/30/07 communications may be sent in the same manner to such other addresses as a party may from time to time designate by mail. Written notices, demands and communications between the Agency and the Developer shall be sufficiently given if (i) delivered by hand, (ii) delivered by reputable same -day or overnight messenger service that provides a receipt showing date and time of delivery, or (iii) dispatched by registered or certified mail, postage prepaid, return receipt requested, to the principal offices of the Agency and the Developer at the addresses set forth above. Such written notices, demands and communications may be sent in the same manner to such other addresses as either party may from time to time designate by mail as provided above. A notice signed by legal counsel for a party and delivered to the other party in accordance with this Section shall be deemed notice delivered by the party on whose behalf such legal counsel is acting. Any written notice, demand, or communication shall be deemed received immediately if delivered by hand or delivered by messenger in accordance with the preceding paragraph, and shall be deemed received on the third (3rd) day from the date it is postmarked if delivered by registered or certified mail in accordance with the preceding paragraph. 19.0 NONLIABILITY OF AGENCY OFFICIALS. No officer, official, member, employee, agent, or representative of Agency shall be personally liable to Developer, or any successor in interest, in the event of any default or breach by Agency or for any amount which may become due to Developer or successor or on any obligations under the terms of this Agreement or any of the Agency Agreements. 20.0 TRANSACTIONS WITH AFFILIATES. Developer shall have the right to enter into contracts with subsidiaries, and Affiliates for the purpose of providing management, cleaning, maintenance and repair services, insurance policies and other purposes related to the operation of the Site, provided that all such costs and charges are competitive with the costs, charges, rent and other sums which would be paid by or to, as the case may be, an unrelated third party. 21.0 SEVERABILITY/WAIVER/INTEGRATION/INTERPRETATION; ENTIRE AGREE- MENT. 21.1 Severability. If any provision of this Agreement shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining portions hereof shall not in any way be affected or impaired thereby. 21.2 Waiver. All waivers of the provisions of this Agreement, unless specified otherwise herein, must be in writing and signed by the appropriate authorities of Agency and Developer, as applicable. No delay or omission by either party hereto in exercising any right or power accruing upon the compliance or failure of performance by the other party hereto under the provisions of this Agreement shall impair any such right or power or be construed to be a waiver thereof. A waiver by either party hereto of a breach of any of the covenants, conditions or agreements hereof to be performed by the other party shall not invalidate this Agreement nor 882/015610-0047 -28- 843409.07 a10/30/07 shall it be construed as a waiver of any succeeding breach of the same or other covenants, agreements, restrictions or conditions hereof. 21.3 Inteeration. This Agreement contains the entire Agreement between the parties concerning the subject matter hereof and neither party relies on any warranty or representation not contained in this Agreement. 21.4 Interpretation. The terms of this Agreement shall be construed in accordance with the meaning of the language used and shall not be construed for or against either party by reason of the authorship of this Agreement or any other rule of construction that might otherwise apply. 21.5. Entire Agreement. This Agreement integrates all of the terms and conditions mentioned herein or incidental hereto, and supersedes all negotiations or previous agreements between the parties or their predecessors -in -interest with respect to all or any part of the subject matter hereof. 22.0 ENFORCED DELAY: EXTENSIONS OF TIME. Performance by a party hereunder shall not be deemed to be in default where delays or defaults are due to war; insurrection; strikes; lock -outs; riots; floods; earthquakes; fires; casualties; supernatural causes; acts of the public enemy; epidemics; quarantine restrictions; freight embargoes; lack of transportation; governmental restrictions or priority litigation; unusually severe weather; inability to secure necessary labor, materials or tools; acts of the other party; acts or the failure to act of a public or governmental agency or entity (except that acts or the failure to act of Agency or City shall not excuse performance by Agency or City unless the act or failure is caused by the acts or omissions of Developer); or any other causes beyond the reasonable control or without the fault of the party claiming an extension of time to perform. In the event of such a delay (herein "Enforced Delay"), the party delayed shall continue to exercise reasonable diligence to minimize the period of the delay. An extension of time for any such cause shall be limited to the period of the Enforced Delay, and shall commence to run from the time of the commencement of the cause, provided notice by the party claiming such extension is sent to the other party within fifteen (15) days after the sending party has knowledge, or should have obtained knowledge, of the commencement of the cause. The following shall not be considered as events or causes beyond the control of Developer, and shall not entitle Developer to an extension of time to perform: (i) Developer's failure to obtain financing for the Project (except as a result of an omission or breach by Agency), (ii) Developer's failure to negotiate agreements with prospective tenants or users for the Project, or (iii) interest rates or economic or market conditions. Times of performance under this Agreement may also be extended by mutual written agreement by Agency and Developer. The Agency Executive Director shall also have the authority on behalf of Agency to administratively approve extensions of time not to exceed a cumulative total of one (1) year. 23.0 THIRD PARTY BENEFICIARY. The City of La Quinta is deemed a third party beneficiary of the terms and covenants contained in this Agreement and has the right, but not the obligation, to enforce the terms and covenants contained herein. 882/015610-0047 -29- 843409 07 a10/30107 24.0 FUTURE ENFORCEMENT. The parties hereby agree that should the Agency cease to exist as an entity at any time during the term of this Agreement, the City of La Quinta shall have the right to enforce all of the terms and conditions herein, unless the Agency had previously specified another entity to enforce this Agreement. 25.0 GOVERNING LAW. This Agreement shall be governed by the internal laws of the State of California without regard to conflicts of law. 26.0 NO MERGER. The covenants, terms, and provisions of this Agreement shall not merge with any grant deed or other instrument pertaining to the conveyance of any interest in real property. 27. COUNTERPARTS. This Agreement may be executed in any number of counterparts, each of which shall constitute one original and all of which shall be one and the same instrument. [End - Signature Page Follows] 882/015610-0047 84340907 a]0/30/07 -30- IN WITNESS WHEREOF, the Agency and Developer have executed this Regulatory Agreement and Declaration of Covenants and Restrictions by duly authorized representatives on the date first written hereinabove. Date: ATTEST: By: Secretary APPROVED AS TO FORM: RUTAN & TUCKER LLP By: Attorneys for the V Quinta Redevelopment Agency Date: "AGENCY" LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic 0 Thomas Genovese Executive Director "DEVELOPER" NATIONAL COMMUNITY RENAISSANCE OF CALIFORNIA, a nonprofit public benefit corporation Its: RichardJ. Whittingham, CPA Chief Financial Officer 882/015610-0047 843409 07 a10130/07 -31- IN WITNESS WHEREOF, the Agency and Developer have executed this Regulatory Agreement and Declaration of Covenants and Restrictions by duly authorized representatives on the date first written hereinabove. "AGENCY" LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and p . is By Date: apf� 7 /O 3/ Thomas Genovese APPROVED AS TO FORM: RUTAN & TUCKER LLP By: d �--- Attorneys for the V, Quinta Redevelopment Agency Date: ;xecutive Director "DEVELOPER" NATIONAL COMMUNITY RENAISSANCE OF CALIFORNIA, a nonprofit public benefit corporation Its: 682/015610-0047 84340907 a10/30/07 -31- IN WITNESS WHEREOF, the Agency and Developer have executed this Regulatory Agreement and Declaration of Covenants and Restrictions by duly authorized representatives on the date first written hereinabove. Date: ATTEST: By: Secretary APPROVED AS TO FORM: RUTAN & TUCKER, LLP By: Attorneys for the La Quinta Redevelopment Agency Date: "AGENCY" LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic By: Thomas Genovese Executive Director "DEVELOPER" NATIONAL COMMUNITY RENAISSANCE OF CALIFORNIA, a nonprofit public benefit corporation By: Its: Richard J. Whittingham, CPA Chief Financial Officer ATTACHMENT NO. 7 882101561OM47 Page 31 of 45 943409.05 a10/IN07 g STATE OF CALIFORN[A ) ) ss. (� COUNTY OF Q< 1A}P z 4r)j ) On )u` 3l I ��� before me, , personally appeared x9 rrcwe 0-1; liersonally mown t& 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. Carymwon r 1697M* Mokur F - caraero SEAL mow° cwtf 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/arc 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] 88DO 15610-0047 84340907 a10/3007 -32- ALL-PURPOSE ACKNOWLEDGMENT State of California ' SS. County of I 11'n &/na /Dr!l dl A - I / On �/+%%e/,3(J� OIJ�, before me, �(� 1l , &rlu /7Giz Notary Public, DATE personally appeared �[� hn i Gy l �/1%LZ 11y7f4�GdQ !22 personally ]mown to me (or proved to me on the basis of'satisfactory evidence) to be the person(p) whose name(O is/are subscribed to the within instrument and acknowledged to me that he/ sey executed the same in his/herftheir authorized capacity(i"), and that by his/4er4kcir signature(} on the instrument the person(,, or the entity upon behalf D HERNANDEZ of which the person( acted, executed the instrument. /^ Comm.# 1750272 �N Way PUBLIC-FW ORW Sir BSBBARDBIO Courrr Mr Cory. EIIP. - S, 2011 WITNESS my hand and official seal. NOTARY'S SIGNATURE PLACE NOTARY SEAL IN ABOVE SPACE OPTIONAL INFORMATION The information below is optional. However, it may prove valuable and could prevent fraudulent attachment of this form to an unauthorized document. CAPACITY CLAIMED BY SIGNER (PRINCIPAL) DESCRIPTION OF ATTACHED DOCUMENT INDIVIDUAL CORPORATE OFFICER PARTNER(S) TITLE(S) ATTORNEY -IN -FACT TRUSTEE(S) GUARDIAN/CONSERVATOR OTHER: SIGNER (PRINCIPAL) IS REPRESENTING: NAME OF PERSON(S) ORENTITY(IES) TITLE OR TYPE OF DOCUMENT OF PAGES DATE OF DOCUMENT RIGHT THUMBPRINT OF SIGNER a H° APA 1/06 NOTARY BONDS, SUPPLIES AND FORMSAT H7TP//WWWVALLEY-SIERRA.COM 02005 VALLEY-Mhu lNbU h EXHIBIT A THAT PORTION OF THE SOUTHEAST QUARTER OF THE NORTHEAST QUARTER OF SECTION 19, TOWNSHIP 5 SOUTH, RANGE 7 EAST, SAN BERNARDINO MERIDIAN, IN THE CITY OF LA QUINTA, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, DESCRIBED AS FOLLOWS: COMMENCING AT THE SOUTHEAST CORNER OF THE NORTHEAST QUARTER OF SAID SECTION 19; THENCE SOUTH 89" 33' 05" WEST, ON THE SOUTHERLY LINE OF THE NORTHEAST QUARTER OF SAID SECTION, 330 FEET, TO THE TRUE POINT OF BEGINNING; THENCE SOUTH 89" 33' 05" WEST, ON SAID SOUTHERLY LINE OF THE NORTHEAST QUARTER, 330 FEET; THENCE NORTH 0" 13' 40" WEST, 1,324.57 FEET, TO THE NORTHERLY LINE OF THE SOUTHEAST QUARTER OF NORTHEAST QUARTER OF SAID SECTION 19; THENCE NORTH 89" 34' 05" EAST, ON SAID NORTHERLY LINE, 330 FEET; THENCE SOUTH 0" 13' 40" EAST, 1,324.47 FEET TO THE TRUE POINT OF BEGINNING; EXCEPTING THEREFROM THE SOUTHERLY 50 FEET CONVEYED TO THE COUNTY OF RIVERSIDE BY DEEDS RECORDED AUGUST 30, 1933 IN BOOK 133, PAGE 292 AND BOOK 134, PAGE 298 RESPECTIVELY, OF OFFICIAL RECORDS, RIVERSIDE COUNTY RECORDS. ALSO EXCEPTING THEREFROM THAT PORTION DESCRIBED IN THE DEEDS TO THE CITY OF LA QUINTA, RECORDED FEBRUARY, 17, 1999, AS INSTRUMENT NOS. 62425 AND 62426, BOTH OF OFFICIAL RECORDS. EXHIBIT `B" INCOME COMPUTATION AND CERTIFICATION FORM [See following pages] 882/015610-0047 EXHIBIT `B" 843409 07 a10/30/07 CITY OF LA QUINTA REDEVELOPMENT AGENCY 78-495 Calle Tampico, La Quinta, CA 92253 INCOME COMPUTATION AND CERTIFICATION FORM (Affordable Housing Eligibility for Renter Occupied Unit PART I. PROPERTY FINANCED WITH GOVERNMENT ASSISTANCE Property Address: PART II. TENANT HOUSEHOLD INFORMATION Date of Birth Sue. Sec. # Relationship TOTAL NUMBER OF PERSONS IN HOUSEHOLD: (Please list information on other household members below) Mailing Address: Telephone Numbers: Work (_-) Home(_) PART III. GROSS HOUSEHOLD INCOME Complete the following, attach copies of required verification as specified below. Attach a note explaining any significant changes in household income between the previous year and the current year. INFORMATION IS REQUIRED FOR ALL MEMBERS OF THE HOUSEHOLD AGE 18 OR OLDER REGARDLESS OF WHETHER THEY CONTRIBUTE TO THE COSTS OF THE HOUSEHOLD. If you are not required to file a tax return, please indicate this in Part V by your signature. ANN INCOME ANN INCOME INCOME SOURCES for owner others in hshld VERIFICATIONS (needed for file) A. Employment earnings Last tax return & last 3 pay stubs, employer verification B. Self-employment earnings Last 2 tax returns & current financial strut C. Social Security (OASDI) Annual award letter D. Supplemental Security Income (SSI) Annual award letter E. Public assistance (AFDC, general Current benefit statement assistance, unemployment, etc.) F. Pension (s) Annual award letter, year end strut, W-2 G. Interest income Last 2 statements for all accounts H. Investment income (stocks, bonds, real estate, etc.) Last 2 statements for all accounts I. Room rental Rental agreement, copies of checks, etc. J. Other income (list type/source;) EXHIBIT `B" 882/015610-0047 Page 1 of 2 843409 07 a10/30/07 g K. TOTAL INCOME (sum of A thru J) 12 months = mo. income PART IV. PROPERTY STATUS Will this property be your primary residence? Will someone other than the individuals listed above be occupying this property? If yes - Name of occupants: Telephone Number: My/our housing expenses are as follows: 1. Monthly tenant rent _ 2. Average monthly utilities Mailing Address: PART V. TENANT CERTIFICATION I/We understand that after the initial eligibility determination, completion of monitoring forms is required on an annual basis. I/We certify that Uwe have disclosed all information pertaining to my/our application and that the information presented in the foregoing Sections I through IV is true and accurate to the best of my (our) knowledge. Tenant Date Tenant For more information regarding this application, please contact management staff at (760) Comments: FOR OFFICE USE ONLY Date Information verified Income category Maximum allowable annual income ( % of median) Applicant's annual income gross monthly max housing costs Management EXHIBIT `B" 882/015610-0047 Page 2 Of 2 843409 07 a10/30/07 g Date EXHIBIT "C" INCOME RECERTIFICATION FORM [See following pages] 882/015610-0047 843409 07 .10/30/07 EXHIBIT "C" LA QUINTA REDEVELOPMENT AGENCY 78-495 Calle Tampico, La Quinta, CA 92253 INCOME RECERTIFICATION FORM (Renter Occupied Unit) PART I. GENERAL INFORMATION 1. Property Owner Name 2. Renter Name 3. Property Address La Quinta, CA 92253 (Please include P.O. Box No. if applicable) 4. Has there been a change in ownership of this property during the preceding 12 month period? Yes ( ) No ( ) (If yes, please explain) PART II. UNIT INFORMATION 5. Number of Bedrooms 6. Number of Occupants Names: PART III. AFFIDAVIT OF RENTER 1, _, and I, , as renters of units assisted pursuant to the La Quinta Redevelopment Agency's (the "Agency") Affordable Housing Program (the "Program"), do hereby represent and warrant that the following computation includes all income (I/we) anticipate receiving for the 12-month period commencing on January 1, 20_ (including the renter(s) and all family members of the renters): (a) amount of wages, salaries, overtime pay, commissions, fees, tips and bonuses, and payments in lieu of earnings, such as unemployment and disability compensation, worker's compensation and severance pay (before payroll deduction) (b) net income from business or profession or rental of property (without deduction for repayment of debts or expansion of business) (c) interest and dividends (d) periodic receipts such as social security, annuities, pensions, retirement funds, insurance policies, disability or death benefits, alimony, child support, regular contributions or gifts from persons not occupying unit (e) public assistance allowance or grant plus excess of maximum allowable for shelter or utilities over the actual allowance for such purposes EXHIBIT "C" 982/015610-0047 Page 1 of 2 843409 07 a10/30/07 g (f) regular and special pay and allowances of a member of armed services (whether or not living in the dwelling) who is head of the family or spouse _ Subtotal (a) through (f) _ LESS: Portion of above items which are income of a family member who is less than 18 years old or a full-time student TOTAL ELIGIBLE INCOME _ NOTE: The following items are not considered income: casual or sporadic gifts; amounts specifically for or in reimbursement of medical expenses; lump sum payment such as inheritances, insurance payments, capital gains and settlement for personal or property losses; educational scholarships paid directly to the student or educational institution; government benefits to a veteran for education; special pay to a serviceman head of family away from home and under hostile fire; foster child care payments; value of coupon allotments for purpose of food under Food Stamp Act of 1964 which is in excess of amount actually charged the eligible household; relocation payments under Title II of Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970; payments received pursuant to participation in the following programs: VISTA, Service Learning Programs, and Special Volunteer Programs, SCORE, ACE, Retired Senior Volunteer Program, Foster Grandparent Program, Older American Community Services Program, and National Volunteer Program to Assist Small Business Experience. 2. This affidavit is made with the knowledge that it will be relied upon by the Landlord and the Agency to determine maximum income for eligibility and (I/we) warrant that all information set forth in this Part III is true, correct and complete and based upon information (I/we) deem reliable and that the estimate contained in paragraph 1 is reasonable and based upon such investigation as the undersigned deemed necessary. 3. (I/We) will assist the Landlord and the Agency in obtaining any information or documents required to verify the statements made in this Part III and have attached hereto a copy of our federal income tax return for the last year (20__). 4. (I/We) acknowledge that (I/we) have been advised that the making of any misrepresentation or misstatement in this affidavit will constitute a material breach of (my/our) agreement with the Landlord to rent the unit and will additionally enable the Agency to initiate and pursue all applicable legal and equitable remedies with respect to the unit and to me/us. B. (My/Our) monthly housing expenses are limited to the following: Base rent 2. Average Monthly Utilities 3. Other (explain) (I/We) understand that completion of monitoring forms is required on an annual basis and agree to notify the La Quinta Redevelopment Agency in writing of any change in ownership or rental of the unit. (I/We) do hereby swear under penalty of perjury that the foregoing statements are true and correct. Date Renter(s) EXHIBIT "C" 882/015610-0047 Page 2 of 2 843409 07 a10/30/07 g EXHIBIT "D" LEASE RIDER [See following page] 882/015610-0047 EXHIBIT "D" 843409 07 al0/30/07 _(Project Name)_ AFFORDABLE HOUSING PROJECT Lease Rider RESIDENT: (if there is more than one adult occupant, each person must sign the rider) LEASE DATE: UNIT NO.: The undersigned tenant(s) hereby certify and agree as follows: Income Certification. The attached income certification is true, correct and complete. I/we agree to provide a similar certification annually upon request during the term of my occupancy. 2. Employer Verification. The landlord or property manager has my permission to verify my/our income from any sources of income I/we receive. 3. False Statements. If the income certification and/or lease application submitted by me/us is false, or if I/we fail to provide annual certifications, the landlord or property manager will have the right to terminate my/our lease and recover possession of my/our Unit. I/we understand that the landlord and property manager are relying on this income certification in accepting me/us as a tenant, and the landlord or property manager will be seriously harmed if my/our income does not qualify the Unit for the affordable housing program. This rider shall be considered as part of my/our lease. Date: Tenant Tenant Tenant Tenant EXHIBIT "D" 882/015610-0047 Page 1 of 1 843409 07 a10/30/07 g v ' • EXHIBIT "B" CERTIFICATION OF CONTINUING PROGRAM COMPLIANCE [See following page] 982/015610-0047 843409 07 a10/30/07 EXHIBIT "E" • •1 CERTIFICATION OF CONTINUING PROGRAM COMPLIANCE The undersigned, being duly authorized to execute this certificate on behalf of _, owner of the Project, hereby represents and warrants that: I. He/she has read and is thoroughly familiar with the provisions of the Affordable Housing Agreement between the La Quinta Redevelopment Agency and National Community Renaissance of California. 2. As of June 30, 20_, the following number of residential units in the Project (i) are currently occupied by tenants qualifying as Eligible Tenants at Affordable Rents; (ii) are currently occupied by Moderate Income Tenants; or (iii) are currently vacant and being held available for occupancy by Eligible Tenants and have been so held continuously since the date Eligible Tenants vacated such unit, as indicated: _ Units occupied by Eligible Tenants _ Units occupied by Moderate Income Tenants Vacant units Other (please explain) The unit number, unit size, the tenant paid rental amount charged and collected, the number of occupants and the income of the occupants for each restricted unit in the _ Project is set forth on the attached list. All restricted units in the _ Project are rented at Affordable Rent. Dated: 882/015610-0047 843409M 00/I6/07 20_ OWNER NAME By: vim. Richard J. Whittingham, CPA Chief Financial Officer (Printed name and title) ATTACHMENT NO. 7 Page 44 of 45 , 1- v EXHIBIT "F" RESTRICTED UNIT MATRIX INCOME LEVEL NO. OF UNITS Very Low Income Household 39 50% Very Low Income Household 31 Extremely Low Income Household 9 Moderate Income Household (Management Unit) 1 882/015610-0047 84340907 a10/30/07 EXHIBIT "F" Recording Hequesteh by GHICA60 TITLE COMPANY Recording Requested By And When Recorded Mail To La Quinta Redevelopment Agency 78-495 Calle Tampico La Quinta, California 92253 Attn: Executive Director (Exempt from Recording Fees per Gov. Code §27383) DOC # 2007-0669207 10/32/2007 08:00p Fee:40.00 Page 1 of 12 Recorded in Official Records County of Riverside Larry U. Ward Assessor, County Clerk $ Recorder Ililll111111111111111111111111111111111111111111111111 S R U I PAGE I SIZE I DA I MISC I LONG RFD COPY M A L 1 465 1 426 1 PCOR NCOASMF NCHG EIM UNI O T SUBORDINATION AGREEMENT (VISTA DUNES) 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 Subordination Agreement ("Agreement') dated as of October 1, 2007, is executed by Vista Dunes Housing Partners, L.P., a California limited partnership ("Owner") and National Coin nnunity Renaissance of California, a California nonprofit public benefit corporation ("Junior Lienholder") in favor of the La Quinta Redevelopment Agency, a public body, corporate and politic (together with its successors and assigns, the "Senior Lienholder") with reference to the following facts: A. Owner owns or as of the date of recordation hereof will own a fee simple interest in the real property (the "Property") described in Exhibit "A," attached hereto and incorporated herein by this reference. B. Junior Lienholder is the present owner and holder of that certain Residual Receipts Promissory Note Secured by Deed of Trust (Purchase Money) dated as of October 30, 2007, executed by Owner for the benefit of Junior Lienholder in the face principal amount of Five Million Two Hundred Dollars ($5,200,000), together with that certain Deed of Trust with Absolute Assignment of Leases and Rents, Security Agreement and Fixture Filing (Purchase Money Note) dated as of October 30, 2007, executed by Owner in favor of Junior Lienholder, encumbering Owner's right, title and interest in the Property (the "Junior Deed of Trust") to be recorded in the Official Records of Riverside County, California ("Official Records") substantially concurrently herewith. As used herein, the tern "Junior Obligation" means any and all indebtedness, claims, debts, liabilities or other obligations from Owner to Junior Lienholder under the Note and the Junior Deed of Trust, together with all costs and expenses, including attorneys' fees, and collection thereof, whether the same accrues or is incurred before or after the commencement of any bankruptcy case by or against Owner. C. Owner and Junior Lienholder desire that Senior Lienholder and Junior Lienholder consummate the executory provisions of that certain Amended and Restated Affordable Housing Agreement dated as of October _, 2007 (the "AHA") pursuant to which, among other things, the Senior Lienholder has agreed to convey the Property to Junior Lienholder (wluch is to occur concurrently with Junior Lienholder's sale of the Property to Owner) and to receive from Junior Lienholder that certain Promissory Note representing Junior Lienholder's indebtedness to Senior Lienholder in the aggregate principal amount of Twenty -Two Million Six Hundred Forty -Two Thousand Nine Hundred Nineteen Dollars ($22,642,919) in accordance with the terms and conditions set forth in the AHA. Junior Lienholder's obligations to Senior Lienholder under the AHA are secured by, among other things, that certain Construction Deed of Trust with Assignment of Rents and Riders Attached Thereto (the "Senior Deed of Trust") dated concurrently with the said Promissory Note, made by Junior Lienholder for the benefit of Senior Lienholder. The Senior Deed of Trust is being recorded substantially concurrently herewith in the Official Records. The Senior Deed of Trust and the AHA are hereinafter collectively referred to as the "Senior Loan Documents." D. As used herein, the term "Senior Lien Indebtedness" means any and all indebtedness, claims, debts, liabilities or other obligations from Junior Lienholder to Senior Lienholder under the Senior Loan Documents, together with all interest accruing thereon and all costs and expenses, including attorneys' fees, of collection thereof, whether the same accrues or is incurred before or after the commencement of any bankruptcy case by or against the Junior Lienholder. E. Pursuant to the Senior Deed of Trust and the other Senior Loan Documents, neither Junior Lienholder or Owner is not entitled to further encumber the Property without the prior written consent of Senior Lienholder, which consent may be withheld in Senior Lienholder's discretion. F. It is a condition precedent to Senior Lienholder entering into the Senior Loan Documents as well as permitting the recordation of any of the Junior Obligation documents that the Senior Deed of Trust and the other Senior Loan Documents be and remain at all times a lien or charge upon the Property prior and superior to the liens or charges of the Junior Obligation. G. The Senior Lienholder is willing to permit the recordation of the recordable Junior Obligation documents, provided that (i) the Senior Deed of Trust and the other Senior Loan Documents are a lien or charge upon the Property prior and superior to the liens or charges of the Junior Obligation documents, and (ii) Junior Lienholder will specifically subordinate the liens or charges of the Junior Obligation documents to the lien or charge of the Senior Deed of Trust and the other Senior Loan Documents. H. Junior Lienholder is willing that the Senior Deed of Trust shall constitute a lien or charge upon the Property which is prior and superior to the liens or charges of the Junior Obligation documents. The parties hereto enter into this Agreement for the purposes set forth in these Recitals. OPERATIVE PROVISIONS In consideration of the foregoing, and for other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: 1. The Senior Deed of Trust and all amendments, modifications, extensions and renewals thereof 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 Junior Obligation documents. Junior Lienholder intentionally and unconditionally subordinates the lien or charge of the Junior Obligation documents in favor of the lien or charge upon the Property of the Senior Deed of Trust in favor of the Senior Lienholder, and understands that in reliance upon and in consideration of this subordination specific financial accommodations 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. 2. Junior Lienholder acknowledges that it has received and reviewed the Senior Loan Documents. Junior Lienholder acknowledges and agrees that in making disbursements pursuant to any of the Senior Loan Documents, Senior Lienholder is under no obligation or duty to, nor has Senior Lienholder represented that will, see to the application of such proceeds by the person or persons to whom Senior Lienholder disburses such proceeds, and any application or use of such proceeds for purposes other than those provided for in such Senior Loan Documents shall not defeat the subordination herein made in whole or in part. 3. Junior Lienholder hereby represents and warrants to Senior Lienholder that it has delivered true and complete copies of the Junior Property documents to Senior Lienholder. Senior Lienholder acknowledges that it has received and, subject to the terms and conditions of this Agreement, Senior Lienholder hereby consents to all of the provisions of, the Junior Obligation documents, and Senior Lienholder hereby agrees that the execution and performance of the Junior Obligation documents shall not constitute a default under the Senior Loan Documents. Junior Lienholder shall not, without the prior written consent of Senior Lienholder (which consent shall not be unreasonably withheld): (a) amend, supplement or modify the Junior Obligation documents; or (b) sell, assign or otherwise transfer to any other party the Junior Obligation documents or any interest therein. Junior Lienholder hereby represents that the Junior Obligation documents are not cross -defaulted with any other loan from Junior Lienholder to Owner or any other person or entity, and the Property does not secure any such additional or other loan from Junior Lienholder to Owner or any other person or entity. 4. Senior Lienholder agrees that it shall not complete a foreclosure sale of the Property or record a deed -in -lieu of foreclosure with respect to the Property (each, a "Foreclosure Remedy") unless at least sixty (60) days have elapsed since Senior Lienholder first gave Junior Lienholder written notice of the event(s) of default giving Senior Lienholder the right to complete such Foreclosure Remedy, and unless Junior Lienholder has failed, within such sixty (60) day period ("Cure Period"), to cure such event(s) of default; provided, however, that Senior Lienholder shall be entitled during such sixty (60) day Cure Period to continue to pursue all of its rights and remedies under the Senior Loan Documents, including, but not limited to, acceleration of the Loan held by the Senior Lienholder (subject to any de -acceleration provisions specifically set forth in the Senior Loan Documents), commencement and pursuit of a judicial or non judicial foreclosure (but not completion of the foreclosure sale), appointment of a receiver, enforcement of any guaranty (subject to any notice and cure provisions contained therein), and/or enforcement of any other Senior Loan Document. In the event Senior Lienholder has accelerated the loan held by the Senior Lienholder and the Junior Lienholder cures all events of default giving rise to such acceleration within the sixty (60) day Cure Period described above, such cure shall have the effect of de -accelerating the loan held by the Senior Lienholder; provided, however, that such de - acceleration shall not waive or limit any of Senior Lienholder's rights to accelerate its loan or exercise any other remedies under the Senior Loan Documents as to any future Events of Default. Senior Lienholder shall give Junior Lienholder notice at the address set forth below or such other address as Junior Lienholder may instruct Senior Lienholder in writing from time to time: National Community Renaissance of California 9065 Haven Avenue, Suite 100 Rancho Cucamonga, California 91730 Attn: President 5. This Agreement shall be the sole agreement among the parties hereto with regard to the subordination of the Junior Deed of Trust to the Senior Deed of Trust and shall supersede, but only insofar as would affect the priority between such deeds of trust, any prior agreements as to such subordination. 6. Junior Lienholder hereby assigns and shall release unto the holder of the Senior Deed of Trust, for application against the obligations secured by, or other disposition in accordance with, the Senior Deed of Trust, all of Junior Lienholder's right, title and interest, if any, in and to (a) the proceeds of all insurance covering the Property, and (b) all awards or other compensation made for any taking of any part of the Property. In the event that, following any such application and/or disposition of insurance or condemnation proceeds, any balance remains, such balance shall be made payable to the joint order of Junior Lienholder and Owner (and their successors and assigns). 7. Junior Lienholder shall not acquire, by subrogation or otherwise, any lien upon or other interest in the Property (including, without limitation, any lien or interest relating to real estate taxes or other governmental charges) which is or may be prior to the lien of the Senior Deed of Trust unless (a) Junior Lienholder first gives written notice to the holder of the Senior Deed of Trust of Junior Lienholder's intention to acquire such lien or other interest, and (b) Senior Lienholder does not acquire such lien or other interest within thirty (30) days following receipt of such notice. 8. So long as the Senior Deed of Trust is a lien upon the Property or any part thereof, Junior Lienholder and Owner shall each execute, acknowledge and deliver, upon demand, any further subordinations or other instruments in recordable form that Senior Lienholder reasonably requires to carry out the purpose and intent of this Agreement. 9. Junior Lienholder understands that, in reliance upon this Agreement, one or more loans will be made and/or other credit will be extended which would not be made and/or extended but for such reliance. 10. This Agreement shall bind, and shall inure to the benefit of, the successors and assigns of the parties. This document may be executed in counterparts with the same force and effect as if the parties had executed one instrument, and each such counterpart shall constitute an original hereof. This Agreement shall be governed by the laws of the State of California. [Remainder of Page Intentionally Left Blank] NOTICE: THIS SUBORDINATION AGREEMENT CONTAINS A PROVISION WHICH ALLOWS THE PERSON OBLIGATED ON YOUR REAL PROPERTY SECURITY TO OBTAIN A LOAN, A PORTION OF WHICH MAY BE EXPENDED FOR PURPOSES OTHER THAN IMPROVEMENT OF THE PROPERTY. "Junior Lienholder" National Conununity Renaissance of California, a California nonprofit public benefit corporation IIy: Richard J. Whittingham, CFO "Senior Lienbolder" La Quinta Redevelopment Agency, a public body, corporate and politic to ATTEST: By: Secretary Name: Title: APPROVED AS TO FORM AND LEGAL CONTENT: RUTTAN & TUCKER, LLP By Z�_ Agency Couns "Senior Liediolder" La Quinta Redevelopment Agency, a public body, corporate and politic By: Name: bMax !a Title: Fixr�e.7i�/� l7t►Y`{or ATTEST: Secretary APPROVED AS TO FORM AND LEGAL CONTENT: RUTTAN & TUCKER, LLP By t Agency Counse ALL-PURPOSE ACKNOWLEDGMENT State of California ) ss. County of�t��_ On 10151 2007, before me, h Date Name a dd Title of (e. ,, 'Jane Doe, 64tary Public) personally appeared T''- Name(s) of Slgner(s) personally known to me ❑ proved to me on the basis of satisfactory evidence do be the person(s) whose name(s) is/are subscribed fo 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 S entity upon behalf of which the person(s) acted, executed the instrument. W SS my hand and official seal. P ce a Above ak Signature of No ry Public OPTIONAL Though the Information below is not required by law, It may prove valuable to persons relying on the document and could prevent fraudulent removal and reattachment of this form to another document. Description of Attached Document Title or Type of Document: Subordination Agreement Document Dated _ . 2007 Number of Pages: 5 Signer(s) Other Than Named Above: Capacity(ies) Claimed by Signer Signer's Name: _ ❑ Individual ❑ Corporate Officer - Title(s):_ ❑ Partner - ❑ Limited ❑ General ❑ Attorney in Fact ❑ Co -Trustee ❑ Guardian or Conservator Other: Signer is Representing: Right Thumbprint of Signer "Owner" Vista Dunes Housing Partners, L.P., a California limited partnership By its General Partner Vista Dunes GP, LLC, a California limited liability company By its Manager Southern California Housing Development Corporation of the hiland Empire, a California nonprofit public benefit corporation M Richard J. W -dttingham, CFO ALL-PURPOSE ACKNOWLEDGMENT State of California ) )SS. County of 5a b w&rd,/_ / On(�f�-31.2007, before me, �(1� ill &Z, 6771fu A7/a///'_ Date Name and Tllle of Officer (e g ,,,'Jane Doe, Notary ') Public personally appeared �l(�Idd J. Wh f tt !!�(%jk&Pu_ Name(s) of Slgnegs) A_ personally known to me ❑ proved to me on the basis of satisfactory evidence to be the person() whose nameV) is/are subscribed 11A ERNAND1EZ to the within instrument and acknowledged to me that 1756272 heAref hey executed the same in his/hepAheir N NOTARYPUBUC-CAUFOBNIA N authorized capacity(iee , and that by his/herftheh $AN SEAl1AA0INO COUNTY 3 MyCow, UP. JI1lY 2011 r signature(i) on the instrument the person(5r), or the entity upon behalf of which the person($) acted, executed the instrument. WITNESS my hand and official seal. Place Notary Seal Above �i�lX Signature of Notary Public Though the information below /s not required bylaw, it may prove valuable to persons relying on the document and could prevent fraudulent removal and reattachment of this form to another document. Description of Attached Document Title or Type of Document: Subordination Agreement Document Dated_ 2007 Number of Pages: _ Signer(s) Other Than Named Abo� Capacity(ies) Claimed by Signer Signer's Name: ❑ Individual ❑ Corporate Officer- Title(s):_ ❑ Partner- ❑ Limited ❑ General ❑ Attorney in Fact ❑ Co -Trustee ❑ Guardian or Conservator Other. Signer is Representing: Right Thumbprint of Signer EXHIBIT A THAT PORTION OF THE SOUTHEAST QUARTER OF THE NORTHEAST QUARTER OF SECTION 19, TOWNSHIP 5 SOUTH, RANGE 7 EAST, SAN BERNARDINO MERIDIAN, IN THE CITY OF LA QUINTA, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, DESCRIBED AS FOLLOWS: COMMENCING AT THE SOUTHEAST CORNER OF THE NORTHEAST QUARTER OF SAID SECTION 19; THENCE SOUTH 89° 33' 05" WEST, ON THE SOUTHERLY LINE OF THE NORTHEAST QUARTER OF SAID SECTION, 330 FEET, TO THE TRUE POINT OF BEGINNING; THENCE SOUTH 89° 33' 05" WEST, ON SAID SOUTHERLY LINE OF THE NORTHEAST QUARTER, 330 FEET; THENCE NORTH 00 13' 40" WEST, 1,324.57 FEET, TO THE NORTHERLY LINE OF THE SOUTHEAST QUARTER OF NORTHEAST QUARTER OF SAID SECTION 19; THENCE NORTH 89° 34' 05" EAST, ON SAID NORTHERLY LINE, 330 FEET; THENCE SOUTH 00 13' 40" EAST, 1,324.47 FEET TO THE TRUE POINT OF BEGINNING; EXCEPTING THEREFROM THE SOUTHERLY 50 FEET CONVEYED TO THE COUNTY OF RIVERSIDE BY DEEDS RECORDED AUGUST 30, 1933 IN BOOK 133, PAGE 292 AND BOOK 134, PAGE 298 RESPECTIVELY, OF OFFICIAL RECORDS, RIVERSIDE COUNTY RECORDS. ALSO EXCEPTING THEREFROM THAT PORTION DESCRIBED IN THE DEEDS TO THE CITY OF LA QUINTA, RECORDED FEBRUARY, 17, 1999, AS INSTRUMENT NOS. 62425 AND 62426, BOTH OF OFFICIAL RECORDS. AGENCY NOTE October 31, 2007 ("Mote; Date") $24,000,000 ("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 TWENTY-FOUR MILLION DOLLARS ($24,000,000,000) ("Note Amount"), or such lesser amount which shall from time to time be owing hereunder pursuant to the terms hereof. The principal sum hereof shall be disbursed pursuant to the terms and conditions set forth herein and in that certain Amended and Restated Affordable Housing Agreement by and among Maker and Holder, dated October 31, 2007 ("AHA"), pertaining to Maker's acquisition of certain real property defined in the AHA as the "Site" and improved with a partially complete affordable housing development and Maker's completion of construction and subsequent operation thereof. Reference is also made to the following additional agreements and documents, of even date herewith, involving Maker and Holder and/or pertaining to the Site: (i) Construction Deed of Trust with Assignment of Rents and Rider Attached Thereto by and between Maker as Trustor, Holder as beneficiary, and Chicago Title Company as Trustee, and recorded in the Office of the Riverside County Recorder ("Agency Deed of Trust"). The Agency Deed of Trust secures, in part, repayment of this Note. (ii) Regulatory Agreement and Declaration of Covenants and Restrictions, by and between Maker and Holder, for the benefit of Holder, and recorded in the Office of the Riverside County Recorder ("Agency Regulatory Agreement"). The AHA, Agency Deed of Trust, and Agency Regulatory Agreement are referred to herein collectively as the "Agency Agreements." The Agency Agreements are incorporated herein as though fully set forth. Except as otherwise provided herein, the defined terms used in this Note shall have the same meaning as set forth in the AHA. 1. Purpose of Loan. The loan evidenced by this Note is a loan for the purpose of assisting Maker with Maker's costs for acquiring the Site and completing construction of the Project thereon in accordance with the AHA. 2. Principal Amount. The principal amount of this loan shall be TWENTY-FOUR MILLION DOLLARS ($24,000,000) ("Loan Amount"). No interest shall accrue on the outstanding principal amount. 3. Disbursement of Agency Loan. 3.1 The Agency Loan shall be disbursed in accordance with the terms of the AHA. 892/015610-0041 858817,01 a10/30/07 -l- 3.2 Subject to the provisions of Section 4 herein, which provide for acceleration of the then outstanding principal and immediate payment thereof in the event of a default by Maker, this Note shall be automatically cancelled, as evidenced by Holder's return to Maker of the original of this Note marked "cancelled," and the Agency Deed of Trust shall be reconveyed, on the fifth anniversary of the Permanent Loan Closing. In the event of such cancellation, any outstanding amounts due under this Note shall automatically be forgiven. 4. Default; Acceleration; Cross -Default. In the event: 4.1 Maker is in material default of any of the covenants, terms, or provisions of this Note or of any of the Agency Agreements and Maker fails to timely cure such default under the terms of the applicable agreement, it being understood and agreed by Maker that a default of this Note or of any of the Agency Agreements (beyond any applicable cure period) shall be a default of all of the foregoing listed documents; then Maker shall be in default of this Note, and all portions of the Loan Amount that have been disbursed to Maker shall become immediately due and payable. Notwithstanding the foregoing, upon completion of the Housing Development, as evidenced by Holder's issuance of a Release of Construction Covenants, then only a material default by Maker of any of the covenants, terms, or provisions of this Note or of the Regulatory Agreement that is not timely cured by Maker under the terms of the applicable agreement shall constitute a default hereunder and cause the Loan Amount to be accelerated. 5. Collection Costs; Attorneys' Fees. If, because of any event of default under this Note or any of the Agency Agreements, any attorney is engaged by Holder to enforce or defend any provision of this instrument, whether or not suit is filed hereon, then Maker shall pay upon demand reasonable attorneys' fees, expert witness fees and all costs so incurred by Holder, as if such fees and costs had been added to the principal owing hereunder. The Agency Loan and this Note shall constitute a nonrecourse obligation of Maker, and neither Maker nor any partner, member, or shareholder thereof shall have any personal liability for repayment. However, nothing contained in the foregoing limitation of liability shall (a) limit or impair the enforcement against all such security for this Note of all the rights and remedies of the Holder, or (b) be deemed in any way to impair the right of the Holder to assert the unpaid principal amount of this Note as a demand for money within the meaning and intendment of Section 431.70 of the California Code of Civil Procedure or any successor provision thereto. The foregoing limitation of liability is intended to apply only to the obligation for the repayment of the principal of this Note; nothing contained therein is intended to relieve the Maker and, if Maker is a partnership, limited liability company, or corporation, any general partner, member, or shareholder of Maker, of liability for damages caused to Holder as a result of (i) fraud or willful misrepresentation; (ii) the failure to pay taxes, assessments or other charges which may create liens on the real property described in the Agency Agreements that are payable or applicable prior to any foreclosure under the Agency Deed of Trust (to the full extent of such taxes, assessments or other charges); (iii) the retention of any rental income or other income arising with respect to the Housing Development collected by Maker after a Default to the full 881/015610-0047 858817.01 .10/30107 -2- extent of the rental income or other income retained and collected by Maker after the giving of any such notice, and not used to pay Operating Expenses of the Housing Development; (iv) the misapplication of any proceeds under any insurance policies or awards resulting from condemnation or the exercise of the power of eminent domain or by reason of damage, loss or destruction to any portion of the Project; and (v) breach of any environmental covenant or representation made by the Maker relating to the Housing Development. 6. Waivers 'bv Maker. Maker and all endorsers, guarantors and persons liable or to become liable on this Note waive presentment, protest and demand, notice of protest, demand and dishonor and nonpayment of this Note and any and all other notices or matters of a like nature, and consent to any and all renewals and extensions near the time of payment hereof and agree further that at any time and from time to time without notice, the terms of payment herein may be modified or the security described in any documents securing this Note released in whole or in part, or increased, changed or exchanged by agreement between Holder and any owner of the premises affected by said documents securing this Note, without in any way affecting the liability of any party to this Note or any persons liable or to become liable with respect to any indebtedness evidenced hereby. 7. Severability. The unenforceability or invalidity of any provision or provisions of this Note as to any persons or circumstances shall not render that provision or those provisions unenforceable or invalid as to any other provisions or circumstances, and all provisions hereof, in all other respects, shall remain valid and enforceable. 8. Modifications. Neither this Note nor any term hereof may be waived, amended, discharged, modified, changed or terminated orally; nor shall any waiver of any provision hereof be effective except by an instrument in writing signed by Maker and Holder. No delay or omission on the part of Bolder 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. Nonassienability. Maker may only Transfer (as that term is defined in the AHA) this Note in accordance with provisions and restrictions pertaining to a transfer of the AHA as set forth in the AHA. Holder may freely Transfer Holder's interest in this Note in any manner, at Holder's sole discretion; provided, that at the time of such Transfer Holder also transfers the AHA to such transferee. 11. 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. 12. Time of Essence. Time is of the essence in the performance of the obligations and provisions set forth in this Note. I'V015610-0047 858817 01 .10n0107 -3- IN WITNESS WHEREOF, Maker has executed this Note as of the Note Date. Holder: LA QUINTA REDEVELOPMENT AGENCY, a public body corporate andpolitic By�yv4� f Dated: �/ 2007 Its: Executive Director A' Agency APPROVED AS TO FORM: RUTAN & TUUCCKER, LLP <` Attorneys for the La Wilta Redevelopment Agency Maker: NATIONAL COMMUNITY RENAISSANCE OF CALIFORNIA, a California nonprofit public benefit corporation By: Dated: , 2007 Its: 18V015e10-0047 858817 01 .10/30/07 -4- IN WITNESS WHEREOF, Maker has executed this Note as of the Note Date. Holder: LA QUINTA REDEVELOPMENT AGENCY, a public body corporate and politic By: Dated: 2007 Its: ATTEST: Agency Secretary APPROVED AS TO FORM: RUTAN & TUCKER, LLPP I -2 Attornys for the La D6inta Redevelopment Agency Executive Director Maker: NATIONAL COMMUNITY RENAISSANCE OF CALIFORNIA, a California nonprofit public benefit corporation By: Dated: 2007 Its: 882/015610-0047 858817.01 a10/30/07 -4- IN WITNESS WHEREOF, Maker has executed this Note as of the Note Date. Holder: LA QUINTA REDEVELOPMENT AGENCY, a public body corporate and politic By: Dated: 2007 Its: Executive Director ATTEST: Agency Secretary APPROVED AS TO FORM: RUTAN & TUCKER, LLP Attorney to I jRedevelopment Agency Maker: NATIONAL COMMUNITY RENAISSANCE OF CALIFORNIA, a California nonprofit public benefit corporation By: Z�7� Dated: , 2007 Its: ar hitlingham, CPA Chief Financial Officer 887 O15610,0047 958817,01 a10/30107 -4- A AGREEMENT TO CONVEY FEE TITLE This AGREEMENT TO CONVEY FEE TITLE ("Agreement") is made and entered into this �1 day of OctoberY2007 ("Effective Date"), by and between the LA QUINTA REDEVELOPMENT AGE , a public body, corporate and politic ("Agency"), and NATIONAL COMMUNITY RENAISSANCE OF CALIFORNIA, a California nonprofit public benefit corporation ("Developer"). RECITALS: A. Developer (under its former name The Southern California Housing Development Corporation) and the Agency entered into that certain Affordable Housing Agreement dated as of March 8, 2007 (the "Initial Agreement"). Subsequent thereto, the Agency began construction of an eighty -unit affordable; rental housing development (the "Housing Development") on the property identified in the. Initial Agreement as the "Site." B. On .Tune 5, 2007, Vista Dunes Housing Partners, L.P., a California limited partnership (the "Limited Partnership") of which the general partner is Vista Dunes GP, LLC, a California limited liability company, the manager of which is Southern California Housing Development Corporation of the Inland Empire ("National CORE-IE"), an entity affiliated with Developer, was advised by the TCAC of the TCAC's award of 9% federal tax credits to the Limited Partnership for the Housing Development. C. In order to permit the Limited Partnership to claim and take advantage of the award of Tax Credits, the Agency has conveyed or will convey to the Developer the site and Housing Development (collectively, the "Project") prior to the time that it is "placed in service," and the parties contemplate that subsequent to the Agency's conveyance to the Developer, the Developer will convey the Project to the Limited Partnership. D. As a result of the foregoing, on or about October 31, 2007, Agency and Developer entered into that certain Amended and Restated Affordable Housing Agreement which replaced, in its entirety, the Initial Agreement (the "AHA"). The AHA is incorporated herein by reference as if fully set forth. E. Pursuant to the AHA, Agency agreed to provide financial assistance to Developer in an amount up to Twenty -Four Million Dollars ($24,000,000) (the "Agency Loan") for the purpose of assisting Developer to acquire the Site and partially completed Housing Development, and to complete thereon construction of the Housing Development. F. Pursuant to Section 8.2 of that certain Amended and Restated Agreement of Limited Partnership governing the Limited Partnership, the Limited Partnership has entered into with Developer that certain Purchase Option and Right of First Refusal Agreement, which provides the Developer with both a right of first refusal and an option to acquire the Project, pursuant to the terms set forth therein (the "Developer/Partnership Agreement"). The AHA requires Developer to enter into this Agreement, for purposes of obligating Developer to exercise its option to purchase the Project pursuant to the terms of the Developer/Partnership Agreement, 882/015610-0047 858740 02 a1000/07 -1- and to thereafter transfer the Project to the City of La Quinta ("City"), as the Agency's successor, at such time as is required by applicable provisions of the AHA. AGRE$MENT: NOW, THEREFORE, in consideration of the foregoing Recitals, which are incorporated herein and made a part hereof by this reference, and for other valuable consideration, the sufficiency of which is hereby acknowledged, the Developer and Agency hereby covenant and agree as follows: 1. Develope:r's Exercise of Option. Upon the expiration of the fifteenth (15`h) year of the "Compliance Period," Developer shall exercise the "Option" and purchase the Project from the Limited Partnership pursuant to its rights under Section 2 of the Developer/Partnership Agreement (as those terms are defined in the Developer/Partnership Agreement). If, prior to the time Developer acquires the Project from the Limited Partnership, Developer receives notice that the Limited Partnership intends to transfer, sell, alienate, assign, give, bequeath or otherwise dispose of the Project, Developer shall exercise its right of first refusal pursuant to its rights under Section 1 of the Developer/Partnership Agreement. Developer shall take all necessary actions to ensure that it then qualifies as an organization described in Section 42(h)(5)(C) of the Internal Revenue Code of 1986, as amended from time to time, or any corresponding provision or provisions of succeeding law. 2. Recordation of Notice. Within thirty (30) days after Developer acquires fee title to the Project from the Limited Partnership, Developer and Agency shall record a Memorandum of Agreement to Convey Fee Title in the form attached hereto and incorporated herein as Exhibit "A„ 3. Developer's Conveyance to City. On the expiration of the term of that certain Regulatory Agreement and Declaration of Covenants and Restrictions entered into by and between the Agency and Developer and recorded on or about October 31, 2007, in the Official Records of the County of Riverside (the "Agency Regulatory Agreement") (e.g., fifty-five years after the closing of the permanent loan for the Project), Developer shall convey to City, as the Agency's successor, fee title to the Project. 4. Consideration. The parties hereto intend that the Developer's conveyance of the Project to the Agency shall be effected for no additional cash consideration paid by Agency to Developer, and the parties further acknowledge and agree that Developer's and Developer's successors in interest, including, without limitation, the Limited Partnership's use and enjoyment of the Project during the term of the Agency Regulatory Agreement constitutes adequate consideration for the aforementioned transfer. 5. Amendments. Any amendment hereto shall be in writing and shall be signed by authorized representatives of Agency and Developer prior to being valid. 6. Covenants to Run with the Land. Developer hereby subjects the Site to the covenants, reservations, and restrictions set forth in this Agreement. Agency and Developer hereby declare their express intent that upon Developer's acquisition of the Project pursuant to Section 1 above (the "Covenant Commencement Date"), all such covenants, reservations, and 882/015610-0047 858740 02 a10130/07 -2- restrictions shall be deemed covenants running with the land, and shall pass to and be binding upon the Developer's successors in title to the Site. All covenants established in this Agreement shall, without regard to technical classification or designation, be binding for the benefit of the Agency, and such covenants shall run in favor of the Agency and the City, as the Agency's successor, until such time as the City acquires fee title to the Project, without regard to whether the Agency is or remains an owner of any land or interest therein to which such covenants relate. Each and every contract, deed or other instrument executed after the Covenant Commencement Date covering or conveying the Site or any portion thereof shall conclusively be held to have been executed, delivered and accepted subject to such covenants, reservations, and restrictions, regardless of whether such covenants, reservations, and restrictions are set forth in such contract, deed or other instrument. Agency and Developer hereby declare their understanding and intent that the burden of the covenants set forth herein touch and concern the land in that as of the Covenant Commencement Date Developer's legal interest in the Site is rendered less valuable thereby. Agency and Developer further hereby declare their understanding and intent that the benefit of such covenants touch and concern the land by furthering the public purposes for which the Agency was formed. Developer, in exchange for the Agency entering into the AHA, hereby agrees as of the Covenant Commencement Date to hold, sell, and convey the Site subject to the terms of this Agreement. Developer also grants to the Agency commencing on the Covenant Commencement Date the right and power to enforce the terms of this Agreement against the Developer and all persons having any right, title or interest in the Site or any part thereof, their heirs, successive owners and assigns. 7. Notice. Formal notices, demands, and communications between Agency and Developer shall be sufficiently given if (i) personally delivered, (ii) delivered by a reputable same -day or overnight courier services that provides a receipt showing date and time of delivery, (iii) delivered by United States mail, registered or certified, postage prepaid, return receipt requested, or (iv) delivered by facsimile transmission, provided the original of the faxed communication is delivered within twenty-four (24) hours by one of methods described in clauses (i), (ii), or (iii) of the foregoing. Delivery shall be made to the following addresses: If to Agency: La Quinta Redevelopment Agency 78-495 Calle Tampico La Quinta, CA 92253 Attn: Executive Director Fax: (760} 777-7101 With a copy to: Rutan & Tucker, LLP 611 Anton Boulevard, Suite 1400 Costa Mesa, CA 92626 Attn: M. Katherine Jenson, Esq. Fax: (714) 546-9035 "V015610-0047 $58740 02 .10/30/07 -3- If to Developer: National Community Renaissance of California 9065 Haven Avenue, Suite 100 Rancho Cucamonga, CA 91730 Attn: President Fax: (909) 483-2448 With a copy to: Law Office of Edward A. Hopson 655A North Mountain Avenue Upland, CA 91786 Attn: Edward A. Hopson, Esq. (909) 920-3727 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. Written notices, demands and communications between the Agency and the Developer shall be sufficiently given if (i) delivered by hand, (ii) delivered by reputable same -day or overnight messenger service that provides a receipt showing date and time of delivery, or (iii) dispatched by registered or certified mail, postage prepaid, return receipt requested, to the principal offices of the Agency and the Developer at the addresses set forth above. Such written notices, demands and communications may be sent in the same manner to such other addresses as either party may from time to time designate by mail as provided above. A notice signed by legal counsel for a party and delivered to the other party in accordance with this Section shall be deemed notice delivered by the party on whose behalf such legal counsel is acting. Any written notice, demand, or communication shall be deemed received immediately if delivered by hand or delivered by messenger in accordance with the preceding paragraph, and shall be deemed received on the third (3rd) day from the date it is postmarked if delivered by registered or certified mail in accordance with the preceding paragraph. 8. Severability/Waiver/Integration/Interpretation; Entire Agreement. 8.1 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. 8.2 Waiver. All waivers of the provisions of this Agreement, unless specified otherwise herein, must be in writing and signed by the appropriate authorities of Agency and Developer, as applicable. No delay or omission by either party hereto in exercising any right or power accruing upon the compliance or failure of performance by the other party hereto under the provisions of this Agreement shall impair any such right or power or be construed to be a 882/015' 10-0047 858740.02 a10130/07 4- waiver thereof. A waiver by either party hereto of a breach of any of the covenants, conditions or agreements hereof to be performed by the other party shall not invalidate this Agreement nor shall it be construed as a waiver of any succeeding breach of the same or other covenants, agreements, restrictions or conditions hereof. 8.3 Inteeration. 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. 8.4 Interpretation. The terms of this Agreement shall be construed in accordance with the meaning of the language used and shall not be construed for or against either party by reason of the authorship of this Agreement or any other rule of construction that might otherwise apply. 8.5. Entire Agreement. This Agreement integrates all of the terms and conditions mentioned herein or incidental hereto, and supersedes all negotiations or previous agreements between the parties or their predecessors -in -interest with respect to all or any part of the subject matter hereof. 9. Third Party Beneficiary. The City of La Quinta is deemed a third party beneficiary of the terms and covenants contained in this Agreement and has the right, but not the obligation, to enforce the terms and covenants contained herein. 10. 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. 11. Governing>, Law. This Agreement shall be governed by the internal laws of the State of California without regard to conflicts of law. 12. Counteparts. 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] 182/015610-0047 85874002 a10/30/07 -5- IN WITNESS WHEREOF, the Agency and Developer have executed this Agreement by duly authorized representatives on the date first written hereinabove. Date: APPROVED AS TO FORM: RUTAN & TUCKER, LLP By: , - --- ,6tt6r ys for the L inta Redevelopment Agency Date: "AGENCY" LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and litic B; Z� Thomas Genovese ;xecutive Director "DEVELOPER" NATIONAL COMMUNITY RENAISSANCE OF CALIFORNIA, a nonprofit public benefit corporation Its: 112/01561 M047 858740 02 a I0/30iF -6- W WITNESS WHEREOF, the Agency and Developer have executed this Agreement by duly authorized representatives on the date first written hereinabove. Date: ATTEST: Secretary APPROVED AS TO FORM: RUTAN & TUCKER, LLP By:�/%, Attbrnkys for the Lc inta Redevelopment Agency Date: "AGENCY" LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic By: Thomas Genovese Executive Director "DEVELOPER" NATIONAL COMMUNITY RENAISSANCE OF CALIFORNIA, a nonprofit public benefit corporation Rv- Its: Richard J. Whitfingham, CPA Chief Financial Officer :2/015610-0047 _6- 858740 02.]Or0/07 EXHIBIT "A" MEMORANDUM OF AGREEMENT TO CONVEY FEE TITLE [SEE FOLLOWING PAGES] 882/015610A0d] 8582a0.02.10130/07 EXHIBIT "A" RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: La Quinta Redevelopment Agency 78-495 Calle Tampico La Quinta, CA 92253 Attn: Executive Director (Space Above For Recorder's Use) This Memorandum of Agreement to Convey Fee Title is recorded at the request and for the benefit of the La Quints, Redevelopment Agency and is exempt from the payment of a recording fee pursuant to Government Code § 27383. MEMORANDUM OF AGREEMENT TO CONVEY FEE TITLE This MEMORANDUM OF AGREEMENT TO CONVEY FEE TITLE ("Memoran- dum") is entered into this _ day of _, by and between the LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic ("Agency"), and NATIONAL COMMUNITY RENAISSANCE OF CALIFORNIA, a California nonprofit public benefit corporation ("National CORE"). This Memorandum is made with reference to the following: 1. On or about the date of this Memorandum, National CORE acquired from Vista Dunes Housing Partners, L.P., a limited partnership formed under the laws of the State of California (the "Partnership") fee title to that certain real property located in the City of La Quinta, County of Riverside, State of California, more particularly described in the legal description attached hereto as Exhibit "A" and incorporated herein by this reference (the "Property"). 2. On or about October 31, 2007, Agency and National CORE entered into that certain Agreement to Convey Fee Title (the "Agreement") which requires National CORE to convey the Property and apartment complex thereon to Agency on the date of expiration of the term of that certain Regulatory Agreement and Declaration of Covenants and Restrictions entered into by and between the Agency and Developer on or about October 31, 2007, and recorded on , as Instrument No. in the Official Records of the County of Riverside (the "Agency Regulatory Agreement") (e.g., fifty-five years after the closing of the permanent loan for the Project). 3. The Agreement provides for Agency and National CORE to enter into this Memorandum and to record the same in the Official Records of the County of Riverside to provide notice to all persons of the existence of said Agreement, and to cause the Agreement to run with the Property and be binding on National CORE and National CORE's successors -in - interest as to the Property. EXHIBIT "A" 887J015610-0047 Page 1 of 4 93374022 a1a3a07 g E 4. 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. IN WITNESS WHEREOF, Agency and National CORE have entered into this Memorandum as of the date first set forth above. ATTEST: Secretary APPROVED AS TO FORM: RUTAN & TUCKER, LLP Attorneys for the La Quinta Redevelopment Agency "Agency" LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic 0 Its: Executive Director "Developer" NATIONAL COMMUNITY RENAISSANCE OF CALIFORNIA, a California nonprofit public benefit corpora By: Its: Richard Whlffingham,CPA Chief Financial Officer EXHIBIT "A" 8821015010-0047 Page 2 of 4 858740.02 a[0130/07 g STATE OF CALIFORNIA ) ) ss. COUNTY OF RIVERSIDE ) On / , before me, /'/7//L'/L / ft j yC2N!yBZ , personally appeared �1,fh l f hnA 1M-1k-- _,personally known tome (or proved to me on the basis of satisfactory evide e) to be the person(z) whose name(g) is/aw subscribed to the within instrument and acknowledged to me that he/skeAkey executed the same in his/herkheir authorized capacity(ies), and that by his/herkheir signature(s) on the instrument the person($) or the entity upon behalf of which the person(jr) acted, executed the instrument. Witness my hand and official seal. HILDA HERNANDEZ N Comm. 9 1756272 NOTARY PUBIC CAUFORNIA SAN BERNARDINO COUNTY MY Cow. Exp. JULY 9, 2011 i [SEAL] STATE OF CALIFORNIA ) ) ss. COUNTY OF RIVERSIDE ) 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) istare 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] EXHIBIT "A" RR2MI5610-0047 Page 3 of 4 858140.02.10Ooroa7 g EXHIBIT "A" LEGAL DESCRIPTION OF PROPERTY All of that certain real property in the City of La Quints, County of Riverside, State of California, described as follows: That portion of the Southeast quarter of the Northeast quarter of Section 19, Township 5 South, Range 7 East, San Bernardino Base and Meridian, described as follows: Commencing at the Southeast corner of the Northeast quarter of said Section 19; Thence South 89° 33' 05" West, on the Southerly line of the Northeast quarter of said Section, 330 feet, to the true point of beginning; thence South 891 33' 05" West, on said Southerly line of the Northeast quarter, 330 feet; Thence North 0° 13' 40" West, 1,324.57 feet, to the Northerly line of the Southeast quarter of Northeast quarter of said Section 19; thence North 89' 34' 05" East, on said Northerly line, 330 feet; thence South 0° 13' 40" East, 1,324.47 feet to the true point of beginning; Excepting therefrom the Southerly 50 feet conveyed to the County of Riverside by Deeds recorded August 30, 1933 in Book 133, Page(s) 292 and Book 134, Page(s) 298 respectively, of Official Records, Riverside County Records. Also excepting therefrom that portion of described in the deeds to the City of La Quinta, recorded 02-17-1999, as Instrument No. 62425 and 62426, Official Records. Excepting therefrom the mobile liome located thereon. EXHIBIT "A" 8821015610.0047 95974002 a10/50107 Page 4 of 4 PURCHASE OPTION AND RIGHT OF FIRST REFUSAL AGREEMENT THIS PURCHASE OPTION AND RIGHT OF FIRST REFUSAL AGREEMENT (this "Agreement"), dated and effective as of the 1st day of October, 2007, is made by and between Vista Dunes Housing Partners, L.P., a limited partnership formed under the laws of the state of California (the "Partnership") and National Community Renaissance of California, a California nonprofit public benefit corporation (the "Purchaser"). Recitals The Partnership was formed for the purpose of acquiring, owning, developing, constructing, leasing, managing, operating, and, if appropriate or desirable, selling or otherwise disposing of the buildings comprising an 80 Unit (including 1 manager's unit) residential project located in La Quinta, California, on property the legal description of which is attached hereto as Exhibit A (the "Project"). The Partnership is operating by an Amended and Restated Agreement of Limited Partnership to which this Agreement is attached as an Exhibit (the "Partnership Agreement"). The Partnership desires to give, grant, bargain, sell, and convey to Purchaser certain rights to purchase the Property on the terms and subject to the conditions set forth herein. Accordingly, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows: 1. Right of First Refusal. Upon the expiration of the fifteenth (15`) year of the applicable Tax Credit compliance period (the "Compliance Period"), the Partnership will not transfer, sell, alienate, assign, give, bequeath or otherwise dispose of the Apartment Complex to any Person without first offering the Apartment Complex for a period of forty-five (45) days to Purchaser (if it then qualifies as an organization described in Section 42(h)(5)(C) of the Code), and the Partnership's efforts with respect to the sale of the Apartment Complex shall comply with the procedures set forth in the Extended Use Agreement (the "Buyout"), at a price (the "Buyout Price") equal to the sum of (i) the principal amount of all outstanding indebtedness secured by the Apartment Complex, all other loans from the General Partner or its Affiliates, and any accrued interest on any of such debt and (ii) all federal, State, and local taxes attributable to such sale, including those incurred or to be incurred by the partners of the Limited Partner. All costs of the Buyout including any filing fees and transfer taxes, shall be paid by Purchaser. In the event that Purchaser does not purchase the Apartment Complex on the terms set forth above, then the right of first refusal granted herein shall lapse. 2. Option. At all times after the Compliance Period, the Purchaser shall have the option (the "Option"), to purchase the Apartment Complex for the "Option Price." The Option shall be exercisable upon at least thirty (30) days and not more than ninety (90) days prior written Notice to the Partnership and the Special Limited Partner. The Option Price shall equal the greater of (i) the Fair Market Value of the Apartment Complex as of the date of the closing of the purchase pursuant to the Option, or (ii) all federal, state and local taxes attributable to such 1. sale, including those incurred or to be incurred by the partners of the Limited Partners. For this purpose, the Fair Market Value shall mean a calculation, reviewed by the Accountants, of the amount the Partnership would receive upon a sale of the Apartment Complex by the Partnership for its Appraised Value. The Purchaser's "notice to the Partnership and the Limited Partners (the "Option Notice") shall include (i) an appraisal of all of the Apartment Complex (the "Appraised Value") by an appraiser selected by the Purchaser, and (ii) a calculation by the Accountants of the Option Price, all calculated as of the closing date proposed by the Purchaser in its Option Notice. The Special Limited Partner shall have thirty (30) days after receipt of the Option Notice in which either to accept the Option Price set forth in the Option Notice or to notify the Partnership and the Purchaser of its desire to appoint a second appraiser to evaluate the Option Price. In the event that the Special Limited Partner fails to notify the Partnership and the Purchaser within the aforesaid thirty (30) day period that it desires to appoint a second appraiser, it shall be deemed to have accepted the Option Price, in which event the Option Price shall be the price calculated by the Accountants and set forth in the Option Notice, and the Partnership shall sell and the Purchaser shall purchase the Apartment Complex on the date specified in the Option Notice. In the event that the Special Limited Partner notifies the Partnership and the Purchaser of its desire to appoint a second appraiser, the Special Limited Partner shall appoint such appraiser within thirty (30) days after it notifies the Partnership and the Purchaser of its election, and the two appraisers shall together appoint a third appraiser within fifteen (15) days after the appointment of the second appraiser. The three appraisers so appointed shall each determine the Appraised Value of the Apartment Complex within thirty (30) days after the appointment of the third appraiser, and the Appraised Value for the purpose of determining the Option Price shall be the average of the three appraisers' determinations; provided that if one or more of the appraisers' determinations is more than ten percent (10%) higher or lower than the average of the three determinations, such appraiser's determination shall be disregarded in determining the Appraised Value of the assets, and provided, further, that if none of the appraisers' determinations is equal to or less than ten percent (10%) higher or lower than the average of the three determinations, the Appraised Value shall be the middle of the three determinations. The Accountants shall determine the Option Price within fifteen (15) days after the three appraisers complete their determinations of the Option Price formula set forth in the first paragraph of this Section 2, which determination shall be based on the amount of Sales Proceeds the Partnership would receive if the Project was sold for its Appraised Value, and the closing of the sale of the Apartment Complex to the Purchaser shall occur within sixty (60) days after the Accountants determine the Option Price. The entire Option Price shall be paid by the Purchaser to the Partnership at the closing in cash or immediately available funds. The Limited Partner shall be responsible for the costs of the second appraiser and fifty percent (50%) of the costs of the third appraiser, if any, and for its own attorneys' fees incurred in connection with the closing. All other costs associated with the exercise of the Option, including the costs of the appraiser appointed by the Purchaser, the Accountants' fees and any filing fees or transfer taxes, shall be paid by the Purchaser. 3. Partnership Agreement. Except as expressly provided herein, this Agreement shall be subject to the applicable terms and conditions of the Partnership Agreement. 2 4. Burden and Benefit. The covenants and agreements contained herein shall be binding upon and inure; to the benefit of the successors and assigns of the respective parties hereto. No party may assign this Agreement without the consent of the other party. 5. Severability of Provisions. Each provision of this Agreement shall be considered severable, and if for any reason any provision that is not essential to the effectuation of the basic purposes of the Agreement is determined to be invalid and contrary to any existing or future law, such invalidity shall not impair the operation of or affect those provisions of this Agreement that are valid. 6. No Continuing Waiver. None of the parties hereto shall be deemed to have waived any rights hereunder unless such waiver shall be in writing and signed by such party. The waiver by any party of any breach of this Agreement shall not operate or be construed to be a waiver of any subsequent breach. 7. Defined Terms. Except as expressly provided herein, terms used in this Agreement with initial capital letters shall have the meanings set forth in the Partnership Agreement. 8. Governing Law. This Agreement shall be construed and enforced in accordance with the laws of the State of California, without regard to principles of conflicts of laws. 9. Binding Agreement. This Agreement shall be binding on the parties hereto, and their heirs, executors, personal representatives, successors and assigns. 10. Headings. All headings in this Agreement are for convenience of reference only and are not intended to qualify the meaning of any provision of this Agreement. 11. Terminology. All personal pronouns used in this Agreement, whether used in the masculine, feminine, or neuter gender, shall include all other genders, the singular shall include the plural, and vice versa as the context may require. 12. Counterparts. This Agreement may be executed in several counterparts, each of which shall be deemed to be an original copy, and all of which together shall constitute one agreement binding on all parties hereto, notwithstanding that all the parties shall not have signed the same counterpart. 13. Subordination. All options and rights of first refusal hereby granted shall automatically be subject and subordinate to the liens of all existing and future Mortgages, as such Mortgages may be amended, modified, supplemented, or extended from time to time. s IN WITNESS WHEREOF, the parties have executed this Purchase Option and Right of First Refusal Agreement as of the date first above written. Vista Dunes Housing Partners, L.P. By: Vista Dunes GP, LLC General Partner By: Name: NFlichardi.Whittinntsa C9fbn Title: Chief.F.inanei8l+ORmer National Community Renaissance of California Purchaser By: Name: nich'rH _1 WhiPongham CPA Title: Chief Financial Officer 4 ASSIGNMENT AND RELEASE This ASSIGNMENT AND RELEASE ("Assignment and Release") dated Ma311R 31_ , 2007, is executed by La Quinta Redevelopment Agency, a public body, corporate and politic ("Assignor), in favor of National Community Renaissance of California, a California nonprofit public benefit corporation ("Assignee"). Assignor is the owner of that certain land (the "Site") located in the City of La Quinta, California, described more specifically on Schedule "1" hereto. The Site and the partially completed Housing Development thereon are being conveyed by Assignor to Assignee pursuant to a grant deed delivered concurrently herewith. Terms used herein but not defined shall have the meanings ascribed thereto in that certain Affordable Housing Agreement by and between Assignor and Assignee dated as of OCZOBi—Q— 31 , 2007 (the "Affordable Housing Agreement"). Now, therefore, f'or good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Assignor and Assignee hereby agree as follows: 1. Subject to Section 2 below, Assignor hereby grants, assigns, transfers, conveys and delivers to Assignee, without warranty, all of Assignor's right, title, interest, benefits and privileges, if any, in and to all entitlements, approvals, maps, applications, plans, and specifications, relating to the Housing Development or the construction of the Housing Development on the Site that are owned by Agency, as well as the following described property: (a) That certain Agreement executed by and between the Agency and Davis Reed Construction Inc., the general contractor for the Housing Development, and any and all amendments and modifications thereto, and all warranties with respect thereto (including all statutory, express and implied warranties); (b) All architectural drawings, plans, specifications, soils tests, appraisals, engineering reports and similar materials relating to any or all of the Site and/or the Housing Development. (c) All of Assignor's rights, claims, actions, and causes of action against any of Assignor's general contractors, subcontractors, engineers, architects and consultants relating to or arising from preparation of the architectural drawings, plans, specifications, reports or similar materials relating to the development of the Site or construction of public improvements thereon or construction of the Housing Development, all of the plans and documents referred to in paragraphs 1 and 2 above, as well as all of the same relating to construction of the Housing Development, as well as all rights of Assignor as an additional insured or otherwise pertaining to insurance coverage concerning such architects, engineers, general contractors, consultants and the Site. (d) All governmental entitlements, permissions, environmental clearances, authority to develop the; Site and construct the Housing Development, rights, licenses and 882,'015610.0047 856277 04 a10/30i07 -1- permits which relate to all or any of the Site, the Housing Development, or the operation thereof, and (e) All general intangibles relating to the development or use of the Site and the Housing Development. 2. Notwithstanding anything to the contrary herein, the foregoing grants, assignments, transfers, conveyances, and deliveries are subject to any limitations which may be imposed by law or under any agreement with any governmental agency or authority or with the contractors, subcontractors, engineers, consultants, and architects referenced in Section 1 above. 3. In consideration of the foregoing assigmnent, Assignee, for itself and for its agents, successors and assigns, fully releases, acquits and discharges the Assignor and the City of La Quinta ("City") and the Assignor's and City's respective officers, officials, members, representatives, employees, attorneys and agents (all of the foregoing, collectively, the "Released Parties"), from all rights, claims, demands, actions or causes of action that Assignee has or may have against the Released Parties arising out of or related to the development, or physical condition, of the Housing Development, including, but not limited to, claims for damages, attorney's fees and costs, and expert witness fees and costs. ACKNOWLEDGMENT CONCERNING CIVIL CODE SECTION 1542 Waiver of Section 1542 of the Civil Code Assignee, on behalf of itself and its agents, successors, and assigns, expressly waives any and all rights under Section 1542 of the Civil Code of the State of California, or any other federal or state statutory rights or rules, or principles of conunon law or equity, or those of any jurisdiction, government, or political subdivision thereof, similar to Section 1542 (hereinafter referred to as a "Similar Provision"), Thus, Assignee may not invoke the benefits of Section 1542 or any Similar Provision in order to prosecute or assert in any manner claims released hereunder. Section 1542 provides as follows: A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOVOR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH, IF KNOWN BY HIM OR HER, MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR. Assignee's initials: 4. The City shall be deemed an express third party beneficiary of the provisions of this Assignment and Release. 5. This Assignment and Release shall be construed according to its fair meaning and as if prepared by both ;parties hereto. 88210156IM047 8s6277.04.10/30/07 -2- 6. This Assignment and Release shall be governed by the internal laws of the State of California, without regard to conflict of law principles, and any question arising hereunder shall be construed or determined according to such law. The Superior Courts of the State of California in and for the; County of Riverside, or such other appropriate court in such county, shall have exclusive jurisdiction of any litigation between the parties concerning this Assignment and Release. 7. This Assignment and Release may be executed in counterparts, each of which, when this Assignment and Release has been signed by all the parties hereto, shall be deemed an original, and such counterparts shall constitute one and the same instrument. 8. The person(s) executing this Assignment and Release on behalf of each of the parties hereto represent .and warrant that (i) such party is duly organized and existing, (ii) they are duly authorized to execute and deliver this Assignment and Release on behalf of said party, (iii) by so executing this Assignment and Release such party is formally bound to the provisions of this Assignment and Release, and (iv) the entering into this Assignment and Release does not violate any provision of any other agreement to which such party is bound. [signatures on next page] 112/01561"047 156277 04 a10/30/07 -3- IN WITNESS WHEREOF, Assignee and Assignor each hereby represent that they have read this Assignment and Release, understand it, and hereby execute this Assignment and Release to be effective as of the day and year first written above. "Assignor" LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate an�9d politic Bvl��J%�AiJ/`: /ylit�tol^lite Its: Executive Director APPROVED AS TO FORM: RUTAN &TUZk;�_, Attome s for the 1,64uinta Redevelopment Agency "Assignee" NATIONAL COMMUNITY RENAISSANCE OF CALIFORNIA, a California nonprofit, public benefit corporation By: Its: 112/0156 1 D-0047 116277 04 al0/10/07 -4- IN WITNESS WHEREOF, Assignee and Assignor each hereby represent that they have read this Assignment and Release, understand it, and hereby execute this Assignment and Release to be effective as of the day and year first written above. ATTEST: Secretary APPROVED AS TO FORM: RUTAN &TUCKER, LLP � Attome s for the L64uinta Redevelopment Agency "Assignor" LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic By: Its: Executive Director "Assignee" NATIONAL COMMUNITY RENAISSANCE OF CALIFORNIA, a California nonprofit, public benefit corporation By: Its: 882/015610-0047 856277 04 a10130/07 -4- IN WITNESS WHEREOF, Assignee and Assignor each hereby represent that they have read this Assignment and Release, understand it, and hereby execute this Assignment and Release to be effective as of the day and year first written above. "Assignor" LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic By: Its: ATTEST: Secretary APPROVED AS TO FORM: RUTA�P A orneys or the Q16A Redevelopment Agency Executive Director "Assignee" NATIONAL COMMUNITY RENAISSANCE OF CALIFORNIA, a California nonprofit, public benefit corporation By: o Its: Richard J. Whittingham, CPA Chief Financial Officer 1121015610.0047 a56277.04 n10/30/07 -4- SCHEDULEI LEGAL DESCRIPTION OF PROPERTY All of that certain real property in the City of La Quints County of Riverside, State of California, described as follows: That portion of the Southeast quarter of the Northeast quarter of Section 19, Township 6 South, Range 7 East, San Bernardino Base and Meridian, described as follows: Commencing at the Southeast corner of the Northeast quarter of said Section 19; Thence South 89° 33' 05" West, on the Southerly line of the Northeast quarter of said Section, 330 feet, to the true point of beginning; thence South 89' 33' 05" West, on said Southerly line of the Northeast quarter, 330 feet; Thence North 0° 13' 40" West, 1,324.57 feet, to the Northerly line of the Southeast quarter of Northeast quarter of said Section 19; thence North 89' 34' 05" East, on said Northerly line, 330 feet; thence South 0° 13' 40" East, 1,324.47 feet to the true point of beginning; Excepting therefrom the Southerly 50 feet conveyed to the County of Riverside by Deeds recorded August 30, 1933 in Book 133, Page(s) 292 and Book 134, Page(s) 298 respectively, of Official Records, Riverside County Records. Also excepting therefrom that portion of recorded 02-17-1999, as Instrument No. therefrom the mobile home located thereon. described in the deeds to the City of La Quinta, 62425 and 62426, Official Records. Excepting :82/015610-0047 5627704 a10/30/07 SCHEDULE 1 (D Recording Reclusstea t3y CHICAGO TITLE COMPANY WHEN RECORDED MAIL TO: U.S. Bank National Association Mail Code LMCA-LJS2 4330 La Jolla Village Drive Suite 200 San Diego, California 92122 Attention: Ms. Lvnrl Parsons DOC # 2007-0669204 10/31/2007 08:000 Fee:52.00 Page t of to Recorded In official Records County of Riverside Larry U. Ward Assessor, COLMtV Clark & Recorder 1111111111111111111111111111111l11111111111I11 s R U I PAGE I szE I oA MISC LONG RFD COPY A L —11 455 428 IPCORINCOR SMF NCMG ExAM CTY UNI SUBORDINATION AGREEMENT �� NOTICE: THIS SUBORDINATION AGREEMENT RESULTS IN THE ESTATES IN THE PROPERTY BECOMING SUBJECT TO AND OF LOWER PRIORITY THAN THE LIEN OF nO42 SOME OTHER OR LATER SECURITY INSTRUMENT. THIS SUBORDINATION AGREEMENT ("Agreement") is made as of October 31, 2007, by and among VISTA DUNES HOUSING PARTNERS, L.P., a California limited partnership ("Owner"), LA QUINTA REDEVELOPMENT AGENCY, a public body corporate and politic ("Junior Lienholdee ), and U.S. BANK NATIONAL ASSOCIATION, a national banking association ("Senior Lienholder"). RECITALS A. Owner owns (i) certain real estate more particularly described on Exhibit "A", and all improvements now or hereafter located thereon (collectively, the "Real Property"), and (ii) that certain personal property more particularly described in the Senior Loan Documents (the "Personal Property'; together with the Real Property, the "Property"). B. Each of the documents listed on Exhibit "B" be referred to collectively as the "Junior Obligation Documents." C. As used herein, the term "Junior Obligations" means any and all indebtedness, claims, debts, liabilities or other obligations from Owner to Junior Lienholder under the Junior Obligation Documents, together with all costs and expenses, including attorneys' fees, of collection thereof, whether the same accrues or is incurred before or after the commencement of any bankruptcy case by or against Owner. D. Owner and Junior Lienholder desire that Senior Lienholder and Owner enter into that certain Loan Agreement dated as of October 31, 2007 ("Senior Loan Agreement"), pursuant to which Senior Lienholder has agreed to make a loan to Owner in the aggregate principal amount of S1,317,1 S2 in accordance with the terms and conditions set forth in the Senior Loan Agreement. Owner's obligations to Senior Lienholder under the Senior Loan Agreement are secured by, among other things, (i) that certain Deed of Trust with Assignment of Leases and Rents, Security Agreement and Fixture Filing ("Senior Deed of Trust"), dated as of even date with the Senior Loan Agreement, made by Owner for the benefit of Senior Lienholder and (ii) the Loan Documents described in the Senior Loan Agreement. The Senior Deed of Trust is being recorded substantially concurrently herewith in the Official Records of the County of LosA:U30448.5 0 (� Riverside, State of California ("Official Records"). The Senior Deed of Trust, the Senior Loan Agreement and the other Loan Documents (as defined in the Senior Loan Agreement) are hereinafter collectively referred to as the "Senior Loan Documents." E. As used herein, the term "Senior Lienholder Indebtedness" means any and all indebtedness, claims., debts, liabilities or other obligations from Owner to Senior Lienholder under the Senior Loan Documents, together with all interest accruing thereon and all costs and expenses, including; attorneys' fees, of collection thereof, whether the same accrues or is incurred before or after the commencement of any bankruptcy case by or against Owner. F. Plarsuant to the Senior Deed of Trust and the other Senior Loan Documents, Owner is not entitled to further encumber the Property without the prior written consent of Senior Lienholder, which consent may be withheld in Senior Lienholder's sole discretion. G. It is a condition precedent to Senior Lienholder to entering into the Senior Loan Documents and permitting the recordation of any of the Junior Obligation Documents that the Senior Deed of Trust and the other Senior Loan Documents be and remain at all times a lien or charge upon the Property, prior and superior to the liens or charges of the Junior Obligation Documents. H. Senior Lienholder is willing to permit the recordation of the recordable Junior Obligation Documents, provided that (1) the Senior Deed of Trust and the other Senior Loan Documents are a lien or charge upon the Property prior and superior to the liens or charges of the Junior Obligation Documents, and (2) Junior Lienholder will specifically subordinate the liens or charges of the Junior Obligation Documents to the lien or charge of the Senior Deed of Trust and the other Senior Loan Documents. I. Junior Lienholder is willing that the Senior Deed of Trust shall constitute a lien or charge upon the Property which is prior and superior to the liens or charges of the Junior Obligation Documents. The parties hereto enter into this Agreement for the purposes set forth in these Recitals. J. Capitalized terms used herein and not otherwise defined shall have the meanings set forth for them in the Senior Loan Agreement. AGREEMENT NOW, T13EREFORE, 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 Senior Lienholder to make the "Loan" described in the Senior Loan Agreement, it is hereby declared, understood, and agreed as follows: 1. Subordination. The Senior Deed of Trust in favor of Senior Lienholder, and all amendments, modifications, extensions and renewals thereof 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 Junior Obligation Documents. Junior Lienholder intentionally and unconditionally subordinates the LOSA2U10648 5 0 lien or charge of the Junior Obligation Documents in favor of the lien or charge upon said land of the Senior Deed of Trust in favor of Senior Lienholder, and 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 said reliance upon this subordination. 2. Only Agreement Regarding Subordination. Senior Lienholder would not permit the recordation of any Junior Obligation Documents without this Agreement. This Agreement shall be the whole and only agreement with regard to the subordination of the lien or charge of the Junior Obligation Documents to the lien or charge of the Senior Deed of Trust and shall supersede and cancel, but only insofar as would affect the priority between said deeds of trust and said covenants, conditions and restrictions, any prior agreements as to such subordination, including, but not limited to, those provisions, if any, contained in the Junior Obligation Documents which provide for the subordination of the lien or charge thereof to another deed or deeds of trust or to another mortgage or mortgages. 3. Loan Disbursements. In making disbursements pursuant to any of the Senior Loan Documents, Senior Lienholder is under no obligation or duty to, nor has Senior Lienholder represented that it will, see to the application of such proceeds by the person or persons to whom Senior Lienholder disburses such proceeds, and any application or use of such proceeds for purposes other than those provided for in such Senior Loan Document(s) shall not defeat the subordination herein made in whole or in part. 4. Receipt of Senior Loan Documents. Junior Lienholder has received copies of the Senior Loan Documents, including but not limited to any extension, modification and/or amendment of said agreements, between Owner and Senior Lienholder. No decision by Junior Lienholder to review or not review the Senior Loan Documents, including but not limited to the disbursement provisions contained therein, shall impair or otherwise limit the enforceability of this Agreement. 5. Other Aereements. Junior Lienholder and Owner declare, agree, and acknowledge that: 5.1 Subordination of Indebtedness. Any and all Junior Obligations are hereby subordinated and subject to any and all Senior Lienholder Indebtedness, as set forth herein. 5.2 Permitted Pavments. Owner may make payments under the Junior Obligation Documents, if required, as long as all payments under the Senior Deed of Trust and the other Senior Loan Documents are current and not delinquent or in arrears, and only so long as at the time of such payment: (i) no default under the Senior Lienholder Indebtedness exists and no event exists which, with the lapse of time or the giving of notice or both, would be an event of default under the Senior Lienholder Indebtedness of which Junior Lienholder has received notice; and (ii) such payment would not result in a violation of any of Owner's financial covenants set forth in any of the documents evidencing the Senior Lienholder Indebtedness ("Permitted Payments"). LOSA NW649 5 0 0 5.3 Payment Subordination. Except for any Permitted Payments, (a) all of the Senior Lienholder Indebtedness now or hereafter existing shall be first paid in full by Owner before any payment shall be made by Owner on the Junior Obligations, and (b) this priority of payment shall apply at all times until all of the Senior Lienholder Indebtedness has been repaid in full. In the event of any assignment by Owner for the benefit of Owner's creditors, or any bankruptcy proceedings instituted by or against Owner, or the appointment of any receiver for Owner or Owner's business or assets, or of any dissolution or other winding up of the affairs of Owner or of Owner's business, and in all such cases respectively, Owner's officers and any assignee, trustee in bankruptcy, receiver and other person or persons in charge are hereby directed to pay to Senior Lienholder the full amount of the Senior Lienholder Indebtedness before making'any payments to Junior Lienholder due under the Junior Obligations. 5.4 Return of Prohibited Pam. Except as otherwise expressly agreed to herein, if Junior Lienholder shall receive any payments or other rights in any property of Owner in connection with the Junior Obligations in violation of this Agreement, such payment or property shall immediately be delivered and transferred to Senior Lienholder after notice to Junior Lienholder. 5.5 Repayment of Senior Lienholder Indebtedness. This Agreement shall remain in full force and effect until all Senior Lienholder Indebtedness is fully repaid in accordance with its terrns and all of the terms of this Agreement have been complied with. Senior Lienholder Agreements. Senior Lienholder agrees that it shall not complete a foreclosure sale of the Property or record a deed -in -lieu of foreclosure with respect to the Property (each, a "Foreclosure Remedy') unless Junior Lienholder has first been given sixty (60) days written notice of the Event(s) of Default giving Senior Lienholder the right to complete such Foreclosure Remedy, and unless Junior Lienholder has failed, within such sixty (60) day period, to cure such Event(s) of Default; provided, however, that Senior Lienholder shall be entitled during such sixty (60) day period to continue to pursue all of its rights and remedies under the Senior Loan Documents, including, but not limited to, acceleration of the Senior Loan (subject to any de - acceleration provisions specifically set forth in the Senior Loan Documents), commencement and pursuit of a judicial or non judicial foreclosure (but not completion of the foreclosure sale), appointment of a receiver, enforcement of any guaranty (subject to any notice and cure provisions contained therein), and/or enforcement of any other Senior Loan Document. In the event Senior Lienholder has accelerated the Senior Loan and Junior Lienholder cures all Events of Default giving rise to such acceleration within the sixty (60) day cure period described above, such cure shall have the effect of de -accelerating the Senior Loan; provided, however, that such de -acceleration shall not waive or limit any of Senior Lienholder's rights to accelerate the Senior Loan or exercise any other remedies under the Senior Loan Documents as to any future or continuing Events of Default. It is the express intent of the parties hereunder that Senior Lienholder shall have the right to pursue all rights and remedies except completion of a Foreclosure Remedy without liability to Junior Lienholder for failure to provide timely notice to Junior Lienholder required hereunder, and that Senior Lienholder's liability hereunder shall be expressly limited to actual and consequential damages to Junior Lienholder directly caused by Senior Lienholder's completion of a Foreclosure Remedy without Junior Lienholder receiving LOSA2030648 5 the notice and opportunnty to cure described above. Senior Lienholder shall give Junior Lienholder notice at the address set forth below or such other address as Junior Lienholder may instruct Senior Lienholder in writing from time to time: La Quinta Redevelopment Agency 78-495 Calle Tampico La Quinta, California 92253 Attention: Executive Director Except to the extent otherwise expressly set forth herein or in any exhibit hereto, nothing set forth in this Agreement shall prevent the Junior Lienholder from enforcing the terms of that certain Amended and Restated Affordable Housing Agreement or that certain Regulatory Agreement and Declaration of Covenants and Restrictions executed by and between the Junior Lienholder and National Community Renaissance of California, Owner's predecessor in interest in and to the Property, both of which documents have been assumed by Owner, by specific performance. 7. Bankruptcy Provisions. To the extent any payment under any Senior Loan Document (whether by or on behalf of Owner, as proceeds of security or enforcement of any right of set-off, or otherwise) is declared to be fraudulent or preferential, set aside or required to be paid to a trustee, receiver or other similar party under the Bankruptcy Code or any federal or state bankruptcy, insolvency, receivership or similar law, then if such payment is recovered by, or paid over to, such trustee, receiver or other similar party, the Senior Indebtedness or part thereof originally intended to be satisfied shall be deemed to be reinstated and outstanding as if such payment had not occurred. 8. Casualty Proceeds: Condemnation Proceeds. In the event Senior Lienholder shall release, for the purposes of restoration of all or any part of the improvements, its right, title and interest in and to the proceeds under policies of insurance thereon, and/or its right, title and interest in and to any awards, or its right, title and interest in and to other compensation made for any damages, losses or compensation for other rights by reason of a taking in eminent domain, Junior Lienholder shall simultaneously release (and hereby agrees that it shall be irrevocably and unconditionally deemed to have agreed to release) for such purpose all of Junior Lienholder's right, title and interest, if any, in and to all such insurance proceeds, awards or compensation. Junior Lienholder agrees that the balance of such proceeds remaining after such restoration, or all of such proceeds in the event Senior Lienholder elects, in accordance with California law, not to release any such proceeds for any such restoration, shall be applied to the payment of amounts due under the Senior Loan Documents until all such amounts have been paid in full, prior to being applied to the payment of any amounts due under the Junior Obligation Documents. If Senior Lienholder holds such proceeds, awards or compensation and/or monitors the disbursement thereof, Junior Lienholder agrees that Senior Lienholder may also elect, in its sole and absolute discretion, to hold and monitor the disbursement of such proceeds, awards and compensation to which Junior Lienholder is or may be entitled. Nothing contained in this Agreement shall be deemed to require Senior Lienholder, in any way whatsoever, to act for or on behalf of Junior Lienholder or to hold or monitor any proceeds, awards or compensation in trust for or on behalf of Junior Lienholder, and all or any of such sums so held or monitored may be commingled with any funds of Senior Lienholder. LOSA2\330648.5 9. Effect of Other Agreements. The relationship between Owner and Senior Lienholder under the Senior Loan Documents is, and shall at all times remain, solely that of borrower and lender. Based thereon, Junior Lienholder acknowledges and agrees that Senior Lienholder neither undertakes nor assumes any fiduciary responsibility or other responsibility or duty to Owner or Junior Lienholder to guarantee or assist in Owner's or Junior Lienholder's performance under any of the agreements between those parties and other third parties, including without limitation the Junior Obligation Documents. 10: Miscellaneous. This Agreement may be executed in multiple counterparts and the signature page(s) and acknowledgment(s) assembled into one original document for recordation, and the validity hereof shall not be impaired by reason of such execution in multiple counterparts. This Agreement is to be governed according to the laws of the State of California. In the event of action, suit, proceeding or arbitration to enforce any term of this Agreement, the prevailing party shall be entitled to recover from the non -prevailing party, as determined by the court or arbitrator, all of the prevailing party's costs and expenses, including without limitation attorneys' fees and expert witness fees, incurred by the prevailing party in connection therewith. The Agreement shall inure to the benefit of, and the binding upon, the parties hereto and the respective successors and assigns. Senior Lienholder is and shall be a third -party beneficiary of Junior Lienholder's obligations under Section 200 of the AHA (as defined on Exhibit `B" attached hereto). LOSA2WO648.5 IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date and year first above written. NOTICE: THIS SUBORDINATION AGREEMENT CONTAINS A PROVISION WHICH MAY ALLOW THE PERSON OBLIGATED ON YOUR REAL PROPERTY SECURITY TO OBTAIN A LOAN A PORTION OF WHICH MAY BE EXPENDED FOR OTHER PURPOSES THAN IMPROVEMENT OF THE PROPERTY. JUNIOR LIENHOLDER: LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic Executive Director -- j APPROVED AS TO FORM RUTAN & TUCKE ., LLP By:�__ Agency`Counsel LOSAM30648 5 S`I 0 CONSENTED AND AGREED TO BY: NATIONAL COMMUNITY RENAISSANCE OF CALIFORNIA a California non r it public benefit corporation By: Name: RichardJ.Whittincham,CPA Title: Chief Financial Officer LOSA2\330648.$ S-^ 101 OWNER: VISTA DUNES HOUSING PARTNERS, L.P., a California limited partnership By: Vista Dunes GP, LLC, a California limited liability company, its General Partner By: Southern California Housing Development Corporation of the Inland Empire, a California nonprofit public benefit corporation, its Manager By: Richard J. Whittingham, Chief Financial Officer LOSA2\330848.5 S-3 () 0 LOSA2U30608.4 SENIOR LIENHOLDER: U.S. BANK NATIONAL ASSOCIATION, a national banking association By: Tiena J son -Hall, Vice Pr&Went S-4 W CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT State of California County of S'a vi On i/ 13C//2 _ before me, IY�IY 1yyN d��li�icn �� /i �f r/ ��� tic Date Nameand TINa of OfliCer (e.g., "Jane Dob, Notary Pudic') ' personally appeared 'personally known to me _ ❑ (or proved to me on the basis of satisfactory evidence) ttot to be the person(s) whose name(s) is/are subscribed to the ►br P CONOMb within instrument and acknowledged to me that Son swriomilCour* he/she/they executed the same in his/her/their authorized ca"""•��Aar22,2o 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. Place Notary Seal Above Signature ly Signature of Notary Public OPTIONAL Though the information below is not required by law, it may prove valuable to persons retying on the document and could prevent fraudulent removal and reattachment of this form to another document. Description of Attached Document Title or Type of Document: crCi r41Gfi r7t )Q FmOParl�n f Document Date: __LL:,4E,CI fic -I- Number of Pages: Ic Signer(s) Other Than Named Above: Capacity(les) Clal ed by Si iner(s) Signer's Name: l s l l/ l cl r; l ^. Signer's Name: ❑ Individual ❑ Individual 3if Corporate Officer—Title(s): !FD ❑ Corporate Officer—Title(s): ❑ Partner — ❑ Limited ❑I General ❑ Partner — ❑ Limited ❑ General ❑ Attorney in Fact ❑ Attorney in Fact El Trustee Top of thumb here Top of thumb here ❑ Trustee ❑ Guardian or Conservator ❑ Guardian or Conservator ❑ Other: ❑ Other: Signer Is Representing: Signer Is Representing: 02006 �p ,alNotaryA on 9350c w.,o<z<cO.Box ovorth. A�931 -•.nan=cn-c o--. 907v6D wrder all Toll -Fr. 1.800-r�•-cv O 2006 National Notary Asaoaabon • 9350 De Solo Ave., P.O. Box 2402 • ChetevrorM, CA 91313.2002 Item Na. 590] v809 Reortler. Cell Toll -Free 1-e00b]8-SB27 State of Califo to County of1k1� W On 1DO Ji before me, O u(insegname end title o C�c officer) V ,�4.w personally appeared ��rrtat� �IQA.tu personally known to roe (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.6— 2 mraon • 16of7q tawr " . caa u,w n t� _ N�vna. Signature MYComm � O�ef 16, 201 (Seal) 882/015610-0047 8134 W 07 a] 0130/07 -10- 0 0 I CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT State of California 1 County of '5ali r�//)u2t'ntnJ Jj On JG 130�69+ _ before me, MM ( zlelc5V7 /Ic personally appeared wweRq u 5"g4 - _— Opersonaliy known to me ❑ (or proved to me on the basis of satisfactory evidence) MOW-4 RODRIGUEZ C*l 0 Mot A 1871975 to be the person(s) whose name(s) islare subscribed to the ft � Public - within instrument and acknowledged to me that MyCOwmLBVYes�2g. he/shelthey executed the same in hisrnerAheir authorized capacity(ies 1, and that by hislherttheir 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. Phq N2Ury 3•tl A0•w Signature Pima — OPTIONAL Though the inkmNlian below is not reputed by law, it may prove vateabls to pomm reyhep on des document and could prevent freud dent removal end reattachment of drls form to another document. Description of Attached Title or Type of Document: Document Date: _ ) 0'130GJ9 Number of Pages: Signer(s) Other Than Named Above: Capacity(les) Clapp1e� by Signer(e) Signer's Name: !1'cJ1a e/_T. a,lt.h,AILM , ❑ Individual a Corporate Officer—Tife(s): 4GJ ❑ Partner — ❑ Limited ❑ General ❑ Attorney In Fact ❑ Trustee Top of �eunb hers ❑ Guardian or Conservator ❑ Other: _ Signer Is Representing: '51,PWelli A �T L Signers Name. ❑ Individual ❑ Corporate Officer — Mole): ❑ Partner— ❑ Limited ❑ General ❑ Attorney in Fact himom Top d tivmb hue ❑ Trustee ❑ Guardian or Conservator ❑ Other: Signer Is Representing: e 2023 N•tlpW Nd•ryAtl•d•0a,••350ds•eeM.. P.O.Bm 2402•CluNe0q.CA01313d402 IWe Na SW vM R*Wft Ce27aan••1.AW076N2f STATE OF CALIFORNIA ) ) ss. COUNTY OF LL os AN(, E1.- t ) On of=190L 29 , 2007 before me,`0.r8lint astlnehlorrenne f NotaryPublic in and for said State and County, personally appeared 'Plea. Jehnsor, - Awll (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) istare 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. I�INOutBASpIEN9i COMM. /174"04 z Signature I II�UI-- (Seal) 1oiM� t2 t1r STATE OF CALIFORNIA ss. COUNTY OF On , 2007 before me, , Notary Public in and for said State and County, 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 Losnawoeese (Seal) 0 0 EXHIBIT "A" Legal Description THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF LA QUINTA, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, AND IS DESCRIBED AS FOLLOWS: THAT PORTION OF THE; SOUTHEAST QUARTER OF THE NORTHEAST QUARTER OF SECTION 19, TOWNSHIP 5 SOUTH, RANGE 7 EAST, SAN BERNARDINO MERIDIAN, IN THE CITY OF LA QUINTA, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, DESCRIBED AS FOLLOWS: COMMENCING AT THE SOUTHEAST CORNER OF THE NORTHEAST QUARTER OF SAID SECTION 19; THENCE SOUTH 890 33' 05" WEST, ON THE SOUTHERLY LINE OF THE NORTHEAST QUARTER OF SAID SECTION, 330 FEET, TO THE TRUE POINT OF BEGINNING; THENCE SOUTH 890 33' 05" WEST, ON SAID SOUTHERLY LINE OF THE NORTHEAST QUARTER, 330 FEET, THENCE NORTH 0° 13' 40" WEST, 1,324.57 FEET, TO TITS NORTHERLY LINE OF THE SOUTHEAST QUARTER OF NORTHEAST QUARTER OF SAID SECTION 19; THENCE NORTH 890 34' D5" EAST, ON SAID NORTHERLY LINE, 330 FEET; THENCE SOUTH 0° 13' 40" EAST, 1,324.47 FEET TO THE TRUE POINT OF BEGINNING; EXCEPTING THEREFROM THE SOUTHERLY 50 FEET CONVEYED TO THE COUNTY OF RIVERSIDE BY DEEDS RECORDED AUGUST 30, 1933 1N BOOK 133, PAGE 292 AND BOOK 134, PAGE 298 RESPECTIVELY, OF OFFICIAL RECORDS, RIVERSIDE COUNTY RECORDS. ALSO EXCEPTINGTHEREFROM THAT PORTION DESCRIBED IN THE DEEDS TO THE CITY OF LA QUINTA, RECORDED FEBRUARY, 17, 1999, AS INSTRUMENT NOS. 62425 AND 62426, BOTH OF OFFICIAL RECORDS. Exhibit "A" LOSA2U30648.5 0 � EXHIBIT "B" Junior Obligation Documents 1. Sections 109 [Prohibition Against Charge in Ownership, etc.], 223 [Indemnity], 306 [Permanent Loan Closing], and 406 [Limitation on Encumbrances] of that certain Affordable Housing Agreement ("AIIA") dated October 31, 2007, by and between Junior Lienholder, Owner, and National Community Renaissance of California, a California nonprofit public benefit corporation. 2. That certain Promissory Note ("Junior Note") dated as of October 31, 2007, executed by Owner for the benefit of Junior Lienholder in the face principal amount of $24,000,000. 3. That certain Construction Deed of Trust with Assignment of Rents and RIDERS ATTACHED HERETO, dated as of even date with the Junior Note, executed by Owner in favor of Junior Lienholder, encumbering Owner's right, title and interest in the Property to be recorded in the Official Records substantially concurrently herewith. 4. Sections 3.04, 3,05, 3,13, 3.10, 4.2, 5.5, 5.6 and 6.2.3, Articles 7, 8 and 9, and Sections 10.2 and 14.0, as of that certain Regulatory Agreement and Declaration of Covenants and Restrictions dated as of even date with the Junior Note, executed by and between Junior Lienholder and Owner (and all monetary liens and damages created or afforded thereby or thereunder). Exhibit "B" LOSA2Mo648.5 i Recording Requested By CHICAGO TITLE COMPANY j Recording Requested By ' La Quints Redevelopment Agency — and -- When Recorded Mail To: National CORE 9065 Haven Avenue, Suite Ioo Rancho Cucamonga, CA 91730 Attn: Executive Director (�D DOC # 2007-0669201 10/31/2007 08:0011 Fee:NC Page 1 of 1e Recorded In Offielal Records County of Riverside Larry Y. Yard Assessor, County Clerk 6 Recorder 1111111111111111111111111111111 Nil 11111111111111 f Q0==y,'1M=®=E3� MMMIM----M_ 1rJJ======E3rVJN ®®® Exempt from recording fees pursuant to .� Government Code §§6103 and 27383 ASSIGNMENT, ASSUMPTION, AMENDMENT AND CONSENT Foll THIS ASSIGNMENT, ASSUMPTION, AMENDMENT AND CONSENT -(this "Assignment') is dated for identification as of October 31, 2007 and is by and between National Community Renaissance of California, a California nonprofit public benefit corporation ("National CORE'), 'Vista Dunes Housing Partners, L.P., a California limited partnership (the "Project Partnership') and the La Quints Redevelopment Agency, a public body, corporate and politic ("Agency'), with reference to the following matters. RECITALS A. National CORE and the Agency entered into that certain Affordable Housing Agreement entered into as of March 8, 2007, as amended by that certain Amended and Restated Affordable Housing Agreement entered into as of October 23, 2007 (as amended, the "AHA'). Pursuant to and in satisfaction of certain of the executory provisions of the AHA, National CORE and the Agency have or will enter into an escrow with Four Seasons Escrow to consummate transfer of title and possession of the `Partially Constructed Project" (as defined in the AHA) from the Agency to National CORE. At Closing, the Agency has required and National CORE has agreed to record that certain Regulatory Agreement and Declaration of Covenants and Restrictions (the "Regulatory Agreement') in the Official Records of the Riverside County Recorder's office. Assignment, As,umption Amendment and Consent Page I O 0 CO B. The transfer of the Partially Completed Project to National CORE will satisfy some of the executory provisions of the AHA. Additionally, following transfer of the Partially Constructed Project to National CORE, the Agency retains certain obligations to National CORE concerning completion of construction of the Partially Constructed Project and, pursuant to Sections 304 and 305 of the AHA, the Agency is obligated, upon the satisfaction of certain conditions precedent, to make a loan to National CORE sufficient to pay, once other denominated proceeds have been exhausted, the balance of the cost of construction thereof. C. The provisions of the AHA require the Agency's consent to assignment of the AHA, and its rights thereunder, by National CORE. D. National CORE and the Project Partnership have entered into a Purchase and Sale Agreement under which National CORE proposes to sell and transfer the Partially Completed Project to the Project Partnership along with all of the exclusive and nonexclusive rights, remedies and contracts which National CORE has received from the Agency, including, but not limited to, the construction contract between the Agency and Davis Reed Construction, Inc. Notwithstanding the foregoing, however, National CORE intends to retain its rights and obligations under all provisions of the AHA not assigned hereunder, including, but not limited to, Sections 304 and 305 of the AHA, and not to assign its rights and/or obligations in said provisions to the Project Partnership (all such rights and obligations retained by National CORE are excluded from this Assignment, are not assigned to the Project Partnership hereunder, and are referred to collectively as the "Retained Rights"). As a result thereof and to facilitate the same, National CORE desires to assign all of its right, title and interest in and to the AHA, except for the Retained Rights, to the Project Partnership and desires to sell the Partially Completed Project to the Project Partnership. E. This Assignment is being made pursuant to the AHA and for the proposes of assigning to the Project Partnership all of National CORE's right, title and interest in and to the following (collectively, the "Assigned Matters"): (i) Only the following Sections of the AHA, namely: 100-109; 202; 222; 223 - 226; 301-303; 306; 401-402; the insurance and indemnity requirements of 403; 404-408; all of Articles 500 and 600, and all rights and interests appurtenant thereto (all Retained Rights hereunder not specifically assigned are retained by the Assignor); (ii) All exclusive and nonexclusive assignments of rights, remedies and contracts which National CORE has received from the Agency, including, but not limited to, the agreement originally between the Agency and Davis Reed Construction, Inc., as well as all studies, surveys, warranties, plans, specifications and contracts relating to the Partially Completed Project for the construction of improvements thereon, as well as all rights, privileges, easements and appurtenances to the real property commonly known as 78990 Miles Avenue, La Quinta, California and the partially completed improvements thereon; Assignment, Assumption Amendment and Consent Page 2 O (iii) The Regulatory Agreement and all rights and interest appurtenant thereto, subject to all obligations thereunder. F. National CORE desires to assign the Assigned Matters to the Project Partnership upon the terms and conditions contained herein and the Project Partnership desires to acquire National CORE's interest in the Assigned Matters upon such terms and conditions including, but not limited to, assumption by the Project Partnership of all of the duties and obligations of the National CORE arising from or relating to the AHA (excluding therefrom the Retained Rights) from and after the effective date hereof (which the parties agree shall be the date when this Assignment is approved and executed by the Agency). G. National CORE and the Project Partnership acknowledge that assignment by National CORE of the Assigned Matters requires the prior written consent of the Agency. OPERATIVE PROVISIONS NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, National CORE, the Project Partnership and the Agency hereby agree as follows:. 1. Assiammetit by National CORE. 1.1 Assigned Matters. Subject to the provisions of paragraph 1.2 below, National CORE hereby, assigns, conveys and transfers to the Project Partnership all of the Assigned Matters. 1.2 Retained Rights. In addition to the Retained Rights, National CORE retains a nonexclusive interest, as may be necessary, in any and all warranty rights, indemnity rights (including defense and other related rights) and any and all other rights and claims against any person relating to any event with respect to which any claim (whether valid or invalid) is at any time made against National CORE under and/or related to any of the Assigned Matters; provided, however that the Project Partnership shall have the primary/leading role in enforcing any such rights and/or claims. 2. Acceptance and Assumotion The Project Partnership hereby accepts the assignment of the Assigned Matters as provided in Section 1 above, and assumes the responsibility of performing any and all of the duties and obligations of National CORE under and/or relating to the Assigned Matters, and to execute all documents and instruments which National CORE was, is or will be obligated to execute under the provisions of the AHA. 3. RRoreserrtations and Warranties of National CORE. National CORE represents and warrants to the Project Partnership and the Agency as follows: Assigmnent, Assumption Amendment and Consent Page 3 O K X (a) National CORE has not heretofore transferred, assigned, pledged or encumbered the .Assigned Matters. (b) To the knowledge of National CORE and except as otherwise disclosed to the Project Partnership and the Agency, (i) National CORE has in all material respects complied with its obligations under the AHA required of it to be performed as of the effective date hereof, and (ii) no maternal default by National CORE exists thereunder. 4. Indemnification. (a) The Project Partnership's Indemnification by National CORE. National CORE shall, to the fullest extent permitted by law, indemnify, defend (with legal counsel reasonably acceptable to the Project Partnership), protect and hold harmless the Project Partnership and the Project Partnership's members, partners, directors, officers, employees, agents, successors and assigns from and against any and all claims, actions, causes of action, rights, defenses, demands, allegations, damages, fines, penalties, liabilities, losses, liens, obligations, judgments, awards, appeals, costs and expenses (including, but not limited to, fees and costs of attorneys, expert witnesses and other consultants) of any kind or character at law, in equity or otherwise, regarding, arising out of or in connection with, or in any manner related to (i) any of the Assigned Matters prior to the effective date hereof and/or (ii) any breach or default by National CORE under this Assignment. (b) National CORE's Indemnification by the Project Partnership. The Project Partnership shall, to the fullest extent permitted by law, indemnify, defend (with legal counsel reasonably acceptable to National CORE), protect and hold harmless National CORE and National CORE's members, directors, officers, employees, agents, successors and assigns from and against any and all claims, actions, causes of action, rights, defenses, demands, allegations, damages, fines, penalties, liabilities, losses, liens, obligations, judgments, awards, appeals, costs and expenses (including, but not limited to, fees and costs of attorneys, expert witnesses and other consultants) of any kind or character at law, in equity or otherwise, regarding, arising out of or in connection with, or in any manner related to (i) any of the Assigned Matters from and after the effective date hereof and/or (ii) any breach or default by the Project Partnership under this Assignment. (c) Indemnification of the Agency by National CORE and the Project Partnership. The Project Partnership and National CORE shall, to the fullest extent permitted by law, indemnify, defend (with legal counsel acceptable to the Agency), protect and hold harmless the Agency and the Agency's members, officers, employees, agents, successors and assigns from and against any and all claims, actions, causes of action, rights, defenses, demands, allegations, damages, fines, penalties, liabilities, losses, liens, obligations, judgments, awards, appeals, costs and expenses (including, but not limited to, fees and costs of attorneys, expert witnesses and other consultants) of any kind or character at law, in equity or otherwise, regarding, arising out of or in connection with, or in any mariner related to (i) this Assignment and/or (ii) any breach or default by either or both of National CORE and the Project Partnership under this Assignment. Assignment, Assumption Amendment and Consent Page 4 O 5. Further Assurances. Each of the parties to this Assigmnent shall execute and deliver any and all additional papers, documents and other assurances and shall do any and all acts and things reasonably necessary in connection with the performance of their obligations under this Assignment and to carry out the intent and agreement of the parties to this Assignment. 6. Successors and Assiens. This Assignment shall be binding upon and inure to the benefit of the permitted successors and assigns of the parties hereto. 7. Incorporation of Recitals. The Recitals set forth at the beginning of this Assignment are incorporated into this Assignment as though set forth in full herein. 8. Authorfty. Each person signing this Assignment represents and warrants that he or she has the proper authority to bind the party on whose behalf he or she signs this Assignment. 9. Counterparts. This Assignment may be executed in counterparts, each of which shall be deemed an original but all of which shall together constitute one and the same instrument. 10. Third Party Benefices. Agency is deemed for all purposes to be a third party beneficiary of and to this Agreement, and is consequently entitled to the benefits hereunder and to enforce each slid all of the provisions hereof. IN WITNESS WHEREOF, the parties have executed this Assignment as of the date fast above written. "National CORE" National Community Renaissance of California, a California nonprofit public benefit corporation By Richard J. Whittingham, CFO [signatures continue on following page] Assignment, Assumption Amendment and Consent Page 5 of 6 C� "Project Partnership" Vista Dunes Housing Partners, L.P., a California limited partnership By its General Partner Vista Dunes GP, LLC, a California limited liability company By its Manager Southern California Housing Development Corporation of the Inland Empire, a California nonprofit public benefit corporation By: Richard J. Whittingham, CFO For the sole purpose of providing written consent to the assignment of the AHA, as contemplated by this Assignment, to provide written consent to the sale and transfer of the Assigned Matters and of the Partially Completed Project from National CORE to the Project Partnership, and as a third party beneficiary hereof. "Agency" La Quints, Redevelopment Agency, a public body, corporate and politic Dated: October—. 2007 By: Name: Its: ATTEST: By: -- Secretary APPROVED AS TO FORM: RUTTAN & TUCKER, LLP By: Attorneys for the La Quinta Redevelopment Agency Assignment, Assumption Amendment and Consent Page 6 of 6 0 "Project Partnership" Vista Dunes Housing Partners, L.P., a California limited partnership By its General Partner Vista Dunes GP, LLC, a Califomia limited liability company By its Manager Southern California Housing Development Corporation of the Inland Empire, a California nonprofit public benefit corporation 0 Richard 1. Whittingbam, CFO For the sole purpose of providing written consent to the assignment of the AHA, as contemplated by this Assignment, to provide written consen to the sale and transfer of the Assigned Matters and of the Partially Completed Project from National CORE to the Project Partnership, and as a third parry beneficiary hereof "Agency La Quinta Redevelopment Agency, a public body, corporate and politic Dated: Octobet& 2007 i AT APPROVED AS TO FORM: RUTTAN & TUCKER, LLP �/ By _� 46,�- Attorn ys for the uinta Redevelopment Agency A661$nnlelt� Assmtrydon Nnrndtnent and Conamt 8gC O (D 0 ALL-PURPOSE ACKNOWLEDGMENT State of California ) ) SS. County of SLLyi 6eryIct2(rtc� ) On C; 4. 30 .2007, before me, t^( aAi t rn i2Llt rif7 t.','z-. tti'0 -v� "' (;c- Date Name and Title of O cer (e.g., -Jane Doe, Notary Public`) personally appeared Richard J. Whittinaham Name(s) of Signers) tL- personally known to me ❑ proved to me on the basis of satisfactory Mores �� evidence San LCara*' Ion t 1571975 Way ktft -CaIlaft to be the person(s) whose name(s) is/are subscribed W � to the within instrument and acknowledged to me that INW - - V - - - - - I 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 - /)official seal. Place Notary Seal Above Signatu of Notary Public OPTIONAL Though the information below Is not required by law, it may prove valuable to persons relying on the document and could prevent fraudulent removal and reattachment of this form to another document. Description of Attached Document Title or Type of Document: Assignment, Assumption, Ame Document Dated October 30, 2007 Number of Pages: Signer(s) Other Than Named Above: Capacity(ies) Claimed by Signer Signer's Name: I&Y'lle rrl ❑ Individual ® Corporate Officer - Title(s): CFO ❑ Partner - ❑ Limited ❑ General ❑ Attorney in Fact ❑ Co -Trustee ❑ Guardian or Conservator Other: Signer is Representing: 5.j, fIf II (d,( -rfji; LLI 5_ g &4� Assignment, Assumption Amendment and Consent Right Thumbprint of Signer Recording Requested By CHICAGO TITLE COMPANY RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: Vista Dunes Housing Partners, L.P., c/o National Community Renaissance of California 9065 Haven Ave., Suite 100 Rancho Cucamonga, CA 91730 Attn: President DOC # 2007-0669197 10/31/2007 08:000 Fee:28.00 Page t of a Recorded In Official Records County of Riverside Larry U. Yard Assessor, County Clerk 8 Recorder IIIIII INII1 IIII 111111111111111111111111111111111111111 mom", UOOmEM ' .�Yk�' � m= "mmmWig In accordance with Section 11932 of the California Revenue and Taxation Code, Grantor has declared the amount of the transfer tax which is due by a separate statement which is not being recorded with this Grant Deed. (coy -03a -07,2.3 t GRANT DEED FOR A VALUABLE CONSIDERATION, receipt of which is hereby acknowledged, the s- LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic, organized S and existing under the California Community Redevelopment Law (Health & Safety Code O Section 33000 et seq.) (the "Grantor"), hereby grants to NATIONAL COMMUNIT? r RENAISSANCE OF CALIFORNIA, a Californianonprofit public a non benefit S• P P corporation ("Grantee"), that certain real property ("Property") located in the City of La Quinta, County of Riverside, State of California, described in the legal description attached hereto as Exhibit "A" and incorporated herein by this reference, subject to all matters of record, and is further subject to the following: A. Reservation of Subsurface Rights. Grantor excepts and reserves from the conveyance herein described all interest of the Grantor in oil, gas, hydrocarbon substances, and minerals of every kind and character lying more than five hundred (500) feet below the surface, together with the right to drill into, through, and across, and to use and occupy all parts of the Property lying more than five hundred (500) feet below the surface thereof for any and all purposes incidental to the exploration for and production of oil, gas, hydrocarbon substances, or minerals from the Property or other lands, but without, however, any right to use the surface of the Property or any portion of the Property within five hundred (500) feet below the surface of the Property for such exploration. B. Conveyance in Accordance With Redevelopment Plan. The Property is conveyed in accordance with and subject to the Redevelopment Plan for Project Area No. 2 ("Redevelopment Plan"), a copy of which is on file with the City Clerk of the City of La Quinta, California. All uses on the Property shall conform to the uses permitted by the Redevelopment Plan. The foregoing shall remain in effect until the expiration of the Redevelopment Plan. U21015610-0047 943412.06 a]0130107 ' t C. Nondiscrimination. Grantee, on behalf of itself and its successors and assigns to all or any portion of the Property, covenants and agrees as follows: 1. There shall be no discrimination against, or segregation of, any persons, or group of persons, on account of race, color, creed, religion, sex, marital status, ancestry, or national origin in the sale, lease, or rental or in the use, occupancy, or enjoyment of the Property, nor shall the grantee itself, or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy of tenants, lessees, subtenants, sublessees, or vendees of the Property or any portion thereof, The foregoing covenants shall run with the land and shall remain in effect in perpetuity. 2. The grantee shall refrain from restricting the rental, sale, or lease of any portion of the Property, or contracts relating to the Property, on the basis of race, color, creed, religion, sex, marital status, age, ancestry, or national origin of any person. All such deeds, leases or contracts shall contain or be subject to substantially the following nondiscrimination or nonsegregation clauses: a. In deeds: "The grantee herein covenants by and for itself, its heirs, executors, administrators, and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex, marital status, age, ancestry, or national origin in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the land herein conveyed, nor shall the grantee itself, or any persons claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy of tenants, lessees, subtenants, sublessees, or vendees in the land herein conveyed. The foregoing covenants shall run with the land." b. In leases: "The lessee herein covenants by and for itself, its heirs, executors, administrators, and assigns, and all persons claiming under or through it, and this lease is made and accepted upon and subject to the following conditions: 'That there shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex, marital status, age, ancestry, or national origin in the leasing, subleasing, transferring, use, occupancy, tenure, or enjoyment of the land herein leased, nor shall the lessee itself, or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy of tenants, lessees, sublessees, subtenants, or vendees in the land herein leased."' C. In contracts pertaining to the realty: "There shall be no discrimination against or segregation of any persons or group of persons on account of race, color, creed, religion, sex, marital status, age, ancestry, or national origin in the sale, lease, transfer, use, occupancy, tenure, or enjoyment of land, nor shall the transferee itself, or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy of tenants, lessees, subtenants, sublessees, or vendees of land." The foregoing nondiscrimination covenants shall remain in effect in perpetuity. 8'2/015610-0047 843412.06 a10/30/07 _2_ X X E D: Covenants Run With The Land. All covenants contained in this Grant Deed shall be covenants running with the land. E. Covenants for Benefit of Grantor. All covenants set forth in this Grant Deed, without regard to technical classification or designation, shall be binding for the benefit of the Grantor, and such covenants shall run in favor of Grantor for the entire period during which such covenants shall be in force and effect, without regard to whether the Grantor is or remains an owner of any land or interest therein to which such covenants relate. Grantor, in the event of any breach of any such covenants, shall have the right to exercise all the rights and remedies and to maintain any actions at law or equity or other property proceedings to enforce the curing of such breach. RUT�AN`&& TUCKER, LLP Agency Counsel ASIVISSIO-W7 343411.06J0/3M7 "Grantor" LA QUiNTA REDEVELOPMENT AGENCY, Byublic b y, corporate d p i[i Thomas Genovese Its: Executive Director "Grantee" NATIONAL COMMUNITY RENAISSANCE OF CALIFORNIA, a California nonprofit public benefit corporation M Its: -3- 0 C� D. Covenants Run With The Land. All covenants contained in this Grant Deed shall be covenants running with the land. E. Covenants for Benefit of Grantor. All covenants set forth in this Grant Deed, without regard to technical classification or designation, shall be binding for the benefit of the Grantor, and such covenants shall run in favor of Grantor for the entire period during which such covenants shall be in force and effect, without regard to whether the Grantor is or remains an owner of any land or interest therein to which such covenants relate. Grantor, in the event of any breach of any such covenants, shall have the right to exercise all the rights and remedies and to maintain any actions at law or equity or other property proceedings to enforce the curing of such breach. ATTEST: Agency Secretary APPROVED AS TO FORM: RUTAN & TUCKER, LLP 9. Agency Counsel "Grantor" LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic By: Thomas Genovese Its: Executive Director "Grantee" NATIONAL COMMUNITY RENAISSANCE OF CALIFORNIA, a California nonprofit public benefit corporation By. 400e� — Its: RiCh ' unbam, GhA if Financial- Officer 8921015610-0047 843412 06 a10l30/07 -3- 0 STATE OF CALIFORNIA ) ) ss COUNTY OF, SA On before me, y4&A. 4-MIJ LJLY Z , Notary Public, personally appeared personally known to me (or proved to me on the basis oCsatisfactory evidence) to be the personV) whose name( is/an subscribed to the within instrument and acknowledged to me that he/skehhey executed the same in his/heAheir authorized capacity(ies), and that by him signature(s) on the instrument the person($) or the entity upon behalf of which the person(pj acted, executed the instrument. Witness my hand and official seal. HILDA HERNANDEZ COPY. S 1750272 OWir xarunvwuc•euOMY N &M Buueodp C Ne Call. Eu, Jwr 8, 3011 [SEAL] STATE OF CALIFORNIA Wei Kal11'"S On personally appeared V&i - Notary Public ) ss before me, , Notary Public, personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. Witness my hand and official seal. Notary Public [SEAL] 832/015610-0047 843412 06 a10/30/07 -4- EXHIBIT "A" LEGAL DESCRIPTION OF PROPERTY The land referred to is situated in the City of La Quinta, State of California, County of Riverside, City of La Quinta and is described as follows: That portion of the Southeast quarter of the Northeast quarter of Section 19, Township 6 South, Range 7 East, San Bernardino Base and Meridian, described as follows: Commencing at the Southeast corner of the Northeast quarter of said Section 19; Thence South 89' 33' 05" West, on the Southerly line of the Northeast quarter of said Section, 330 feet, to the true point of beginning; thence South 89' 33' 05" West, on said Southerly line of the Northeast quarter, 330 feet; Thence North 00 13' 40" West, 1,324.57 feet, to the Northerly line of the Southeast quarter of Northeast quarter of said Section 19; thence North 89' 34' 05" East, on said Northerly line, 330 feet; thence South 01 13' 40" East, 1,324.47 feet to the true point of beginning; Excepting therefrom the Southerly 50 feet conveyed to the County of Riverside by Deeds recorded August 30, 1933 in Book 133, Page(s) 292 and Book 134, Page(s) 298 respectively, of Official Records, Riverside County Records. Also excepting therefrom that portion of described in the deeds to the City of La Quinta, recorded 02-17-1999, as Instrument No. 62425 and 62426, Official Records. Excepting therefrom the mobile home located thereon. 892/015610-0047 84341206 aloBorol EXHIBIT "A' DOC`# 2007-0669202 10/31/2007 06:00R Fee:16.00 Recording Requested By Page I of 4 Doe T Tax Paid CHICAGO TITLE COMPANY ReeeCountyn ffRiversidecords Recording Requested by Larry U. hard —and — Assessor, Counntllyl Clark i Recorder Return to: 11 otNatttien onall I Illlll OINII llll Mlle IWII lilt Iilll III lllnIII cµJorded, ORE of Calitfornia UII S R U IF. 9065 Haven Ave., Ste. 100 Rnncho Cucamonga, CA 91730 L 465 428OTNCHG 14CCORWTY MW04 , "-oso-oirK bL 0 't�UNl DN THE UNDERSIGNED GRANTOR(s) DECLARE(s) ' IY DOCUMENTARY TRANSFER TAXIS $ S Zo O O [1]Ounincorporated area 11 City of La t t Parcel No. 604-032.022-3 ❑ computed on full value of property conveyed, or )(Computed on full value less value of liens or encumbrances remaining at time of sale, an FOR A VALUABLE CONSIDERATION, receipt of which is hereby acknowledged, National Community Renaissance of California, a California nonprofit public benefit corporation, hereby GRANT(S) to Vista Durres Housing Partners, L.P., a California limited partnership, the following described real property in the City of La Quinta, County of Riverside. State of California: - See Attached Legal Description, attached herein as Exhibit "A" - Dated October22 2007 National Community Renaissance of California, n ATE OF CALIFORNIA California non refit public benefit corporation nNTY OFySL " )S.S. A? zbefara me, By: Richard J. Whitdnghar CFO peraonatty knc n to me (ar r td to me on the baria of 6uFisfadory evidence) to be person hose neme(/j idov subscribed ro the within inswment ac lodged to methathdakrAleyexecutal the rime m hisArr4hsir rixed eapacity(ws)rend that by hiaPoerhheir signature(e) on the ins ri the person(a}: ar the entity upon behalf of wbich the person(e} to , ecuted [ha instrument WITNESS my bbd and offic:0-zeal �r-t.. ATfActic.,� 1.1 txa fzY HILDA HERNANgQ Comm 11766272 N also lemause c n N liar araaysda y k" er We. Ear. Jatr t. Mtt (This area For official notarial seal) MAIL TAX STATEMENTS TO PARTY SHOWN ON aOLLOWING LINE; FF NO PARTY SHOWN, MAIL AS DDiWM ABOVE N.. Smrr AAdna r1'N A xtefo 0 K Name of New Owner: Vista Dunes Housing Partners, L.P., a California limited partnership Signature of New Owner: Vista Dunes Housing Partners, L.P., a California limited partnership By its General Partner Vista Dunes GP, LLC, a California limited liability company By its Manager Southern California Housing Development Corporation of the Inland Empire, a California nonprofit public benefit corporation B. Richard J. whittingham, CFO Name of Entity: Vista Dunes Housing Partners, L.P., a California limited partnership Address: 9065 Haven Ave., Ste. I00, Rancho Cucamonga, California 91730 Telephone: (909) 483-2444 Date: October J 2007 Federal Employer ID Number: 33- 05,2./Z.l$ K i ALL-PURPOSE ACKNOWLEDGMENT State of Califomia County of t�Q n&� SS. a On &htr�0,� before me, ffi/r>/Q rna ,2iO Notary Public, personally appeared h4 Ak personally (mown to me (or proved to me on the basis of satisfactory evidence) to be the person(A whose nameW is/AP& subscribed to the within instrument and acknowledged to me that he/ slte/tlaey executed the same in his/heAkir authorized capacity(ies), and that by his/kerklteir signature($) on the instrument the person(s), or the entity upon behalf of which the person() acted, executed the instrument. WIUTA HERNANDEZ Comm.$ V56272 a] Bo a PLACE NOTARYSBAL INABOVE SPACE WITNESS my hand and official seal. OPTIONAL INFORMATION The information below is optional. However, it may prove valuable and could prevent fraudulent attachment of this form to an unauthorized document. CAPACITY CLAIMED BY SIGNER (PRINCIPAL) INDIVIDUAL CORPORATE OFFICER PARTNER(S) ATTORNEY IN -FACT TRUSTEE(S) GUARDIAN/CONSERVATOR OTHER: Tm E(S) SIGNER (PRINCIPAL) IS REPRESENTING: NAME OF PERSON(S) OR ENTTTY(JES) DESCRIPTION OFATTACHED DOCUMENT TITLE OR TYPE OF DOCUMENT NUMBER OF PAGES ]SATE OF DOCUMENT RIGHT THUMBPRINT OF SIGNER OTHER --- ........n1 IYY/WWW.VALLtY-SIERRA.COM 02005 VALLEY -SIERRA INSURANCE 0 EXHIM A (D THAT PORTION OF THE SOUTHEAST QUARTER OF THE NORTHEAST QUARTER OF SECTION 19, TOWNSHIP 5 SOUTH, RANGE 7 EAST, SAN BERNARDINO MERIDIAN, IN THE CITY OF LA QUINTA, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, DESCRIBED AS FOLLOWS: COMMENCING AT THE SOUTHEAST CORNER OF THE NORTHEAST QUARTER OF SAID SECTION 19; THENCE SOUTH 890 33' 05" WEST, ON THE SOUTHERLY LINE OF THE NORTHEAST QUARTER OF SAID SECTION, 330 FEET, TO THE TRUE POINT OF BEGINNING; THENCE SOUTH 890 33' 05" WEST, ON SAID SOUTHERLY LINE OF THE NORTHEAST QUARTER, 330 FEET; THENCE NORTH 00 13' 40" WEST, 1,324.57 FEET, TO THE NORTHERLY LINE OF THE SOUTHEAST QUARTER OF NORTHEAST QUARTER OF SAID SECTION 19; THENCE NORTH 890 34' 05" EAST, ON SAID NORTHERLY LINE, 330 FEET; THENCE SOUTH 0" 13' 40" EAST, 1,324.47 FEET TO THE TRUE POINT OF BEGINNING; EXCEPTING THEREFROM THE SOUTHERLY 50 FEET CONVEYED TO THE COUNTY OF RIVERSIDE BY DEEDS RECORDED AUGUST 30, 1933 IN BOOK 133, PAGE 292 AND BOOK 134, PAGE 298 RESPECTIVELY, OF OFFICIAL RECORDS, RIVERSIDE COUNTY RECORDS. ALSO EXCEPTING THEREFROM THAT PORTION DESCRIBED IN THE DEEDS TO THE CITY OF LA QUINTA, RECORDED FEBRUARY, 17, 1999, AS INSTRUMENT NOS. 62425 AND 62426, BOTH OF OFFICIAL RECORDS. CHICAGO TITLE INSURANCE COMPANY Indemnity No. 77044321 Order No 77044321 Date: October 26, 2007 Project Name: Vista Dunes INDEMNITY AGREEMENT THIS INDEMNITY AGREEMENT (hereinafter referred to as this "Agreement'D is executed this day of October, 2007, by La Quints Redevelopment Agency, a Public Body, Corporate and Politic, organized and existing under the California Community Redevelopment Law (hereinafterreferred to as "INDEMNITOR") for the benefit of THE ABOVE TITLE INSURANCE COMPANY, a corporation, and CHICAGO TITLE COMPANY (hereinafter referred to as "COMPANY"). This Agreement covers any part, parcel, or subdivision of the real property (hereinafter referred to as the "Real Property") in the County of , State of , described as: See Exhibit "A " attached hereto 2. Certain works of improvement have been or will be commenced upon the Real Property or for the benefit thereof; by or on behalf of Indemnitor, which may thereafter result in Mechanics' Liens, and actions to enforce said Mechanics' Liens, being filed or recorded against the Real Property. INDEMNITOR hereby represents to COMPANY that all costs, charges, expenses and bills for labor, material, and services will be paid before the expiration of the respective times for recording claims of lien arising out of such works of improvement, performed by or on behalf of Indemnitor, and that, where applicable, a notice of completion will be properly recorded in accordance with any and all legal requirements thereof. 3. INDEMNITOR (whether as owner of, part owner of, or having an interest in the Real Property or in a corporation, partnership, joint venture or other entity which is the owner of, part owner of, or has an interest in the Real Property or as contractor for a work of improvement thereon, or otherwise) has an interest in the issuance of, and desires COMPANY from time to time to issue, policies of title insurance, or endorsements thereof, covering the Real Property or lots or portions thereof, inswing against loss which may be sustained by reason of Mechanics' Liens, or without exception as to Mechanics' Liens, arising out of such works of improvement performed by or on behalf of Indemnitor or insuring holders of mortgages or deeds of trust against loss by reason of the priority of any such Mechanics' Liens over said mortgages or deeds of trust. 4. Nothing herein shall be construed as an obligation on the part of COMPANY to issue any of the policies or insurance mentioned in this Agreement. However, if COMPANY does issue any such policies or insurance or issue hold harmless or indemnity letters to induce other title insurance companies to issue title insurance policies, then MEMNITOR shall be deemed to have concurrently given the assurances and made the agreements therein set forth for the benefit of COMPANY 5. In order to induce COMPANY to issue and in consideration of the issuance by COMPANY of such policies of title insurance and endorsements as it may be willing to issue, INDEMNITOR promises and agrees to hold harmless, protect and indemnify COMPANY from and against any and all liabilities, losses, damages, expenses, charges, and fees, including but not limited to attorneys' fees and expenses of litigation, which it may sustain, under each and every policy or policies of title insurance or endorsements thereof which it may at any time issue, resulting directly or indirectly from any Mechanics' Liens, or claims thereof, affecting the Real Property or any portion or portions thereof covered by such policy or policies and arising out of any such work or works of improvement performed by or on behalf of Indemnitor, and to pay all costs, expenses and attorneys' fees incurred in the enforcement of this Agreement. 6. It is understood and agreed that COMPANY may rely upon this Agreement in issuing say policy, policies or endorsements covering all or any portion of the Real Property, whether or not INDEMNITOR is the person ordering the same, regardless of any change in ownership of or the title to the Real Property or any portion thereof or say change in the nature of INDEMNITOR's interest in the same or in any such work of improvement, that the issuance of any such policy or policies or endorsements in the manner desired by INDEMNITOR may cause COMPANY to deem it necessary or expedient for practical business reasons to issue other policies or endorsements covering the Real Property, without showing therein, as matters not insured against, Mechanics' Liens or actions based thereon, arising out of or in connection with the works of improvements referred to in Paragraph 2 hereof, and therefore the obligations of INDEMNITOR-hereunder shall not be limited to policies initially issued covering the Real Property or portions thereof but shall apply also to any policy or policies of title insurance subsequently issued covering the Real Property or portions thereof- provided, however, that INDEMNITOR may, at any time, deliver written notice to COMPANY of INDEMNUOR's election to exclude from the future application of this Agreement any of the Real Property upon which COMPANY has not issued a policy or endorsement in reliance upon this Agreement. INDEMNITOR's election shall be effective on the fifth (5th) business day following receipt by COMPANY of the above -referenced notice. 7. INDEMNTTOR agrees that it is directly and primarily liable to COMPANY and that the obligations of INDEMNITOR hereunder are independent of the obligations of any other indemnitor or third party owing to COMPANY. If more than one person signs this Agreement as INDEMNITOR, the obligation hereunder shall be joint and several. INDEMNITOR agrees that any release which may be given by COMPANY to any other indemnitor or third party shall not release INDEMNITOR from the payment and performance of its obligations under this Agreement. As a condition to the payment and performance by INDEMNITOR of its obligations under this Agreement, COMPANY shall not be required to, and INDEMNITOR hereby waives any and all rights to require COMPANY to prosecute or seek to enforce any remedies against any other indemnitor or third party, or with respect to any security interests, Hens or encumbrances granted to COMPANY by any other indemnitor or third party. INDEMNTTOR also agrees that its obligations under this Agreement shall not be impaired or affected by any modification, supplement, or amendment to any policy, policies or endorsements issued regarding the Real Property, nor by release or other alteration of any security pledged by any other indetnitor or third party, nor by any agreements or arrangements whatsoever with any other indemnitor or third party. 8. Without affecting any of INDEMNITOR's obligations owing to COMPANY under this Agreement, D DEMNITOR hereby agrees that COMPANY may elect, in its sole and absolute discretion, to retain legal counsel of its choice on behalf of COMPANY s Insureds in connection with any claims, disputes, demands, or actions made or arising in connection with the subject matter of this Indemnity or any policy or policies of title insurance or endorsements thereof issued covering the Real Property, and COMPANY may, in its sole and absolute discretion, settle or compromise any such claim, dispute, demand or action on such terms and in such a manner as COMPANY deems appropriate. COMPANY is under no obligation to accept INDEMNITOR's selection of counsel. At COMPANY's option it may suggest to its Insureds that counsel recommended by INDEMNITOR be retained for the defense of the Insureds, INDEMNITOR agrees to underwrite the fees, costs and expenses associated with the defense of the Insureds. Any counsel selected by the INDEMNITOR to represent COMPANY's Insureds must be acceptable to the Insureds and be independent counsel free of any conflict of interest 9. In the event that any Mechanics' Liens or claims thereof arising out of any such work of improvement performed by or on behalf of Indemnitor shall be filed against the Real Property or any action shall be commenced to foreclose such liens, INDEMNITOR agrees within twenty (20) days thereafter to cause such Mechanics' Liens to be released of record and any such actions dismissed, or to record a bond effective to release the Real Property from the lien and from any action to foreclose such lien and to do such other acts as COMPANY may require; and should INDEMNITOR fail to do so, COMPANY is authorized but not obligated to advance and pay such amounts as shall, in COMPANY's sole and absolute discretion, be deemed necessary to procure releases of such claims or liens and satisfactions of anyjudgments of foreclosure rendered in such actions, or otherwise necessary for the protection of COMPANY s insured and itself, and INDEMNITOR agrees to reimburse COMPANY on demand for all amounts so advanced, with interest at the maximum legal rate from the date advanced by COMPANY until the date of reimbursement by INDEMMTOR. 10. WDEMNITOR is presently informed of the condition and status of the Real Property and of all other circumstances which a diligent inquiry would reveal and which bear upon the risk of liability of INDEM?4rMR under this Agreement. INDEMNITOR hereby covenants that it will continue to keep itself informed of the condition and status of the Real Property, the status of other indemmtors, if any, and of all other circumstances which bear upon the risk of liability of INDEMMTOR under this Agreement. Absent a written request for such information by INDEMNITOR to COMPANY, INDENOTMR. hereby waives its right, if any, to require COMPANY to disclose to it any information which COMPANY may now or hereafter acquire concerning such condition or circumstances including, but not limited to, the release of or revocation by any other indemnitor. 11. INDEMNITOR hereby waives any defense arising by mason of any claim or defense based upon an election of remedies by COMPANY, which, in any manner impairs, affects, reduces, releases, destroys and/or extinguishes INDEMNITOR's subrogation rights, reimbursement rights, and/or any other rights of INDEMNITOR to proceed against any other indemnitor or against any other third party or security. INDEWUOR waives all presentments, demands for performance, notices of non-performance, protests, notices of protest, notices of dishonor, notices of default, notice of acceptance of this Agreement, and notices of the existence, creation, or issuance of any new or additional policy or policies of title insurance, and of endorsements thereot, regarding the Real Property, and all other notices or formalities to which INDEMMTOR may be entitled. In witrress w r f the undersigned INDEMNITOR has executed this Agreement this day of,_, 2007, INDEMNITOR: LA QUINTA REDEVELOPMENT AGENCY, A public body corporate and politic Dated: AnAz 007 By: Its: Executive Director APPROVED AS TO FORM: RUTAN & TUCKER, LLP Attorneys for the uinta Redevelopment Agency In witness whe}e the undersigned INDEMNITOR has executed this Agreement thus 3% day of 2007. INDEMNITOR: LA QUINTA REDEVELOPMENT AGENCY, A public bocorporate and poloidc Dated: 2007 By: /liGor�R.o/• �07�GGC Its: Executive Director w WE on". - M""'m w!", APPROVED AS TO FORM: RUTAN & CRE LLP Attomeys Tor the La Q I to Redevelopment Agency #1 Non -Imputation Endorsement Order No_ County San Bernardino State of California ) ) ss County of San Bernardino ) The undersigned being duly sworn upon oath represents and affirms the following: The undersigned (has)(have) reviewed the attached Preliminary Report No.77044321F03, and that in reference to the land described therein, the undersigned (has)(have) not done anything to create any lien, encumbrance, transfer of interest, constructive trust or other equity in said land not disclosed in said Preliminary Report, except for the following matters: (if none, so state) -NONE- nor, does the undersigned have any knowledge of any claim of an 10/26/2007 > = Page 2 of 4 interest in or to said land not disclosed in the Preliminary Report, except for the following matters: (if none, so state) -NONE- The undersigned gives this affidavit to induce Chicago Title Insurance Company to issue and attach its Non -Imputation Endorsement to the policy of title insurance when issued under the above order. The Undersigned acknowledges that Chicago Title Insurance Company, in issuing its Non -Imputation Endorsement, will reply upon the representation and affirmation of the undersigned set forth above. Address 9065 Haven Avenue, Suite 100 Rancho Cucamonga, California 91730 Southern California Housing Development Corporation of e Enland Empire, a California non ro it public benefit corporation By: Richard J. Whittingham, CFO Subscribed and sworn before me this 31st day of October 2007/, RONDEE R. VAR. S commmlon * 1595322 Nota t61MYComm. ry Public - CaStomla San Bernardino County Expires Jul 15. 20 O My commission expires the /,5il2 day of 20. 10/26/2007 TD: Non -Imputation Endorsement Order No. County San Bernardino state of California ) )ss County of San Bernardino ) The undersigned being duly sworn upon oath represents and affirms the following: The undersigned (has)(have) reviewed the attadhed Preliminary Report No.77044321F03, and that in reference to the land described therein, the undersigned (has)(have) not done anything to create any lien, encumbrance, transfer of interest, constructive trust or other equity in said land not disclosed in said Preliminary Report, except for the following matters: (if none, so state) -NONE- nor, does the undersigned have any knowledge ,of any claim of an 10126M07 ' MT Page 2 of 4 interest in or to said land not disclosed in the Preliminary Report, except for the following matters: (if none, so state) -NONE- The undersigned gives this affidavit to induce Chicago Title Insurance Company to issue and attach its Non -Imputation Endorsement to the policy of title insurance when issued under the above order. The Undersigned acknowledges that Chicago Title Insurance company, in issuing its Non -Imputation Endorsement, will reply upon the representation and affirmation of the undersigned set forth above. Address 9065 Haven Avenue, Suite 100 Rancho Cucamonga, California 91730 Vista Dunes GP, LLC, a California limited liability Company By its Manager Southern California Housing Development Corporation 'I of the Inland Fmplro,ya California nonprofit pu benefit corporation By: �ichard J. Whittingham, CFO Subscribed and sworn before me this aiFt day of nrtnher 20 07 RONOEE R. VNL mmlaslon # 1695322 ' •s NolaryPublic • Caffomla + San Bernardino County My Comm. Explrara Ju115, 20 No ry My commission expires the day of Zoo. 10/26/2007 p� P DATE: (11 ESCROW INSTRUCTION and FIRST SUPPLEMENT To Amended and Restated Affordable Housing Agreement And to Purchase and Sale Agreement FOUR SEASONS ESCROW,INC. IS LICENSED BY THE STATE OF CALIFORNIA, DEPARTMENT OF CORPORATIONS LICENSE NO. 9632224. Escrow Officer: Malia Monroe/Doris Ellis Title Officer: Chris Ritter Escrow Associate: Kim Jarrett Title Order No.: 77044321 Escrow No.: 7177 Title Company: Chicago Title This Escrow Instruction and Supplement is to and supplements the Amended and Restated Affordable Housing Agreement by and between National Community Renaissance of California, a California nonprofit public benefit corporation, as Buyer and La Quinta Redevelopment Agency, a public body, corporate and politic, as Seller dated October 29, 2007. This Escrow Instruction and Supplement is to and also supplements A Purchase and Sale agreement known , (the "Agreement") is dated as of October 26, 2007 and is between National Community Renaissance of California, a California nonprofit public benefit corporation ("Seller') and Vista Dunes Housing Partners, L.P., a California limited partnership ("Buyer"). Property Address: Approximately 9.7 acres, a Portion Sec 19 Township 6 South Range 7 East San Bernardino Base and Meridian, Riverside County, La Quinta, California. Located at: 78990 Miles Avenue,La Quinta , California. (see legal description attached as Exhibit "A" hereto and made a part thereof) PURPOSE: To provide for concurrent transfers of ownership as one sale escrow under agreements made outside escrow which are incorporated in an Amended and Restated Affordable Housing Agreement by and between National Community Renaissance of California, a California nonprofit public benefit corporation, as Buyer who shall for the purposes of this escrow be referred to as 'Buyer A" and La Quinta Redevelopment Agency, a public body, corporate and politic, as Seller, who for the purposes of this escrow shall be referred to as "Seller B" dated October 29, 2007. Concurrently this escrow provides for sale escrow transfer under agreements made outside escrow which are incorporated in PURCHASE AND SALE AGREEMENT (the "Agreement") dated as of October 26, 2007 and is between National Community Renaissance of California, a California nonprofit public benefit corporation ("Seller') who shall for the purposes of this escrow shall be referred to as "Seller C" and Vista Dunes Housing Partners, L.P., a California limited partnership ("Buyer") who shall be referred to for the purposes of this escrow as "Buyer D". IN PLEASE INITIALe "' AGREEMENTS: All agreements made between the parties are made by and are incorporated in the referenced agreement or agreements to which this escrow instruction is a supplement, and the Amended and Restated Affordable Housing Agreement is made outside escrow by and between National Community Renaissance of California, a California nonprofit public benefit corporation, who may be referred to for the purposes of this escrow as National CORE, as Buyer" Buyer A" and La Quinta Redevelopment Agency, a public body, corporate and politic, who may be referred to for the purposes of this escrow as the "Agency" as Seller, "Seller B", dated October 29, 2007. Amendments made to this escrow shall only amend and or supersede the First Supplement and Amended and Restated Affordable Housing Agreement where and as specifically indicated and shall be by written instruction of the parties to the escrow holder All agreements made between the parties are made by and are incorporated in the referenced agreement or agreements to which this escrow instruction is a supplement, and the Purchase and Sale agreement known as, (the "Agreement") is dated as of October 26, 2007 and is between National Community Renaissance of California, a California nonprofit public benefit corporation ("Seller"), "Seller C" and Vista Dunes Housing Partners, L.P., a California limited partnership ("Buyer'). "Buyer D". Amendments made to this escrow shall only amend and or supersede the First Supplement and Purchase and Sate Agreement between National CORE. "Seller C" and Vista Dunes Housing Partners, L.P., a California limited partnership ("Buyer"). "Buyer D". where and as specifically indicated and shall be by written instruction of the parties to the escrow holder ESCROW FEE Under Amended and Restated Affordable Housing Agreement The initial Escrow fee shall be paid by the parties to the escrow in accordance with the Amended and Restated Affordable Housing Agreement and shall be $3500.00 for each party. The initial fees shall be paid at the "closing" referred to in the agreement and recordation of the Grant Deed from the Agency to National CORE, the Regulatory Agreement and Agency Deed of Trust, on or about October 31, 2007. ESCROW FEE Under Purchase and Sale Agreement The initial escrow fee shall be paid at conveyance from National Community Renaissance of California "Seller C" to Vista Dunes Housing Partner, L.P., "Buyer D" and shall be $3500.00 charge to each party. '"'Additional escrow fees shall be collected for and at each additional or subsequent "closing" for services provided after close in accordance with both agreements and/or upon completion of the escrow. Additional fees for charges incurred on behalf of the parties to either agreement by the escrow holder or fees for additional services or duties shall be charged equally to parties, or to the party for whom a direct cost was incurred in the event that agreement (s) to pay the fee or service is/has not been specifically addressed by or in the agreement or subsequent amendments. Escrow fees shall be in accordance with generally accepted fees for commercial real estate settlement services with in the geographical area of both the escrow holder and the real property conveyed. to b R PLEASE INITIAL �� DUTIES OF ESCROW HOLDER: The duties of the escrow holder are those specified in the Amended and Restated Affordable Housing Agreement and in the Purchase and Sale Agreement known as, (the "Agreement") dated as of October 26, 2007 and any amendments made by the parties. The escrow holder shall act in accordance with its General provisions which are made a part of this supplement. Opening of Escrow: The opening of escrow is October 31, 2007 Close of Escrow: The term "close of escrow (COE)" shall mean the date on which all instruments/documents deposited into escrow are recorded. In the event escrow is not in a position to close on the date specified in these instructions, then Escrow Holder shall, unless otherwise instructed in writing from the principals herein, close escrow when all conditions set forth herein have been satisfied. Close of escrow shall occur when all the terms and conditions of the Amended and Restated Affordable Housing Agreement, and any amendments to it executed by parties are met and ownership is transferred at the COE to Vista Dunes Housing Partners , L.P. a California limited partnership referred to as the "Limited Partnership" in the Amended and Restated Affordable Housing Agreement, which shall occur in accordance with the Amended and Restated Affordable Housing Agreement. Portions of the agreement call for transfer of interests, recordation and or release or disbursement of valuable consideration which may not constitute final disposition or close of this multi phase escrow. Escrow Holder Acknowledgement: Buyer and Seller herein acknowledge that Escrow Holder shall act in accordance with the Amended and Restated Affordable Housing Agreement by and between National Community Renaissance of California, a California nonprofit public benefit corporation, as Buyer "A" and La Quinta Redevelopment Agency, a public body, corporate and politic, as Seller "B" dated October 29, 2007. subject to the following: • Escrow Holder shall NOT be concerned or liable as to enforceability, accuracy or validity for documents to be recorded which are provided to the escrow holder such as the Grant Deed, Trust Deeds, or any other documents not prepared by the escrow holder and executed by the parties. Further, Buyer and Seller herein acknowledge that Escrow Holder shall act in accordance the Purchase and Sale agreement known as, (the "Agreement") is dated as of October 26, 2007 and is between National Community Renaissance of California, a California nonprofit public benefit corporation ("Seller"), "Seller C" and Vista Dunes Housing Partners, L.P., a California limited partnership ("Buyer"). "Buyer D" subject to the following: • Escrow Holder shall NOT be concerned or liable as to enforceability, accuracy or validity for documents to be recorded which are provided to the escrow holder such as the Grant Deed, Trust Deeds, or any other documents not prepared by the escrow holder and executed by the parties. PLEASE INITIAL �_! Fee Title: Fee title to the subject property of this escrow is vested in: La Quinta Redevelopment Agency, a public body, corporate and politic. Buyer VESTING (a): The vesting (s) shall be handed to escrow holder before close and shall be in accordance with the agreements. Vestings are supplied, for the purposes of recordation and title insurance policy (ies), to the title company. Legal Description of Subject Property EXHIBIT "A" ATTACHED AND MADE A PART HERETO Said legal description is hereby approved by the undersigned principals. Delivery of Documents and Funds: Escrow Holder is instructed to forward all documents and funds to the Buyers(s) and Seller(s) at the applicable addresses as instructed. All documents and funds requiring delivery after close of escrow shall be forwarded to the addresses set forth on the "Disbursement of Proceeds/Refund Instructions", or as subsequently instructed by Buyer(s), Seller(s) and their respective agents. Release of Funds: Release of funds during this escrow shall be made in accordance with the Amended and Restated Affordable Housing Agreement and any subsequent amendments and the general provisions of the escrow holder. All other terms and conditions remain in FULL force and effect. EACH OF THE UNDERSIGNED STATES THAT EACH HAS READ THE FOREGOING INSTRUCTIONS, UNDERSTANDS THEM, AND ACKNOWLEDGES RECEIPT OF A COPY OF THESE INSTRUCTIONS. National Community Renaissance of California, a California nonprofit public benefit corporation, Vista Dunes Housing Partners, L.P. A California Limited Partnership BY:Its manager, Southern California Housing Development Corporation of the Inland Empire, a California nonprofit public benefit corporation. Richard J Whittingham, CFO La Quinta Redevelopment Agency, a public body corporate/ad po tic, By: Executive Director r19 h � ® PLEASE INITIAL jip d FOUR SEASONS ESCROW, INC GENERAL PROVISIONS Privacy Policy (15 U.S. C. 6801 and 16 CFR Part 313) We collect nonpublic personal information about you from information you provide on forms and documents and from other people such as your lender, real restate agent, attorney, Title Company, etc. We do not disclose any nonpublic personal information about our customers or former customers to anyone, except as permitted by law. We restrict access to nonpublic personal information about you to those employees who need to know that information in order to provide products or services to you. We maintain physical, electronic and procedural safeguards that comply with federal regulations to guard your nonpublic personal information. Role of Escrow Holder Seller and Buyer agree that Four Seasons Escrow, Inc. is acting solely as Escrow Holder in connection with this transaction and is not acting as a Trustee or in any other fiduciary capacity. Duty of escrow officer does not commence nor shall escrow be deemed open until Escrow Holder receives mutual escrow instructions signed by all parties. Until receipt of mutually signed escrow instructions, either party has the right to revoke these instructions by written request and may withdraw any funds, instruments or documents previously provided to Escrow Holder. Escrow Holder's duties shall be limited to the proper handling of deposited funds and the proper safekeeping of all instruments and/or documents received for this transaction; including the disposition of same in accordance with the written instructions received and accepted by Escrow Holder. Escrow Holder will make no physical inspection of the real property or personal property described in this escrow nor will Escrow Holder be liable for the condition of same. 1. Legal Advice All parties acknowledge and understand that Escrow Holder is not authorized to practice law nor give legal advice. Escrow Holder will make no representations about the legal sufficiency, legal consequences, and financial effect or tax consequences of the enclosed escrow instructions. All parties are hereby advised to seek legal and financial counsel for advice regarding the effect of these escrow instructions. 2. Sufficiency, Validity, Authority of Documents Escrow Holder shall not be responsible or have any liability with respect to the sufficiency or correctness as to form, manner of execution or validity of any document deposited in this escrow; nor as to the identity, authority or rights of any person executing same, Escrow Holder will not be liable or responsible for forgeries or false impersonations in connection with the instruments or documents submitted in this escrow. 3. Contingency Periods Escrow Holder shall not be responsible for monitoring contingency time period between the parties. The parties shall execute such documents as may be requested by Escrow Holder to confirm the status of any such period. Execution and Delivery of Escrow Instructions These instructions may be executed in counterparts and said counterparts, regardless of date of execution and delivery will be deemed an original and together will constitute one and the same instrument. Escrow Holder shall not be concerned with nor have any liability for any items designated as memoranda in these instructions or with any other agreement or contract made between the parties outside of these escrow. two � PLEASE INITIAL �%%'% Written Instruction Escrow Holder is authorized to accept oral instructions from the principals' real estate agent(s), lenders and/or attorneys concerning the preparation of escrow instructions, amendments or supplements, However, no change of instruction, amendments or supplements will be effective until executed copies of same by all principals are delivered to Escrow Holder. Any document received by Escrow Holder that has been altered from its original form may be considered null and void and shall be of NO effect to this escrow. 2. Facsimile and Electronic Mail All parties acknowledge that documents may be transmitted via facsimile (FAX) and/or electronic mail (e-mail). In the event the parties choose to utilize fax or e-mail transmissions, said parties instruct Escrow Holder to act upon such instructions as if they were originals. "Instructions for release of funds will require original signatures prior to releasing of funds. '"AII documents necessary for recording are required to have original signatures. 3. Authorization to Furnish Copies Escrow Holder is authorized to furnish copies of escrow instructions, amendments, supplements, preliminary reports, notice of cancellation and closing statements in this escrow to the real estate broker(s), lenders and/or attorneys representing principals to this escrow. Any third party requesting documentation will need to provide written authorization by represented principal of the escrow prior to the release of documentation. 4. Close of Escrow The term "close of escrow (COE)" as used in this escrow, shall mean the date on which all instruments/documents deposited into escrow are recorded. In the event escrow is not in a position to close on the date specified in these instructions, then Escrow Holder shall, unless otherwise instructed in writing from the principals herein, close escrow when all conditions set forth herein have been satisfied. 5. No Duty to Notify as to Other Transactions Escrow Holder has no duty or responsibility to notify any party to this escrow of any sale, resale, loan, exchange or other transaction involving the subject property of this escrow or any profit realized by any person or entity in connection therewith, notwithstanding that Escrow Holder may act as escrow holder for such transaction(s) in this or another escrow(s). 6. Usury Escrow Holder is not to be concerned with any question of usury in any loan or encumbrance involved in the processing of this escrow and is hereby released of any liability therefore. Deposit of Funds All funds received, unless instructed in writing in the escrow, in this escrow will be deposited with other escrow funds in one or more non -interest -bearing escrow accounts at Union Bank of California. Escrow Holder shall not be responsible and shall have no liability for any delay in closing this escrow if the funds deposited in escrow are not available for immediate withdrawal as a matter of right following deposit in such financial institution. Escrow Holder may receive certain direct and indirect financial benefits from the financial institution as a � h PLEASE INITIAL �' result of maintaining the general escrow account. Escrow Holder shall have no obligation to account to the parties to this escrow the value of such direct and indirect financial benefits. Any such benefits shall be deemed additional compensation of Escrow Holder for its services rendered in connection with this escrow. For security purposes, Escrow Holder will not accept cash for any escrow deposit, Any check submitted that is dishonored upon presentment for payment, Escrow Holder is authorized to notify all parties and/or their respective agents of such nonpayment. Interest bearing accounts Any party depositing funds into escrow has the right to earn interest on such funds through a deposit account arrangement that Escrow Holder has established with one of its financial institutions. Depositing party must request in writing to have such an account setup on their behalf. Depositing party will be charged a $75 Set up Fee by Escrow Holder to compensate Escrow Holder for the costs associated with establishing and maintaining such an account. It is important that depositing party consider the set up cost associated with establishing and maintaining such an account as it may exceed the actual amount of interest earned. The interest rates on such accounts vary by financial institution and fluctuate periodically based on market conditions and other compensating factors. Interest rate is subject to change prior to or during the time parties funds are on deposit. 2. Good Funds Law (California Insurance Code Section 12413.1) All parties are aware and understand that California Insurance Code Section 12413.1 mandates that funds deposited into an escrow must be collected and available for withdrawal prior to disbursement. The determination and availability of funds is set forth as follows: (A) Cash and Electronic Transfers (wired funds) are available for same day disbursement. (B) Cashier's Checks and Certified Checks drawn on a California bank are available for disbursement the next business day after the date of deposit. If funds are received by any other means, recording and/or disbursements may be delayed. 3. Disbursement of Funds 13 11 Escrow holder reserves the right to have 24 hours from confirmation of recording to disburse all proceeds. Disbursements will be made by check and issued jointly to the parties designated as payees, unless instructed otherwise in writing. Any written instruction for a bank wire will require reasonable time or notice for Escrow Holder's compliance with said instruction. In the event there is insufficient time to place a wire within the Federal Reserve System, parties agree to provide written instruction for an alternative method of disbursement. Without an alternative disbursement instruction, funds will be held in the general escrow trust account until the next opportunity for wire placement. Escrow Holder will not be held responsible for lost interest due to wire delays caused by any bank or the Federal Reserve System. Insurance of Funds All parties are hereby notified that all funds deposited in connection with this escrow are insured only to the limit provided by the Federal Deposit Insurance Corporation. Lender Funds Funds deposited by a lender are ordinarily deposited one or two days prior to closing. All parties are hereby notified that lenders may begin charging interest from the day of NA b R PLEASE INITIAL funds deposited into Escrow Holder's escrow trust account. 6. Unjust Enrichment In the event any party to this escrow receives funds or is credited with funds to which they are not entitled, effected party agrees upon written demand to return said funds immediately to the escrow for correct disbursement. • Prorations All prorations and/or adjustments called for in this escrow shall be made on the basis of a thirty (30) day month or 360 day year, unless otherwise instructed by all parties in writing. All prorations and/or adjustments will be based on last available tax statement, rental statement as provided by Seller. Property Taxes/Supplemental Taxes Escrow Holder shall not be held liable for any personal property tax, which may be assessed against any former owner of the subject property to this escrow, nor for the corporation or license tax of any corporation as a former owner. Buyer is hereby advised that the County Tax Assessor will revalue property that changes ownership or contains new construction, which may result in a supplemental tax bill. The supplemental taxes will be assessed as of the date of change of ownership or completion of construction. Escrow Holder is not responsible for lost or non -receipt of property tax bills. All parties are hereby advised to contact the local County Assessor and/or Tax Collector for additional copies of outstanding property tax bills or supplemental bills and make payment arrangements accordingly. Cancellation Any principal instructing Escrow Holder to cancel this escrow shall file notice of cancellation in writing and state the reason for cancellation. Upon receipt of same, Escrow Holder is instructed to prepare cancellation instructions and forward to principals and their representing agents for signature. Upon receipt of mutually agreed, executed cancellation instructions Escrow Holder is authorized to deduct cancellation fee and cancel escrow. Conflicting Instructions/interpleader No notice, demand or change of instructions shall be of any effect in this escrow unless given in writing by all parties affected thereby. In the event of conflicting demands, Escrow Holder shall have the right to either take no further action until receipt of mutually concurring instructions from all parties OR file an action in interpleader requiring the principals to answer and litigate their several claims and rights amongst themselves. Upon such filing, Escrow Holder is authorized to deposit with the Clerk of the Court all documents and funds held in this escrow. Escrow Holder is thereupon released of any further liability or obligations with respect to this escrow. All parties agree to pay all costs, damages, judgments and attorney's fees incurred by Escrow Holder in connection with any suit filed with interpleader. No Activity If there is no written activity by a principal to this escrow for a period of six months, Escrow Holder shall notify the parties of its intention to cancel escrow. Written notification of same will be sent via certified mail to last known address of principals. If no written objection is received within fifteen (15) days of mailing said notice, Escrow Holder shall cancel this escrow and all documents, monies or other items held by Escrow Holder will be returned to the respective parties, less fees and charges herein provided. am R PLEASE INITIALb -✓ • Retention of Records Escrow Holder is hereby authorized to destroy or dispose of any and all documents, papers, instructions, correspondence and other materials pertaining to this escrow any time after the expiration of five (5) years from COE or cancellation thereof, without liability or further notice to the parties of said transaction. Payoffs (HOA demands, Institutional Demands, Private Beneficiary Demands, Liens, Judgments) Escrow Holder is not responsible for the contents or accuracy of any statements or demands provided by the existing lienholder. Escrow Holder's sole responsibility is to act upon any statements or demands as provided by lienholder or his agent. Escrow Holder is not required to submit any statement or demand to the parties for approval prior to close of escrow, unless instructed to do so in writing. All parties acknowledge that such payoff statements may include a prepayment penalty and other charges above and beyond principal and interest. Any necessary adjustments due to a discrepancy between the information provided by lienholder and the amount disbursed through the escrow, which may be later determined to be incorrect, shall be settled between the parties directly outside of this escrow. 1. Consumer Debt Any party requesting or required by lender to pay consumer debt through escrow must provide Escrow Holder with a current statement for such account(s). Escrow Holder's sole responsibility is to make the payoff at COE based on remaining balance shown on statement provided by said party. Escrow Holder is not liable for any fees or balances remaining after date of payoff at COE. Internal Revenue Service (IRS) and Franchise Tax Board (FTB) Reporting Requirements All parties acknowledge that Escrow Holder may be required to report this transaction, or aspects thereof, to the Internal Revenue Service (in accordance with Sections 121, 1031, 1033 and 1445 of the Internal Revenue Code) and/or the Franchise Tax Board (in accordance with Section 18662 of the Revenue and Taxation Code). Parties authorize Escrow Holder to make such reporting, as it deems necessary and hold Escrow Holder harmless for such reporting. Parties hereby agree to provide all necessary documentation and information as requested by Escrow Holder to comply with reporting requirements. 1. Seller is subject to penalty for knowingly filing a fraudulent certificate for the purpose of avoiding the withholding requirement. 2. Buyer understands that Escrow Holder will NOT assist in obtaining a waiver from withholding from the Franchise Tax Board Change of Ownership (California Revenue and Taxation Code Section 480.3) All parties are aware that a "Preliminary Change of Ownership" form (PCOR) is to be filed with the County Assessor's Office upon recordation of all transfer documents involving property. As an accommodation only, Escrow Holder will provide the necessary forms to the Buyer and upon return of the completed form to Escrow Holder prior to close of escrow, Escrow Holder shall deliver said form to the County Assessor's Office concurrently with recordation of documents being recorded in this escrow. Escrow Holder will not delay close 9 h PLEASE INITIAL�� of escrow or recording of documents deposited in escrow for non -receipt of PCOR. Escrow Holder shall not be liable for any fees or penalties, which may result from recordation of documents without required PCOR. All fees and penalties incurred are the sole responsibility of the grantee. • Severability If any provision or any part of any provision of this Agreement is for any reason held to be invalid, unenforceable or contrary to any public policy law, statute and/or ordinance, then the remainder of the Agreement shall not be affected thereby and shall remain in full force and effect. • Choice of Law/Construction This Agreement and all transactions relating to or arising out of this Agreement shall be interpreted in accordance with and governed in all respects by the laws of the State of California. The proper venue for any disputes concerning, relating to, or arising out of this Agreement shall be the Riverside County Superior Court, Indio Branch. Statute of Limitations Any and all causes of action, lawsuits, or similar claims against Escrow Holder, whether arising in contract, tort, or equity shall be brought within six (6) months of the time the cause of action, lawsuit, or similar claim arises. Failure to bring any cause of action, lawsuit, or similar claim within the above time frame shall be considered a waiver of the party's right to bring said cause of action, lawsuit, or similar claim against the Escrow Holder. Integration This Agreement constitutes the entire understanding of the parties with regard to the matters set forth within. There are no representations, warranties, agreements, arrangements, undertakings, oral or written, between or among the parties hereto relating to the subject matter of this Agreement, which are not fully expressed herein. This Agreement shall be construed according to its own terms, as defined in this agreement or otherwise according to their ordinary meaning, without any parole evidence. This Agreement is fully integrated and supersedes any prior or contemporaneous oral or written Agreement between the Parties. The terms and provisions of this Agreement can be modified only in writing, executed by all Parties. • Binding Affect This Agreement shall be binding on and inure to the benefit of the parties and their respective successors and assigns. • Liquidated Damages It is understood and agreed by and between the parties hereto that Escrow Holder is not an Insurer. Insurance, if any, will be obtained by the Buyer and Seller. Charges are based solely upon the value of the services provided for, and are unrelated to the value of the Buyer(s) or Seller(s) property or the property of others. The Buyer and Seller do not desire this Agreement to provide for the liability of Escrow Holder and Buyer and Seller agree that Escrow Holder shall not be liable for loss or damage due directly or indirectly to any occurrence or consequences there -from. From the nature of the services to be performed, it is Mii b ® PLEASE INITIAL impractical and extremely difficult to fix the actual damages, if any, which may proximately result from the failure on the part of Escrow Holder to perform any of its obligations hereunder or the failure of the system to properly, operate with the resulting loss to the Subscriber. The provisions of the this paragraph shall apply in the event loss or damage, irrespective of cause pr origin, results directly or indirectly to person or property from the performance or non- performance of the obligations set forth by the terms of this contract, or from negligence, active or otherwise, of Escrow Holder, its agents, officers, shareholders or employees. ACKOWLEDGEMENT OF GENERAL PROVISIONS I/We, the undersigned, hereby acknowledge receipt of the General Provisions as set forth by Four Seasons Escrow, Inc. My/Our signature hereto constitutes instruction to Escrow Holder of all terms and conditions contained in the General Provisions and further signify that I/we have read and understand and agree to the same in their entirety. UWe further acknowledge that Uwe have been made aware that the escrow instructions may affect my/our legal rights and/or obligations and any questions relating hereto should be directed to an attorney, accountant or other legal advisor. FOUR SEASONS ESCROW,INC. IS LICENSED BY THE STATE OF CALIFORNIA, DEPARTMENT OF CORPORATIONS LICENSE NO. 9632224. National Community Renaissance of California, a California nonprofit public benefit corporation, 0 Vista Dunes Housing Partners, L.P A California Limited Partnership BY:Its manager, Southern California Housing Development Corporation of the Inland Empire, a California nonprofit public benefit corporation. Richard J Whittingham, CFO La Quinta Redevelopment Agency, a public body, corporate and politic, By: Executive Director � r3 PLEASE INITIAL Recording Requested by - and - When recorded Mail to: La Quhrta Redevelopment Agency P.O. Box 1504 La Ouinta, CA 92253 Attn: Thomas Genovese DOC # 2009-0122229 03/13/2009 08:00p Fee:NC Page 1 of a Recorded in Official Records County of Riverside Larry Lt. Ward Assessor, County Clerk & Recorder 1111111111111111111111111111111111111111111111111111111 S R U PAGE I SIZE I DA MISC LONG I RFD COPY M A L 465 1 426 POOR NCOR SMF NCHG EXAM UNI T. CTY I vwi • i SPACE ABOVE THIS LINE FOR RECORDER'S USE Recording exempt from recording fees pursuant to California Government Code §27383 600 ASSIGNMENT AND ASSUMPTION OF REGULATORY AGREEMENT AND DECLARATION OF COVENANTS AND RESTRICTIONS Lil AND CONSENT THERETO THIS ASSIGNMENT AND ASSUMPTION OF REGULATORY AGREEMENT AND DECLARATION OF COVENANTS AND RESTRICTIONS (""Assignment") is dated for identification as of October 31, 2007 and is by and among National Community Renaissance of California, a California nonprofit public benefit corporation ("Former Owner"), Vista Dunes Housing Partners, L.P., a California limited partnership ("Partnership") and La Quinta Redevelopment Agency, a public body, corporate and politic ("Agency"), with reference to the following matters. RECITALS A. On or about October 31, 2007, Agency and Fortner Owner entered into that certain Amended and Restated Affordable Housing Agreement relating to development, financing and construction of an 80-unit affordable rental housing development coinmotiy known as the "Vista Dunes Apartments" (the "Project") on certain real property more specifically described in Exhibit A attached hereto and incorporated by reference herein (the "Site"). aftgo Title Company has recorded Us Assignment and Assumption of Irutrumont by request as an accommoda5on only Regulatory Agreement and Declaration sad has not examined itior redukriy End surfi- dncy or as to ds effect upon the title to any real of Covenants and Restrictions and Consent thereto 1 pra y W,�y pedesrnbed hess§L _ B. In conjunction therewith, Agency and Former Owner executed that certain Regulatory Agreement and Declaration of Covenants and Restrictions dated October 29, 2007, which was subsequently recorded on October 31, 2007 as Document No. 2007-0669198, Official Records of Riverside County, California (the "Regulatory Agreement'). Among other things, the Regulatory Agreement in Section 3.1 requires that the Project owner permit occupancy of 79 of the apartment units in the Project only by Eligible Tenants, defined therein to be "Very Low Income Households," "Extremely Low Income Households" or "50% Very Low Income Households" (capitalized terms used but not defined herein shall have the meanings ascribed thereto in the Regulatory Agreement). C. On or about October _, 2007, the Agency and the Former Owner entered into that certain unrecorded Agreement to Convey Fee Title ("Conveyance Agreement'). Pursuant to the Conveyance Agreement, Agency consented to transfer of title of the Site and the Project from Former Owner to Partnership. As one of the conditions imposed on such transfer, in Section 6 of the Conveyance Agreement the Partnership agreed to assume the responsibility for complying with the affordability restrictions and other covenants and agreements contained in the Amended and Restated Affordable Housing Agreement, including, but not limited to, the terms, conditions and restrictions contained in the Regulatory Agreement. D. On or about October 31, 2007, Former Owner transferred title of the Project and of the Site to Partnership. E. In order to extend the benefits of the "welfare exemption" provided in California Revenue & Taxation Code §214(g) to Partnership, Riverside County has required that the Partnership formally assume, as a matter of Public Record, the responsibility to apply and enforce the affordability restrictions and other obligations contained in the Regulatory Agreement, in order to demonstrate compliance with Board of Equalization Rule 140(a)(3), (5) and (6), as well as Rule 140(b)(1)(B). F. This Assignment is being made pursuant to applicable provisions of the Conveyance Agreement as well as Section 9 of the Regulatory Agreement, for the purpose of assumption by La Quinta Housing Partners, L.P. of the obligations, responsibilities and restrictions contained in the Regulatory Agreement and consent thereto by the Agency. OPERATIVE PROVISIONS NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Former Owner, Partnership and the Agency hereby agree as follows: 1. Assignment by Former Owner. Effective as of the date hereof, Former Owner confirms that its has assigned, conveyed and transferred, and it hereby assigns, conveys and transfers to the Partnership all obligations, duties, responsibilities and rights arising under the Regulatory Agreement and the benefits and burdens thereunder. Assignment and Assumption of Regulatory Agreement and Declaration of Covenants and Restrictions and Consent thereto 2. Acceptance of Assumption. The Partnership hereby accepts the assignment of the Regulatory Agreement as provided in Section 1 above. The Partnership further agrees that it shall and hereby does assume the responsibility of performing and enforcing any and all of the duties and obligations arising under or relating to the Regulatory Agreement, including, but not limited to, the obligation to hold and rent Units in the Project to Eligible Tenants, as provided more specifically in the Regulatory Agreement, the provisions of which are incorporated herein by reference, and, as the owner of the Project and the Site, to perform all other obligations imposed by the provisions of the Regulatory Agreement on the owner of the Project and the Site. 3. Further Assurances. Each of the parties to this Assignment shall execute and deliver any and all additional papers, documents and other assurances and shall do any and all acts and things reasonably necessary in connection with the performance of its obligations hereunder and to cart' out the intent and agreement of the parties to this Assignment. 4. Successors and Assigns. This Assignment shall be binding upon and inure to the benefit of the permitted successors and assigns of the parties hereto. 5. Incorporation of Recitals. The Recitals set forth at the beginning of this Assignment are incorporated into this Assignment as though set forth in full herein. 6. Authoritv. Each person signing this Assignment represents and warrants that he or she has the proper authority to bind the party on whose behalf he or she signs this instrument. 7. Counterparts. This Assignment may be executed in counterparts, each of which shall be deemed an original but all of which shall together constitute one and the same instrument. IN WITNESS WHEREOF, the parties have executed this Assignment to be effective as of the date and year first above written, regardless of the date of actual execution hereof. "Former Owner" National Community Renaissance of California, a California nonprofit public benefit corporation By: Richard J. Whittingham, CFO [signatures continue on following page] Assignment and Assumption of Regulatory Agreement and Declaration of Covenants and Restrictions and Consent thereto "Partnership" Vista Dunes Housing Partners, L.P., a California limited partnership By its General Partner Vista Dunes GP, LLC, a California limited liability company By its Manager Southern California Housing Development Corporation of the Inland Empire, a California nonprofit public benefit corporation By '� Richard J. Wluttinghatn, CFO This instrument is executed by the undersigned for the sole purpose of providing written consent to the assignment of the Regulatory Agreement, as contemplated by this Assignment and by the Conveyance Agreement, effective as of the date of this instrument. "Agency" La Quinta Redevelopment Agency, a public body, corporateandpolitic Name:n.��S%��C�uttv�sG Title: i sr 6GGrT ✓E /�i.2E GT�'/Z. ATTEST: , Secretary Assignment and Assumption of Regulatory Agreement and Declaration of Covenants and Restrictions and Consent thereto EXHIBIT "A" LEGAL DESCRIPTION OF SITE All of that certain real property in the City of La Quints, County of Riverside, State of California, described as follows: That portion of the Southeast quarter of the Northeast quarter of Section 19, Township 6 South, Range 7 East, San Bernardino Base and Meridian, described as follows: Commencing at the Southeast comer of the Northeast quarter of said Section 19; Thence South 89' 33' 05" West, on the Southerly line of the Northeast quarter of said Section, 330 feet, to the true point of beginning; thence South 89' 33' 05" West, on said Southerly line of the Northeast quarter, 330 feet; Thence North 0° 13' 40" West, 1,324.57 feet, to the Northerly line of the Southeast quarter of Northeast quarter of said Section 19; thence North 89' 34' 05" East, on said Northerly line, 330 feet; thence South 0° 13' 40" East, 1,324.47 feet to the true point of beginning; Excepting therefrom the Southerly 50 feet conveyed to the County of Riverside by Deeds recorded August 30, 1933 in Book 133, Page(s) 292 and Book 134, Page(s) 298 respectively, of Official Records, Riverside County Records. Also excepting therefrom that portion of described in the deeds to the City of La Quinta, recorded 02-17-1999, as Instrument No. 62425 and 62426, Official Records. Excepting therefrom the mobile home located thereon. "M156 10-0047 143409,07.10nnm7 EXHIBIT "A" ALL-PURPOSE ACKNOWLEDGMENT State of California ) r ) SS, County of DAn & rnar dl n 0 ) On Vcbcu"I S 2009, before me, i crr't L. �Aatihtvjs, �J)0-6ry Pub bi L Date Name and Title of Officer (e.g., "Jane Doe, Notary Public") personally appeared Richard J. Whittingham Name(s)of Signer(s) 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 she executed the same in her authorized capacity, and that by her 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. W L. MATTHM CamfYWon # 1763450 WITNESS my hand and official seal. • No1pV KoW 'Caltlam1O So §fflr ono caa ly �,�/t��11/C/ /�f�{'yq1 MitComm.iF,rpx�hn2e. 2o11 Place Notary Seal Above Si ure of NoV Public Though the information below is not required by law, it may prove valuable to persons relying on the document and could prevent fraudulent removal and reattachment of this form to another document. Description of Attached Document Title or Type of Document: Assignment and Assumption Document Dated October 31, 2007 Number of Pages: Signer(s) Other Than Named Abo\ Capacity(ies) Claimed by Signer Signer's Name: ❑ Individual is Corporate Officer - Title(s): CFO ❑ Partner - ❑ Limited ❑ General ❑ Attorney in Fact ❑ Trustee in Guardian or Conservator Other: Signer is Representing: Assignment and Assumption of Regulatory Agreement and Declaration of Covenants and Restrictions and Consent thereto Right Thumbprint of Signer ALL-PURPOSE ACKNOWLEDGMENT State of California )'ss. Countty`�� of � t �en.a-a.>Siti.J )) J On � . 2009, before me, \-{ �`�C Date Name 4 Title of Officer (e.., "Jane DA6Notary Publi personally appearedta+ua�' Name(s) of Signer(s) 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 she executed the same in her authorized capacity, and that by her 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. "gnus MAatv WITNESS my hand and official seal. COOyKew- aww MolaY htb0e • 6aYlortft pur«atls cour" sA"cawn, s7�tr.. oa t a 101 .Q Quo Place Notary Seal Above Signature of Notfry Public OPTIONAL Though the information below is not required by law, it may prove valuable to persons relying on the document and could prevent fraudulent removal and reattachment of this form to another document. Description of Attached Document Title or Type of Document: Assignment and Assumption Document Dated October 31, 2007 Number of Pages: 4 Signer(s) Other Than Named Abo% Capacity(ies) Claimed by Signer Signer's Name: ❑ Individual ❑ Corporate Officer - Title(s):_ ❑ Partner - ❑ Limited ❑ General ❑ Attorney in Fact ❑ Trustee ❑ Guardian or Conservator Other: Signer is Representing: Assignment and Assumption of Regulatory Agreement and Declaration of Covenants and Restrictions and Consent thereto Right Thumbprint of Signer 8 P i P, I r'. I 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 (� ( rs ` )'jq n jet Notary Identification Number % 977Q County Where Bond Is Filed 2 -e-sr -C -e Date Commission Exp 2or c-) �j SPL, Inc. as agent DATE: 3 / r Z / a9 Signature State of California ) County of ) On before me, personally appeared, who proved to me the basis of satisfactory evidence) to be the person (s) whose name (a) 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. Signature 1 CERTIFY UNDER PENALTY OF PERJURY THAT THIS MATERIAL IS A TRUE COPY OF THE ORIGINAL MATERIAL CONTAINED IN THE DOCUMENT: 5 ` ` 1 �cw Q S P. (;4e✓7overc SPL, Inc. as agent DATE: ature Raised 3/(,/08 R I DR Old ; PCiLdIles MI "Ith :008 ack R I doc Recording Requested by - and - When recorded Mail to: La Quinta Redevelopment Agency P.O. Box 1504 La Quinta, Ca 92253 Attn: Thomas Genovse DOC # 2009-0122230 03/13/2009 08:00A Fee:NC Page 1 of 8 Recorded in Official Records County of Riverside Larry W. Ward Assessor, County Clerk 1, Recorder 1 1111111111111111111111I 111111111111111 I 111111111111111 S R U PAGE LSIZE I DA I MISC LONG RFD COPY M A L 1 465 1 426 PCOR NCOR SMF NCHG EXAM UNI T: CTY SPACE ABOVE THIS LINE FOR Recording exempt from recording fees pursuant to California Government Code §27383 ASSIGNMENT AND ASSUMPTION OF REGULATORY AGREEMENT AND DECLARATION OF COVENANTS AND RESTRICTIONS AND CONSENT THERETO THIS ASSIGNMENT AND ASSUMPTION OF REGULATORY AGREEMENT AND DECLARATION OF COVENANTS AND RESTRICTIONS (""Assignment') is dated for identification as of October 31, 2007 and is by and among National Community Renaissance of California, a California nonprofit public benefit corporation ("Former Owner"), Vista Dunes Housing Partners, L.P., a California limited partnership ("Partnership") and La Quinta Redevelopment Agency, a public body, corporate and politic ("Agency"), with reference to the following matters. RECITALS A. On or about October 31, 2007, Agency and Former Owner entered into that certain Amended and Restated Affordable Housing Agreement relating to development, financing and construction of an 80-unit affordable rental housing development commonly known as the "Vista Dunes Apartments" (the "Project') on certain real property more specifically described in Exhibit A attached hereto and incorporated by reference herein (the "Site"). 6111eago Title company has ramVW #A bshment by request as an aocommodation onk Assignment and Assumption of and has not examined it for regulgrity and su& Regulatory Agreement and Declaration doAoy or as to as eflep upon the tla to any Ml of Covenants and Restrictions and Consent thereto 1 ProPeny that may be deearoW heMAL 0 B. In conjunction therewith, Agency and Former Owner executed that certain Regulatory Agreement and Declaration of Covenants and Restrictions dated October 29, 2007, which was subsequently recorded on October 31, 2007 as Document No. 2007-0669198, Official Records of Riverside County, California (the "Regulatory Agreement'). Among other things, the Regulatory Agreement in Section 3.1 requires that the Project owner permit occupancy of 79 of the apartment units in the Project only by Eligible Tenants, defined therein to be "Very Low Income Households," "Extremely Low Income Households" or "50% Very Low Income Households" (capitalized terms used but not defined herein shall have the meanings ascribed thereto in the Regulatory Agreement). C. On or about October _, 2007, the Agency and the Former Owner entered into that certain unrecorded Agreement to Convey Fee Title ("Conveyance Agreement'). Pursuant to the Conveyance Agreement, Agency consented to transfer of title of the Site and the Project from Former Owner to Partnership. As one of the conditions imposed on such transfer, in Section 6 of the Conveyance Agreement the Partnership agreed to assume the responsibility for complying with the affordability restrictions and other covenants and agreemeiyts contained in the Amended and Restated Affordable Housing Agreement, including, but not limited to, the terms, conditions and restrictions contained in the Regulatory Agreement. D. On or about October 31, 2007, Former Owner transferred title of the Project and of the Site to Partnership. E. In order to extend the benefits of the "welfare exemption" provided in California Revenue & Taxation Code §214(g) to Partnership, Riverside County has required that the Partnership formally assume, as a matter of Public Record, the responsibility to apply and enforce the affordability restrictions and other obligations contained in the Regulatory Agreement, in order to demonstrate compliance with Board of Equalization Rule 140(a)(3), (5) and (6), as well as Rule 140(b)(1)(B). F. This Assignment is being made pursuant to applicable provisions of the Conveyance Agreement as well as Section 9 of the Regulatory Agreement, for the purpose of assumption by La Quinta Housing Partners, L.P. of the obligations, responsibilities and restrictions contained in the Regulatory Agreement and consent thereto by the Agency. OPERATIVE PROVISIONS NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Former Owner, Partnership and the Agency hereby agree as follows: 1. Assignment by Former Owner. Effective as of the date hereof, Former Owner confirms that its has assigned, conveyed and transferred, and it hereby assigns, conveys and transfers to the Partnership all obligations, duties, responsibilities and rights arising under the Regulatory Agreement and the benefits and burdens thereunder. Assignment and Assumption of Regulatory Agreement and Declaration of Covenants and Restrictions and Consent thereto 2. Acceptance of Assunption. The Partnership hereby accepts the assignment of the Regulatory Agreement as provided in Section 1 above, The Partnership further agrees that it shall and hereby does assume the responsibility of performing and enforcing any and all of the duties and obligations arising under or relating to the Regulatory Agreement, including, but not limited to, the obligation to hold and rent Units in the Project to Eligible Tenants, as provided more specifically in the Regulatory Agreement, the provisions of which are incorporated herein by reference, and, as the owner of the Project and the Site, to perform all other obligations imposed by the provisions of the Regulatory Agreement on the owner of the Project and the Site. 3. Further Assurances. Each of the parties to this Assigtunient shall execute and deliver any and all additional papers, documents and other assurances and shall do any and all acts and things reasonably necessary in connection with the performance of its obligations hereunder and to carry out the intent and agreement of the parties to this Assignment. 4. Successors and Assigns. This Assignment shall be binding upon and inure to the benefit of the permitted successors and assigns of the parties hereto. 5. Incorporation of Recitals. The Recitals set forth at the begimning of this Assignment are incorporated into this Assignment as though set forth in full herein. 6. Authority. Each person signing this Assignment represents and warrants that he or she has the proper authority to bind the party on whose behalf he or she signs this instrument. 7. Counterparts. This Assignment may be executed in counterparts, each of which shall be deemed an original but all of which shall together constitute one and the same instrument. IN WITNESS WHEREOF, the parties have executed this Assignment to be effective as of the date and year first above written, regardless of the date of actual execution hereof. "Former Owner" National Community Renaissance of California, a Californianonprofitpublic benefit corporation 13y4:' Richard J. Whittingham, CFO [signatures continue on following page] Assignment and Assumption of Regulatory Agreement and Declazation of Covenants and Restrictions and Consent thereto "Partnership" Vista Dunes Housing Partners, L.P., a California limited partnership By its General Partner Vista Dunes GP, LLC, a California limited liability company By its Manager Southern California Housing Development Corporation of the Inland Empire, a California nonprofit public benefit corporation B�/!/ Richard J. Whittingham, CFO This instrument is executed by the undersigned for the sole purpose of providing written consent to the assignment of the Regulatory Agreement, as contemplated by this Assignment and by the Conveyance Agreement, effective as of the date of this instrument. "Agency" La Quinta Redevelopment Agency, a public body, corporate and politic By:�/�t,�..��/y Name: '74 c/,, 4 S P Title: FW7-1'yf Assignment and Assumption of Regulatory Agreement and Declaration of Covenants and Restrictions and Consent thereto EXHI➢IT "A" LEGAL DESCRIPTION OF SITE All of that certain real property in the City of La Quinta, County of Riverside, State of California, described as follows; That portion of the Southeast quarter of the Northeast quarter of Section 19, Township 6 South, Range 7 East, San Bernardino Base and Meridian, described as follows: Commencing at the Southeast comer of the Northeast quarter of said Section 19; Thence South 89° 33' 05" West, on the Southerly line of the Northeast quarter of said Section, 330 feet, to the true point of beginning; thence South 89' 33' 05" West, on said Southerly litre of the Northeast quarter, 330 feet; Thence North 0° 13' 40" West, 1,324.57 feet, to the Northerly line of the Southeast quarter of Northeast quarter of said Section 19; thence North 89' 34' 05" East, on said Northerly line, 330 feet; thence South 0° 13' 40" East, 1,324.47 feet to the true point of beginning; Excepting therefrom the Southerly 50 feet conveyed to the County of Riverside by Deeds recorded August 30, 1933 in Book 133, Page(s) 292 and Book 134, Page(s) 298 respectively, of Official Records, Riverside County Records. Also excepting therefrom that portion of described in the deeds to the City of La Quinta, recorded 02-17-1999, as Instrument No. 62425 and 62426, Official Records. Excepting therefrom the mobile home located thereon. wsvm 56 104047 .43409.07 OMM? EXHIBIT "A" ALL-PURPOSE ACKNOWLEDGMENT State of California ) ss. County of ��/i i iPYI(Lt/^i&z ) On 2009, before me, T*dAL / 1_11AI1lOeZ, /il07Qyrt/ Date Name and Title of Officer (e.g., "Jane Doe, Notary Public") personally appeared Richard J. Whittingham Name(s) of Signer(s) 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 she executed the same in her authorized capacity, and that by her 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. w/..Lz%m� ,Signature of Notary Public <9 y HILDA HERNANDEZ COMM. N 1756272 N NOTARY PUBLIC-CALIFORNIA N BAN BERNARDINO COUNTY ....__.. MY CONN. EXP. J:::: 2011 Place Notary Seal Above OPTIONAL Though the information below is not required by law, it may prove valuable to persons relying on the document and could prevent fraudulent removal and reattachment of this form to another document. Description of Attached Document Title or Type of Document: Assignment and Assumption Document Dated October 31, 2007 Number of Pages: Signer(s) Other Than Named Above: Capacity(tes) Claimed by Signer Signer's Name: ❑ Individual ® Corporate Officer - Title(s): CFO ❑ Partner - ❑ Limited ❑ General ❑ Attorney in Fact ❑ Trustee ❑ Guardian or Conservator Other: Signer is Representing: Assigrunent and Assumption of Regulatory Agreement and Declaration of Covenants and Restrictions and Consent thereto Right Thumbprint of Signer ALL-PURPOSE ACKNOWLEDGMENT State of California ) ) SS. County //off On 2009, before me, �n sty �1 lQd Ala�`L Date Name ark Title of Officer (e.g., "Jane , Notary Pu i ') personally appeared P G Name(s)of Slgner(s) 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 she executed the same in her authorized capacity, and that by her 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. r�us WITNESS my hand and official seal. CO"0°� tNf Canly Place Notary Seal Above Signature of jotary Public Though the information below is not required by law, it may prove valuable to persons relying on the document and could prevent fraudulent removal and reattachment of this form to another document. Description of Attached Document Title or Type of Document: Assignment and Assumption Document Dated October 31, 2007 Number of Pages: 4 Signer(s) Other Than Named Abo\ Capacity(ies) Claimed by Signer Signer's Name: ❑ Individual ❑ Corporate Officer - Title(s): ❑ Partner- ❑ Limited ❑ General ❑ Attorney in Fact ❑ Trustee ❑ Guardian or Conservator Other: Signer is Representing: Assignment and Assumption of Regulatory Agreement and Declaration of Covenants and Restrictions and Consent thereto Right Thumbprint of Signer S I P i .. Iv Caovt�.��,ea�� Cocas 2'13�0� 1 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 S Hqn /Ptv Notary Identification Number 1 fP?77Q6 County Where Bond Is Filed Date Commission Exp DATE: 3 / I Z / Gq (21Vel Sr �f SPL, Inc. as agent �Q�a�ign—ature-e State of California ) County of ) On before me, personally appeared, who proved tome 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 is) 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. Signature F a Qr% i it r vlvutK PENALTY OF PERJURY THAT THIS MATERIAL IS A TRUE COPY OF THE ORIGINAL MATERIAL CONTAINED IN THE DOCUMENT: DATE: / / SPL, Inc. as agent Signature Rmsed 3/(,/08 R I L)R 014 1 Pcnp1Iles "I I wah 2008 ack R I duc ACORDTM EVIDENCE OF COMMERCIAL PROPERTY INSURANCE DfYY oATi YYI 0512014 THIS EVIDENCE OF COMMERCIAL PROPERTY INSURANCE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE ADDITIONAL INTEREST NAMED BELOW. THIS EVIDENCE DOES NOT AFFIRMATIVELY OR NEGATIVELY AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. THIS EVIDENCE OF INSURANCE DOES NOT CONSTITUTE A CONTRACT BETWEEN THE ISSUING INSURER(S), AUTHORIZED REPRESENTATIVE OR PRODUCER, AND THE ADDITIONAL INTEREST. PRODUCER NAME, - PHONE 303-534.4567 COMPANY NAME AND ADDRESS NAIC NO: 19437 CONTACT PERSON AND ADDRESS . AIC No Ext : IMA, Inc. - Colorado Division Lexington Insurance Company 1706170 Street, Suite 100 . Denver CO 80202 - - - 303.534-0600 ADDRESS: denpam�Imacorp.00M A/C No):FAX _ IF MULTIPLE COMPANIES COMPLETE SEPARATE FORM FOR EACH CODE: SUB CODE: 116 POLICY TYPE Commercial Property Policy AGENCY CUSTOMER ID #: 34403 NAMED INSURED AND ADDRESS LOAN NUMBER POLICY NUMBER - National Community Renaissance of California 1146337020150 EFFECTIVE DATE EXPIRATION DATE ❑ CONTINUED UNTIL 9421 Haven Avenue Rancho Cucamonga, CA 91730 10110112015 01/01/2016 TERMINATED IF CHECKED ADDITIONAL NAMED INSUREDIS) THIS REPLACES PRIOR EVIDENCE DATED: Vista Dunes Housing Partners, L.P. 11111ury bpdce lb requlreut 161 DUILUIMb VR LJ OYD1nIC53 YtKDVNAL YKVYCK 17 Name of Property: Vista Dunes Coumryard Homes 44-960 Vista Dunes Ln, La Quints, CA 92201 THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS EVIDENCE OF PROPERTY INSURANCE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS. COVERAGE INFORMATION PERILS INSURED ❑ BASIC ❑ BROAD ❑ SPECIAL COMMERCIAL PROPERTY COVERAGE AMOUNT OF INSURANCE: $125,000,000 Loss Limit DED: $5,000 YES NO NIA ® BUSINESS INCOME ® RENTAL VALUE If YES, LIMIT: See Remarks ® Actual Loss Sustained; # of months: 12 BLANKET COVERAGE X If YES, indicate value(s) reported on property identified above: $ TERRORISM COVERAGE X Attach Disclosure Notice / DEC IS THERE A TERRORISM -SPECIFIC EXCLUSION? X IS DOMESTIC TERRORISM EXCLUDED? X LIMITED FUNGUS COVERAGE X If YES, LIMIT: See Remarks DED: $5,000 FUNGUS EXCLUSION (IF "YES," specify organintion's form used) X REPLACEMENT COST X AGREED VALUE - X COINSURANCE X If Yes, % EQUIPMENT BREAKDOWN (If Applicable) X If YES, LIMIT: Ind. in loss limit DED: $5,000 ORDINANCE OR LAW - Coverage for loss to undamaged portion of bldg X - - Demolition Costs X If YES, LIMIT: See Remarks DED: $5,000 ' - Incr. Cost of Construction X If YES, LIMIT: Sea Remarks DED: $5.000 EARTH MOVEMENT (If Applicable)- -X - --If YES, LIMIT: See Remarks --DES: See Remarks' --- FLOOD (if Applicable) X If YES, LIMIT: See Remarks DED: See Remarks WIND/HAIL (If Subject to Different Provisions) X If YES, LIMIT: Incl. in loss limit DED: $5,000 PERMISSION TO WAIVE SUBROGATION IN FAVOR OF MORTGAGE HOLDER PRIOR TO LOSS X CANCELLATION SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE EXPIRATION DATE THEREOF, NOTICE WILL BE DELIVERED IN ACCORDANCE WITH THE POLICY PROVISIONS. ADDITIONAL INTEREST MORTGAGEE LENDERS LOSS PAYABLE ADDITIONAL INSURED LENDER SERVICING AGENT NAME AND ADDRESS NAME AND ADDRESS AUTHORIZED REPRESENTATIVE La Quints Redevelopment Agency Calls Tampico / La Quintts, CA 92253 La Quints, j,J ACORD 28 (2009112) PAGE 1 OF 2 © 2003-2009 ACORD CORPORATION. All rights reserved. The ACORD name and logo are registered marks of ACORD Building, Personal Property, Business Income, (Including Loss of Rents), Extra Expense Coverage, Machinery & Equipment Breakdown, Builder; Risk Hard Costs and Soft Costs All Coverage Combined are Included in the $125,000,000 Loss Limit Any One Occurrence. Newly Acquired or Constructed Property - Building, Your Business Personal Property and Business Interruption including Loss of Rents. Permanent Structures - $10,000,000 Automatic coverage up to 180 days; Full coverage once underwriter advised and accepted. Property Under the Course of Construction - $5,000,000 Automatic coverage up to 180 days; Full coverage once underwriter advised and accepted. Building Ordinance Demolition and Increased Cost of Construction Sub -Limit: 20% of Replacement Cost of damaged building structure(s) - subject to $500,000 minimum and a $2,500,000 per property maximum any one occurrence/Total Any One Occurrence - $109000,000 Limited Fungus Coverage - $26,000 clean-up only after covered cause of loss. Earthquake - $6,000,000 Any One Occurrence; $6,000,000 Annual Aggregate; Deductible 2% of RC of damaged structure(s) or $25,000 Minimum per Occurrence. Earthquake coverage is excluded in California, Hawaii, Alaska, Puerto Rico, Canada and New Madrid Zone States and Counties as defined by the policy. Flood - $5,000,000 Any One Occurrence; $5,000,000 Annual Aggregate; Deductible 2% of RC of damaged structure(s) or $25,000 Minimum per Occurrence. Flood coverage is excluded in Zones A, B or V as defined by the National Flood Insurance Program. Wind/Hall: Named Windstorm, Flood & Storm Surge as defined by the policy and Excluding Terrorism: Tier 1B Counties as defined by the policy in Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Rhode Island & Virginia. Deductible: 2% of Replacement Cost of damaged building structure(s) - subject to $26,000 minimum Exclusion for Named Windstorm, Flood & Storm Surge and Terrorism as defined by the policy: Tier 1A States, Counties and Parishes as defined by the policy in Alabama, Florida, Georgia, Hawaii, Louisiana, Mississippi, North Carolina, South Carolina and Texas. Limits of Insurance used for Premium determination: Building $ 19,630,000 Limit $ 5,000 Deductible Business Personal Property $ 200,000 Limit $ 6,000 Deductible Business Income, Rents & Extra Expense $ 581,000 Limit ACORD 28 (2009112) PAGE 2 OF 2 © 2003-2009 ACORD CORPORATION. All rights reserved. The ACORD name and logo are registered marks of ACORD June 11, 2014 City of La Quinta Carla Triplett, Housing Director 78-495 Calle Tampico La Quinta, CA 92253 Re: Agency Note Dear Carla, This letter is to begin the process for forgiving the Agency note between La Quinta Redevelopment Agency and Vista Dunes Housing Partners, L.P. dated October 31, 2007 for $24,000,000. Per the agreement: 3. Disbursement of Agency Loan "3.2 Subject to the provisions of Section 4 herein, which provide for acceleration of the then outstanding principal and immediate payment thereof in the event of a default by Maker, this Note shall be automatically cancelled, as evidenced by Holder's return to Maker of the original of this Note marked "cancelled", and the Agency Deed of Trust shall be reconveyed, on the fifth anniversary of the Permanent Loan Closing. In the event of such cancellation, any outstanding amounts due under this Note shall automatically be forgiven." The fifth anniversary of the agency loan was October 31, 2012 and Vista Dunes Housing Partners, L.P. would like to cancel the loan as of June 11, 2014 per section 3.2 of the Agency Loan. Also, attached is the Deed of Trust to be reconveyed. If you have any questions, please contact myself at pnelson@nationalcore.org (909)483, 2444 or Tracy Thomas, at tthomas@nationalcore.org or (909)483-2444. Thank Phi[ip Nelson Lee RECEIVED General Counsel JUN 16 Z014 CITY OF LA QUINTA PLANNING DEPARTMENT • • • 9421 Haven Avenue, Rancho Cucamonga, CA 91730 909.483.2444 Fax: 909.483.2448 nationalcore.org RUTAN RUTAN & TUCKER, LLP February 10, 2015 Patti Porter Title Officer Fidelity National Title Major Accounts/Builder Services 1300 Dove Street, Suite 310 Newport Beach, CA 92660 Re: Reconveyance of Deed of Trust (Vista Dunes) Dear Ms. Porter: Allison LeMoine-Bui Direct Dial: (714) 662-4658 E-mail: alemoine-bui@rutan.coln This office represents the La Quinta Housing Authority (the "Authority"). On or about October 31, 2007, National Community Renaissance of California ("National CORE") and the former La Quinta Redevelopment Agency (the "Agency") entered into an Amended and Restated Affordable Housing Agreement ("AHA"). Pursuant to the AHA, National CORE executed that certain Agency Note in the amount of Twenty -Four Million Dollars ($24,000,000), in favor of the Agency. Repayment of the Agency Note was secured by that certain Construction Deed of Trust with Assignment of Rents and Riders Attached Hereto (the "Deed of Trust"). The Deed of Trust was recorded in the Official Records of the County of Riverside (the "Official Records") on October 31, 2007, as Instrument No. 2007-0669199. The Authority is the housing successor to the Agency, and has the right to administer all housing agreements and programs of the former Agency. Pursuant to Section 3.2 of the Agency Note, the Agency Note is to be automatically cancelled, and the Deed of Trust reconveyed, on the fifth anniversary of the "Permanent Loan Closing" (as that term is defined in the AHA). Further, the Agency Note provides that in the event of such cancellation, any outstanding amounts due under the Agency Note shall automatically be forgiven. The fifth anniversary of the Permanent Loan Closing has passed. Pursuant to Section 3.2 of the Agency Note, (i) all outstanding amounts due under the Agency Note have been forgiven, and (ii) the Authority has prepared a reconveyance of the Deed of Trust and now requests your office to record said reconveyance in the Official Records. 611 Anton Blvd., Suite 1400, Costa Mesa, CA 92626 PO Box 1950, Costa Mesa, CA 92628-1950 1 714.641.5100 1 Fax 714.546.9035 Orange County I Palo Alto I www.rutan.com 882/015610-0040 8053217.1 a02/10/15 RUTAN RUTAN 6 TUCKER, LLP Patti Porter February 10, 2015 Page 2 Please feel free to call me should you have any questions regarding this matter. Very truly yours, RUTAN & TUCKER, LLP Allison LeMoine-Bui 882/015610-0040 8053217.1 a02/10/15 TO Tracy Thomas FROM Dianna Noeth — Asset Management DATE March 2, 2015 RE Vista Dunes -Re -conveyance Attached is a letter from the attorney representing the La Quinta Housing Authority in regards to the cancellation of the $24MM debt against Vista Dunes. Patti.Porter at Fidelity Title approved the re - conveyance but also stated it -would be wise to obtain a letter from the Authority confirming the lien is being re -conveyed without consideration for title's file. Tracy, please review both the re -conveyance and letter, Patti at title is ready to record. Thank you, Dianna RUTAN RUTAN 6 TUCKER, l..t.P February 10, 2015 Patti Porter Title Officer Fidelity National Title Major Accounts/Builder Services 1300 Dove Street, Suite 310 Newport Beach, CA 92660 Re: Reconveyance of Deed of Trust (Vista Dunes) Dear Ms. Porter: Allison LeMoine-Bui Direct Dial: (714) 662-4658 . E-mail: alemoine-bui@rutan.com _. This office represents the La Quinta Housing Authority (the "Authority'-). On or about rl October 31, 2007, National Community Renaissance of California ("National CORE") and the former La Quinta Redevelopment Agency (the "Agency") entered into an Amended and Restated Affordable Housing Agreement ('`AHA"). Pursuant to the AHA, National CORE executed that certain Agency Note in the amount of Twenty -Four Million Dollars ($24,000,000); in favor of the Agency. Repayment of the Agency Note was secured by that certain Construction Deed of - Trusi with Assignment of Rents and Riders Attached'Hereto (the "Deed of Trust"). The Deed of Trust was recorded in the Official Records of the County of Riverside (the "Official Records") on October 31, 2007, as Instrument No, 2007-0669199. The Authority is the housing successor to the Agency, and has the right to administer all housing agreements and programs of the former =^ Agency, Pursuant to Section 3.2 of the Agency Note, the Agency I�tote is to be automatically cancelled, and the Deed of Trust reconve;✓ed, on the fifth anniversary of the "Permanent Loan Closing" .(as that term is defined in the AHA). Further, the Agency Note provides that in the event of such cancellation, any outstanding amounts due tinder the Agency Note shall Y; automatically be forgiven. The fifth anniversary of the Permanent Loan Closing has passed. Pursuant to Section 3.2 of the Agency Note, (i) all outstanding amounts due under the Agcncy Note have been forgiven, and (ii) the Authority has prepared a reconveyance of the Deed of Trust and now requests your office to record said reconveyance in the Official Records. 611 Anton Blvd., Suite 1400, Costa Mesa, CA 92626 PO Box 1950, Costa Mesa, CA 92628-1950 1 714.641.5100 1 Fax 714.546.9035 Orange County I Palo Alto I www.rutan.com I I ). 882/015610-0040 8053217 1 302A0l15 RUTAN RUTAN L TUCKER. LLP Patti Porter February 10, 2015 Page 2 Please feel free to call me should you have any questions regarding this matter. Very truly yours, RUTAN & TUCKER, LLP Allison Leibloine-Bui ALB 882/015610-0040 .` 6053217.1, a02/10/15 RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO La Quinta Housing Authority 78-495 Calle Tampico La Quinta, CA 92253 Attn: Authority Secretary APN:604-032-022 (Space Above for Recorder's Use) Exempt from Recordation Fee per Gov. Code § 27383 SUBSTITUTION OF TRUSTEE AND DEED OF FULL RECONVEYANCE National Community Renaissance of California, a California nonprofit public benefit corporation ("CORE"), executed that certain Construction Deed of Trust With Assignment of Rents And Riders Attached Hereto dated October 31, 2007, and recorded October 31, 2007, as Instrument No. 2007-0669199, in the Official Records of the County of Riverside, State of California ("Deed of Trust") for the benefit of the former La Quinta Redevelopment Agency, a public body, corporate and politic (the "Agency"). The La Quinta Housing Authority, a public body, corporate and politic ("Housing Authority'), is the housing successor entity to the Agency and became the beneficiary under the Deed of Trust pursuant to (i) Health and Safety Code Section 34176(b), added by Assembly Bill 26 from the 2011-2012 First Extraordinary Session of the California Legislature and amended by Assembly Bill 1484 from the 2011-2012 Regular Session of the California Legislature, (ii) La Quinta City Council Resolution No. 2012-002, adopted on January 3, 2012, and (iii) La Quinta Housing Authority Resolution No. 2012-002, adopted on January 17, 2012. On October 31, 2007, CORE assigned all of its right, title, and interest in and to the Deed of Trust to Vista Dunes Housing Partners, L.P., a California limited partnership. Housing Authority, as the current beneficiary and owner and holder of the Deed of Trust, hereby substitutes Housing Authority as trustee in lieu of Chicago Title Company. Housing Authority hereby accepts said appointment as trustee under the Deed of Trust and, as successor trustee, pursuant to the request of the current owner and holder, does hereby reconvey, without warranty, to the person or persons legally entitled thereto, all of the estate, title and interest now held by it under the Deed of Trust. [End — Signature page follows] 8921015610-0040 7930784.1 a01105I15 -1- RECORDING REQUESTED BY FIDELITY NATIONAL TITLE .2.�01fd7G�_p RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO La Quinta Housing Authority 78-495 Calle Tampico La Quinta, CA 92253 Attn:. Authority Secretary DOC # 2016-0118773 03/25/2015 08:00 AM Fees: $23.00 Page 1 of 4 Recorded in Official Records County of Riverside Peter Aldana Assessor, County Clerk & Recorder `*This document was electronically submitted to the County of Riverside for recording— Receipted by: MRUIZ APN:604-032-022 (Space Above for Recorder's Use) Exempt from Recordation Fee per Gov. Code § 27383 SUBSTITUTION OF TRUSTEE AND DEED OF FULL RECONVEYANCE National Community Renaissance of California, a California nonprofit public benefit corporation ("CORE"), executed _that certain Construction Deed of Trust With Assignment of Rents And Riders Attached Hereto dated October 31, 2007, and recorded October 31, 2007, as Instrument No. 2007-0669199, in the Official Records of the County of Riverside, State of California ("Deed of Trust") for the benefit of the former La Quinta Redevelopment Agency, a public body, corporate and politic (the "Agency"). The La Quinta Housing Authority, a public body, corporate and politic ("Housing Authority"), is the housing successor entity to the Agency and became the beneficiary under the Deed of Trust pursuant to (i) Health and Safety Code Section 34176(b), added by Assembly Bill 26 from the 2011-2012 First Extraordinary Session of the California Legislature and amended by Assembly Bill 1484 from the 2011-2012 Regular Session of the California Legislature, (ii) La Quinta City Council Resolution No. 2012-002, adopted on January 3, 2012, and (iii) La Quinta Housing Authority Resolution No. 2012-002, adopted on January 17, 2012. On October 31, 2007, CORE assigned all of its right, title, and interest in and to the Deed of Trust to Vista Dunes Housing Partners, L.P., a California limited partnership. Housing Authority, as the current beneficiary and owner and holder of the Deed of Trust, hereby substitutes Housing Authority as trustee in lieu of Chicago Title Company. Housing Authority hereby accepts said appointment as trustee under the Deed of Trust and, as successor trustee, pursuant to the request of the current owner and holder, does hereby reconvey, without warranty, to the person or persons legally entitled thereto, all of the estate, title and interest now held by it under the Deed of Trust. [End — Signature page follows] 9921015610-0040 7930794.1 a01/05/15 —1— DOC #2015-0118773 Page 2 of 4 03/25/2015 08:00 AM ATTEST: B: Y Susan Maysels, Secret State of ifomia ) County of Ri ide ) On "Housing Authority" LA QUINTA HOUSING AUTHORITY, a public body, corpora and politic . SpOa'bek, Executive Director before me, , (insert name and title of the officer) Notary Public, personally app red who proved to me on the basis o tisfactory evidence to be the person(s) whose name(s) is/are subscribed to the withi instrument and acknowledged to me that he/she/they executed the same in his/he eir authorized capacity(ies), and that by his/her/their signature(s) on the instrument th erson(s), or the entity upon behalf of which the person(s) acted, executed the instrum t. I certify under PENALTY OF PERJURY under t laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature 8821015610-0040 7930784.1 a01l05/15 -2- DOC #2015-0118773 Page 3 of 4 03/25/2015 08:00 AM STATE OF CALIFORNIA ss. COUNTY OF RIVERSIDE A notary public or other officer completing this certificate verifies only the identity of the individual who -signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. On : _ 16_ . before me, �P.r'e�so�-T�OrnpSO, Notary Public, perso ally 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 =� Notary Public - California i Riverside County My Comm. Expires Jun 24. 2017 DOC #2015-0118773 Page 4 of 4 03/25/2015 08:00 AM LEGAL DESCRIPTION All of that certain real property in the, City of La Quinta, County of Riverside, State of California, described as follows: That portion of the Southeast quarter of the Northeast quarter of Section 19, Township 6 South, Range 7 East, San Bernardino Base and Meridian, described as follows: Commencing at the Southeast comer of the Northeast quarter of said Section 19;. Thence South 890 33' 05" West, on the Southerly line of the Northeast quarter of said. Section, 330 feet, to the true point of beginning; thence South 890 33' 05" West, on said Southerly line: of the -Northeast quarter, 330 feet; Thence North 01 13' 40" West, 1,324.57 feet, to the Northerly line of the Southeast quarter of Northeast quarter of said Section 19; thence North 890 34' 05" East, on said Northerly line, 330 feet; thence South 0° 13' 40" East, 1,324.47 feet to the true point of beginning; Excepting therefrom the Southerly 50 feet conveyed to the County of Riverside by Deeds recorded August 30, 1933 in Book 133, Page(s) 292 and Book 134, Page(s) 298 respectively, of Official Records, Riverside County Records. Also excepting therefrom that portion of described in the deeds to the City of - La Quints, recorded 02-17-1999, as Instrument No. 62425 and 62426, Official Records. Excepting therefrom the mobile home located thereon. APN: 604-032-022 DOC # 2015-0118773 RECORDING REQUESTED BY FIDELITY NATIONAL TITLE agora7�r/-,a RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO La Quinta Housing Authority 78-495 Calle Tampico La Quinta, CA 92253 Attn: Authority Secretary 03/25/2015 08:00 AM Fees: $23.00 Page 1 of 4 Recorded in Official Records County of Riverside Peter Aldana Assessor, County Clerk & Recorder "This document was electronically submitted to the County of Riverside for recording" Receipted by: MRUIZ APN:604-032-022 (Space Above for Recorder's Use) Exempt from Recordation Fee per Gov. Code § 27383 SUBSTITUTION OF TRUSTEE AND DEED OF FULL RECONVEYANCE National Community Renaissance of California, a California nonprofit public benefit corporation ("CORE"), executed that certain Construction Deed of Trust With Assignment of Rents And Riders Attached Hereto dated October 31, 2007, and recorded October 31, 2007, as Instrument No. 2007-0669199, in the Official Records of the County of Riverside, State of California ("Deed of Trust") for the benefit of the former La Quinta Redevelopment Agency, a public body, corporate and politic (the "Agency"). The La Quinta Housing Authority, a public body, corporate and politic ("Housing Authority"), is the housing successor entity to the Agency and became the beneficiary under the Deed of Trust pursuant to (i) Health and Safety Code Section 34176(b), added by Assembly Bill 26 from the 2011-2012 First Extraordinary Session of the California Legislature and amended by Assembly Bill 1484 from the 2011-2012 Regular Session of the California Legislature, (ii) La Quinta City Council Resolution No. 2012-002, adopted on January 3, 2012, and (iii) La Quinta Housing Authority Resolution No. 2012-002, adopted on January 17, 2012. On October 31, 2007, CORE assigned all of its right, title, and interest in and to the Deed of Trust to Vista Dunes Housing Partners, L.P., a California limited partnership. Housing Authority, as the current beneficiary and owner and holder of the Deed of Trust, hereby substitutes Housing Authority as trustee in lieu of Chicago Title Company. Housing Authority hereby accepts said appointment as trustee under the Deed of Trust and, as successor trustee, pursuant to the request of the current owner and holder, does hereby reconvey, without warranty, to the person or persons legally entitled thereto, all of the estate, title and interest now held by it under the Deed of Trust. (End — Signature page follows] 882/015610-0040 7930784.1 a01/05/15 '1— DOC #2015-0118773 Page 2 of 4 03/25/2015 08:00 AM ATTEST: By: ---- Susan Maysels, State of 154ifornia ) County of !n��s ) On "Housing Authority" LA QUINTA HOUSING AUTHORITY, a public body, corporaoand politic LOW, rank J. S Executive Director before me, (insert name and title of the officer) Notary Public, personally app red , who proved to me on the basis o tisfactory evidence to be the person(s) whose name(s) is/are subscribed to the withi nstrument and acknowledged to me that he/she/they executed the same in his/he eir authorized capacity(ies), and that by his/her/their signature(s) on the instrument th erson(s), or the entity upon behalf of which the person(s) acted, executed the instrum t. I certify under PENALTY OF PERJURY under that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature 882/015610-0040 7930784.1 a01/05/15 -2- laws of the State of California (Sea DOC #2015-0118773 Page 3 of 4 03/25/2015 08:00 AM STATE OF CALIFORNIA ss. COUNTY OF RIVERSIDE A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. On _ _ 10 24 AQ).5 before me, TP, re-Sa. t r ►0iYI Notary Public, perso ally 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 Nut)uc TERESA THOMPSON Commission # 2030796 �.i Notary Public - California z Riverside County My Comm. Expires Jun 24, 2017 t DOC #2015-0118773 Page 4 of 4 03/25/2015 08:00 AM All of that certain real property California, described as follows: LEGAL DESCRIPTION in the City of La Quinta, County of Riverside, State of That portion of the Southeast quarter of the Northeast quarter of Section 19, Township 6 South, Range 7 East, San Bernardino Base and Meridian, described as follows: Commencing at the Southeast corner of the Northeast quarter of said Section 19; Thence South 890 33' 05" West, on the Southerly line of the Northeast quarter of said Section, 330 feet, to the true point of beginning; thence South 89° 33' 05" West, on said Southerly line of the Northeast quarter, 330 feet; Thence North 0° 13' 40" West, 1,324.57 feet, to the Northerly line of the Southeast quarter of Northeast quarter of said Section 19; thence North 89' 34' 05" East, on said Northerly line, 330 feet; thence South 0° 13' 40" East, 1,324A7 feet to the true point of beginning; Excepting therefrom the Southerly 50 feet conveyed to the County of Riverside by Deeds recorded August 30, 1933 in Book 133, Page(s) 292 and Book 134, Page(s) 298 respectively, of Official Records, Riverside County Records. Also excepting therefrom that portion of described in the deeds to the City of La Quinta, recorded 02-17-1999, as Instrument No. 62425 and 62426, Official Records. Excepting therefrom the mobile home located thereon. APN: 604-032-022