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HomeMy WebLinkAboutCONVEYANCE OF A SINGLE FAMILY LOT TO HABITAT FOR HUMANITY - VIRGINIA AVE - RESOLUTION 514 PALM DESERT REDEVELOPMENT AGENCY STAFF REPORT REQUEST: PUBLIC HEARING FOR CONVEYANCE OF A SINGLE-FAMILY LOT TO HABITAT FOR HUMANITY OF THE COACHELLA VALLEY, INC. AND APPROVAL OF A DISPOSITION AND DEVELOPMENT AGREEMENT SUBMITTED BY: JANET MOORE, HOUSING AUTHORITY ADMINISTRATOR DATE: JANUARY 12, 2006 CONTENTS: 1. AGENCY RESOLUTION NO. 2. DISPOSITION AND DEVELOPMENT AGREEMENT Recommendation: That the Agency Board open the public hearing and following public testimony pursuant to Section 33445 of the Health and Safety Code take the following action: By Minute Motion: 1. Adopt Resolution No. ,a resolution of the Palm Desert Redevelopment Agency approving the conveyance of certain real property located on Virginia Avenue known as APN 637-362-002 to Habitat for Humanity of the Coachella Valley, Inc., for the purpose of constructing a single-family dwelling to be made available to a very low income family. 2. Approve a Disposition and Development Agreement and a Unit Regulatory and Lien Agreement, substantially as to form. 3. Authorize Executive Director or his designee to execute all necessary documents to facilitate the transfer. Executive Summary: The Redevelopment Agency has received a request from Habitat for Humanity of the Coachella Valley, Inc. requesting the donation of a vacant lot from the City of Palm Desert Redevelopment Agency to build single-family dwelling unit. Habitat for Humanity of the Coachella Valley, Inc. has built six (6) homes in the City of Palm Desert and has been successful in building quality housing for low income families. The lot would be suitable for this purpose and staff recommends that the above-mentioned lot be donated to Habitat for Humanity of the Coachella Valley, Inc. \\ :\c::nd;,It;;ni._OOu-J;m L'Pub I Irc\lr,gym;,I t tit;tl'Rpt a-pd 12100s 11' Agctid;t Item._OOu-Jan 12 Pub I Irc Lot St;111'I2pt a-pd 12100s Staff Report Public Hearing — Conveyance of Single-family lot to Habitat for Humanity Page 3 January 12, 2006 Discussion: The above-referenced lot is owned by the Redevelopment Agency and was acquired with the specific intent to construct a single-family dwelling to be made available to a very low income household. 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 for at least two (2) weeks prior to the hearing. In addition, attached for your review and approval is a proposed Disposition and Development Agreement and a Unit Regulatory and Lien Agreement by and between Habitat for Humanity of the Coachella Valley, Inc., and the Redevelopment Agency, which outlines the requirements on behalf of Habitat in consideration for the conveyance of the above-referenced property. Conditions for the conveyance are: 1. The recordation of the 45-year affordability covenants; 2. The sale of the dwelling to a very low income household; 3. Incorporate energy efficient elements above Title 24; 3. Resale price controls; and 4. The Agency's option to purchase upon resale Submitted by: Department Head: Janet M. Moore Dave Yrigoyen Housing Authority Administrator Director of Redevelopment/Housing jmg Approval: Justin McCarthy, ACM/Redevelopment Carlos L. Ortega, Executive Director _OOu-J;m 12 Pub I Irc\1121111,11 t St;tlRpt upd I2I0OS RESOLUTION NO. A RESOLUTION OF THE PALM DESERT REDEVELOPMENT AGENCY APPROVING THE CONVEYANCE OF CERTAIN REAL PROPERTY LOCATED ON VIRGINIA AVENUE KNOWN AS APN 637-362-002 TO HABITAT FOR HUMANITY OF THE COACHELLA VALLEY, INC. FOR THE CONSTRUCTION OF A SINGLE FAMILY DWELLING AND APPROVING A DISPOSITION AND DEVELOPMENT AGREEMENT RECITALS A. Pursuant to Health and Safety Code 33433, the Redevelopment Agency, is required to hold a public hearing before any property of the Agency acquired in whole or in part, directly or indirectly, with tax increment money is sold or leased for development pursuant to the Redevelopment Plan, said conveyance shall first be approved by the City Council by resolution after a public hearing. B. Pursuant to Health and Safety Code 33013, the Redevelopment Agency hereby determines that the proposed conveyance of the property to Habitat for Humanity of the Coachella Valley, Inc., constitutes a "Small Housing Project", and thereby elects not to apply the requirements of Housing Code 33433 (a) and 33433 (b). C. Pursuant to Health and Safety Code 33433(c), the Redevelopment Agency hereby directs the Agency to prepare a report to the City Council on or before 30 days after the end of the Agency's present fiscal year disclosing the name of the owner of the property, the legal description or street address of the property, the date of the conveyance of the property, the restrictions posed by the agreement on the owner of the property and the date on which the Agency had a public hearing on the conveyance of the property. NOW, THEREFORE, the Palm Desert Redevelopment Agency of the City of Palm Desert hereby finds, determines, resolves and orders as follows: Section 1 That a duly noted public hearing in conformity with the requirement of Health and Safety Code 33433 (a) was held on Section 2 The Redevelopment Agency has reviewed and considered all written and oral comments, questions and concerns regarding the Agency's proposed conveyance of the property to Habitat for Humanity of the Coachella Valley, Inc., received prior to and at the public hearing on said conveyance. Section 3 The Redevelopment Agency hereby authorizes the Agency to convey the property to Habitat for Humanity of the Coachella Valley, Inc. in accordance with the terms and conditions of the Disposition and Development Agreement and pursuant to the requirements of Health and Safety code 33433. _OOu-J;m 12 Pub I Irc\1121111,11 t St;tlRpt upd I2I0OS 11' Agctid;t Item._OOu-Jan 12 Pub I Irc Lot St;111'I2pt a-pd 12100s Staff Report Public Hearing — Conveyance of Single-family lot to Habitat for Humanity Page 6 January 12, 2006 PASSED, APPROVED and ADOPTED by the Palm Desert Redevelopment Agency, this 12th of January, 2006, by the following vote, to wit: AYES: NOES: ABSENT: ABSTAIN: Jim Ferguson, Chairman ATTEST: Rachelle D. Klassen, Secretary _OOu-J;m 12 Pub I Irc\1121111,11 t St;tlRpt upd I2I0OS RESOLUTION NO. 514 A RESOLUTION OF THE PALM DESERT REDEVELOPMENT AGENCY APPROVING THE CONVEYANCE OF CERTAIN REAL PROPERTY LOCATED ON VIRGINIA AVENUE KNOWN AS APN 637-362-002 TO HABITAT FOR HUMANITY OF THE COACHELLA VALLEY,INC.FOR THE CONSTRUCTION OF A SINGLE FAMILY DWELLING AND APPROVING A DISPOSITION AND DEVELOPMENT AGREEMENT RECITALS A. Pursuant to Health and Safety Code 33433, the Redevelopment Agency, is required to hold a public hearing before any property of the Agency acquired in whole or in part, directly or indirectly, with tax increment money is sold or leased for development pursuant to the Redevelopment Plan, said conveyance shall first be approved by the City Council by resolution after a public hearing. B. Pursuant to Health and Safety Code 33013,the Redevelopment Agency hereby determines that the proposed conveyance of the property to Habitat for Humanity of the Coachella Valley, Inc., constitutes a"Small Housing Project", and thereby elects not to apply the requirements of Housing Code 33433 (a) and 33433 (b). C. Pursuant to Health and Safety Code 33433(c), the Redevelopment Agency hereby directs the Agency to prepare a report to the City Council on or before 30 days after the end of the Agency's present fiscal year disclosing the name of the owner of the property, the legal description or street address of the property, the date of the conveyance of the property, the restrictions posed by the agreement on the owner of the property and the date on which the Agency had a public hearing on the conveyance of the property. NOW, THEREFORE, the Palm Desert Redevelopment Agency of the City of Palm Desert hereby finds, determines, resolves and orders as follows: Section 1 That a duly noted public hearing in conformity with the requirement of Health and Safety Code 33433 (a) was held on Section 2 The Redevelopment Agency has reviewed and considered all written and oral comments, questions and concerns regarding the Agency's proposed conveyance of the property to Habitat for Humanity of the Coachella Valley, Inc., received prior to and at the public hearing on said conveyance. Section 3 The Redevelopment Agency hereby authorizes the Agency to convey the property to Habitat for Humanity of the Coachella Valley, Inc. in accordance with the terms and conditions of the Disposition and Development Agreement and pursuant to the requirements of Health and Safety code 33433. G RI)A Jessica Gonzales Word Files HAD!IAl SI AFFRPRT-habitat Virginia lot donation.supd 121905 PASSED, APPROVED and ADOPTED by the Palm Desert Redevelopment Agency, this 12th of January, 2006, by the following vote, to wit: AYES: NOES: ABSENT: ABSTAIN: Jim Ferguson, Chairman ATTEST: Rachelle D. Klassen, Secretary G RDA Jessica Gonzales Word Filcs HABITAT STAFFRPR1-habitat Virginia lot donation tied 121905 DISPOSITION AND DEVELOPMENT AGREEMENT BY AND BETWEEN PALM DESERT REDEVELOPMENT AGENCY AND HABITAT FOR HUMANITY DATED January 12, 2006 W:`Agenda Items`2006-Jan 12`.Pub Hrg Virginia Lot`Virginia Lot dda 122205.doc TABLE OF CONTENTS ARTICLE 1 DEFINITIONS 2 Section 1.1 Definitions 2 1.1.1 Agency 2 1.1.2 Agency Board 2 1.1.3 Agreement 2 1.1.4 City 2 1.1.5 City Council 2 1.1.6 Certificate of Occupancy 2 1.1.7 Close of Escrow 2 1.1.8 Close of Escrow Date 2 1.1.9 Default 2 1.1.10 Escrow 2 1.1.11 Escrow Holder 2 1.1.12 Hazardous Materials 2 1.1.13 Improvements 3 1.1.14 Party 3 1.1.15 Permitted Exceptions 3 1.1.16 Property 3 1.1.17 Schedule of Performance 3 1.1.18 Scope of Development 3 ARTICLE 2 CONVEYANCE OF THE PROPERTY 4 Section 2.1 Conveyance of the Property 4 Section 2.2 Consideration 4 Section 2.3 Opening and Closing of Escrow 4 Section 2.4 Condition of Title; Title Insurance 4 Section 2.5 Escrow Charges 6 Section 2.6 Conditions to Close of Escrow 6 Section 2.7 Condition of the Property 7 Section 2.8 Deposit into Escrow 9 Section 2.9 Authorization to Record Documents and Disburse Funds 9 Section 2.10 Escrow's Closing Actions. 10 Section 2.11 Environmental Indemnity 10 Section 2.12 Additional Instructions 11 ARTICLE 3 DEVELOPMENT OF THE PROPERTY 11 Section 3.1 Development of the Improvements 11 Section 3.3 Rights of Access 11 W:`Agenda Items`2006-Jan 12`.Pub Hrg Vvginia Lot`Vvginia Lot dda 122205.doc '•+++ •--•^+-- •+++•++ ++ +^ +v Section 3.4 Local, State and Federal Laws 11 Section 3.5 City and Other Governmental Agency Permits and Approvals 12 Section 3.6 Anti-discrimination During Construction 12 Section 3.7 Taxes, Assessments, Encumbrances and Liens 12 Section 3.8 No Agency Created 12 Section 3.9 Certificates of Occupancy 12 ARTICLE 4 LIMITATIONS ON TRANSFERS AND SECURITY INTERESTS 12 Section 4.1 Restriction on Transfer of the Developer's Rights and Obligations 12 Section 4.2 Mortgages and Deeds of Trust 13 Section 4.3 Rights of Holders 13 Section 4.4 Noninterference with Holders 13 ARTICLE 5 USE OF THE PROPERTY 14 Section 5.1 Use of Property 14 Section 5.2 Obligation to Refrain from Discrimination 14 Section 5.3 Form of Nondiscrimination and Non-Segregation Clauses 14 ARTICLE 6 EVENTS OF DEFAULT, REMEDIES AND TERMINATION 15 Section 6.1 Defaults--Definition 15 Section 6.2 Remedies in the Event of Default 16 6.2.1 Remedies Prior to the Close of Escrow 16 6.2.2 Failure to Commence or Complete Construction. 17 6.2.3 Remedies for Default After the Close of Escrow 17 Section 6.3 Liberal Construction 18 Section 6.4 No Personal Liability 18 Section 6.5 Rights and Remedies are Cumulative 18 Section 6.6 Inaction Not a Waiver of Default 18 Section 6.7 Force Majeure 18 ARTICLE 7 INSURANCE; INDEMNITY 19 Section 7.1 Insurance 19 Section 7.2 Indemnity 20 ARTICLE 8 GENERAL PROVISIONS 20 Section 8.1 Notices 20 Section 8.2 Construction 21 Section 8.3 Interpretation 21 Section 8.4 Time of the Essence 21 W:`Agenda Items`2006-Jan 12`.Pub Hrg Virginia Lot`Virginia Lot dda 122205.doc Section 8.5 Warranty Against Payment of Consideration for Agreement 22 Section 8.6 Attorneys' Fees 22 Section 8.7 Entire Agreement, Waivers and Amendments 22 Section 8.8 Severability 22 Section 8.9 Headings 22 Section 8.10 No Third Party Beneficiaries other than the City 23 Section 8.11 Governing Law; Jurisdiction; Service of Process 23 Section 8.12 Survival 23 W:`Agenda Items`2OO6-Jan 12`.Pub Hrg Virginia Lot`Virginia Lot dda 122205.doc DISPOSITION AND DEVELOPMENT AGREEMENT THIS DISPOSITION AND DEVELOPMENT AGREEMENT ("Agreement"), dated as of , 2006, is entered into by and between the PALM DESERT REDEVELOPMENT AGENCY, a public body, corporate and politic (the "Agency"), and HABITAT FOR HUMANITYOF COACHELLA VALLEY, INC., a California non-profit, public benefit corporation ("Developer"). RECITALS This Agreement is entered into with reference to the following facts: A. The purpose of this Agreement is to effectuate the Redevelopment Plan for Project Area No. 4 of the Agency (the "Redevelopment Plan"), in the City of Palm Desert, California, by facilitating improvements to real property within the Project Area (as defined below). B. The Redevelopment Plan has been approved and adopted by Ordinance No. 724 of the City of Palm Desert adopted July 19, 1993. C. The Agency is a public body, corporate and politic, exercising governmental functions and powers, and organized and existing under the Community Redevelopment Law of the State of California. D. Construction of the Improvements (as hereinafter defined) will assist in the elimination of blight in the Project Area, provide additional jobs, and substantially improve the economic and physical conditions in the Project Area in accordance with the purposes and goals of the Redevelopment Plan. E. The land uses specified in this Agreement and the provisions relating to construction of the Improvements are consistent with the provisions of the Redevelopment Plan and each of its applicable elements. F. A material inducement to the Agency to enter into this Agreement is the agreement by the Developer to pay the amounts to the Agency or the City as provided herein. 1 W:`Agenda Items`2006-Jan 12`.Pub Hrg Virginia Lot`Virginia Lot dda 122205.doc AGREEMENT NOW, THEREFORE, in consideration of the above recitals and of the mutual covenants contained in this Agreement the parties hereto agree as follows: ARTICLE 1 DEFINITIONS. Section 1.1 Definitions. The following terms as used in this Agreement shall have the meanings given unless expressly provided to the contrary: 1.1.1 Agency means the Palm Desert Redevelopment Agency, a public body, corporate and politic, exercising governmental functions and powers, and organized and existing under the Community Redevelopment Law of the State of California. 1.1.2 Agency Board means the board of directors of the Palm Desert Redevelopment Agency. 1.1.3 Agreement means this Disposition and Development Agreement. 1.1.4 City means the City of Palm Desert, a municipal corporation. 1.1.5 City Council means the City Council of the City of Palm Desert, a municipal corporation. 1.1.6 Certificate of Occupancy means a certificate issued by the City of Palm Desert pursuant to the City's building code as defined in such code approving a single family residence for use by occupants. 1.1.7 Close of Escrow is defined in Section 2.3. 1.1.8 Close of Escrow Date for the Property means the date upon which the Agency by quitclaim deed shall convey title to the Property to the Developer and such quitclaim deed is recorded in the Official Records of the County of Riverside in accordance with this Agreement. 1.1.9 Default is defined in Section 6.1. 1.1.10 Escrow is defined in Section 2.3. 2 W:`Agenda Items`2006-Jan 12`.Pub Hrg Virginia Lot`Virginia Lot dda 122205.doc 1.1.11 Escrow Holder means Foresite Escrow, or another licensed escrow holder mutually selected by the Parties. 1.1.12 Hazardous Materials means any chemical, material or substance now or hereafter defined as or included in the definition of"hazardous substances,""hazardous wastes," "hazardous materials," "extremely hazardous waste," "restricted hazardous waste," "toxic substances," "pollutant or contaminant," "imminently hazardous chemical substance or mixture," "hazardous air pollutant," "toxic pollutant,"or words of similar import under any local, state or federal law or under the regulations adopted or publications promulgated pursuant thereto applicable to the Property, including, without limitation: the Comprehensive Environmental Response, Compensation and Liability Act of 1980, 42 U.S.C. '9601, et seq. ("CERCLA"); the Hazardous Materials Transportation Act, as amended, 49 U.S.C.' 1801, et seq.; the Federal Water Pollution Control Act, as amended, 33 U.S.C. ' 1251, et seq.; and the Resource Conservation and Recovery Act of 1976, 42 U.S.C. ' 6901, et seq. The term "Hazardous Materials" shall also include any of the following: any and all toxic or hazardous substances, materials or wastes listed in the United States Department of Transportation Table (49 CFR 172.101) or by the Environmental Protection Agency as hazardous substances (40 CFR Part 302)and in any and all amendments thereto in effect as of the Close of Escrow Date; oil, petroleum, petroleum products (including, without limitation, crude oil or any fraction thereof), natural gas, natural gas liquids, liquefied natural gas or synthetic gas usable for fuel, not otherwise designated as a hazardous substance under CERCLA; any substance which is toxic, explosive, corrosive, reactive, flammable, infectious or radioactive (including any source, special nuclear or by-product material as defined at 42 U.S.C. ' 2011, et seq.), carcinogenic, mutagenic, or otherwise hazardous and is or becomes regulated by any governmental authority; asbestos in any form; urea formaldehyde foam insulation; transformers or other equipment which contain dielectric fluid containing levels of polychlorinated byphenyls; radon gas; or any other chemical, material or substance (i) which poses a hazard to the Property, to adjacent properties, or to persons on or about the Property, (ii) which causes the Property to be in violation of any of the aforementioned laws or regulations, or (iii) the presence of which on or in the Property requires investigation, reporting or remediation under any such laws or regulations. 1.1.13 Improvements means all buildings, landscaping, infrastructure, utilities, and other improvements to be built on the Property, or any part thereon, as described in the Scope of Development. 1.1.14 Party means any party to this Agreement. The "Parties" means all parties to this Agreement. 1.1.15 Permitted Exceptions are defined in Section 2.4.4. 3 W:`Agenda Items`2OO6-Jan 12`.Pub Hrg Virginia Lot`Virginia Lot dda 122205.doc 1.1.16 Property is that certain real property to be developed by the Developer described in Exhibit A, attached hereto and incorporated by reference herein. 1.1.17 Schedule of Performance means the schedule on Exhibit B. 1.1.18 Scope of Development means the description of the Improvements set forth in Exhibit C. ARTICLE 2 CONVEYANCE OF THE PROPERTY. Section 2.1 Conveyance of the Property. Subject to and in accordance with the terms and conditions hereinafter set forth, the Agency to convey to the Developer, and the Developer agrees to acquire from the Agency, fee simple title to the Property. Section 2.2 Consideration. The Agency convey the Property to the Developer in consideration for the Developer's covenant to construct the improvements on the Property described below, and the covenants of the Developer set forth in the Regulatory Agreement. Section 2.3 Opening and Closing of Escrow. Within five (5) business days after the Agency's approval of this Agreement, the Agency and the Developer shall cause an escrow(the "Escrow") to be opened with Escrow Holder for the conveyance of the Property by the Agency to the Developer. The Parties shall deposit with Escrow Holder a fully executed duplicate original of this Agreement which shall serve as the escrow instructions for the Escrow. The Agency and the Developer shall provide such additional escrow instructions as shall be necessary and consistent with this Agreement. Escrow Holder is authorized to act under this Agreement and to carry out its duties as Escrow Holder hereunder. Escrow shall close (the "Close of Escrow") on or before within 60 days after the Opening of Escrow. Section 2.4 Condition of Title; Title Insurance. 2.4.1 The Developer has received from First American ("Title Company"), a preliminary report for CLTA Owner's Standard Coverage Policy for the Property ("Preliminary Report"), setting forth all liens, encumbrances, easements, restrictions, conditions, pending litigation, judgments, administrative proceedings, and other matters affecting the Agency's title to the Property (each an "Exception"), together with copies of all documents relating to Exceptions referred to in the Preliminary Report. The Developer shall approve or disapprove each Exception shown on the Preliminary Report within five 4 W:`Agenda Items`2006-Jan 12`.Pub Hrg Virginia Lot`Virginia Lot dda 122205.doc (5) business days after the Opening of Escrow. Any title Exceptions that are approved or accepted by the Developer are referred to as "Permitted Title Exceptions." 2.4.2 Any monetary liens and special assessments affecting the Property, other than current non-delinquent real property taxes not then due and payable, are hereby disapproved (a "Monetary Disapproved Exception"). 2.4.3 If any title Exception other than a Monetary Disapproved Exception is disapproved or deemed disapproved (each a "Non-Monetary Disapproved Exception"), then the Agency may, at the Agency's option, exercisable at the Agency's sole and absolute discretion, within thirty (30) days following expiration of the 5 business day period provided under Section 2.4.1 above, elect to use its good faith efforts to cause each Non- Monetary Disapproved Exception to be discharged, satisfied, released, or terminated, as the case may be, of record, and in a form that is reasonably satisfactory to the Developer, all at the Agency's sole cost and expense. If the Agency makes such election, then the Agency shall have until the Close of Escrow to cause it to be discharged. The Agency shall notify the Developer as soon as reasonably possible if the Agency reasonably believes that the Agency will succeed or not succeed in causing any such Non-Monetary Disapproved Exception to be removed at the Close of Escrow, and shall keep the Developer informed as to the progress of the Agency's efforts in that regard. If the Agency is unable to obtain a discharge, satisfaction, release, or termination of a Non-Monetary Disapproved Exception, or if the Agency does not elect to do so, then the Developer shall have the right to: 2.4.3.1 Waive the Non-Monetary Disapproved Exception and proceed with Closing, accepting title to the Property subject to the Non-Monetary Disapproved Exception, without any price reduction, (at which time such Exception shall be deemed a Permitted Title Exception), or 2.4.3.2 Terminate this Agreement, in which event both the Developer and the Agency shall be relieved of all further obligation and liability to each other under this Agreement and all the funds and documents deposited with Escrow Agent shall be promptly refunded or returned, as the case may be, by Escrow Agent to the depositing party, less escrow cancellation fees of not to exceed $500. 2.4.4 At the Close of Escrow, the Agency shall convey title to the Property to the Developer (or its Permitted Assignee) by quitclaim deed substantially in the form attached hereto as Exhibit D and incorporated herein by this reference (the "Quitclaim Deed") or Grant Deed of acceptable form to the County Recorder of said County. Title to S W:`Agenda Items`2006-Jan 112`.Pub Hrg Virginia Lot`Virginia Lot dda 1122205.doc P.i u•,:• --n.d .,' n . ry the Property shall be conveyed subject to (i) non-delinquent current real property taxes and assessments not yet due for the tax year during which the conveyance occurs, (ii) all Permitted Title Exceptions, (iii) the covenants, conditions and restrictions benefiting and burdening the Property as set forth in the Regulatory Agreement attached hereto as Exhibit E, and (iv) any other matters which arise out of the actions of the Developer or its agents and representatives (collectively, the "Permitted Exceptions"). The Developer agrees to approve or disapprove any title exceptions within 5 business days after the Opening of Escrow. The Agency shall cause to be removed by the Close of Escrow all Monetary Disapproved Exceptions and shall use its best reasonable efforts to remove or cause to be removed by the Close of Escrow any Non-Monetary Disapproved Exceptions, but if the Agency is unable to remove any Non-Monetary Disapproved Exception(s), then the Agency shall not be in breach hereof but the Developer shall have the right to terminate this Agreement. 2.4.5 At the Close of Escrow, the Agency shall, at the Developer's sole cost and expense, cause to be delivered to the Developer a CLTA Owner's Standard Policy of Title Insurance, issued by First American (or another title company mutually approved by the Parties) (the "Title Company") in favor of the Developer in the amount of$25,000.00, insuring that title is vested in the Developer free and clear of all liens, easements, covenants, conditions, restrictions, and other encumbrances of record, other than the Permitted Exceptions for the Property. The Developer may obtain one or more extended coverage policies of title insurance or special endorsements at its own cost. Section 2.5 Escrow Charges. The Developer shall be responsible for any recording fees, documentary and local transfer taxes, and customary escrow fees and charges arising hereunder. Section 2.6 Conditions to Close of Escrow. The obligation of the Agency and the Developer under this Agreement to close Escrow shall be subject to the satisfaction or waiver of each of the following conditions: 2.6.1 The Developer's approval of the physical condition of the Property, which the Developer shall approve or disapprove by written notice delivered to the Agency within 15 days after the Opening of Escrow. 2.6.2 The Developer's provision to the Executive Director the insurance certificates conforming to Section 7 of this Agreement; 6 W:`Agenda Items`2006-Jan 12`.Pub Hrg Virginia Lot`Virginia Lot dda 122205.doc 2.6.3 The Developer's obtaining of all building permits and other entitlements required in order for Developer to construct the Improvements on the Property; 2.6.4 The Developer's delivery to the Agency's Executive Director of evidence reasonably satisfactory to the Executive Director that the Developer has the due authority to execute and deliver all of the contracts, entered into by the Developer in connection with construction of the Improvements. Such evidence shall include, without limitation, partnership agreements, certificates of limited partnership, articles of incorporation, by-laws, and resolutions of the Developer, as well as good standing certificates issued by the Developer's state of incorporation; 2.6.5 The Developer's approval of the condition of title to the Property as described in Section 2.4. 2.6.6 The Agency's delivery of all documents required to be delivered by the Agency pursuant to Section 2.8 hereof. 2.6.7 The Title Company shall have committed to issue a CLTA Standard Coverage Owner's Title Insurance Policy, with any endorsements requested by the Developer, and with liability equal to the value of the Property (as determined by the Developer) showing fee simple title to the Property vested in the Developer or the Developer's assignee or designee, subject only to the Permitted Exceptions, at the Close of Escrow. 2.6.8 The concurrent recordation of a Regulatory Agreement in the form attached hereto as Exhibit E (the "Regulatory Agreement"), restricting the sale of the Property by the Developer to persons or families of very low income; 2.6.9 The Developer's delivery to the Agency of such other documents and instruments as the Agency shall reasonably require. Section 2.7 Condition of the Property. 2.7.1 The Developer shall have the right, for the period commencing with the date hereof through the date that is 30 days after the Opening of Escrow, to approve or disapprove the physical condition of the Property. During such period, the Developer is hereby granted permission to enter onto the Property for the purpose of performing a Phase I Environmental Assessment, and inspecting and testing the soil to determine the adequacy and quality of the underlying soil to meet its building requirements. The 7 W:`Agenda Items`2006-Jan 12`.Pub Hrg Virginia Lot`Virginia Lot dda 122205.doc Developer shall indemnify, hold harmless, and defend the Agency against and hold the Agency and the Property harmless from, all losses, costs, damages, liabilities, liens, and expenses, including, without limitation, reasonable attorney fees, arising out of such entry and activities by the Developer and its agents, employees, or contractors, prior to the Close of Escrow, except to the extent any such losses, costs, damages, liabilities, and expenses arise out of the gross negligence or willful acts of the Agency. 2.7.2 The Agency shall convey the Property to the Developer in an "as is" condition, and except for those representations and warranties expressly set forth in this Agreement, the Agency makes no warranty whatsoever to the Developer as to the condition of any portion of the Property, including whether the Property contains any Hazardous Materials. Subject to the provisions of Section 2.7.1, the Developer has inspected the Property and has determined that the Property is suitable for the Developer's purposes. The Developer acknowledges and agrees: 2.7.2.1 The Agency has made no representation or warranty with respect to the Property except for those representations and warranties contained in this Agreement, and that prior to the Close of Escrow, the Agency will make no representations and warranties with respect to the Property other than those contained in this Agreement. 2.7.2.2 It is purchasing the Property with the ultimate objective of constructing new improvements thereon. 2.7.2.3 Its decision to acquire the Property will be based on the results of its analysis and the reports it obtains during the period described in Section 2.7.1 hereof. 2.7.2.4 The Agency has made no representation or warranty as to the accuracy or completeness of any reports and other materials prepared by persons other than the Agency and delivered by the Agency to the Developer, and the Developer is not relying on the accuracy and completeness of any such reports and other materials prepared by persons other than the Agency. 2.7.2.5 Except as specifically provided in this Agreement, the Agency has made no representation or warranty with respect to the use, fitness for a particular reason, zoning, value, improvements, square footages or any other condition of the Property. 2.7.2.6 The Agency shall have disclosed to the Developer promptly after the execution of this Agreement all material adverse conditions, defects and other matters relating to the Property of which the Agency has actual knowledge which, in the Agency's sole judgment, would have a material adverse impact upon the Property; provided that the 8 W:`Agenda Items`2006-Jan 12`.Pub Hrg Virginia Lot`Virginia Lot dda 122205.doc foregoing disclosure obligation shall apply only to the Property itself, and not to general or local economic or market conditions. Except for the Agency's representations, warranties and covenants contained in this Agreement, the Developer is accepting the Property in "AS-IS," "WHERE-IS" condition "WITH ALL FAULTS." The Developer agrees that the Agency has no obligation to remedy any faults, defects, or other adverse conditions described in any report or other material obtained by the Developer or delivered by the Agency to the Developer, including the remediation of any Hazardous Material on the Property. 2.7.3 The Developer represents and warrants to the Agency as of the date of this Agreement and as of the Close of Escrow Date that: 2.7.3.1 The Developer is a non-profit, public benefit corporation, duly organized, validly existing and in good standing under the laws of the State of California. 2.7.3.2 The Developer has duly authorized the execution and performance of this Agreement and the execution and performance of all of the closing documents set forth herein. 2.7.3.3 The Developer's execution and performance of this Agreement and the closing documents will not violate any provision of any mortgage, lease, contract, agreement, instrument, order, judgment or decree by which the Developer is bound. 2.7.3.4 This Agreement is valid and enforceable against the Developer in accordance with its terms and each instrument to be executed by the Developer pursuant to this Agreement will, when executed and delivered, be enforceable in accordance with its terms, subject to bankruptcy, insolvency and similar laws affecting creditors= rights generally. Section 2.8 Deposit into Escrow. The Agency hereby covenants and agrees to deliver to Escrow Holder prior to the Close of Escrow the following instruments and documents, the delivery of each of which shall be a condition of the Close of Escrow: 2.8.1 A Quitclaim Deed or Grant Deed duly executed and acknowledged by the Agency granting and conveying to the Developer good and marketable title to the Property. Said Quitclaim Deed shall be in the form attached hereto as Exhibit D or that which is acceptable to the County Recorder of said County; 9 W:`Agenda Items`2006-Jan 12`.Pub Hrg Virginia Lot`Virginia Lot dda 122205.doc 2.8.2 The Agency's affidavit as contemplated by California Revenue and Taxation Code '18662 ("Withholding Affidavit"); 2.8.3 A Certification of Non-Foreign Status in accordance with I.R.C. Section 1445 (the "FIRPTA Certificate"); and 2.8.4 Such proof of the Agency's authority and authorization to enter into this transaction as the Title Company may reasonably require in order to issue the Developer's policy of title insurance. Section 2.9 Authorization to Record Documents and Disburse Funds. Escrow Holder is hereby authorized to record the documents and disburse the funds and documents called for hereunder upon the Close of Escrow, provided each of the following conditions has then been fulfilled: 2.9.1 The Title Company can issue in favor of the Developer a CLTA Standard Coverage Owner's Policy of Title Insurance, with liability equal to the value of the Property (as determined by the Developer) showing the Property vested in the Developer subject only to the Permitted Exceptions. 2.9.2 The Agency shall have deposited in Escrow the documents required pursuant to Section 2.8, and the Developer shall have deposited in Escrow the Developer's share of Escrow closing costs. 2.9.3 The Agency and the Developer have confirmed to Escrow Holder that all of the other closing conditions set forth in Section 2.6 have been satisfied or waived in writing. Unless otherwise instructed in writing, Escrow Holder is authorized to record at the Close of Escrow any instrument delivered through this Escrow if necessary or proper for issuance of the Developer's policy of title insurance. Any amendment of these escrow instructions shall be in writing and signed by both the Agency and the Developer. At the time of any amendment, Escrow Holder shall agree to carry out its duties as escrow holder under such amendment. Escrow Holder is instructed to send copies of notices, demands and communications between the Parties to or from the Agency or to or from the Developer, to both parties to the addresses and in the manner established in Section 8.1 of this Agreement. 10 W:`Agenda Items`2006-Jan 12`.Pub Hrg Virginia Lot`Virginia Lot dda 122205.doc Section 2.10 Escrow's Closing Actions. On the Close of Escrow, Escrow Holder shall close Escrow as follows: 2.10.1 Record the Quitclaim Deed or Grant Deed (marked for return to the Developer) with the Riverside County Recorder (which shall be deemed delivery to the Developer); 2.10.2 Record the Regulatory and Lien Agreement (marked for return to the Agency); 2.10.3 Issue the Title Policy or cause the Title Company to issue the Title Policy; 2.10.4 Prorate taxes, assessments, rents, and other charges as of the Close of Escrow in accordance with the settlement statements approved by the Parties. 2.10.5 Charge the Developer for those costs and expenses to be paid by the Developer pursuant to this Agreement and disburse any net funds remaining after the preceding disbursements to the Developer; 2.10.6 Prepare and deliver to both the Developer and the Agency one signed copy of Escrow Holder's closing statement showing all receipts and disbursements of the Escrow; and 2.10.7 Deliver to the Developer the FIRPTA Certificate and the Withholding Affidavit. Section 2.11 Environmental Indemnity. The Developer shall indemnify, protect, defend and hold harmless the City (as a third party beneficiary) and the Agency, and the Agency's officials, officers, attorneys, employees, consultants, agents, and representatives, from and against any and all claims, liabilities, suits, losses, costs, expenses and damages, including but not limited to attorneys' fees and costs, arising out of any claim for loss or damage to any property, including the Property, injuries to or death of persons, or for the cost of cleaning up the Property and removing Hazardous Materials or toxic substances, materials and waste therefrom, by reason of contamination or adverse effects on the environment, or by reason of any statutes, ordinances, orders, rules or regulations of any governmental entity or agency requiring the clean-up of any Hazardous Materials caused by or resulting from any Hazardous Material, or toxic substances or waste existing on or under, any portion of the Property acquired by the Developer. 11 W:`Agenda Items`2006-Jan 12`.Pub Hrg Virginia Lot`Virginia Lot dda 122205.doc The buyer hereby releases herein all claims they may have now or in the future with respect to contamination that may exist on the property, (the "Property") as of the date of closing. In connection with such release, Buyer hereby expressly waives its rights, if any, under California Civil Code Section 1542 which provides: "A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IS KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR." Buyer's Initials Section 2.12 Additional Instructions. The Parties shall execute appropriate escrow instructions, prepared by the Escrow Holder, which are not inconsistent herewith. If there is any inconsistency between the terms hereof and the terms of the escrow instructions, the terms hereof shall control unless an intent to amend the terms hereof is expressly stated in such instructions. ARTICLE 3 DEVELOPMENT OF THE PROPERTY. Section 3.1 Development of the Improvements. The Developer shall develop, or cause to be developed, the Improvements on the Property, in accordance with the Scope of Development, the Schedule of Performance, all requirements of the City's Municipal Code, and any and all applicable federal, state and local laws, rules and regulations in connection with such construction, any conditions of approval required by the City (including conditions of approval for the subdivision of the Property), and all terms, conditions and requirements of this Agreement. Section 3.2 Cost of Construction. The cost of constructing the Improvements, including the costs for developing and constructing the Improvements thereon, shall be borne solely by the Developer. Section 3.3 Rights of Access. In addition to those rights of access to and across the Property to which the Agency and the City may be entitled by law, members of the staffs of the Agency and the City shall have a reasonable right of access to the Property, 12 W:`Agenda Items`2006-Jan 12`.Pub Hrg Virginia Lot`Virginia Lot dda 122205.doc without charge or fee, at any reasonable time, upon reasonable notice to the Developer to inspect the work being performed at the Property. The Developer may require that a representative from the Developer accompany the Agency's or City's staff members during any such inspection. Section 3.4 Local, State and Federal Laws. The Developer shall carry out the construction of the Improvements on the Property in conformity with all applicable laws, including all applicable federal and state occupation, safety and health standards. The Developer represents and warrants that all of the Improvements to be constructed by the Developer shall be constructed in compliance with the current City and State of California standards and laws. Section 3.5 City and Other Governmental Agency Permits and Approvals. Before commencement of construction or development of any work of improvement on the Property, the Developer shall (at the Developer's expense)secure, or cause to be secured, any and all permits, which may be required by the City or any other governmental agency having jurisdiction over such construction or development. Section 3.6 Anti-discrimination During Construction. The Developer, for itself and its successors and assigns, agrees that it shall not discriminate against any employee or applicant for employment because of age, sex, marital status, race, handicap, color, religion, creed, ancestry, or national origin in the construction of the Improvements. Section 3.7 Taxes, Assessments, Encumbrances and Liens. The Developer shall pay when due all real property taxes and assessments assessed or levied on portions of the Property from time to time owned by the Developer. Section 3.8 No Agency Created. In performing this Agreement, the Developer is an independent contractor and not the agent of the Agency or the City. The Agency and the City are not agents of the Developer. Neither the Agency nor the City shall have any responsibility whatsoever for payment to any contractor or supplier of the Developer. The Developer shall not have any responsibility whatsoever for payment to any contractor or supplier of the Agency or the City. Section 3.9 Certificates of Occupancy. Upon the Developer's completion of the construction of the Improvements, the Developer will apply to the City for one or more Certificates of Occupancy for the Improvements. The City's issuance of final Certificate(s) of Occupancy for the Improvements shall constitute the acknowledgement of the Agency and the City that the Developer has complied in all respects with its development obligations set forth in Article 3 of this Agreement. 13 W:`Agenda Items`2006-Jan 112`.Pub Hrg Virginia Lot`Virginia Lot dda 1122205.doc P.i u•,:• --n.d .,' n . ry ARTICLE 4 LIMITATIONS ON TRANSFERS AND SECURITY INTERESTS. Section 4.1 Restriction on Transfer of the Developer's Rights and Obligations. 4.1.1 Prior to issuance of a Certificate of Occupancy for the Improvements, the Developer shall not sell, assign, transfer, mortgage, hypothecate, or convey (collectively, a "Transfer") the Property or any part thereof or any of the Developer's rights or obligations hereunder, without the Agency's prior written consent, which consent may be granted or withheld in the Agency's sole and absolute discretion, except for the execution of one or more mortgages, deeds of trust and related instruments securing the Developer's construction loan. The Developer acknowledges that the identity of the Developer is of particular concern to the Agency, and it is because of the Developer's identity that the Agency has entered into this Agreement with the Developer. Except for any Transferee approved by the City pursuant to this Section 4.1, and except for any Holder (defined in Section 4.2) that has taken possession of the Property, no voluntary or involuntary successor in interest of the Developer shall acquire any rights or powers under this Agreement. No transfer or assignment of the Developer's interest hereunder without the Agency's prior written approval shall be deemed to release the Developer from the obligations of the Developer hereunder. 4.1.2 After the issuance of a Certificate of Occupancy for the Improvements, the Developer shall have the right to Transfer the Property to any person or entity meeting the requirements of the Regulatory Agreement. Section 4.2 Mortgages and Deeds of Trust. Notwithstanding any provisions of Section 4.1 to the contrary, the Developer shall have the right to mortgage or hypothecate its interest in the Property and the Improvements pursuant to one or more mortgages, deeds of trust, sales and leaseback, or any other form of encumbrance or conveyance required for any reasonable method of financing from an institutional lender approved by the Agency (which approval shall not unreasonably be withheld), for the purpose of securing loans of funds to be used for financing the direct and indirect costs of the Improvements (including land development costs, reasonable and customary developer fees, loan fees and costs, and other normal and customary project costs), or for refinancing the construction financing with permanent financing. Any institutional lender of record holding any such mortgage, deed of trust, or other security instrument authorized by this Agreement shall be referred to as a Holder. Section 4.3 Rights of Holders. The Agency shall deliver a copy of any notice or demand to the Developer concerning any breach or default by the Developer under this 14 W:`Agenda Items`2006-Jan 12`.Pub Hrg Virginia Lot`Virginia Lot dda 122205.doc Agreement to each Holder who has previously made a written request to the Agency for special notice hereunder. Any notice of breach or default by the Developer shall not be effective against any such Holder unless given to such Holder. Such Holder shall have the right at its option to cure or remedy any such default and to add the cost thereof to the secured debt and the lien of its security interest. If such breach or default can only be remedied or cured by such Holder upon obtaining possession, such Holder may remedy or cure such breach or default within a reasonable period of time after obtaining possession, provided such Holder seeks possession with diligence through a receiver or foreclosure. Such Holder shall be permitted to undertake or continue the construction or completion of the Improvements beyond the extent necessary to conserve or complete the Improvements. Section 4.4 Noninterference with Holders. The provisions of this Agreement do not limit the right of Holders to foreclose or otherwise enforce any mortgage, deed of trust, or other security instrument encumbering all or any portion of the Property, and the Improvements thereon, or to pursue any remedies for the enforcement of any pledge or lien encumbering such portions of the Property. In the event of a foreclosure sale under any such mortgage, deed of trust or other lien or encumbrance, or sale pursuant to any power of sale contained in any such mortgage or deed of trust, the purchaser or purchasers and their successors and assigns, and such portions of the Property shall be, and shall continue to be, subject to all of the conditions, restrictions and covenants of all documents and instruments recorded pursuant to this Agreement, including, without limitation, the restrictions set forth in the Quitclaim Deed and the Regulatory Agreement. The Agency agrees to execute such further documentation regarding the rights of any Holder as is customary with respect to construction or permanent financing, as the case may be, to the extent that such documentation is reasonably requested by any Holder and is reasonably approved by the Agency. ARTICLE 5 USE OF THE PROPERTY. Section 5.1 Use of Property. For the duration of the Regulatory Agreement, the Property and any portion thereof may be used only for the development of an affordable single-family residence, and for sale to a single family of lower income (as described in Section 3 (C) of Unit Regulatory Agreement) for occupancy as their principal residence, and for no other purposes. Leasing of the Property is expressly prohibited. Section 5.2 Obligation to Refrain from Discrimination. The Developer covenants and agrees for itself and its successors and assigns, and for every successor in interest to the Property, or any part thereof, and their rights under this Agreement, that there shall be no discrimination against or segregation of any person, or group of persons, on account of 15 W:`Agenda Items`2006-Jan 12`.Pub Hrg Virginia Lot`Virginia Lot dda 122205.doc sex, marital status, age, handicap, race, color, religion, creed, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Property, and the Developer(itself or any person claiming under or through the Developer)shall not 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 vendors of the Property or any portion thereof. This provision, which is required by law, shall not be construed as permitting the leasing of the Property. Section 5.3 Form of Nondiscrimination and Non-Segregation Clauses. The Developer shall refrain from restricting the rental, sale or lease of the Property or any portion thereof, on the basis of sex, age, handicap, marital status, race, color, religion, creed, ancestry or national origin of any person. All deeds, leases or contracts shall contain or be subject to substantially the following nondiscrimination or non-segregation clauses: 1. In deeds: "The grantee herein covenants by and for himself, his heirs, executors, administrators and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of, any person or group of persons on account of sex, marital status, race, age, handicap, color, religion, creed, 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 any person claiming under or through him, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, subleases or vendors in the land herein conveyed. The foregoing covenants shall run with the land." 2. In leases: "The lessee herein covenants by and for himself, his heirs, executors, administrators and assigns, and all persons claiming under or through him, and this lease is made and accepted upon and subject to the following conditions: "That there shall be no discrimination against or segregation of any person or group of persons on account of sex, marital status, race, age, handicap, color, religion, creed, national origin or ancestry, in the leasing, subleasing, transferring, use, or enjoyment of the land herein leased, nor shall the lessee himself, or any person claiming under or through him, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy, of tenants, lessees, sublessees, subtenants or vendees in the land herein leased." 3. In contracts relating to the sale or transfer of the Property, or any interest therein: "There shall be no discrimination against or segregation of any person or group of 16 W:`Agenda Items`2006-Jan 12`.Pub Hrg Virginia Lot`Virginia Lot dda 122205.doc persons on account of sex, marital status, race, age, handicap, color, religion, creed, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land, nor shall the transferee himself or any person claiming under or through him, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy, of tenants, lessees, subtenants, sublessees or vendees of the land." The foregoing provisions, which are required by law, shall not be construed as permitting the leasing of the Property. ARTICLE 6 EVENTS OF DEFAULT, REMEDIES AND TERMINATION. Section 6.1 Defaults--Definition. Occurrence of any or all of the following shall constitute a default ("Default") under this Agreement: 6.1.1 Any breach of this Agreement by any Party involving the payment of money, and the continuance of such breach for a period of thirty (30) days after the non- defaulting Party has given written notice to the defaulting Party, as specified in Section 8.1; 6.1.2 A breach of any material term of this Agreement by any Party not involving the payment of money and failure of such Party to cure such breach within thirty (30) days after the non-defaulting Party has given written notice to the defaulting Party; provided, however, if such breach is not reasonably curable within such thirty (30) day period, then such Party shall be deemed in Default only if such Party does not commence to cure such breach within such thirty (30) day period and thereafter fails to diligently prosecute such breach to completion; 6.1.3 The Developer's Transfer (as defined in Section 4.1), or the occurrence of any involuntary Transfer, of the Property or any part thereof or interest therein, or any rights or obligations of the Developer under this Agreement, in violation of this Agreement; 6.1.4 The Developer's failure or refusal to keep in force and effect any material permit or approval with respect to construction of the Improvements, and the Developer's failure to cure such breach within thirty (30) calendar days after notice from the Agency of the Developer's breach; provided, however, if such breach is not reasonably curable within such thirty (30) day period, then the Developer shall be deemed in Default 17 W:`Agenda Items`2006-Jan 12`.Pub Hrg Virginia Lot`Virginia Lot dda 122205.doc only if the Developer does not commence to cure such breach within such thirty (30) day period and thereafter fails to diligently prosecute such breach to completion; 6.1.5 Filing of a petition in bankruptcy by or against any Party or appointment of a receiver or trustee of any property of any Party, or an assignment by any Party for the benefit of creditors, or adjudication that such Party is insolvent by a court, and the failure of such Party to cause such petition, appointment, or assignment to be removed or discharged within 90 days. 6.1.6 The Developer's failure to commence or complete construction of the Improvements on the Property by the dates set forth in the Schedule of Performance attached hereto as EXHIBIT B. The obligation set forth in this 6.1.6 shall continue and survive the Close of Escrow and be incorporated into and made a part of the Quitclaim Deed. Section 6.2 Remedies in the Event of Default. 6.2.1 Remedies Prior to the Close of Escrow. In the event of a Default by any Party prior to the Close of Escrow, the non-defaulting Party shall have the right to terminate this Agreement provided it is not in breach of its obligation under this Agreement, by delivering written notice thereof to the defaulting Party and to Escrow Holder, subject to the rights of the defaulting Party to cure such Default as provided in Section 6.1. Such Party may seek against the defaulting Party any available remedies at law or equity, including but not limited to, the right to receive damages or to pursue an action for specific performance. 6.2.2 Remedies for Default After the Close of Escrow. In the event of a Default by any party after the Close of Escrow, and prior to the issuance of the Certificate of Completion, a non-defaulting party shall be entitled to the following remedies, as applicable. (a) A defaulting Party shall be liable to the non-defaulting Party for all damages, costs and losses incurred by the non-defaulting Party, and the non-defaulting Party may seek against the defaulting Party any available remedies at law or equity, including but not limited to the right to receive damages or to pursue an action for specific performance; and (b) The Agency shall have the right of reversion provided for below in this Section 6.2.2(b) in the event the Developer fails to commence or complete construction of the Improvements by the dates set forth in the Schedule of Performance 18 W:`Agenda Items`2OO6-Jan 12`.Pub Hrg Virginia Lot`Virginia Lot dda 122205.doc attached hereto as EXHIBIT B, as such dates may be extended by the number of days of any period of Force Majeure Delay as provided for in Section 6.7 of this Agreement. In such event, in the exercise of its sole discretion, the Agency may terminate this Agreement and re-enter and take possession of the Property, will all Improvements thereon, and revest in the Agency title to the Property theretofore conveyed to the Developer (or its successors in interest), take any and all actions necessary to commence and complete the enforcement of its reversionary interest and in such event the Developer agrees promptly to take all actions and to execute all documents necessary to revert title to the Property to the Agency free and clear of all liens and encumbrances created by or with the consent of Developer. 6.2.3 Remedies for Default After the Close of Escrow. In addition to the provisions of Section 6.2.2, in the event of a Default by any Party after the Close of Escrow, and prior to the issuance of a Certificate of Occupancy, a non-defaulting party shall be entitled to the following remedies, as applicable: A defaulting Party shall be liable to the non-defaulting Party for all damages, costs and losses incurred by the non-defaulting Party, and the non-defaulting Party may seek against the defaulting Party any available remedies at law or equity, including but not limited to the right to receive damages or to pursue an action for specific performance. Section 6.3 Liberal Construction. The rights established in this Article are to be interpreted in light of the fact that the Agency will convey the Property to the Developer for development of the Improvements thereon and the sale of it to a person or family of very low income, and not for speculation in undeveloped land or for construction of different improvements. The Developer acknowledges that it is of the essence of this Agreement that the Developer is obligated to complete all Improvements. Section 6.4 No Personal Liability. No representative, agent, attorney, consultant, or employee of the Agency shall personally be liable to the Developer or any successor in interest of the Developer, in the event of any Default or breach by the Agency, or for any amount which may become due to the Developer or any successor in interest, on any obligation under the terms of this Agreement. Section 6.5 Rights and Remedies are Cumulative. The rights and remedies of the parties are cumulative, and the exercise by either party of one or more of such rights or remedies shall not preclude the exercise by it, at the same time or different times, of any other rights or remedies for the same default or any other default by the non-defaulting Party. 19 W:`Agenda Items`2006-Jan 12`.Pub Hrg Virginia Lot`Virginia Lot dda 122205.doc Section 6.6 Inaction Not a Waiver of Default. Any failures or delays by either Party in asserting any of its rights and remedies as to any default shall not operate as a waiver of any default or of any such rights or remedies, or deprive either such Party of its rights to institute and maintain any actions or proceedings which it may deem necessary to protect, assert or enforce any such rights or remedies. The acceptance by a Party of less than the full amount due from the other Party shall not constitute a waiver of such Party's right to demand and receive the full amount due, unless such Party executes a specific accord and satisfaction. Section 6.7 Force Majeure. Notwithstanding anything to the contrary in this Agreement, either Party's unexcused material failure to complete the Improvements required by such Party to be completed according to this Agreement, the Scope of Development, and Schedule of Performance shall be a breach hereof, provided, however, nonperformance shall be excused when performance is prevented or delayed by reason of any of the following forces reasonably beyond the control of such party (a "Force Majeure Delay"): (i) civil disturbance, future order claiming jurisdiction, act of the public enemy, war, riot, sabotage, blockade, embargo, (ii) any delay or failure to perform attributable to any strike, lockout or other labor or industrial disturbance (whether or not on the part of the employees of either party hereto), or the unusual inability to secure customary materials, equipment, supplies or labor through ordinary sources, but only to the extent that any such delay referred to in this clause (ii) is an actual, industry wide condition affecting substantially all similar works of construction in the Coachella Valley, California, area; (iii) delay attributable to the failure of the Developer to secure plan checks, building permits, and other governmental permits or approvals (including any failure to obtain a temporary certificate of occupancy)within a reasonable period of time, where such delay is not due to any fault of the Developer; or (iv) delay attributable to severe weather, lightning, earthquake, fire, storm, hurricane, tornado, flood, washout, explosion, or any other similar cause beyond the reasonable control of the party from whom performance is required, or any of its contractors or other representatives. Any prevention, delay or stoppage due to any Force Majeure Delay shall excuse the performance of the party affected for a period of time equal to any such prevention, delay or stoppage (except the obligations of either party to pay money to the other party or to close escrow). ARTICLE 7 INSURANCE; INDEMNITY. Section 7.1 Insurance. 7.1.1 The Developer shall obtain and maintain at no cost or expense to the Agency, with a reputable and financially responsible insurance company reasonably 20 W:`Agenda Items`2OO6-Jan 12`.Pub Hrg Virginia Lot`Virginia Lot dda 122205.doc acceptable to the Agency, commercial broad form general public liability insurance, insuring against claims and liability for bodily injury, death, or property damage arising from the construction, use, occupancy, condition, or operation of the Property, which insurance shall provide combined single limit protection of at least $1,000,000. Such insurance policy shall name the City and the Agency and their council members, board members, officers, employees, consultants, independent contractors, attorneys and servants as additional insureds. 7.1.2 Before commencement of any demolition or construction work by the Developer on any portion of the Property owned by the Developer, the Developer shall obtain and maintain in force until completion of such work (i) "all risk" builder's risk insurance, including coverage for vandalism and malicious mischief, in a form and amount and with a company reasonably acceptable to the Agency, and (ii)workers' compensation insurance covering all persons employed by the Developer in connection with work on the Improvements, or any portion thereof. During the construction of Improvements on any portion of the Property by the Developer, such builder's risk insurance shall cover improvements in place and all material and equipment at the job site furnished under contract, but shall exclude contractors', subcontractors', and construction managers'tools and equipment and property owned by contractors' and subcontractors' employees. 7.1.3 The Developer shall also furnish or cause to be furnished to the Agency evidence satisfactory to the Agency that any contractor with whom it has contracted for the performance of work on the Property or otherwise pursuant to this Agreement carries workers' compensation insurance as required by law. 7.1.4 With respect to each policy of insurance required above, the Developer and each of the Developer's general contractors shall furnish to the Agency an endorsement to the insurance policy on the insurance carrier's form setting forth the general provisions of the insurance coverage. The Developer prior to commencement of construction of any Improvements shall furnish the required certificate. 7.1.5 All such policies required by this Section shall be nonassessable and shall contain language to the effect that (i) the policies cannot be canceled or materially changed except after thirty (30) days' written notice by the insurer to the Agency, and (ii) the Agency shall not be liable for any premiums or assessments. All such insurance shall have deductibility limits that shall be commercially reasonable. Section 7.2 Indemnity. From and after the execution of this Agreement, the Developer hereby agrees to indemnify, defend, protect, and hold harmless the Agency and the City and any and all agents, employees and representatives of the Agency and the 21 W:`Agenda Items`2OO6-Jan 112`.Pub Hrg Virginia Lot`Virginia Lot dda 1122205.doc P.i u•,:• --n.d .,' n . ry City, from and against all losses, liabilities, claims, damages (including foreseeable or unforeseeable consequential damages), penalties, fines, forfeitures, costs and expenses (including all reasonable out-of-pocket litigation costs and reasonable attorney's fees)and demands of any nature whatsoever, related directly or indirectly to, or arising out of or in connection with: (i) the development of the Improvements on the Property or the use, ownership, management, occupancy, or possession of the Property, (ii) any breach or Default by the Developer hereunder, or (iii) any of the Developer's activities on the Property (or the activities of the Developer's agents, employees, lessees, representatives, licensees, guests, invitees, contractors, subcontractors, or independent contractors on the Property), regardless of whether such losses and liabilities shall accrue or are discovered before or after termination or expiration of this Agreement, except to the extent such losses or liabilities are caused solely and exclusively by the gross negligence or intentionally wrongful acts of the Agency. The Developer shall defend, at its expense, including attorneys' fees, the Agency and the City, and the Agency's and the City's council members, board members, officers, agents, attorneys, consultants, independent contractors, servants and employees in any legal action based upon such alleged acts or omissions. The Agency and the City may in their discretion participate in the defense of any such legal action. ARTICLE 8 GENERAL PROVISIONS. Section 8.1 Notices. All notices and demands shall be given in writing by certified mail, postage prepaid, and return receipt requested, or by personal delivery. Notices shall be considered given upon the earlier of (a) personal delivery, or (b) one business day following deposit or delivery with a nationally recognized overnight courier delivery charges prepaid, or(c) three (3) business days following after deposit or delivery shown on the return receipt in the United States mail, postage prepaid, certified or registered, return receipt requested. A copy of all notices delivered prior to the Close of Escrow shall be sent to Escrow Holder. Notices shall be addressed as provided below for the respective Party; provided that if any Party gives notice in writing of a change of name or address, notices to such Party shall thereafter be given as demanded in that notice: 22 W:`Agenda Items`2006-Jan 12`.Pub Hrg Virginia Lot`Virginia Lot dda 122205.doc The Agency: Mr. Carlos L. Ortega, Executive Director Palm Desert Redevelopment Agency 73-510 Fred Waring Drive Palm Desert, California 92260 (Telephone: 760-346-0611) (Facsimile: 760-341-6372) with a copy to: Richards, Watson & Gershon A Professional Corporation 355 S. Grand Avenue, 40th Floor Los Angeles, California 90071-3101 Attention: William L. Strausz (Telephone: 213-626-8484) (Facsimile: 213-626-0078) The Developer: Habitat for Humanity Coachella Valley, Inc. P.O. Box 11738 Palm Desert, CA 92255 (Telephone: (760) 342-2243) (Facsimile: (760) 775-9053) Section 8.2 Construction. The Parties agree that each Party and its counsel have reviewed and revised this Agreement and that any rule of construction to the effect that ambiguities are to be resolved against the drafting Party shall not apply in the interpretation of this Agreement or any amendments or exhibits thereto. This Agreement shall be construed as a whole according to its fair language and common meaning to achieve the objectives and purposes of the Parties. Section 8.3 Interpretation. In this Agreement the neuter gender includes the feminine and masculine, and singular number includes the plural, and the words "person" and "party" include corporation, partnership, firm, trust, or association where ever the context so requires. Section 8.4 Time of the Essence. Time is of the essence of this Agreement. Section 8.5 Warranty Against Payment of Consideration for Agreement. The Developer warrants that it has not paid or given, and will not pay or give, to any third person, any money or other consideration for obtaining this Agreement, other than normal costs of conducting business and costs of professional services such as architects, engineers and attorneys. 23 W:`Agenda Items`2006-Jan 12`.Pub Hrg Virginia Lot`Virginia Lot dda 122205.doc Section 8.6 Attorneys' Fees. If any Party brings an action to enforce the terms hereof or declare its rights hereunder, the prevailing Party in any such action shall be entitled to its reasonable attorneys' fees to be paid by the losing Party as fixed by the court. If either the Agency or the City, without fault, is made a Party to any litigation instituted by or against the Developer, then the Developer shall defend the City and/or the Agency against and save it harmless from all costs and expenses including reasonable attorney's fees incurred in connection with such litigation. If the Developer, without fault, is made a Party to any litigation instituted by or against the Agency or the City, then the Agency shall defend the Developer against and save it harmless from all costs and expenses including reasonable attorney's fees incurred in connection with such litigation. Section 8.7 Entire Agreement, Waivers and Amendments. The Agreement may be executed in duplicate originals. Escrow Holder may accept escrow instructions in counterparts. This Agreement, together with all attachments and exhibits hereto, and all agreements executed pursuant hereto, constitutes the entire understanding and agreement of the Parties. This Agreement integrates all of the terms and conditions mentioned herein or incidental hereto, and supersedes all negotiations or previous agreements between the Parties with respect to the subject matter hereof. No subsequent agreement, representation or promise made by either Party hereto, or by or to any employee, officer, agent or representative of either Party, shall be of any effect unless it is in writing and executed by the Party to be bound thereby. No person is authorized to make, and by execution hereof the Developer and the Agency acknowledge that no person has made, any representation, warranty, guaranty or promise except as set forth herein; and no agreement, statement, representation or promise made by any such person which is not contained herein shall be valid or binding on the Developer or the Agency. Section 8.8 Severability. Each and every provision of this Agreement is, and shall be construed to be, a separate and independent covenant and agreement. If any term or provision of this Agreement or the application thereof shall to any extent be held to be invalid or unenforceable, the remainder of this Agreement, or the application of such term or provision to circumstances other than those to which it is invalid or unenforceable, shall not be affected hereby, and each term and provision of this Agreement shall be valid and shall be enforced to the extent permitted by law. Section 8.9 Headings. All section headings and subheadings are inserted for convenience only and shall have no effect on the construction or interpretation of this Agreement. The references in this agreement to "Section" shall refer to the sections of this Agreement unless it is clear from the context that another meaning is intended. 24 W:`Agenda Items`2006-Jan 12`.Pub Hrg Virginia Lot`Virginia Lot dda 122205.doc Section 8.10 No Third Party Beneficiaries other than the City. The City shall be a named third party beneficiary of this Agreement. This Agreement is made and entered into for the sole protection and benefit of the Parties, the City and their successors and assigns. No other person shall have any right of action based upon any provision of this Agreement. Section 8.11 Governing Law; Jurisdiction; Service of Process. California law shall govern this Agreement and the rights of the Parties. The Parties consent to the exclusive jurisdiction of the California Superior Court for the County of Riverside. If any legal action is commenced by the Developer against the Agency, or by Agency against the Developer, service of process on the Agency shall be made by personal service upon the executive director or secretary of the Agency, or in such other manner as may be provided by law. If any legal action is commenced by Agency against the Developer, service of process on the Developer shall be made by personal service on the President of the Developer, or in such other manner as may be provided by law. The Developer agrees, for the benefit of the Agency, that it shall designate an agent for service of process in the State of California in the manner prescribed by law, and if it fails to do so, the Secretary of State of the State of California is designated as agent for the Developer, with full authority to receive such service of process on its behalf, which designation and authorization shall survive the Close of Escrow and be irrevocable. Section 8.12 Survival. The provisions hereof shall not terminate but rather shall survive any conveyance hereunder and the delivery of all consideration. 25 W:`Agenda Items`2OO6-Jan 12`.Pub Hrg Virginia Lot`Virginia Lot dda 122205.doc IN WITNESS WHEREOF, the Parties hereto have entered into this Agreement as of the day and year first above written. Agency: Developer: PALM DESERT REDEVELOPMENT AGENCY, a HABITAT FOR HUMANITY OF COACHELLA public body, corporate and politic VALLEY, INC., a California non-profit, public benefit corporation By: Jim Ferguson, Chairman By: President Attest: By: Secretary Sheila R. Gilligan, Secretary APPROVED AS TO FORM: RICHARDS, WATSON & GERSHON, Special Counsel to the Palm Desert Redevelopment Agency Agency Counsel 26 W:`Agenda Items`2006-Jan 12`.Pub Hrg Virginia Lot`Virginia Lot dda 122205.doc LIST OF EXHIBITS Exhibit A. -- Legal Description Exhibit B. -- Schedule of Performance Exhibit C. -- Scope of Development Exhibit D. -- Quitclaim Deed Exhibit E. -- Unit Regulatory and Lien Agreement Exhibit F. -- Long Form Deed of Trust and Assignment of Rents 27 W:`Agenda Items`2006-Jan 12`.Pub Hrg Virginia Lot`Virginia Lot dda 122205.doc EXHIBIT A. LEGAL DESCRIPTION Lot 161 of Tract No. 4079, as shown by map on file in book 66 page(s) 67 through 69, inclusive of Maps, Records of Riverside County, California; Excepting therefrom 1/16th of all coal, oil, gas and other deposits contained in said land, as reserved to the State of California in patent recorded April 17, 1929 in book 9 page 378 of Patents, Records of Riverside County, California. Also excepting therefrom all oil, gas and other mineral deposits below 500 feet with no right of surface entry, as reserved by T.L.C. Homes, Inc., a corporation, in deed recorded July 20, 1973 as Instrument No. 95532 of Official Records of Riverside County, California. APN 637-362-002 1 W:`Agenda Items`2006-Jan 12`.Pub Hrg Virginia Lot`Virginia Lot dda 122205.doc EXHIBIT B SCHEDULE OF PERFORMANCE 1. Agency's Publication of Notice of Public Hearing December 19, 2005 December 29, 2005 & January 5, 2006 2. Approval of the DDA by Agency Board January 12, 2006 3. Execution of the DDA by the Developer, and tender to the Agency February 28, 2006 4 Developer's approval or disapproval of Preliminary Title Report March 15, 2006 5 Developer's approval or disapproval of the physical condition of the Property 30 days from escrow opening 6 Close of Escrow 60 days from opening 7 Commencement of Construction of the Improvements June 30, 2006 8 Completion of construction of the Improvements December 1, 2006 9. Transfer of Title to eligible low-income Purchaser December 30, 2009 NOTE: Schedule may be amended with written approval of the Agency's Executive Director. 1 W:`Agenda Items`2006-Jan 12`.Pub Hrg Virginia Lot`Virginia Lot dda 122205.doc EXHIBIT C SCOPE OF DEVELOPMENT A. Development of a single-family residence of approximately 1,280 square feet with four bedrooms, two baths, two-car attached garage and landscaping. B. Developer shall endeavor to install in ADDITION to the minimum energy efficiency standards set forth in the current edition of Title 24 Calif. Administrative Code (CAC) as many of the following energy efficiency features or higher as described below: 1) Architectural design for energy conservation shall incorporate structural overhangs, or architectural projections, for shading of all eastern, southern and western facing glazing. Where shading by architectural design is unfeasible in these locations, glazing shall consist of the following: a) Thermal break design window and/or door frames. b) U factor of .40 or less (NFRC tested) c) SHGC value of 0.35 or less (NFRC tested) 2) All vented attics shall have a radiant barrier roof sheathing installed per Title 24 CAC 2005 edition. 3) All flat or low-sloped exterior roof surfaces shall have a Cool Roof reflective coating. 4) HVAC equipment minimum standards: a) Fuel type: All heating shall be by natural gas. b) Furnace efficiency to be a minimum AFUE rating of 80% c) SEER: 14.0 minimum d) EER: 11.5 minimum e) HSPF: 8.0 minimum. f) Duct insulation shall be R-6 or better. g) All ducts shall be pressure tested for leakage conforming to current standards in Title 24 CAC 2005 edition. 5) Energy Star Appliances. If provided by the developer, all the following appliances shall be Energy Star rated: a) Dishwashers b) Refrigerators c) Clothes Washers d) Clothes Dryers (Must be Natural Gas only) e) Ceiling fans f) Exhaust fans 1 W:`Agenda Items`2006-Jan 12`.Pub Hrg Virginia Lot`Virginia Lot dda 122205.doc 6) Lighting: Lighting in all laundry rooms, utility rooms, mechanical rooms, closets and garages shall be fluorescent controlled by a manual - on, automatic- off occupancy sensor. All common area landscape lighting shall be fluorescent. 7) All common area public pools and spas shall have solar water heating conforming to current Plumbing Code and Solar Energy Code standards. Natural gas heaters for the common area public pools and spas are permitted with a AFUE of 92% minimum. 2 W:`Agenda Items`2006-Jan 12`.Pub Hrg Virginia Lot`Virginia Lot dda 122205.doc EXHIBIT D. FORM OF QUITCLAIM DEED Recording Requested by: Palm Desert Redevelopment Agency And when recorded return to and mail tax statements to: Assessor's Parcel Map No.: Exempt from Recording Fees Pursuant to G.C. 6103 QUITCLAIM DEED The undersigned grantor(s) declare(s): Documentary transfer tax is $ FOR A VALUABLE CONSIDERATION, receipt of which is hereby acknowledged, PALM DESERT REDEVELOPMENT AGENCY, a public body, corporate and politic ("Grantor") hereby QUITCLAIMS, RELEASES AND REMISES to HABITAT FOR HUMANITY OF COACHELLA VALLEY, INC., a California non- profit, public benefit corporation ("Grantee") the following described real property (the "Property") located in the City of Palm Desert, County of Riverside, State of California: 1 W:`Agenda Items`2006-Jan 12`.Pub Hrg Virginia Lot`Virginia Lot dda 122205.doc Lot 161 of Tract No. 4079, as shown by map on file in book 66 page(s) 67 through 69, inclusive of Maps, Records of Riverside County, California; Excepting therefrom 1/16th of all coal, oil, gas and other deposits contained in said land, as reserved to the State of California in patent recorded April 17, 1929 in book 9 page 378 of Patents, Records of Riverside County, California. Also excepting therefrom all oil, gas and other mineral deposits below 500 feet with no right of surface entry, as reserved by T.L.C. Homes, Inc., a corporation, in deed recorded July 20, 1973 as Instrument No. 95532 of Official Records of Riverside County, California. APN 637-362-002 SUBJECT TO, all easements, covenants, conditions, restrictions, and rights of way of record. 1. This Quitclaim of the Property is subject to the Redevelopment Plan for Project Area No. 4 of the Palm Desert Redevelopment Agency and pursuant to a Disposition and Development Agreement (the "Agreement") entered into by and between Grantor and Grantee dated , 2006, the terms of which are incorporated herein by reference. A copy of the Agreement is available for public inspection at the offices of the Grantor, 73-510 Fred Waring Drive, Palm Desert, California 92260. The Property is conveyed further subject to all easements, rights of way, covenants, conditions, restrictions, reservations and all other matters of record. 2. The Grantee covenants by and for itself, its representatives, its successors and assigns and every successor in interest to the Property or any part thereof, that during construction of improvements and thereafter the Grantee shall not use or permit the use of the Property in violation of the Redevelopment Plan for Project Area No. 4, as adopted by the City of Palm Desert by its Ordinance No. 724 of the City of Palm Desert adopted July 19, 1993. The Grantee further covenants and agrees for itself, and its successors and its assigns, that for a period of Forty-Five (45) years after the date of recordation of this Deed, the Grantee, such successors, and such assignees shall use the Property and every part thereof only for only for the construction of the Improvements (as defined in the Agreement) thereon and use thereof for which the Improvements are designed, and any other uses expressly permitted by the Agreement. The Grantee further covenants and agrees that upon completion of the any Improvements described in the Agreement, for a period of Forty- 2 W:`Agenda Items`2006-Jan 12`.Pub Hrg Virginia Lot`Virginia Lot dda 122205.doc Five (45) years after the date of recordation of this Deed, the Grantee shall maintain such Improvements (including landscaping) in good condition and repair. 3. By acceptance hereof, Grantee agrees, for itself, its successors and assigns, to refrain from restricting the rental, sale or lease of the Property on the basis of race, color, creed, religion, ancestry, sex, marital status, national origin or age of any person in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Property, nor shall the Grantee itself or any persons claiming under or through it establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees, or vendees in the Property. The foregoing covenants shall run with the land. All deeds, leases or contracts entered into with respect to the Property 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, national origin, sex, marital status, age or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land herein conveyed, nor shall the grantee himself or herself, or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees in the land herein conveyed. The foregoing covenants shall run with the land." (b) In leases: "The lessee herein covenants by and for himself or herself, his or her heirs, executors, administrators and assigns, and all persons claiming under or through him or her, and this lease is made and accepted upon and subject to the following conditions: That there be no discrimination against or segregation of any person or group of persons, on account of age, race, color, creed, religion, sex, marital status, national origin, or ancestry, in the leasing, subleasing, transferring, use or 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, sublessees, subtenants or vendees in the land herein leased." 3 W:`Agenda Items`2006-Jan 12`.Pub Hrg Virginia Lot`Virginia Lot dda 122205.doc (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, age, national origin, sex, marital status 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, subtenants, sublessees or vendees of the land." The foregoing shall be a covenant running with the land for the benefit of, and as a burden upon the property described herein. 4. As provided in and subject to Sections 6.1 and 6.2 of the Agreement, Grantee agrees and covenants that if construction of the Improvements is not commenced by and completed by , then Grantor shall have the right at its option to re-enter and take possession of the Property hereby conveyed, with all improvements thereon and to terminate and revest in Grantor the Property hereby conveyed to Grantee (or its successors in interest). Upon Grantee's timely completion of the Improvements and conveyance of the Property to a person or family of very low income as required by the Agreement, Grantor shall release and convey its reversionary interest and right of re-entry to Grantee (or its successors in interest). 5. All covenants contained in this Quitclaim Deed shall run with the land and shall be binding for the benefit of Grantor and its successors and assigns and such covenants shall run in favor of the Grantor and for the entire period during which the covenants shall be in force and effect, without regard to whether the Grantor is or remains an owner of any land or interest therein to which such covenants relate. The Grantor, in the event of any breach of any such covenants, shall have the right to exercise all of the rights and remedies provided herein or otherwise available, and to maintain any actions at law or suits in equity or other property proceedings to enforce the curing of such breach. The covenants contained in this Quitclaim Deed shall be for the benefit of and shall be enforceable only by the Grantor and its successors and assigns. 4 W:`Agenda Items`2006-Jan 12`.Pub Hrg Virginia Lot`Virginia Lot dda 122205.doc IN WITNESS WHEREOF, the undersigned has executed this Quitclaim Deed as of the date set forth below. Dated: PALM DESERT REDEVELOPMENT AGENCY, a public body, corporate and politic By: Jim Ferguson, Chairman Attest: Sheila R. Gilligan, Secretary 5 W:`Agenda Items`2006-Jan 12`.Pub Hrg Virginia Lot`Virginia Lot dda 122205.doc State of California } } County of } On , 200_, before me, , a Notary Public, personally appeared , personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. Signature (seal) 6 W:`Agenda Items`2006-Jan 12`.Pub Hrg Virginia Lot`Virginia Lot dda 122205.doc EXHIBIT E UNIT REGULATORY AND LIEN AGREEMENT 1 W:`Agenda Items`2006-Jan 12`.Pub Hrg Virginia Lot`Virginia Lot dda 122205.doc EXHIBIT F LONG FORM DEED OF TRUST AND ASSIGNMENT OF RENTS 1 W:`Agenda Items`2006-Jan 12`.Pub Hrg Virginia Lot`Virginia Lot dda 122205.doc DRAFT PENDING F,EVISION BY CITY ATTORNEY RECORDING REQUESTED BY AND WHEN RECORDED RETURN TO: Palm Desert Redevelopment Agency 73-510 Fred Waring Drive Palm Desert, California 92260 Attention: Housing Dept. EXEMPT FROM RECORDING FEES PURSUANT TO G.C. 6103 UNIT REGULATORY AND LIEN AGREEMENT THIS UNIT REGULATORY AGREEMENT (the "Agreement") including DECLARATIONS OF CONDITIONS, COVENANTS AND RESTRICTIONS is entered into this day of , 2006, by and between the PALM DESERT REDEVELOPMENT AGENCY, a public body, corporate and politic(the"Agency"),and HABITAT FOR HUMANITY OF COACHELLA VALLEY, INC., a California nonprofit corporation (the "Owner"). RECITALS A. The Owner is concurrently herewith acquiring that certain real property(the"Unit") located in the City of Palm Desert, County of Riverside, State of California, legally described in Exhibit"A"attached hereto and incorporated herein by reference,the legal description,of which is set forth in Section 1(b) of this Agreement. B. The Agency and the Owner are parties to that certain Disposition and Development Agreement dated (the 'DDA"). Pursuant to the DDA, the Owner has agreed to construct a residential dwelling unit on the Unit, and the Agency has agreed to donate the Unit to the Owner. C. Pursuant to the DDA,the Owner is required to restrict the sale of the Unit to persons or families of very low and low income ('Qualified Persons"). D. The"Owner"shall, at the time Construction is completed, as described in Exhibit B of the DDA,is required to transfer all named and recorded instruments to any successor who will assume as "Owner" all conditions contained therein (and will conform to affordability). E. It is the desire of the Agency and the Owner to enter into this Declaration for the W'Agentla Items'200G-Jan 12'Pub Hrg Virginia Lot'Exh E Unit Reg Agm tloc 121905 DRAFT PENDING REVISION BY CITY ATTORNEY creation of affordable housing within the Project Area. NOW, THEREFORE, the parties agree as follows: 1. Fundamental Provisions. The Following shall serve as the basis terms of this Agreement: (a) Residential Dwelling: The Owner is to construct a residential dwelling unit on the property as more particularly described in the DDA. (b) Value of Property: The Agency's interest will be secured by a Promissory Note with a Second Deed of Trust in the Amount of$20,000.00. 2. Term of Agreement. This Agreement shall become effective upon recordation hereof(the"Term"), and shall continue from such date through the date that is 45 years after the date this instrument is recorded in the Official Records of Riverside County, California (as described by Section 18 herein). 3. Definitions. For purposes of this Agreement, the terms listed below shall have the meanings thereinafter specified. (a) "AMI". As used herein and throughout this Agreement, "AMI"means the median family income of the Riverside-San Bernardino SMSA, as determined and published annually by the United States Department of Housing and Urban Development("HUD'),pursuant to California Health and Safety Code Section 50093,and the regulations promulgated thereunder. The AMI shall be adjusted for family size in accordance with state regulations adopted pursuant to California Health and Safety Code Section 50052.5 for the number of persons in the family occupying the Unit if the household does not contain four (4) persons in the case of a three- bedroom unit,or if the household does not contain five(5) persons in the case of a four-bedroom unit. (b) Affordable Housing Cost. For the purposes hereof, the term "Affordable Housing Cost" has the following meaning: (i) For a Very-Low Income Household, housing cost will be determined pursuant to California Health and Safety Code Section 50052.5 for the number of persons in each family appropriate for the Unit in question. (ii) Fora Low-Income Household, housing cost will be determined pursuant to California Health and Safety Code Section 50052.5 for the number of persons in each family appropriate for the Unit in question. W'Agenda!ters\2006-Jan 12'Pub Hrg Virginia Lot\Exh E Unit Reg Agin doc 121905 2 DRAFT PENDING REVISION BY CITY ATTORNEY (iii) For a Moderate-Income Household housing cost will be determined pursuant to California Health and Safety Code Section 50052.5 for the number of persons in each family appropriate for the Unit in question. For the purposes hereof,the term"housing cost"shall have the meaning ascribed to such term in 25 California Code of Regulations Section 6920, as amended. (c) Person or Family of Very Low, Low, or Moderate Income, or Very- Low Income Household, a Low-Income Household, or a Moderate-Income Household means a person, family or household meeting the income qualification limits set forth in California Health and Safety Code Sections 50093, 50105,50052.5,and 50053, and Title 25 of the California Code of Regulations Section 6910, et seq., as the case or context may require, as such statutes and regulations may be amended from time to time, and any successor statutes thereto. (d) Qualified Person means a Person or Family of Very Low, Low or Moderate Income. The Agency may limit the occupancy and bedroom sizes as may be necessary from time to time. (e) Escrow and Title Costs are to include only those fees charged by an escrow agent&title insurance company solely for the closing costs of escrow. These are not to include loan fees, refinancing fees, broker commissions, prepaid items, homeowner's dues, or other fees not directly related to the transfer of ownership. (g) Unit means the real property descried in attached Exhibit"A"and may include vacant land and single-family dwellings. (h) Owner means both the party identified as'Owner'in first paragraph of this Agreement, and any successor in interest of such Owner with respect to the Property. 4. Restriction on Transfer. (a) The Owner and any Successors,shall not sell,convey,transfer,lease, sublease, assign, encumber, mortgage, refinance, or hypothecate the Unit, or enter into agreements to sell,convey,transfer, lease,sublease, assign, encumber, mortgage,refinance,or hypothecate the Unit, except in compliance with the terms of this Agreement. 'Comment[COMMENTI]: ;. (b) Any violation or breach of the provisions hereof is prohibited and any Unit sale or other transfer of interest enumerated in Section 4 (a) above, in whole or in part, or transfer in violation hereof shall be null,void and unenforceable at the option of the Agency and shall additionally, at the option of the Agency, result in an acceleration of the Note requiring the W'Agenda!ters\2006-Jan 12'Pub Hrg Virginia Lot\Exh E Unit Reg Agin doc 121905 3 DRAFT PENDING REVISION BY CITY ATTORNEY Owner to immediately repay in full the Note if such transfer is made prior to the expiration of the Term of this Agreement. Comment[COMMENT2]: 5. Covenant to Maintain Affordability. (a) The Unit conveys the Owner and any Successors, to increase and improve the community's supply of low-and moderate-income housing available at an Affordable Housing Cost in accordance with the affordable housing requirements of the Community Redevelopment Law(California Health and Safety Code,Section 33000,et seq).The Owner and any Successors,shall sell, convey,assign, or transfer ownership or occupancy of the Unit only to persons who cannot obtain comparable housing at affordable costs on the open market as provided in Health and Safety Code Section 33334.2(e)(8),as amended. To this end,the Owner and any Successors,agrees that during the Term the Unit shall, except as provided in Sections 6, 9 and 12 hereof, remain available only at an Affordable Housing Cost and shall only be used by persons or families whose incomes do not exceed either a Very Low,Low or Moderate Income. In Comment[COMMENTS]: addition, if,without the Agency's consent,the Owner fails to occupy the Unit as the Owner's sole residence for a period of 90 calendar days, cumulatively, in any calendar year, then the Owner shall be in breach of this Agreement. Comment[COMMENT4]: (b) Subject to the provisions of Section 12 hereof,if after the expiration of the entire Term the Owner has not either (i) sold, conveyed, transferred, or assigned the Unit except to a Qualified Person, where expressly permitted by Section 6 hereof, or (ii) leased or subleased the Unit in violation of the terms hereof,or(iii) refinanced, hypothecated,encumbered, or mortgaged the Unit in violation of the terms hereof, or(iv)sold the Unit at a price exceeding the maximum price permitted under Section 11 hereof, or (v) otherwise breached the terms and provisions hereof, then the Agency shall forgive the principal balance outstanding and any accrued interest.. 6. Permitted Transfers and Mortgages. (a) Conveyances to Qualified Persons. Subject to the option rights of the Agency herein, the Owner may convey the Unit to Qualified Persons whose incomes do not exceed either a Low or Moderate Income, on the condition that (i)the Owner complies with the requirements of Sections 10 and 11 hereof, (ii) the purchaser covenants to occupy the Unit as such party's sole residence, and (iii)the purchase price does not exceed the maximum permitted resale price set forth in Section 12 hereof. Any permitted transferee shall acquire the Unit subject to the terms and conditions hereof or a new unit regulatory at Agency's discretion. Any permitted transferee shall execute in recordable form an assumption agreement in form and content t[COMMENTS]: Commen satisfactory to the Agency's Executive Director. W'Agenda!ters\2006-Jan 12'Pub Hrg Virginia Lot\Exh E Unit Reg Agin doc 121905 4 DRAFT PENDING REVISION BY CITY ATTORNEY (b) Intra-Family Conveyances. The following transfers of title shall not be breaches of this instrument:transfer by gift,devise, or inheritance to the Owner's spouse;taking of title by surviving joint tenant that is the Owner's spouse;transfer of title to a spouse as part of a divorce or dissolution proceeding;acquisition of title in conjunction with marriage;transfers of title to children when the children's income does not exceed a low or moderate income at the time of transfer. A transfer to children of the Owner where the income of such children exceeds the maximum household income permitted hereunder shall give rise to the option in favor of the Agency to purchase the Unit described in Section 8; provided, however, such option shall be exercised by the Agency within 60 days after receipt by the Agency of written notice of such transfer, and the purchase price shall be the amount set forth in Section 8(e). (Comment[COMMENT6]: Comment[COMMENT7]: (c) First Trust Deed-Purchase. The Owner may encumber the Unit with a first position deed of trust or mortgage securing a purchase money loan. Comment[COMMENTs]: (d) Refinancing of First Trust Deed. The Owner may refinance any first trust deed or mortgage encumbering the Unit provided that prior written approval of the transaction is obtained from the Agency according to the notification and approval process designated in Section 10 below. Approval will be subject to the limitations that the principal amount, interest,terms and conditions are reasonable at the time the refinancing takes place(in the opinion of the Agency), and the principal amount thereof does not exceed the original principal amount of the loan secured by the first trust deed or mortgage being refinanced (plus Comment[COMMENT9]::•. reasonable loan fees and costs)and together with the second Trust Deed doesn't over-encumber the property. Failure to obtain prior Agency approval to refinance any first trust deed or mortgage encumbering the Unit shall be deemed a violation or breach of terms of this Agreement,subject to the provisions of Section 4(b) and deemed a default, subject to the provisions of Section 16. (e) Junior Trust Deeds. Any loan to be secured by a junior trust deed or mortgage encumbering the Unit shall require the prior written approval of the Agency according to the notification and approval process designated in Section 10 below. The Agency shall consider in good faith whether to permit a loan of the aforementioned type,subject to the restrictions that the proceeds of said loan are to be used to pay for repairs or the construction of improvements to the Unit, on the following terms and conditions: (i) the principal amount of such loan shall not exceed the cost of the repairs or the improvements(plus loan fees and loan costs), (ii)the loan is originated by a bank, savings and loan association, or other institutional lender, (iii)the interest rate and payment terms thereon are reasonable (in the Agency's reasonable opinion), (iv) the Owner shall be capable of meeting the monthly payments provided by such loan (in the Agency's reasonable opinion), and (v)the Unit is not over-encumbered. Construction of improvements is not to include any items that are construed to be of a luxury nature, i.e., in ground pools or spas, interior or exterior decorative items,or improvements that the reasonable useful life has expired. Failure to obtain prior Agency approval for any loan to be secured by a junior trust deed or mortgage encumbering the Unit shall be deemed a violation or breach of the terms of this W'Agenda!ters\2006-Jan 12'Pub Hrg Virginia Lot\Exh E Unit Reg Agm doc 121905 5 DRAFT PENDING REVISION BY CITY ATTORNEY Agreement, subject to the provisions of Section 4 (b) and deemed a default, subject to the provisions of Section 16. 7. Subordination to First Trust Deed Encumbrances. (a) The Agency recognizes that immediately prior to the recordation hereof the Owner is or may be recording a deed of trust that shall be superior to this Agreement Comment[COMMENT10]: and the Deed of Trust, and the Agency agrees that, in such event, such deed of trust recorded prior hereto shall be superior to this Agreement and the Deed of Trust. Therefore,in the event of the foreclosure of such deed of trust,or the conveyance by deed in lieu of foreclosure of the Unit to a bank, savings and loan, or other institutional lender that is the beneficiary of such deed of trust superior to the lien hereof,the provisions hereof shall terminate and be of no force or effect; provided, however, if the senior lien holder acquires title to the Unit pursuant to a deed in lieu of foreclosure, then the terms hereof shall terminate only if(i) the Agency has been given written notice of a default under the senior deed of trust and (ii) the Agency shall not have cured the default under the senior deed of trust,or diligently pursued the curing of the default as determined by the senior lien holder, within 60 days after the date the notice is sent to the Agency. On recording any such first trust deed as above,the borrower, at the borrower's expense, shall cause to be recorded in the Office of the Riverside county Recorder a written request for a special notice of default in favor of the Agency (independent of the notice required by part(i) of the preceding paragraph). Comment[COMMENT11]: • (b) The Agency further agrees that,in the event of a resale of the Unit or a refinancing of a deed of trust that was superior to the lien hereof,the Agency agrees to execute a subordination agreement, in form and substance acceptable to the Agency, subordinating this Agreement and the Deed of Trust to any first deed of trust or mortgage, in favor of any bank, savings and loan association, or other institutional lender which makes a loan to finance or refinance the loan for the purchase of the Unit,securing the obligations under such loan,subject to the following terms and conditions: (i) The principal amount of the new loan does not exceed the original principal amount of the loan being refinanced, plus reasonable loan fees and costs; (ii) The terms and provisions of the loan secured by such deed of trust,including interest rate,term, amortization,fees, acceleration clauses,late payment charges, and prepayment charges, shall conform substantially to the provisions in the lender's loan documents for comparable loans, unless deviations are pre-approved in writing in advance of the W'Agenda!ters\2006-Jan 12'Pub Hrg Virginia Lot\Exh E Unit Reg Agin doc 121905 6 DRAFT PENDING REVISION BY CITY ATTORNEY subordination by the Agency; (iii) The borrower shall deliver to the Agency true and accurate copies of the loan agreement, proposed promissory note,deed of trust,and a written statement from the borrower certifying that such documents are true and accurate copies of the loan documents which the borrower intends to execute in connection with the loan; (iv) On recording the new first trust deed, the borrower, at the borrower's expense, causes to be recorded in the Office of the Riverside County Recorder a written request for a special notice of default in favor of the Agency; (v)The borrower shall deliver to the Agency,at the owner's expense,a copy of Insurance Coverage each year in favor of the Palm Desert Redevelopment Agency as a loss payee: and (vi)The Agency may condition any such subordination upon its receipt of assurances from a reputable title company that this Agreement is not being subordinated to any liens or encumbrances other than such new loan as the result of such subordination. If the Agency,at its sole election,advances any sums to any senior lien holders that are due and payable by the Owner to the senior lien holder, such amounts shall immediately be due and payable by the Owner to the Agency together with interest thereon at the maximum legal rate permitted under California usury laws. W'Agenda!ters\2006-Jan 12'Pub Hrg Virginia Lot\Exh E Unit Reg Agm doc 121905 DRAFT PENDING REVISION BY CITY ATTORNEY 8. Agency Option to Purchase. (a) Option. In order to maintain and insure that the Unit shall remain affordable to and only occupied by Persons or Families of Very Low, Low or Moderate Income, the Agency is hereby granted an option,throughout the Term hereof,to purchase such Unit if the Owner desires to transfer the Unit, or to find another Person or Family of Very Low, Low or Moderate Income to purchase the Unit. The option shall be exercised in writing by the Agency,if at all, within 60 days after the Agency's receipt of the written notice (the "Notice of Proposed Sale") of the Owner's desire to transfer the Unit as provided in Section 9(a), below. During such 60 day period Owner may also concurrently attempt to market the Unit to sell it to a Qualified Person,as provided in Section 9.With Agency approval,the Owner may enter into an agreement to sell the Unit to a Qualified Person at a price that does not exceed the maximum price set forth in Section 11. Provided the Agency approves the qualified person that the owner presents, then the Agency shall not then exercise the option or find another buyer. If the Agency exercises the Option, then the Agency shall promptly open escrow thereafter and shall close escrow for the purchase of the Unit prior to the date that is 60 days after the Agency opens escrow. Title to the Unit shall be delivered to the Agency at the close of escrow free and clear of monetary liens and encumbrances,and closing costs shall be allocated in the fashion as is customary for buyers and Comment[COMMENT12]: sellers in Riverside County. (b) Agency's Failure to Close Following Exercise of the Option. If the Agency exercises the option to purchase but,due to the Agency's sole fault,the Agency does not close escrow within 90 days after the date the Agency first received the Owner's Notice of Proposed Sale,then the Owner shall be entitled to sell the Unit to a person or family that is not a Qualified Person; provided, however, (i) if the Unit is sold to a person or family that is not a Qualified Person, or (ii) if the Unit is sold at a price that exceeds the maximum resale price set forth in Section 11,then the Owner shall repay the Loan (including all accrued interest thereon)to the Agency as provided in Section 9(c), below, plus an amount equal to 25% of the amount by which the net sale proceeds received by the Owner ("net sale proceeds" being the gross sale proceeds minus customary and reasonable costs of sale incurred by the Owner, including brokerage commissions, and adjusted for reasonable pro-rations)exceeds the maximum resale price set forth in Section 11. (c) Terms of Purchase. If the Agency exercises the option,the purchase price to be paid by the Agency shall be paid all in cash at the close of escrow. The Owner may require a deposit to open escrow in an amount not to exceed three percent(3%)of the purchase price. Title to the Unit shall be delivered to the Agency at the close of escrow free and clear of monetary liens and encumbrances. Closing costs shall be allocated between the buyer and seller according to the customary practices in Riverside County in effect at the time the option is exercised. Comment[COMMENT13]: • W'Agenda!ters\2006-Jan 12'Pub Hrg Virginia Lot\Exh E Unit Reg Agin doc 121905 8 DRAFT PENDING REVISION BY CITY ATTORNEY (d) Conditions to Close of Escrow. The escrow instructions may provide for conditions or contingencies of the type and nature customarily included in residential purchase escrows (including but not limited to inspection by the Agency and elimination of pests, and preliminary title report approvals), provided that any such conditions or contingencies(other than the status of title to the Unit at the time of conveyance and other conditions which by their nature cannot be satisfied prior to closing) must be satisfied or waived on or before the close of escrow. The proceeds of the sale shall be used to pay off all monetary liens and encumbrances upon the close of escrow. Escrow shall close within 60 days after the Agency exercises its option to purchase. (e) Purchase Price. The purchase price of the Unit to be paid by the Agency pursuant to the Agency's exercise of the Option shall be the lesser of: (i) The actual purchase price paid by the Owner for the Unit plus reasonable and customary escrow closing and title costs (defined in Section 3 (e)) actually Comment[COMMENT14]: - incurred by the Owner in purchasing such Unit,times a fraction,the numerator of which is the AMI for the year in which the sale takes place, and the denominator of which is AMI in which the Owner purchased the Unit(and subtracting therefrom the amount of the Loan,which the Agency shall assume from the Owner); or (ii) the maximum resale price determined pursuant to Section 11 (a), below, assuming that the Agency, as purchaser, is of the same income category as was the seller at the time the seller purchased the Unit; or (iii) the fair market value of the Unit, as determined by an appraiser approved by the Agency. W'Agenda!ters\2006-Jan 12'Pub Hrg Virginia Lot\Exh E Unit Reg Agm doc 121905 9 DRAFT PENDING REVISION BY CITY ATTORNEY 9. Resale Price Controls and Procedures. (a) If the Owner elects at any time to sell the Unit,then the Owner shall, prior to signing a listing agreement or other authorization to sell with a real estate broker, first provide to the Agency a notice(the"Notice of Proposed Sale")setting forth the Owner's intention to sell the Unit,and a property information form to be prepared by the Agency. Such Notice shall contain information about the Owner's original purchase price of the Unit. Agency or its designee shall have sixty (60)days from the time following the receipt by the Agency or its designee of the Notice to find a new buyer for the Unit being sold, or sixty (60) days to exercise the Agency's option to purchase described in Section 8; provided, however, the Agency or its designee may Comment[COMMENT15]: shorten such time period upon a showing of hardship by the Owner. The Owner agrees to consider as purchasers those Qualified Persons identified on a list that may be maintained by the Agency. Nothing contained herein shall be construed as imposing on the Agency any obligation to find a purchaser of the Unit if the Owner has elected to sell the Unit. (b) If the Owner resells the Unit to a Qualified Person at a price that does not exceed the price set forth in Section 11,then the provisions hereof shall continue to encumber the Unit, and the Agency shall subordinate its interest in this Agreement and the Deed of Trust as provided in Section 7 hereof. Each successor in interest to Owner that is a Qualified Person shall acquire the Unit subject to the affordability covenants of Forty-Five(45)years,and restrictions on such property provided in this Agreement and the Deed of Trust; and if Agency purchases such property and resells the Unit,such acquisition shall not operate to merge this Agreement and the Deed of Trust into the Agency's fee interest. Comment[COMMENT16]: (c) If,after expiration of the sixty(60)day period,Agency or its designee has failed to procure an eligible and qualified buyer and the Agency has not exercised its option, then the Owner shall then be free to seek a buyer for the Unit without any limitation on resale price or income category of the purchaser; provided, however, (i) if the purchaser is not a Qualified Person, or(ii) if the resale price exceeds the maximum resale price set forth in Section 11,then the Owner shall repay the Loan (and all accrued interest thereon)to the Agency,plus an amount equal to 25% of the amount by which the net sale proceeds received by the Owner exceed the maximum resale price set forth in Section 11. (d) The escrow instructions may provide for conditions or contingencies of the type and nature customarily included in residential purchase escrows (including but not limited to financing contingencies, inspection rights, and preliminary title report approvals), provided that any such conditions or contingencies(other than the status of title to the Unit at the time of conveyance and other conditions which by their nature cannot be satisfied prior to closing) must be satisfied or waived on or before the close of escrow. The proceeds of the sale shall be used to pay off all monetary liens and encumbrances upon the close of escrow. Escrow shall close within a reasonable time after opening thereof. W'Agenda!ters\2006-Jan 12'Pub Hrg Virginia Lot\Exh E Unit Reg Agin doc 121905 10 DRAFT PENDING REVISION BY CITY ATTORNEY (e) The Owner shall notify any proposed purchaser in writing prior to such person's execution of escrow instructions, deposit receipt, purchase and sale agreement or Comment[COMMENT17]: similar agreement, whichever is earliest, that the title to the Unit will be restricted in the manner described herein. (f) The Owner may require a deposit to open escrow in an amount not to exceed three percent (3%) of the purchase price. Title to the Unit shall be delivered to the purchaser at the close of escrow free and clear of monetary liens and encumbrances, except as provided for in this Agreement. Closing costs shall be allocated between the buyer and seller according to the customary practices in Riverside County in effect at the time the escrow is opened. (g) For the purpose of confirming with the Agency that a proposed purchaser is a Qualified Person that will be paying a purchase price that is in compliance with the terms hereof, the Owner shall notify the Agency in writing of any offer from a prospective purchaser which the Owner intends to accept, disclosing the identity of such prospective purchaser and providing the Agency with such financial, credit, and other information on such prospective purchaser as required by the Agency, including the following: (i) Name and address of the purchaser. (ii) Number of persons comprising the purchaser's household and their names and ages. (iii) Proposed purchase price of the Unit, and any other consideration for the purchase of the Unit. (iv)Verification purchaser is a First Time Home Buyer. (v)Amount of down payment. (vi)Terms of any loan that will be used by the purchaser to finance the purchase of the Unit, including, but not limited to, principal, interest rate, term, and loan fees. (vii) Closing date. (viii) Aggregate annual income of the purchaser's household. (ix)Most recent federal and state income tax returns of the purchaser and all other members of the purchaser's household for the preceding two(2)calendar years,and W'Agenda Items'2006-Jan 12'Pub Hrg Virginia Lot\Exh E Unit Reg Agm doc 121905 DRAFT PENDING REVISION BY CITY ATTORNEY verification of the proposed purchaser's salary or wages from the purchaser's employer or from current pay stubs showing year to date as well as period payroll for the preceding two (2) calendar years. (x) Copy of any proposed purchase and sale agreement, escrow instructions, loan application, or other agreements between the Owner and the purchaser of the Unit or relating to the sale of the Unit including closing documents or any other documentation that the Agency deems appropriate to implement this agreement. (xi) A written statement signed by the proposed purchaser that the Unit will be occupied by the purchaser of such Unit and used as his or her primary residence. In lieu of providing the foregoing information,these requirements shall be deemed to have been satisfied by delivery to the Agency of a written certification of the foregoing information from the purchaser's lender who shall hold a first position trust deed encumbering the Unit, which certification shall be furnished to the Agency at least 15 days prior to the close of escrow for the Unit. (h) The Agency shall have 30 days to review the information (unless the Agency received the certification from prospective purchaser's lender, in which case the Agency shall have 15 days to review the information). If the Agency fails to approve the purchaser within such period of time,then the purchaser shall be deemed approved by the Agency. The Agency may require the purchaser to submit other written documentation reasonably requested by the Agency to verify the information set forth herein and to determine that the Affordable Housing Cost restrictions of this instrument are being satisfied. If the Agency receives all such prospective purchaser information requested by the Agency, the Agency shall determine whether the prospective purchaser is a Qualified Person, and shall thereafter immediately notify the Owner in writing that the prospective sale is authorized and approved, or that the prospective purchaser does not qualify to purchase the Unit as a Person or Family of Very Low, Low or Moderate Income. The Agency hereby designates the Executive Director of the Agency to make the Comment[COMMENT18]: evaluations, reviews and determinations set forth in this Section. (i) If the Agency notifies the Owner that the sale is authorized and approved,the Owner shall proceed to complete the sale of the Unit within seventy-five(75)days of the date of such approval from the Agency. 10. Notification Prior to Mortgage, Encumbrance or Hypothecation. If Owner desires to refinance any loan secured by a first trust deed encumbering the Unit, pursuant to Section 6(d), or to borrow funds for a new loan to be secured by a junior trust deed encumbering the Unit the proceeds of which are to be used to pay for repairs or the construction of improvements to the Unit, pursuant to Section 6(e), prior written approval of the Agency is W'Agenda!ters\2006-Jan 12'Pub Hrg Virginia Lot\Exh E Unit Reg Agin doc 121905 12 DRAFT PENDING REVISION BY CITY ATTORNEY required. To request approval, at least 30 days prior to the recordation of the intended deed of trust or mortgage, the Owner shall submit to the Agency in writing the following information: (a) Name and address of lender. (b) Terms of the loan,including, but not limited to, principal, interest rate, term, and loan fees. (c) Closing date of the loan. (d) Copy of any proposed escrow instructions, loan application, or other agreements between the Owner and the lender. (e) Written documentation of compliance with the conditions for Agency approval as set forth in Section 6(d) or Section 6(e), whichever applies. (f) Other written documentation reasonably requested by the Agency to verify the information set forth herein. The Agency shall have fifteen (15 ) working days, after all requested information has been submitted,to review the documentation. If the Agency fails to affirmatively approve or disapprove Comment[COMMENT19]: the refinancing within such period of time,then the purchaser shall be deemed approved by the Agency. Failure to obtain prior Agency approval for the transactions covered by this Section 10 shall be deemed a violation or breach of the terms of this Agreement,subject to the provisions of Section 3(b) and deemed a default, subject to the provisions of Section 16. 11. Restriction on Resale Price. Except as permitted by Sections 8 and 9, the Owner shall not resell the Unit at a price higher than the lesser of the following: (a) An Affordable Housing Cost (as defined in Section 3 (b)) for the Comment[COMMENT2o]: • prospective purchaser, assuming (i) a reasonable down payment, and (ii) a 30 year fixed rate mortgage at prevailing interest rates. (b) The sum of: (i) the selling Owner's original purchase price of the Unit times a fraction, the numerator of which is the AMI for the year in which the sale takes place, and the denominator of which is AMI in which the Owner purchased the Unit; plus (ii) escrow costs, title insurance premiums paid, and other W'Agenda Items'2006-Jan 12'Pub Hrg Virginia Lot\Exh E Unit Reg Agm doc 121905 13 DRAFT PENDING REVISION BY CITY ATTORNEY customary closing costs and fees as defined by Section 3 (e). plus Comment[COMMENT21]: (iii) if the Owner sells the Unit after a default under a mortgage or deed of trust, but prior to a trustee's sale or foreclosure sale,the purchase price shall be further increased by all expenses actually incurred by the holder of such mortgage or beneficiary under such deed of trust due to the Owner's default including, but not limited to, trustee's fees, attorney's fees, costs of sale and debt service on the debt secured by such mortgage or deed of trust. Comment[COMMENT22]: 12. Repayment of the Loan. Upon any resale of the Unit,the Loan shall be due and payable, except as follows: If the resale of the Unit is to another Qualified Person,then (i) all interest accrued from the date of the seller's acquisition of the Unit through the closing date of the resale to the new Qualified Person shall be paid at close of escrow, (ii)interest shall then accrue from and after Comment[COMMENT23]: the closing date of the resale (with such accrued interest again to be subject to payment upon another resale to yet another Qualified Person),and (iii)the principal amount of the Loan shall be due only to the extent that(A)the purchase price paid by the purchaser exceeds(B)the amount that would have been the maximum resale price to another purchaser at the same income category as was the seller's at the time of the seller's original acquisition of the Unit. (Thus,if the seller and the purchaser are of the same income category, then none of the principal would be due, but if the purchaser is of a higher income category, then it is possible that some of the principal may be due because the maximum resale price calculated pursuant to Section 11(a) may be higher if the purchaser is of a higher income category than was the seller at the time of the seller's acquisition of the Unit.) At the end of the Forty-Five (45) year Term hereof, if there have been no resales to any person or family other than a Qualified Person,the principal balance outstanding and any accrued interest shall be forgiven by the Agency subject to and in accordance with the provisions of Section 5(b) hereof. 13. Annual Report. The Agency shall Comment[COMMENT24]: • have the option of requesting information not more than once annually, to implement this agreement. 14. Nondiscrimination Covenants. By the Owner's acceptance hereof,the Owner and Successors agrees, for itself, its successors and assigns, to refrain from restricting the transfer of the Unit on the basis of race, color, creed, religion, ancestry, sex, marital status, Comment[COMMENT25]: national origin or age of any person. All such deeds and leases entered into with respect to the Unit 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 W'Agenda!ters\2006-Jan 12'Pub Hrg Virginia Lot\Exh E Unit Reg Agin doc 121905 14 DRAFT PENDING REVISION BY CITY ATTORNEY persons on account of race,color,creed, religion,sex, marital status, national origin,or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the premises herein conveyed, nor shall the grantee or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees,subtenants,sublessees, or vendees in the premises herein conveyed. The foregoing covenants shall run with the land." (b) In leases: "The lessee herein covenants by and for himself or herself, his or her heirs,executors,administrators, and assigns,and all persons claiming under or through him or her, and this lease is made and accepted upon and subject to the following conditions: 'That there shall be no discrimination against or segregation of any person or group of persons,on account of race,color, creed, religion,sex, marital status, national origin,or ancestry, in the leasing,subleasing,transferring, use, occupancy,tenure,or enjoyment of the premises herein leased nor shall the lessee himself, or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy, of tenants, lessees, sublessees, subtenants, or vendees in the premises herein leased.'" Comment[COMMENT26]: The foregoing shall be a covenant running with the land for the benefit of, and as a burden upon the Unit, and shall remain in effect in perpetuity. Nothing contained herein shall be construed as permitting the Owner or Successors to rent or lease the Unit without the Agency's prior written consent. Comment[COMMENT27]: 15. Maintenance of the Unit/Prohibition Against Waste. The Owner shall not commit waste upon the Unit. The Owner shall not remove or demolish the improvements on the Unit. The Owner shall, throughout the Term hereof, keep and maintain the Unit and the improvements thereon in good condition and repair. If the Owner at any time fails to so keep and maintain the Unit in good condition and repair,after 30 days notice from the Agency,the Agency shall have a right to enter onto the Unit and perform such deferred maintenance, and the Owner shall promptly reimburse the Agency for all costs incurred by the Agency in performing such maintenance. 16. Default. If either party defaults with regard to any of the provisions of this Agreement,the nondefaulting party shall serve written notice of such default upon the defaulting party. If the default is not cured by the defaulting party within thirty(30)days after service of the notice of default, or if the default is not commenced to be cured within thirty (30) days after service of the notice of default and is not cured promptly within a reasonable period of time after commencement, the defaulting party shall be liable to the other party for damages caused by such default. W'Agenda!ters\2006-Jan 12'Pub Hrg Virginia Lot\Exh E Unit Reg Agm doc 121905 15 DRAFT PENDING REVISION BY CITY ATTORNEY 17. Notices. All notices to be delivered to the parties pursuant to the terms hereof shall be in writing and shall be delivered in person or by U.S. Mail or other delivery service to the addresses listed below. Any of the following addresses may be changed by written notice. If notice is given it shall be deemed effective upon 3 business days after deposit of same, postage prepaid, in the U.S. Mail, or the date of actual receipt as evidenced by personal acknowledgment, return receipt or other comparable means. If to Owner: Habitat for Humanity P.O. Box 11738 Palm Desert, CA 92255 Attention: Cindy Pieper If to the Agency: Palm Desert Redevelopment Agency 73-510 Fred Waring Drive Palm Desert, California 92260 Attn: Executive Director 18. Covenants to Run With the Land. Subject to Section 6 hereof,the covenants established in this Agreement shall be binding on the Owner and any successor in interest of the Owner to the Unit, and shall be for the benefit and in favor of the Agency, its successors and assigns, the City of Palm Desert, and Alphonso Sanchez the real party in interest under that certain Stipulation for Entry of Judgment, Riverside County Superior Court Case No. INDIO 51124; subject to Section 6 hereof, the covenants shall run with the land in favor of the Agency and shall be a burden upon the Unit and shall be for the benefit of the parcels that comprise the Project Area owned by the City of Palm Desert, as described in Instrument No. 23610, recorded on December 22, 1981 in the Official Records of Riverside County. The covenants established in this Agreement shall be incorporated by reference in all deeds conveying all or any portion of the Unit. The Owner(and each successor in interest,as the case may be)shall furnish a copy of this instrument to any successors in interest and assume all restrictions and conveyances as recorded on all said instruments secured by the Deed of Trust. The Agency shall have the right, in the event of any breach by the Owner of any covenant or agreement herein,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. Notwithstanding the foregoing, however,the Owner and the successors in interest to the Owner named herein shall be liable for performance hereof only during their respective period of ownership of the Unit, provided that the "transferee" Owner has in writing assumed and agreed to perform the "transferor" Owner's obligations hereunder. 19. Administration. The Agency may administer the terms hereof or may, from W'Agenda!ters\2006-Jan 12'Pub Hrg Virginia Lot\Exh E Unit Reg Agin doc 121905 16 DRAFT PENDING REVISION BY CITY ATTORNEY time to time assign its rights hereunder or designate another entity, person, licensed real estate broker or organization to administer the terms hereof. 20. Independent and Severable Provisions. If any provision of this instrument is held by a court of competent jurisdiction to be unenforceable or invalid, such holding shall not render unenforceable any other provision hereof, each provision hereof being expressly severable and independently enforceable to the fullest extent permitted by law. 21. Further Assurances and Recordations. The Owner covenants that upon request of the Agency,the Owner, or its heirs,successors or assigns,will execute,acknowledge and deliver,or cause to be executed, acknowledged and delivered,such further instruments and agreements and do such further acts as may be necessary,desirable or proper to carry out more effectively the purpose of this instrument. At the expiration of the Term, the Agency agrees to provide to the Owner an instrument in recordable form that has the effect of confirming the termination of the affordable housing requirements of this instrument. 22. Captions and Section Headings. Captions and section headings used herein are for convenience only and shall not be used in construing this instrument. 23. No Waiver. No waiver by the Agency of its rights hereunder,or of any breach by the Owner of any covenant, restriction, or condition herein contained,shall be effective unless such waiver is in writing, signed by the Agency and delivered to the Owner. Any waiver by the Agency of its power to terminate the Owner's estate herein or of any covenant, restriction, or condition herein contained, or the failure by the Agency to exercise any right or remedy with respect to any breach or breaches,shall not constitute a waiver or relinquishment for the future of any rights regarding subsequent sales, or of any such covenant or condition nor bar any right or remedy of the Agency in respect of any subsequent breach. 24. Entire Agreement. This instrument constitutes the entire agreement of the parties hereto, and the provisions hereof may be modified or amended only by a written instrument signed by the party to be charged. 25. Attorneys' Fees. In any action brought to declare the rights granted herein or to enforce or to interpret any of the terms of this Agreement,the prevailing party shall be entitled to an award of reasonable attorney's fees in an amount determined by the court. 26. Amendments. Only the Agency,its successors and assigns,and the Owner and the successors and assigns of the Owner in and to all or any part of the fee title to the Unit 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 Unit to additional covenants, easements or other restrictions. W'Agenda!ters\2006-Jan 12'Pub Hrg Virginia Lot\Exh E Unit Reg Agin doc 121905 17 DRAFT PENDING REVISION BY CITY ATTORNEY 27. Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the Agency and the Owner, and their respective successors, owners and assigns. The terms and provisions hereof shall run with the land and shall be a burden upon the land, including the Unit and each Unit,and shall be binding upon the Owner's successors in interest as purchasers of the Unit, for the benefit of the Agency. 28. Foreclosure of Superior Mortgage. In the event of the foreclosure of a deed of trust or mortgage superior to the lien hereof,or the conveyance by deed in lieu of foreclosure of the Unit to a bank, savings and loan, or other institutional lender holding a deed of trust or mortgage superior to the lien hereof,the provisions hereof shall terminate and be of no force or effect; provided, however, if the senior lien holder acquires title to the Unit pursuant to a deed in lieu of foreclosure, then the terms hereof shall terminate only if(i) the Agency has been given written notice of a default under the senior deed of trust and (ii)the Agency shall not have cured the default under the senior deed of trust, or diligently pursued the curing of the default as determined by the senior lien holder, within 60 days after the date the notice is sent to the Agency. Comment[COMMENT28]: IN WITNESS WHEREOF,the parties hereto have executed this Agreement as of the day and year first above written. "AGENCY" "OWNER" PALM DESERT REDEVELOPMENT AGENCY, HABITAT FOR HUMANITY a public body, corporate and politic By: — By: Attest : Secretary W'Agenda!ters\2006-Jan 12'Pub Hrg Virginia Lot\Exh E Unit Reg Agm doc 121905 18 DRAFT PENDING REVISION BY CITY ATTORNEY State of California } } County of } On , 2006, before me, , a Notary Public, personally appeared , personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s)on the instrument the person(s),or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. Signature (seal) W'Agenda Items\2006-Jan 12'Pub Hrg Virginia Lot\Exh E Unit Reg Agin doc 121905 DRAFT PENDING REVISION BY CITY ATTORNEY State of California } } County of } On , 200_, before me, , a Notary Public, personally appeared , personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s)on the instrument the person(s),or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. Signature (seal) W'Agenda Items\2006-Jan 12'Pub Hrg Virginia Lot\Exh E Unit Reg Agin doc 121905 DRAFT PENDING REVISION BY CITY ATTORNEY EXHIBIT A LEGAL DESCRIPTION That certain real property situated in the City of Palm Desert, County of Riverside, State of California, described as follows: LOT 161 OF TRACT MAP NO. 4079, IN THE CITY OF PALM DESERT, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA,AS PER MAP RECORDED IN BOOK 66 OF MAPS, PAGES 67 THROUGH 69, INCLUSIVE, RECORDS OF SAID COUNTY. W Agentla Items200G-Jan 12Pub Hrg Virginia LotExh E Unit Reg Agm tloc 121905 RECORDING REQUESTED BY Palm Desert Redevelopment Agency AND WHEN RECORDED MAIL TO Palm Desert Redevelopment Agency 73-510 Fred Waring Drive Palm Desert, California 92260 Attn: Housing Dept. No Recording Fee Required - Government Code Section 6103 SPACE ABOVE THIS LINE FOR RECORDER'S USE LONG FORM DEED OF TRUST AND ASSIGNMENT OF RENTS A. P. N. 637-362-002 This Deed of Trust, made this day of , 2006, between , herein called Trustor, whose address is , Palm Desert, California in favor of First American Title Insurance Company, as Trustee, for the benefit of the PALM DESERT REDEVELOPMENT AGENCY, a public body, corporate and politic, herein called Beneficiary, Witnesseth: That Trustor IRREVOCABLY GRANTS, TRANSFERS AND ASSIGNS TO TRUSTEE IN TRUST, WITH POWER OF SALE, that property (the"Property") in Riverside County, California, described as: LOT 161 OF TRACT MAP NO. 4079, IN THE CITY OF PALM DESERT, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 66 OF MAPS, PAGES 67 THROUGH 69, INCLUSIVE, RECORDS OF SAID COUNTY. TOGETHER WITH the rents, issues and profits thereof, SUBJECT, HOWEVER, to the right, power and authority hereinafter given to and conferred upon Beneficiary to collect and supply such rents, issues and profits. For the Purpose of Securing: 1_ Performance of each agreement of Trustor herein contained. 2. Payment of the indebtedness evidenced by one promissory note of even date herewith, and any extension or renewal thereof, in the principal sum of $20,000.00 executed by Trustor in favor of Beneficiary or order. 3. The rights of the Beneficiary set forth in Page 1 of 8 W\Agenda Items\2006-Jan 12\Pub Hrg Virginia Lot\Exh F Long Form Deed ofTrust doc 121905 that certain Unit Regulatory and Lien Agreement (the "Unit Regulatory and Lien Agreement") from the original Trustor to Beneficiary dated and recorded as Instrument Number To Protect the Security of This Deed of Trust, Trustor Agrees: (1) To keep said Property in good condition and repair; not to remove or demolish any building thereon; to complete or restore promptly and in good workmanlike manner any building which may be constructed, damaged or destroyed thereon and to pay when due all claims for labor performed and materials furnished thereof; to comply with all laws affecting said Property, or requiring any alterations or improvements to be made thereon; not to commit or permit waste thereof; not to commit, suffer or permit any act upon said Property in violation of law; and to do all other acts which from the character or use of said Property may be reasonably necessary, the specific enumerations herein not excluding the general. (2) To provide or cause to provide, maintain and deliver to Beneficiary fire insurance satisfactory to and with loss payable to Beneficiary and any superior trust deed holder, as their interests may appear. The amount collected under any fire or other insurance policy may be applied by Beneficiary upon any indebtedness secured hereby and in such order as Beneficiary may determine, or at option of Beneficiary the entire amount so collected or any part thereof may be released to Trustor. Such application or release shall not cure or waive any default or notice of default hereunder or invalidate any act done pursuant to such notice. (3) To appear in and defend any action or proceeding purporting to affect the security hereof or the rights or powers of Beneficiary or Trustee; and to pay all costs and expenses, including cost of evidence of title and attorney's fees in a reasonable sum, in any such action or proceeding in which Beneficiary or Trustee may appear, and in any suit brought by Beneficiary to foreclose this Deed of Trust. (4) To pay: at least ten days before delinquency all taxes and assessments affecting said Property, including assessments on appurtenant water stock; when due, all encumbrances, charges and liens, with interest, on said Property or any part thereof, which appear to be prior or superior hereto; all costs, fees and expenses of this Trust. Should Trustor fail to make any payment or to do any act as herein provided, then Beneficiary or Trustee, but without obligation so to do and without notice to or demand upon Trustor and without releasing Trustor from any obligation hereof, may: make or do the same in such manner and to such extent as either may deem necessary to protect the security hereof, Beneficiary or Trustee being authorized to enter upon said Property for such purposes; appear in and defend any action or proceeding purporting to affect the security hereof or the rights or powers of Beneficiary or Trustee; pay, purchase, contest or compromise any incumbrance, charge or lien which in the judgment of either appears to be prior or superior hereto; Page 2 of 8 W\Agenda Items\2006-Jan 12\Pub Hrg Virginia Lot\Exh F Long Form Deed ofTrust doc 121905 and, in exercising any such powers, pay necessary expenses, employ counsel and pay his reasonable fees. (5) To pay immediately and without demand all sums so expended by Beneficiary or Trustee, with interest from date of expenditure at the amount allowed by law in effect at the date hereof, and to pay for any statement provided for by law in effect at the date hereof regarding the obligation secured hereby any amount demanded by the Beneficiary not to exceed the maximum allowed by law at the time when said statement is demanded. (6) That any award of damages in connection with any condemnation for public use of or injury to said Property or any part thereof is hereby assigned and shall be paid to Beneficiary (and to any superior trust deed holder, as their interests may appear) who may apply or release such moneys received by him in the same manner and with the same effect as above provided for disposition of proceeds of fire or other insurance. (7) That by accepting payment of any sum secured hereby after its due date, Beneficiary does not waive his right either to require prompt payment when due of all other sums so secured or to declare default for failure so to pay. (8) That at any time or from time to time, without liability therefore and without notice, upon written request of Beneficiary and presentation of this Deed of Trust and said note for endorsement, and without affecting the personal liability of any person for payment of the indebtedness secured hereby, Trustee may: reconvey any part of said Property; consent to the making of any map or plat thereof; join in granting any easement thereon; or join in any extension agreement or any agreement subordinating the lien or charge hereof. (9) That upon written request of Beneficiary stating that all sums secured hereby have been paid, and upon surrender of this Deed of Trust and said note to Trustee for cancellation and retention and upon payment of its fees, Trustee shall reconvey, without warranty, the Property then held hereunder. The recitals in such reconveyance of any matters or facts shall be conclusive proof of the truthfulness thereof. The grantee in such reconveyance may be described as "the person or persons legally entitled thereto." Five years after issuance of such full reconveyance, Trustee may destroy said note and this Deed of Trust (unless directed in such request to retain them). (10) That as additional security, subject to the rights of superior trust deed holders, as their interests may appear, Trustor hereby gives to and confers upon Beneficiary the right, power and authority, during the continuance of these Trusts, to collect the rents, issues and profits of said Property, reserving unto Trustor the right, prior to any default by Trustor in payment of any indebtedness secured hereby or in performance of any agreement hereunder, to collect and retain such rents, issues and profits as they become due and payable. Upon any such default, Page 3 of 8 W\Agenda Items\2006-Jan 12\Pub Hrg Virginia Lot\Exh F Long Form Deed ofTrust doc 121905 Beneficiary may at any time without notice, either in person, by agent, or by a receiver to be appointed by a court, and without regard to the adequacy of any security for the indebtedness hereby secured, enter upon and take possession of said Property or any part thereof, in his own name sue for or otherwise collect such rents, issues and profits, including those past due and unpaid, and apply the same, less costs and expenses of operation and collection, including reasonable attorney's fees, upon any indebtedness secured hereby, and in such order as Beneficiary may determine. The entering upon and taking possession of said Property, the collection of such rents, issues and profits and the application thereof as aforesaid, shall not cure or waive any default or notice of default hereunder or invalidate any act done pursuant to such notice. (11) That upon default by Trustor in payment of any indebtedness secured hereby, or in performance of any agreement hereunder, Beneficiary may declare all sums secured hereby immediately due and payable by delivery to Trustee of written declaration of default and demand for sale and of written notice of default and election to cause to be sold said Property, which notice Trustee shall cause to be filed for record. Beneficiary also shall deposit with Trustee this Deed of Trust, said note and all documents evidencing expenditures secured hereby. After the lapse of such time as may then be required by law following the recordation of said notice of default, and notice of sale having been given as then required by law, Trustee, without demand on Trustor, shall sell said Property at the time and place fixed by it in said notice of sale, either as a whole or in separate parcels, and in such order as it may determine, at public auction to the highest bidder for cash in lawful money of the United States, payable at time of sale. Trustee may postpone sale of all or any portion of said Property by public announcement at such time and place of sale, and from time to time thereafter may postpone such sale by public announcement at the time fixed by the preceding postponement. Trustee shall deliver to such purchaser its deed conveying the Property so sold, but without any covenant or warranty, express or implied. The recitals in such deed of any matters or facts shall be conclusive proof of the truthfulness thereof. Any person, including Trustor, Trustee, or Beneficiary as hereinafter defined, may purchase at such sale. After deducting all costs, fees and expenses of Trustee and of this Trust, including cost of evidence of title in connection with sale, Trustee shall apply the proceeds of sale to payment of: all sums expended under the terms hereof, not then repaid, with accrued interest at the amount allowed by law in effect at the date hereof; all other sums then secured hereby; and the remainder, if any, to the person or persons legally entitled thereto. (12) Beneficiary, or any successor in ownership of any indebtedness secured hereby, may from time to time, by instrument in writing, substitute a successor or successors to any Trustee named herein or acting hereunder, which instrument, executed by the Beneficiary and duly acknowledged and recorded in the Page 4 of 8 W\Agenda Items\2006-Jan 12\Pub Hrg Virginia Lot\Exh F Long Form Deed ofTrust doc 121905 office of the recorder of the county or counties where said Property is situated, shall be conclusive proof of proper substitution of such successor Trustee or Trustees, who shall, without conveyance from the Trustee predecessor, succeed to all its title estate, rights, powers and duties. Said instrument must contain the name of the original Trustor, Trustee and Beneficiary hereunder, the book and page where this Deed of Trust is recorded and the name and address of the new Trustee. (13) That this Deed of Trust applies to, inures to the benefit of, and binds all parties hereto, their heirs, legatees, devisees, administrators, executors, successors and assigns. The term Beneficiary shall mean the owner and holder, including pledges, of the note secured hereby, whether or not named as Beneficiary herein. In this Deed of Trust, whenever the context so requires, the masculine gender includes the feminine and/or neuter, and the singular number includes the plural. (14) That Trustee accepts this Trust when this Deed of Trust, duly executed and acknowledged, is made a public record as provided by law. Trustee is not obligated to notify any party hereto of pending sale under any Deed of Trust or of any action or proceeding in which Trustor, Beneficiary or Trustee shall be a party unless brought by Trustee. (15) If the Trustor shall sell, lease, transfer, assign, convey, encumber, mortgage, hypothecate or alienate the real Property described herein, or any part thereof, or any interest therein, or shall be divested of title or any interest therein in any manner or way, whether voluntarily or involuntarily (except as permitted by Beneficiary pursuant to the terms and conditions set forth in the Unit Regulatory and Lien Agreement), or if Trustor shall fail to make any payments due under the note secured by this Deed of Trust, or fail to perform any other obligation under said Unit Regulatory and Lien Agreement of even date herewith, this Deed of Trust or the note secured hereby, or any other deed of trust encumbering the subject Property, then Beneficiary shall have the right, at its option, to declare any indebtedness or obligations secured hereby, irrespective of the maturity date specified in any note evidencing the same, immediately due and payable. Notwithstanding the foregoing, if the resale of the Property is to another Qualified Person (as defined in the Unit Regulatory and Lien Agreement), and such purchaser assumes in writing the obligations of the Unit Regulatory and Lien Agreement, the Note, and this Deed of Trust, then (i) all interest accrued from the date of the seller's acquisition of the Property through the closing date of the resale to the new Qualified Person shall be paid at Close of Escrow, (ii) interest shall then accrue from and after the closing date of the resale (with such accrued interest again to be subject to payment upon another resale to yet another Qualified Person), and (iii) the principal amount of the Loan shall be due only to the extent that the purchase price paid by the purchaser exceeds the amount that would have been the maximum resale price to another purchaser at the same income level of the seller (at the time of the seller's original acquisition of the Property). (Thus, if Page 5 of 8 W\Agenda Items\2006-Jan 12\Pub Hrg Virginia Lot\Exh F Long Form Deed ofTrust doc 121905 the seller and the purchaser are of the same income level, then none of the principal would be due, but if the purchaser is of a higher income level, then it is possible that some of the principal may be due because the maximum resale price calculated pursuant to Section 11(a) of the Unit Regulatory Agreement may be higher if the purchaser is of a higher income level than was the seller at the time of the seller's acquisition of the Property.) At the end of the Forty-Five (45) year term hereof, if there have been no resales to any person or family other than a Qualified Person, the principal balance outstanding and any accrued interest shall be forgiven by the Beneficiary subject to and in accordance with the provisions of Section 5 part (b) of the Unit Regulatory and Lien Agreement. (16) Notwithstanding anything provided herein to the contrary, the Beneficiary agrees to look solely to the Trustor's interest in the Property encumbered hereby and improvements thereon (or the proceeds thereof) for the satisfaction of any remedy of the Beneficiary, and for the collection of a judgment (or other judicial process) requiring the payment of money by the Trustor, except where such judgment results from a claim of fraud; intentional misrepresentation; misapplication; misappropriation; or wrongful retention of rental income; casualty insurance; condemnation proceeds; or other funds attributable to the Property; the commission of any act of deliberate waste with respect to the Property encumbered hereby; or the deposit of any hazardous or toxic materials on the Property encumbered hereby; in which events there shall be no such limitation on the Beneficiary's recourse against the Trustor. (17) Any breach or default under the Unit Regulatory and Lien Agreement shall be deemed a breach of this Deed of Trust. (18) Immediately prior to the recordation hereof the Trustor is or may be recording a deed of trust that shall be superior to this Deed of Trust. In such event, such Deed of Trust recorded prior hereto shall be superior to this Deed of Trust. Therefore, in the event of the foreclosure of such Deed of Trust, or the conveyance by deed in lieu of foreclosure of the Property to a bank, savings and loan, or other institutional lender that is the beneficiary of such Deed of Trust superior to the lien hereof, the provisions hereof shall terminate and be of no force or effect; provided however, if the Senior Lender acquires title to the Property pursuant to a deed in lieu of foreclosure, then this Deed of Trust shall terminate only if(i) Beneficiary has been given written notice of a default under the Senior Lender's Deed of Trust, and (ii) the Beneficiary shall not have cured the default under the Senior Lender's Deed of Trust, or diligently pursued the curing of the default as described in the Unit Regulatory and Lien Agreement as determined by the Senior Lender, within 60 days after the date the notice is sent to the Senior Lender. Page 6 of 8 W\Agenda Items\2006-Jan 12\Pub Hrg Virginia Lot\Exh F Long Form Deed ofTrust doc 121905 The undersigned Trustor requests that a copy of any Notice of Default and of any Notice of Sale hereunder be mailed to him at his address hereinbefore set forth. Signature of Trustor Title Order No. Escrow or Loan No. Page 7 of 8 W\Agenda Items\2006-Jan 12\Pub Hrg Virginia Lot\Exh F Long Form Deed ofTrust doc 121905 State of California } County of } On , 20_ before a Notary Public, personally appeared , personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. Signature (seal) State of California } County of } On , 20 before me, _ _.a Notary Public, personally appeared , personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity (ies), and that by his/her/their signature(s)on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. Signature (seal) Page 8 of 8 W\Agenda Items\2006-Jan 12\Pub Hrg Virginia Lot\Exh F Long Form Deed ofTrust doc 121905