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RESOLUTION NO. 6530
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
ARCADIA, CALIFORNIA, APPROVING AN AFFORDABLE
HOUSING AGREEMENT BETWEEN THE REDEVELOPMENT
AGENCY OF THE CITY OF ARCADIA AND TRADEMARK
DEVELOPMENT COMPANY CONCERNING THE
DEVELOPMENT OF A SIX (6)- UNIT OWNER OCCUPIED
AFFORDABLE HOUSING PROJECT LOCATED AT 119 AND
121 ALTA STREET IN THE CITY OF ARCADIA AND
MAKING CERTAIN FINDINGS PURSUANT TO CALIFORNIA
HEALTH AND SAFETY CODE SECTION 33433 IN
CONNECTION THEREWITH
WHEREAS, pursuant to the provisions of California Community
Redevelopment Law (California Health and Safety Code Section 33000 et @.)
("CRL"), the City Council ("City Council") of the City of Arcadia ("City") approved
and adopted a redevelopment plan ("Redevelopment Plan") for the Central
Redevelopment Project Area ("Project Area"); and
WHEREAS, the Agency is engaged in activities necessary to execute and
implement the Redevelopment Plan for the Project Area; and
WHEREAS, the Agency owns two (2) parcels of real property within the Project
Area approximately sixteen thousand (16,000) square feet in size located at 119 AHa
Street and 121 AHa Street the City and identified as Assessor Parcel Numbers 5773-
014-912 and 5773-014-913 ("Property"); and
WHEREAS, Trademark Development Company, a California limited liability
company ("Developer") desires to acquire the Property from the Agency and construct
on the Property six (6) owner-occupied multifamily residences ("Project") reserved for
occupancy, for a period of at least forty-five (45) years, by families whose household
earnings do not exceed one hundred twenty percent (120%) of Los Angeles County
median income; and
WHEREAS, to assist in the development of the Project on the Property, the
Agency desires to provide the Developer a loan in an amount not to exceed Seven
Hundred Sixty Thousand Dollars ($760,000) to assist the Developer in financing the
development of the Project on the Property ("Agency Development Loan"); and
WHEREAS, the Agency and the Developer have negotiated the terms of an
affordable housing abrreement entitled "Affordable Housing Agreement (119/121 Alta
Street)" ("Agreement"), which provides, among other things, for the Developer's
development of the Project on the Property and the Agency's provision of the Agency
Development Loan to the Developer; and
WHEREAS, a copy of the Agreement IS attached to this resolution
("Resolution") as Exhibit "A' and incorporated into this Resolution by this reference;
and
WHEREAS, the Agency has determined that implementation of the Agreement:
(i) is in the best interests of the City and the Agency and the health, safety and welfare
of the City's taxpayers and residents and is in accordance with the public purposes set
forth in the Redevelopment Plan and CRL, (ii) strengthens the City's land use and
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social structure; (iii) alleviates economic and physical blight in the City; and (iv)
provides needed affordable housing in the City; and
WHEREAS, pursuant to Government Code Section 65402, the Planning
Commission of the City must determine prior to the time of conveyance ofthe Property
to the Developer that the location, purpose, extent and development of the Project are
in conformance with the City's general plan; and
WHEREAS, pursuant to CRL Section 33433 the City Council of the City (acting
as the Agency's legislative body) must make certain findings and determinations in
connection with Agency's sale of the Property which was acquired with Agency tax
increment revenue; and
WHEREAS, pursuant to CRL Section 33433, the Agency has prepared, and the
City Council has reviewed and considered, a summary report ("Summary Report")
setting forth: (I) the cost of the Agreement to the Agency; (2) the estimated value of
the interest to be conveyed; and (3) an explanation of how the acquisition and
conveyance of that interest will assist in the elimination of blight within the Project
Area and the Agency has made the Summary Report available for public inspection in
accordance with CRL Section 33433; and
WHEREAS, pursuant to CRL Section 33433, on May 22, 2006, and May 29,
2006, the Agency caused notice of the a joint public hearing of the City Council and
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the Agency's Governing Board to be published in a newspaper of general circulation
within the Agency's territorial jurisdiction; and
WHEREAS, pursuant to provisions ofCRL Section 33433, on June 6,2006, the
City Council and the Agency's Governing Board held a duly noticed joint public
hearing on the proposed Project and on the proposed Agreement; and
WHEREAS, all other legal prerequisites to the adoption ofthis Resolution have
occurred.
THE CITY COUNCIL OF THE CITY OF ARCADIA, CALIFORNIA, DOES
HEREBY FIND, DETERMINE AND RESOLVE AS FOLLOWS:
SECTION 1. The City Council finds and determines, based on the
information made available in the Summary Report, the staff report accompanying this
Resolution, the oral presentation of staff, and the other written and oral evidence
presented to the City at or prior to the public hearing, that, pursuant to CRL Section
33433:
(i) The sale of the Property and development of the Project will
assist in the elimination of blight and provide housing for
moderate-income persons;
(ii) The sale of the Property is consistent with the implementation
plan adopted by the Agency for the Project Area; and
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(iii) The consideration to be paid for the Property by the Developer is
not less than fair reuse value of the Property with the covenants,
conditions and development costs.
SECTION 2. The City Council approves the Agreement together with non-
substantive changes and amendments as may be approved by both the City Manager
and the City Attorney.
SECTION 3.
The City Council hereby authorizes and directs the City
Manager to take any action and execute any documents necessary to implement the
Agreement.
SECTION 4.
This Resolution shall take effect upon its adoption.
SECTION 5.
The City Clerk shall certify to the adoption of this
Resolution.
[SIGNATURES ON NEXT PAGE]
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Passed, approved and adopted this 6th day of Tllne
,2006.
~ cll-
May of the City of Arcadia
ATTEST:
~'--M<- ~
ity Clerk
APPROVED AS TO FORM:
~r.~
City Attorney
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STATE OF CALIFORNIA )
COUNTY OF LOS ANGELES ) SS:
CITY OF ARCADIA )
I, JAMES H. BARROWS, City Clerk of the City of Arcadia, hereby certifies
that the foregoing Resolution No. 6530 was passed and adopted by the City Council of
the City of Arcadia, signed by the Mayor and attested to by the City Clerk at a regular
meeting of said Council held on the 6th day of June, 2006 and that said Resolution was
adopted by the following vote, to wit:
A YES: Council Member Amundson, Segal, Wuo and Chandler
NOES: None
ABSENT: Council Member Harbicht
~~. ~
ity Clerk ofthe City of Arcadia
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DISCUSSION DRAFT 1
MAY 9, 2006
AFFORDABLE HOUSING AGREEMENT
(119 Alta Street / 121 Alta Street)
between
THE REDEVELOPMENT AGENCY OF IHE CITY OF ARCADIA
a public body, corporate aiid politic
and
TRADEMARK DEVELOPMENT COMl'ANY, LLC
a California limited liability company
[Dati,d as of June 6, 2006, for reference purposes onlyl
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This AFFORDABLE HOUSING AGREEMENT (119 Alta Street / 121 Alta Street)
("Agreement") is reference dated as of June 6, 2006, by and between THE REDEVELOPMENT
AGENCY OF THE CITY OF ARCADIA, a public body corporate and politic ("Agency"), and
TRADEMARK DEVELOPMENT COMPANY, a California limited liability company ("Developer").
The Agency and the Developer are sometimes referred to in this Agreement, individually, as a "Party"
and, collectively, as "Parties." This Agreement is entered into with reference to the following recitals of
fact ("Recitals"):
RECITALS
A. Pursuant to the provisions of California Community Redevelopment Law (Health and
Safety Code Section 33000 et .ilil.) ("CRL"), the City Council ("City Council") of the City of Arcadia
("City") approved and adopted a redevelopment plan ("Redevelopment Plan") for the Central
Redevelopment Project Area ("Project Area") on December 26,1973 by Ordinance Number 1490.
B. The Agency is engaged in activities necessary to execute and implement the
Redevelopment Plan for the Project Area,
C. The Agency owns two (2) parcels of real property approximately sixteen thousand
(l6,000) square feet in size located at 119 Alta Street and 121 Alta Street the City and identified as
Assessor Parcel Numbers 5773-014-912 and 5773-014-913 ("Property"). The Property is legally
described in Exhibit A attached to this Agreement and incorporated into this Agreement by this reference.
A site map depicting the Property is attached to this Agreement as Exhibit B and is incorporated into this
Agreement by this reference. The Property is locate'itwithin the Project Area.
D. The Developer desires to acquire the Property from the Agency and construct on the
Property six (6) owner-occupied multifamily residences ("Project") reserved for occupancy, for a period
of at least forty-five (45) years, by families whose household earnings do not exceed one hundred twenty
percent (l20%) of Los Angeles County median income. The Project is more particularly described in the
scope of development ("Scope of Development") attached to this Agreement as Exhibit C and
incorporated into this Agreement by this reference.
E. To assist in the development of the Project on the Property, the Agency desires to: (i)
transfer the Agency's fee interest in the Property to the Developer for a purchase price of One Dollar
($1.00); (ii) provide the Developer a loan in an amount not to exceed Seven Hundred Sixty Thousand
Dollars ($760,000) to assist the Developer in financing the development of the Project on the Property
("Agency Development Loan").
F. This Agreement and the exhibits attached to this Agreement ("Exhibits") implement the
goals and objectives of the Agency and the City for the disposition of the Property and the development
of the Project on the Property which will benefit the affordable housing needs of the City and assist the
Agency in meeting its inclusionary housing obligations as set forth in the Redevelopment Plan and CRL.
The development of the Project on the Property pursuant to this Agreement is in the best interests of the
City and the Agency and the health, safety and welfare of the City's taxpayers and residents and is in
accordance with the public purposes set forth in the Redevelopment Plan and CRL. Implementation of
this Agreement will further the goals and objectives of the Redevelopment Plan and the City's general
plan by: (i) strengthening the City's land use and social structure; (ii) alleviating economic and physical
blight within the Project Area; and (iii) providing needed affordable housing in the City.
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NOW, THEREFORE, in consideration of the mutual promises set forth in this Agreement and
other good and valuable consideration, the receipt and sufficiency of which is acknowledged by the
Agency and the Developer, the Parties agree as follows:
TERMS AND CONDITIONS
ARTICLE I
DEFINITIONS; PARTIES; REPRESENTATIONS
AND WARRANTIES; EFFECTIVE DATE
1.1 Definitions. All initially capitalized terms not otherwise defined in this Agreement shall
have the following meanings:
1.1.1 Adiusted Familv Income. The term "Adjusted Family Income" shall mean
the anticipated total annual income (adjusted for family size) of each individual or family residing or
treated as residing in a New Home as calculated in accordance with Treasury Regulation 1.167(k) -
3(b)(3) under the United States Internal Revenue Code, as adjusted, based upon family size in accordance
with the household income adjustment factors adjusted and amended from time to time, pursuant to
Section 8 of the United States Housing Act of 1937, as amended.
1.1.2 Affordable Housing Cost. The term "Affordable Housing Costs" shall have
the meaning set forth in California Health and Safety Code Section 50052.5, as it may be amended from
time to time through the term of the Regulatory Agreement.
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1.1.3 Affordable Housing Funds. The term "Affordable Housing Funds" shall
mean that portion of the Agency's general property tax increment allocation set aside pursuant to CRL
Section 33334.2 for the purposes of increasing, improving, providing and preserving the community's
supply of affordable housing available to persons and families of low or moderate income.
1.1.4 Agencv. The term "Agency" shall mean the Redevelopment Agency of the
City of Arcadia, a public body corporate and politic, and any assignee of or successor to its rights, powers
and responsibilities,
1.1.5 Agencv Development Deed Of Trust, The term "Agency Development Deed
of Trust" shall mean that certain Agency Development Deed of Trust attached hereto as Exhibit J
securing the Developer's obligation to repay the Agency Development Loan and the fair market value of
the Property pursuant to the terms of this Agreement and the Agency Development Promissory Note,
1.1.6 Agencv Development Loan. The term "Agency Development Loan" shall
mean a loan in an amount not to exceed Seven Hundred Sixty Thousand Dollars ($760,000) from the
Agency to the Developer in order to assist the Developer in fmancing the development of the Project on
the Property.
1.1.7 Agencv Development Promissory Note. The term "Agency Development
Promissory Note" shall mean that certain promissory note attached hereto as Exhibit I evidencing the
Developer's obligation to repay the Agency Development Loan and the fair market value of the Property
pursuant to the terms of this Agreement and the Agency Development Promissory Note. The Agency
Development Promissory Note shall be secured by the Agency Development Deed of Trust.
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1.1.8 Agencv Ouitclaim Deed. The term "Agency Quitclaim Deed" shall mean the
Quitclaim Deed for the conveyance of the Property from the Agency to the Developer, substantially in the
form of Exhibit E attached to this Agreement.
1.1.9 Agencv's Conditions Precedent. The term "Agency's Conditions Precedent"
shall mean the conditions precedent to the Closing for the benefit of the Agency as set forth in Section
2,8.2.
1.J.l0 Agencv's Title Notice. The term "Agency's Title Notice" shall have the
meaning ascribed to the term in Section 2,1.1.
1.1.11 AlITeement. The term "Agreement" shall mean this Affordable Housing
Agreement between the Agency and the Developer, including the Exhibits attached to this Agreement.
J.J.l2 AMI. The term "AMI" shall mean the area median income for Los Angeles
County, California adjusted for family size appropriate for a New Home by the California Department of
Housing and Community Development in accordance with adjustment factors adopted and amended from
time to time by the United States Department of Housing and Urban Development pursuant to Section 8
of the United States Housing Act of 1937, and California Health and Safety Code Section 50093.
1.1.13 CEOA. The term "CEQA" shall mean that California Environmental Quality
Act, California Public Resources Code Section 21000 et ~.
I. J.l4 Certificate of Completion, The term .....Certificate of Completion" shall mean
the Agency's written certification that the Project is complete and in compliance with the terms and
conditions of this Agreement, substantially in the form of Exhibit F attached to this Agreement.
I. J.l5 City. The term "City" shall mean the City of Arcadia, a California municipal
corporation and any assignee of or successor to its rights, powers and responsibilities.
I. J.l6 City Council. The term "City Council" shall mean the duly elected
governing body of the City.
1.1.17 Close of Escrow: Closing. The terms "Close of Escrow" and "Closing" shall
mean the date when the Escrow Holder is in receipt of all necessary documents and the Escrow Holder is
in a position to comply with the final written instructions of the Parties and causes the Agency Quitclaim
Deed to be recorded and the Developer's Title Policy to be delivered to the Developer.
1.1.18 Closimr Date. The term "Closing Date" shall mean the date of the Closing,
as set forth in Section 2. II .
J.I.19 Closing Statement. The term "Closing Statement" shall mean the statement
prepared by the Escrow Holder indicating among other things, the Escrow Holder's estimate of all funds
to be deposited or received by the Agency or the Developer and all charges to be paid by the Agency or
the Developer through the Escrow.
1.1.20 Completion Guarantee. The term "Completion Guarantee" shall mean a
guarantee from the Developer guaranteeing to the Agency the completion of the Project in accordance
with this Agreement, substantially in the form of Exhibit K attached hereto.
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1.1.21 Completion of Construction. The term "Completion of Construction" shall
mean the issuance by the City of all final (not temporary) certificates of occupancy required for the
occupancy of each and every New Home in Project.
1.1.22 Construction. The term "Construction" shall mean the work of improvement
to be performed on the Property in accordance with the terms and conditions of this Agreement.
1.1.23 Construction Loan, The term "Construction Loan" shall mean a Loan
obtained by the Developer from an institutional Lender or other Lender making such Loans in the normal
course of its business to finance all or part of the Project Costs, which shall be secured by a Lien.
1.1.24 CRL. The term "CRL" shall mean California Community Redevelopment
Law (California Health and Safety Code Section 33000 ~ ll!;g.).
1.1.25 Default. The term "Default" shall mean the failure of a Party to perform any
action or covenant required by this Agreement within the time period provided for such performance in
this Agreement following any provided notice and opportunity to cure.
1.1.26 Developer. The term "Developer" shall mean Trademark Development
Company, LLC, a California limited liability company, and any voluntary successors and assigns to
which a Permitted Transfer of the Project may be made, as authorized by the provisions of this
Agreement.
1.1.27 Developer's Conditions Precedent. The term "Deve}gper's Conditions
Precedent" shall mean the conditions precedent to the Closing for the benefit of the De'veloper as set forth
in Section 2.8.1.
1.1.28 Developer's Due Diligence Completion Certificate. The term "Developer's
Due Diligence Completion Certificate" shall have the meaning ascribed to the term in Section 2.3.1.7.
1.1.29 Developer's Preliminary Title Report. The term "Developer's Preliminary
Title Report" shall have the meaning ascribed to the term in Section 2.1.1.
1.1.30 Developer's Survev, The term "Developer's Survey" shall mean a survey of
the Property prepared by a land surveyor duly licensed by the State of California and in compliance with
ALTNASCM land survey standards.
1.1.31 Developer's Survev Obiection Notice. The term "Developer's Survey
Objection Notice" shall have the meaning ascribed to the term in Section 2.2.
1.1.32 Developer's Title Obiection Notice. The term "Developer's Title Objection
Notice" shall have the meaning ascribed to the term in Section 2.1,1.
1.1.33 Developer's Title Policy. The term "Developer's Title Policy" shall mean
the Title Company's ALTA extended owner's policy of title insurance, with liability in an amount equal
to the fair market value of the Property insuring fee title to the Property vested in the Developer and
subject only to: (i) non-delinquent real property taxes and assessments; (ii) non-monetary title exceptions
approved by the Developer pursuant to Section 2.1; (iii) the provisions of the Agency Quitclaim Deed;
(iv) the applicable provisions of this Agreement; and (v) such other title exceptions, if any, resulting from
documents being recorded or delivered through Escrow.
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1.1.34 Due Diligence Period. The term "Due Diligence Period" shall mean the date
commencing upon the Effective Date of this Agreement and expiring at 5:00 p.m. Pacific Standard Time
(GMT - 8:00) on the thirtieth (30th) calendar day thereafter.
1.1.35 Effective Date. The tenn "Effective Date" shall have the meaning ascribed
to the term in Section 1.5.
1.1.36 Environmental Laws. The tenn "Environmental Laws" shall mean all
federal, state, local, or municipal laws, rules, orders, regulations, statutes, ordinances, codes, decrees, or
requirements of any government authority regulating, relating to, or imposing liability of standards of
conduct concerning any hazardous substance (as later defined), or pertaining to occupational health or
industrial hygiene (and only to the extent that the occupational health or industrial hygiene laws,
ordinances, or regulations relate to hazardous substances on, under, or about the Property), occupational
or environmental conditions on, under, or about the Property, as now or may at any later time be in effect,
including without limitation, the Comprehensive Environmental Response, Compensation and Liability
Act of 1980 ("CERCLA") [42 USC Section 9601 ~ ~.]; the Resource Conservation and Recovery Act
of 1976 ("RCRA") [42 USC Section 6901 et ~.]; the Clean Water Act, also known as the Federal Water
Pollution Control Act ("FWPCA") [33 USC Section 1251 et ~.]; the Toxic Substances Control Act
("TSCA") [15 USC Section 2601 ~ ~.]; the Hazardous Materials Transportation Act ("HMTA") [49
USC Section 1801 et seq.]; the Insecticide, Fungicide, Rodenticide Act [7 USC Section 6901 et ~.] the
Clean Air Act [42 USC Section 7401 ~ ~.]; the Safe Drinking Water Act [42 USC Section 300f ~
~.]; the Solid Waste Disposal Act [42 USC Section 6901 et ~.]; the Surface Mining Control and
Reclamation Act [30 USC Section 101 et ~.] the Emergency Planning and Community Right to Know
Act [42 USC Section 11001 et ~.]; the Occupational Safety and Health Ael [29 USC Section 655 and
657]; the California Underground Storage of Hazardous Substances Act [California Health and Safety
Code Section 25288 et ~.]; the California Hazardous Substances Account Act [California Health and
Safety Code Section 25300 et ~.]; the California Safe Drinking Water and Toxic Enforcement Act
[California Health and Safety Code Section 24249.5 et ~.] the Porter-Cologne Water Quality Act
[California Water Code Section 13000 ~ ~.] together with any amendments of or regulations
promulgated under the statutes cited above and any other federal, state, or local law, statute, ordinance, or
regulation now in effect or later enacted that pertains to occupational health or industrial hygiene, and
only to the extent the occupational health or industrial hygiene laws, ordinances, or regulations relate to
hazardous substances on, under, or about the Property, or the regulation or protection of the environment,
including ambient air, soil, soil vapor, groundwater, surface water, or land use.
1.1.37 Escrow. The tenn "Escrow" shall mean an escrow account opened with
Escrow Holder for the conduct of the purchase and sale transaction described in this Agreement.
1.1.3 8
Escrow Holder. The term "Escrow Holder" shall mean
, California.
located at
1.1.39 Executive Director. The tenn "Executive Director" shall mean the Executive
Director of the Agency or his or her designee or successor in ftmction.
1.1.40 Fair Market Value. The term "Fair Market Value" shall have the meaning
ascribed to the term in Section 2,5.
1.1.41 Financing Commitments. The term "Financing Commitments" shall mean
irrevocable commitments, subject only to customary and reasonable conditions precedent from a Lender
for fmancing the construction, ownership and use ofthe Project.
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1.1.42 Financing Plan. The term "Financing Plan" shall mean the description of the
proposed method of financing the Construction of the Project on the Property, which is attached as
Exhibit H to this Agreement, which, together with the Project Budget, illustrates the financing structure of
the Project.
1.1.43 FIRPTA. The term "FIRPTA" shall mean the United States Foreign
Investment in Real Property Transfer Act.
1.1.44 First Installment. The term "First Installment" shall mean the first
installment of the Agency Development Loan distributed by the Agency to the Developer as provided in
Section 3.4.1.2.1,
1.1.45 First Mortgage Financing. The term "First Mortgage Financing" shall mean
any ofthe following: (i) the Construction Loan; (ii) the Permanent Loan; or (iii) any Replacement Loan
refinancing any Construction Loan and/or any Permanent Loan so long as the total amount refinanced
does not exceed the total original principal amount of each Construction Loan and/or Permanent Loan.
1.1.46 Fiscal Year. The term "Fiscal Year" shall mean a twelve (12) calendar
month period commencing on July I of one year and ending on June 30 of the immediately following
year.
1.1.47
body of the Agency.
Governing Body. The term "Governing Body" shall mean the governing
~
.c
1.1.48 Governmental Agency. The term "Governmental Agency" shall mean any
and all courts, boards, agencies, commissions, offices, or authorities of any nature whatsoever for any
governmental entity (federal, state, county, district, municipal, city, or otherwise) whether now or later in
existence,
1.1.49 Governmental Reauirements. The term "Governmental Requirements" shall
melll! all codes, statutes, ordinances, laws, permits, orders, and any rules and regulations promulgated
thereunder of any Governmental Agency having jurisdiction, partial or otherwise over the Property or the
Proj ect.
1.1.50 Hazardous Substances. The term "Hazardous Substances" shall mean: (i)
those substances included within the definitions of "hazardous substance," "hazardous waste," "hazardous
material," "toxic substance," "solid waste," or "pollutant or contaminate" in CERCLA, RCRA, TSCA,
HMT A, or under any other Environmental Laws; (ii) those substances listed in the United States
Department of Transportation ("DOT") Table [49 CFR 172.101], or by the EPA, or any successor agency,
as hazardous substances [40 CFR Part 302]; (iii) other substances, materials, and wastes that are or
become regulated or classified as hazardous or toxic under federal, state, or local laws or regulations; and
(iv) any material, waste, or substance that is a petroleum or refined petroleum product, asbestos,
polychlorinated biphenyl, designated as a hazardous substance pursuant to 33 USC Section 1321 or listed
pursuant to 33 USC Section 1317, a flammable explosive, or a radioactive material.
1.1.51 Land Use Laws, The term "Land Use Laws" shall have the meaning
ascribed to the term in Section 2.4.1.
1.1.52 Lender, The term "Lender" shall mean a mortgagee or a beneficiary of a
Lien and shall include its successors and assigns.
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1.1.53 Lien, The term "Lien" shall mean any mortgage, deed of trust or other
security instrument encumbering the Developer's fee interest in the Property and/or Project, or any part
thereof.
1.1.54
Loan. The term "Loan" shall mean any loan made as permitted by this
Agreement.
1.1.55 Marketing Application and Initial Owner Selection Plan. The term
"Marketing Application and Initial Owner Selection Plan" shall mean the marketing application and
initial owner selection plan attached to this Agreement as Exhibit L and incorporated into this Agreement
by this reference.
1.1.56 Net Proceeds. The term "Net Proceeds" shall mean the proceeds of any Loan
less the repayment from such Net Proceeds of any Loan made prior in time to said Loan and less any fees
or charges paid out of or reimbursed from the gross proceeds of such Loan, including, without limitation,
broker's commissions and fees, loan commitment fees or other charges assessed by the Lender for making
the Loan, normal closing costs, title insurance premiums, and attorneys' fees. Net Proceeds shall be
determined on a cash basis.
1.1.57 New Homes. The term "New Homes" shall mean the six (6) multi-family
residences constituting the Project. The term "New Home" shall mean one (I) of the multi-family
residences in the Project.
1.1.58 Normal Business Hours. The term "Normal Business Hours" shall mean any
weekday, Monday through Friday, between the hours of 8:00 a.m. and 5:00 p.m. Pacific Standard Time.
1.1.59 Ooening of Escrow. The term "Opening of Escrow" shall have the meaning
ascribed to the term in Section 2.6.
1.1.60
Outside Closing Date. The term "Outside Closing Date" shall mean June
30th, 2006.
1.1.61 PCO Statement. The term "PCO Statement" shall mean a preliminary
change of ownership statement provided for in California Revenue and Taxation Code Section 480.3,
1.1.62 Permanent Loan. The term "Permanent Loan" shall mean any Loan secured
by a Lien, the Net Proceeds of which are used in whole or in part to pay any Lender's Construction Loan,
1.1.63 Permitted Transfer. The term "Permitted Transfer" shall mean any sale,
transfer, assignment or conveyance of the Property or the Project that is approved by the Agency or is
expressly permitted by the terms of this Agreement.
1.1.64 Prime Rate. The term "Prime Rate" shall mean the prime rate of interest or
the equivalent thereof established by Bank of America or if Bank of America is no longer in existence,
then by the largest commercial bank located in California on the date of payment.
1.1.65 Proiect. The term "Project" shall mean the Construction of six (6) multi-
family owner-occupied residences to be owned and occupied by Qualified Households. The Project is
more particularly described in the scope of development ("Scope of Development") attached to this
Agreement as Exhibit C and incorporated into this Agreement by this reference.
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1.1.66 Proiect Area. The term "Project Area" shall mean the Central
Redevelopment Project Area adopted by the City Council of the City on December 26, 1973 by
Ordinance Number 1490.
1.1.67 Proiect Budget. The term "Project Budget" shall mean the budget of costs
and expenses projected to be necessary for the Developer to acquire the Property and construct the Project
on the Property which is attached to this Agreement as Exhibit H and incorporated into this Agreement by
this reference.
1.1.68 Proiect Costs. The term "Project Costs" shall mean the total cost incurred by
the Developer in acquiring the Property and constructing the Project on the Property, consistent with the
Project Budget and in accordance with terms and conditions of this Agreement.
1.1.69 Proiect Entitlements. The term "Project Entitlements" shall mean the precise
plan, parcel map, variances, zone changes, and grading permits necessary for development of the Project
on the Property to be approved by the City. Project Entitlements shall not include building permits or the
formation or approval of districts, bonds or exactions (including, but not limited to, special assessments
and special taxes) necessary to finance, directly or indirectly, the construction of public improvements or
the provision of public services necessary for the Project. Project Entitlements also shall not include
permits to occupy or operate after initial completion of construction has occurred.
1.1.70 Prooertv. The term "Property" shall mean the real property legally described
in Exhibit A and depicted in Exhibit B which is owned by the Agency and shall be conveyed to the
Developer pursuant to the terms and conditions of this Agreement. ...,
1.1.71 Purchase Price. The term "Purchase Price" shall have the meaning ascribed
to the term in Section 2.4.
1.1.72 Oualified Households. The term "Qualified Households" shall mean persons
and/or families who have an Adjusted Family Income which does not exceed one hundred twenty percent
(120%) of the AMI for Los Angeles County.
1.1.73 Oualified Residence Period. The term "Qualified Residence Period" as to a
particular New Home shall mean the period of time beginning on the date escrow closes for the first sale
of the New Home to a Qualified Household and ending on the date which is forty-five (45) years
thereafter.
1.1.74 Redevelooment Plan. The term "Redevelopment Plan" shall mean the
redevelopment plan for the Project Area, as amended from time to time.
1.1.75 Regulatory Al!feement. The term "Regulatory Agreement" shall mean that
certain regulatory agreement entitled "Regulatory Agreement" to be recorded against each New Home
upon the initial sale of such New Home from the Developer to a Qualified Household, substantially in the
form attached hereto as Exhibit G ensuring that the New Home may only be sold, transferred, or
conveyed to a Qualified Household at an Affordable Housing Cost during the Qualified Residence Period.
1.1. 76 Remaining Balance. The term "Remaining Balance" shall mean the
difference between the total sum of the Agency Development Loan and the First Installment distributed
by the Agency to the Developer as provided in Section 3.4.1.2.2.
RVPUBIKV ARNER\710715.1
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.6530
1.1.77 Schedule of Performance. The term "Schedule of Performance" shall mean
the schedule for the performance of certain actions by the Agency and the Developer, pursuant to this
Agreement which is attached to this Agreement as Exhibit D and is incorporated into this Agreement by
this reference.
1.1.78 Scope of Development. The term "Scope of Development" shall mean the
detailed description of the primary elements of the Project which is attached to this Agreement as Exhibit
~ and is incorporated into this Agreement by this reference.
1.1.79 Title Companv. The
Title Company located at
term "Title Company"
. California
shall
mean
1.1.80 Transfer. The term "Transfer" shall mean any voluntary or involuntary sale,
transfer, assignment or conveyance of the Property, any portion thereof or interest therein, or any
agreement to do so, except for a Pennitted Transfer.
1.2 Parties to Agreement.
1.2.1 Agencv, The Agency is a public body, corporate and politic, exerclsmg
governmental functions and powers and organized and existing under CRL. The principal office and
mailing address of the Agency, for the purposes of this Agreement, is 240 West Huntington Drive,
Arcadia, California 91066, Attention: Executive Director, telephone (626) 574-5401; facsimile (626)
446-5729; with copies to Best Best & Krieger LLP, 3750 University Avenue, Suite 400, Riverside,
California 92501, Attention: Kevin K. Randolph, Esq.; telephone (951) 686-1450; facsi~le (951) 686-
3083.
1.2.2 Developer. The Developer is Trademark Development Company, LLC, a
California limited liability company. The principal office and mailing address of the Developer, for the
purposes of this Agreement, is , Attention: ; telephone:
facsimile with copies to
; telephone ; facsimile
1.3 Representations and Warranties.
1.3.! Agencv Representations and Warranties. The representations and warranties
of the Agency contained in this Section 1.3.1 shall be based upon the actual current knowledge of
William R. Kelly, Executive Director of the Agency, as of the Effective Date. All representations and
warranties contained in this Section 1.3.1 are true and correct as of the Effective Date. The Agency's
liability for misrepresentation or breach of warranty, representation or covenant, wherever contained in
this Agreement, shall survive the execution and delivery of this Agreement and the Closing. The Agency
hereby makes the following representations, covenants and warranties and acknowledges that the
execution of this Agreement by the Developer has been made in material reliance by the Developer on
such covenants, representations and warranties:
1.3.1.1 The Agency is a community redevelopment agency, duly formed and
operating under the CRL. The Agency has the legal power, right and authority to enter into this
Agreement and to execute the instruments and documents referenced herein, and to consummate the
transactions contemplated hereby.
1.3.1.2 The persons executing any instruments for or on behalf of the Agency
have been authorized to act on behalf of the Agency and this Agreement is valid and enforceable against
RVPUB\KV ARNER\71071S.1
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the Agency in accordance with its terms and each instrument to be executed by the Agency pursuant
hereto or in connection therewith will, when executed, shall be valid and enforceable against the Agency
in accordance with its terms. No approval, consent, order or authorization of, or designation or
declaration of any other person, is required in connection with the valid execution and delivery of and
compliance with this Agreement by the Agency.
. 1.3.1.3 The Agency has taken all requisite action and obtained all requisite
consents for agreements or matters to which the Agency is a party in connection with entering into this
Agreement and the instruments and documents referenced herein and in connection with the
consummation of the transactions contemplated hereby,
1.3 .1.4 The funds used by the Agency to provide the Agency Development
Loan, originated solely from Affordable Housing Funds. There are no sources of funds other than
Affordable Housing Funds used or to be used by the Agency with respect to the funding of the Agency
Development Loan.
1.3.2 Develooer Reoresentations and Warranties. The representations and
warranties of the Developt:r contained in this Section 1.3.2 shall be based upon the actual current
knowledge of as of the Effective Date. All representations and warranties contained in this
Section 1.3.2 are true and correct as of the Effective Date. The Developer's liability for misrepresentation
or breach of warranty, representation or covenant, wherever contained in this Agreement, shall survive
the execution and delivery of this Agreement and the Closing. The Developer hereby makes the
following representations, covenants and warranties and acknowledges that the execution of this
Agreement by the Agency has been made in material reliance by the Agency on such covenants,
representations and warranties:
~
.0
1.3.2.1 The Developer is a Trademark Development Company, LLC, a
California limited liability company, lawfully entitled to do business in the City. The Developer has the
legal right, power and authority to enter into this Agreement and the instruments and documents
referenced herein and to consurmnate the transactions contemplated hereby. The persons executing this
Agreement and the instruments referenced herein on behalf of the Developer hereby represent and
warrant that such persons have the power, right and authority to bind the Developer.
1.3.2.2 The Developer has taken all requisite action and obtained all requisite
consents in connection with entering into this Agreement and the instruments and documents referenced
herein and the consurmnation of the transactions contemplated hereby, and no consent of any other party
is required for the Developer's authorization to enter into Agreement.
1.3.2.3 Neither the execution of this Agreement nor the conswnmation of the
transactions contemplated hereby shall result in a breach of or constitute a default under any other
agreement, document, instrument or other obligation to which the Developer is a party or by which the
Developer may be bound, or under law, statute, ordinance, rule, governmental regulation or any writ,
injunction, order or decree of any court or governmental body applicable to the Developer or to the
Property.
1.3.2.4 This Agreement is, and all agreements, instruments and docwnents to
be executed by the Developer pursuant to this Agreement shall be, duly executed by and shall be valid
and legally binding upon the Developer and enforceable in accordance with their respective tenns, No
approval, consent, order or authorization of, or designation or declaration of any other person, is required
in connection with the valid execution and delivery of in compliance with this Agreement by the
Developer.
RVPUB\K.V ARNER\710715.1
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1.4 Prohibition Against Change in Ownership, Management and Control of the Developer
and Assignment of Agreement. The qualifications and identity of the Developer is of particular concern
to the Agency. It is because of those qualifications and identity that the Agency has entered into this
Agreement with the Developer. No voluntary or involuntary successor in interest of the Developer shall
acquire any rights or powers under this Agreement except as expressly set forth herein.
1.4.1 The Developer shall not assign all or any part of this Agreement or any rights
hereunder prior to the issuance of the Certificate of Completion for the Project without the prior written
approval of the Agency Executive Director, which approval shall not be unreasonably conditioned,
withheld or delayed,
1.4.2 This Agreement may be terminated by the Agency prior to the Close of
Escrow if there is any material change, whether voluntary or involuntary, in membership, ownership,
management or control of the Developer (other than such changes occasioned by the death or incapacity
of any individual) that has not been approved by the Agency prior to the time of such change or the
Agency may seek other appropriate relief in the event that at any time following the Close of Escrow and
prior to issuance of the Certificate of Completion, a material change in the ownership or control of the
Developer occurs; provided, however, that (i) the Agency shall first notify the Developer in writing of its
intention to terminate this Agreement or assert any other such remedy, and (ii) the Developer shall have
thirty (30) calendar days following its receipt of such written notice to commence and thereafter diligently
and continuously proceed with the cure of the default of the Developer hereunder and submit evidence of
the initiation of satisfactory completion of such cure to the Agency in a form and substance deemed
satisfactory to the Agency, in its reasonable discretion.
~
.c
1.4.3 For the purpose of Section 1.4 the words "material change" refer to any total
or partial sale, assignment, or conveyance, or any trust power or any transfer in any other mode or form
by the Developer.
1.5 Effective Date. This Agreement is dated June 6, 2006 for reference purposes only. This
Agreement shall not become effective until the date on which all of the following are true ("Effective
Date"): (i) this Agreement is approved and executed by the appropriate authorities of the Developer and
delivered to the Agency; (ii) following all legally required notices and hearings, this Agreement is
approved by the Agency's Governing Board after the City Council of the City has made the findings
required by CRL Section 33433; and (iii) this Agreement is executed by the authorized representatives of
the Agency and delivered to the Developer.
1.6 Exhibit List. The following is a list of the Exhibits attached to this Agreement. Each of
the Exhibits is incorporated by this reference into this Agreement.
Exhibit A
Exhibit B
Exhibit C
Exhibit D
Exhibit E
Exhibit F
Exhibit G
Exhibit H
Exhibit I
Exhibit J
Exhibit K
Exhibit L
RVPUB'KV ARNER\710715.1
Legal Description of Property
Site Map of Property
Project Scope of Development
Project Schedule of Performance
Agency Quitclaim Deed
Certificate of Completion
Regulatory Agreement
Project Budget and Financing Plan
Agency Development Promissory Note
Agency Development Deed of Trust
Completion Guarantee
Marketing Application and Initial Owner Selection Plan.
-11-
ARTICLE II
ACQUISITION AND CONVEYANCE OF PROPERTY
2.1 Review and Aooroval of Condition of Title of Prooertv bv the Develooer.
2.1.1 As soon as practicable following the Opening of Escrow, the Agency shall
cause to be delivered to the Developer a preliminary title report for an ALTA extended owner's policy of
title insurance issued by the Title Company, together with copies of all documents identified in Schedule
"B" of the report ("Developer's Preliminary Title Report"), for the Property. The Developer shall notify
the Agency in writing ("Developer's Title Objection Notice") prior to the expiration of the Due Diligence
Period of any objections the Developer may have to the matters set forth in Schedule "B" of the
Developer's Preliminary Title Report. The Agency shall have a period of twenty (20) calendar days after
receipt of the Developer's Title Objection Notice in which to deliver written notice to the Developer
("Agency's Title Notice") of the Agency's election to either: (i) remove the objectionable items prior to
the Close of Escrow, or (ii) decline to remove any such title exceptions; provided, however, that the
Agency shall be required to remove all monetary liens and encumbrances created by or as a result of the
Agency's activities. If the Agency notifies the Developer of its election to decline to remove any such
title exceptions objected to in the Developer's Title Objection Notice, the Developer shall have the right,
by written notice delivered to the Agency within five (5) business days after the Developer's receipt of
the Agency's Title Notice, to agree to either accept the Property subject to the objectionable items
identified in the Developer's Title Objection Notice and the Developer shall take title to the Property at
the Close of Escrow subject to such objectionable title matters, or terminate this Agreement and cancel
the Escrow at no liability to either the Agency or the Developer. In the event that the Escrow is
terminated by the Developer under this Section 2.1.1, the Agency shall be responsible for paying for all
Escrow cancellation costs of the Escrow Holder.
2.1.2 Upon the issuance of any amendment or supplement to the Developer's
Preliminary Title Report for the Property that adds additional exceptions (including, but not limited to,
adding additional exceptions for matters shown on the Developer's Survey), the foregoing right of review
and approval shall also apply to said amendment or supplement (provided that the period for the
Developer to review such amendment or supplement shall be the later of the expiration of the Due
Diligence Period or ten (10) calendar days from receipt of the amendment or supplement) and Escrow
shall be deemed extended by the amount of time necessary to allow such review and approval in the time
and manner set forth in this Section 2.1.2.
2.2 Develooer's Survev. The Developer, at its sole cost and expense, may obtain a survey of
the Property ("Developer's Survey"). The Developer's Survey shall be in a form acceptable to the Title
Company for the deletion of the standard survey exception in the Agency's Title Policy relating to
boundaries, without the addition of further exceptions, unless the same are acceptable to the Developer, in
its sole and absolute discretion. The Developer shall have until the end of the Due Diligence Period to
complete and examine the Developer's Survey and to notify the Agency in writing of any objections the
Developer has to the Developer's Survey ("Developer's Survey Objection Notice"). The Agency shall
have a period of five (5) business days after receipt of the Developer's Survey Objection Notice in which
to deliver written notice to the Developer ("Agency's Survey Notice") of the Agency's election to either:
(i) agree to remove objectionable items identified in the Developer's Survey Objection Notice prior to the
Close of Escrow or (ii) decline to remove such items and terminate this Agreement and the Escrow. If the
Agency notifies the Developer of its intention not to remove objectionable items identified in the
Developer's Survey Objection Notice, the Developer shall have the right, by written notice delivered to
RVPUBIKV ARNEIl.\7!0715.!
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6530
the Agency within five (5) business days after the Developer's receipt of the Agency's Survey Notice, to
agree to accept the Property subject to the objectionable items, in which event, the Agency's election to
terminate this Agreement and cancel the Escrow shall be of no further effect, and the Developer shall
accept the Property at the Close of Escrow subject to such objectionable items identified in the
Developer's Survey Objection Notice. In the event that this Agreement is terminated by the Agency
under this Section 2.2, the Agency shall be responsible for paying for all Escrow cancellation costs of the
Escrow Holder.
2.3 Due Diligence Investigations. During the Due Diligence Period, the Developer shall
have the right to examine, inspect and investigate the Property to determine, in its sole and absolute
discretion, whether the conditions of the Property are acceptable to the Developer ("Due Diligence
Investigations").
2.3.1 Develooer's Due Diligence Investigation of the Prooertv.
2.3. l.l No Due Diligence Investigations of the Property shall unreasonably
disrupt any then existing use or occupancy of the Property or the business operations of the Agency. The
Developer shall be liable for any damage or injury to any person or property arising from the acts of the
Developer, its employees, agents or representatives during the course of any Due Diligence Investigations
on the Property, and the Developer shall indemnify, defend with counsel reasonably acceptable to the
Agency and hold harmless the Agency and its elected officials, officers, directors, attorneys, agents and
employees from any and all liens, claims, demands or liability arising from any Due Diligence
Investigations on the Property.
.....~
2.3.1.2 Prior to commencing any Due Diligence Investigations on the
Property, the Developer shall deliver copies of policies of insurance to the Agency evidencing compliance
by the Developer with the insurance requirements of Section 4.1.19.
2.3.1.3 Due Diligence Investigations on the Property may be conducted by
the Developer and/or its agents during Normal Business Hours upon seventy-two (72) hours prior notice
to the Agency, which notice shall include a description of any investigation work or tests to be conducted
by the Developer on the Property and identifying any consultants of the Developer that will be conducting
the investigations or testing.
2.3.1.4 The Developer shall complete all of its Due Diligence Investigations
within the Due Diligence Period and shall conduct all of its Due Diligence Investigations at its sole cost
and expense. The Developer shall rely solely and exclusively upon the results of its Due Diligence
Investigations of the Property with regard to any physical condition or state of the Property, including,
without limitation, geotechnical soil conditions, compliance with applicable laws pertaining to the use of
the Property by the Developer and any other matters relevant to the physical condition or suitability of the
Property for the Project and not on any express or implied representation or warranty of the Agency.
2.3.1.5 The Agency makes no representation or warranty to the Developer
relating to the condition or suitability of the Property for any intended use or development by the
Developer. Without limiting the foregoing, the Agency makes no representations or warranties as to
whether the Property presently comply with Environmental Laws or whether the Property contain any
Hazardous Substance, except as required by law. Furthermore, to the extent that the Agency has provided
the Developer with any environmental assessments or other information relating to the condition of the
Property, including information and reports prepared by or on behalf of the Agency, the Agency makes no
representation or warranty with respect to the accuracy, completeness, methodology or content of any
such reports or information.
Il.VPUBIKV ARNER\71 0715.1
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2.3.1.6 Without limiting the foregoing, except to the extent covered by an
express representation or warranty of the Agency set forth in this Agreement, the Developer, on behalf of
itself, and its successors and assigns, as of the Closing, waives and releases City and the Agency and its
successors and assigns from any and all demands, claims, legal or administrative proceedings, losses,
liability, damages, penalties, fines, judgments, costs or expenses whatsoever (including, without
limitation, attorneys' fees and costs), whether direct or indirect, known or unknown, foreseen or
unforeseen, arising from or relating to the condition of the Property or any law or regulation applicable to
the Property, including the presence or alleged presence of harmful or Hazardous Substances in, under or
about the Property including, without limitation, any claims under or on account of (i) CERCLA and
similar statutes and any regulations promulgated thereunder or (ii) any other Environmental Laws. As of
the Closing, the Developer expressly waives any rights or benefits available to it with respect to the
foregoing release under any provision of applicable law that generally provides that a general release does
not extend to claims that the creditor does not know or suspect to exist in his or her favor at the time the
release is agreed to, which, if known to such creditor, would materially affect a settlement. By initialing
below, the Developer acknowledges that it fully understands the foregoing, and with this understanding,
nonetheless elects to and does assume all risk for claims known or unknown, described in this Section
2.3.1.6. Without limiting the generality of the foregoing, the undersigned acknowledges that it has been
advised by legal counsel of its own selection and is familiar with the provisions of California Civil Code
Section 1542, and hereby expressly waives any rights it may have under such law, as well as under any
other statutes or common law principles of similar effect to Califomia Civil Code Section 1542, which
reads, as follows:
"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE
CREDITOR DOES NOT KNOW OR SUSPECf TO EXIST IN HIS/HER
FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF
KNOWN BY HIM/HER, MUST HA VE MATERIALLY AFFECTED HIS/HER
SETTLEMENT WITH THE DEBTOR."
Initials of the Developer
2.3.1.7 Within the Due Diligence Period, the Developer shall complete all of
its Due Diligence Investigations of the Property and deliver a certificate signed by the authorized
representative(s) of the Developer to the Agency and Escrow Holder indicating either: (i) the Developer's
unconditional acceptance of the condition of the Property, or (ii) setting forth matters or exceptions
relating to the condition of the Property that the Developer is not able to accept or resolve to its
satisfaction during the Due Diligence Period ("Developer's Due Diligence Completion Certificate").
2.3.1.8 If the Developer does not unconditionally accept the condition of the
Property by the end of the Due Diligence Period as evidenced by the Developer's delivery of the
Developer's Due Diligence Completion Certificate, the Developer shall be deemed to have rejected the
condition of the Property and refused to accept conveyance of title to the Property. Upon such
occurrence, the Developer or the Agency shall have the right to cancel the Escrow and terminate this
Agreement, in the terminating Party's sole discretion, without liability to the other Party or any other
person, by delivery of a written notice of termination to the other Party and Escrow Holder. The
Developer shall accept all conditions of the Property, without any liability of the Agency whatsoever,
upon the Developer's acceptance of the condition of the Property.
2.3.1.9 The Due Diligence Completion Certificate indicating the Developer's
unconditional acceptance of the condition of the Property shall evidence the acceptance of the c15ndition
of the Property by the Developer in its existing "AS IS," "WHERE IS" and "SUBJECf TO ALL
RVPUBIKV AItNER\710715. I
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6530
FAULTS" condition as of the last day of the Due Diligence Period. In its sole discretion, the Developer
may accept the Property in its "AS IS," "WHERE IS" and "SUBJECf TO ALL FAULTS" condition at
any time before the end of the Due Diligence Period.
2.4 Proiect Entitlements.
2.4.1 The Developer acknowledges and agrees that the Developer's use or
development of the Property shall be subject to the City's, zoning, building and land use regulations
(whether contained in ordinances, the municipal code of the City, conditions of approval or elsewhere)
(collectively, "Land Use Laws"). No action by the City with reference to this Agreement or any related
documents shall be deemed to constitute a waiver of any Land Use Laws regarding the Property, the
Developer, any successor-in-interest of the Developer or any successor-in-interest to the Property. Land
Use Laws may only be changed or waived by modification or variance approved by the City. Under no
circumstances shall the Developer commence Construction of the Project on any portion of the Property
prior to the Close of Escrow. Any Project Entitlement, permit or other approval regarding the
Construction of the Project that must attach to the Property prior to the Close of Escrow shall be the
property of the Agency, without further action of either Party or any other person, but shall be transferred
to the Developer at the Close of Escrow. Notwithstanding the foregoing, the Developer and the Agency
hereby acknowledge that at the time the Developer attempts to obtain the Project Entitlements, permits
and other approvals, the Agency will be the fee simple owner of the Property. The Agency shall sign any
applications, or any other documents required by the City in connection with the obtaining of the Project
Entitlements or permit the Developer to sign such applications on behalf of the Agency, within a timely
manner.
2.4.2 The Developer shall be responsible for obtaining all Project Entitlements and
the Developer shall submit all applications therefor and shall be responsible for the costs incurred in
connection with obtaining any such Project Entitlement, unless otherwise provided herein. The
Developer shall also be responsible for satisfying all conditions of approval and mitigation measures. The
Agency shall reasonably cooperate with the Developer's efforts in obtaining any Project Entitlements.
2.4.3 The Developer shall submit the location, purpose and extent of the sale of the
Property to the City under this Agreement to the planning agency of the City, and request that such
planning agency report on the transaction contemplated in this Agreement pursuant to the provisions of
California Government Code Section 65402( c).
2.4.4
Project Entitlements.
The Developer shall notify the Agency immediately upon approval of any
2.5 Purchase and Sale of the Property: Fair Market Value of Property: Purchase Price. The
Agency shall sell the Property to the Developer and the Developer shall purchase the Property from the
Agency pursuant to the terms and conditions of this Agreement. The Agency and the Developer
acknowledge and agree that the Fair Market Value of the Property as of the Effective Date of this
Agreement is One Million Six Hundred Thousand Dollars ($1,600,000) ("Fair Market Value"). The
Agency agrees to sell the Property to the Developer and the Developer agrees to purchase the Property
from the Agency for One Dollar ($1.00) ("Purchase Price"), which is significantly less than the Fair
Market Value of the Property.
2.6 Ooening of Escrow: Escrow Instructions. The purchase and sale of the Property shall
take place through the Escrow to be administered by the Escrow Holder. The Developer shall cause the
Escrow to be opened by delivering a fully executed copy of this Agreement with Escrow Holder
("Opening of Escrow") within ten (10) calendar days from the Effective Date. The Escrow Holder shall
RVPUBIKV ARNER\710715.1
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promptly confirm in writing to both of the Parties the date of the Opening of Escrow, the Escrow number
and title insurance order numbers assigned to the Escrow. The Opening of Escrow shall occur no later
than May 31, 2006 ("Opening Date"). If, for any reason, the Opening of Escrow has not occurred by the
Opening Date, then any Party not then in Default of this Agreement may terminate this Agreement,
without liability to the other Party or any other person for such termination and cancellation, by delivering
written notice of termination to the other Party. Without limiting the termination rights of the Parties
provided for in the previous sentence, if Escrow does not open on or before the Opening Date, and no
Party has yet exercised its contractual right to terminate this Agreement, the Opening of Escrow shall
occur as soon as reasonably possible
2.7 Escrow Instructions. This Agreement constitutes the joint escrow instructions of the
Parties to the Escrow Holder for completion of the Escrow for the purchase and sale of the Property, as
contemplated by this Agreement. The Developer and the Agency shall execute such further Escrow
instructions consistent with the provisions of this Agreement as may be reasonably requested by Escrow
Holder. In the event of any conflict between the provisions of this Agreement and any further Escrow
instructions requested by Escrow Holder, the provisions of this Agreement shall control.
2.8 Conditions to Close of Escrow. The conditions set forth in this Section 2.8 shall be
satisfied or waived by the respective benefited Party on or before the Escrow Closing Date or the Party
benefited by any unsatisfied condition shall not be required to proceed to close the Escrow. Where
satisfaction of any of the foregoing conditions requires action by the Developer or by the Agency, each
Party shall use its reasonable best efforts, in good faith, and at its own cost, to satisfy such condition.
Where satisfaction of any of the conditions requires the approval of a Party, such approval shall be in
such Party's reasonable discretion. Either Party may waive any of the conditions set forth in this
Agreernent, but any such waiver shall be effective only if contained in a writing signed by the waiving
Party and delivered to the Escrow Holder and the other Party.
2.8.1 Developer's Conditions Precedent. The Developer's obligation to purchase
the Property from the Agency on the Escrow Closing Date shall be conditioned upon the fulfillment of the
following conditions precedent ("Developer's Conditions Precedent"), all of which shall be satisfied (or
waived in writing by the Developer pursuant to Section 2.8) prior to the Close of Escrow:
2.8.1.1 The Developer delivers the Developer's Due Diligence Completion
Certificate to both the Agency and Escrow Holder indicating the Developer's unconditional acceptance of
the condition and conveyance of the Property from the Agency, subject only to the other terms and
conditions of this Agreement, prior to the expiration of the Due Diligence Period;
2.8.1.2 The Title Company is unconditionally committed to issue the
Developer's Title Policy to tlle Developer; and
2.8.1.3
The Agency deposits all of the items into Escrow required by Section
2.10.
2.8.2 Agencv's Conditions Precedent. the Agency's obligation to sell the Property
to the Developer on the Escrow Closing Date shall be conditioned upon the fulfillment of the following
conditions precedent ("Agency's Conditions Precedent"), all of which shall be satisfied (or waived in
writing pursuant to Section 2.8) prior to the Close of Escrow:
2.8.2.1 The Developer delivers the Developer's Due Diligence Completion
Certificate to both the Agency and Escrow Holder indicating the Developer's unconditional acceptance of
RVPUBIKV ARNER\710715.1
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6530
the condition and conveyance of the Property from the Agency, subject only to the other terms and
conditions of this Agreement, prior to the expiration of the Due Diligence Period;
2.8.2.2
The Developer deposits all of the items into Escrow required by
Section 2.9;
2.8.2.3 The Title Company IS unconditionally committed to Issue the
Developer's Title Policy to the Developer;
2.8.2.4 The guarantor under the Completion Guarantee has executed and
delivered the Completion Guarantee to the Agency;
2.8.2.5 The Developer has provided the Agency with satisfactory evidence of
Lenders Financing Commitments to provide the Construction Loan and Permanent Loan in an aggregate
amount no less than Dollars ($ 1;
2.8.2.6 The Developer has provided the Agency with satisfactory evidence of
the insurance required by Section 4.1.19;
2.8.2.7 The Developer has obtained the Project Entitlements that are required
for the development of the Project on the Property;
2.8.2.8 The Developer performs all of its material obligations required to be
performed by the Developer under this Agreement prior to Close of Escrow; and
2.8.2.9 The representations, warranties and covenants of the Developer set
forth in this Agreement are true and correct in all material respects on the Effective Date and on the
Escrow Closing Date.
2.9 Developer's Escrow Deoosits. Following satisfaction or waiver of each of the
Developer's conditions precedent to Close of Escrow set forth in Section 2.8.1, the Developer shall
deposit the following items into Escrow and, concurrently, provide a copy of each such item to the
Agency, at least two (2) business days prior to the Escrow Closing Date scheduled by Escrow Holder by
written notice delivered to each of the Parties:
2.9.1 The Development Promissory Note and the Agency Development Deed of
Trust, duly executed and acknowledged by the authorized representatives of the Developer.
2.9.2 An acknowledgment and acceptance of the Agency Quitclaim Deed, duly
executed and acknowledged by the authorized representatives of the Developer.
2.9.3 Two (2) duplicate original copies of the Closing Statement described in
Section 2.14.2, duly executed by the authorized representatives of the Developer.
2.9.4 A PCO Statement executed by the authorized representative(s) of the
Developer for the Property.
2.9.5 A FIRPTA affidavit executed by the authorized representative(s) of the
Developer, in the customary form provided by the Escrow Holder; California Franchise Tax Board Form
593-W executed by the Developer.
RVPUBIKV ARNER\710715.1
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2.9.6 Evidence of the existence, organization and authority of the Developer
reasonably requested by Escrow Holder or Title Company.
2.9.7 A copy of all homeowner's association documents and materials, which have
been approved by the Agency in its reasonable discretion, required for the formation of the homeowner's
association necessary for the maintenance and operation of the common areas of the Project.
2.9.8 Any other documents, instruments or funds required to be delivered by the
Developer under the terms of Agreement or as otherwise reasonably requested by Escrow Holder or Title
Company in order to close Escrow that have not previously been delivered by the Developer.
2.10 Agencv's Escrow Deoosits. Following satisfaction or waiver of each of the Agency's
conditions precedent to Close of Escrow set forth in Section 2.8.2, the Agency shall deposit the following
items into Escrow and, concurrently, provide a copy of each such item to the Developer, at least two (2)
business days prior to the Escrow Closing Date scheduled by Escrow Holder by written notice delivered
to each of the Parties:
2.10.1
The first installment of the Agency Development Loan in an amount not to
Dollars ($ ).
exceed
2.10.2
The Agency Quitclaim Deed executed by the authorized representative of the
Agency.
2.10.3 A FIRPT A affidavit executed by the authorized representative of the Agency,
in the customary form provided by the Escrow Holder; California Franchise Tax Board Form 593-W
executed by the Agency.
2.10.4 Two (2) duplicate original copies of the estimated Closing Statement
described in Section 2.14.2, duly executed by the authorized representative of the Agency.
2.10.5 Any other documents, instruments, funds and records required to be
delivered by the Agency under the terms of this Agreement or as otherwise reasonably requested by
Escrow Holder or Title Company in order to close Escrow that have not been previously delivered by the
Agency.
2.11 Closing Procedure. When each of the Developer's Escrow deposits, as set forth in
Section 2.9, and each of the Agency's Escrow deposits, as set forth in Section 2.10, are deposited into
Escrow, Escrow Holder shall request confirmation in writing from both the Agency and the Developer
that" each of their respective conditions to the Close of Escrow, as set forth in Section 2.8, are satisfied or
waived. Upon Escrow Holder's receipt of written confirmation from both the Agency and the Developer
that each of their respective conditions to the Close of Escrow are satisfied or waived, Escrow Holder
shall "Close Escrow" by doing all of the following:
2.11.1 Recordation of Documents. File the Agency Quitclaim Deed and the Agency
Development Deed of Trust with the Office of the Recorder of Los Angeles County, Califomia, for
recordation in the order set fOlth in Section 2.13;
2.11.2 Distribution of Recorded Documents. Distribute each recorded document to
the Party or other person designated for such distribution in Section 2.13;
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2.11.3 PCO Statements. File the PCO Statements with the Office of the Recorder of
Los Angeles County, California;
2.11.4 FIRPTA Affidavits. File the FIRPTA Affidavits with the United States
Internal Revenue Service;
2.11.5 Forms 593. File Form 593-W with the California Franchise Tax Board;
2.11.6 Title Policv. Obtain and deliver to the Developer the Developer's Title
Policy issued by the Title Company; and
2.11.7 Purchase Price: First Installment of the Agencv Development Loan. Deliver
the Purchase Price to the Agency and the first installment of the Agency Development Loan to the
Developer, less the Developer's share of Escrow closing costs and any other charges to the account of the
Developer.
2.12 Close of Escrow. Close of Escrow shall occur following satisfaction of all conditions
precedent therefor set forth in Section 2.8 and elsewhere in this Agreement have occurred. If the Close of
Escrow has not occurred by the Outside Closing Date, then any Party not then in default of this
Agreement may terminate this Agreement and cancel the Escrow, without liability to the other Party or
any other person for such termination and cancellation, by delivering written notice of termination to the
other Party and Escrow Holder and, thereafter, the Parties shall proceed pursuant to Section 2.16.
2.13 Recordation and Distribution of Documents. Escrow Holder shall cause the following
documents to be recorded in the official records of the Recorder of Los Angeles County, California, in the
following order at Close of Escrow: (i) the Agency Quitclaim Deed, (ii) the Agency Development Deed
of Trust, (iii) this Agreement, and (iv) any other documents to be recorded through Escrow upon the joint
instructions of the Parties. Immediately after Closing, Escrow Holder shall deliver: (i) a certified copy of
the Agency Quitclaim Deed to the Developer and a copy to the Agency, each showing all recording
information, (ii) the original of this Agreement to the Agency and a copy to the Developer, (iii) the
original of the Completion Guarantee to the Agency, (iv) a certified copy of the Agency Development
Deed of Trust to the Agency and a copy to the Developer, each showing all recording information, (v) the
original of the Agency Development Promissory Note to the Agency and a copy to the Developer, and
(vi) the original of any other documents recorded at the Close of Escrow to the Party or other person
designated in the joint escrow instructions of the Parties for such recordation and a copy of each such
document to the other Party or Parties, each showing all recording information.
2.14 Escrow Costs. The Agency shall pay one-half (y,) of the customary and reasonable
escrow fees that may be charged by the Escrow Holder in connection with the Close of Escrow. The
Developer shall pay the cost of the premiums for the Developer's Title Policy, together with one-half (1,)
of the customary and reasonable escrow fees that may be charged by the Escrow Holder in connection
with the Close of Escrow. The Developer shall pay the additional cost of the Developer's Survey, any the
Developer Title Policy endorsements requested by the Developer, additional ALTA extended policy
costs, and any and all survey and subdivision costs associated with the development of the Project on the
Property in compliance with the California Subdivision Map Act and the City's municipal code.
2.14.1 Any other Escrow-related transaction expenses or Escrow closing costs
incurred by the Escrow Holder in connection with this transaction shall be apportioned and paid for by the
Parties to this Agreement in the manner customary in Los Angeles County, California.
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2.14.2 No later than five (5) business days prior to the Closing Date, the Escrow
Holder shall prepare and deliver for approval by the Developer and the Agency the Closing Statement on
the Escrow Holder's standard form indicating, among other things, the Escrow Holder's estimate of all
closing costs, pay-off amounts for the release and reconveyance of all non-tax liens secured by the
Property and prorations made pursuant to this Agreement, if any. The Developer and the Agency shall
assist the Escrow Holder in determining the amount of any and all prorations.
2.15 Escrow Cancellation Charges. If the Escrow fails to close due to the Agency's material
Default under this Agreement, the Agency shall pay all ordinary and reasonable Escrow and title order
cancellation charges. If the Escrow fails to close due to the Developer's material Default under this
Agreement, the Developer shall pay all ordinary and reasonable Escrow and title order cancellation
charges. If the Escrow fails to close for any reason other than the material Default of either the Developer
or the Agency, the Developer and the Agency shall each pay one-half (1/2) of any ordinary and
reasonable Escrow and title order cancellation charges.
2.16 Escrow Cancellation. If this Agreement is terminated pursuant to a contractual right
granted to a Party in this Agreement to terminate this Agreement (other than due to the default of another
Party), the Parties shall do each of the following:
2.16.1 Cancellation Instructions. The Parties shall, within three (3) business days of
Escrow Holder's written request, execute any reasonable Escrow cancellation instructions requested by
Escrow Holder;
2.16.2 Return of Funds and Documents. Within ten (10) business days of receipt by
the Parties of a settlement statement of Escrow and title order cancellation charges from Escrow Holder:
(i) the Developer or Escrow Holder shall return to the Agency any documents previously delivered by the
Agency to the Developer or Escrow Holder, (ii) the Agency or Escrow Holder shall return to the
Developer all documents previously delivered by the Developer to the Agency or Escrow Holder; and (iii)
Escrow Holder shall return to the Developer any funds deposited in Escrow, less the Developer's share of
customary and reasonable Escrow and title order cancellation charges, if any.
2.17 Breach of Article II: Liquidated Damages.
2.17.1 Breach of Article II Bv the Agencv: Liquidated Damages. IN THE EVENT
THAT ESCROW FAILS TO CLOSE DUE TO A MATERIAL BREACH BY AGENCY OF ITS
OBLIGATIONS UNDER THIS ARTICLE II PRIOR TO THE CLOSE OF ESCROW, THE DAMAGES
THAT DEVELOPER WILL INCUR BY REASON OF SUCH MATERIAL BREACH ARE AND WILL
BE IMPRACTICAL AND EXTREMELY DIFFICULT TO ESTABLISH. DEVELOPER AND
AGENCY, IN A REASONABLE EFFORT TO ASCERTAIN WHAT DEVELOPER'S DAMAGES
WOULD BE IN THE EVENT OF SUCH A BREACH BY AGENCY, HAVE AGREED THAT SUCH
DAMAGES SHALL BE A LIQUIDATED AMOUNT OF DOLLARS
($ ). SUCH LIQUIDATED DAMAGES AMOUNT SHALL BE PAID TO
DEVELOPER IN THE EVENT OF MATERIAL BREACH BY AGENCY RESULTING IN THE
TERMINATION OF THIS AGREEMENT AND CANCELLATION OF THE ESCROW, AS
LIQUIDATED DAMAGES, WHICH DAMAGES SHALL BE .DEVELOPER'S SOLE AND
EXCLUSNE REMEDY AT LAW OR IN EQUITY IN THE EVENT OF AND FOR SUCH
MATERIAL BREACH BY AGENCY, ALL OTHER REMEDIES (INCLUDING THE REMEDY OF
SPECIFIC PERFORMANCE AND THE RIGHT TO RECORD A NOTICE OF PENDENCY OF
ACTION AGAINST THE PROPERTY) BEING HEREBY EXPRESSLY WAIVED.
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Initials of the Developer
Initials of the Agency
2.17.2 Breach of Article II Bv the Developer: Liquidated Damages. IN THE
EVENT THAT ESCROW FAILS TO CLOSE DUE TO A MATERIAL BREACH BY DEVELOPER OF
ITS OBLIGATIONS UNDER THIS ARTICLE II PRIOR TO THE CLOSE OF ESCROW, THE
DAMAGES THAT AGENCY WILL INCUR BY REASON OF SUCH MATERIAL BREACH ARE
AND WILL BE IMPRACTICAL AND EXTREMELY DIFFICULT TO ESTABLISH. DEVELOPER
AND AGENCY, IN A REASONABLE EFFORT TO ASCERTAIN WHAT AGENCY'S DAMAGES
WOULD BE IN THE EVENT OF SUCH A MATERIAL BREACH BY DEVELOPER, HAVE
AGREED THAT SUCH DAMAGES SHALL BE A LIQUIDATED AMOUNT OF
DOLLARS ($ ). SUCH LIQUIDATED DAMAGES AMOUNT
SHALL BE PAID TO AGENCY IN THE EVENT OF A MATERIAL BREACH BY DEVELOPER AS
LIQUIDATED DAMAGES, WHICH DAMAGES SHALL BE AGENCY'S SOLE AND EXCLUSIVE
REMEDY AT LAW OR IN EQUITY IN THE EVENT OF AND FOR SUCH MATERIAL BREACH
BY DEVELOPER, ALL OTHER REMEDIES BEING HEREBY EXPRESSLY WAIVED.
ANYTHING IN THIS SECTION 2.l7.2 TO THE CONTRARY
NOTWITHSTANDING, THIS SECTION 2.17.2 SHALL NOT APPLY TO THE REMEDIES
AVAILABLE TO THE AGENCY UPON THE DEVELOPER'S BREACH OF ITS OBLIGATIONS
UNDER THE AGENCY PROMISSORY NOTE AND AGENCY DEED OF TRUST, WHICH SHALL
CONTINUE TO BE ENFORCEABLE IN ACCORDANCE WITH THEIR TERMS
NOTWITHSTANDING ANY LIQUIDATED DAMAGES PAID TO THE AGENCY AS
HEREINABOVE DESCRIBED.
Initials of the Developer
Initials of the Agency
2.18 Report to IRS. After the Close of Escrow and prior to the last date on which such report
is required to be filed with Internal Revenue Service, if such report is required pursuant to Section
6045(e) of the Internal Revenue Code, Escrow Holder shall report the gross proceeds of the purchase and
sale of the Property to the Internal Revenue Service on Form 1099-B, W-9 or such other formes) as may
be specified by the Internal Revenue Service pursuant to Section 6045(e). Concurrently with the filing of
such reporting form with IRS, Escrow Holder shall deliver a copy of the filed form to the Agency and the
Developer.
2.19 Condemnation. In the event that, prior to the Close of Escrow, any governmental entity,
other than the Agency, shall commence any eminent domain or similar proceedings to take any portion of
the Property, following notice of such proceedings, the Developer shall have the option either: (i) to elect
not to acquire the Property and terminate this Agreement; or (ii) the Developer may complete the
acquisition of the Property, in which case the Developer shall be entitled to all the proceeds of such taking
to which the Agency would otherwise have been entitled; provided however, that the Agency agrees that
it shall not settle or compromise the proceedings before the Close of Escrow without the Developer's
prior written consent, which consent will not be unreasonably withheld or delayed. The Developer shall
confirm the exercise of its election under subparagraph (i) or (ii) of the preceding sentence within thirty
(30) calendar days of its receipt of notice of the proceedings.
2.20 Maintenance of ProPertv. The Agency shall, prior to the Close of Escrow, continue to
maintain the Property in substantially the same condition as of the Effective Date of this Agreement and
shall not further encumber, or suffer to be encumbered, the Property with any liens or other non-statutory
encumbrances, nor shall the Agency enter into any contracts with respect to the Property which will
RVPUBIKV ARNER\7107IS. I
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survive the Close of Escrow without the Developer's prior written consent, which may be given or
conditioned in the Developer's sole and absolute discretion.
ARTICLE III
FINANCING OF PROJECT
3.1 Proiect Costs. The Developer has provided a detailed scope of work for the Construction
ofthe Project in the Scope of Development which is attached to this Agreement as Exhibit C. The Project
Costs shall be subject to change from time to time in accordance with this Agreement, subject to prior
written approval by the Agency (which approval shall not be unreasonably withheld). The Executive
Director is hereby authorized to act on behalf of the Agency to approve any revisions to the Project Costs
which do not in any way increase the Agency's financial obligations hereunder.
3.2 Proiect Budget and FinancinlZ Plan. The Developer has submitted to the Agency the
Project Budget and a Financing Plan based on the best, good faith estimate of the Developer of the Project
Costs and sources and uses of funds to pay for the estimated Project Costs. The Parties recognize that
events and circumstances not currently contemplated, some of which are outside of the control of the
Parties, could result in changes in the Project Costs, necessitating changes in the Project Budget and
Financing Plan. To the extent that there are changes to the Project Budget and Financing Plan between
the date of this Agreement and the Closing, the Developer shall submit a revised Project Budget and
Financing Plan to the Agency for the Agency's review and approval as to the sufficiency of the Financing
Commitments to meet revised Project Budget requirements not later than ten (10) business days prior to
Closing.
3.3
3.4 Development Financing.
3.4.1 Agencv Development Loan. Subject to the terms and conditions of this
Agreement, the Agency Development Promissory Note and the Agency Development Deed of Trust, the
Agency shall pay to or for the benefit of the Developer amounts constituting the Agency Development
Loan in an amount not to exceed Seven Hundred Sixty Thousand Dollars ($760,000) in order to assist the
Developer in developing the Project on the Property, as specified in the Project Budget
3.4.1.1 Use of Agencv Develooment Loan. . The Developer shall use the
Agency Development Loan as set forth in this Agreement solely for the Project Costs associated with
completing the Project and in accordance with the Project Budget or to pay down the Construction Loan
or the Permanent Loan. The Developer shall not be entitled to use any portion of the Agency
Development Loan to reimburse the Developer for any internal management, administrative or overhead
expenses or for any purpose other than paying for expenses directly attributable to the development of the
Project on the Property or paying down the Construction Loan or the Permanent Loan.
3.4.1.2 Disbursement of Agencv Development Loan.
3.4.1.2.1 First Installment. The first installment of the Agency
Development Loan in an amount not to exceed Dollars ($ ) ("First
Installment") shall be distributed to the Developer at the Close of Escrow as provided in Article II.
3.4.1.2.2 Remaining Balance of Agencv Development Loan. The
total amount of the Agency Development Loan less the First Installment shall be referred to in this
Agreement as the "Remaining Balance." The Developer shall open an escrow account with an escrow
RVPUBIKV ARNER\7107IS.1
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agent reasonable acceptable to the Agency through which the Developer shall receive and withdraw any
and all proceeds of the Construction Loan and the Remaining Balance of the Agency Development Loan.
The Construction Lender and the Agency shall disburse the proceeds of the Construction Loan and the
Remaining Balance of the Agency Development Loan in the following order: (i) first, all of the
Developer's funds on deposit with the Construction Lender, (ii) second, fifty percent (50%) of the
proceeds of the Remaining Balance of the Agency Development Loan (iii) third, fifty percent (50%) of
the proceeds of the Construction Loan; (iv) fourth, an additional thirty percent (30%) of the proceeds of
the Remaining Balance of the Agency Development Loan; (v) fifth, an additional thirty percent (30%) of
the proceeds of the Construction Loan; (vi) sixth, an additional ten percent (10%) of the proceeds of the
Remaining Balance of the Agency Development Loan; and (vii) seventh, an additional ten percent (10%)
of the proceeds of the Construction Loan.
3.4.1.3 Repayment of Agencv Development Loan. The Developer shall repay
the Agency Development Loan over a period of five (5) years with no interest accruing on the balance of
the Agency Development Loan pursuant to the terms and conditions of the Agency Development
Promissory Note attached to this Agreement as Exhibit 1. The Agency Development Promissory Note
shall be secured by the Agency Development Deed of Trust attached to this Agreement as Exhibit J and
shall be subordinate only to the First Mortgage Financing. As provide in the Agency Development
Promissory Note, the Developer's repayment of the Agency Development Loan shall be callable in full on
demand, including accrued interest, upon Developer's failure to receive permanent certificates of
occupancy for the entire Project within the time period set forth in the Schedule of Performance.
3.4.2 Construction Loan. The proceeds of the Construction Loan shall be used to
defray the costs of developing the Project on the Property, as specified in the Project Budget. During
development of the Project on the Property, a portion of the cost of development shall be funded by a
conventional Construction Loan, to be made by an institutional Lender acceptable to Agency in the
amount of approximately Dollars ($ ). The Lender for
the Construction Loan shall be an institutional Lender subject to the approval of the Agency, which may
be conditioned or withheld in the Agency's reasonable discretion. The terms and provisions of the
Construction Loan shall be similar to ordinary and customary provisions of Lenders on Loans similar to
the Construction Loan. Documentation for the Construction Loan shall be subject to the review and
approval of the Agency, which shall not be unreasonably withheld or delayed. The Construction Loan
shall provide for normal and customary disbursement controls, the payment of normal and customary fees
and expenses for a Construction Loan of similar size and purpose, and for the payment of other expenses
contained in the Project Budget. The Agency's Executive Director shall approve or disapprove the terms
and provisions and documentation for the Construction Loan within five (5) business days of receipt of
such documentation. If the Agency shall disapprove any such financing or Construction Loan documents,
it shall do so by written notice to the Developer stating reasons for such disapproval. In such event, the
Developer shall promptly obtain and submit to the Agency new or revised Construction Loan documents,
as appropriate. The Agency shall approve or disapprove of such new or revised Construction Loan
documents in the same manner and within the same times established in this section for the approval or
disapproval of the Construction Loan documents as initially submitted to Agency.
3.4.3 Permanent Loan. The Developer shall obtain for the Agency's review and
approval, which may be withheld or conditioned in Agency's reasonable discretion, a conditional forward
loan commitment for the Permanent Loan in an amount of approximately Dollars
($ ) from a Lender reasonably acceptable to the Agency. Upon completion
of the development of the Project on the Property, a Permanent Loan shall be obtained from the Lender
which provides the original conditional Loan commitment or from another Lender reasonably acceptable
to Agency, on the best terms then commercially available. The Net Proceeds of the Permanent Loan shall
be used to payoff the Construction Loan.
RVPUBIKV ARNER\710715.1
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3.5 Refinancing. The Developer shall be permitted to refinance (a "Refmancing") the First
Mortgage Financing with the express written consent of the Agency.
.";'-
3.6 No Subordination of Affordabilitv Covenants and Related Encumbrance. The Agency
has found, concurrently with its approval of this Agreement, that an economically feasible method of
financing for the development of the Project, without the subordination of this Agreement, excluding the
Regulatory Agreement, is not reasonably available. The Agency consequently agrees that this Agreement
(excluding the Regulatory Agreement), the Agency Development Promissory Note, the Agency
Development Deed of Trust, (all of the foregoing, "Subordinate Instruments"), may be made junior and
subordinate to the deeds of trust and other documents required in connection with the Construction Loan
and Permanent Loan for the Project established and obtained pursuant to and in compliance with the
provisions of this Agreement. The Executive Director is hereby authorized to execute such subordination
agreements and/or other documents as may be reasonably necessary to evidence subordination, without
further authorization from the Agency, provided that such subordination agreements contain written
commitments which the Executive Director finds are reasonably designed to protect the Agency's
investment in the event of default, such as one or more of the following: (i) the right of the Agency to
cure a default on a senior loan prior to foreclosure; (ii) the right of the Agency to negotiate with a Lender
after notice of default from the Lender and prior to foreclosure; (iii) an agreement that if, prior to
foreclosure on a Loan, the Agency takes title to the Property and cures the default on the Loan, the Lender
will not exercise any right it may have to accelerate the Loan by reason of transfer of title to the Agency;
and (iv) a right of the Agency to reacquire the Property from the Developer at any time after a material
default on a Loan. Nothing set forth herein shall be construed to require the Agency to subordinate any of
the Subordinate Instruments in favor of any person holding any interest in the Property other than the
Lender for the Construction Loan, the Lender for the Permanent Loan, and any other person claiming
under or through any of the foregoing.
3.2.1 No Other Agencv Financial Assistance. The sole source of funds for the
payment of the proceeds of the Agency Development Loan pursuant to this Agreement shall' be
Affordable Housing Funds. No funds of the Agency other than Affordable Housing Funds shall be
committed, pledged, obligated or encumbered by the terms of this Agreement. The Agency does not,
currently, have adequate funds available to pay for the costs to construct or operate the Project in excess
of the Agency Development Loan and the Agency shall be under no obligation to contribute any other
financial assistance to the construction or operation of the Project other than the Agency Development
Loan.
.
ARTICLE IV
DEVELOPMENT OF THE PROJECT
4.1 Development of Proiect and Property. It is the intent of the Parties that the Property be
developed as follows: the construction on the Property of the Project comprised of six (6) owner-
occupied multi-family New Homes reserved for occupancy by Qualified Households during the Qualified
Residence Period, together with all on and off site improvements such as streets, curbs, sidewalks, storm
drains, gutter, utilities, etc (e.g., the public improvements necessary for the development of the Property).
The Project is more particularly described in the Scope of Development.
4.\.1 The City's zoning 'ordinance and the City's building requirements shall be
applicable to the use and development of the Property pursuant to this Agreement. The Developer
acknowledges that any change in the plans for development of the Project on the Property as set forth in
the Scope of Development shall be subject to the City's zoning ordinance and building requirements. No
action by the Agency or the City with reference to this Agreement or related documents shall be deemed'
RVPUBIKV ARNER\7107IS.1
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to constitute a waiver of any lawful City requirements which are applicable to the Property or to the
Developer, any successor in interest of the Developer or any successor in interest pertaining to the
Property, except by modification or variance approved by the City consistent with this Agreement.
4.1.2 The Project shall be developed and completed in conformance with the
approved Scope of Development and any and all other plans, specifications and similar development
documents required by this Agreement, except for such changes as may be mutually agreed upon in
writing by and between the Developer and the Agency and the mutual approval of any such change shall
not be unreasonably conditioned, withheld or delayed. The approval by the City shall be deemed to be
approved by the Agency of the preliminary and final construction plans for the Project, if such plans
approved by the City are reasonably consistent with the Scope of Development.
4.1.3 The approval of the Scope of Development by the Agency shall not be
binding upon the City Council of the City or the planning commission of the City with respect to any
regulatory approvals relating to the development of the Project and/or the public improvements necessary
for the development of the Property as may be required by such other bodies. If any material change of
the Scope of Development as previously approved by the Agency shall be required by another
government official, agency, department or bureau having jurisdiction over the development of the
Property, the Developer and the Agency shall cooperate in efforts to obtain waivers of such revisions, or
to obtain approvals of any such revisions which have been made by the Developer and have thereafter
been approved by the Agency. The Agency shall not unreasonably withhold or delay approval of such
revisions to the Scope of Development; provided however that no such change may result in the reduction
of the number of New Homes that shall be constructed by the Developer and reserved for occupancy by
Qualified Households.
.
4.1.4 Notwithstanding any provision to the contrary in this Agreement, the
Developer agrees to obtain all necessary permits, follow all necessary processes and pay all necessary
fees relating to the completion of the Project on the Property, unless otherwise provided herein.
4. 1 .5 The Developer agrees to accept and comply fully with any and all lawful
conditions of approval applicable to all permits and other governmental actions affecting the development
of the Property and consistent with this Agreement.
4.1.6 The Developer shall prepare and submit to the City all development plans,
construction drawings and related documents for the development of the Project on the Property,
including the public improvements necessary for the development of the Property, consistent with the
Scope of Development. The development plans, construction drawings and related documents submitted
by the Developer to the City shall be in the form of final drawings, plans and specifications. Such final
drawings, plans and specifications are hereby defined as those which contain sufficient detail necessary to
obtain a building permit from the City.
4.1.7 During the preparation of all drawings, plans, specifications and related
documents in connection with the development of the Project on the Property, including the public
improvements necessary for the development of the Property, the Developer shall provide to the Agency
regular progress reports to advise the Agency of the status of the preparation by the Developer, and the
submission to and review by the City of the drawings, plans, specifications and related documents. The
Developer shall communicate and consult with the Agency as frequently as is necessary to ensure that any
such drawings, plans, specifications and related documents submitted by the Developer to the City are
being processed in a timely fashion.
RVPUBIKV ARNER\710715.1
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4.1.8 The Agency shall cooperate with and shall assist the Developer in order for
the Developer to obtain the approval of any and all drawings, plans, specifications and related documents
submitted by the Developer to the City consistent with the Schedule of Performance. Any failure by the
City to approve any such plans or to issue necessary permits for the development of the Project on the
Property within the period provided in the Schedule of Performance shall constitute an enforced delay
hereunder, and the Schedule of Performance shall be extended by that period of time beyond the period
described in the Schedule of Performance in which the City approves said documents; provided, however,
that in the event that the City disapproves of any of such documents, the Developer shall within thirty
(30) calendar days after receipt of such disapproval revise and resubmit such documents in accordance
with the City's requirements and in such form and substance so as to obtain the City's approval thereof.
~-
'.
4.1.9 The Agency shaH approve any modified or revised drawings, plans,
specifications and related documents to which reference is made in this Agreement as long as such
modified or revised drawings, plans, specifications and related documents are generaHy consistent with
the Scope of Development and any other documents related to the development of the Project on the
Property which have been approved by the Agency. Upon any disapproval of such modified or revised
drawings, plans, specifications or related documents, the Agency shall state in writing the reasons for
such disapproval. the Developer, upon receipt of notice of any disapproval, shall promptly revise such
disapproved portions of the drawings, plans, specifications or related documents in a manner that
addresses the reasons for disapproval and reasonably meets the requirements of the Agency in order to
obtain the Agency's approval thereof. the Developer shall resubmit such revised drawings, plans,
specifications and related documents to the Agency as soon as possible after its receipt of the notice of
disapproval and, in any event, no later than thirty (30) calendar days thereafter. the Agency shall approve
or disapprove such revised drawings, plans, specifications and related documents in the same manner and
within the same time as provided for approval or disapproval of drawings, plans, specifications and
related documents initially submitted to the Agency, and if no specific time for approval is specified then
the Agency shall so approve or disapprove the proposed modifications or revisions promptly upon the
written request ofthe Developer. .
4.1.l 0 If the Developer desires to make any material change in the final
construction drawings, plans, specifications and related documents after their approval by the Agency
and/or the City, the Developer shall submit the proposed change in writing to the Agency and/or the City
for approval. The Agency shall notify the Developer of approval or disapproval thereof in writing within
fifteen (15) calendar days after submission to the Agency. This fifteen (15) calendar day period may be
extended by mutual consent of the Developer and the Agency. Any such change shall, in any event, be
deemed to be approved by the Agency unless rejected, in whole or in part, by written notice thereof
submitted by the Agency to the Developer, setting forth in detail the reasons therefore, and such rejection
shall be made within said fifteen (15) calendar day period unless extended as permitted herein. The
Agency shall use its best efforts to cause the City to review and approve or disapprove any such change.
4.1.11 The Developer, upon receipt of a notice of disapproval by the Agency and/or
the City, may revise such portions of the proposed change in the drawings, plans, specifications and
related documents as are rejected and shaH thereafter resubmit such revisions to the Agency and/or the
City for approval in the manner provided in Section 4.1.10.
4.1.12 The Developer shall have the right during the course of construction to make
changes in construction concerning the interior design of the New Homes and minor field changes with
respect to the New Homes, and to make minor field changes to the public improvements necessary for the
development of the Project on the Property without seeking the approval of the Agency; provided,
however, that such changes do not affect the type of use to be conducted within all or any portion of a
New Home or the ability of the City to accept the completion of the public improvements necessary for
RVPUBIKV ARNER\710715.1
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the development of the Project on the Property; and further provided that the City has approved any such
minor field change to either a New Home or the public improvements necessary for the development of
the Project on the Property' in accordance with the standards and practices of the City Building
Department and/or City Public Works Department, as applicable. The term ''minor field changes" shaH
be defined as those changes from the approved final construction drawings, plans and specifications
which have no substantial effect on the improvements and are made in order to expedite the work of
construction in response to field conditions. Nothing contained in this Section 4.1.12 shall be deemed to
constitute a waiver of or change in the City's Building Code or Public Works Department requirements
governing such minor field changes or in any and all approvals by the City otherwise required for such
minor field changes.
4.1.13 Except as otherwise specified in this Agreement, the cost of constructing the
Project on the Property and all other improvements on the Property shall be paid for by the Developer.
4.1.14 Except as otherwise provided in this Agreement, the Developer shall, at its
expense, cause to be prepared, and shall pay any and all fees pertaining to the review and approval thereof
by the City, all required construction, planning and other documents reasonably required by govemmental
bodies pertinent to the development of the Project on the Property hereunder including, but not limited to
the public improvements necessary for the development of the Project on the Property and to the
specifications, drawings, plans, maps, permit applications, land use applications, zoning applications and
design review documents for the New Homes.
4.1.15 Except as otherwise provided in this Agreement, the Developer shaH pay for
any and all costs, including but not limited to the costs of design, construction, relocation and securing of
permits for utility improvements and connections, which may be required in developing the Property.
The Developer shall obtain any and all necessary approvals prior to the commencement of applicable
portions of said construction, and the Developer shaH take reasonable precautions to ensure the safety and
stability of surrounding properties during said construction.
4.1.16 The Developer shall begin and complete aH construction and development
and undertake all obligations and responsibilities of the Developer within the times specified in the
Schedule of Performance, or within such reasonable extensions of such times as may be granted by the
Agency or as otherwise provided for in this Agreement. The Schedule of Performance shaH be subject to
revision from time to time as mutually agreed upon in writing by and between the Developer and the
Agency. Any and all deadlines for performance by the Parties shall be extended for any time attributable
to delays which are not the fault of the performing Party and are caused by the other Party, other than
periods for review and approval or reasonable disapprovals of plans, drawings and related documents,
specifications or applications for permits as provided in this Agreement.
4.1.17 Prior to and during the period of construction of the Project on the Property
and the public improvements necessary for the development of the Property, the Developer shall submit
to the Agency written progress reports when and as reasonably requested by the Agency, but in no event
more frequently than every four (4) weeks. The reports shall be in such form and detail as may
reasonably be required by the Agency. In addition, the Developer shall attend the Agency meetings when
requested to do so by the Agency staff.
4.1.18 Prior to the commencement of Due Diligence Investigations pursuant to
Section 2.3.1.2 or of any construction on the Property, the Developer shaH furnish, or shaH cause to be
furnished, to the Agency duplicate originals or appropriate certificates of public indemnity and liability
insurance in the amount of Two Million Dollars ($2,000,000) combined single limit, naming the Agency
and the City as additional insureds. Said insurance shall cover comprehensive general liability including,
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but not limited to, contractual liability; acts of subcontractors; premises-operations; explosion, collapse
and underground hazards, if applicable; broad form property damage, and personal injury including libel,
slander and false arrest. The Developer agrees to have its general liability coverage endorsed so that all
coverage limits required by this Agreement are available separately for each and every location at which
the Developer conducts operations of any type on behalf of the Agency. The 'Developer warrants that
these limits will not be reduced except by losses attributable to those specific locations and not by losses
from any other operations of the Agency. In addition, the Developer shall provide to the Agency adequate
proof of comprehensive automobile liability insurance covering owned, non-owned and hired vehicles,
combined single limit in the amount of Two Million Dollars ($2,000,000) each occurrence; and proof of
workers' compensation insurance. Any and all insurance policies required hereunder shall be obtained
from insurance companies admitted in California and rated at least B+: XII in Best's Insurance Guide. All
said insurance policies shall provide that they may not be canceled unless the Agency and the City receive
written notice of cancellation at least thirty (30) calendar days prior to the effective date of cancellation.
Any and all insurance obtained by the Developer hereunder shall be primary to any and all insurance
which the Agency and/or City may otherwise carry, including self insurance, which for all purposes of
this Agreement shall be separate and apart from the requirements of this Agreement. Any insurance
policies goveming the Property as obtained by the Agency shall not be transferred from the Agency to the
Developer. Any and all insurance required hereunder shall be maintained and kept in force until the
Agency has issued the Certificate of Completion for the Project.
4.1.19 The Developer for itself and its successors and assigns agrees that in the
construction of the Project on the Property and the public improvements necessary for the development of
the Property, the Developer shall not discriminate against any employee or applicant for employment
becduse of sex, marital status, race, color, religion, creed, national origin, or ancestry. Notwithstanding
the foregoing, the Developer shall use best efforts to offer employment opportunities to local residents
and will seek to acquire goods and services from local vendors.
4.1.20 The Developer shall carry out its construction of the Project on the Property
and the public improvements necessary for the development of the Property in conformity with all
applicable laws, including all applicable Califomia labor standards and requirements and with respect to
the development of the Property. The Developer further agrees and acknowledges that it shall pay no less
than the prevailing per diem rate of wages to all laborers providing labor to the work of improvements on
the Project, as determined by the Director of the Califomia Department of Industrial Relations. The
Developer further agrees to keep all necessary related records in accordance with State of California law.
The Developer agrees to pass through all prevailing wage requirements to any and all subcontractors
hired by the Developer if and when applicable. The Developer hereby agrees to indemnify, defend and
hold the Agency harmless from and against any and all liability arising out of or related to the Developer's
failure to comply with any and all applicable prevailing wage requirements or to require its
subcontractors to comply with any and all applicable prevailing wage requirements.
4.1.21 The Developer shall, at its own expense, secure or shall cause to be secured,
any and all permits which may be required for such construction, development or work by the City or any
other governmental agency having jurisdiction thereof. the Agency shall cooperate in good faith with the
Developer in the Developer's efforts to obtain from the City or any other appropriate governmental
agency any and all such permits including, but not limited to, permits for flags and signs on the Property
and, upon completion of applicable portions of the development of the Project on the Property,
certificates of occupancy.
4.1.22 Officers, employees, agents or representatives of the Agency and the City
shall have the right of reasonable access to the Project and the Property, without the payment of charges
or fees, during Normal Business Hours during the period of construction in order to inspect the work
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being performed in constructing the Project on the Property and to ensure that the Developer is complying
with this Agreement. Such officers, employees, agents or representatives of the Agency and/or the City
shall be those persons who are so identified by the Executive Director. Any and all officers, employees,
agents or representatives of the Agency and the City who enter the Property pursuant hereto shall identify
themselves at the Project office upon their entrance on to the Property and shall at all times be
accompanied by a representative of the Developer while on the Property; provided, however, that the
Developer shall make a representative of the Developer available for this purpose at all times during
Normal Business Hours upon reasonable notice from the Agency. The Agency shall indemnify, defend
and hold the Developer harmless from injury, property damage or liability arising out of the exercise by
the Agency and/or the City of this right of access, other than injury, property damage or liability relating
to the negligence of the Developer or its officers, agents or employees.
4.1.23 The Agency shall inspect relevant portions of the construction of the Project
on the Property prior to issuing any written statements reflecting adversely on the Developer's compliance
with the terms and conditions of this Agreement pertaining to development of the Project on the Property;
provided however, that the Developer has not objected to such an inspection by the Agency or otherwise
prevented the Agency from conducting such an inspection.
4.2 Property Taxes and Assessments. The Developer shall pay prior to the delinquency all
real property taxes and assessments assessed and levied on or against the Property subsequent to the Close
of Escrow. Nothing herein contained shall be deemed to prohibit the Developer from contesting the
validity or amounts of any tax assessment, encumbrance or lien, nor to limit the remedies available to the
Developer in respect thereto, or for claiming exemptions available under California Revenue and
Taxation Code Section 214 (g).
......~
4.3 Prohibition Against Transfer.
4.3.1 Except as expressly provided in Section 4.4, prior to. the recordation of the-
Certificate of Completion with respect to development of the Project on the Property, the Developer shall
not, without prior written approval of the Agency, which may not be unreasonably withheld, delayed or
conditioned, or except as permitted by this Agreement, (i) assign or attempt to assign this Agreement or
any right herein or (ii) make any total or partial sale, transfer, conveyance, lease, leaseback, or assignment
of the whole or any part of the Property or the improvements thereon or permit to be placed on any of the
Property any unauthorized mortgage, Deed of Trust, deed of trust, encumbrance or Lien. This prohibition
shall not apply to the reasonable grant by the Developer of utility easements or permits to facilitate the
development of the Property.
4.3.2 In the absence of specific written agreement or approval by the Agency, no
unauthorized sale, transfer, conveyance, lease, leaseback or assignment of the Property shall be deemed to
relieve the Developer or any other party from any obligations under this Agreement.
4.4 Security Financing: Right of Holders.
4.4.1 Notwithstanding any provision of Section 4.3 to the contrary, any Lien
required for any reasonable method of financing the construction and improvement of the Property is
permitted before the recordation of any Certificate of Completion. The Developer shall notify the Agency
in writing in advance of any Lien if the Developer proposes to enter into the same before the recordation
of any Certificate of Completion. The Developer shall not enter into any such Lien without first
providing written notice to the Agency. The following restrictions apply to any Lien: (i) it must be given
to a responsible financial or lending institution including, without limitation, banks, savings and loan
institutions, insurance companies, real estate investment trusts, pension programs and the like, or other
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acceptable persons or entities for the purpose of financing the construction of the Project on the Property,
and (ii) any Loan made in connection with the Lien must contain customary construction lender
disbursement controls.
4.4.2 The Developer shall promptly notify the Agency of any Lien that has been
created or attached thereto prior to completion of the construction of the Project on the Property whether
by voluntary act of the Developer or otherwise; provided, however, that no notice of filing of preliminary
notices or mechanic's liens need be given by the Developer to the Agency prior to suit being filed to
foreclose such mechanic's lien.
4.4.3 The holder of any mortgage, deed of trust or other security interest
authorized by this Agreement shall in no manner be obligated by the provisions of this Agreement to
construct the Project on the Property or to guarantee such construction or completion. Nothing in this
Agreement shaH be deemed to permit or authorize any such holder to devote the Property to any other
use, or to construct any other improvement thereon, except those uses or improvements provided for or
authorized by this Agreement.
4.4.4 Whenever the Agency shall deliver any notice or demand to the Developer
with respect to any breach or Default by the Developer in the completion of construction of the Project on
the Property, or any breach or Default of any other obligations which, if not cured by the Developer,
entitle the Agency to terminate this Agreement or exercise its right to re-enter the Property, or a portion
thereof, the Agency shall at the same time deliver to each holder of record of any Lien authorized by this
Agreement a copy of such notice or demand. Each such holder shall (insofar as the rights of the Agency
are concerned) Ilave the right, at its option, to commence the cure or remedy of any such Default and to
diligently and continuously proceed with such cure or remedy, within sixty (60) calendar days after the
receipt of the notice; and to add the cost thereof to the security interest debt and the lien of its security
interest. If the Default can only be remedied or cured by such holder upon obtaining possession, such
holder shall seek to obtain possession with diligence and continuity through a receiver or otherwise, and
shall remedy or cure such default within sixty (60) calendar days after obtaining possession; provided that
in the case ofa Default which cannot with diligence be remedied or cured, or the remedy or cure of which
cannot be commenced, within such sixty (60) calendar day period, such holder shall have such additional
time as is reasonably necessary to remedy or cure such Default of the Developer, not to exceed one
hundred eighty (180) calendar days. Nothing contained in this Agreement shall be deemed to permit or
authorize such holder to undertake or continue the construction or completion of the Project on the
Property (beyond the extent necessary to conserve or protect the improvements or construction already
made) without first having expressly assumed the Developer's obligations by written agreement
satisfactory to the Agency. The holder in that event must agree to complete, in the manner provided in
this Agreement, the improvements to which the Lien relates and must submit evidence satisfactory to the
Agency that it has the qualifications and financial responsibility necessary to perform such obligations.
Any such holder completing such improvements in accordance herewith shall be entitled, upon written
request made to the Agency, to be issued the Certificate of Completion by the Agency.
4.4.5 In any case where, one hundred eighty (180) calendar days after Default by
the Developer under this Agreement, the holder of any such Lien has not exercised the option to construct
the applicable portions of the Project on the Property, or has exercised the option but has not proceeded
diligently and continuously with the completion of the construction of the Project on the Property, then in
such event, the Agency may purchase the Lien by payment to the holder of the amount of the unpaid debt,
including principal, accrued and unpaid interest, late charges, costs, expenses and other amounts payable
to the holder by the Developer under the loan documents between holder and the Developer. If the
ownership of the Property has vested in the holder, the Agency, if it so desires, shall be entitled to a
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conveyance from the holder to the Agency upon payment to the holder of an amount equal to the sum of
the following:
4.4.5. 1 The unpaid Lien debt, including principal, accrued and unpaid
interest, late charges, costs, expenses and other amounts payable to the holder by the Developer under the
loan documents between the holder and the Developer, at the time title became vested in the holder (less
all appropriate credits, including those resulting from collection and application of rentals and other
income received during foreclosure proceedings).
4.4.5.2
All expenses, if any, incurred by the holder with respect to
foreclosure.
4.4.5.3 The net expenses, if any (exclusive of general overhead), incurred by
the holder as a direct result of the subsequent ownership or management of the Property, such as
insurance premiums and real estate taxes.
4.4.5.4
The cost of any improvements made by such holder.
4.4.5.5 An amount equivalent to the interest that would have accrued on the
aggregate on such amounts had all such amounts become part of the Lien had the Lien continued in
existence to the date of payment by the Agency.
4.4.6 In the event of a default or breach by the Developer of a Lien with respect to
the Prdperty (or any portion thereof) prior to the issuance of a Certificate of Completion for the Project,
and the holder has not exercised its option to complete the development, the Agency may cure the default
but is under no obligation to do so prior to completion of any foreclosure. In such event, the Agency shall
be entitled to reimbursement from the Developer of all costs and expenses incurred by the Agency in
curing the default. The Agency shall also be deemed to have a Lien of the Agency as may arise under this
Section 4.4.6 upon the Property (or any portion thereof) to the extent of such costs and disbursements.
Any such Lien shall be subordinate and subject to mortgages, deeds of trust or other security instruments
executed by the Developer for the purpose of obtaining the funds to construct and improve the Property as
authorized herein.
4.5 Right of the Agencv to Satisfy Other Liens on the ProPertv after Convevance of Title.
After the conveyance of title to the Property by the Agency to the Developer and prior to the recordation
of the Certificate of Completion, and after the Developer has had a reasonable time to challenge, cure or
satisfy any unauthorized Liens on the Property, the Agency shall after sixty (60) calendar days prior
written notice to the Developer have the right to satisfy any such Liens; provided, however, that nothing
in this Agreement shall require the Developer to payor make provisions for the payment of any tax,
assessment, lien or charge so long as the Developer in good faith shall contest the validity or amount
thereof, and so long as such delay in payment shall not subject the Property or any portion thereof, to
forfeiture or sale.
4.6 Certificate of Completion.
4.6.1 Following the written request therefor by the Developer and the completion
of construction of the Project on the Property, excluding minor building punch-list items to be completed
by the Developer upon any New Home in the Project, the Agency shall furnish the Developer with a
Certificate of Completion for the Project, substantially in the form set forth in Exhibit F. and such
Certificate of Completion shall be recorded after the Developer's completion of construction of the
Project on the Property if requested by the Developer. Notwithstanding any provision set forth herein to
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the contrary, the completion of construction of the Project on the Property shall include the completion of
construction of all of the Ncw Homes on the Property and any related improvements necessary to support
or which meet the requirements applicable to occupancy of each New Home comprising the Project.
4.6.2 The Agency shall not unreasonably withhold the issuance of a Certificate of
Completion. A Certificate of Completion shall be, and shall so state, that it is a conclusive determination
of satisfactory completion of all of the obligations of this Agreement with respect to construction of the
Project. After the recordation of the Certificate of Completion, any party thereafter leasing or otherwise
acquiring any interest in a New Home shall not (because of such lease or acquisition) incur any obligation
or liability under this Agreement, except that such party shall be bound by any covenants contained in the
Agency Quitclaim Deed or other instrument of transfer, which the Agency Quitclaim Deed or other
instrument of transfer shall include the provisions of Section 5.2 and 5.3 of this Agreement.
4.6.3 The Certificate of Completion shall be in such form as to permit it to be
recorded in the Recorder's Office of Los Angeles County, California.
4.6.4 If the Agency refuses or fails to furnish a Certificate of Completion after
written request from the Developer, the Agency shall, within fifteen (15) calendar days of the written
request or within three (3) calendar days after the next regular meeting of the Agency, whichever date
occurs later, provide to the Developer a written statement setting forth the reasons with respect to the
Agency's refusal or failure to furnish a Certificate of Completion. The statement shall also contain the
Agency's opinion of the action the Developer must take to obtain a Certificate of Completion. If the
reason for such refusal is confined to the immediate unavailability of specific items or materials for
construction or landscaping-at a price reasonably acceptable to the Developer or other minor building
"punch-list" items, the Agency may issue its Certificate of Completion upon the posting of a bond or
irrevocable letter of credit, reasonably approved as to form and substance by the Agency Counsel and
obtained by the Developer in an amount representing a fair value of the work not yet completed as
reasonably determined by the Agency. If the Agency'shall have failed to provide such written statement
within the foregoing period, the Developer shall be deemed conclusively and without further action of the
Agency to have satisfied the requirements of this Agreement with respect to the construction of the
Project on the Property as if a Certificate of Completion had been issued therefore.
4.6.5 A Certificate of Completion shall not constitute evidence of compliance with
or satisfaction of any obligation of the Developer to any holder of a Lien securing money loaned to
finance the construction of the Project on the Property, or any part of the Project. A Certificate of
Completion shall not be deemed to constitute a notice of completion as referred to in California Civil
Code Section 3093, nor shall it act to terminate the continuing covenants or conditions subsequent
contained in this Agreement, the Agency Quitclaim Deed, or a Regulatory Agreement.
4.7 Marketing Aoplication and Initial Owner Selection Plan. The Developer shall comply
with the Marketing Application and Initial Owner Selection Plan attached as Exhibit N. and with any
amendment thereto which are imposed by any state or federal agency. The Marketing, Application and
Initial Owner Selection Plan is incorporated herein by this reference.
ARTICLE V
USE OF THE PROPERTY
5.1 Proiect Restricted to Oua!ified Households. The Developer shall record a duly executed
Regulatory Agreement against each New Home concurrently with the initial conveyance of such New
Home to a Qualified Household. As more particularly provided in the Regulatory Agreement, the
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Developer covenants and agrees for itself, its successors, and assigns that each New Home in the Project
remain affordable to Qualified Households for a period of forty-five (45) years following the close of
escrow for the initial conveyance of such New Home to a Qualified Household. The covenants of this
Section 5.1 shall run with the land.
5.2 Obligation to Refrain from Discrimination. the Developer covenants and agrees for
itself, its successors, its assigns and every successor in interest to the Property or any part thereof, that
there shall be no discrimination against or segregation of any person, or group of persons, on account of
sex, marital status, race, color, religion, creed, national origin or ancestry in the sale, lease, sublease,
transfer, use, occupancy, tenure or enjoyment of the Property; nor shall the Developer, itself or any person
claiming under or through it, establish or permit any such practice or practices of discrimination or
segregation with reference to the selection, location, number, use or occupancy of tenants, lessees,
subtenants, sublessee or vendees of the Property.
5.3 Form of Nondiscrimination and NonselITel?:ation Clauses. the Developer covenants and
agrees for itself, its successors, its assigns, and every successor in interest to the Property, or any part
thereof, that the Developer, such successors and such assigns shall refrain from restricting the sale, lease,
sublease, rental, transfer, use, occupancy, tenure or enjoyment of the Property (or any part thereof) on the
basis of sex, marital status, race, color, religion, creed, ancestry or national origin of any person. All
deeds, leases or contracts pertaining thereto shall contain or be subject to substantially the following
nondiscrimination or nonsegregation clauses:
5.3) In Deeds. "The grantee herein covenants by and for itself, its successors and
assigns, and all persons claiming under or through them, that there shall be no discrimination against or
segregation of, any person or group of persons on account of race, color, 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
it, establish or permit any such practice or practices of discrimination or segregation with reference to the
selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessee, or vendees in the
premises herein conveyed. The foregoing covenants shall run with the land."
5.3.2 In Leases. "The Lessee herein covenants by and for itself, its successors and
assigns, and all persons claiming under or through them, and this lease is made and accepted upon and
subject to the following conditions: That there shall be no discrimination against or segregation of any
person or group of persons, on account ofrace, 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 itself, or any person claiming under or through it, establish or permit any
such practice or practices of discrimination or segregation with reference to the selection, location,
number, use, or occupancy, of tenants lessees, sublessee, subtenants, or vendees in the premises herein
leased. "
5.3.3 In Contracts. "There shall be no discrimination against or segregation of any
person or group of persons on account of race, color, creed, religion, sex, marital status, national origin, or
ancestry, in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the premises herein
conveyed or leased, nor shall the transferee or any person claiming under or through it, establish or permit
any such practice or practices of discrimination or segregation with reference to the selection, location,
number, use, or occupancy, of tenants, lessees, sublessees, subtenants, or vendees of the premises herein
transferred." The foregoing provision shall be binding upon and shall obligate the contracting party or
parties and any subcontracting party or parties, or other transferees under the instrument.
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5.4 Effect and Duration of Covenants. The covenants established against discrimination shall
remain in effect in perpetuity. The covenants respecting use, occupancy and maintenance of the Project
shall remain in effect for a period of forty-five (45) years following the close of escrow for the initial
conveyance of a New Home to a Qualified Household. All of the covenants set forth in Section 5.1
through 5.3 shall run with the land and shall constitute equitable servitudes thereon, and shall, without
regard to technical classification and designation, be binding for the benefit and in favor of the Agency,
its successors and assigns and the City.
5.4.1 The Agency may enforce the terms and provisions of this Agreement and the
covenants running with the land for and in its own rights and for the purposes of protecting the interests
of the Community. the Agency shall have the right, if such covenants are breached, to exercise all rights
and remedies and to maintain any actions or suits at law or in equity or such other proper proceedings to
enforce the curing of such breaches to which it or any other beneficiary of such covenants may be
entitled, including, without limitation, to specific performance, damages and injunctive relief. The
Agency shall have the right to assign all of its rights and benefits hereunder to the City.
ARTICLE VI
DEFAULTS, REMEDIES AND TERMINATION
6.1 Defaults.
6.1.1 Subject" to the extensions of time set forth in Section 7.5 hereof, failure or
delay by either Party to perform any tei'itt or provision of this Agreement shall constitute a default under
this Agreement; provided, however, that if a Party otherwise in default commences to cure, correct or
remedy such default within thirty (30) calendar days after receipt of written notice specifying such default
and shall diligently and continuously prosecute such cure, correction or remedy to completion (and where
any time limits for the completion of such cure, correction or remedy are specifically set forth in this
Agreement, then within said time limits), such Party shall not be deemed to be in default hereunder.
6.1.2 The injured Party shall give written notice of default to the Party in default,
specifying the default complained of by the non-defaulting Party. Delay in giving such notice shall not
constitute a waiver of any default nor shall it change the time of default.
6.1.3 Any failure 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.
Delays by either Party in asserting any of its rights and remedies shall not deprive either Party of its right
to institute and maintain any actions or proceedings which it may deem necessary to protect, assert or
enforce any such rights or remedies.
6.2 Legal Actions.
6.2.1 In addition to any other rights or remedies, either Party may institute legal
action to cure, correct or remedy any default, to recover damages for any default, or to obtain any other
remedy consistent with the purposes of this Agreement. Such legal actions must be instituted in the
Superior Court of Los Angeles County, California, or in any other appropriate court in Los Angeles
County, California.
6.2.1.1
enforcement of this Agreement.
The laws of California shall govern the. interpretation and
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6.2.1.2 In the event that any legal action is commenced by the Developer
against the Agency, service of process on the Agency shall be made by personal service upon the
Executive Director or Chairperson of the Agency, or in such other manner as may be provided by law.
6.2.1.3 In the event that any legal action is commenced by the Agency
against the Developer, service of process on the Developer shall be made by personal service on the
Executive Director or the Chairperson of the Board (or such other agent for service of process and at such
address as may be specified in written notice to the Agency), or in such other manner as may be provided
by law, and shall be valid whether made in or outside of California.
6.3 Rights and Remedies are Cumulative. Except with respect to any rights and remedies
expressly declared to be exclusive in this Agreement, the rights and remedies of the Parties are
cumulative and the exercise by either Party of one or more of such rights or remedies shall not preclude
the exercise by it, at the same or different times, of any other rights or remedies for the same default or
any other default by the other Party.
6.4 Damages. If either Party defaults with regard to any provlSlon of this Agreement
following the Close of Escrow, the non-defaulting Party shall serve written notice of such default upon
the defaulting Party. If the defaulting Party does not diligently commence to cure such default within
thirty (30) calendar days after service of the notice of default and promptly complete the cure of such
default within a reasonable time, not to exceed ninety (90) calendar days (or such shorter period as may
otherwise be specified in this Agreement for any specific default), after the service of written notice of
such default, and subject to the.,provisions of Section 7.10, the defaulting Party shall be liable to the other
Party for damages caused by such default.
6.5 Soecific Performance. If the Developer defaults under any of the provisions or covenants
set forth in Article V of this Agreement, the Agency shall serve written notice of such default upon the
Developer. If the Developer does not commence to cure the default and diligently and continuously
proceeds with such cure within thirty (30) calendar days after service of the notice of default, and such
default is not cured within a reasonable time thereafter, the Agency, at its option and in addition to any
other remedies available to it for such default, may institute an action for specific performance of the
terms of Article V.
6.6 Agencv Rights of Termination Following Close of Escrow.
6.6.1 Subject to written notice of default which shall specify the Developer's
default and the action required to commence cure of same and upon thirty (30) calendar days notice to the
Developer of the Agency's intent to terminate this Agreement pursuant to this Section 6.6, the Agency at
its option may terminate this Agreement following the Close of Escrow, if the Developer is in breach of
this Agreement, assigns or attempts to assign this Agreement, or any right therein, or attempts to make
any total or partial sale, lease or leaseback, transfer or conveyance of the whole or any part of the
Property or the improvements to be developed thereon in violation of the terms of this Agreement, and the
Developer does not correct such violation within thirty (30) calendar days from the date of receipt of such
notice.
6.6.2 Subject to written notice of default, which shall specify the Developer's
default and the action required to commence cure of same and upon thirty (30) calendar days notice to the
Developer of the Agency's intent to terminate this Agreement pursuant to this Section 6.6, following the
Close of Escrow, the Agency at its option may terminate this Agreement if the Developer: (i) does not
within the time limits set forth in this Agreement or as specifically provided in the Schedule of
Performance, subject to extensions authorized by this Agreement due to force majeure or otherwise,
RVPUBIKV ARNER\710715.1
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submit development plans, Construction drawings and related documents acceptable to the Planning
Division and Building Division of the City for plan check purposes and in order to obtain building
permits for the improvement of the Property, together with applicable fees therefor prepared to the
minimum acceptable standards as required by the Planning Department and Building Division of the City
for commencement of formal review of such documents and as required by this Agreement, or (ii) does
not carry out its other responsibilities under this Agreement or in accordance with any modification or
variance, precise plan, design review and other environmental or governmental approvals and such
default is not cured or the Developer does not commence and diligently and continuously proceed with
such cure within thirty (30) calendar days after the date of receipt of written demand therefore from the
Agency.
6.7 Right to Reenter. Reoossess and Revest.
6.7.1 Foliowing the Close of Escrow, the Agency shall, upon thirty (30) calendar
days notice to the Developer which notice shall specify this Section 6.7, have the right, at its option, to re-
enter and take possession of all or any portion of the Property, together with all improvements thereon,
and to terminate and revest in the Agency the estate conveyed to the Developer hereunder, if after
conveyance of title and prior to the recordation of the Certificate of Completion, the Developer (or its
successors in interest) shall:
6.7.1.1 Fail to commence Construction of all or any portion of the Project as
required by this Agreement for a period of ninety (90) calendar days after the time specified for such
commencement in the Schedul~ of Performance; provided that the Developer shall not have obtained an
extension or postponement to which the Developer may be entitled pursuant to Section 7.5 hereof; or
6.7.1.2 Abandon or substantially suspend Construction of all or any portion
of the Project as required by this Agreement for a period of ninety (90) calendar days after written notice
of such, abandonment or suspension from the Agency; provided that the Developer shall not have obtained
an extension or postponement to which the Developer may be entitled to pursuant to Section 7.5 hereof;
or
6.7.1.3 Assign or attempt to assign this Agreement, or any rights herein, or
transfer, or suffer any involuntary transfer, of the Property or any part thereof, in violation of this
Agreement, and such violation shall not have been cured within fifteen (15) calendar days after the date of
receipt of written notice thereof from the Agency to the Developer;
6.7.1.4 Fail to complete Construction of the entirety of the Project as required
by this Agreement for a period of ninety (90) calendar days after the time specified for completion in the
Schedule of Performance; provided that the Developer shall not have obtained an extension or
postponement to which the Developer may be entitled pursuant to Section 7.5 hereof; or
6.7.2 The thirty (30) calendar day written notice specified in Section 6.7.1 shall
specify that the Agency proposes to take action pursuant to this Section and shall specify which of the
Developer's obligations set forth in Section 6.7.1 have been breached. The Agency shall proceed with its
remedy set forth herein only in the event that the Developer continues in Default of said obligation(s) for
a period of thirty (30) calendlll" days following such notice or, upon commencing to cure such Default,
fails to diligently and continuously prosecute said cure to satisfactory conclusion.
6.7.3 The right of the Agency to terminate this Agreement and reenter, repossess
and revest in title in the Property shall be subject and subordinate to, shall be limited by and shall not
defeat, render invalid or limit:
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6.7.3.1
Any mortgage, deed of trust or other security interest permitted by
this Agreement;
6.7.3.2 Any rights or interests provided in this Agreement for the protection
of the holders of such mortgages, deeds of trust or other security interests;
6.7.3.3 Any leases, declarations of covenants, conditions and restrictions,
easement agreements or other recorded documents previously approved or authorized by the Agency and
applicable to the Property.
6.7.4 Upon the revesting in the Agency of title to the Property, or any part thereof,
as provided in this Section 6, the Agency shall, pursuant to its responsibilities under California law, use
its best efforts to resell the Property, or any part thereof, at fair market value as soon and in such manner
as the Agency shall find feasible and consistent with the objectives of such law, to a qualified and
responsible party or parties (as determined by the Agency) who will assume the obligations of making or
completing the improvements, or such other improvements in their stead as shall be satisfactory to the
Agency and in accordance with the uses specified for the Property, or any part thereof. Upon such resale
of the Property, or any part thereof, the proceeds thereof shall be applied:
6.7.4.1 First, to make any payment made or necessary to be made to
discharge or prevent from attaching or being made any subsequent Liens (defined in the Agreement) due
to obligations incurred with respect to the making or completion of the agreed improvements or any part
thereof on the Property or anY.J!.ortion ihereof; next to reimburse the Agency for all actual costs and
expenses incurred by the Agency~ including but not limited to customary and reasonable fees or salaries
to third party personnel engaged in such action (but excluding the Agency's general overhead expense), in
connection with the recapture, management and resale of the Property or any portion thereof; all taxes,
assessments and water and sewer charges paid by the Agency with respect to the Property or any portion
thereof; any amounts otherwise owing to the Agency by the Developer and its successor transferee; and
6.7.4.2 Second, to the extent that any and all funds which are proceeds from
such resale are thereafter available, to reimburse the Developer, or its successor transferee the costs
incurred for the development of the Property, or applicable part thereof, or for the Construction of the
improvements thereon including, but not limited to, costs of carry, taxes and items set forth in the
Developer's cost statement which shall be submitted to and approved by the Agency.
6.7.4.3 Any balance remaining after the foregoing application of proceeds
shall be retained by the Agency.
ARTICLE VII
GENERAL PROVISIONS
7.1 Notices. Demands and Communications Between the Parties.
7.1.1 Any and all notices, demands or communications submitted by any Party to
another Party pursuant to or as required by this Agreement shall be proper if in writing and dispatched by
messenger for immediate personal delivery, or by registered or certified United States mail, postage
prepaid, return receipt requested, to the principal office of the Agency and the Developer, as applicable,
as designated in Section 1.2 hereof. Such written notices, demands and communications may be sent in
the same manner to such other addresses as either Party may from time to time designate as provided in
this Section 7.1.1. Any such notice, demand or communication shall be deemed to be received by the
RVPUBIKV ARNER\710715.1
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addressee, regardless of whether or when any return receipt is received by the sender or the date set forth
on such return receipt, on the day that it is dispatched by messenger for immediate personal delivery, or
two (2) calendar days after it is placed in the United States mail as heretofore provided.
7.1.2 In addition to the submission of notices, demands or communications to the
Parties as set forth above, copies of all notices shall also be delivered by facsimile as follows:
to the Developer:
with copy to:
Trademark Development Company, LLC
to the Agency:
with copy to:
Redevelopment Agency of the
City of Arcadia
240 West Huntington Drive
Arcadia, Califomia 91066
Attention: Executive Director Facsimile:
(626) 446-5729
Best Best and Krieger LLP
3750 University Avenue
Suite 400
Riverside, California 9250 I
Attention: Kevin K. Randolph
Facsimile: (951) 686-3083
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7.2 Conflict of Interest. No member, official, employee or agent of the Developer shall have
any personal interest, direct or indirect, in this Agreement, or in the development of the Project on
Property, nor shall any such member, official, employee or agent of the Developer participate in any
decision relating to the Agreement. The Parties represent and warrant that they do not have knowledge of
any such conflict of interest.
7.3 Warranty Against Payment of Consideration for Agreement. The Developer warrants
that it has not paid or given, and will not payor give, any third party any money or other consideration for
obtaining this Agreement. Third parties, for the purposes of this Section 7.3, shall not include persons to
whom fees are paid for professional services if rendered by attorneys, financial consultants, accountants,
engineers, architects and the like when such fees are considered necessary by the Developer.
7.4 Nonliability of the Agencv Officials and Emplovees. No member, official or employee
of the Agency $hall be personally liable to the Developer, or any successor in interest, in the event of any
default or breach by the Agency or for any amount which may become due to the Developer or to its
successor, or on any obligations under the terms of this Agreement, except for gross negligence or willful
acts of such member, officer or employee.
7.5 Enforced Delav: Extension of Time of Performance. In addition to specific provisions of
this Agreement, performance by either Party hereunder shall not be deemed to be in default, or considered
to be a default, where delays or defaults are due to the force majeure events of war, acts of terrorism,
insurrection, strikes, lockouts, riots, floods, earthquakes, fires, casualties, acts of God, acts of the public
enemy, epidemics, quarantinc restrictions, freight embargoes or lack of transportation, weather~aused
delays, inability to secure necessary labor, materials or tools, delays of any contractors, subcontractor or
supplier, which are not attributable to the fault of the Party claiming an extension of time to prepare or
RVPUBIKV ARNER\71 0715.1
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acts or failure to act of any public or governmental agency or entity (provided that acts or failure to act of
the City or the Agency shall not extend the time for the Agency to act hereunder except for delays
associated with a lawsuit or injunction including but without limitation to lawsuits pertaining to the
approval of the Agreement, and the like). An extension of time for any such force majeure cause shall be
for the period of the enforced delay and shall commence to run from the date of occurrence of the delay;
provided however, that the Party which claims the existence of the delay has first provided the other Party
with written notice of the occurrence of the delay within ten (10) calendar days of the commencement of
such occurrence of delay. The inability of the Developer to obtain a satisfactory commitment from a
construction Lender for the improvement of the Property or to satisfy any other condition of this
Agreement relating to the redevelopment of the Property shall not be deemed to be a force majeure event
or otherwise provide grounds for the assertion of the existence of a delay under this Section 7.5. The
Parties hereto expressly acknowledge and agree that changes in either general economic conditions or
changes in the economic assumptions of any of them which may have provided a basis for entering into
this Agreement and which occur at any time after the execution of this Agreement, are not force majeure
events and do not provide. any Party with grounds for asserting the existence of a delay in the performance
of any covenant or undertaking which may arise under this Agreement. Each Party expressly assumes the
risk that changes in general economic conditions or changes in such economic assumptions relating to the
terms and covenants of this Agreement could impose an inconvenience or hardship on the continued
performance of such Party under this Agreement, but that such inconvenience or hardship is not a force
majeure event and does not excuse the performance by such Party of its obligations under this Agreement.
7.6 Inspection of Books and Records. The Agency shall have the right at all reasonable times
at the Agency's cost and expense to inspeol_the books and records of the Developer pertaining to the
Property, and/or the development of the Pr~ject on the Property, as necessary for the Agency, in its
reasonable discretion, to enforce its rights under this Agreement. Matters discovered by the Agency shall
not be disclosed to third parties unless required by law or unless otherwise resulting from or related to the
pursuit of any remedies or the assertion of any rights of the Agency hereunder.
7.7 Approvals. Except as otherwise provided in this Agreement, approvals required of the
Agency or the Developer, or any officers, agents or employees of either the Agency or the Developer,
shall not be unreasonably withheld and approval or disapproval shall be given within the time set forth in
the Schedule of Performance or, ifno time is given, within a reasonable tirne.
7.8 Real Estate Commissions. The Agency shall not be liable for any real estate
commissions, brokerage fees or fmder fees which may arise from or relate to this Agreement.
7.9 Indemnification. The Developer agrees to indemnify and hold the City and the Agency,
and their officers, employees and agents, harmless from and against all damages, judgments, costs,
expenses and fees arising from or related to any act or omission of the Developer in performing its
obligations hereunder. The Agency agrees to indemnify and hold the Developer and its officers,
employees and agents, harmless from and against all damages, judgments, costs, expenses and fees
arising from or related to any act or omission of the Agency in performing its obligations hereunder.
7.10 Release of the Developer from Liability. Notwithstanding any provision herein to the
contrary, the Developer shall be relieved of any and all liability for the obligations of the Developer
hereunder with regard to the development of the Property when a Certificate of Completion has been
issued by the Agency hereunder with respect thereto, other than any covenants and obligations provided
by the Regulatory Agreement or the Agency Quitclaim Deed. The provisions of this Section 7.10 shall
extend to any permitted successor of the Developer. Nothing contained in this Section 7.10 shall be
deemed to impair any security interest held by the Agency in the Project or the Property or to preclude the
Il.VPUBIKV ARNER\710715.1
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Agency from foreclosing thereon or from realizing upon any security encumbered in favor of the Agency
in the event of a default by the Developer.
7.11 Attomevs' Fees. If either Party hereto files any action or brings any action or proceeding
against the other arising out of this Agreement, or is made a party to any action or proceeding brought by
the Escrow Holder or a third party, then as between the Developer and the Agency, the prevailing Party
shall be entitled to recover as an element of its costs of suit, and not as damages, its reasonable attorneys'
fees and costs of experts as fixed by the Court, in such action or proceeding or in a separate action or
proceeding brought to recover such attorneys' fees. For the purposes hereof the words 'reasonable
attorneys' fees" mean and include, in the case of the Agency, salaries and expenses of the lawyers
employed by the Agency (allocated on an hourly basis) who may provide legal services to the Agency in
connection with the representation of the Agency in any such matter.
7.12 Effect. This' Agreement shall be binding upon and inure to the benefit of the Parties
hereto and their respective heirs, executors, administrators, legal representatives, successors and assigns.
7.13 Further Assurances. The Parties agree to reasonably consider such additional actions or
the execution of such other documents as may be reasonably necessary or convenient to the financing,
development, and operation of the Project, although nothing in this Section 7.13 shall be deemed a
representation, guarantee or commitment by either Party to take any action or execute any document.
Without limiting the generality of the foregoing, the Agency agrees that it will not unreasonably withhold
its approval of any amendment to this Agreement requested by any Lender providing financing for the
Project in accordance with the terms of the Financing Plan and Project Budget.
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ARTICLE VIII
ENTIRE AGREEMENT, WAIVERS AND AMENDMENT
8.1 Entire Alrreement. 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 all or any portion of the Property and the development thereof.
8.2 No Merger With Ouitclaim Deed. None of the terms, covenants, agreements or
conditions set forth in this Agreement shall be deemed to be merged with the Agency Quitclaim Deed,
and this Agreement shall continue in full force and effect before and after such conveyance.
8.3 Waivers and Amendments. All waivers of the provisions of this Agreement and all
amendments hereto must be in writing and signed by the appropriate authorities of the Agency and the
Developer.
8.3.1 Authority of Executive Director. The Executive Director of the Agency is
authorized to sign on his or her own authority amendments to this Agreement which are of routine or
technical nature, including minor adjustments not exceeding in the aggregate sixty (60) calendar days to
the Schedule of Performance.
ARTICLE IX
EXECUTION AND RECORDATION OF AGREEMENT
9.1 Execution of Alrreement.
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9.1.1 Counterparts. This Agreement shall be executed in three (3) triplicate
originals each of which is deemed to be an original. This Agreement includes forty three (43) pages
(including signature pages) and fourteen (14) Exhibits, which constitute the entire understanding and
Agreement of the Parties.
9.1.2 Acceptance of Agreement Bv the Agencv. Following its execution by the
Developer and prompt delivery thereafter to the Agency, this Agreement shall be subject to the review
and approval by the Governing Board of the Agency in its sole and absolute discretion within forty-five
(45) calendar days after the date of signature by the Developer. In the event that the Agency has not
approved, executed and delivered this Agreement to the Developer within the foregoing period, then the
Parties shall be mutually released from any further duties or obligations hereunder.
IN WITNESS WHEREOF, the Parties hereto have duly executed this Agreement as of the dates
set forth below.
[Signatures on Following Pages]
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RVPUBIKV ARNER\710715.1
-41.
Date:
ATTEST:
By:
SIGNATURE PAGE
TO
AFFORDABLE HOUSING AGREEMENT
AGENCY:
THE REDEVELOPMENT AGENCY OF THE
CITY OF ARCADIA,
a public body, corporate and politic
By:
William R. Kelly
Executive Director
Agency Secretary
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APPROVED AS TO LEGAL FORM:
BEST BEST & KIUEGER LLP
By:
Agency Counsel
RVPUBIKV ARNER\710715.1
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SIGNATURE PAGE
TO
AFFORDABLE HOUSING AGREEMENT
DEVELOPER:
TRADEMARK DEVELOPMENT COMPANY, LLC
a California limited liability company
Date: By:
Its:
Date: By:
Its:
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RVPUBIKV ARNER\710715. I
-43-
RVPUBIKV ARNER\710715.1
EXHIBIT A
TO
AFFORDABLE HOUSING AGREEMENT
Legal Description of Property
[Insert Legal Description of Property on this Page]
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RVPUBIKV ARNER\710715. I
EXHIBIT B
TO
AFFORDABLE HOUSING AGREEMENT
Site Map of Property
[Insert Site Map of Property on this Page]
....~
EXHIBIT C
TO
AFFORDABLE HOUSING AGREEMENT
Proj ect Scope of Development
As part of the Project and pursuant to the terms and conditions of the Agreement, the Developer
shall: (i) acquire the Property, and (ii) construct on the Property six (6) owner-occupied multi-family
residences which shall be reserved for occupancy, for a period of at least forty-five (45) years, by families
whose household eamings do not exceed one hundred twenty percent (120%) of the Los Angeles County
median income.
The Developer shall construct three (3) two-bedroom New Homes approximately thirteen
hundred (1,300) square feet in size and three (3) three-bedroom New Homes approximately fifteen
hundred (1,500) square feet in size. Every New Home shall contain two (2) bathrooms.
[May wish to add detail showing elevations, architecture, etc.]
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RVPUBIKV ARNER\7107l5.1
EXHIBIT D
TO
AFFORDABLE HOUSING AGREEMENT
Schedule of Performance
[Attached Behind This Page)
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The Developer to submit to the Agency an AL T A lender's title insurance
policy in the amount of the fair market value of the Property
The Developer to submit to the Agency Proof of Insurance in accordance with
Section 4.1.19 of the Agreement
The Developer shall open Escrow with Escrow Holder.
The Developer shall submit tentative tract map application to the Planning
Division. (This process can run concurrently with the plan check process-
developer assumes all potential risks)
The Developer shall submit Construction documents for plan check to the
Building Division. (This process can run concurrently with the tentative tract
map process - developer assumes all potential risks)
The City to provide the Developer with corrections to plans from plan checker
from first submittal.
The Developer to submit revised Construction documents to the Building
Division for second plan check.
The City to provide the Developer with final corrections to plans from second
submittal.
May 23, 2006
May 23, 2006
May 25, 2006
May 30, 2006
May 30, 2006
No later than 28 days
from submittal to the
City
No later than 14 days
from receipt of City
comments.
-.~
No later than 28 days
from re-submittal to the
City.
The Planning Commission to consider the tentative tract map for the Project by July 25, 2006
public hearing.
The Developer to submit final plans for permits and pay fees at the Building
Division.
The Developer to comply with Section 2.8.1 of the Agreement entitled
Developer's Conditions Precedent
The Developer to commence Construction of the Project on the Property.
The Developer to submit to the Agency the final tract map for the Project.
RVPUBIKV ARNER\710715. I
No later than 14 days
upon receipt of City's
final comments.
Prior to the close of
escrow.
No later than 90 days
after conveyance of the
Property to the
Developer.
No later than 60 days
before request for
Certificate of
Completion
6530
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The Agency Board shall consider final tract map for the Project.
No later than 30 days
before request for
Certificate of
Completion
Completion of Construction of the Project on the Property.
Within 12 months after
commencement of
Construction of the
Property.
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RVPUBIKV ARNER\7107IS.1
EXHIBIT E
TO
AFFORDABLE HOUSING AGREEMENT
Agency Quitclaim Deed
[Attached Behind This Page]
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6530
RECORDING REQUESTED BY AND
WHEN RECORDED MAIL TO:
The Redevelopment Agency of the
City of Arcadia
240 West Huntington Drive
Arcadia, CA 91066
Attention: William R. Kelly
Trademark Development Company, LLC
Attention:
THE REDEVELOPMENT AGENCY OF THE CITY OF ARCADIA
QUITCLAIM DEED
CONTAINING POWER OF TERMINA nON AND OTHER COVENANTS
AFFECTING THE FUTURE USE AND OCCUPANCY
OF CERTAIN PROPERTY
PART ONE
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For valuable consideration, the receipt of which is hereby acknowledged, The
Redevelopment Agency of the City of Arcadia, a public body, corporate and politic ("Grantor"), hereby
remises, releases and quitclaims to Trademark Development Company, LLC, a California limited liability
company ("Grantee") the real property legally described in Attachment 1 and by this reference
incorporated into this Quitclaim Deed ("Property").
PART TWO
The quitclaim of the Property by the Grantor to the Grantee in Part One is subject to the
following Community redevelopment terms, conditions and covenants:
Section 1. Convevance Pursuant to Terms of Affordable Housing Agreement. The Property
is conveyed pursuant to that certain Affordable Housing Agreement, dated as of June 6, 2006, by and
between the Grantor and the Grantee ("Agreement"). All capitalized terms not otherwise defined in this
Quitclaim Deed shall have the meaning ascribed to the terms in the Agreement.
Section 2. Condition of Property. The Grantee acknowledges and agrees that the Property
are quitclaimed by the Grantor to the Grantee in its "AS IS," "WHERE IS" and "SUBJECf TO ALL
FAULTS CONDITION," as of the date of recordation of this Quitclaim Deed, with no warranties,
expressed or implied, as to the environmental or other physical condition of the Property, the presence or
absence of any patent or latent environmental or other physical condition on or in the Property, or any
other matters affecting the Property.
Section 3. Proiect Restricted to Oualified Households. Grantee covenants and agrees for
itself, its successors and assigns that each New Home the Developer is to construct as part of the Project
EXHIBIT E- I
RVPUBIKV ARNEIl.\7107IS.1
shall remain affordable to Qualified Households for a period of forty-five (45) years following the close
of escrow for the initial sale of the New Home to a Qualified Household.
Section 4. Obligation to Refrain from Discrimination. The Grantee covenants and agrees
for itself, its successors, its assigns and every successor-in-interest to the Property, or any part thereof,
that there shall be no discrimination against or segregation of any person, or group of persons, on account
of sex, marital status, race, color, religion, creed, national origin or ancestry in the sale, lease, sublease,
transfer, use, occupancy, tenure or enjoyment of the Property; nor shall the Grantee, itself or any person
claiming under or through it, establish or permit any such practice or practices of discrimination or
segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, sub-
tenants, sub-lessees or vendees of the Property.
Section 5. Fonn of Non-Discrimination and Non-Segregation Clauses. The Grantee
covenants and agrees for itself, its successors, its assigns, and every successor-in-interest to the Property,
or any part thereof, that the Grantee, such successors and such assigns shall refrain from restricting the
sale, lease, sublease, rental, transfer, use, occupancy, tenure or enjoyment of the Property (or any part
thereof) on the basis of sex, marital status, race, color, religion, creed, ancestry or national origin of any
person. All deeds, leases or contracts pertaining to the Property shall contain or be subject to
substantially the following non-discrimination or non-segregation covenants:
5.1 In deeds: "The Grantee herein covenants by and for itself, its successors
and assigns, and all persons claiming under or through them, that there shaH be no discrimination against
or segregation of, any person or group of persons on account of race, color, creed, religion, sex, marital
status, national origin, or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure, or
enjoyment of the premises herein conveyed, nor shall the grantee or any person claiming under or through
it, establish or permit any such practice or practices of discrimination or segregation with reference to the
selection, location, number, use or occupancy of tenants, lessees, sub-tenants, sub-lessee, or vendees in
the premises herein conveyed. The foregoing covenants shall run with the land."
5.2 In leases: "The Lessee herein covenants by and for itself, its successors
and assigns, and all persons claiming under or through them, and this lease is made and accepted upon
and subject to the following conditions: That there shall be no discrimination against or segregation of
any person or group of persons, on account of race, color, 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 itself, or any person claiming under or through it, establish or
permit any such practice or practices of discrimination or segregation with reference to the selection,
location, number, use, or occupancy, of tenants lessees, sub-lessees, sub-tenants, or vendees in the
premises herein leased."
5.3 In contracts: "There shaH be no discrimination against or segregation of
any person or group of persons on account of race, color, creed, religion, sex, marital status, national
origin, or ancestry, in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the
premises herein conveyed or leased, nor shall the transferee or any person claiming under or through it,
establish or permit any such practice or practices of discrimination or segregation with reference to the
selection, location, number, use, or occupancy, of tenants, lessees, sub-lessees, sub-tenants, or vendees of
the premises herein transferred. The foregoing provision shall be binding upon and shall obligate the
contracting party or parties and any subcontracting party or parties, or other transferees under the
instrument.
EXHIBIT E-2
RVPUBIKV ARNER\710715.1
6530
Section 6.
Power of Termination.
6.1 Following the Close of Escrow, Grantor shall, upon thirty (30) calendar
days notice to Grantee which notice shall specify this Section 6, have the right, at its option, to re-enter
and take possession of all or any portion of the Property, together with all improvements thereon, and to
terminate and revest in Grantor the estate conveyed to Grantee hereunder, if after conveyance of title, and
prior to the recordation of the Certificate of Completion, Grantee (or its successors in interest) shall:
6.1.1 Fail to commence Construction of all or any portion of the
Project as required by the Agreement for a period of ninety (90) calendar days after the time specified for
such commencement in the Schedule of Performance; provided that Grantee shall not have obtained an
extension or postponement to which Grantee may be entitled pursuant to Section 7.5 of the Agreement; or
6.1.2 Abandon or substantially suspend Construction of all or any
portion of the Project for a period of ninety (90) calendar days after written notice of such abandonment
or suspension from Grantor; provided that Grantee shall not have obtained an extension or postponement
to which Grantee may be entitled to pursuant to Section 7.5 of the Agreement; or
6.1.3 Assign or attempt to assign the Agreement, or any rights the
Agreement, or transfer, or suffer any involuntary transfer, of the Property or any part thereof, in violation
of the Agreement, and such violation shall not have been cured within fifteen (15) calendar days after the
date of receipt of written notice thereof from Grantor to Grantee; or
6.1.4 Fail to complete Construction of the entirety of the Project for a
period of ninety (90) calendar days after the time specified for completion in the Schedule of
Performance; provided that Grantee shall not have obtained an extension or postponement to which
Grantee may be entitled pursuant to Section 7.5 of the Agreement.
6.2 The thirty (30) calendar day written notice specified in Section 6.1 shall
specify that Grantor proposes to take action pursuant to this Section 6 and shall specify which of
Grantee's obligations set forth in Section 6.1 have been breached. Grantor shall proceed with its remedy
set forth herein only in the event that Grantee continues in default of said obligation(s) for a period of
thirty (30) calendar days following such notice or, upon commencing to cure such default, fails to
diligently and continuously prosecute said cure to satisfactory conclusion.
6.3 The right of Grantor to terminate the Agreement and reenter, repossess
and revest in title in the Property shall be subject and subordinate to, shall be limited by and shall not
defeat, render invalid or limit:
6.3.1 Any mortgage, deed of trust or other security interest permitted
by the Agreement;
6.3.2 Any rights or interests provided in the Agreement for the
protection of the holders of such mortgages, deeds of trust or other security interests;
6.3.3 Any leases, declarations of covenants, conditions and
restrictions, easement agreements or other recorded documents previously approved or authorized by
Grantor and applicable to the Property.
6.4 Upon the revesting in Grantor of title to the Property, or any part thereof,
as provided in this Section 6, Grantor shall, pursuant to its responsibilities under California law, use its
EXHIBIT E-3
RVPUBIKV ARNER\710715.1
best efforts to resell the Property, or any part thereof, at fair market value as soon and in such manner as
Grantor shall find feasible and consistent with the objectives of such law, to a qualified and responsible
party or parties (as determined by Grantor) who will assume the obligations of making or completing the
improvements, or such other improvements in their stead as shall be satisfactory to Grantor and in
accordance with the uses specified for the Property, or any part thereof. Upon such resale of the Property,
or any part thereof, the proceeds thereof shall be applied:
6.4.1 First, to make any payment made or necessary to be made to
discharge or prevent from attaching or being made any subsequent Liens due to obligations incurred with
respect to the making or completion of the Project, next to reimburse Grantor for all actual costs and
expenses incurred by Grantor, including but not limited to customary and reasonable fees or salaries to
third party personnel engaged in such action, in connection with the recapture, management and resale of
the Property or any portion thereof; all taxes, assessments and water and sewer charges paid by the
Grantor with respect to the Property or any portion thereof; any amounts otherwise owing to Grantor by
Grantee and its successor transferee; and
6.4.2 Second, to the extent that any and all funds which are proceeds
from such resale are thereafter available, to reimburse Grantee, or its successor transferee, up to the
amount equal to the costs incurred for the development of the Property, or applicable part thereof, or for
the Construction of the improvements thereon including, but not limited to, costs of carry, taxes and items
set.forth in Grantee's cost statement which shall be submitted to and approved by Grantor.
6.4.3 Any balance remaining after the foregoing application of
proceeds shall be retained by Grantor.
PART THREE
Section 7. Covenants Run with the Land of the Property. Each of the covenants and
agreements contained in this Quitclaim Deed touch and concern the Property and each of them is
expressly declared to be a Community redevelopment covenant that runs with the land for the benefit of
the Grantor, and such covenants run with the land in favor of the Grantor for the entire period that such
covenants are in full force and effect, regardless of whether the Grantor is or remains an owner of any
land or interest in land to which such covenants relate. The Grantor, in the event of any breach of any
such covenants, has the right to exercise all of the rights and remedies, and to maintain any actions at law
or suits in equity or other proper proceedings, to enforce the curing of such breach, as provided in the
Agreement or by law. The covenants contained in this Quitclaim Deed are for the benefit of and are
enforceable only by the Grantor and shall survive the Close of Escrow, execution and recordation of this
Quitclaim Deed and the issuance and recordation of a Certificate of Completion, for the time period set
forth for each covenant.
Section 8. Costs and Attornevs' Fees for Enforcement Proceeding. If legal proceedings are
initiated to enforce the rights, duties or obligations of any of the covenants set forth in this Quitclaim
Deed, then the prevailing party in such proceeding shall be entitled to collect its reasonable attorney fees
and costs from the other party in addition to any other damages or relief obtained in such proceedings.
Section 9. Effe<:t of Unlawful Provision: Severability. 'In the event that any provision of this
Quitclaim Deed may be held to be invalid or unlawful by a final judgment of a court of competent
jurisdiction, such invalidity shaH not affect the validity of any other provision of this Quitclaim Deed.
IN WITNESS WHEREOF, the Grantor has caused this Quitclaim Deed to be executed by its
authorized representative(s) on this _ day of . 2006.
EXHIBIT E-4
RVPUBIKV ARNER\710715.1
6530
SIGNATURE PAGE
TO
AGENCY QUITCLAIM DEED
GRANTOR:
THE REDEVELOPMENT AGENCY OF THE
CITY OF ARCADIA,
a public body, corporate and politic
By:
Date:
William R. Kelly
Executive Director
ATTEST:
By:
Agency Secretary
APPROVED AS TO LEGAL FORM:
BEST BEST and KRIEGER LLP
By:
Agency Counsel
[SIGNATURE MUST BE ACKNOWLEDGED I
EXHIBIT E-5
RVPUBIKV ARNER\710715.1
CERTIFICATE OF ACCEPTANCE
OF
THE REDEVELOPMENT AGENCY OF THE CITY OF ARCADIA
QUITCLAIM DEED
The undersigned hereby acknowledges acceptance by Trademark Development Company, LLC, a
California limited liability company, the Grantee, in the Redevelopment Agency of the City of Arcadia
Quitclairn Deed, of the delivery of the subject property described within the Redevelopment Agency of
the City of Arcadia Quitclaim Deed, subject to all of the community redevelopment covenants expressly
set forth or incorporated within the Redevelopment Agency of the City of Arcadia Quitclaim Deed.
GRANTEE:
TRADEMARK DEVELOPMENT COMPANY, LLC
a California limited liability company
Date: By:
Its:
Date: By:
Its:
[ALL SIGNATURES MUST BE ACKNOWLEDGED)
EXHIBIT E-6
RVPUBIKV ARNER\710715.1
6530
ATTACHMENT I
TO
THE REDEVELOPMENT AGENCY OF THE CITY OF ARCADIA
QUITCLAIM DEED
Legal Description of Property
[Insert Legal Description of Property on this Page]
EXHIBIT E-7
RVPUBIKV ARNER\710715.1
rtVPUBIKV ARNER\7J0715.1
EXHIBIT F
TO
AFFORDABLE HOUSING AGREEMENT
Certificate of Completion
[Attached Behind This Page]
EXHIBIT F
6530
RECORDING REQUESTED BY AND
WHEN RECORDED MAIL TO:
The Redevelopment Agency of the
City of Arcadia
240 West Huntington Drive
Arcadia, Califomia 91066
Attention: William R. Kelly
EXEMPT FROM RECORDING FEE PER
GOVERNMENT CODE SECTION 27383
(Space above for Recorder's Use)
CERTIFICATE OF COMPLETION
I, , Executive Director of the Redevelopment Agency of the City of Arcadia
("Agency"), certify as follows:
By its Resolution No. , adopted and approved
- .
, the Agency resolved as follows:
Section I. This Certificate of Completion is made with respect to that certain Affordable Housing
Agreement entered into by and between the Agency and Trademark Development Company, LLC, a
California limited liability company ("Developer") dated June 6, 2006 ("Agreement"). The provisions of
the Agreement are incorporated herein by this reference and shall be deemed to be a part hereof as if set
forth at length herein. The Agreement is an official record of the Agency and a copy of the Agreement
may be inspected in the office of the Agency Secretary, located at 240 West Huntington Drive, Arcadia,
California 91066, during Normal Business Hours. All capitalized terms not otherwise defined herein
shall have the same meaning as ascribed to those terms in the Agreement.
Section 2. The six (6) owner-occupied multi-family residential affordable housing project
("Project") required to be constructed in accordance with the Agreement on that certain real property
("Property") described in the Agreement, has been completed in accordance with the provisions of the
Agreement.
Section 3. Pursuant to Section 4.6 of the Agreement, this Certificate of Completion is a conclusive
determination of the satisfactory completion of the Developer's obligation to complete Construction of
the Project on the Property, including all buildings and all parking, landscaping and related improvements
necessary to support the Project and its use upon the Property; provided, however, that the Agency may
enforce any covenants and obligations surviving this Certificate of Completion in accordance with the
terms and conditions of the Agreement, the Regulatory Agreement, and the Agency Quitclaim Deed.
EXHIBIT F - I
RVPUBIKV ARNEIl.\710715.1
DATED AND ISSUED this _ day of
Date:
ATTEST:
By:
Agency Secretary
APPROVED AS TO LEGAL FORM:
BEST BEST & kRIEGER LLP
By:
Agency Counsel
RVPUBIKV ARNER\710715.1
By:
EXHIBIT F-2
Executive Director
6530
EXHIBIT G
TO
AFFORDABLE HOUSING AGREEMENT
Regulatory Agreement
[Attached Behind This Page]
RVPUB\I(CVI67563 !.I
RECORDING REQUESTED BY AND
WHEN RECORDED MAIL TO:
The Redevelopment Agency of the
City of Arcadia
240 West Huntington Drive
Arcadia, Califomia 91006
Attention: Executive Director
EXEMPT FROM RECORDING FEE PER GOVERNMENT CODE SECTION 27383
REGULATORY AGREEMENT
AND
DECLARATION OF RESTRICTIVE COVENANTS
FOR
OWNER OCCUPIED PROPERTY
LOCATED AT 119 AND 121 ALTA STREET IN THE CITY OF ARCADIA
RVPUBIKCV\675631.1
6530
THIS REGULATORY AGREEMENT AND DECLARATION OF RESTRICTNE
COVENANTS FOR OWNER-OCCUPIED PROPERTY LOCATED AT i 19 AND 121 AL T A STREET
("Regulatory Agreement") is dated , 2006 for reference purposes only, and is made
by and among (i) THE REDEVELOPMENT AGENCY OF THE CITY OF ARCADIA, a public body
corporate and politic ("Agency"), (ii) TRADEMARK DEVELOPMENT COMPANY, LLC a California
limited liability company ("Developer"), and (iii) ("Qualified
Homebuyer"). This Regulatory Agreement is entered into with reference to the following recitals of fact
("Recitals"):
RECITALS
A. The Developer is the fee simple owner of certain real property located at I 19 and 121
Alta Street in the City of Arcadia ("City") identified as Assessor's Parcel Numbers 5773-014-912 and
5773-0 I 4-913 ("Property"). The Property is legally described in Exhibit A attached to this Regulatory
Agreement and incorporated into this Regulatory Agreement by this reference.
B. The Developer acquired the Property from the Agency pursuant to the terms of an
Affordable Housing Agreement dated June 6, 2006 ("Agreement") between the Agency and the
Developer which, among other things, provided for: (i) the Agency's conveyance of its fee interest in the
Property to the Developer for a purchase price of One Dollar ($1); (ii) the Developer's development of
six (6) owner-occupied multifamily residences reserved for occupancy for persons and families of
moderate income ("Project") on the Property, and (iii) the Agency's loan to the Developer of an amount
not to exceed Seven Hundred Sixty Thousand Dollars ($760,000) to assist the Developer in financing
certain development expenses ("Agency Development Loan").
C. The Developer has agreed that in return for the Agency's conveyance 'of the Property,
and the Agency Development Loan, the Developer will develop the Project on the Property and, upon
selling the Property, will make the Property available at an affordable housing cost for persons and
families of moderate income, all as more specifically set forth in this Regulatory Agreement.
D. The Qualified Homebuyer proposes to acquire one of the New Homes in the Project
("New Home") to be owned and occupied by the Qualified Homebuyer as their principal residence. The
legal description of the New Home is attached hereto as Exhibit B and incorporated herein by this
reference.
E. Pursuant to the terms of this Regulatory Agreement, the Agency, Developer and the
Qualified Homebuyer agree that the New Home shall be restricted in certain respects for the term as
provided herein in order to ensure that the New Home will be used and occupied in accordance housing
affordability goals and objectives of the Agency.
RVPUBIKCV1675631.1
NOW, THEREFORE, IN CONSIDERATION OF THE MUTUAL COVENANTS AND
UNDERT AKlNGS SET FORTH HEREIN, AND FOR OTHER GOOD AND VALUABLE
CONSIDERATION, TIm RECEIPT AND SUFFICIENCY OF WHICH IS HEREBY
ACKNOWLEDGED, THE AGENCY, THE DEVELOPER AND THE QUALIFIED HOMEBUYER
DO HEREBY COVENANT AND AGREE FOR THEMSELVES, THEIR SUCCESSORS AND
ASSIGNS AS FOLLOWS:
Section 1. Defmitions of Certain Terms. As used in this Regulatory Agreement, the following
terms shall have the meaning as provided in this Section I unless the specific context of usage of a
particular word or term may otherwise require:
1.1 Adiusted Familv Income. The term "Adjusted Family Income" means the
anticipated total annual income (adjusted for family size) of each individual or family residing or treated
as residing in the New Home as calculated in accordance with Treasury Regulation 1.I67(k) - 3b)(3)
under the Code, as adjusted, based upon family size in accordance with the household income
adjustment factors adjusted and amended from time to time, pursuant to Section 8 of the United States
Housing Act of 1937, as amended.
1.2 Affordable Housing Cost. The term "Affordable Housing Cost" shall have the
meaning as set forth in California Health and Safety Code Section 50052.5(b)(4), as that section may
hereafter be amended from time-to-time. In the event that either the Qualified Homebuyer on the
Delivery Date, or later that a proposed Successor-In-Interest may be (but shall not be required to be) an
"extremely low income household," a "very low income household" or a "lower income household", as
..., these terms are defined in the California Health and Safety Code, then in such event the amount of the
maximum Affordable Housing Cost payable by any such Successor-In-Interest household in connection
with the acquisition of the New Home at any time during the Qualified Residence Period shall be
calculated as set forth in Health and Safety Code 50052.5(b)(1), (2) or (3), as applicable.
1.3 Code. The term "Code" means the Internal Revenue Code of 1986, as amended,
and any regulation, rulings or procedures with respect thereto.
1.4 Deed of Trust. The term "Deed of Trust" means the performance deed of trust
attached to this Regulatory Agreement as Exhibit C and incorporated into this Regulatory Agreement by
this reference which secures the prompt and complete observance and performance of each and every
monetary and non-monetary condition, obligation, covenant and agreement contained in this Regulatory
Agreement.
1.5 Deliverv Date. The term "Delivery Date" means the date of delivery of title and
possession of the New Home from the Developer to the Qualified Homebuyer at the close of the New
Home Escrow. In the case of a Successor-In-Interest, the words "Delivery Date" refers to the date on
which such Successor-In-Interest acquires the New Home from the Qualified Home Buyer; provided
however, that for the purpose of establishing the termination date of the Qualified Residence Period, the
Delivery Date shall refer to the date on which this Regulatory Agreement are recorded.
1.5 First Mortgage Lender. The term "First Mortgage Lender" shall have the
meaning ascribe to it in Section 5.1.
RVPUIlIKCV\6756ll.1
6530
1.6 Maintenance Deficiencv. The term "Maintenance Deficiency" shall have the
meaning ascribed to the term in Section 4.1.
1.7 Moderate-Income Household. The term "Moderate-Income Household" means
persons and families whose income does not exceed one hundred twenty percent (120%) of the then-
current area median income of the County of Los Angeles adjusted for family size by the California
Department of Housing and Community Development in accordance with adjustment factors adopted
and amended from time to time by the United States Department of Housing and Urban Development
pursuant to Section 8 of the United States Housing Act of 1937, as amended, and Califomia Health and
Safety Code Section 50093, as that section may hereafter be amended from time-to-time.
1.8 New Home. The term "New Home" means the owner-occupied multi-family
residence sold from the Developer to the Qualified Homebuyer. The legal description of the New Home
is attached hereto as Exhibit B and incorporated into this Regulatory Agreement by this reference.
1.9 New Home Escrow. The term "New Home Escrow" means and refer to the real
estate conveyance transaction or escrow by and between the Developer and the Qualified Homebuyer (or
later, by and between the Qualified Homebuyer and the Successor-In-Interest). The transfer of the New
Home from the Developer to the Qualified Homebuyer (or later, by and between the Qualified
Homebuyer and the Successor-In-Interest) shall be accomplished upon the close of the New Home
Escrow.
~-
o.
1.]0 Notice of Agencv Concurrence. The term "Notice of Agency Concurrence"
means the acknowledgment in recordable form in which the Agency confirms that the proposed
Successor-In-Interest of the Qualified Homebuyer satisfies all of the Adjusted Family Income and other
requirements of this Regulatory Agreement for occupancy of the New Home by the Successor-In-
Interest at any time during the Qualified Residence Period.
1.11 Qualified Homebuver. The term "Qualified Homebuyer" means the purchaser
of the New Home from the Developer (e.g.: all persons identified as having a property ownership
interest vested in the New Home as of the close of the New Home Escrow). At the close of the New
Home Escrow, the Qualified Homebuyer shall: (i) have an annual Adjusted Family Income which does
not exceed the household income qualification limits of a Moderate-Income Household, and (ii) pay no
more than an Affordable Housing Cost for the New Home pursuant to the terms of the purchase
transaction for the New Home, including all sums payable by the Qualified Homebuyer for its purchase
money mortgage fmancing, insurance, escrow and other fees and costs.
1.12 Qualified Residence Period. The term "Qualified Residence Period" means the
period of time beginning em the Delivery Date and ending on the date which is forty-five (45) years after
the Delivery Date.
1.13 Performance Deed of Trust. The term "Performance Deed of Trust" shall mean
the Performance Deed of Trust attached to this Regulatory Agreement as Exhibit C securing the
Qualified Homebuyer's obligations under this Regulatory Agreement
RVPUBIKCYl675631.1
1.14 ReJwlatorv Agreement. The term "Regulatory Agreement" shall mean this
Regulatory Agreement among the Agency, the Developer and the Qualified Homebuyer.
1.15 Successor-In-Interest. The term "Successor-In-Interest" means the person,
family or household which may acquire the New Home from the Qualified Homebuyer at any time
during the Qualified Residence Period by purchase, assignment, transfer or otherwise. The Successor-
In-Interest shall have an income level for the twelve (12) months prior to the date on which the
Successor-In-Interest acquires the New Home which does not exceed the maximum Adjusted Family
Income level for a Moderate-Income Household. Upon acquisition of the New Home the Successor-In-
Interest shall be bound by each of the covenants, conditions and restrictions of this Regulatory
Agreement.
Section 2. Acknowledlnnents and Rcoresentations of the Oualified Homebuver. The Qualified
Homebuyer hereby acknowledges and represents that, as of the Delivery Date:
2.1 The total household income for the Qualified Homebuyer does not exceed the
maximum amount permitted as Adjusted Family Income for a Moderate-Income Household, adjusted for
actual family size.
2.2 The Qualified Homebuyer shall promptly occupy the New Home after the
Delivery Date as the principal place of residence and the Qualified Homebuyer has not entered into any
arrangement and shall not sell, transfer or assign the New Home to any third party during the Qualified
Residence Period so as to frustrate the purpose ofthis Regulatory Agreement.
~-
..
2.3 The Qualified Homebuyer has no present intention to lease or rent any room or
sublet or rent a portion of the New Home to any relative of the Qualified Homebuyer or to any third
person at any time during the first five (5) years following the Delivery Date.
2.4 The ~ggregate sum payable each month by the Qualified Homebuyer following
the close of the New Home Escrow as principal and interest, property taxes and, property casualty
insurance for the acquisition of the New Home does not exceed the Affordable Housing Cost for the
household.
2.5 The Qualified Homebuyer agrees to provide the Agency with the following
items of information for inspection by the Agency promptly upon written request of the Agency:
2.5.1 State and federal income tax returns filed by all persons who reside in
the New Home for the three (3) most recent tax years preceding the close of the New Home Escrow for
inspection of such State and federal income tax returns; and
2.5.2 current wage, income and salary statements for all persons residing in
the New Home at the close of the New Home Escrow;
2.6 The Qualified Homebuyer has been informed by the Developer that this
Regulatory Agreement imposes certain restrictions on the use and occupancy of the New Home during
the term of this Regulatory Agreement and that this Regulatory Agreement imposes certain restrictions
RVPUBIKCVI67563 J.I
6530
on the resale of the New Home during the Qualified Residence Period. The Qualified Homebuyer
acknowledges and understands that these restrictions shall be applicable to the New Home and to any
resale of the New Home from the Delivery Date to the end of the Qualified Residence Period which is
,20 .
Initials of
Qualified Homebuyer
Section 3. Covenant of the Oualified Homebuver to Maintain Affordabilitv of the New Home
During the Oualified Residence Period and Covenant Relating to Sale or Transfer of the New Home
During the Qualified Residence Period to a Successor-In-Interest.
3.1 The Qualified Homebuyer for itself, its heirs, successors and assigns, hereby
covenants and agrees that during the term of the Qualified Residence Period the New Home shall be
used and occupied by the Qualified Homebuyer as its principal residence, and that the New Home shall
be reserved for sale, use and occupancy by the Qualified Homebuyer and/or for another Moderate-
Income Household as a Successor-In-Interest at an Affordable Housing Cost. The Qualified
Homebuyer, for itself, its heirs, successors and assigns, further covenants and agrees that, during the
Qualified Residence Period, the Agency shall have the right and duty as provided in this Section 3 to
verify that each proposed Successor-In-Interest of the Qualified Homebuyer in the New Home satisfies
the income requirements and Affordable Housing Cost limitations of a Moderate-Income Household
(based upon the Adjusted Family Income of each household).
~-:--
3.2 The Qualified Homebuyer, for itself, its successors and assigns, hereby
covenants and agrees that during the term of the Qualified Residence Period the Qualified Homebuyer
shall not sell, transfer or otherwise dispose of the New Home (or any interest therein) to a Successor-In-
Interest without first giving written notice to the Agency and without first obtaining the written
concurrence of the Agency as provided herein. At least forty-five (45) calendar days prior to the date on
which the Qualified Homebuyer proposes to transfer title in the New Home to a Successor-In-Interest,
the Qualified Homebuyer shall send a written notice to the Agency as provided in Section 17 of the
intention of the Qualified Homebuyer to sell the New Home to a Successor-In-Interest which includes
the following true and correct information:
3.2.1 name of the proposed Successor-In-Interest (including the identity of all
persons in the household of the Successor-In-Interest, proposing to reside in the New Home);
3.2.2 copies of state and federal income tax returns for the Successor-In-
Interest for the calendar year preceding the year in which the notice of intention to sell the New Home is
given to the Agency;
3.2.3 resale price of the New Home payable by the Successor-In-Interest,
including the terms of all purchase money mortgage financing to be assumed, provided or obtained by
the Successor-In-Interest, escrow costs and charges, realtor broker fees and all other resale costs or
charges payable by either the Qualified Homebuyer or the Successor-In-Interest;
Il.VPUBIKCYl67563 !.l
3.2.4 name address, and telephone number of the escrow company which
shall coordinate the transfer of the New Home from the Qualified Homebuyer to the Successor-In-
Interest;
3.2.5 appropriate mortgage credit reference for the Successor-In-Interest with
a written authorization signed by the Successor-In-Interest authorizing the Agency to contact each such
reference; and
3.2.6 such other relevant information as the Agency may reasonably request.
3.3 Within twenty (20) days following receipt of the notice of intention described in
Section 3.2, the Agency shall provide the Qualified Homebuyer with either a preliminary confirmation
of approval or a preliminary rejection of approval in writing of the income and household occupancy
qualifications of the Successor-In-Interest. The Agency shall not unreasonably withhold approval of any
proposed sale of the New Home to a Successor-In-Interest who satisfies the Adjusted Family Income and
the Affordable Housing Cost requirements for occupancy of the New Home and for whom the other
information as described in Section 3.2 has been provided to the Agency. In the event that the Agency
may request additional information relating to the confirmation of the matters described in Section 3.2,
the Qualified Homebuyer shall provide such information to the Agency as promptly as feasible.
3.4 Upon its final confirmation of approval of the Adjusted Family Income and
Affordable Housing Cost eligibility of the Successor-In-Interest to acquire the New Home, the Agency
shall deliver a written acknowledgment and approval of the resale of the New Home to the Successor-In-
Interest in reCOrdable form to the escrow holder referenced in Section 3.2 above, and thereafter the
Successor-In-Interest may acquire the New Home subject to the satisfaction of the following conditions:
3.4.1 the recordation of the Notice of Agency Concurrence executed by the
Successor-In-Interest and the Agency at the close of the resale escrow;
3.4.2 the escrow holder shall have provided the Agency with a copy of the
customary form of the final escrow closing statement of the Qualified Homebuyer and the final escrow
closing statement for the Successor-In-Interest; and
3.4.3 the other conditions of the resale escrow as established by the Qualified
Homebuyer and Successor-In-Interest shall have been satisfied.
3.5 The Qualified Homebuyer for itself, its successors and assigns hereby covenants
and agrees that \U1til the forty-fifth (45th) anniversary of the Delivery Date, the New Home shall not be
leased, subleased, or rented to any third person, except for a temporary period (not to exceed twelve (12)
months) in the event of an emergency or other unforeseen circumstance as may be expressly approved in
writing by the Agency subject to compliance during the temporary rental period with the reasonable
temporary rental occupancy conditions required by the Agency. The Qualified Homebuyer shall submit
a written request to the Agency prior to the commencement of the temporary occupancy, as practicable,
but in any event within not more than (60) calendar days following the commencement of a temporary
rental occupancy of the New Home by a third party, which notice shall set forth the grounds on which
II. VPUBIKCV\67 5631.1
6530
the Qualified Homebuyer believes an emergency or other unforeseen circumstance has occurred and that
a temporary rental occupancy in necessary.
Section 4. Maintenance Condition of the New Home. The Qualified Homebuyer, for itself, its
successors and assigns, hereby covenants and agrees that:
4.1 The exterior areas of the New Home which are subject to public view (e.g.: all
improvements, paving, walkways, landscaping, and ornamentation) shall be maintained in good repair
and a neat, clean and orderly condition, ordinary wear and tear excepted. In the event that at any time
during the term of the Qualified Residence Period, there is an occurrence of an adverse condition on any
area of the New Home which is subject to public view in contravention of the general maintenance
standard described above, ("Maintenance Deficiency") then the Agency shall notify the Qualified
Homebuyer in writing of the Maintenance Deficiency and give the Qualified Homebuyer thirty (30)
calendar days from the date of such notice to cure the Maintenance Deficiency as identified in the notice.
The words "Maintenance Deficiency" include without limitation the following inadequate or non-
confirming property maintenance conditions and/or breaches of single family dwelling residential
property use restrictions:
4.1.1 failure to properly maintain the windows, structural elements, and
painted exterior surface areas of the New Home in a clean and presentable manner;
4. \.2 failure to keep the front and side yard areas of the New Home free of
accumulated debris, appliances, inoperable motor vehicles or motor vehicle parts, or free of storage of
lumb~f;building materials or equipment not regularly in use on the New Home;
4.1.3 failure to regularly mow lawn areas or permit grasses planted in lawn
areas to' exceed nine inches (9") in height, or failure to otherwise maintain the landscaping in a
reasonable condition free of weeds and debris;
4.1.4 parking of any commercial motor vehicle in excess of seven thousand
(7,000) pounds gross weight anywhere on the New Home property, or the parking of motor vehicles,
boats, camper shells, trailers, recreational vehicles and the like in any side yard or on any other parts of
the New Home property which are not covered by a paved and impermeable surface;
4.1.5 the use of the garage area of the dwelling New Home for purposes other
than the parking of motor vehicles and the storage of personal possessions and mechanical equipment of
persons residing in the New Home.
4.2 In the event the Qualified Homebuyer fails to cure or commence to cure the
Maintenance Deficiency within the time allowed, the Agency may thereafter conduct a public hearing
following transmittal of written notice thereof to the Qualified Homebuyer ten (10) calendar days prior
to the scheduled date of such public hearing in order to verify whether a Maintenance Deficiency exists
and whether the Qualified Homebuyer has failed to comply with the provision of this Section 4.2. If,
upon the conclusion of a public hearing, the Agency makes a finding that a Maintenance Deficiency
exists and that there appears to be non-compliance with the general maintenance standard, as described
above, thereafter the Agency shall have the right to enter the New Home (exterior areas only) and
RVPUBIKCV\675631.1
perform all acts necessary to cure the Maintenance Deficiency, or to take other action at law or equity
the Agency may then have to accomplish the abatement of the Maintenance Deficiency. Any sum
expended by the Agency for the abatement of a Maintenance Deficiency as authorized by Section 4 shall
become a lien on the New Home. If the amount of the lien is not paid within thirty (30) calendar days
after written demand for payment by the Agency to the Qualified Homebuyer, the Agency shall have the
right to enforce the lien in the manner as provided in Section 4.4.
4.3 Graffiti which is visible from any public right-of-way which is adjacent or
contiguous to the New Home shall be removed by the Qualified Homebuyer from any exterior surface of
a structure or improvement on the New Home by either painting over the evidence of such vandalism
with a paint which has been color-matched to the surface on which the paint is applied, or graffiti may be
removed with solvents, detergents or water as appropriate. In the event that graffiti is placed on the New
Home (exterior areas only) and such graffiti is visible from an adjacent or contiguous public right-of-
way and thereafter such graffiti is not removed within seventy-two (72) hours following the time of its
application; then in such event and without notice to the Qualified Homebuyer, the Agency shall have
the right to enter the New Home and remove the graffiti. Any sum expended by the Agency for the
removal of graffiti from the New Home as authorized by this Section 4.3 shall become a lien on the New
Home. If the amount of the lien is not paid within thirty (30) calendar days after written demand for
payment by the Agency to the Qualified Homebuyer, the Agency shall have the right to enforce its lien
in the manner as provided in Section 4.4.
4.4 The parties hereto further mutually understand and agree that the rights
conferred upon the Agency under this Section 4 expressly include the power to establish and enforce a
lien or other encumbrance>"llgainst the New Home in the manner provided under Civil Code Sections
2924, 2924b and 2924c in the amount as reasonably necessary to restore the New Home to the
maintenance standard required under Section 4, including attorneys' fees and costs of the Agency
associated with the abatement of the Maintenance Deficiency or removal of graffiti and the collection of
the costs of the Agency in connection with such action. In any legal proceeding for enforcing such a lien
against the New Home, the prevailing party shall be entitled to recover its attorneys' fees and costs of
suit. The provisions of this Section 4, shall be a covenant running with the land for the Qualified
Residence Period and shall be enforceable by the Agency in its discretion, cumulative with any other
rights or powers granted by the Agency under applicable law. Nothing in the foregoing provisions of
this Section 4 shall be deemed to preclude the Qualified Homebuyer from making any alterations,
additions, or other changes to any structure or improvement or landscaping on the New Home, provided
that such changes comply with the zoning and development regulations of the Agency and other
applicable law.
Section 5. Acknowledlm1ent of Priority of the Provisions of Section 3 and Section 6.2 of this
Regulatorv Agreement to the Mortgage Security Interest of the First Mortgage Lender.
5.1 Concurrently upon the execution and recordation of this Regulatory Agreement
the Qualified Homebuyer shall obtain certain purchase money mortgage financing for the acquisition of
the New Home from ("First Mortgage Lender"). As of the Delivery Date, the Qualified
Homebuyer has provided the Agency with a true and correct copy of the loan agreement by and between
the First Mortgage Lender and the Qualified Homebuyer. The provisions of Section 3 and Section 6.2 of
II. VPUBIKCVI67 5631.1
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this Regulatory Agreement shall be prior and senior to the security interest of the First Mortgage Lender
in the New Home.
5.2 No breach or default by the Qualified Homebuyer of any provision of Section 3
and/or Section 6.2 of this Regulatory Agreement, nor the exercise by the Agency of any remedy it may
have against the Qualified Homebuyer in the event of such a breach or default shall affect or render
invalid the lien of the First Mortgage Lender in the New Home. In the event that the First Mortgage
Lender (or its assignee) may foreclose the lien of the First Mortgage Lender in the New Home through
trustee sale, judicial foreclosure or by acceptance of deed in lieu of foreclosure, the First Mortgage
Lender, and its good faith purchasers for value, shall receive title in the New Home subject to the
provisions of Section 3 and Section 6.2 of this Regulatory Agreement.
Section 6.
Foreclosure of Purchase Monev Mortgage Loan and Agencv Right of First Refusal.
6.1 During the Qualified Residence Period the Agency shall have the right (but not
the obligation) to bid on the purchase of any mortgage loan lien secured by the New Home at the time of
any trustee foreclosure sale or any judicial foreclosure sale.
6.2 During the Qualified Residence Period the Agency shall have the right of first
refusal to purchase the New Home from the Qualified Homebuyer on the same terms which the
Qualified Homebuyer may propose to offer the New Home for resale to a Successor-In-Interest. The
Agency must exercise such a right of first refusal within thirty (30) calendar days following written
notification of the intention of the Qualified Homebuyer to resell the New Home, and if the Agency
accepts the offer in \vnting within such time period the Agency shall be bound to complete the purchase
of the New Home strictly in accordance with the offer. Thereafter the Agency shall pay the "resale
price" to the Qualified Homebuyer and close an escrow for the transfer of the New Home to the Agency
within sixty (60) calendar days following written notification of the intention of the Qualified
Homebuyer to resell the New House.
Section 7. Covenants to Run With the Land. The Developer, the Agency and the Qualified
Homebuyer hereby declare their specific intent that the covenants, reservations and restrictions set forth
herein shall be deemed covenants running with the land and shaH pass to and be binding upon the New
Home and each Successor-In-Interest of the Qualified Homebuyer in the New Home for the term
provided in Section 9. The Qualified Homebuyer hereby expressly assumes the duty and obligation to
perform each of the covenants and to honor each of the reservations and restrictions set forth in this
Regulatory Agreement. Each and every contract, deed or other instrument hereafter executed covering
or conveying the New Home or any interest therein shall conclusively be held to have been executed,
delivered and accepted subject to such covenants, reservations, and restrictions, regardless of whether
such covenants, reservations and restrictions are set forth in such contract, deed or other instrument.
Section 8. Burden and Benefit. The Agency, the Developer and the Qualified Homebuyer hereby
declare their understanding and intent that the burden of the covenants set forth herein touch and concern
the land in that the Qualified Homebuyer's legal interest in the New Home is affected by the affordablensingle family dwelling use and occupancy covenants hereunder. The Agency and the Qualified
Homebuyer hereby further declare their understanding and intent that the benefit of such covenants
RVPUBIKCYl675631.1
touch and concern the land by enhancing and increasing the enjoyment and use of the New Home by the
intended beneficiaries of such covenants, reservations and restrictions.
Section 9. Term. This Regulatory Agreement shall apply to the New Home and the Qualified
Homebuyer and to each Successor-In-Interest as of the Delivery Date for the Qualified Residence Period
-- e.g.: this Regulatory Agreement shall remain in full force and effect for forty five (45) years after the
Delivery Date. Any provision Dr section hereof, may be terminated after the Delivery Date upon
agreement by the Agency and the Qualified Homebuyer (or the Successor-In-Interest in the New Home),
if there shall have been provided to the Agency an opinion of special legal counsel that such a
termination under the terms and conditions approved by the Agency in its reasonable discretion will not
adversely affect the Agency.
Section 10. Breach and Default and Enforcement.
10.1 Failure or delay by the Qualified Homebuyer to honor or perform any material
term or provision of this Regulatory Agreement shall constitute a breach under this Agreement; provided
however, that if the Qualified Homebuyer commences to cure, correct or remedy the alleged breach
within thirty (30) calendar days after the date of written notice specifying such breach and shall
diligently complete such cw'e, correction or remedy, the Qualified Homebuyer shall not be deemed to be
in default hereunder.
10.2 The Agency shall give the Qualified Homebuyer written notice of breach
specifying the alleged breach which if uncured by the Qualified Homebuyer within thirty (30) calendar
days, shall be deemed to be an event ordefault. Delay in giving such notice shall not constitute a waiver
of any breach or event of default nor shall it change the time of breach or event of default; provided,
however, the Agency shall not exercise any remedy for an event of default hereunder without first
delivering the written notice of breach as specified in this Section 10.
10.3 Except with respect to rights and remedies expressly declared to be exclusive in
this Regulatory Agreement, the rights and remedies of the Agency are cumulative with any other right or
power of the Agency or the Agency or other applicable law, and the exercise of one or more of such
rights or remedies shall not preclude the exercise by the Agency at the same or different times, of any
other right or remedy for the same breach or event of default.
10.4 In the event that a breach of the Qualified Homebuyer may remain uncured for
more than thirty (30) calendar days following written notice, as provided above, an event of default shall
be deemed to have occurred. In addition to the remedial provisions of Section 4 as related to a
Maintenance Deficiency at the New Home, upon the occurrence of any event of default the Agency shall
be entitled to seek any appropriate remedy or damages by initiating legal proceedings as follows:
10.4.1 by mandamus or other suit, action or proceeding at law or in equity, to
require the Qualified Homebuyer to perform its obligations and covenants hereunder, or enjoin any acts
or things which may be unlawful or in violation of the rights of the Agency; or
10.4.2 by other action at law or in equity as necessary or convenient to enforce
the obligations, covenants and agreements of the Qualified Homebuyer to the Agency.
RVPUBIKCYI675631.1
6530
10.4.3 No third party shall have any right or power to enforce any provision of
this Regulatory Agreement on behalf of the Agency or to compel the Agency to enforce any provision of
this Regulatory Agreement against the Qualified Homebuyer on the New Home.
Section II. Governing Law. This Regulatory Agreement shall be governed by the laws of the State of
California.
Section 12. Amendment. This Regulatory Agreement may be amended after the Delivery Date only
by a written instrument executed by the Qualified Homebuyer (or the Successor-In-Interest, as
applicable) and by the Agency. The Developer shall have not any right or power to approve any such
amendment to this Regulatory Agreement, and the execution by the Developer of any such amendment
after the Delivery Date shall not be required.
Section 13. Attornevs' Fees. In the event that the Agency brings an action to enforce any condition or
covenant, representation or warranty in this Regulatory Agreement or otherwise arising out of this
Regulatory Agreement, the prevailing party in such action shall be entitled to recover from the other
party reasonable attorneys' fees to be fixed by the court in which a judgment is entered, as well as the
costs of such suit.
Section 14. Severability. If any provision of this Regulatory Agreement shall be declared invalid,
inoperative or unenforceable by a final judgment or decree of a court of competent jurisdiction such
invalidity or unenforceability of such provision shall not affect the remaining parts of this Regulatory
Agreement which are hereby dct:lared by the parties to be severable from any other part which is found
by a court to be invalid or unenforceable.
Section 15. Time is of the Essence. For each provision of this Regulatory Agreement which states a
specific amount of time within which the requirements thereof are to be satisfied, time shall be deemed
to be of the essence.
Section 16. Titles and Headings. The titles and headings of the sections of this Regulatory Agreement
have been inserted for convenience of reference only and are not to be considered a part hereof and shall
not in any way modify or restrict the meaning any of the terms or provisions hereof.
Section 17. Notice. Any notice required to be given under this Regulatory Agreement shall be given
by the Agency or by the Qualified Homebuyer, as applicable, by personal delivery or by First Class
United States mail at the addresses specified below or at such other address as may be specified in
writing by the parties hereto:
If to the Agency:
The Redevelopment Agency of the
City of Arcadia
240 West Huntington Drive
Arcadia, California 91066
Attention: Executive Director
RVPUBIKCYI675631.1
If to the Developer:
Trademark Development Company, LLC
Attention:
If to the Qualified Homebuyer:
Attention:
Notice shall be deemed given five (5) calendar days after the date of mailing to the party, or, if
personally delivered, when received by the Agency, Developer, or the Qualified Homebuyer, as
applicable.
Section 18. Obligations Secured Bv Performance Deed of Trust. The prompt and complete
observance and performance of each and everyroonetary and non-monetary condition, obligation,
covenant and agreement contained in this Regulatory Agreement shall be secured by the Deed of Trust
attached to this Regulatory Agreement as Exhibit C and incorporated into this Regulatory Agreement by
this reference.
IN WITNESS WHEREOF, the Agency, the Developer and the Qualified Homebuyer have
caused. this Regulatory Agreement to be signed, acknowledged and attested on their behalf by duly
authorized representatives in counterpart original copies which shall upon execution by all of the parties
be deemed to be one original document. .
[Signatures on Following Pages]
RVPUBIKCYI675631.l
6530
Date:
Date:
Date:
Date:
RVPUBIKCY\675631.l
SIGNATURE PAGE
TO
REGULATORY AGREEMENT
QUALIFIED HOMEBUYER:
By:
Its:
By:
Its:
--
'.
DEVELOPER:
TRADEMARK DEVELOPMENT COMPANY, LLC
a California limited liability company
By:
Its:
By:
Its:
Date:
ATTEST:
By:
SIGNATURE PAGE
TO
REGULATORY AGREEMENT
AGENCY:
THE REDEVELOPMENT AGENCY OF THE
CITY OF ARCADIA,
a public body, corporate and politic
By:
William R. Kelly
Executive Director
~
.~
Agency Secretary
APPROVED AS TO LEGAL FORM:
BEST BEST & KRIEGER LLP
By:
Agency Counsel
RVPUBIKCVI67563 1.1
6530
RVPUBIKV ARNEIl.\710715.1
EXHIBIT A
TO
REGULATORY AGREEMENT
Legal Description of the Property
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EXHIBIT G
Il.VPUlJIKV ARNER\710715.1
EXHIBIT B
TO
REGULATORY AGREEMENT
Legal Description of the New Home
[Insert Legal Description of New Home on this Page]
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EXHIBIT G
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EXHIBITC
TO
REGULATORY AGREEMENT
Performance Deed of Trust
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EXHffiIT G
RVPUBIKV ARNER\710715.1
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
Redevelopment Agency of the City of Arcadia
Attention: Executive Director
204 West Huntington Drive
Arcadia, California 91006-6021
(Space above for Recorder's use only)
PERFORMANCE DEED OF TRUST. SECURITY AGREEMENT AND FIXTURE FILING
(WITH ASSIGNMENT OF RENTS)
THIS PERFORMANCE DEED OF TRUST, SECURITY AGREEMENT, AND FIXTURE
FILING (WITH ASSIGNMENT OF RENTS) ("Deed of Trust") is made as of , 2006, by
("Trustor"), whose address is .
California to ("Trustee"), whose address is
, for the benefit of the REDEVELOPMENT AGENCY OF THE
CITY OF ARCADIA, a public body corporate and politic, its successors and assigns ("Beneficiary"),
whose address is 204 West Huntington Drive, Arcadia, California 91006-6021, and is executed to secure
that certain Regulatory Agreement of even date herewith between Trustor Beneficiary. The provisions of
the Regulatory Agreement are incorporated in the Trust Deed by this reference.
.....-:--
Trustor hereby IRREVOCABLY GRANTS, TRANSFERS AND ASSIGNS to Trustee, its
successors and assigns, in Trust, with POWER OF SALE TOGETHER WITH RIGHT OF ENTRY AND
POSSESSION, the following property ("Trust Estate"):
A. All of that certain real property in the City of Arcadia, Los Angeles County,
California, more particularly described in Exhibit "A" attached hereto and by this reference made a part
hereof ("Subject Property");
B. All buildings, structures and other improvements now or in the future located or
to be constructed on the Subject Property ("Improvements");
C. All tenements, hereditament, appurtenances, privileges, franchises and other
rights and interests now or in the future benefitting or otherwise relating to the Subject Property or the
Improvements, including easements, rights-of-way and development rights ("Appurtenances").
(Appurtenances, together with the Subject Property and the Improvements, are hereafter collectively
referred to as the "Real Property";
D. Subject to the assignment to Beneficiary set forth in Paragraph 4 below, all rents,
issues, income, revenues, royalties and profits now or in the future payable with respect to or otherwise
derived from the Trust Estate or the ownership, use, management operation, leasing or occupancy of the
Trust Estate, including those past due and unpaid ("Rents");
E. All present and future right, title and interest of Trustor in and to all inventory,
equipment, fixtures and other goods (as those terms are defmed in Division 9 of the California Uniform
Commercial Code ("UCC")), whether existing now or in the future) located at, upon or about, or affixed
or attached to or installed in, the Real Property, or used or to be used in connection with or otherwise
relating to the Real Property or the ownership, use, development, construction, maintenance,
EXHIBIT G
Il.VPUBIKV ARNI1R\710715.1
6530
management, operation, marketing, leasing or occupancy of the Real Property, including furniture,
furnishings, machinery, appliances, building materials and supplies, generators, boilers, furnaces, water
tanks, heating, ventilating and air conditioning equipment and all other types of tangible personal property
of any kind or nature, and all accessories, additions, attachments, parts, proceeds, products, repairs,
replacements and substitutions of or to any of such property ("Goods," and together with the Real
Property, collectively the "Property"); and
F. All present and future right, title and interest of Trustor in and to all accounts,
general intangibles, chattel paper, deposit accounts, money, instruments and documents (as those terms
are defmed in the UCC) and all other agreements, obligations, rights and written material (in each case
whether existing now or in the future) now or in the future relating to or otherwise arising in connection
with or derived from the Property or any other part of the Trust Estate or the ownership, use,
development, construction, maintenance, management operation, marketing, leasing, occupancy, sale or
financing of the property or any other part of the Trust Estate, including (to the extent applicable to the
Property or any other portion of the Trust Estate) (i)' permits, approvals and other governmental
authorizations, (ii) improvement plans and specifications and architectural drawings, (iii) agreements with
contractors, subcontractors, suppliers, project managers, supervisors, designers, architects, engineers,
sales agents, leasing agents, consultants and property managers, (iv) takeout, refinancing and permanent
loan commitments, (v) warranties, guaranties, indemnities and insurance policies, together with insurance
payments and unearned insurance premiums, (vi) claims, demands, awards, settlements, and other
payments arising or resulting from or otherwise relating to any insurance or any loss or destruction of,
injury or damage to, trespass on or taking, condemnation (or conveyance in lieu of condemnation) or
public use of any of the Property, (vii) license agreements, service and maintenance agreements, purchase
and sale agreements and purchase options, together with advance payments, security deposits and other
amounts paid to or deposited with Trustor under any such agreements, (viii) reserves, deposits, bonds,
deferred payments, refunds, rebates, discounts, cost savings, escrow proceeds, sale proceeds and other
rights to the payment of money, trade names, trademarks, goodwill and all other types on intangible
personal property of any kind or nature, and (ix) all supplements, modifications, amendments, renewals,
extensions, proceeds, replacements and substitutions of or to any of such property (collectively,
"Intangibles").
Trustor further grants to Trustee and Beneficiary, pursuant to the UCC, a security interest in all
present and future right, title and interest of Trustor in and to all Goods and Intangibles and all of the
Trust Estates described above in which a security interest may be created under the UCC (collectively, the
"Personal Property"). This Deed of Trust constitutes a security agreement under the UCC, conveying a
security interest in the Personal Property to Trustee and Beneficiary. Trustee and Beneficiary shall have,
in addition to all rights and remedies provided herein, all the rights and remedies of a "secured party"
under the UCC and other applicable California law. Trustor covenants and agrees that this Deed of Trust
constitutes a fixture filing under Sections 9313 and 9402(6) of the UCC.
FOR THE PURPOSE OF SECURING, due, prompt and complete observance, performance
and discharge of each and every monetary and non-monetary condition, obligation, covenant and
agreement contained herein or contained in the Regulatory Agreement ("Secured Obligations").
AND TO PROTECf THE SECURITY OF TillS DEED OF TRUST, TRUSTOR
COVENANTS AND AGREES:
I. That Trustor shall perform the obligations of the Qualified Homebuyer as set forth in the
Secured Obligations at the time and in the manner respectively provided therein;
EXHIBIT G
RVPUBIKV ARNER\710715.1
2. That Trustor shaH not permit or suffer the use of any of the property for any purpose
other than the use for which the same was intended at the time this Deed of Trust was executed;
3. That the Secured Obligations are incorporated in and made a part of this Deed of Trust.
Upon default of a Secured Obligation, and after the giving of notice and the expiration of any applicable
cure period, the Beneficiary, at its option, may declare the whole of the indebtedness secured hereby to be
due and payable. This Deed of Trust shall cover, and the property subject hereto shall include, all property
now or hereafter affixed or attached to or incorporated upon the Subject Property in, to or under which
Trustor now has or hereafter acquires any right, title or interest, which, to the fullest extent permitted by
law, shaH be deemed fixtures and a part of the Subject Property. To the extent any of the property subject
to this Deed of Trust consists of rights in action or personal property covered by the Uniform Commercial
Code, this Deed of Trust shall also constitute a security agreement, and Trustor hereby grants to
Beneficiary, as secured party, a security interest in such property, including all proceeds thereof, for the
purpose of securing the Secured Obligations. In addition, for the purpose of securing the Secured
Obligations, Trustor hereby grants to Beneficiary, as secured party, a security interest in all of the
property described herein ill, to, or under which Trustor now has or hereafter acquires any right, title or
interest, whether present, future or contingent, including, but not limited to, all equipment, inventory,
accounts, general intangibles, instruments, documents and chattel paper, as those terms are defmed in the
Uniform Commercial Code, and all other personal property of any kind (including, without limitation,
money and rights to the payment of money), whether now existing or hereafter created, that are now or at
any time hereafter (i) in the possession or control of Beneficiary in any capacity; (ii) erected upon,
attached to or appurtenant to the Subject Property; (iii) located or used on the Subject Property or
identified for use on the Subject Property (whether stored on the Subject Property or elsewhere); or (iv)
used in connection with, arising from, related to, or associated with the Subject Property'W any of the
personal property described herein, the construction of any improvements on the Subject Property, the
ownership, development, maintenance, management or operation of the Subject Property, the use or
enjoyment of the Subject Property or the operation of any business conducted thereon, including, without
limitation, aH such property described as the Trust Estate hereinabove. The security interests granted in
this paragraph are hereinafter severaHy and collectively called the "Security Interest". The Security
Interest shall be self-{)perative with respect to the real property described herein but Trustor shall execute
and deliver on demand such additional security agreements, financing statements and other instruments as
may be requested in order to impose the Security Interest more specifically upon the real and personal
property encumbered hereby. The Security Interest, at all times, shall be prior to any other interest in the
personal property encumbered hereby. Trustor shall act and perform as necessary and shall execute and
file all security agreements, financing statements, continuation statements and other documents requested
by Beneficiary to establish, maintain and continue the perfected Security Interest. Trustor, on demand,
shall promptly pay all costs and expenses of filing and recordation, to ensure the continued priority of the
Security Interest. Trustor shaH not sell, transfer, assign or otherwise dispose of any personal property
encumbered hereby without obtaining the prior written consent of Beneficiary, except that the Trustor
may, in the ordinary course of business, replace personal property or dispose of personal property that
will not be replaced because of its obsolescence. Unless Beneficiary then agrees otherwise in writing, all
proceeds from any permitted sale or disposition in excess of that required for full replacement shall be
paid to Beneficiary to be applied on the Note. Although proceeds of personal property are covered
hereby, this shall not be construed to mean' that Beneficiary consents to any sale of such personal
property. Upon its recordation in the real property records of Riverside County, this Deed of Trust shall
be effective as a financing statement filed as a fixture filing. In that regard, the following information is
provided:
Name of Debtor:
Address of Debtor: See the initial paragraph of this Deed of Trust
Name of Secured Party: The Redevelopment Agency of the City of Arcadia
EXHIBIT G
RVPUBIKV ARNER\710715.1
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Address of Secured Party: See the initial paragraph of this Deed of Trust
In addition, a carbon, photostatic or other reproduced copy of this Deed of Trust and/or any financing
statement relating hereto shall be sufficient for filing and/or recording as a financing statement;
4. That all rents, profits and income from the property covered by this Deed of Trust are
hereby assigned to the Beneficiary for the purpose of discharging the debt hereby secured. Permission is
hereby given to Trustor so long as no default exists hereunder after the giving of notice and the expiration
of any applicable cure period, to collect such rents, profits and income for use in accordance with the
provisions of the Secured Obligations;
5. That upon default hereunder or under the aforementioned agreements, and after the
giving of notice and the expiration of any applicable cure period, Beneficiary shall be entitled to the
appointment of a receiver by any court having jurisdiction, without notice, to take possession and protect
the property described herein and operate same. and collect the rents, profits and income therefrom;
6. That Trustor will keep the improvements now existing or hereafter erected on the
property insured against loss by fire and such other hazards, casualties, and contingencies as may be
required by applicable provisions of the Secured Obligations, and all such insurance shall be evidenced by
standard fire and extended coverage insurance policy or policies. Such policies shall be endorsed with
standard mortgage clause with loss payable to the Beneficiary and certificates thereof together with copies
of original policies, if requested, shall be deposited with the Beneficiary;
7. To pay before delinquency any taxes and assessments affecting said Property; to pay,
when due, all encumbrances, charges and liens, with interest, on said Property or any part thereof which
appear to be prior or superior hereto; and to pay all costs, fees, and expenses of this Trust.
Notwithstanding anything to the contrary contained in this Deed of Trust, Trustor shall not be required to
pay and discharge any such tax, assessment charge or levy so long as Trustor is contesting the legality
thereof in good faith and by appropriate proceedings, and Trustor has adequate funds to pay any liabilities
contested pursuant to this Section;
8. As it is provided more specifically in the Secured Obligations, to keep said property in
good condition and repair, subject to ordinary wear and tear, casualty and condemnation, not to remove or
demolish any buildings thereon; to complete or restore promptly and in good and workmanlike manner
any building which may be constructed, damaged, or destroyed thereon and to pay when due all claims
for labor performed and materials furnished therefor; to comply with all laws affecting said property or
requiring any alterations or improvements to be made thereon (subject to Trustor's right to contest the
validity or applicability of laws or regulations); not to commit or permit waste thereof; not to commit,
suffer or permit any act upon said property in violation of law and/or covenants, conditions and/or
restrictions affecting said property; not to permit or suffer any material alteration of or addition to the
buildings or improvements hereafter constructed in or upon said property without the consent of the
Beneficiary;
9. 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 reasonable attorney's fees in a reasonable sum, in any such action or proceeding in
which Beneficiary or Trustee may appear;
10. Should Trustor fail, after the giving of notice and the expiration of any applicable cure
period, to make any payment or 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
EXHIBIT G
RVPUBIKV ARNER\71071 5.1
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. Following default, after the giving of notice and the expiration of
any applicable cure period, Beneficiary or Trustee being authorized to enter upon said property for such
purposes, may commence, appear in and/or defend any action or proceeding purporting to affect the
security hereof or the rights or powers of Beneficiary or Trustee; may pay, purchase, contest or
compromise any encumbrance, charge, or lien which in the judgment of either appears to be prior or
superior hereto; and, in exercising any such powers, may pay necessary expenses, employ counsel, and
pay his reasonable fees;
II. Beneficiary shall have the right to pay fire and other property insurance premiums when
due should Trustor fail to make any required premium payments. All such payments made by the
Beneficiary shall be added to the sums secured hereby;
12. To pay immediately and without demand all sums so expended by Beneficiary or Trustee,
under permission given under this Deed of Trust, with interest from date of expenditure, at the highest
rate of interest permitted by law;
13. That the funds to be advanced hereunder are to be used in accordance with applicable
provisions of the Affordable Housing Agreement and the Secured Obligations; upon the failure of Trustor
to do so, after the giving of notice and the expiration of any applicable cure period, Trustor shall be in
default hereunder.
14. Trustor further covenants that it will not voluntarily create, suffer, or permit to be created
against the property subject to this Deed of Trust any lien or liens except as authorized by Benefici~~
and/or as provided in the Secured Obligations and further that it will keep and maintain the property free
from the claims of all persons supplying labor or materials which will enter into the construction of any
and all buildings now being erected or to be erected on said premises. Notwithstanding anything to the
contrary contained in this Deed of Trust Trustor shall not be obligated to pay any claims for labor,
materials or services which Trustor in good faith disputes and is diligently contesting, provided that
Trustor shall, at Beneficiary's written request, within thirty (30) days after the filing of any claim or lien
(but in any event, and without any requirement that Beneficiary must first provide a written request prior
to foreclosure) record in the Office of the Recorder of Riverside County, a surety bond in the amount
required by law to protect against a claim of lien, or provide such other security reasonably satisfactory
to Beneficiary;
15. That any and all improvements made or about to be made upon the premises covered by
this Deed of Trust and all plans and specifications, comply with all applicable municipal ordinances and
regulations and all other applicable regulations made or promulgated, now or hereafter, by lawful
authority, and that the same will upon completion comply with all such municipal ordinances and
regulations and with the rulcs of the applicable fire rating or inspection organization, bureau, association
or office.
IT IS MUTUALL Y AGREED THAT:
16. Should the Property or any part thereof be taken or damaged by reason of any public
improvement or condemnation proceeding, or damaged by fire, or earthquake, or in any other manner,
Beneficiary shall be entitled to all compensation, awards, and other payments or relief therefor which are
not used to reconstruct, restore or otherwise improve the property or part thereof that was taken or
damaged, and shall be entitled at its option to commence, appear in and prosecute in its own name, any
action or proceedings, or to make any compromise or settlement, in connection with such taking or
damage. All such compensation, awards, damages, rights of action and proceeds which are not used to
EXHIBIT G
RVPUBIKV ARNER\7107IS.1
6530
reconstruct, restore or otherwise improve the property or part thereof that was taken or damaged,
including the proceeds of any policies of fire and other insurance affecting said property, are hereby
assigned to Beneficiary;
17. Upon default by Trustor in taking any action or in making any payments provided for
herein, or in the Secured Obligations, if Trustor shall fail to perform any covenant or agreement in this
Deed of Trust within 30 days after written demand therefor by Beneficiary (or, in the event that more than
30 days is reasonably required to cure such default, should Trustor fail to promptly commence such cure,
and diligently prosecute same to completion), after the giving of notice and the expiration of any
applicable cure period, Beneficiary may declare all sums secured hereby immediately due and payable by
delivery to Trustee of written declaration of default and demand for sale, and of written notice of default
and of election to cause the property to be sold, which notice Trustee shall cause to be duly filed for
record and Beneficiary may foreclose this Deed of Trust. Beneficiary shall also deposit with Trustee this
Deed of Trust and all documents evidencing expenditures secured hereby;
28. 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 the time and place of sale, and from time
to time thereafter may postpone the sale by public announcement at the time and place of sale, and from
time to time thereafter may postpone the sale by public announcement at the time fixed by the preceding
postponement. Trustee shall deliver to the purchaser its Deed conveying the property so sold, but.without
any covenant or warranty, express or implied. The recitals in the Deed of any matters or facts shall be
conclusive proof of the truthfulness thereof. Any person, including Trustor, Trustee or Beneficiary, may
purchase at the sale. The Trustee shall apply the proceeds of sale to payment of (1) the expenses of such
sale, together with the reasonable expenses of this trust including therein reasonable Trustee's fees or
attorney's fees for conducting the sale, and the actual cost of publishing, recording, mailing and posting
notice of the sale; (2) the cost of any search and/or other evidence of title procured in connection with
such sale and revenue stamps on Trustee's Deed; (3) all sums expended under the terms hereof, not then
repaid, with accrued interest at the maximum rate allowed by law; (4) all other sums then secured hereby;
and (5) the remainder, if any, to the person or persons legally entitled thereto;
19. Beneficiary may from time to time substitute a successor or successors to any Trustee
named herein or acting hereunder to execute this Trust. Upon such appointment, and without conveyance
to the successor trustee, the latter shall be vested with all title, powers, and duties conferred upon any
Trustee herein named or acting hereunder. Each such appointment and substitution shall be made by
written instrument executed by Beneficiary, containing reference to this Deed of Trust and its place of
record, which, when duly recorded in the proper office of the county or counties in which the property is
situated, shall be conclusive proof of proper appointment of the successor trustee;
20. The pleading of any statute of limitations as a defense to any and all obligations secured
by this Deed of Trust is hereby waived to the full extent permissible by law;
21. Upon written request of Beneficiary stating that all sums secured hereby have been paid
and all obligations secured hereby have been satisfied, and upon surrender of this Deed of Trust 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 of fact shall
be conclusive proof of the truthfulness thereof. The grantee in such reconveyance may be described as
"the person or persons legally entitled thereto";
EXHIBIT G
RVPUBIKV ARNER\710715.1
22. The trust created hereby is irrevocable by Trustor;
23. 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
include not only the original Beneficiary hereunder but also any future successor in interest to
Beneficiary. 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. All obligations of Trustor hereunder
are joint and several;
24. Trustee accepts this Trust when this Deed of Trust, duly executed and acknowledged, is
made public record as provided by law. Except as otherwise provided by law, the Trustee is not obligated
to notify any party hereto of pending sale under this Deed of Trust or of any action or proceeding in
which Trustor, Beneficinry, or Trustee shall be a party unless brought by Trustee;
25. The undersigned Trustor requests that a copy of any notice of default and of any notice of
sale hereunder be mailed to it at the address set forth in the Deed of Trust.
26. Trustor agrees at any time and from time to time, upon receipt of a written request from
Beneficiary, to fumish to Beneficiary detailed statements in writing of income, rents, profits, and
operating expenses of the premises, and the names of the occupants and tenants in possession, together
with the expiration dates of their leases and full information regarding all rental and occupancy
agreements, and the rents provided for by such leases and rental and occupancy agreements, and such
other information regarding the premises and their use as may be requested by Beneficiary.
27. Trustor agrees that the obligations secured by this Deed of Trust are made expressly for
the purpose of financing the acquisition of the Property, and the rehabilitation and operation of the
improvements on the Property, which will be maintained as affordable housing for persons and families
of very low income and low income, as is more specifically provided in the Secured Obligations.
~-
'.
38. As is provided more specifically in the Secured Obligations, the obligations of Trustor
thereunder are nonrecow'se obligations of the Trustor. Neither Trustor nor any of its principals, nor any
other party, shall have any personal liability for payment of obligations arising from the Secured
Obligations, except as specifically provided therein. The sole recourse of Beneficiary shall be the
exercise of its rights against the Property except as otherwise provided in the Secured Obligations and any
related security.
29. Notwithstanding specific provisions of this Deed of Trust, non-monetary performance
hereunder shall not be deemed to be in default where delays or defaults are due to: war; insurrection;
strikes; lock-outs; riots; floods; earthquakes; fires; casualties; acts of God; acts of the public enemy;
epidemics; quarantine restrictions; freight embargoes; lack of transportation; governmental restrictions or
priority; litigation; unusually severe weather; inability to secure necessary labor, materials or tools; delays
of any contractor or supplier; acts of the other party; acts or failure to act of the City, the Agency, or any
other public or governmental agency or entity (except that any act or failure to act of Beneficiary shall not
excuse performance by Beneficiary unless such act or failure to act is allowed or required by law); or any
other causes beyond the reasonable control or without the fault of the party claiming an extension of time
to perform. An extension of time for any such cause (a "Force Majeure Delay") shall be for the period of
the enforced delay and shall commence to run from the time of the commencement of the cause. If,
however, notice by the party claiming such extension is sent to the other party more than thirty (30) days
after the commencement of the cause, the period shall commence to run only thirty (30) days prior to the
giving of such notice. Times of performance under this Deed of Trust may also be extended in writing by
the Beneficiary and Trustor.
EXHIBIT G
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.0
30. If the rights and liens created by this Deed of Trust shall be held by a court of competent
jurisdiction to be invalid or unenforceable as to any part of the obligations described herein, the unsecured
portion of such obligations shall be completely performed and paid prior to the performance and payment
of the remaining and secured portion of the obligations, and all performance and payments made by
Trustor shall be considered to have been performed and paid on and applied first to the complete payment
of the unsecured portion of the obligations.
31. Subject to the extensions of time set forth in Section 29, and subject to the further
provisions of this Section 31, failure or delay by Trustor to perform any term or provision respectively
required to be performed under the Secured Obligations or this Deed of Trust constitutes a default under
this Deed of Trust.
B. Beneficiary shall give written notice of default to Trustor, specifying the default
complained of by the Beneficiary. Delay in giving such notice shall not constitute a waiver of any default
nor shall it change the time of default.
C. Any failures or delays by Beneficiary 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. Delays by
Beneficiary in asserting any of its rights and remedies shall not deprive Beneficiary of its right to institute
and maintain any actions or proceedings which it may deem necessary to protect, assert, or enforce any
such rights or remedies.
D. If an event of default occurs under the terms of this Deed of Trust, prior to
exercising any remedies hereunder or thereunder, Beneficiary shall give Trustor written notice of such
default. Trustor shall have a reasonable period of time after such notice is given within which to cure the
default prior to exercise of remedies by Beneficiary under this Deed of Trust. In no event shall
Beneficiary be precluded from exercising remedies if its security becomes or is about to become
materially jeopardized by any failure to cure a default or the default is not cured within thirty (30) days
after the notice of default is first given.
E. If an event of default occurs under the terms of the Secured Obligations, prior to
exercising any remedies hereunder or thereunder, Beneficiary shall give Trustor notice of such default.
As is provided more specifically in the Secured Obligations, if the default is reasonably capable of being
cured within thirty (30) days, Trustor shall have such period to effect a cure prior to exercise of remedies
by the Beneficiary under the Secured Obligations, or this Deed of Trust. If the default is such that it is not
reasonably capable of being cured within thirty (30) days, and Trustor (i) initiates corrective action within
said period, and (ii) diligently and in good faith works to effect a cure as soon as possible, then Trustor
shall have such additional time as is reasonably necessary to cure the default prior to exercise of any
remedies by Beneficiary. In no event shall Beneficiary be precluded from exercising remedies if its
security becomes or is about to become materially jeopardized by any failure to cure a default.
IN WITNESS WHEREOF, Trustor has executed this Deed of Trust as of the day and year set
forth above.
TRUSTOR:
By:
By:
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RVPUBIKV ARNER\710715.\
STATE OF CALIFORNIA
)
) ss.
)
COUNTY OF RIVERSIDE
On , 200_, before me, ' Notary Public, personally
appeared personally known to me or ( ) proved to me on the basis of satisfactory
evidence to be the person(s) whose name(s) is/are subscribed to the within instrument, and acknowledged
to me that he/she/they executed the same in hisfher/their authorized capacity(ies), and that by hisfher/their
signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted,
executed the instrument.
WITNESS my hand and official seal.
Signature of Notary
[SEAL)
EXHIBIT G
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RVPUBlJ<v ARNER\710715.1
.
EXHmIT A
TO
PERFORMANCE DEED OF TRUST
Legal Description of Subject Property
o.
o.
EXHIBIT G
.
RVPUBIKV ARNER\710715.1
EXHIBIT H
TO
AFFORDABLE HOUSING AGREEMENT
Project Budget and Financing Plan
[Attached Behind This Page
6530
RVPUBIKV ARNEIl.\710715.1
EXHIBIT I
TO
AFFORDABLE HOUSING AGREEMENT
.
Agency Development Promissory Note
[Attached Behind This Page]
AGENCY DEVELOPMENT PROMISSORY NOTE
Fair Market Value of the Property + $760,000
.2006
This Agency Development Promissory Note Secured by a Deed of Trust ("Agency Development
Promissory Note") is entered into between the Arcadia Redevelopment the Agency, a California public
body, corporate and politic ("Holder") and Trademark Development Company, LLC, a California limited
liability company ("Maker"). This Agency Development Promissory Note is made and given pursuant to
that certain Mfordable Housing Agreement dated June 6, 2006 ("Agreement") by and between the Maker
(as the Agency therein) and Holder (as the Developer therein). The Agreement is incorporated herein by
reference. All initially capitalized terms used but not defmed herein shall have the meanings given to
them in the Agreement.
I. Principal.
FOR VALUE RECENED, Maker promises to pay to the Holder at such place as the Holder may,
from time to time, designate by written notice to the Maker, the principal sum of the Fair Market Value of
the Property plus Seven Hundred Sixty Thousand Dollars ($760,000) ("Principal Sum"). The Principal
Sum represents the Fair Market Value of the Property as described in Section 2.5 of the Agreement and
Agency Development Loan advanced to or on behalf of Maker pursuant to Section 3.4.1 of the
Agreement.
2. No Interest Accruals.
The Agency Development Loan shall not accrue interest.
3. Repavment. Reduction of Principal: Release and Reconvevance.
a. Repavment of the Agencv Development Loan. Concurrent with the close of
escrow for the sale of each New Home to a Qualified Household, an amount equal to one-sixth (1/6) of
the total of the Fair Market Value of the Property and the Agency Development Loan shall be credited to
the principal balance of this Agency Development Promissory Note and the principal balance of this
Agency Development Promissory Note shall thereafter be reduced by the aforementioned credited
amount.
b. Release and Reconvevance. Upon (i) the recordation of each Regulatory
Agreement executed by a Qualified Household against the New Home which is the subject of a sale
between the Maker and such Qualified Household; and (ii) credit of the amounts due and payable
pursuant to Section 3(a) hereof, Holder shall release and reconvey that New Home from the Development
Deed of Trust.
4. Maturity Date.
The Maturity Date of this Agency Development Promissory Note shall be the fifth (5th)
anniversary of the date of execution of this Agency Development Promissory Note by Maker.
RVPUBIKV ARNER\71 0715.1
6530
5. Preoavment.
This Agency Development Promissory Note may be prepaid in whole or part at any time and
from time to time without penalty or premium. Principal and interest shall be payable in lawful money of
the United States of America. Interest shal1 be computed based on an actual day year and the actual
number of days elapsed.
6. Security for Note.
This Agency Development Promissory Note is secured by that certain Agency Development
Deed of Trust executed and dated herewith by Maker.
7. Acceleration Upon Certain Events or Upon Event of Default.
7.1 Anything to the contrary in this Agency Development Promissory Note
notwithstanding, the entire unpaid principal balance and accrued interest of this Agency Development
Promissory Note shall be due and payable prior to the Maturity Date upon the occurrence of any of the
fol1owing events ("Events of Default"):
7.1.1 Maker materially breaches any of the obligations of this Agency
Development Promissory Note or the Agreement; or
7.1.2 Maker (i) becomes insolvent or unable to pay Maker's debts general1y as
they mature, (ii) makes a general assignment for the benefit of creditors, (iii) admits in writing Maker's
inability to pay Maker's debts general1y as they mature, (iv) files or has filed against it a petition in
bankruptcy or a petition or answer seeking a reorganization, arrangement with creditors or other similar
relief under the federal bankruptcy laws or under any other applicable law of the United States of
America or any state thereof, or (v) consents to the appointment of a trustee or receiver for it or for a
substantial part of Maker's property; or
7.1.3 Any order, judgment or decree is entered appointing, without Maker's
consent, a trustee or receiver for it or for a substantial part of Maker's property that is. not removed within
sixty (60) days from such entry; or
7.1.4 Maker voluntarily or involuntarily transfers, in any way, the Property or
any potion thereof without the Holders prior written consent, except as permitted in the Agreement; or
7.1.5 Termination of the Agreement and the Escrow due to Maker's uncured
material default.
7.2 Upon the occurrence of one or more of the aforementioned Events of Default, the
Holder may, at Holder's option, without prior notice (unless prior notice is required by California law),
declare the unpaid balance of this Agency Development Promissory Note, including interest thereon, to
be immediately due and payable, and the same shall immediately become due and payable.
Notwithstanding the above, in the event of an actual or deemed entry of an order for relief with respect to
Maker under the Federal Bankruptcy Code, this Agency Development Promissory Note and all interest
and other amounts due hereon shal1 automatically become and be due and payable, without presentment,
demand, protest or any notice of any kind, all of which are hereby expressly waived by Maker. The
Holder may exercise Holder's option to accelerate after any Event of Default, regardless of any prior
forbearance. Any amounts which become due to the Agency pursuant to this Section 7.2 shall be payable
from all of Maker's legally available funds and assets.
RVPUBIKV ARNER\7J0715.1
8. Costs and Attornevs' Fees Paid bv Maker.
Maker agrees to pay the following costs, expenses and attorneys fees paid or incurred by the
Holder, or as adjudged by a court of competent jurisdiction: (a) reasonable costs of collection, costs and
expenses, fees of experts, and attorneys fees paid or incurred in connection with the collection or
enforcement of this Agency Development Promissory Note, whether or not suit is filed; and (b) costs of
suit in such sum as the court may adjudge reasonable as attorneys fees in any action to enforce payment
of this instrument.
9. Waiver.
Maker hereby waives diligence, presentment, protest and demand, notice of protest, dishonor and
nonpayment of this instrument, and expressly agrees that, without in any way affecting the liability of
Maker hereunder, the Holder may extend any maturity date or the time for payment of any installment
due hereunder, accept additional security, release any party liable hereunder or release any security now
or hereafter securing this Agency Development Promissory Note. Maker hereby waives, to the fullest
extent permitted by law, the right to plead any and all statutes of limitations as a defense to any demand
on this instrument or any deed of trust, security agreement, guarantee or other agreement now or hereafter
securing this Agency Development Promissory Note.
10. Severability.
If any provision of this Agency Development Promissory Note is determined by a court of
competent jurisdiction to be void or unenforceable, such determination shall not affect any other
provision of this instrument, and all other provisions hereof shall remain valid and in full force and effect.
11. Non Waiver.
No delay in demanding or failure to demand performance hereunder shall constitute a waiver by
the Agency of its right to subsequently demand such performance or to exercise any remedies for any
default hereunder. Further, in order to be effective, any waiver of any of the Agency's rights and
remedies hereunder shall be expressed in a writing signed by a duly appointed representative of the
Holder. Further, waiver by the Holder of any right hereunder shall not constitute a waiver of any other
right, including, but not limited to, the right to exercise any and all remedies for a different or subsequent
event of default hereunder.
MAKER:
TRADEMARK DEVELOPMENT COMPANY, LLC
a California limited liability company
Date:
By:
Its:
Date:
By:
Its:
Il.VPUBIKV ARNER\710715.1
6530
RVPUBIK.V ARNER\710715.1
EXHIBIT J
TO
AFFORDABLE HOUSING AGREEMENT
Agency Development Deed of Trust
RECORDING REQUESTED BY:
WHEN RECORDED MAIL TO:
Redevelopment Agency of the
City of Arcadia
240 West Huntington Drive
Arcadia, California 91066
Attention: Executive Director
llillJ
rFee Exemot - Gov't Code Section
(Space above for Recorder's Use)
AGENCY DEVELOPMENT DEED OF TRUST
THIS AGENCY DEVELOPMENT DEED OF TRUST ("Agency Development Deed of
Trust") is made this _ day of --' 2006, between Trademark Development Company, LLC, a
California limited liability company ("Trustor"); in favor of ("Trustee"), and
the Redevelopment Agency of the City of Arcadia, a public body, corporate and politic, whose address is
240 West Huntington Drive, Arcadia, California 91066 ("Beneficiary"), and is executed to secure that
certain Agency Development Promissory Note ("Agency Development Promissory Note") of even date
herewith in the principal amount plus interest thereon as provided by the Agency Development
Promissory Note.
Section I. Agreement: Definitions. This Agency Development Deed of Trust is made with respect
to that certain Affordable Housing Agreement ("Agreement") dated as of June 6, 2006 between Trustor as
"Developer" and Beneficiary as "Agency." All initially capitalized terms used but not defined herein
shall have the meanings given to them in the Agreement
Section 2. Grant In Trust and Security Agreement. Trustor irrevocably grants, transfers and assigns
to Trustee, in trust, with power of sale, for the benefit of Beneficiary, the following property ("Trust
Estate'}
2.1 that certain real property located at 119 and 121 Alta Street in the City of Arcadia
("City") and identified as Assessor's Parcel Numbers 5773-014-912 and 5773-014-913 more particularly
described in Exhibit An attached hereto and incorporated herein by reference ("Land"); and
2.2 all buildings, structures and other improvements now or in the future located or
to be constructed on the Land ("Improvements"); and
2.3 all other rights and interests now or in the future benefiting or otherwise relating
to the Land or the Improvements, including easements, rights-of-way, water rights and water stock (the
"Appurtenances," and together with the Land and the Improvements, the "Property").
Section 3. Obligations Secured. This Agency Development Deed of Trust is given for the purpose
of securing payment and performance of the following ("Secured Obligations"): (a) all present and future
indebtedness evidenced by the Promissory Note, (b) all present and future obligations of Trustor to
Beneficiary under this Agency Development Deed of Trust and the Agreement; and (c) all additional
RVPUBIKV ARNER\710715.1
6530
present and future obligations of Trustor to Beneficiary under any other agreement which is secured by
this Agency Development Deed of Trust.
Section 4. Trustor's Covenants. To protect the security of this Agency Development Deed of Trust,
Trustor agrees as follows:
4.1 Payment and Performance of Secured Obligations. Trustor shall pay and perform
all Secured Obligations in accordance with their respective terms.
4.2. Liens and Taxes. Trustor shall pay, prior to delinquency, all taxes and perform
all other obligations which are or may become a lien affecting any part of the Trust Estate.
Section 5. Obligations With Respect to Trust Estate. Neither Beneficiary nor Trustee shall be under
any obligation to preserve, maintain or protect the Trust Estate or any of Trustor's rights or interests in the
Trust Estate, or take any action with respect to any other matters relating to the Trust Estate. Beneficiary
and Trustee do not assume and shall have no liability for any of Trustor's obligations with respect to any
rights or any other matters relating to the Trust Estate.
Section 6. Remedies Upon Event of Default. Upon the occurrence of any Event of Default (defined
in Section 7 hereof): (i) all Secured Obligations shall immediately become due and payable without
further notice to Trustor; (ii) upon demand by Beneficiary, Trustor shall pay to Beneficiary sums which
will be sufficient to pay all taxes which are or may become a lien affecting the Trust Estate and the
premiums for any policies of insurance to be maintained hereunder. In addition, Beneficiary may,
without notice to or demand upon Trustor, exercise anyone or more of the following remedies, either
directly or through Trustee, an agent or court-appointed receiver:
(a) enter, take possession of, manage, and exercise any other rights of an owner of
the Trust Estate, and use any other properties of Trustor relating to the Trust Estate, all without payment
of rent or other compensation to Trustor;
(b) conduct any business of Trustor in relation to the Trust Estate and deal with
Trustor's creditors, debtors, tenants, agents and employees and any other persons having any relationship
with Trustor in relation to the Trust Estate;
(c) take such other action as Beneficiary deems appropriate to protect the security of
this Agency Development Deed of Trust.
6.1 Beneficiary may execute and deliver to Trustee written notice of default and of
its election to cause all or any part of the Trust Estate to be sold, which notice Trustee shall cause to be
filed for record; and after the lapse of such time as may then be required by law following the recordation
of such notice of default, and notice of sale having been given as then required by law, Trustee, without
demand on Trustor, shall sell such Property at the time and place fixed by it in such notice of sale, either
as a whole or in separate parcels and in such order as Beneficiary may direct (Trustor waiving any right to
direct the order of sale), at public auction to the highest bidder for cash in lawful money of the United
States (or cash equivalents acceptable to Trustee to the extent permitted by applicable law), payable at the
time of sale. Any person, including Trustee or Beneficiary, may purchase at such sale, and any bid by
Beneficiary may be, in whole or in part, in the form of cancellation of all or any part of the Secured
Obligations. Any such sale shall be free and clear of any interest of Trustor and any lease, encumbrance
or other matter affecting the property so sold which is subject or subordinate to this Agency Development
Deed of Trust.
RVPUBIKV ARNER\710715.1
6.2 All proceeds of collection, sale or other liquidation of the Trust Estate shall be
applied first to all costs, fees, expenses and other amounts (including interest) payable by Trustor under
this Agency Development Deed of Trust and to all other Secured Obligations not otherwise repaid in such
order and manner as Beneficiary may determine, and the remainder, if any, to the person or persons
legally entitled thereto.
6.3 Each of the remedies provided in this Agency Development Deed of Trust is
cumulative and not exclusive of, and shall not prejudice, any other remedy provided in this Agency
Development Deed of Trust or by applicable laws and shall be subject and subordinate to the remedies of
any holder of a senior lien permitted hereunder. Trustor, for itself and for any other person claiming by or
through 'frustor, waives, to the fullest extent permitted by applicable laws, all rights to require a
marshaling of assets by Trustee or Beneficiary or to require Trustee or Beneficiary to first resort to any
particular portion of the Trust Estate or any other security (whether such portion shall have been retained
or conveyed by Trustor) before resorting to any other portion, and all rights of redemption, stay and
appraisal.
Section 7. Event of Default. An "Event of Default" shall be deemed to occur if Trustor is in
material breach of any of its obligations under any of the following: (i) the Promissory Note; (ii) this
Agency Development Deed of Trust; or (iii) the Agreement and such breach is not cured within ten (10)
days after Trustor receives written notice of such breach.
Section 8. Costs. Fees and Expenses. Trustor shall pay, on demand, all costs, fees, expenses,
advances, charges, losses and liabilities of Trustee and Beneficiary under or in connection with this
Agency Development Deed of Trust or the enforcement of, or the exercise of any remedy or any other
action taken by Trustee or Beneficiary under, this Agency Development Deed of Trust or the collection of
the Secured Obligations, in each case including (i) reconveyance and foreclosure fees of Trustee, (ii) costs
and expenses in connection with the operation, maintenance, preservation, or sale of the Trust Estate or
foreclosure of this Agency Development Deed of Trust, (iii) advances made by Beneficiary to complete
or partially construct all or any part of any Construction on the Land, (iv) cost of evidence of title, and (v)
the reasonable fees and disbursements of Trustee's and Beneficiary's legal counsel.
Section 9. Late Payments. By accepting payment of any part of the Secured Obligations after its
due date, Beneficiary does not waive its right either to require prompt payment when due of all other
Secured Obligations or to declare a default for failure to so pay.
Section 10. Reconvevance. Upon written request of Beneficiary and surrender of this Agency
Development Deed of Trust and the Promissory Note to Trustee for cancellation or endorsement, and
upon payment of its fees and charges and compliance with all other requirements for reconveyance as
specified in the Promissory Note and Agreement, Trustee shall reconvey, without warranty, all or any part
of the Property then subject to this Agency Development Deed of Trust. Any reconveyance, whether full
or partial, may be made in terms to "the person or persons legally entitled thereto," and the recitals in such
reconveyance of any matters or facts shall be conclusive proof of the truthfulness thereof. Beneficiary
shall not be required to cause any Property to be released from this Agency Development Deed of Trust
until final payment and performance in full of all Secured Obligations and termination of all obligations
of Beneficiary under or in connection with the Promissory Note or until the Secured Obligations are
forgiven.
Section 11. Substitution of Trustee. Beneficiary may from time to time, by instrument in writing,
substitute a successor or successors to any Trustee named in or acting under this Agency Development
Deed of 'frust.
RVPUBIKV ARNER\7\0715.1
6530
Section 12. Successors and Assigns. This Agency Development Deed of Trust applies to and shall be
binding on and inure to the benefit of all parties to this Agency Development Deed of Trust and their
respective successors and permitted assigns.
Section 13. Acceotance. Notice of acceptance of this Agency Development Deed of Trust by
Beneficiary or Trustee is waived by Trustor. Trustee accepts this Agency Development Deed of Trust
when this Agency Development Deed of Trust, duly executed and acknowledged, is made a public record
as provided by law.
Section 14. Governing Law. This Agency Development Deed of Trust shall be governed by, and
construed and enforced in accordance with, the Laws of California.
Section 15. Request for Notice. Trustor requests that a copy of any notice of default and a copy of
any notice of sale be mailed to Trustor at Trustor's address set forth above.
[Signatures on Following Pages]
RVPUBIKV ARNER\710715.\
RVPUBIKV ARNER\710715.1
SIGNATURE PAGE
TO
AGENCY DEVELOPMENT DEED OF TRUST
TRUSTOR:
TRADEMARK DEVELOPMENT COMPANY, LLC
a California limited liability company
By:
Its:
By:
Its:
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NOTARY ACKNOWLEDGMENT
STATE OF CALIFORNIA
)
) ss.
)
COUNTY OF LOS ANGELES
On
undersigned
2006, before me, th
personally appeare
notary
public,
,
o personally known to me OR 0 proved to me on the basis
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/herftheir authorized
capacity(ies), and that by his/herftheir 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.
o Individual(s) ",..\.
p,Cor]lor8te'..:: ,- ...
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o,Pmner(s) '"~.,, ," " ' "
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Signature of Notary Public
RVPUBIKV ARNER\7107Is.!
o Individual(s)
o Corporate
Oflicer(s)
[J PBrtner(s) .'
o Attorney-in-Fact'
o TrtiSlCC(S)
me, the 0 Silbscrib"ing Witness' . ,
appeared [J GuBr~ianlConserv.io~ ,
[J Other: ' . , ,
~ .
NOTARY ACKNOWLEDGMENT
STATE OF CALIFORNIA
)
) ss.
)
COUNTY OF LOS ANGELES
On
undersigned
2006, before
personally
notary
public,
,
o personally known to me OR 0 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 hislher/their authorized
capacity(ies), and that by his/her/their signature(s) on the ·
instrument the person(s), or the entity upon behalf of which the
person(s) acted, executed the instrument.
WITNESS my hand and official seal.
-
.~
Signature of Notary Public
RVPUBIKV ARNEIl.\7J071S.1
i. 'I"
6530
/'
EXHIBIT A
TO
AGENCY DEVELOPMENT DEED OF TRUST
Legal Description of the Land
That real property located In the City of Arcadia, Los Angeles County, California, more
particularly described as follows:
--
'.
RVPUBlKv ARNER\710715.1
EXHIBIT K
TO
AFFORDABLE HOUSING AGREEMENT
Completion Guarantee
This GUARANTY AGREEMENT ("Guaranty") is made and entered into as of , by
, a ("Guarantor") in favor of the Redevelopment Agency of
the City of Arcadia, a public body corporate and politic ("Agency").
WHEREAS, the Agency and Trademark Development Company, LLC, a California
limited liability company ("Developer") have entered into that certain Affordable Housing Agreement
dated as of May 16, 2006 ("Agreement") lll1der which the Developer has agreed to construct a six (6)
New Home, owner-{)ccupied multi-family affordable housing project, as more specifically defined in the
Agreement ("Project").
NOW, THEREFORE, for other good and valuable consideration, receipt and sufficiency
of which are hereby acknowledged, and intending to be legally bound, Guarantor hereby covenants and
agrees as follows:
I. Guarantor hereby unconditionally guarantees that the Developer shall construct
and complete the Project in accordance with the Agreement on or before the completion date specified in
the Schedule'"wPerformance attached to the Agreement (subject to applicable notice, cure and extensions
as contained in the Agreement and shall pay all costs and expenses with respect to the Construction and
completion of the Project.
2. If the Developer does not perform as specified in Section I hereof, Guarantor
unconditionally and irrevocably covenants and agrees that Guarantor shall construct and complete the
Project on or before the times required by, and otherwise in accordance with, the Agreement and pay all
costs and expenses and discharge all liabilities, with respect to such Construction and completion.
3. This Guaranty shall remain in full force and effect until such time as a Certificate
of Completion (as defined in the Agreement) has been issued by the Agency for the Project.
4. In the event the Developer does not perform its obligations set forth in Section I
of the Guaranty on or prior to the time such performance (or any portion thereof) is required, the Agency
may, at its option, proceed to enforce this Guaranty against Guarantor in the first instance without first
proceeding against the Developer or any other person and without first resorting to any security held by or
on behalf of the Agency as security or to any other remedies, and the liability of Guarantor hereunder
shall be in no manner affected or impaired by any failure, delay, neglect, omission or election by the
Agency not to realize upon or pursue any persons or security liable for obligations of the Developer under
the Agreement.
5. The Agency, from time to time and before or after any events of default by the
Developer under the Agreement and with or without further notice to or assent from Guarantor and
without in any manner affecting the liability of Guarantor and upon such terms and conditions as it may
. deem advisable, may: (a) extend in whole or in part (by renewal or otherwise), modify, accelerate,
change or release (or consent to any of the foregoing) any other agreements, documents or instruments in
any way related to the obligations hereby guaranteed and any other indebtedness, liability or obligation of
the Developer or of any other person secondarily or otherwise liable for any such indebtedness, liability
RVPUBIKV ARNER\7107IS.\
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or obligation of the Developer, or waive any default with respect thereto; (b) sell, release, surrender,
modify, impair, exchange, substitute or extend any and all security at any time held by the Agency as
security for the payment or performance of the obligations of the Developer under the Agreement and any
other indebtedness, liability or obligation of the Developer to the Agency; and (c) settle, adjust or
compromise any claim of the Agency against the Developer or any other person secondarily or otherwise
liable (including, but not limited to, Guarantor) for the obligations of the Developer under the Agreement
or any other indebtedness, liability or obligation of the Developer. Guarantor hereby ratifies and confirms
any such extension, renewal, change, release, waiver, surrender, exchange, modification, impairment,
substitution, settlement, adjustment, compromise or consent and agrees that the same shall be binding
upon Guarantor, and Guarantor hereby expressly waives any and all defenses, counterclaims or offsets
which Guarantor might or could have by reason thereof, it being understood that Guarantor shall at all
times be bound by this Guaranty and remain liable to the Agency hereunder until all of the obligations
hereunder shall have been performed in full. Guarantor agrees that its obligations hereunder shall not be
discharged, limited or otherwise affected by any circumstances which otherwise would constitute a legal
or equitable discharge of Guarantor as surety or guarantor.
6. the Agency may without the consent of Guarantor at any time and from time to
time: (a) amend any provisions of the Agreement, and any other agreements, instruments or documents
relating in any way to the obligations hereby guaranteed and any change in the obligations to be
performed thereunder; (b) make any agreement with the Developer for the extension, renewal,
modification, payment, compounding, compromise, discharge, exchange, settlement, waiver or release of
any provision of the Agreement, and any other agreements, documents or instruments relating in any way
to the obligations hereby guaranteed, or of any person liable for or any security for the performance of
any ol"1he obligations hereby guaranteed, without notice to or the consent of Guarantor; and (c) without
limiting the generality of the foregoing, surrender to the Developer, or to deal with or modify the form of,
any security which the Agency may at any time hold or which is held on its behalf to secure the
performance of any obligation hereby guaranteed, and the obligations herein undertaken by Guarantor
shall not be impaired or affected by any of the foregoing but shall include any other obligations thereby
undertaken by the Developer.
7. (a) Guarantor hereby waives all requirements that the Agency shall institute
any action or proceedings at law or in equity against the Developer or anyone else or with respect to any
security held by the Agency as a condition precedent to bringing an action against Guarantor upon this
Guaranty, and Guarantor further agrees to make and perform its obligations hereunder whether or not any
one or more of the following events have occurred: (a) the Agency have made any demand on the
Developer; (b) the Agency have taken any action of any nature against or has pursued any rights which
the Agency have against any other person, partnership, corporation, association, company or entity who
may be liable for performance of the obligations with respect to the completion of the Project; (c) the
Agency holds or has resorted to any security for the obligations of the Developer under the Agreement or
any other liabilities or obligations hereby guaranteed; or (d) the Agency has invoked any other remedies
or rights the Agency has available with respect to the obligations of the Developer under the Agreement
or the liabilities or obligations hereby guaranteed.
(b) Guarantor shall not be released by any act or thing which might, but for
this provision of this Guaranty, be deemed a legal or equitable discharge of a surety or guarantor, or by
reason of any waiver, extension, modification, forbearance or delay of the Agency or its failure to proceed
promptly or otherwise in the enforcement of the Agreement or any other agreement, document or
instrument relating in any way to the obligations hereby guaranteed, and Guarantor hereby expressly
waives and surrenders any defense to their liability under this Guaranty based upon any of the foregoing
acts, things, agreements or waivers, including without limitation, any benefits it may have under
California Civil Code Section 2815 (or any similar law in any jurisdiction).
RVPUBIKV ARNER\71071S.1
8. Guarantor hereby waives presentment for payment, demand, protest, notice of
protest and of dishonor, notice of acceptance hereof, notices of default and all other notices now or
hereafter provided by law.
9. Guarantor hereby agrees that this instrument contains the entire agreement
between the parties and there is and can be no other oral or written agreement or understanding whereby
the provisions of this instrument have been or can be affected, varied, waived or modified in any manner
unless the same be set forth in writing and signed by the Agency, and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which given.
10. This Guaranty is and shaH be deemed to be a contract entered into under and
pursuant to the laws of the State of California without regard to the choice of law principles thereof.
I I. Guarantor shall not, by reason of the performance of the terms and provisions of
this Guaranty, succeed to or be subrogated to the rights and privileges of the Agency against the
Developer or any other party or be deemed to be the successor or assign of either the Agency, unless and
until each and every indebtedness, liability and obligation of any kind of the Developer to the Agency
shall have been performed and discharged. In addition and without the foregoing or any other waiver
herein, Guarantor hereby waives, in accordance with California Civil Code Section 2856(a)(I), if
applicable, all rights, benefits and defenses including, without limitation, aH rights of subrogation,
reimbursement, indemnification and contribution, under California Civil Code Section 2787 to 2855,
inclusive, 2899 and 3433, and under, or based upon, directly or indirectly, California Code of Civil
Procedure Section 580a, 580b, 580d and 726, if applicable (or any similar law in any other jurisdiction)
and no other pre}1ision of this Guaranty shaH be constructed as the limiting the generality of any
covenants and waivers set forth in this Section 15.
l2. No delay on the part of the Agency in exercising any rights hereunder or failure
to exercise the same shaH operate as a waiver of such rights. All of the rights, powers and remedies
hereunder and under any other agreement entered into between Guarantor and the Agency, shall be
cumulative and not alternative, and such rights, powers and remedies shall be in addition to all of such the
Agency's rights, powers and remedies provided by law.
13. Guarantor agrees to pay aH costs and expenses which may be incurred by the
Agency, their successors and assigns, in the enforcement of this Guaranty or otherwise relating to this
Guaranty, including, but not limited to, reasonable attorneys' fees.
14. This Guaranty shall not be deemed to affect, limit, modify or otherwise have any
impact or effect upon, or be affected, limited or modified by, any other agreement of guaranty or
suretyship given by Guarantor with respect to the Agreement. Notwithstanding anything to the contrary
herein contained, this Guaranty shall be deemed supplemental to, and not in derogation of, any such
agreement of guaranty or suretyship or any other instrument now or hereafter executed by Guarantor in
favor of the Agency.
IS. In case anyone or more of the provisions of this Guaranty shall be invalid, illegal
or unenforceable in any respect, the validity of the remaining provisions shall be in no way affected,
prejudiced or disturbed thereby.
16. In the event any party is added to become an additional guarantor under this
Guaranty, all obligations of Guarantor hereunder shall be joint and several with any such other party or
parties, and, under such circumstances, all references to Guarantor herein shaH thereafter be deemed to
Il.VPUBIKV ARNEIl.\7107IS.1
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refer to each of such parties comprising Guarantor both individually and collectively with the other such
party or parties.
IN WITNESS WHEREOF, Guarantor has duly executed this Guaranty as of the day and year first
above written.
GUARANTOR:
a
Date: By:
Its:
Date: By:
Its:
"-.-:-
RVPUBIKV ARNER\710715.1
EXHIBIT L
TO
AFFORDABLE HOUSING AGREEMENT
Marketing Application and Initial Owner Selection Plan
1. Overall Marketing Objective
a. To sell, as much as permitted by law and regulations, (i) two (2) of the New Homes to
income-qualified City employees who are currently living within the City limits; and (ii)
four (4) of the New Homes to income-qualified persons living within the City limits, but
who are not employees of the City.
b. In the event that no City employees living within the City limits desire to purchase the
New Homes, then to sell all six (6) New Homes to income-qualified persons living within
the City limits.
2. Marketing Strategy
The following marketing strategy will be utilized to achieve the overall marketing objective.
. Generate awareness of Project among City residents through the programs below:
-.-:-
-Direct Marketing
-Public Relations
-Directory Advertising
3. Media Advertising
. Generate and maintain prospect communication through an initial interest list comprised of
telephone inquiries resulting from publicity about the project in local news media, signage at
the development site, groundbreaking news release, and local advertising in the City.
. Build and maintain prospect and Community influencer relationships through a Community
relations program with the City departments, non-profits, Community service organizations,
and churches.
. In the event sufficient interest is not generated from the City area, expand the marketing
effort to the San Gabriel Valley, and then to the greater Los AngelesILong Beach area by
press and audio/visual announcements.
4. Geographic Market
. Primary Market Area (PMA) is within the City limits of Arcadia.
5. Basic Eligibility
RVPUBIKCVl71071S
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. Income ranges from
income) to $
income). (See below)
Dollars $
Dollars $
for a single person (moderate
for three people (moderate
Income Limits (2005)
I Person
2 People
3 People
Moderate
6. Marketing Programs
6.1 Direct Advertising in Neighborhood and Public Service Directories
-Pacific Bell and General Telephone
-Donnelly Directory
-Chamber of Commerce list of Community organizations
-Community Service Organizations themselves
-City area real estate guides
-Housing Authority of the County of Los Angeles
-City Churches, Temples, Synagogues and other places of worship
6.2 Media Advertising
-Primary Market Area (PMA) - Advertise in the Arcadia Weekly.
'0
7 Wait List Policy and Procedures
7.1 Names will be placed on the interest list in order of the inquiry. An Interest Form will be
mailed to each interested party (see Attachment I). .
7.2 Only one (I) name per address/household will be permitted to submit an Interest Form
and be placed on the waiting list. Should more than one (I) application per name or household be
discovered, all applications from that name and household will be disqualified. .
7.3 In order to be put on the "Waiting List" each applicant must return the signed "Interest
Form," (Attachment 2).
7.4 Once a wait list applicant has signed and returned the completed Interest Form, they will
be given a receipt with a number. This will act as the applicant's Wait List Number. There will be only
one Wait List Number assigned to each application, no matter how many people are listed on the Interest
Form.
7.5 The Interest Form, deposit account and Wait List records and Wait List Number will be
kept at the Agency office.
7.6 Monthly contact will be made keeping the Wait List applicants aware of the selection and
subsequently the Construction progress, etc.
7.7 Applicant Screening Process- to begin 90 days prior to occupancy and the applicant
screening process will be based upon each applicant's Wait List Number.
RVPUBIKCVl71071S
7.8 All applicant names on the Wait List will be placed in two lotteries - one lottery for City
employees and one lottery non-City employees (by Wait List Number). Note - only the Applicant's Wait
List Number will be entered.
7.9 The following priority shall be made:.
7.9.1 Eligible applicants residing in the City for twenty (20) or more years (e.g., 6,936
days) from December 31, 2006 shall have five (5) balls with their Wait List Number placed in the Lottery
drum.
7.9.2 Eligible applicants residing in the City for more than five (5) years (e.g., 1461
days) but less than twenty (20) years (e.g., 6935 days) shall have three (3) balls with their Wait List
Number placed in the Lottery drum.
7.9.3 Eligible applicants residing in the City for more than two (2) years (e.g., 730
days) but less than five (5) years (e.g., 1,460 days) shall have two (2) balls with their Wait List Number
placed in the Lottery drum.
7.9.4 All other eligible applicants shall have one (I) ball with their Wait List Number
placed in the appropriate lottery drum.
7.10 The initial selection for the two separate lotteries shall be made on
a.m.lp.m. in Arcadia City Hall Council Chambers, 240 West Huntington Drive.
7.11 A list of the winners of the two lotteries in the order drawn shall be prepared by the
Agency
at
7.12 A certified letter, return receipt requested, shall be sent to the first twelve (12) names
drawn. The first six (6) applicants shall be informed of their opportunity to purchase a New Home; the
six (6) others shall be informed they may have an opportunity to purchase a New Home if one of the
initial six (6) are ineligible for any reason.
7.13 Each applicant selected then will have twenty one (21) calendar days to complete a
detailed in-person questionnaire.
7.14
Applicants ,vill need to provide proof of social security
7.15
Applicants ,vill need to provide proof of all income and assets (equity).
7.16
Applicants will need to review and execute a purchase agreement.
7.17
Applicants must not be in a current bankruptcy.
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ATTACHMENT I
TO
MARKETING APPLICATION AND INITIAL OWNER SELECTION PLAN
INTEREST FORM
Note: This form must be completely and accurately filled out, signed by all potential interested initial
owner s, and returned to the Agency.
1.
Applicant Name Birth Date
Address Apt.
City State Zip Code
....":"
Telephone Fax E-mail
2. Length of time you have lived at this address.
3. If you have lived at the above address less than three (3) years, please provide your previous
address.
Address
City
4. Length of time at this address. from
to
5. Spouse's Name:
(ifto be co-owner)
Birth Date
6. Other third-party (non-spouse) proposing to share tenancy, (if any):
Name:
Birth Date
7. Relationship to applicant:
8. AssetslEquity - Per federal guidelines, the value of each applicant's and co-owner 's assets (net of
mortgages, etc.) will be calculated. This amount shall be multiplied by a ten percent (10%) interest
factor and that figure shall be added to income. Eligibility shall be based on total annual income.
Annual Income Restrictions (per 2002 - U.S. Federal Housing and Urban Development).
RVPlJB~CV>710715
1 Person
2 People
3 People
Moderate
Certification
a. I/W e certify that my/our annual income is less than shown in "Annual Income Restrictions"
above.
B. I/We certify that I/We are reasonably certain that my/our assets/equity as defined in paragraph
8 above will not be sufficient to disqualify me/us on the basis of income.
d. I/We certify that my/our current (and previous address) is as stated in paragraphs 1 to 4 above.
If you are initially selected through the Lottery, you (and your spouse and/or other third party) will be
required to provide additional information and documentation verifying all of the information above and
as may then be requested.
Applicant
Signature:
Applicant
Date
~
"
Print name
Other
Signature:
(if any)
Spouse
Date
Print name
Signature:
(if any)
Other Party
Date
Print name
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