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HomeMy WebLinkAboutRes 05-92 and 511 Rancho Housing Alliance - DDA Relating to the Conveyance of a Single-Family HomeCITY OF PALM DESERT/PALM DESERT REDEVELOPMENT AGENCY STAFF REPORT REQUEST: PUBLIC HEARING FOR CONVEYANCE OF A SINGLE-FAMILY HOME TO RANCHO HOUSING ALLIANCE AND APPROVAL OF A DISPOSITION AND DEVELOPMENT AGREEMENT SUBMITTED BY: LAURI AYLAIAN, REDEVELOPMENT MANAGER DEVELOPER: RANCHO HOUSING ALLIANCE 53-990 ENTERPRISE WAY, SUITE 1 COACHELLA, CALIFORNIA 92236 DATE: OCTOBER 27, 2005 CONTENTS: 1) CITY RESOLUTION NO. 05- 92 2) AGENCY RESOLUTION NO.511 3) DISPOSITION AND DEVELOPMENT AGREEMENT BETWEEN THE PALM DESERT REDEVLOPMENT AGENCY AND RANCHO HOUSING ALLIANCE Recommendation: That the City Council/Agency Board open the public hearing and, following public testimony, take the following actions by Minute Motion: 1. Adopt Resolution No. 05- 92 - A resolution of the City Council of the City of Palm Desert approving a Disposition and Development Agreement between the Palm Desert Redevelopment Agency and the Rancho Housing Alliance concerning property owned by the Agency in the City of Palm Desert located at 74-047 San Marino Circle. 2. Adopt Resolution No. 511 - A resolution of the Palm Desert Redevelopment Agency approving the conveyance of certain real property located at 74-047 San Marino Circle to Rancho Housing Alliance of Coachella, California, for the purpose of rehabilitating the deteriorated single-family dwelling to be made available to a family of lower income; 3. Approve a Disposition and Development Agreement and Declaration of Conditions, Covenants and Restrictions; 4. Authorize the Executive Director or his designee to execute all necessary documents. Staff Report Consideration and Approval of DDA with Rancho Housing Alliance Page 2 of 3 27 October 2005 Executive Summary: Approval of the staff recommendation will sell a deteriorated single-family home on San Marino Circle to Rancho Housing Alliance for rehabilitation and subsequent sale to a qualifying low- or moderate -income family. Discussion: In November 2003, the Palm Desert Redevelopment Agency acquired two residential properties on San Marino Circle in Palma Village. One of the residences was so deteriorated as to warrant demolition. The second property, at 74-047 San Marino Circle, is a blighted, but salvageable, two -bedroom residence. The Agency desires to sell the home to a non-profit developer for rehabilitation and subsequent sale to a qualifying family of low or moderate income. Agency staff solicited proposals from two local non-profit housing developers for the rehabilitation of this home. The proposals, submitted by Rancho Housing Alliance and the Coachella Valley Housing Coalition, were evaluated based upon purchase price, repair cost, administrative services, and fees. Based on this comparison, Rancho Housing Alliance was selected to renovate the property. Health and Safety Code §33433 requires that before any property of the Agency is sold or leased, the conveyance must first be approved by the governing body by resolution at a public hearing. The purpose of the public hearing is to receive public testimony as prescribed by law. Notice of the time and place of the public hearing was published in a newspaper of general circulation in the community (the Desert Sun) for at least 2 weeks prior to the hearing. In addition, attached for your review and approval is a proposed Disposition and Development Agreement including the Regulatory Agreement by and between Rancho Housing Alliance, a California non-profit public benefit corporation, and the Redevelopment Agency, which outlines the requirements on behalf of the Developer in consideration for the conveyance of the above -referenced property. Conditions for the conveyance are: 1. Sale of the home "as -is" to Rancho Housing Alliance for the Agency's original purchase price of $165,000; 2. Replacement of the roof, windows, built-in appliances, fencing, and HVAC unit, and rehabilitation of the irrigation system, garage door, and interior finishes and cabinetry by Developer; G \RDA\Mana Hunt\WPDATA�AYLAIAMSTFRPTS\102705 Rancho Housing Alliance DDA doc Staff Report Consideration and Approval of DDA with Rancho Housing Alliance Page 3 of 3 27 October 2005 3. The sale of the dwelling to a lower income household; 4. Resale price controls; and 5. The Agency's option to purchase upon resale. A comprehensive review of the proposed Disposition and Development Agreement by an independent consultant has determined that: 1. The conveyance and redevelopment of the Site will assist in the elimination of present blighting conditions in Project Area 1; 2. Conveyance of the property is consistent with the implementation plan adopted pursuant to Section 33490 of the California Health and Safety Code; and 3. The consideration is not less than the fair reuse value determined at the use and with the conditions, covenants, and development costs authorized by the Agreement. Submitted by: Lauri Aylaian Redevelopment Manager mh Approval: J496n NcCartkhy,ACMJ3,ed velopment Carlos L. Ortega Executive Director Department Head: Dveavea Yri r n Directo of development/Housing &aul Gibson, Director of Finance G.\RDA\Mana HunttWPDATAIAYLAIAMSTFRPTS',102705 Rancho Housing Alliance DDA doc NOTICE OF PUBLIC HEARING NOTICE IS HEREBY GIVEN pursuant to California Health and Safety Code Section 33433, that on October 27, 2005, at 4:00 p.m., or as soon as practical thereafter in the City Council Chambers located at 73-510 Fred Waring Drive, Palm Desert, California, a public hearing will be held before the Palm Desert City Council, acting as the legislative body of the Agency. At this public hearing, the Agency will receive public comment and testimony concerning a proposed conveyance of Agency property to Rancho Housing Alliance, a California non-profit public benefit corporation, for the purpose of rehabilitation of the property and subsequent sale to an eligible family in the Agency's Low and Moderate Income Housing Program. A copy of the agreement and related documents and the summary report required by Health and Safety Code Section 33433 are available for public inspection and copying at the office of the City Clerk, located at 73-510 Fred Waring Drive, Palm Desert, California. All interested persons are invited to attend and provide testimony and comments to the Agency concerning the proposed agreement. You are hereby advised that should you desire to legally challenge any action taken by the Agency with respect to the agreement, you may be limited to raising only those issues and objections which you or someone else raised at or prior to the time of the public hearing. Dated: October 12, 2005 � 9_Qt�g S RA HE,ETARY PALM DESERT REDEVELOPMENT AGENCY GACityCKNGbria MartinezlLEGAL NOTICESTH 102705 - Rancho Houing Alliance.doc RESOLUTION NO. 05- 92 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PALM DESERT APPROVING A DISPOSITION AND DEVELOPMENT AGREEMENT BETWEEN THE PALM DESERT REDEVELOPMENT AGENCY AND THE RANCHO HOUSING ALLIANCE CONCERNING PROPERTY OWNED BY THE AGENCY IN THE CITY OF PALM DESERT LOCATED AT 74-047 SAN MARINO CIRCLE RECITALS: WHEREAS, the Palm Desert Redevelopment Agency (the "Agency") proposes to enter into a Disposition and Development Agreement ("DDA") with Rancho Housing Alliance, a California non-profit public benefit corporation (the "Developer'), a copy of which DDA is on file with the Secretary of the Agency, providing for the disposition of property owned by the Agency, generally identified as approximately 0.14 acres located at 74-047 San Marino Circle in the City of Palm Desert and improved with a single- family home (the "Property"), to the Developer, the rehabilitation of the Property by the Developer and the sale of the Property by the Developer to a person or family of low or moderate income at an affordable housing cost; WHEREAS, the DDA effectuates the Redevelopment Plan (the "Redevelopment Plan") for Project Area No. 1, as amended (the "Project Area") by providing for the redevelopment of the above -described real property located within the Project Area for low and moderate income housing; WHEREAS, Health and Safety Code Section 33433 requires that before any property of the Agency acquired in whole or in part with tax increment revenue is sold, such sale shall first be approved by the City Council of the City of Palm Desert (the "City Council") after a public hearing; WHEREAS, Health and Safety Code Section 33433 also requires that a Summary Report be made available for public inspection; WHEREAS, the Summary Report and the DDA have been made available for public inspection in the manner required by Health and Safety Code Section 33433; and WHEREAS, the Agency and the City Council have conducted a duly noticed joint public hearing pursuant to Health and Safety Code Section 33433 with respect to the DDA and the City Council has considered all oral and written comments submitted thereto; NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF PALM DESERT HEREBY FINDS, DETERMINES, RESOLVES AND ORDERS AS FOLLOWS: Section 1. Based on the evidence presented to the City Council, including the written staff report, oral and written testimony in this matter, and the P6401 -000 1\855763v l .doc RESOLUTION NO. 05-92 Summary Report prepared pursuant to Health and Safety Code Section 33433, the City Council hereby finds and determines that (i) the sale of the Property pursuant to the DDA will assist in the elimination of blight in the Project Area and will provide housing for low and moderate income persons; (ii) the sale of the Property pursuant to the DDA is consistent with the Agency's Implementation Plan for the Project Area adopted pursuant to Health and Safety Code Section 33490; and (iii) the consideration for the Property is not less than the fair reuse value of the Property at the use and with the covenants and conditions and development costs authorized by the DDA. Section 2. The City Council hereby approves the DDA. PASSED, APPROVED AND ADOPTED this 27t" day of October 2005, by the following vote to wit: AYES: NOES: ABSENTS: ABSTAINS: ATTEST: Rachelle D. Klassen, City Clerk Buford A. Crites, Mayor P6401-0001',855763v1.doc RESOLUTION NO. 511 A RESOLUTION OF THE PALM DESERT REDEVELOPMENT AGENCY APPROVING A DISPOSITION AND DEVELOPMENT AGREEMENT BETWEEN THE PALM DESERT REDEVELOPMENT AGENCY AND THE RANCHO HOUSING ALLIANCE CONCERNING PROPERTY OWNED BY THE AGENCY IN THE CITY OF PALM DESERT LOCATED AT 74-047 SAN MARINO CIRCLE RECITALS: WHEREAS, the Palm Desert Redevelopment Agency (the "Agency') proposes to enter into a Disposition and Development Agreement ("DDA") with Rancho Housing Alliance, a California non-profit public benefit corporation (the "Developer"), a copy of which DDA is on file with the Secretary of the Agency, providing for the disposition of property owned by the Agency, generally identified as approximately 0.14 acres located at 74-047 San Marino Circle in the City of Palm Desert and improved with a single- family home (the "Property"), to the Developer, the rehabilitation of the Property by the Developer and the sale of the Property by the Developer to a person or family of low or moderate income at an affordable housing cost; WHEREAS, the DDA effectuates the Redevelopment Plan (the "Redevelopment Plan") for Project Area No. 1, as amended (the "Project Area") by providing for the redevelopment of the above -described real property located within the Project Area for low and moderate income housing; WHEREAS, Health and Safety Code Section 33433 requires that before any property of the Agency acquired in whole or in part with tax increment revenue is sold, such sale shall first be approved by the City Council of the City of Palm Desert (the "City Council") after a public hearing; WHEREAS, Health and Safety Code Section 33433 also requires that a Summary Report be made available for public inspection; WHEREAS, the Summary Report and the DDA have been made available for public inspection in the manner required by Health and Safety Code Section 33433; and WHEREAS, the Agency and the City Council have conducted a duly noticed joint public hearing pursuant to Health and Safety Code Section 33433 with respect to the DDA and the Agency has considered all oral and written comments submitted thereto; NOW, THEREFORE, THE PALM DESERT REDEVELOPMENT AGENCY HEREBY FINDS, DETERMINES, RESOLVES AND ORDERS AS FOLLOWS: Section 1. Based on the evidence presented to the Agency, including the written staff report, oral and written testimony in this matter, and the Summary Report prepared pursuant to Health and Safety Code Section 33433, the Agency P6401-0001-856329v1.doc RESOLUTION NO. 511 hereby finds and determines that (i) the sale of the Property pursuant to the DDA will assist in the elimination of blight in the Project Area and will provide housing for low and moderate income persons; (ii) the sale of the Property pursuant to the DDA is consistent with the Agency's Implementation Plan for the Project Area adopted pursuant to Health and Safety Code Section 33490; and (iii) the consideration for the Property is not less than the fair reuse value of the Property at the use and with the covenants and conditions and development costs authorized by the DDA. Section 2. The Agency hereby approves the DDA and the Executive Director of the Agency is hereby authorized and directed, for and in the name and on behalf of the Agency, to execute and deliver the DDA in substantially the form on file with the Agency Secretary, with such additions thereto or changes or insertions therein as may be approved by the Executive Director (such approval to be conclusively evidenced by such execution and delivery). Section 3. The officers of the Agency are herby authorized and directed, jointly and severally, to execute and deliver any and all necessary documents and instruments and to do all things which they may deem necessary or proper in order to effectuate the purposes of this Resolution and the transaction contemplated hereby; and any such actions previously taken by such officers are hereby ratified, confirmed and approved. PASSED, APPROVED AND ADOPTED this 27m day of October, 2005, by the following vote to wit: AYES: NOES: ABSENTS: ABSTAINS: ATTEST: Rachelle D. Klassen, Secretary Buford A. Crites, Chairman P6401-0001-856329v1.doc DISPOSITION AND DEVELOPMENT AGREEMENT between PALM DESERT REDEVELOPMENT AGENCY, a public body, corporate and politic RANCHO HOUSING ALLIANCE, a California non-profit public benefit corporation TABLE OF CONTENTS Page Exhibit A LEGAL DESCRIPTION OF SITE Exhibit B SITE MAP Exhibit C SCOPE OF DEVELOPMENT Exhibit D SCHEDULE OF PERFORMANCE Exhibit E FORM OF GRANT DEED Exhibit F REGULATORY AGREEMENT DDA DISPOSITION AND DEVELOPMENT AGREEMENT THIS DISPOSITION AND DEVELOPMENT AGREEMENT ("Agreement"), dated this day of_, 200_ is entered into by and between the PALM DESERT REDEVELOPMENT AGENCY, a public body, corporate and politic (" Agency"), and RANCHO HOUSING ALLIANCE, a California non-profit public benefit corporation ("Developer"). Agency and Developer agree as follows: ARTICLE 1 SUBJECT OF AGREEMENT; DEFINITIONS 1.1 Purpose of the Agreement. The purpose of this Agreement is to effectuate the Redevelopment Plan, by providing for the disposition of the Site to Developer, the rehabilitation of the Site, and its sale to an eligible family in the Agency's Low and Moderate Income Housing Program. The redevelopment of the Site pursuant to this Agreement, and the fulfillment generally of this Agreement, are in the vital and best interests of the City and the health, safety and welfare of its residents and in accord with the public purposes and provisions of applicable federal, state and local laws, including the elimination of present blighting conditions in the Project Area. This Agreement is subject to the provisions of the Redevelopment Plan, which is on file at Agency's office and is incorporated herein by reference. This Agreement is entered into for the purpose of rehabilitating the Site and not for speculation in landholding. The redevelopment of the Site pursuant to this Agreement, and the fulfillment generally of this Agreement, are in the vital and best interests of City and Agency, and the health, safety, morals and welfare of its residents, and are in accord with the public purposes and provisions of applicable state and local laws. 1.2 Definitions. As used hereinafter in this Agreement, including the attachments hereto, the following terms shall have the following respective meanings: 1.2.1 Affordable Housing Cost shall be defined as follows: the amount which is established at a level which ensures that "Monthly Housing Costs" are such that (i) for low income households, affordable housing cost shall mean thirty percent (30%) of seventy percent (70%)of the Riverside County median income, adjusted for family size, as determined by regulations adopted by the California Department of Housing and Community Development pursuant to Health and Safety Code Sections 50052.5 and 50093 and (ii) for moderate income households, affordable housing costs shall mean thirty-five percent (30%) of one- hundred ten percent (110%) of the area median income, adjusted for family size, as determined by regulations adopted by the California Department of Housing and Community Development pursuant to Health and Safety Code Sections 50052.5 and 50093,as amended by the Judgment pursuant to Stipulation, Case DDA 1 No. INDIO 51124 filed 15 May 1991 and amended 18 June 1997 and 20 September 2002. 1.2.2 Approved Title Exceptions shall include the Agency Regulatory Agreement, Permitted Encumbrances, any exceptions contained in the Title Documents and not listed as disapproved by Developer in Section 4.3.2, and any other exceptions approved by Developer. 1.2.3 Basic Concept Drawings is defined in Section 5.2. 1.2.4 California Community Redevelopment Law shall mean Division 24, Part 1 of the Health and Safety Code of the State of California, beginning at Section 33000. 1.2.5 Certificate of Completion is defined in Section 5.16. 1.2.6 Chief Executive Officer shall mean the Chief Executive Officer of Agency, or his or her designee. 1.2.7 City shall mean the City of Palm Desert, California, a municipal corporation, organized and existing under the laws of the State of California and having its office at 73-510 Fred Waring Drive, Palm Desert, California. 1.2.8 Closing or Close of Escrow is defined in Section 4.5.4. 1.2.9 Closing Date is defined in Section 4.5.4. 1.2.10 Agency shall have the meaning set forth in Section 2.1. 1.2.11 Agency Representatives/City Representatives, respectively, shall mean and include all of the respective predecessors, successors, assigns, agents, officials, employees, members, independent contractors, affiliates, principals, officers, directors, attorneys, accountants, representatives, staff, council members, board members, and planning commissioners of Agency or City, as the case may be, and of each of them. 1.2.12 Control shall mean, for purposes of this Agreement, the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a corporation, partnership, joint venture, trust, or other association. 1.2.13 Developer shall have the meaning set forth in Section 2.2. 1.2.14 Developer Affiliate shall mean a limited partnership or limited liability company in which Rancho Housing Alliance, a California non-profit public benefit corporation, shall at all times be a general partner of the partnership or managing member of the limited liability company and have the controlling interest in such entity. DDA 2 1.2.15 Development shall mean the anticipated rehabilitation of the existing house on the Site pursuant to this Agreement, as more particularly described in the Scope of Development. 1.2.16 Encumbrance shall mean and include any mortgage, trust deed, encumbrance, lien or other mode of financing real estate construction and development, including a sale and leaseback. 1.2.17 Environmental Laws shall mean all federal, state and local laws, rules, orders, regulations, statutes, ordinances, codes, decrees, or requirements of any government authority regulating, relating to, or imposing liability or standards of conduct concerning any Hazardous Substance (as later defined), or pertaining to occupational health or industrial hygiene (and only to the extent that the occupational health or industrial hygiene laws, ordinances, or regulations relate to Hazardous Substances on, under, or about the Site), occupational or environmental conditions on, under, or about the Site, as now or may at any later time be in effect, including without limitation, the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (CERCLA) [42 USCS §§ 9601 et seq.]; the Resource Conservation and Recovery Act of 1976 (RCRA) [42 USCS §§ 6901 et seq.]; the Clean Water Act, also known as the Federal Water Pollution Control Act (FWPCA) [33 USCS §§ 1251 et seq.]; the Toxic Substances Control Act (TSCA) [15 USCS §§ 2601 et seq.]; the Hazardous Materials Transportation Act (HMTA) [49 USCS §§ 1801 et seq.]; the Insecticide, Fungicide, Rodenticide Act [7 USCS §§ 136 et seq.]; the Superfund Amendments and Reauthorization Act [42 USCS §§ 6901 et seq.]; the Clean Air Act [42 USCS §§ 7401 et seq.]; the Safe Drinking Water Act [42 USCS §§ 300f et seq.]; the Solid Waste Disposal Act [42 USCS §§ 6901 et seq.]; the Surface Mining Control and Reclamation Act [30 USCS §§ 1201 et seq.]; the Emergency Planning and Community Right to Know Act [42 USCS §§ 11001 et seq.]; the Occupational Safety and Health Act [29 USCS §§ 655 and 657]; the California Underground Storage of Hazardous Substances Act [H & S C §§ 25280 et seq.]; the California Hazardous Substances Account Act [H & S C §§ 25300 et seq.]; the California Hazardous Waste Control Act [H & S C §§ 25100 et seq.]; the California Safe Drinking Water and Toxic Enforcement Act [H & S C §§ 24249.5 et seq.]; the Porter-Cologne Water Quality Act [Wat C §§ 13000 et seq.] together with any amendments of or regulations promulgated under the statutes cited above and any other federal, state, or local law, statute, ordinance, or regulation now in effect or later enacted that pertains to occupational health or industrial hygiene (and only to the extent that the occupational health or industrial hygiene laws, ordinances, or regulations relate to Hazardous Substances on, under, or about the Site), or the regulation or protection of the environment, including ambient air, soil, soil vapor, groundwater, surface water, or land use. 1.2.18 Escrow is defined in Section 4.5. 1.2.19 Escrow Agent shall mean Land America/Southland Title, or another mutually acceptable escrow company agreed to by the parties as set forth in Section 4.5. DDA 3 1.2.20 Exceptions shall mean all exceptions, reservations, liens, encumbrances, qualifications, covenants, conditions, restrictions, leases, easements, rights of way, or other like matters affecting the Site, and all matters or states of facts reflected on or arising out of any tentative or final parcel map for the Site, or concerning or related to zoning, subdivision, permitted use or physical condition of the Site, or arising from the redevelopment, development or related activities of Developer. 1.2.21 Governmental Restrictions shall mean and include any and all laws, statutes, ordinances, codes, rules, regulations, writs, injunctions, orders, decrees, rulings, conditions of approval, or authorization, now in force or which may hereafter be in force, of any governmental entity, agency or political subdivision. 1.2.22 Grant Deed shall mean the grant deed conveying fee title to the Site from Agency to Developer, in the form attached hereto as Exhibit E. 1.2.23 Hazardous Substances shall include, without limitation, petroleum or refined petroleum products, flammable explosives, radioactive materials, asbestos, polychlorinated biphenyls, chemicals known to cause cancer or reproductive toxicity, substances described in Civil Code Section 2929.5(e)(2), as it now exists or as subsequently amended, those substances included within the definitions of hazardous substance, hazardous waste, hazardous material, toxic substance, solid waste, or pollutant or contaminant in CERCLA, RCRA, TSCA, HMTA, or under any other Environmental Law, pollutants, contaminants, hazardous wastes, toxic substances or related materials. 1.2.24 Holder(s) shall mean the mortgager of record of any mortgage, beneficiary of a deed of trust or other security interest, the lessor under a financing leaseback, or grantee under any form of financing conveyance on or affecting the Site or any portion of the Site. 1.2.25 Improvements shall mean and include all grading to be done on the Site, as well as all buildings, structures, fixtures, excavation, parking, landscaping, and other work, construction, rehabilitation, alterations and improvements of whatsoever character to be done by Developer on, around, under or over the Site pursuant to this Agreement. 1.2.26 Losses and Liabilities shall mean and include all claims, demands, causes of action, liabilities, losses, damages, judgments, injuries, expenses (including, without limitation, attorneys' fees and costs incurred by the indemnified party for legal counsel of reasonably acceptable to it) charges, penalties or costs of whatsoever character, nature and kind, whether to property or to person, and whether by direct or derivative action, known or unknown, suspected or unsuspected, latent or patent, existing or contingent. 1.2.27 Low Income Households shall mean households whose income does not exceed eighty percent (80%) of the area median income, DDA 4 adjusted for family size, as determined by regulations adopted by the California Department of Housing and Community Development pursuant to Health and Safety Code Sections 50052.5 and 50093. 1.2.28 Moderate Income Households shall mean households with between eighty percent (80%) and one-hundred twenty percent (120%) of the area median income, adjusted for family size, as determined by regulations adopted by the California Department of Housing and Community Development pursuant to Health and Safety Code Sections 50052.5 and 50093. 1.2.29 Option to Repurchase is defined in Section 7.5. 1.2.30 Ownership Transfer/Transferee shall mean and include any voluntary or involuntary transfer, sale, assignment, lease, sublease, license, franchise, concession, operating agreement, gift, hypothecation, mortgage, pledge or encumbrance, or the like to any person or entity ("Transferee"), or any change in Control of Developer. 1.2.31 Person shall mean an individual, corporation, partnership, limited liability company, joint venture, association, firm, joint stock company, trust, unincorporated association or other entity. 1.2.32 Proiect Area shall mean the area included within the Project Area No. 1, as amended. The exact boundaries of the Project Area are set forth in the Redevelopment Plan. 1.2.33 Qualified Financial Institution shall mean a bank, savings and loan, pension fund, insurance company or other institutional entity which is duly established and in the business of financing the size and type of development contemplated hereunder and which, in the reasonable opinion of Agency, has a sufficient net worth and liquidity position to meet the contemplated financing commitment. 1.2.34 Redevelopment Plan shall mean the Redevelopment Plan for the Project Area, approved and adopted by the City Council of the City by Ordinance No. 275 on November 25, 1981. 1.2.35 Schedule of Performance shall mean the Schedule of Performance attached hereto as Exhibit D and incorporated herein by reference, setting out the dates and time periods by which certain obligations set forth in this Agreement must be accomplished. 1.2.36 Scope of Development shall mean the Scope of Development attached hereto as Exhibit C and incorporated by reference herein, which describes the rehabilitation to be performed by Developer pursuant to the terms and conditions of this Agreement. DDA 5 1.2.37 Site shall mean the entirety of the property subject to this Agreement, as more specifically described in Exhibit A hereto and as depicted on the "Site Map" which is attached hereto as Exhibit B. The Site is generally identified as approximately .14 acres located at 74-047 San Marino Circle, Palm Desert, California, and is located within the Project Area. 1.2.38 Title Company shall mean Land America/Southland Title, or another mutually acceptable title company agreed to by the parties. 1.2.39 Title Documents is defined in Section 4.3.2. 1.2.40 Title Policy shall mean the policy of title insurance described in Section 4.3.3. ARTICLE 2 PARTIES TO THE AGREEMENT. 2.1 Agency. Agency is a public body, corporate and politic, exercising governmental functions and powers and organized and existing pursuant to Part 1 of Division 24 of the Health and Safety Code, Section 33000 et seq. of the State of California. The principal office of Agency is located at 73-510 Fred Waring Drive, Palm Desert, California 92260. The term " Agency" includes any assignee or successor to Agency's rights, powers and responsibilities under this Agreement. 2.2 Developer. Developer is Rancho Housing Alliance, a California non-profit public benefit corporation, having its principal office at 53-990 Enterprise Way, Suite, Coachella, California, 92236. The term "Developer" includes any legally and contractually permissible nominee, assignee or successor to Developer's rights, powers and responsibilities hereunder. All of the terms, covenants, and conditions of this Agreement shall be binding on such successors and assigns of Developer. 2.3 Prohibition Against Transfer. 2.3.1 The Developer represents that its undertakings pursuant to this Agreement are for the purpose of rehabilitation of the Site and not for speculation in land holding. The Developer further recognizes that, in view of (a) the importance of the redevelopment of the Site to the general welfare of the community; (b) the public assistance that has been made available by law and by the Agency for the purpose of making such redevelopment possible; and (c) the fact that a change in ownership or control of the Developer or of a substantial part thereof, or any other DDA 6 act or transaction involving or resulting in a significant change in ownership or control of the Developer or the degree thereof, is for practical purposes a transfer or disposition of the property then owned by the Developer; the qualifications and identity of the Developer and its principals are of particular concern to the Agency. It is because of those qualifications and identity that the Agency has entered into this Agreement with the Developer. No voluntary or involuntary successor in interest of Developer shall acquire any rights or powers under this Agreement except as expressly set forth herein. Except where an Ownership Transfer is specifically permitted by this Agreement, the Developer shall not assign all or any part of this Agreement or any interest in the Site without the prior written approval of the Agency. Nothing in this Section 2.3 shall be construed to prevent Developer from transferring its interest in this Agreement or any interest in the Site to a Developer Affiliate as defined in Section 1.2.13 of this Agreement. 2.3.2 Prior to the recordation of the Certificate of Completion, Developer shall not, except as permitted by this Agreement, effect any change in Control of Developer, or of one or both of the members of Developer; assign or attempt to assign this Agreement or any rights herein; or make any total or partial sale, transfer, or conveyance of the whole or any part of the Site or the buildings or structures now existing or to be constructed thereon without prior written approval by the Agency. Any such approval shall not constitute a release of Developer or its obligations hereunder. This prohibition shall not apply subsequent to the recordation of the Certificate of Completion. 2.3.3 This Section 2.3 shall not prevent the granting of easements or permits to facilitate the development of the Site, nor prohibit granting any security interest in the Site or any other financing arrangement for the purposes of securing funds to be used for financing the construction of the Improvements on the Site, as permitted by this Agreement. This Section 2.3 shall not prevent any change in personnel of Developer. Nothing in this Agreement shall prohibit Developer from, or require approval of Agency for, a Transfer or an assignment to a Developer Affiliate. 2.3.4 (a) Any proposed transferee of the Developer, approved by the Agency, shall have the qualifications and financial responsibility necessary and adequate, as may be reasonably determined by the Agency, to fulfill the obligations undertaken in this Agreement by the transferor. (b) Any proposed transferee, by instrument in writing satisfactory to the Agency and in form recordable among the land records of Riverside County, for itself and its successors and assigns, and for the benefit of the Agency, shall expressly assume all of the obligations of the Developer under this Agreement and shall agree to be subject to all the conditions and restrictions DDA 7 to which the Developer is subject. All relevant instruments and other legal documents proposed to effect any such transfer shall be submitted to the Agency, and if the transferee is approved by the Agency, its approval shall be indicated to the Developer in writing. 2.3.5 If, prior to the issuance of the Certificate of Completion, there is any Ownership Transfer of the Developer not approved by the Agency or otherwise permitted as set forth herein, the Agency may take such action as the Agency may deem appropriate to assure the Agency that the Improvements will be completed, including without limiting the generality of the foregoing, terminating this Agreement and exercising any rights set forth in this Agreement; provided, however, that the Agency shall not terminate this Agreement without first providing Developer written notice and opportunity to cure pursuant to the provisions of Section 7.1. In the absence of specific written agreement by the Agency, no such sale, transfer, conveyance or assignment of the Site, shall be deemed to relieve the Developer from any obligations under this Agreement. 2.4 Delegation to Chief Executive Officer The Chief Executive Officer is hereby authorized to take any and all steps necessary to complete the acquisition and conveyance of the Site and to implement the provisions of this Agreement. ARTICLE 3 SPECIAL PROVISIONS. 3.1 The Redevelopment Plan This Agreement is subject to the provisions of the Redevelopment Plan. The Redevelopment Plan is incorporated herein by reference and made a part hereof as though fully set forth herein. 3.2 Agency Representations Agency, acknowledging that each provision in this Section 3.2 is material and is being relied on by Developer, hereby represents and warrants the following to Developer for the purpose of inducing Developer to enter into this Agreement and to consummate the transactions contemplated hereby, all of which shall be true as of the date hereof and as of the Close of Escrow and which shall survive the Close of Escrow and delivery of the Grant Deed conveying title to the Site: (1) The Redevelopment Plan has been duly adopted in compliance with all applicable laws and is currently in full force and effect (2) Agency is the owner in fee simple of the Site. (3) Agency has the legal power, right and authority to enter into this Agreement and the instruments and documents referenced herein to which DDA 8 Agency is a party, to consummate the transactions contemplated hereby, to take any steps or actions contemplated hereby, and to perform its obligations hereunder. (4) All requisite action has been taken by Agency and all requisite consents have been obtained in connection with entering into this Agreement and the instruments and documents referenced herein to which Agency is a party, and the consummation of the transaction contemplated hereby, and the same are authorized by the Redevelopment Plan and, to the best knowledge of Agency, comply with all applicable laws, statutes, ordinances, rules and governmental regulations. There are no writs, injunctions, orders or decrees of any court or governmental body which would be violated by Agency's entering into or performing its obligations under this Agreement. (5) This Agreement is duly executed by Agency, and all agreements, instruments and documents to be executed by Agency pursuant to this Agreement shall, at such time as they are required to be executed hereunder, be duly executed by Agency, and each such agreement is, or shall be at such time as it is required to be executed hereunder, valid and legally binding upon Agency and enforceable in accordance with its terms, and the execution and delivery thereof shall not, with due notice or the passage of time, constitute a default under or violate the terms of any indenture, agreement or other instrument to which Agency is a party. (6) The uses of the Site as contemplated by this Agreement are permitted pursuant to the Redevelopment Plan. (7) At the Closing, there will be no agreements (whether oral or written), affecting or relating to the right of any party regarding possession of the Site, or any portion thereof, which are obligations which will affect the Site or any portion thereof subsequent to the recordation of the Grant Deed except for the Approved Title Exceptions. 3.3 Developer Representations Developer, acknowledging that each provision in this Section 3.3 is material and is being relied upon by Agency, represents and warrants the following to Agency for the purpose of inducing Agency to enter into this Agreement and to consummate the transactions contemplated hereby, all of which shall be true as of the date hereof and as of the Close of Escrow and which shall survive the Close of Escrow and delivery of the Grant Deed conveying title to the Site pursuant to this Agreement: (1) Developer has the legal power, right and authority to enter into this Agreement and the instruments and documents referenced herein, to consummate the transactions contemplated hereby, to take any steps or actions contemplated hereby, and to perform its obligations hereunder. DDA 9 (2) Developer is a duly organized corporation incorporated within and in good standing under the laws of the State of California. The copies of the documents evidencing the organization of the Developer which have been delivered to Agency are true and complete copies of the originals, as amended to the date of this Agreement. All requisite action has been taken by Developer and all requisite consents have been obtained by Developer in connection with entering into this Agreement and the instruments and documents referenced herein, and the consummation of the transactions contemplated hereby. (3) To the best knowledge of Developer, the execution, delivery and performance by Developer of this Agreement will not violate any provision of law, any order of any court or other agency of government, or any indenture, agreement or other instrument to which Developer is a party or by which Developer or any of its properties is bound. (4) This Agreement is, and all agreements, instruments and documents to be executed by Developer pursuant to this Agreement shall be, duly executed by and are, or shall be, valid and legally binding upon Developer and enforceable in accordance with their respective terms, and the execution and delivery thereof shall not, with due notice or the passage of time, constitute a default under or violate the terms of any indenture, agreement or other instrument to which Developer is a party. (5) Developer understands, agrees and acknowledges that it is purchasing the Site in "as-is/where-is" condition. Agency has not made and will not make, either expressly or impliedly, any representations or warranties concerning the physical or environmental condition of the Site, or its fitness for any particular use or purpose. Developer represents and warrants that prior to the Close of Escrow, Developer will have had the opportunity to make and will have made such an investigation and inspection of all aspects of the condition of the Site as it has deemed necessary or appropriate, including, but not limited to soils and the Site's compliance or non-compliance with applicable laws, rules, regulations and ordinances (including the Environmental Laws) and the existence or non-existence of Hazardous Materials on, in or under the Site. Developer further represents and warrants that in purchasing the Site Developer is relying solely upon its own inspections and investigations in proceeding with this Agreement. (6) Without limiting the generality of the foregoing provisions, Developer acknowledges that Agency has not made and will not make any representations or warranties concerning the Site's compliance or non-compliance with "Environmental Laws" or the existence or non-existence of"Hazardous Materials" in relation to the Site or otherwise. (7) Developer has not been and is not the subject of any bankruptcy proceeding. DDA 10 ARTICLE 4 DISPOSITION OF THE SITE. 4.1 Purchase and Conveyance of the Site Agency has fee title to all of the Site. Within the times provided in the Schedule of Performance (subject, however, to Force Majeure and any other mutually agreed upon extension of time), and subject to the conditions, provisions and terms of this Agreement, Agency shall sell the Site to Developer, and Developer shall purchase the Site from Agency, for the all-inclusive purchase price of one hundred sixty-five thousand Dollars ($165,000) (the "Purchase Price"). Payment of the Purchase Price represents the agreed upon reuse value of the Site, at the use and with the covenants and conditions and development costs authorized by this Agreement. Agency agrees to convey the Site to Developer by Grant Deed (the "Grant Deed"), in the form attached hereto as Exhibit E and incorporated herein by this reference, and Developer agrees to accept such conveyance. Agency and Developer shall perform all acts reasonably necessary for possession and title to the Site to be conveyed in accordance with this Agreement. 4.2 Conditions Precedent to Conveyance 4.2.1 Agency Conditions Precedent The obligation of Agency to convey the Site to Developer is subject to the following conditions precedent: 1. Developer shall have deposited the Purchase Price and executed Regulatory Agreement into Escrow; 2. Developer shall have delivered to Agency evidence of financing satisfactory to the Executive Director; 3. Developer shall have submitted and the Executive Director shall have approved the proof of insurance required by Section 5.12; 4. Developer shall have timely performed all of the obligations required by the terms of this Agreement to be performed by Developer prior to conveyance of the Site; and 5. All representations and warranties made by Developer to Agency in this Agreement shall be true and correct as of the Close of Escrow. 4.2.2 Developer Conditions Precedent The obligation of Developer to accept title to the Site from Agency is subject to the following conditions precedent: DDA 11 1. Developer shall have approved any exceptions of title as disclosed by the Title Documents, pursuant to the provisions of Section 4.3.2, and the Title Company shall have committed to issue the Title Policy subject only to the Approved Title Exceptions; and 2. All representations and warranties made by Agency to Developer in this Agreement shall be true and correct as of the Close of Escrow. 4.3 Condition of Title; Title Insurance 4.3.1 Condition of Title Subject to Section 4.4.2, Agency shall convey to Developer fee simple merchantable title to the Site, free and clear of all recorded or unrecorded liens, encumbrances, covenants, conditions, restrictions, assessments, easements, leases and taxes, except those created under the Redevelopment Plan and other covenants running with the land (as further described in the Grant Deed) requiring that use of the Site be consistent with the Redevelopment Plan and prohibiting discrimination pursuant to Section 33436 of the California Health and Safety Code, other applicable provisions of this Agreement, and the Approved Title Exceptions. 4.3.2 Approval of Title Exceptions Agency has provided to Developer those certain preliminary title reports prepared by dated (Order No. ), including copies of all underlying documents referenced therein (collectively, the "Title Documents"), covering all of the Site. Developer shall review and approve or disapprove the condition of title as set forth in the Title Documents within thirty (30) days after the date of this Agreement. In the event Developer disapproves all or any element of the Title Documents, Developer shall provide written notice of the specifically disapproved exceptions to Agency within such thirty (30) day period. The failure to deliver such written objections shall constitute both a waiver of Developer's right to object and shall be held to be an irrevocable determination that Developer has approved the Title Documents in all respects. Any exceptions not specifically objected to in writing during such period shall be deemed approved. Upon receipt of Developer's written objections Agency shall have fifteen (15) days to elect whether or not to use its best efforts to remove the objected to exceptions; Agency shall transmit its election to Developer within that period. Agency shall not be obligated in any manner to remove any or all exceptions objected to by Developer. In the event Agency cannot or elects not to remove the exceptions as objected to by Developer, Developer shall have ten (10) business days from notice thereof from Agency to elect to either (i) proceed with this Agreement and accept the condition of title which Agency can or will accomplish or (ii) to terminate this Agreement pursuant to Section 7.4. 4.3.3 Title Insurance DDA 12 As a condition to the Close of Escrow, the parties shall cause Land America/Southland Title Company to issue and deliver to Developer an C.L.T.A. Owner's policy of title insurance in the amount of the Purchase Price, insuring that the title to the Site is vested in Developer in the condition required by Section 4.3.1 of this Agreement. Developer may, at its option, request an A.L.T.A. policy of title insurance. Agency shall pay the title insurance premium attributable to a C.L.T.A. standard form. Developer shall be solely responsible to pay any additional costs associated with an A.L.T.A. title policy, including the costs of survey, and for all additional or other premiums for extended coverage or other special endorsements. 4.4 Condition of Site 4.4.1 Inspection and Survey Prior to the conveyance of title to the Site to Developer, representatives of Developer shall have the right of access to and entry at all reasonable times, for the purpose of inspecting the condition of the Site and obtaining data and making surveys and tests necessary to carry out this Agreement. Entry of Developer onto the Site pursuant to this Section 4.4.1 shall be subject to the provisions of Sections 5.11 and 5.12 (Insurance and Indemnification), and to the provisions of a standard Agency access permit. Developer shall defend, indemnify and hold Agency harmless from any costs, claims, damages or liabilities pertaining to or arising from the performance of any such tests and inspections by Developer or any such activities of Developer on the Site. In the event Developer fails to accept title to the Site, Developer shall immediately repair all damage to the Site, if any, caused by entry of Developer onto the Site and tests performed thereon by Developer. 4.4.2 Physical Condition of the Site; Access Rights Prior to Conveyance The Site shall be conveyed by Agency to Developer and Developer shall accept the Site, in an "as is" physical condition, with no warranty, express or implied, by Agency as to the condition of the soil, its geology, the presence of known or unknown faults, its suitability for the use intended by Developer, any structural damage, any on-or off- site soils contamination, any materials, such as asbestos or lead based paint, or any similar matters. It shall be the sole responsibility and obligation of Developer to investigate and correct any adverse soil, surface or subsurface conditions, structural or environmental conditions, on the Site. Developer's remedial actions shall, at all times, conform to all applicable law, policy and regulation of every public agency with jurisdiction over such matter. In the event Developer in good faith and prior to the Close of Escrow determines that the condition of the Site is DDA 13 unacceptable, Developer shall notify Agency of its determination and the reasons within the period set forth in the Schedule of Performance. In that event, Developer may terminate this Agreement pursuant to Section 8.4, unless Agency elects, in its sole discretion, to remediate such conditions in a timely manner. In such event, all times for performance shall be extended for a period of time equivalent to the time necessary to achieve such remediation. Developer's failure to notify Agency of its determination that the Site is unacceptable within the period set forth in the Schedule of Performance shall constitute a waiver of its right to terminate this Agreement pursuant to this Section 4.4.2. 4.5 Disposition Escrow Agency and Developer shall open an escrow (the "Escrow") for the Site with Land America/Southland Title, located at 72-880 Fred Waring Drive, Suite A-1, Palm Desert, California 92260 (the "Escrow Agent") by the time established in the Schedule of Performance. This Agreement constitutes the joint basic escrow instructions of Agency and Developer for Agency's conveyance of the Site and a duplicate original of this Agreement shall be delivered to the Escrow Agent upon the opening of the Escrow. Agency and Developer shall provide such additional escrow instructions as shall be necessary for and consistent with this Agreement. The Escrow Agent is empowered to and shall carry out its duties as Escrow Agent under this Agreement, if it delivers to Agency within five (5) days after the opening of the Escrow its written acceptance of the provisions of this Agreement. 4.5.1 Deposits into Escrow Developer shall pay in escrow to the Escrow Agent the following fees, charges and costs promptly after the Escrow Agent has notified Developer of the amount of such fees, charges and costs, but not earlier than five (5) days prior to the scheduled date for closing the escrow: 1. One-half of escrow fees; as is customary in Riverside County; 2. The portion(s) of the premium for the title insurance policy attributable to the extended coverage (including the costs of the A.L.T.A. survey) or other special endorsements, if any; and 3. One-half of any and all other fees, including but not limited to recording fee and notary fees, necessary to close the escrow, as is customary in Riverside County. Agency shall pay to the Escrow Agent the following fees, charges and costs promptly after the Escrow Agent has notified Agency of the amount of such fees, charges and costs, but not earlier than five (5) days prior to the scheduled date for closing the escrow: 1. One-half of escrow fees; as is customary in Riverside County; DDA 14 2. Ad valorem taxes, if any, upon the Site; 3. The portion of the premium for the title insurance policy attributable to the C.L.T.A. standard form; 4. Any documentary stamps or transfer tax imposed for such transfer; and 5. One-half of any and all other fees, including, but not limited to, recording and notary fees necessary to close the escrow, as is customary in Riverside County. Agency shall timely and properly execute, acknowledge and deliver into Escrow the Grant Deed for the Site, conveying to Developer fee simple merchantable title to the Site in accordance with this Agreement. Developer shall timely and properly execute, acknowledge and deliver into Escrow the Purchase Price and Regulatory Agreement. The Escrow Agent is authorized to: 1. Pay, and charge Developer and Agency for any fees, charges and costs payable under this Section 5.6.1. Before such payments or charges are made, the Escrow Agent shall notify Agency and Developer of the fees, charges and costs necessary to reconvey monetary liens in order to close the Escrow. 2. Disburse funds to the respective party due the same and deliver the Grant Deed and other documents to the parties entitled thereto when the conditions of this Escrow have been fulfilled by Agency and Developer. 3. Record any instruments delivered through this Escrow if necessary or proper to vest title to the Site in Developer in accordance with the terms and provisions of this Agreement. All funds received in the Escrow shall be deposited by the Escrow Agent in a separate interest-earning account or accounts with any state or national bank doing business in the State of California and reasonably approved by Developer and interest so earned shall be payable to Developer. All disbursements shall be made by check of the Escrow Agent. All adjustments are to be made on the basis of a thirty (30) day month. If the Escrow is not in condition to close on or before the time for conveyance established in the Schedule of Performance, the party who then shall have fully performed the acts to be performed before the conveyance of title (other than deposit of the Purchase Price by Developer) may, in writing, demand from the Escrow Agent the return of its money, papers or documents deposited with the Escrow Agent. No demand for return shall be recognized until ten (10) days after the Escrow Agent (or the demanding party) shall have mailed copies of such DDA 15 demand to the other party or parties at the address of its or their principal place or places of business. Objections, if any, shall be raised by written notice to the Escrow Agent and to the other party within the ten (10) day period, in which event the Escrow Agent is authorized to hold all money, papers and documents until instructed by a mutual agreement of the parties or by a court of competent jurisdiction. If no such demands are made, the Escrow shall be closed as soon as possible. If objections are raised as set forth above, the Escrow Agent shall not be obligated to return any such money, papers or documents except upon the written instructions of Agency and Developer or until the party entitled thereto has been determined by a final decision of a court of competent jurisdiction. If no such objections are made within the ten (10) day period, the Escrow Agent shall immediately return the demanded money, papers and documents; and the escrow cancellation fees shall be paid by the non-demanding party. All communications from the Escrow Agent, Agency or Developer shall be directed to the addresses and in the manner established in Section 8.1 of this Agreement for notices, demands and communications between Agency and Developer. The address for the Escrow Agent is set forth in Section 4.5. The liability of the Escrow Agent under this Agreement is limited to performance of the obligations imposed upon it pursuant to this Agreement. 4.5.2 Conveyance of Title and Delivery of Possession Subject to any extensions of time mutually agreed upon between the parties, the conveyance to Developer shall be completed on or prior to the date specified in Section 4.5.4. The parties agree to perform all acts necessary for conveyance of title and possession in sufficient time for title and possession to be conveyed in accordance with the foregoing provisions. 4.5.3 Purchase Price The Purchase Price (the "Purchase Price") for the Site shall be one hundred sixty-five thousand Dollars ($165,000). 4.5.4 Close of Escrow; Closing Date for Escrow For purposes of this Agreement, "Closing" or"Close of Escrow" shall be defined as the date that the Grant Deed is recorded among the land records in the Office of the County Recorder for Riverside County. The Close of Escrow shall occur no more than thirty (30) days (the "Closing Date") after the date of this Agreement, unless extended by both parties for reasonable cause. 4.5.5 Taxes and Assessments DDA 16 Ad valorem taxes and assessments, if any, on the Site levied, assessed or imposed for any period commencing prior to the Closing Date shall be prorated as of the Closing Date. Such taxes and assessments shall be prorated based on a 30-day month and a 360-day year. Those taxes and assessments levied or imposed for any period commencing prior to the Close of Escrow, prorated up to and including the Closing Date, shall be paid by Agency. Developer shall pay those taxes and assessments levied or imposed for any period commencing after the Closing Date, as well as Developer's prorated share of those taxes and assessments levied or imposed prior to the Close of Escrow. Nothing herein shall limit the right of Developer or Agency to contest in good faith or pursue all remedies in challenging any such assessments or taxes. 4.5.6 No Occupants Agency shall transfer the Site to Developer free of any possession or right of possession except the possession of parties consented to by Developer in its sole and absolute discretion. 4.5.7 Recordation Upon the Close of Escrow, the Escrow Agent shall cause the Grant Deed and Regulatory Agreement to be recorded among the land records in the Office of the Riverside Recorder for Riverside County. Escrow Agent shall deliver the Grant Deed to Developer, with a copy to Agency, and the Regulatory Agreement to Agency, with a copy to Developer, and provide both Agency and Developer with conformed copies of all documents recorded in connection with this Agreement. 4.6 No Real Estate Commission Agency and Developer each represent and warrant that no real estate brokerage commission relating to this transaction will be payable on the sale of the Site. If any claim for brokers' or finders' fees for the consummation of this Agreement arise, then Developer hereby agrees to indemnify, save harmless and defend Agency from and against such claim(s) if it (they) shall be based upon any statement or representation or agreement made by Developer, and Agency hereby agrees to indemnify, save harmless and defend Developer if such claim(s) shall be based upon any statement, representation or agreement made by Agency. ARTICLE 5 DEVELOPMENT OF THE SITE 5.1 Scope of Development Developer shall improve the Site in the manner described in the Scope of Development. In addition to approvals hereunder by Agency, all planning and building documents shall be submitted to, reviewed by, and approved or rejected by the Planning and Building Departments of City (as DDA 17 appropriate) pursuant to the City's codes, resolutions, rules and regulations, within the timelines specified in the Schedule of Performance. 5.2 Basic Concept Drawings Developer has prepared and submitted to Agency for approval, and Agency has approved and retained on file, the Basic Concept Drawings and related documents containing the overall plan for the Site, all of which is incorporated in the Scope of Development. Basic Concept Drawings include a site plan showing the proposed rehabilitation of the Site. The Site shall be developed fully and in substantial conformity with the approved Basic Concept Drawings and related documents except as changes may be mutually approved by the parties. 5.3 Construction Drawings and Related Documents To the extent required, Developer shall prepare and submit construction drawings and related documents for the Site to the City's Development Services Department and notify the Executive Director, or his designee, within five (5) days of such submittal to allow for reasonable review as to conformity to this Agreement, the Scope of Development and the Basic Concept Drawings by the times set forth in the Schedule of Performance. During the preparation of all drawings and plans, the parties shall communicate and consult informally as frequently as is necessary to ensure that the formal submittal of any documents to Agency can receive prompt and speedy consideration. 5.4 City and Agency Review of Plans, Drawings and Related Documents City Development Services Department shall review all plans submitted for appropriate entitlements. City shall act as review authority for Agency concurrently and shall review and either approve or disapprove the plans, specifications, drawings and related documents as set forth in Section 5.1 of this Agreement consistent with the time periods needed for plan review by the Development Services Department. If Developer desires to make any substantial change in the approved working drawings, Developer shall submit the proposed change to City Development Services Department and Agency for approval. If the drawings as modified by the proposed change conform to this Agreement, the Scope of Development and the Basic Concept Drawings, the City and Agency shall review the change and Agency shall notify Developer of its approval or disapproval in writing, or if Planning Agency or City Council action is needed, within a time frame as required of such review bodies. The Executive Director or his designee shall have authority to determine on behalf of Agency, as necessary, if a proposed revision or change to DDA 18 any plans, drawings, or other documents previously approved by Agency is a substantial change requiring Agency approval. If the Executive Director or his designee determines that the proposed revision or change is not substantial, no approval by Agency of such revision or change will be necessary. Agency's review is intended to insure that the plans, drawings and related documents are consistent with the Scope of Development and with the Basic Concept Drawings. Any disapproval shall state in writing the reasons for disapproval and the changes which Agency requests to be made. Such reasons and such changes must be consistent with the Scope of Development and any items previously approved or deemed approved hereunder. Developer, upon receipt of a disapproval based upon powers reserved by Agency hereunder, shall revise the plans, drawings and related documents, and shall resubmit to Agency as soon as possible after receipt of the notice of disapproval; provided that in no case shall Agency be entitled to require changes which are inconsistent with the Scope of Development or inconsistent with the most recently applicable previously approved or deemed approved items. Plans approved or deemed approved shall be deemed in all respects to be in accordance with the Redevelopment Plan. Except as expressly provided in this Agreement, Agency and City neither undertake nor assume, nor will Agency and City have any responsibility or duty to Developer, or to any third party, to review, inspect, supervise, pass judgment upon or inform Developer or any third party of any matter in connection with the Development, whether regarding the quality, adequacy or suitability of the plans, any labor, service, equipment or material furnished to the Development, any person furnishing the same or otherwise. Developer, and all third parties shall rely upon their own judgment regarding such matter. Any review, inspection, supervision, exercise of judgment or information supplied to Developer or to any third party by Agency or City in connection with such matter is for the public purpose of carrying out redevelopment in the Project Area in accordance with this Agreement, and neither Developer(except for the purposes set forth in this Agreement), nor any third party is entitled to rely thereon. 5.5 Cost of Construction The cost of rehabilitating the Site, together with all on- and off-site improvements set forth in the Scope of Development or otherwise required by the City Building Official, City Engineer, or City Planner, shall be borne by Developer. The parties hereby acknowledge and agree that any increase in costs above the amounts projected or assumed by Developer, or decreases in revenues below the amounts projected or assumed by Developer, shall be at the sole financial risk of Developer. 5.6 Schedule of Performance After conveyance of title to Developer, Developer shall promptly begin and thereafter diligently prosecute to completion the improvement of the Site as provided in the Scope of Development. Subject to Section 8.3 hereof, Developer shall begin and complete all construction and development within the DDA 19 times specified in the Schedule of Performance or such reasonable extension of those dates as may be granted by each party to the other in writing. The Schedule of Performance is subject to revision from time to time as and if mutually agreed upon in writing between Developer and Agency. 5.7 City and Other Governmental Agency Permits Before commencement of the rehabilitation of the Site, Developer shall, at its own expense, secure or cause to be secured any and all permits which may be required by City or any other governmental agency affected by such work. 5.8 Zoning and Land Use Requirements; Environmental Review 1. Agency shall cooperate with Developer in all proceedings which may be necessary so that the rehabilitation and use of the Site shall be in conformity with applicable zoning and General Plan requirements. Agency shall use its best efforts to expedite all necessary approvals. Agency staff has determined that the Development contemplated by this Agreement is categorically exempt from the provisions of the California Environmental Quality Act ("CEQA") pursuant to Section 15280 of the CEQA Guidelines. In the event additional environmental studies are required, the costs of such studies shall be borne by Developer. 2. Developer shall take all necessary steps so that the rehabilitation and use of the Site shall be in conformity with applicable zoning and General Plan requirements, including the conditions of approval of any required land use entitlements, and that all applicable environmental mitigation measures and other requirements shall have been complied with. 3. If any revisions or modifications to this Agreement, including the Scope of Development, shall be required to comply with any requirement of a governmental official, Agency, department or bureau having jurisdiction over the development of the Site, Agency and Developer shall cooperate in making such reasonable changes, consistent with the public purposes of this Agreement, as may be necessary. 5.9 Asjency Rights of Access During Construction Without limiting any rights of access that Agency or City may have irrespective of this Agreement, representatives of Agency shall have a reasonable right of access to the Site at normal construction hours during the period of construction for the purposes of this Agreement, including but not limited to the inspection of the work being performed in constructing the improvements, so long as they comply with all safety rules and observe any rules adopted by Developer for purposes of maintaining order on the Site, including requirements that such representatives be escorted. Such representatives of Agency shall be those designated in writing by the Chief Executive Officer. DDA 20 Prior to issuance of Agency's Certificate of Completion, City and Agency, at their sole risk and expense, reserve the right to enter the Site or any part thereof at all reasonable times during ordinary business hours and with as little interference as possible for the purpose of construction, reconstruction, maintenance, repair or service of any public improvements or public facilities located on the Site. Any such entry shall be made only after reasonable notice to Developer, except emergency repairs, and City and Agency shall defend, indemnify and hold Developer harmless from any costs, claims, damages or liabilities pertaining to or arising from any such entry or the activities of the City or Agency on the Site. Any damage or injury to the Site or any improvement thereon resulting from any such entry shall be promptly repaired or restored at the City's or Agency's expense. 5.10 Local, State and Federal Laws Developer shall carry out the construction of the improvements being developed in conformity with all applicable laws. 5.11 Indemnification during Construction Developer shall indemnify, defend and hold Agency and the City, and their representatives, volunteers, officers, employees and agents, harmless from and against all liability, loss, damage, costs, or expenses (including attorneys' fees and court costs) arising from or as a result of the death of any person or any accident, injury, loss, and damage whatsoever caused to any person or to the property of any person, including accidental death (including attorney fees and costs), which may be caused by any acts or omissions of Developer or its agents, servants, employees, or contractors under or related to this Agreement and whether such damage shall accrue or be discovered before or after termination of this Agreement. Provided, however, that Developer's obligation to indemnify Agency and City pursuant to this paragraph 5.11 shall not apply to any liability, loss, damage, costs, or expenses arising solely from the willful misconduct or negligence of Agency or City, or their designated agents or employees. 5.12 Bodily Iniurv, Property Damage and Worker's Compensation Insurance 5.12.1 Prior to the commencement of construction on the Site, or to any entry upon the Site pursuant to Section 4.4.1, Developer shall furnish or shall cause to be furnished, to Agency, duplicate originals or appropriate certificates of Comprehensive General Liability Insurance, insuring Agency against losses, costs, liabilities, claims, causes of action and damages for bodily injury and property damage on the Site in the amount of at least Two Million Dollars ($2,000,000) combined single limit coverage, naming Agency as an additional insured. Such insurance shall include Blanket Contractual Liability coverage and builder's risk coverage. All such policies shall be written to apply to all bodily injury, property damage, personal injury and other covered loss, however occasioned, occurring during the policy term, shall be endorsed to add Agency and the City as additional DDA 21 insureds, and to provide that such coverage shall be primary and that any insurance maintained by Agency and/or the City shall be excess insurance only. Such coverage shall be endorsed to waive the insurer's rights of subrogation against Agency and the City. Developer shall also furnish or cause to be furnished to Agency evidence satisfactory to Agency that any contractor with whom it has contracted for the completion of the improvements carries workers compensation insurance as required by law, and an employer's liability insurance endorsement with customary limits, and shall be endorsed with a waiver of subrogation clause for Agency and the City. 5.12.2 All insurance policies required by this Section shall be nonassessable and shall contain language to the effect that (a) the policies are primary and noncontributing with any insurance that may be carried by Agency or City, (b) the policies cannot be canceled or materially changed except after thirty (30) days written notice by the insurer to Agency, and (c) neither Agency nor City shall be liable for any premiums or assessments. All such insurance shall have deductibility limits reasonably satisfactory to Agency and shall contain cross liability endorsements. 5.13 Non-discrimination During Construction Developer for itself and its successors and assigns agrees that in the construction of the improvements on the Site provided for in this Agreement: (1) Developer will not discriminate against any employee or applicant for employment because of race, color, religion, creed, national origin, ancestry, age, marital status, sex or sexual orientation. Developer will take reasonable action to ensure that applicants are employed, and that employees are treated during employment without regard to their race, color, religion, creed, national origin, ancestry, physical handicap, medical condition, age, marital status, sex or sexual orientation. Such action shall include, but not be limited to, the following: employment, upgrading, demotion, or transfer; recruitment or recruitment advertising, layoff or termination; rates of pay or other forms of compensation; and selection for training, including apprenticeship. Developer agrees to post in conspicuous places, available to employees and applicants for employment, notices setting forth the provisions of this nondiscrimination clause. (2) Developer will, in all solicitations or advertisements for employees placed by or on behalf of Developer, state that all qualified applicants will receive consideration for employment without regard to race, color, religion, creed, national origin, ancestry, disability, age, marital status, sex or sexual orientation. (3) Developer will cause the foregoing provisions to be inserted in all contracts for any work covered by this Agreement so that such provisions will be binding upon each contractor and subcontractor, provided that the foregoing provisions shall not apply to contracts or subcontracts for standard commercial supplies or raw materials. Developer shall allow representatives of Agency access DDA 22 to its employment records related to this Agreement during regular business hours to verify compliance with these provisions when so requested by Agency. 5.14 Taxes, Assessments, Encumbrances and Liens Developer shall pay, prior to delinquency, all real estate taxes and assessments assessed and levied on the Site subsequent to Developer's acquisition of fee title thereto. 5.15 Security Financing, Rights of Holders 5.15.1 No Encumbrances Except as Mortgages, Deeds of Trust, Sales and Lease-backs or Other Financing for Development Notwithstanding Section 2.3, mortgages, deeds of trust, sales and lease-backs or any other form of conveyance required for any reasonable method of financing by Developer are permitted before issuance of a Certificate of Completion (including the granting of a security interest in Developer's rights in this Agreement), but only for the purpose of securing funds to be used for financing the acquisition or rehabilitation of the Site and/or any take-out financing related thereto and any other expenditures necessary or appropriate to develop the Site under this Agreement, including without limitation real and personal property taxes, related off-site improvements, insurance premiums, closing costs, attorneys' fees, loan carrying costs and costs of financing. Developer shall notify Agency in advance of any mortgage, deed of trust, or other form of conveyance for financing if Developer proposes to enter into the same before issuance of a Certificate of Completion for the construction of the improvements on the Site or portion of the Site to be subject to such financing arrangement. Developer shall not enter into any such conveyance for financing without the prior written approval of Agency which approval Agency agrees to give if any such conveyance is to an "Institutional Lender" and which must in any event be acted upon by Agency within ten (10) days of Agency receiving evidence of the financing. "Institutional Lender" means a California chartered bank; a bank created and operating 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 Sections 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 DDA 23 organized under the laws of the United States or of any state thereof; and/or 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. In any event, Developer shall promptly notify Agency of any mortgage, deed of trust, sale, lease-back or other financing conveyance, encumbrance or lien that has been created or attached thereto prior to issuance of a Certificate of Completion of the construction of the improvements on the Site or portion of the Site to be subject to such financing arrangement, whether by voluntary act of Developer or otherwise. The words "mortgage" and "deed of trust" as used herein include all other appropriate modes of financing real estate acquisition, construction of land development, and any other expenditure necessary or appropriate to develop the Site under this Agreement, which involves the granting of a security interest. 5.15.2 Holder Not Obligated to Construct Improvements A Holder shall in no way be obligated by the provisions of this Agreement to construct or complete the improvements or to guarantee such construction or completion. Nothing in this Agreement shall be deemed to construe, permit or authorize any Holder to devote the Site to any uses, or to construct any improvements thereon, other than those uses or improvements provided for or authorized by this Agreement. 5.15.3 Notice of Default to Mortgage, Deed of Trust or Other Security Interest Holders; Right to Cure Whenever Agency shall deliver any notice or demand to Developer regarding any Breach or default by Developer in completion of construction of the improvements, or any other alleged default, Agency shall at the same time deliver to each Holder of record authorized by this Agreement a copy of such notice or demand. Each such Holder shall (insofar as the rights of Agency are concerned) have the right at its option, within sixty (60) days after the expiration of any and all cure periods available to Developer, to cure or remedy such default and to add the cost thereof to the security interest debt and the lien on its security interest or to the obligations of Developer under any sale lease-back or of the grantor under any other conveyance for financing. If such default shall be a default which can only be remedied or cured by such Holder upon obtaining possession of the Site and such Holder seeks to obtain possession with diligence through a receiver or otherwise, such Holder shall have until sixty (60) days after obtaining possession to cure such default. Notwithstanding anything to the contrary contained herein, in the case of a default which cannot with diligence be remedied or cured, or the remedy or cure of which cannot be commenced, within sixty (60) days, such Holder shall have such additional time as reasonably necessary to remedy or cure such default with diligence; provided, further, such Holder shall not be required to remedy or cure any non-curable default of Developer. DDA 24 Nothing contained in this Agreement shall be deemed to permit or authorize such Holder to undertake the construction of the improvements (beyond the extent necessary to conserve or protect the improvements or construction already made, including, without limitation, the ability to continue the construction or completion of improvements already begun) without first having expressly assumed the obligations of Developer for the portion of the Site in which the Holder has an interest, by written agreement reasonably satisfactory to Agency. The Holder in that event shall only be liable or bound by Developer's obligations hereunder for such period as the Holder was in possession of the portion of the Site in which the Holder has an interest and, notwithstanding anything to the contrary contained in this Agreement, shall only be liable to the extent of its interest in the portion of the Site and the improvements owned by it thereon. The Holder in that event must agree to complete, in the manner provided in this Agreement, the improvements to which the lien or title of such Holder relates. Any such Holder properly completing such improvements shall be entitled, upon written request made to Agency, to a Certificate of Completion from Agency for such improvements. Breach of any of the covenants, conditions, restrictions, or reservations contained in this Agreement shall not defeat or render invalid the lien of any mortgage or deed of trust made in good faith and for value as to the Site or any portion of the Site or interest therein, whether or not the mortgage or deed of trust is subordinated to this Agreement. Unless otherwise herein provided, the terms, conditions, covenants, restrictions and reservations of this Agreement shall be binding and effective against the Holder and any owner of the Site, or any portion of the Site, whose title thereto is acquired by foreclosure, trustee's sale, or otherwise. No purported rule, regulation, modification, amendment and/or termination of this Agreement affecting the rights of a Holder shall be binding upon any Holder holding a mortgage or deed of trust from and after the date of recordation of such mortgage or deed of trust unless and until the written consent of such Holder is obtained. 5.15.4 Failure of Holder to Complete Improvements If in any case, within sixty (60) days after all cure periods have expired after default by Developer in completion of construction of improvements on the Site under this Agreement, and the notice required by Section 8.1 was properly given, and a Holder has not exercised the option afforded in Section 5.15.3 hereof to construct, Agency may, upon thirty (30) days' written notice, either: (i) purchase the mortgage, deed of trust or other security interest by payment to the Holder of the amount of the unpaid debt plus accrued but unpaid interest and other advances and amounts secured by the security interest, or in the case of a lessor or grantee by payment to such lessor or grantee of the purchase price paid for its interest in the Site and the improvements and any unpaid rent and other charges and sums payable to it under its applicable agreements with its lessee or grantor; (ii) assume such mortgage, deed of trust or DDA 25 other security interest in accordance with the terms of such mortgage, deed of trust or other security interest upon the prior written consent of such Holder, (iii) repurchase the Site as set forth in the Regulatory Agreement, or (iv) terminate this Agreement by notice to Developer. 5.15.5 Right of Agency to Cure Mortgage, Deed of Trust, Other Security Interest, Lease-back or Other Conveyance for Financing Default In the event an uncured default or Breach by Developer of a mortgage, deed of trust, other security instrument or obligations to the grantee under any conveyance for financing for the Site or the Development prior to the issuance of a Certificate of Completion (unless Developer is contesting such default in good faith), and the Holder has not exercised its option to complete the development, Agency may, pursuant to the terms of this Agreement, cure the default no sooner than immediately prior to completion of any imminent foreclosure. In such event, Agency shall be entitled to reimbursement of all direct and actual costs and expenses incurred by Agency in curing the default which reimbursement shall be a nonrecourse obligation of Developer. Such reimbursement amount may be secured at Agency's option by a lien against the Site. Any such lien shall be subordinate and subject to existing mortgages, deeds of trust or other security instruments and grantees under other conveyances for financing permitted pursuant to this Agreement. 5.16 Certificate of Completion Promptly after completion of the construction and improvements comprising the Development, or any portion thereof, Agency shall furnish Developer with a Certificate of Completion upon written request by Developer. The Certificate of Completion shall be and shall constitute a conclusive determination of satisfactory completion of the construction required by this Agreement for the Development or portion of the Development for which the Certificate is issued. Agency shall not unreasonably withhold any such Certificate of Completion. The Certificates of Completion shall be in such form as to permit it to be recorded in the Recorder's Office of Riverside County. If Agency refuses or fails to furnish a Certificate of Completion within ten (10) days after receipt by Agency of written request from Developer, Agency shall, within such period of ten (10) days, provide Developer with a written statement of the reasons why Agency refuses or fails to furnish such Certificate of Completion and Agency's opinion of the action Developer must take to obtain such Certificate of Completion. Such Certificate of Completion shall not constitute evidence of compliance with or satisfaction of any obligation of Developer to any Holder, or any insurer of a mortgage securing money loaned to finance the improvements, or any part thereof. Such Certificate of Completion is not a notice of completion as referred to in the California Civil Code Section 3093. DDA 26 ARTICLE 6 REHABILITATION OF THE SITE 6.1 Uses 6.1.1 Developer shall rehabilitate the Site as a single family home for sale at an Affordable Housing Cost to an eligible family in the Agency's Low and Moderate Income Housing Program (the "Program"), as more specifically described in the Scope of Development. Developer covenants and agrees for itself and its successors and assigns, and every successor in interest to the Site, or any portion thereof, that during construction and thereafter, Developer and such successors and assigns shall use the Site exclusively for the purposes herein stated and shall not devote the Site to any uses which are inconsistent with this Agreement and applicable City land use entitlements. 6.1.2 After the issuance of a Certificate of Completion for the Site, Developer shall not make or permit to be made any substantial structural additions or modifications to the exterior of any of the improvements required to be constructed on the Site pursuant to this Agreement, or permit a use other than as set forth herein, without the prior written consent of Agency. 6.2 Use and Operation Covenants. For a period of not less than forty- five (45) years from the date a Certificate of Occupancy is granted for the Improvements, the Developer hereby covenants and agrees to use and operate the Site to conform to the Redevelopment Plan and the Municipal Code and the affordability covenants in this Agreement and in the Regulatory Agreement attached hereto as Exhibit F, which shall be recorded by the Agency in the office of the Riverside County Recorder and shall run with the land and shall be enforceable against the original owner and successors in interest, by the Agency. 6.3 Sale of Site 6.3.1 Developer Covenant. Developer agrees to sell the Site only to a "Lower or Moderate Income Household" (as those terms are herein defined) and in accordance with this Section 6.3. 6.3.2 Selection of Buyer. The Agency shall identify eligible buyers from the Agency's waiting list for the Program. Developer shall select the buyer for the Site (the "Buyer") from that list, and provide technical assistance to the Buyer to package necessary financing and provide education to the Buyer about the Regulatory Agreement and other Program requirements. If Developer cannot find a Buyer from the list then, or cannot negotiate a purchase and sale contract with its preferred Buyer with the approval from the Agency, the Developer may consider eligible buyers from an established list of Developer. 6.3.3 Income of Buyer. Prior to the sale of the Site to a Buyer, the Developer shall cooperate with any Program requirements related to verifying the Buyer's income and obtaining certifications that Buyer continues to be an eligible Low or Moderate Income Household. DDA 27 6.3.4 Limitation on Sales Price. Developer shall sell the Site to the Buyer at a price that does not exceed the sum of the Purchase Price, plus up to $43,250 for the costs of rehabilitating the Site pursuant to the Scope of Development as approved by the Agency, plus $15,000 for costs of Developer. 6.3.5 Agency Buyer Assistance. The Agency shall provide financial assistance to the Buyer in the purchase of the Site from Developer as part of its First Time Home Buyer Program pursuant to that program's requirements. Such assistance shall be sufficient to lower the sales price to the Affordable Housing Cost for the Buyer's household size. 6.4 Maintenance of the Site. From and after Developer's acquisition of title, Developer covenants that Developer shall reasonably maintain the improvements on the Site and shall keep the Site free from any accumulation of debris or waste materials. Further, Developer agrees to comply with any maintenance requirements set forth in the Regulatory Agreement attached as Exhibit F. 6.5 Obligation to Refrain from Discrimination; Form of Non-discrimination Clauses 6.5.1 Developer covenants by and for itself and any successors in interest that there shall be no discrimination against, or segregation of, any persons, or group of persons, on account of sex or sexual orientation, race, color, creed, marital status, religion, disability, national origin or ancestry in the enjoyment of the Site or any portion or component thereof, nor shall Developer 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, subleases or vendees of the Site. The foregoing covenants shall run with the land and shall remain in effect for the periods specified in the Grant Deed for such the Site and any land subdivided therefrom. 6.5.2 Developer shall refrain from restricting the rental, sale, or lease of the Site or any portion or component thereof on the basis of race, color, creed, religion, disability, sex or sexual orientation, 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: (a) In deeds: "The grantee herein covenants by and for himself or herself, his or her heirs, executors, administrators, and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, disability, sex or sexual orientation, 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, or any persons DDA 28 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, subleases or vendees in the land herein conveyed. The foregoing covenants shall run with the land." (b) In contracts: "There shall be no discrimination against or segregation of any persons or group of persons on account of race, color, creed, religion, disability, sex or sexual orientation, marital status, ancestry or national origin in the sale, lease, transfer, use, occupancy, tenure or enjoyment of land, nor shall the transferee, 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, subleases or vendees of premises." The foregoing covenants shall remain in effect in perpetuity. 6.6 Effect and Duration of Covenants The covenants established in this Agreement, shall, without regard to technical classification or designation, be binding on Developer and any successor in interest to the Site or any part thereof for the benefit and in favor of Agency, its successors and assigns, and the City. Except as otherwise set forth in this Agreement, the covenants contained in this Agreement shall remain in effect until July , 2050. The covenants against discrimination (as described in Section 6.5) shall remain in perpetuity. ARTICLE 7 EVENTS OF DEFAULT AND RIGHTS OF TERMINATION AND OTHER REMEDIES 7.1 Defaults — General 7.1.1 Subject to the extensions of time set forth in Section 8.3, and to the provisions of paragraph 3 of this Section 7.1, failure or delay by either party to perform any term or provision of this Agreement constitutes a default under this Agreement. The party who so fails or delays must immediately commence to cure, correct, or remedy such failure or delay and shall complete such cure, correction or remedy with reasonable diligence and during any period of curing shall not be in default. 7.1.2 The nondefaulting party shall give written notice of default to the party in default, specifying the default complained of by the injured party. Delay in giving such notice shall not constitute a waiver of any default nor shall it change the time of default. 7.1.3 Neither party may exercise any rights or remedies upon a default by the other party, unless and until such default continues for a period of thirty (30) days after written notice thereof from the non-defaulting party. Provided, however, that if the nature of the default is such that more than thirty (30) days are DDA 29 reasonably required for its cure, then the defaulting party shall not be deemed to be in default if it has commenced a cure within the 30-day period and thereafter diligently prosecutes such cure to completion within ninety (90) days after receipt of written notice thereof. 7.2 Institution of Legal Actions In addition to any other rights or remedies, either party may institute legal action to cure, correct, or remedy any default, to recover damages for any default, or to obtain specific performance or any other remedy consistent with the purpose of this Agreement, except that there shall be no right to terminate this Agreement except as set forth in Sections 7.3, 7.4 and 7.5 of this Agreement. Such legal actions must be instituted in the Superior Court of the County of Riverside, State of California, in any other appropriate court in that County, or in the Federal District Court in the Central District of California. 7.3 Right of Termination by Agency Prior to Conveyance Prior to the conveyance of title to the Site by Agency to Developer, Agency, at its option, as its sole and exclusive remedy, may terminate this Agreement if, (1) any of the events described in (a), (b) or (c) below occurs, (2) any pertinent cure period applicable thereto has expired and such default remains uncured, and (3) Agency delivers a written termination notice to Developer that this Agreement is terminated pursuant to this Section 7.3. (a) Developer assigns or attempts to assign this Agreement or any rights therein relating to the Site except as authorized in this Agreement; or (b) Developer fails, after written notice from Agency of default and the expiration of any period to cure such default, to perform a material obligation hereunder, which failure constitutes an event of default under this Agreement; or (c) Any condition precedent to Agency's obligation to convey the Site has not been satisfied as and at the times provided in this Agreement. Upon such termination by Agency, in accordance with this Section, any remaining rights of Developer regarding the Site or arising from this Agreement, shall be deemed terminated. Upon such termination, neither Developer nor Agency shall have any further rights against or liability to the other under this Agreement regarding the Site or the individual parcels comprising the same. Upon such termination of this Agreement by Agency, all monies or documents deposited by Developer into a then unclosed escrow for the Site shall be returned to Developer, and Developer shall, to the extent allowed by any third- DDA 30 party contracts, assign to Agency all of Developer's rights to all design concept and engineering drawings for such Development on the Site. Developer shall pay all attendant escrow cancellation costs. 7.4 Right of Termination by Developer Prior to Conveyance In addition to any other remedies at law or equity available to Developer prior to the conveyance of title to the Site, including, without limitation, specific performance, recovery of damages or other appropriate remedies, Developer at its option may terminate this Agreement if (1) any of the events described in (a), (b) or (c) below occurs, (2) any pertinent cure period applicable thereto has expired and such default remains uncured (provided however that no cure period shall apply to item (a) below except as set forth therein) and (3) Developer delivers a written termination notice to Agency: (a) Agency does not tender conveyance of title to the Site in the manner and condition, and by the date provided in this Agreement, and any such failure shall not be cured within ten (10) days after the date of written demand by Developer, or (b) Agency fails to perform a material obligation hereunder, which failure constitutes an event of default under this Agreement; or (c) Any condition precedent to Developer's obligation to purchase the Site has not been satisfied as and at the times provided in this Agreement. Upon such termination, neither Agency nor Developer shall have any further rights against or liability to the other related to or arising under this Agreement and any remaining rights of Agency arising from this Agreement shall be deemed terminated. Upon such termination of this Agreement by Developer, all monies or documents deposited by any party into the unclosed escrow shall be returned to the party making such deposit. Agency shall pay all escrow cancellation costs. 7.5 Remedies and Rights of Termination after Conveyance; Agency Option to Repurchase Site (1) If Developer defaults on this Agreement, at any time after conveyance of the Site to Developer but prior to issuance of a Certificate of Completion for the rehabilitation of the Improvements pursuant to Section 5.16 of this Agreement, and such default is not cured within the time periods set forth in Section 7.1, and subject to the rights of Holders set forth in Section 5.15, than Agency shall have an option to repurchase the entire Site, or any portion thereof for which a partial Certificate of Completion has not been issued, at any time. The right of Agency to repurchase the Site pursuant to this Section 7.5 shall be set forth in the Grant Deed. DDA 31 (2) This option to purchase shall be exercised, if at all, by Agency's delivery of written notice of its election to exercise the option to Developer within one year after expiration of the last of the cure periods granted to Developer and/or the Holders. (3) (a) The purchase price (the "Option Purchase Price") shall be the cost of paying off all mortgage or other debt on the Site, plus the cost of all improvements made by Developer and accepted by Agency. (b) Agency shall deliver the Option Purchase Price to Developer concurrently with delivery of title to Agency. Agency shall receive a policy of title insurance subject only to exceptions that (i) existed at the time of Developer's acquisition of the Site, or (ii) were created with the written consent of Agency or approved in writing by Agency, including but not limited to the deed of trust or other lien securing the construction financing. (4) Upon the issuance of the Certificate of Completion for the Development, Agency shall execute a memorandum terminating this option to purchase. 7.6 Applicable Law and Attorney's Fees The laws of the State of California shall govern the interpretation and enforcement of this Agreement. Should legal action be brought by either party for breach of this Agreement to enforce any provision, the prevailing party in such action shall be entitled to actual and reasonable attorneys' fees, court costs, and other litigation expenses including, without limitation, expenses incurred for preparation and discovery. The entitlement to recover such fees, costs and expenses shall accrue upon the commencement of the action regardless of whether the action is prosecuted to final judgment. 7.7 Acceptance of Service of Process In the event that any legal action is commenced by Developer against Agency, service of process on Agency shall be made by personal service upon the Chief Executive Officer or in such other manner as may be provided by law. In the event that any legal action is commenced by Agency against Developer, service of process on such party shall be made by personal service upon a partner or an officer of Developer, and shall be valid whether made within or without the State of California. 7.8 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 any party of one or more of such rights or remedies shall not preclude the exercise by it, at the DDA 32 same or different times, of any other rights or remedies for the same default or any other default by any other party. Upon the occurrence of an event of default, except as to rights and remedies expressly declared to be exclusive in this Agreement, the injured party shall have all rights and remedies against the defaulting party as may be available at law or in equity to cure, correct or remedy any event of default, to obtain specific performance, to recover damages, or to obtain any other remedy consistent with the purpose of this Agreement. 7.9 Inaction Not a Waiver of Default Any failures or delays by any party in asserting any of its rights and remedies as to any default shall not operate as a waiver of any default or of any such rights or remedies, or deprive any 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. ARTICLE 8 GENERAL PROVISIONS 8.1 Notices, Demands and Communications Between the Parties Formal written notices, demands, correspondence and communications between Agency, City and Developer shall be sufficiently given if (i) personally served, (ii) dispatched by registered or certified mail, first class, postage prepaid, return receipt requested, (iii) delivered via overnight mail, postage prepaid, or(iv) delivered via facsimile transmission, provided that in addition to such facsimile notice a copy is also delivered via first class, United States Mail, postage prepaid. All notices shall be addressed to the principal offices of Agency, City and Developer, or as applicable to Developer's assignee or assignees at addresses stated in the document or documents effecting the assignment or assignments, with a copy to designated legal counsel as follows: For Agency/City Palm Desert Redevelopment Agency 73-510 Fred Waring Drive Palm Desert, California 92260 Attention: Lauri Aylaian Tel: (760) 346-0611 Fax: (760) 341-6372 For Developer: Rancho Housing Alliance 53-990 Enterprise Way, Suite 1 Coachella, California 92236 Attention: Jeffrey A. Hays, Executive Director Tel: (760) 391-5050 Fax: (760) 391-5100 Such written notices, demands, correspondence and communications may be sent in the same manner to such other persons and addresses as either party may from time to time reasonably designate by mail as DDA 33 provided in this Section. Notice shall be effective upon the date of personal delivery or, in the case of mailing, on the date of delivery or attempted delivery as shown on the U.S. Postal Service certified mail return receipt. 8.2 Nonliability of Agency and City Officials and Employees No member, official or employee of Agency or City shall be personally liable to Developer, or any successor in interest, in the event of any default or breach by Agency or City or for any amount which may become due to Developer or its successors, or on any obligations under the terms of this Agreement. 8.3 Enforced Delay; Extension of Times of Performance In addition to specific provisions of the Agreement, performance by any party hereunder shall not be deemed to be in default, where delays or defaults are due to acts of God, or the elements, accident, casualty, unavailability or delays in delivery of any product, labor, fuel, service or materials, failure or breakdown of equipment, strikes, lockouts, or other labor disturbances, acts of the public enemy, orders or inaction of any kind from the government of the United States, the State of California, or any other governmental, military or civil authority (other than City or Agency, to the extent that such orders or inaction affect City's or Agency's obligations, performance or rights under this Agreement), war, insurrections, riots, epidemics, landslides, lightning, droughts, floods, fires, earthquakes, arrests, civil disturbances, explosions, freight embargoes, lack of transportation, Breakage or accidents to vehicles, or any other inability of any party hereto, whether similar or dissimilar to those enumerated or otherwise, which are not within the control of the party claiming such inability or disability, which such party could not have avoided by exercising due diligence and care and regarding which such party shall use all reasonable efforts that are practically available to it in order to correct such condition. However, no party hereto shall be entitled to any extension of time pursuant to this Section 8.3 due to any event or condition caused by a party's inherent financial condition or financial inability to pay its monetary obligations when due (as distinguished from a party's inability to make a payment by reason of a bank's failure or some other external cause not associated with such party's financial condition). Notwithstanding anything to the contrary in this Agreement, an extension of time for any such cause shall be for the period of time reasonable in light of the enforced delay. The extension of time shall commence to run from the time of the commencement of the cause, so long as the party claiming the extension has notified the other party in writing of the nature of the matter constituting the enforced delay within ten (10) days after the occurrence of the enforced delay. DDA 34 8.4 Plans and Data If this Agreement is terminated for any reason other than Agency's default, and Developer has commenced construction of the dwelling units on the Site, Developer shall deliver to Agency copies of any and all plans and data concerning the Site which are in the possession of Developer, and shall assign to Agency all rights held by Developer to use such plans and data. In doing so, Developer shall not be considered to be making any representation regarding the content of such plans and data or expressly or impliedly warranting the accuracy thereof. 8.5 Successors and Assigns This Agreement shall bind and inure to the benefit of the parties to this Agreement and their respective successors and assigns; provided, however, that this provision shall not authorize the assignment or transfer of any interest which is prohibited specifically by the other terms of this Agreement. 8.6 Relationship of the Parties The terms and provisions of this Agreement shall not cause the parties hereto to be construed in any manner whatsoever as partners, joint venturers or agents of each other in the performance of their respective duties and obligations under this Agreement, or subject either party to this Agreement to any obligations, loss, charge or expense of the other party unless the party to be held responsible has independently contracted with the claimant so as to make it directly responsible for the performance and/or payment, as appropriate, of the pertinent obligation, loss, charge or expense. 8.7 Text to Control; Interpretation The headings in this Agreement are included solely for convenience, and if there shall be any conflict between such headings and the text of this Agreement, the text shall control. Should any provisions of this Agreement require interpretation, it is agreed that the person or persons interpreting or construing the same shall not apply a presumption that the terms of this Agreement shall be more strictly construed against one party by reason of the rule of construction that a document is to be construed more strictly against the party thereto who itself or through its agent or counsel prepared the same or caused the same to be prepared; it being agreed that the agents and counsel of both of the parties hereto have participated equally in the negotiation and preparation of this Agreement. 8.8 Severability To the best knowledge and belief of the parties to this Agreement, this Agreement contains no provision that is contrary to any federal, state or local DDA 35 law or to any regulatory requirement or other ruling or regulation of a federal, state or local Agency or that would be in breach of the obligations of either or both of the parties hereto under the terms and provision of any legally binding agreement. However, if any provision of this Agreement, or any part thereof, shall at any time be held to be invalid, in whole or in part, under any applicable federal, state or local law by a court of competent jurisdiction, or by arbitrators or an administrative Agency of the federal, state or local government with proper jurisdiction, then such provision or a portion thereof, as appropriate, shall be curtailed and limited only to the extent necessary to bring it within the requirements of the law and the validity and enforceability of the remaining provisions of this Agreement shall remain in effect and shall in no way be affected, impaired or invalidated, unless the invalidated provision(s) shall uniquely, materially and adversely affect the rights and obligations of a party to this Agreement. 8.9 Approvals Approvals required of Agency, City or Developer shall not be unreasonably withheld or delayed, and approval or disapproval shall be given within the time set forth in the Schedule of Performance or this Agreement, or, if no time is given, within a reasonable time. 8.10 Time of the Essence Time is of the essence of this Agreement. 8.11 Computation of Time Unless otherwise required by a specific provision of this Agreement, time hereunder is to be computed by excluding the first day and including the last day. 8.12 Calendar Days All references in this Agreement to a number of days in which either party shall have to consent, approve or perform shall mean calendar days unless specifically stated to be business days. The term "holiday" shall mean all holidays as specified in section 6700 and 6701 of the California Government Code. If any act is to be done by a particular time during a day, that time shall be Pacific Time Zone time. 8.13 Further Assurances Each of the parties hereto shall execute and deliver any and all additional papers, documents, instruments and other assurances and shall do any and all other acts and things reasonably necessary to carry out the purposes of this Agreement and the intent of the parties hereto. DDA 36 8.14 Entire Agreement; Waivers and Amendments This Agreement may be executed in duplicate originals, each of which is deemed to be an original. This Agreement includes six (6) Exhibits, each of which is incorporated herein by reference, as follows: Exhibit A Legal Description of Site Exhibit B Site Map Exhibit C Scope of Development Exhibit D Schedule of Performance Exhibit E Form of Grant Deed Exhibit F Regulatory 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 regarding all or any part of the subject matter hereof. All modifications, additions or amendments to this Agreement shall be in writing and signed by the parties hereto. Developer and Agency agree to mutually consider reasonable requests for amendments to this Agreement which may be made by lending parties or institutions, provided the requests are consistent with this Agreement and would not substantially alter the basic business terms included herein. 8.15 Conflict of Interest. No member, official or employee of Agency shall have any personal interest, direct or indirect, in this Agreement, nor shall any such 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. 8.16 Cooperation. Each party agrees to cooperate with the other in this transaction and, in that regard, to sign any and all documents which may be reasonably necessary, helpful, or appropriate to carry out the purposes and intent of this Agreement including, but not limited to, releases or additional agreements. 8.17 Counterparts. This Agreement may be signed in multiple counterparts which, when signed by all parties, shall constitute a binding agreement. This Agreement is executed in three (3) originals, each of which is deemed an original. [Signature page(s) follow] DDA 37 WITNESS the signatures of the parties as of the date first set forth above. PALM DESERT REDEVELOPMENT AGENCY, a public body, corporate and politic Dated: , 2005 By: Title: ATTEST: Secretary/Clerk APPROVED AS TO FORM: AGENCY GENERAL COUNSEL, Richards, Watson and Gershon, a professional corporation By: RANCHO HOUSING ALLIANCE, a California non-profit public benefit corporation Dated: , 2005 By: Title: DDA 38 Exhibit A LEGAL DESCRIPTION OF SITE [To Be Added] DDA 39 Exhibit B SITE MAP [TO BE ADDED] DDA 40 Exhibit C SCOPE OF DEVELOPMENT Rehabilitation of the site shall include, but may not be limited to, the interior and exterior work items identified below. INTERIOR Item No. Item Description Interior Cost 1 Remove and replace built-in appliances $3,600.00 2 Demolish interior— Remove room built in garage 500.00 3 Electrical repair— Service and check existing 400.00 4 Replace HVAC package, ducting, and HERS test 6,200.00 5 Add attic blown insulation 1,000.00 6 Finish carpentry repairs to interior base, doors and cabinetry 1,000.00 7 Repair existing garage door and connect to existing opener 350.00 $13,050.00 EXTERIOR Item No. Item Description Exterior Cost 1 Remove existing wood fencing and replace with tan slump $10,500.00 garden block wall and new gate 2 Landscape — Repair existing sprinkler system, trim and clean 1,500.00 up 3 6,875.00 Remove wood roofing and replace with asphalt/fiberglass shingles 265-300 lb. — 30 year 4 4,375.00 Remove existing window units, replace with new dual pane window units, repair existing slider unit 5 2,350.00 General Conditions — miscellaneous for unanticipated repairs General Conditions 6 4,600.00 Wash and paint previously painted interior and exterior $30,200.00 TOTAL $43,250.00 DDA 41 Exhibit D SCHEDULE OF PERFORMANCE 1. Site Inspection of Site Developer shall make inspection of all aspects of the Within 15 days of Agency condition of the site. Board approval of Disposition and Development Agreement. 2. Construction Drawings and Related Documents To the extent required, Developer shall prepare and Within 30 days of Agency submit construction drawings and related Board approval of Disposition documents for the site to the Agency. and Development Agreement. 3. City and Other Governmental Agency Permits Before commencement of the rehabilitation of the Within 45 days of Agency site, Developer shall, at its own expense, secure or Board approval of Disposition cause to be secured any and all permits that may be and Development Agreement. required. 4. Opening of Escrow The Agency shall open escrow with Escrow Agent. Within 15 days of executed agreements. 5. Conditions Precedent to Closing Developer and Agency shall satisfy(or waive) all of No later than 10 days prior to their respective Conditions Precedent to Closing. scheduled date of escrow closing. 6. Close of Escrow The agency shall convey the site to the Developer. 30 days after opening of escrow. 7. Commencement of Construction of Improvements Developer shall commence construction of the Within 30 days following the improvements. closing. 8. Completion of Construction Developer shall complete construction of the Within 3 months following improvement. commencement of construction of the improvements. DDA 42 Exhibit E FORM OF GRANT DEED WITH OFFER TO REPURCHASE RECORDING REQUESTED BY AND AFTER RECORDATION, MAIL TO: Palm Desert Redevelopment Agency 73-510 Fred Waring Dr. Palm Desert, California 92260 (This document is exempt from payment of a recording fee pursuant to Government Code Section 6103) GRANT DEED WITH RIGHT OF REPURCHASE For valuable consideration, the receipt of which is hereby acknowledged, THE PALM DESERT REDEVELOPMENT AGENCY (herein called "Grantor"), a public body, corporate and politic, of the State of California, acting to carry out the Redevelopment Plan for the Project Area (herein called "Redevelopment Plan"), under the Community Redevelopment Law of the State of California, hereby grants to RANCHO HOUSING ALLIANCE, a California non-profit public corporation (herein called "Grantee"), the real property (the "Site") legally described in the document labeled Exhibit A, attached hereto and incorporated herein by this reference. 1. The Site is conveyed subject to the Redevelopment Plan and pursuant to that certain Disposition and Development Agreement (the "DDA") entered into by and between Grantor and Grantee and dated as of_, 200_. Grantee covenants and agrees for itself and its successors and assigns to use, operate and maintain the Site in accordance with the DDA, the Redevelopment Plan and this Deed. The Site is also conveyed subject to all matters of record and other matters approved by the Grantee pursuant to the DDA, including but not limited to that certain Regulatory Agreement by and between Grantor and Grantee dated as of , 200_ (the "Regulatory Agreement"). 2. Grantee hereby covenants and agrees, for itself and its successors and assigns, that during construction and thereafter, Grantee shall not use, operate and maintain the Site in violation of the Redevelopment Plan and for a period of ( ) years after the issuance of a Certificate of Completion (unless expressly waived in writing by the Grantor or as otherwise provided in Section 6.1 of the DDA) shall use the Site only affordable housing for low and moderate income households and such customary ancillary uses associated with residential development; provided, that the principal use of the Site shall remain at all times an affordable housing development. Grantee further covenants and agrees for itself and its successors and assigns that it shall not engage in or permit DDA 43 any activity on the Site that would violate the Redevelopment Plan, any Plans approved for any portion of the Site, or any applicable Governmental Restrictions. Grantee further covenants and guarantees to Grantor that the Site shall be used solely as affordable housing for a low or moderate income household for the forty- five (45) years following Grantor's issuance of the Certificate of Completion, or in the event such housing is destroyed for reasons beyond the reasonable control of Grantee, then for another affordable housing development in the sole discretion of Grantor. Grantor and Grantee agree that this use covenant on the part of the Grantee is necessary to carry out the purposes of the Redevelopment Plan and the DDA regarding the Site. 3. Grantee shall not, except as permitted by the DDA, Transfer any part of its interest in the DDA or the Site, or Transfer any of its Ownership and/or Control. 4. Grantee acknowledges that Grantor's cost of acquiring the Site exceeds the Purchase Price paid by Grantee. Grantee covenants and agrees that the minimum assessed value of the Site after improvement in accordance with the DDA and after Grantor's issuance of a Certificate of Completion shall be $165,000.00. 5. Subject to the provisions of Section 7.5 of the DDA, Grantor shall have the additional right, at its option, to repurchase the Site hereby conveyed, with all improvements thereon, and revest in Grantor the estate conveyed to Grantee, if after conveyance of title and prior to issuance of a Certificate of Completion for the Improvements to be constructed upon the Site, Grantee or a successor in interest shall: (a) Fail to commence, proceed with, or complete construction of any of the Improvements required by the DDA for a period of sixty (60) days after written notice thereof from Grantor for reasons other than those in Section 8.3 of the DDA; or (b) Abandon or substantially suspend construction of any of the Improvements for a period in excess of sixty (60) days after written notice thereof from Grantor for reasons other than those specified in Section 8.3 of the DDA; or (c) Contrary to the provisions of Section 2.3 (including subsections 2.3.1 and 2.3.2) of the DDA, Grantee allows or suffers a voluntary or involuntary Transfer or attempted Transfer of the whole or any part of the Site or of the Improvements to be constructed thereon, or any interest therein in violation of the DDA; and the above action or failure to act is not cured within the applicable cure period set forth in the DDA. DDA 44 Such right to repurchase shall be subordinate and subject to and shall not defeat, render invalid or limit: (a) Any mortgage, deed of trust or other security instrument permitted by the DDA; or (b) Any rights or interests provided in the DDA for the protection of the holder of such mortgages, deeds of trust or other security instruments. Such right to repurchase may be exercised by Grantor's delivery of written notice to Grantee (as provided in the DDA) of its intention to so exercise, after the occurrence of one or more of the above specified defaults and expiration of the applicable cure period set forth in the DDA. The purchase price under the right to repurchase shall be the cost of paying off all mortgage or other debt on the Site, plus the cost of all improvements made by Developer and accepted by Agency. The rights established herein to repurchase the Site shall terminate and be of no further force and effect upon the issuance of the Certificate of Completion as set forth in Section 5.16 of the DDA. 6. Grantee 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, disability, sex, sexual orientation, marital status, ancestry or national origin in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Site, nor shall 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, sublessee or vendees in the site. All deeds, leases or contracts made relative to the Site, the improvements thereon or any part thereof, shall contain or be subject to substantially the following nondiscrimination clauses: a. In deeds: 'The grantee herein covenants by and for himself or herself, and 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, disability, sex, sexual orientation, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land herein conveyed, nor shall the grantee himself or herself or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessee, or vendees in the land herein conveyed. The foregoing covenants shall run with the land." DDA 45 b. In leases: 'The lessee herein covenants by and for himself or herself, and 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: "That there shall be no discrimination against or segregation of any person or group of persons, on account of race, color, creed, religion, disability, sex, sexual orientation, marital status, national origin or ancestry, in the leasing, subleasing, transferring, use, occupancy, tenure or enjoyment of the land 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, sublessee, subtenants or vendees in the land herein leased." c. In contracts: "There shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, disability, sex, sexual orientation, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land, 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, sublessee, subtenants or vendees in the land." 7. Prior to issuance of the Certificate of Completion by Grantor as provided in the DDA, Grantor shall not place or suffer to be placed on the Site any lien or encumbrance other than mortgages, deeds of trust, sales and leases back or any other form of conveyance required for financing of the acquisition of the Site, the rehabilitation of Improvements on the Site, and any other expenditures necessary and appropriate to develop the Site which meet the requirements set forth in the DDA, and which financing shall require the written approval of Grantor in accordance with the DDA. 8. No violation or breach of the covenants, conditions, restrictions, provisions or limitations contained in this Grant Deed shall defeat or render invalid or in any way impair the lien or charge of any mortgage, deed of trust or other financing or security instrument permitted by the DDA; provided, however, that any successor of Grantee to the site shall be bound by such covenants, conditions, restrictions, limitations and provisions, whether such successor's title was acquired by foreclosure, deed in lieu of foreclosure, trustee's sale or otherwise. 9. The covenants contained in paragraphs 1 through 7, inclusive, of this Grant Deed shall be binding for the benefit of Grantor, its successors, assigns and the City of Palm Desert against any successor in interest to the Site or any part thereof, and such covenants shall run in favor of the Grantor and such aforementioned parties of the entire period during which such covenants shall be DDA 46 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 and such aforementioned parties, in the event of any breach of any such covenants, shall have the right to exercise all of the rights and remedies, and to maintain any actions at law or suits in equity or other proper proceedings to enforce the curing of such breach. The covenants contained in this Grant Deed shall be for the benefit of and shall be enforceable only by the Grantor, its successors and such aforementioned parties. 10. The covenants contained in this Grant Deed (except for the covenant set forth in paragraph 5) shall be construed as covenants running with the land and not as conditions which might result in forfeiture of title. 11. In the event of any conflict between this Grant Deed, the Regulatory Agreement and the DDA, the provisions of the DDA shall control. Unless otherwise expressly provided, all defined terms used in this Grant Deed shall have the defined meaning provided for in the DDA. IN WITNESS WHEREOF, the Grantor and Grantee have caused this instrument to be executed on their behalf by their respective officers thereunto duly authorized, this day of , 200_. "GRANTOR" PALM DESERT REDEVELOPMENT AGENCY By: Title: The provisions of this Grant Deed are hereby approved and accepted. "GRANTEE" RANCHO HOUSING ALLIANCE, a California non-profit public benefit corporation By: Its: By: Its: DDA 47 DDA 48 State of California ) ) ss County of Riverside ) On , 200_, 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. Signature of Notary DDA 49 State of California ) ss County of Riverside ) On , 200_, before me, s 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 of Notary DDA 50 State of California ) ss County of Riverside ) On , 200 , 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. Signature of Notary DDA 51 EXHIBIT A TO Exhibit E LEGAL DESCRIPTION [to be inserted] DDA 52 EXHIBIT F REGULATORY AGREEMENT RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: Palm Desert Redevelopment Agency 73-510 Fred Waring Dr. Palm Desert, California 92260 FREE RECORDING REQUESTED (Gov't Code Section 6103) REGULATORY AGREEMENT THIS REGULATORY AGREEMENT (the "Agreement") is entered into this day of , 200_, by and between the Palm Desert Development Agency, a public body, corporate and politic (the "Agency"), and , a California non-profit public benefit corporation ("Developer"). WHEREAS, for the purpose, among others, of effectuating the Redevelopment Plan for the Project (the "Project"), Developer and Agency have entered into that certain Disposition and Development Agreement dated , 200_(the "DDA"); and WHEREAS, the Redevelopment Plan (the "Redevelopment Plan") for the Project was approved and adopted by the City Council of the City of Palm Desert on , by Ordinance No. . The Redevelopment Plan is a public record on file in the office of the City Clerk of the City of Palm Desert and is incorporated herein by this reference; and WHEREAS, pursuant to the DDA, Developer has acquired, from Agency and certain third parties, that certain real property (the "Site") from Agency located in the County of Riverside, California more particularly described in Exhibit A attached hereto and incorporated herein by this reference, which Site is located in the Project Area of the Project; and WHEREAS, pursuant to the DDA the Developer will rehabilitate the Site for sale to a Low or Moderate Income Household, as more particularly described in the DDA; and WHEREAS, the DDA contains certain provisions relating to the use of the Site both before and after completion of such rehabilitation; and DDA 53 WHEREAS, the parties have agreed to execute and record this Regulatory Agreement. NOW, THEREFORE, AGENCY AND DEVELOPER COVENANT AND AGREE AS FOLLOWS: a. The Developer covenants and agrees (for itself, its successors, assigns, and every successor in interest to the Site or any part thereof) that during construction and thereafter, the Developer, successors, and assigns shall devote the Site (or any part thereof), to the uses specified in the Redevelopment Plan and as housing for a Low or Moderate Income Household pursuant to the DDA and this Agreement. As set forth in the DDA, Developer shall rehabilitate the site, as more specifically described in the Scope of Development attached to the DDA. b. After the issuance of a Certificate of Completion for the Site, as provided in Section 5.16 of the DDA, Developer shall not make or permit to be made any substantial structural additions or modifications to the exterior of any of the improvements required to be constructed on the Site pursuant to the DDA, or permit a use other than as set forth herein, without the prior written consent of Agency. c. During construction and thereafter, the Developer shall maintain the improvements on the Site and shall keep the Site free from any accumulation of debris or waste materials. The Developer shall also maintain in good condition any landscaping required to be planted under the Scope of Development. d. The Developer covenants and agrees for itself, its successors, assigns and every successor in interest to the Site or any part thereof, that there shall be no discrimination against or segregation of any person, or group of persons, on account of race, color, religion, creed, national origin, ancestry, disability, age, marital status, sex or sexual orientation in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Site nor shall the Developer itself, or any person claiming under or 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. e. The Developer shall refrain from restricting the sale, lease, sublease, rental, transfer, use, occupancy, tenure, or enjoyment of the Site (or any part thereof) on the basis of race, color, religion, creed, national origin, ancestry, disability, age, marital status, sex or sexual orientation of any person. All such deeds, leases, or contracts pertaining thereto shall contain or be subject to substantially the following nondiscrimination or nonsegregation clauses: (i) In deeds: "The grantee herein covenants by and for itself, its successors and assigns, and all persons claiming under or through them, DDA 54 that there shall be no discrimination against or segregation of, any person or group of persons on account of race, color, religion, creed, national origin, ancestry, disability, age, marital status, sex or sexual orientation in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land herein conveyed, 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 in the land herein conveyed. The foregoing covenants shall run with the land." (ii) In leases: "The lessee herein covenants by and for itself, its successors 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 race, color, religion, creed, national origin, ancestry, disability, age, marital status, sex or sexual orientation in the leasing, subleasing, renting, transferring, use, occupancy, tenure or enjoyment of the land herein leased, nor shall lessee itself, or any person claiming under or through it, establish or permit such practice or practices of discrimination or segregation with reference to the selection, location, number, or occupancy of tenants, lessees, sublessees, tenants, or vendees in the land herein leased." (iii) In contracts: "There shall be no discrimination against or segregation of, any person or group of persons on account of race, color, religion, creed, national origin, ancestry, disability, age, marital status, or sex in the sale, lease, sublease, rental, transfer, use, occupancy, tenure or enjoyment of the 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 the land." f. Grantee hereby grants to the Grantor an option to purchase the Site as follows: (i) If Developer defaults on the DDA, at any time prior to issuance of a Certificate of Completion pursuant to Section 5.16 of the DDA, and such default is not cured within the time periods set forth in the DDA, then the Grantor may elect to exercise the option described herein. This option to purchase shall be exercised, if at all, by the Agency's delivery of written notice of its election to exercise the option to Developer within one (1) year after expiration of the last of the cure periods granted to Developer at: 53-990 Enterprise Way, Suite 1, Coachella, CA 92236, or to such other address as is provided by Developer to the Agency in writing for the purpose of delivering notices. The purchase price under the option to purchase shall be the cost of paying off all mortgage or other debt on the Site. (ii) Agency shall deliver the purchase price of the mortgage or other debt as described in this Section to the Holder, concurrently DDA 55 with delivery of title to the Agency. The Agency shall receive a policy of title insurance subject only to exceptions that: (i) existed at the time of Developer's acquisition of the Site, or (ii) were created with the written consent of the Agency or approved in writing by the Agency. (iii) Upon the issuance of the Certificate of Completion for all the Improvements to be constructed on the Site, the Agency shall execute a memorandum terminating this option to purchase. g. In amplification and not in restriction of the provisions set forth herein above, it is intended and agreed that Agency shall be deemed a beneficiary of the covenants and agreements provided herein above both for and in its own right and also for the purposes of protecting the interests of the community and the Project Area. All covenants without regard to technical classification or designation shall be binding for the benefit of Agency, and such covenants shall run in favor of Agency for the entire period during which such covenants shall be in force and effect, without regard to whether Agency is or remains an owner of any land or interest therein to which such covenants relate. Agency shall have the right, in the event of any breach of any such covenant or agreement, after delivery of notice and expiration of the cure period discussed in the DDA, to exercise all the rights and remedies, and to maintain any actions at law or suits in equity or other proper proceedings to enforce the curing of such breach of covenant or agreement. h. No violation or breach of the covenants, conditions, restrictions, provisions or limitations contained in this Agreement shall defeat or render invalid or in any way impair the lien or charge of any mortgage or deed of trust or security interest permitted by the DDA, provided, however, that any subsequent owner of the Site shall be bound by such remaining covenants, conditions, restrictions, limitations, and provisions, whether such owner's title was acquired by foreclosure, deed in lieu of foreclosure, trustee's sale or otherwise. i. Both before and after issuance of the Certificate of Completion, only Agency, its successors and assigns, and Developer and the successors and assigns of Developer to all or any part of the fee title to the Site shall have the right to consent and agree to changes in, or to eliminate in whole or in part, any of the covenants, easements, or other restrictions contained in this Agreement, or to subject the Site to additional covenants, easements or other restrictions. Agency, its successors and assigns, and Developer and the successors and assigns of Developer to all or any part of the fee title to the Site shall have the right to consent and agree to changes in, or to eliminate in whole or in part, any of the covenants, easements, or restrictions contained in this Agreement or to subject the Site to additional covenants, easements, or other restrictions without the consent of any tenant, lessee, easement holder, licensee, mortgagee, trustee, beneficiary under a deed of trust or any other person or entity having any interest less than a fee in the Site. DDA 56 j. The covenants established in this Agreement shall, without regard to technical classification and designation, be binding on the Developer and any successor in interest to the Site or any part thereof for the benefit and in favor of the Agency, its successors and assigns, and the County. Except as set forth below, the covenants contained in this Agreement shall remain in effect until December 31, 2040, unless this Agreement provides for their earlier termination. The covenants against discrimination (as described in Paragraphs 4 and 5) shall remain in perpetuity. k. The capitalized terms used herein shall have the meanings defined in the DDA, unless expressly indicated otherwise. [signatures follow) IN WITNESS WHEREOF, the Agency and the Developer have executed this Regulatory Agreement and Option. Palm Desert Redevelopment Agency, a public body, corporate and politic By: Title: Attest: Agency Clerk APPROVED AS TO FORM: Agency General Counsel Assistant Agency Counsel a California non-profit public benefit corporation By: Name: Title: DDA 57 By: Name: Title: 58 ODA STATE OF CALIFORNIA ) ) ss. COUNTY OF RIVERSIDE ) On , 200_, before me, the undersigned, a Notary Public, personally appeared , personally known to me (or proved to me on the basis of satisfactory evidence) to be the person whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his authorized capacity, and that by his signature on the instrument the entity upon behalf of which the person acted executed the instrument. WITNESS my hand and official seal. Signature STATE OF CALIFORNIA ) ss. COUNTY OF RIVERSIDE ) On , 200 , before me, the undersigned, a Notary Public, personally appeared , personally known to me (or proved to me on the basis of satisfactory evidence) to be the person whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his authorized capacity, and that by his signature on the instrument the entity upon behalf of which the person acted executed the instrument. WITNESS my hand and official seal. Signature STATE OF CALIFORNIA ) ) ss. COUNTY OF RIVERSIDE ) On , 200_, before me, the undersigned, a Notary Public, personally appeared _ , personally known to me (or proved to me on the basis of satisfactory evidence) to be the person whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his authorized capacity, and that by his signature on the instrument the entity upon behalf of which the person acted executed the instrument. WITNESS my hand and official seal. DDA 59 Signature DDA 60 Exhibit A LEGAL DESCRIPTION OF SITE [To Be Added] P6402-0001\839935v2.doc -1-