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HomeMy WebLinkAboutC-2222I I • 0 Iwo -`I c 4 -Z =tk_4 SECOND AMENDMENT TO AFFORDABLE HOUSING AGREEMENT BETWEEN THE REDEVELOPMENT AGENCY OF THE CITY OF ARCADIA a public body, corporate and politic I:AI 11 TRADEMARK DEVELOPMENT COMPANY, LLC a California limited liability company [DATED AS OF MARCH _, 2007 FOR REFERENCE PURPOSES ONLY] R V P U BUC RA N DO LP H \72 8210.1 0 0 1. PARTIES AND EFFECTIVE DATE. THIS SECOND AMENDMENT TO AFFORDABLE HOUSING AGREEMENT ( "Second Amendment ") is entered into between THE REDEVELOPMENT AGENCY OF THE CITY OF ARCADIA, a public body, corporate and politic ( "Agency "), and TRADEMARK DEVELOPMENT COMPANY, LLC, a California limited liability company ('Developer "). This Second Amendment is made with reference to that certain "Affordable Housing Agreement" ( "Original Agreement ") between the Agency and the Developer, dated as of June 6, 2006, as amended by that certain "First Amendment to Affordable Housing Agreement" ( "First Amendment ") dated as of September 28, 2006. The Original Agreement and the First Amendment are referred to together in this Second Amendment as "AHA." The Agency and the Developer are sometimes referred to herein as a "Party" and, collectively, as the "Parties." 2. RECITALS. 2.1 Pursuant to the provisions of California Community Redevelopment Law (Health and Safety Code Section 33000 et seq.) ( "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. The City Council has since amended the Redevelopment Plan for the Project Area on the following dates by the following ordinances: (i) on May 19, 1981 by Ordinance Number 1722, (ii) on November 4, 1986 by Ordinance Number 1847, (iii) on November 1, 1994 by Ordinance Number 2025, (iv) on June 4, 1999 by Ordinance Number 2102, and (v) on October 7, 2003 by Ordinance Number 2181. 2.2 The Agency is engaged in activities necessary to execute and implement the Redevelopment Plan for the Project Area. 2.3 The Agency and the Developer are parties to the AHA which provided for, among other things, the Developer's acquisition of two (2) parcels of Agency -owned real property approximately sixteen thousand (16,000) square feet in size located at 119 Alta Street and 121 Alta Street in the City and identified as Assessor Parcel Numbers 5773- 014 -912 and 5773 -014- 913 ( "Property "). 2.4 The AHA also provides for the Developer's construction of six (6) owner - occupied town homes ( "Project ") on the Property and reservation of those units for sale (for a period of at least forty -five (45) years) to families whose household earnings at the time of sale do not exceed one hundred twenty percent (120 %) of Los Angeles County median income. 2.5 To assist in the development of the Project on the Property, the AHA further provides for the Agency's provision of a forgivable loan to the Developer 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 "). 2.6 Section 3.4.1.2.2 of the AHA requires the Developer, together with the lender ( "Lender ") of the construction loan ( "Construction Loan ") for the Project to open a restricted bank account with a financial institution reasonably acceptable to the Agency through which the Developer shall receive and withdraw any and all proceeds of the Construction Loan and the 2 R V PUB \K RANDO LP H \728210.1 0 0 majority of the Agency Development Loan. Section 3.4.1.2.2 further requires that the proceeds of the Construction Loan and the proceeds of the Agency Development Loan be disbursed in proportionate amounts. 2.7 As a condition of funding, the Lender of the Construction Loan has required that the proceeds of the Agency Development Loan be disbursed and expended prior to the disbursement of the proceeds of the Construction Loan. n �, 2.8 The Parties now desire to amend the AHA to meet the requisites of the Lender of UI the Construction can so that the proceeds of the Construction Loan and the Agency D e o ment�Oan�in the following order: first all of the Developer's funds on deposit with are P g O P P a�660 the Construction Lender, (ii) second, the proceeds of the Agency Development Loan, and (iii) third, the proceeds of the Construction Loan. 3. TERMS. 3.1 Incorporation of Recitals. The Recitals set forth above are true and correct and are incorporated into this Second Amendment by this reference. 3.2 Effective Date. This Second Amendment is dated as of March al , 2007 for reference purposes only. This Second Amendment shall not become effective or operative until the first date on which all of the following are true ( "Effective Date of Second Amendment "): this Second Amendment is: (i) approved by the Developer, executed by the authorized representative of the Developer and delivered to the Agency, and (ii) approved by the governing board of the Agency, executed by Agency's Executive Director and delivered to the Developer. 3.3 Defined Terms. All terms, phrases and words indicated to be defined terms by initial capitalization that are not specifically defined in this Second Amendment shall have the meaning ascribed to the same term, phrase or word in the AHA. The defined terms, phrases and words defined in the initial paragraph and Recitals of this Second Amendment are also incorporated into the AHA and this Second Amendment by this reference. 3.4 Estoppel Provision. The Parties each acknowledge and agree that, as of the Effective Date of Second Amendment, no default exists under the AHA and the AHA is in full force and effect. Except as expressly amended by this Second Amendment, the AHA is in all respects ratified and confirmed and all of the terms and provisions and conditions of the AHA, as amended by this Second Amendment, shall be and remain in full force and effect. 3.5 Amendment to Section 3.4.1.2.2 of the AHA. Section 3.4.1.2.2 of the AHA is removed in its entirety and replaced with the following paragraph: "3.4.1.2.2 Remaining Balance of Agency 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, together with the Lender of the Construction Loan shall open a restricted bank account with a financial institution reasonably acceptable to the Agency through which the Developer shall receive and withdraw any and all proceeds of the 3 RV PUDUCRAN DOLPH \728210.1 0 0 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, the proceeds of the Remaining Balance of the Agency Development Loan, and (iii) third, the proceeds of the Construction Loan." IN WITNESS WHEREOF, the Agency and the Developer have caused this Second Amendment 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] 0 RV PU© \KRAN DO LP H \728210.1 • • SIGNATURE PAGE TO SECOND AMENDMENT TO AFFORDABLE HOUSING AGREEMENT DEVELOPER: TRADEMARK DEVELOPMENT COMPANY, LLC a California limited liability company Date: AW,, l 22 By: Its: Its: RVPUB%KRAN DOLPH \728210.1 PF Date: ATTEST: 0 0 SIGNATURE PAGE TO SECOND AMENDMENT TO AFFORDABLE HOUSING AGREEMENT koo 'X AGENCY: THE REDEVELOPMENT AGENCY OF THE CITY OF ARCADIA, a public body, corporate and politic 0 By: IA-�� ( �� - Agency Secretary APPROVED AS TO LEGAL FORM: BEST BEST & KRIEGER LLP By: Agency Counsel 6 RVPUBVCRAN DOLPH \728210.1 qq William R. Kelly Executive Director C, EXHIBIT A TO • SECOND AMENDMENT TO AFFORDABLE HOUSING AGREEMENT Form of Memorandum of the Agreement [To be attached behind this page] EXHIBIT A Form of Memorandum of Agreement R V P U B\KRAN DO L P H \7 28210.1 C, RECORDING REQUESTED BY: Premium Escrow 150 North Santa Anita Avenue Suite 110 Arcadia, CA 91006 WHEN RECORDED MAIL TO: The Redevelopment Agency of the City of Arcadia 240 West Huntington Drive Arcadia, CA 91066 Attention: Executive Director • Exempt from Recording Fees per Govt. MEMORANDUM OF AFFORDABLE HOUSING AGREEMENT This Memorandum of Agreement is made with reference to that certain "Affordable Housing Agreement' entered into between THE REDEVELOPMENT AGENCY OF THE CITY OF ARCADIA, a California public body, corporate and politic ( "Agency ") and TRADEMARK DEVELOPMENT COMPANY, LLC, a California limited liability corporation ('Developer) (collectively the "Parties "), as amended by that certain "First Amendment to Affordable Housing Agreement' dated September 28, 2006 and that certain "Second Amendment to Affordable Housing Agreement' dated March _, 2007 (as so amended, the "Agreement'). The Parties agree as follows: PURPOSE OF THIS MEMORANDUM 1. This Memorandum is entered into for the purpose of providing record notice of the Agreement. The Agreement provides for the disposition in accordance with the Agreement of that certain real property defined in the Agreement as "Property" and described in Exhibit A attached hereto. 2. This Memorandum is prepared solely for the purpose of recording in the Official Records of Los Angeles County to give constructive notice of the Agreement, the terms and conditions of which are made a part of this Memorandum as though fully set forth herein, and in no way modifies any of the express and particular provisions of the Agreement. The Agreement is a public record and a copy of the Agreement is available for public inspection and copying at the offices of the City of Arcadia, 240 West Huntington Drive, Arcadia, CA 91007 [Signatures on following pages] EXHIBIT A Form of Memorandum of Agreement RV PUB \KR ANDOLPH\728210.1 0 0 SIGNATURE PAGE TO MEMORANDUM OF AGREEMENT DEVELOPER: TRADEMARK DEVELOPMENT COMPANY, LLC a California limited liability company Date: Z�1 %% BY: IV IYS: �Nclp%>z- - Date: th A?ACC & 1x?,t ?BOG% By: L• Its: S -1 RVPU6\KRAND0LP 11 \728210.1 0 NOTARY ACKNOWLEDGMENT (California All - Purpose Acknowledgment) STATE OF ss. COUNTY OF On __3/Z-7_ , 2007 before me, Jc� , notary public, personally appeared N ,\ A k personally known to me (or p ) to be the person(e) whose names} ishwe subscribed to the within instrument and acknowledged to me that he /ske{they executed the same in his /hes44e4 authorized capacity(i"), and that by his/hef4h6r signature(a)- on the instrument the person(o,, or the entity upon behalf of which the person(&)- acted, executed the instrument. WITNESS my hand and official seal. Co1nalMm• now PM0 - cdowft LOB ela h R M a1N Cou* �A10, !01 M RV PUB \KRANDOLPH \728210.1 Si� e of Notary blic 0 0 NOTARY ACKNOWLEDGMENT (California All- Purpose Acknowledgment) STATE OF Chl�fOrv�iq ) ss. COUNTY OF Las l�nh cl CS ) On 3�ZZ , 2007 before me, Wu1(t11 Yakr) notary public, personally appeared -- o'd A e yc- -vt personally known to me (or 'dente) to be the person(a} whose name is /are subscribed to the within instrument and acknowledged to me that he /slae4hey executed the same in his/her�• authorized capacity(aes), and that by his /heg4heif signaturcH on the instrument the person(-?, or the entity upon behalf of which the person* acted, executed the instrument. WITNESS my hand and official seal. �oetw► wA1e+Ert �ans�rt �� on0IAN"H Signatur ofNotarv9 blic Noloy FUM ' Ca")ft IMComm•MP ! 101 RVPUH \KRANDOLPH \728210.1 0 0 SIGNATURE PAGE TO MEMORANDUM OF AGREEMENT Date: 8'Hot ATTEST: IC AGENCY: THE REDEVELOPMENT AGENCY OF THE CITY OF ARCADIA, a public body, corporate and politic By: William R. Kelly Executive Director APPROVED AS TO LEGAL FORM: BEST BEST & KRIEGER LLP Agency Counsel S -2 RV PUB \KRANDOLPI1 \728210.1 • • EXHIBIT A TO MEMORANDUM OF AGREEMENT Legal Description of Property Real property in the City of Arcadia, County of Los Angeles, State of California, described as follows: LOT 5 AND 6 IN BLOCK 72 OF THE "ARCADIA" SANTA ANITA TRACT, IN THE CITY OF ARCADIA, AS PER MAP RECORDED IN BOOK 15 PAGES 89 AND 90 OF MISCELLANEOUS RECORDS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY. APN: 5773- 014 -912 and 5773 - 014 -913 Exhibit A Legal Description of Property RVPUB \KRANDO LPH \728210.1 i - 0 E This page is part of your document - DO NOT DISCARD TITLE(S) : FEE CODE FREE H H 20 CODE 19 CODE 9 06 2357349 RECORDED /FILED IN OFFICIAL RECORDS RECORDER'S OFFICE LOS ANGELES COUNTY CALIFORNIA 10/24/06 AT 08:00am 1111111111111111111111111111 IJ D.T.T. Assessor's Identification Number (AIN) To be completed by Examiner OR Title Company in black ink. Number of AIN's Shown ® THIS FORM IS NOT TO BE DUPLICATED F#MT ARIEt11CA6 TITLE COMPANY OF A "SUBDIVISION" RECORDING REQUESTED BY: Premium Escrow 150 North Santa Anita Avenue Suite 110 Arcadia, CA 91006 WHEN RECORDED MAIL TO: The Redevelopment Agency of the City of Arcadia 240 West Huntington Drive Arcadia, CA 91066 Attention: Executive Director 06 • 57349 r Exempt from Recording Fees per Govt. Code §27383 MEMORANDUM OF AFFORDABLE HOUSING AGREEMENT This Memorandum of Agreement is made with reference to that certain "Affordable Housing Agreement" entered into between THE REDEVELOPMENT AGENCY OF THE CITY OF ARCADIA, a California public body, corporate and politic ( "Agency ") and TRADEMARK DEVELOPMENT COMPANY, LLC, a California limited liability corporation ( "Developer) (collectively the 'Parties "), as amended by that certain "First Amendment to Affordable Housing Agreement' dated September 28, 2006 (as so amended, the "Agreement "). The Parties agree as follows: PURPOSE OF THIS MEMORANDUM 1. This Memorandum is entered into for the purpose of providing record notice of the Agreement. The Agreement provides for the disposition in accordance with the Agreement of that certain real property defined in the Agreement as 'Property" and described in Exhibit A attached hereto. 2. This Memorandum is prepared solely for the purpose of recording in the Official Records of Los Angeles County to give constructive notice of the Agreement, the terms and conditions of which are made a part of this Memorandum as though fully set forth herein, and in no way modifies any of the express and particular provisions of the Agreement. The Agreement is a public record and a copy of the Agreement is available for public inspection and copying at the offices of the City of Arcadia, 240 West Huntington Drive, Arcadia, CA 91007 CID 2y2�8o6 -So 60) RVPUB\KRANDOLP11\7217876.1 [Signatures on following pages] EXHIBIT A Form of Memorandum of Agreement t SIGNATURE PAGE TO MEMORANDUM OF AGREEMENT DEVELOPER: TRADEMARK DEVELOPMENT COMPANY, LLC a California limited liability company Date: at �' hod( By: Its: Date: By: Its: / C %� 06 2357341 l�_fa RVPUB \KRAM)01.PHV20976.1 -Ci �' Inm A- S-1 Date: ATTEST: (0*100 0 SIGNATURE PAGE TO MEMORANDUM OF AGREEMENT By: \ Agenc Secretary APPROVED AS TO LEGAL FORM BEST BEST & KRIEGER LLP AGENCY: THE REDEVELOPMENT AGENCY OF THE CITY OF ARCADIA, a public body, corporate and politic By: '�=J pw .IV -- Wd'-%wo!y.,7 ti RVPUBXRAN DOITY1 \720876.1 S -2 William R. Kelly Executive Director 06 2357341 rt EXHIBIT A TO MEMORANDUM OF AGREEMENT Legal Description of Property Real property in the City of Arcadia, County of Los Angeles, State of California, described as follows: LOT 5 AND 6 IN BLOCK 72 OF THE "ARCADIA" SANTA ANITA TRACT, IN THE CITY OF ARCADIA, AS PER MAP RECORDED IN BOOK 15 PAGES 89 AND 90 OF MISCELLANEOUS RECORDS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY. APN: 5773- 014 -912 and 5773- 014 -913 06- 2357349 �t RVPUBUCRAND0LP1 IV20876. 1 - - -- gl1p Exhibit A - Legal Description of Property { 'NOTARY ACKNOWLEDGMENT (California All- Purpose Acknowledgment) STATE OF ss. COUNTY OF i ) On o �, 2006 before me, � —ko,�-� j\p, �xMpy\�'gA , notary public, personally appeared , personally known to me (or proved to me on the basis of satisfactory evidence) o be the personN whose name(k) is /* subscribed to the within instrument and acknowledged to me that he /she /they executed the same in his/&r /their authorized capacity(iks), and that by his/hkr /their signature('c) on the instrument the person* or the entity upon behalf of which the personO acted, executed the instrument. WITNESS my hand and official seal. Signatuary Public T 06. 2357349 t l� cm-- - -- RVPUB\KRAND0LPN \720876.1 L ALL PURPOSE ACKNOWLEDGMENT STATE OF CALIFORNIA • . alibi a Notary Public in and for said State, personally 0 personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is /are subscribed to the within instrument and acknowledged to me that he /she /they executed the same in his /her /their authorized capacity(ies), and that by his /her /theij�wignature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instr ent. ATTENTION NOTARY: Although the information requested below is OPTIONAL, it could prevent fraudulent attachment of this certificate to another document. THIS CERTIFICATE MUST BE ATTACHED TO Title of Document Type THE DOCUMENT DESCRIBED AT RIGHT. Number of Pages_ Date of Document Signer(s) Other Than Named Above 06- 2357349 ® This page is part of your document - DO NOT DISCARD 06 2357347 TITLE(S) : F1 FEE RECORDED /FILED IN OFFICIAL RECORDS RECORDER'S OFFICE LOS ANGELES COUNTY CALIFORNIA 10/24/06 AT 08:00am 11111111111111111111111111 FREE HH CODE 20 CODE 19 CODE ,9 Assessor's Identification Number (AIN) To be completed by Examiner OR Title Company in black ink. D.T.T. Number of AIN's Shown THIS FORM IS NOT TO BE DUPLICATED A r° FIRST AMERICAN TITLE COMPANY. OF L.A. 06 2357347 "SUBDIVISION" RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: - - -_ The Redevelopment Agency of the City of Arcadia 240 West Huntington Drive Arcadia, CA 91066 Attention: Donald Penman Trademark Development Company, LLC 1028 North Lake Avenue, Suite 101 Pasadena, CA 91104 Attention: Joel Bryant APNs: 5773- 014 -912 and 5773- 014 -913 No recording fee required - Gov't Code Section 27383, This document is exenspt from fee per Gov't Code Section 6103 THE REDEVELOPMENT AGENCY OF THE CITY OF ARCADIA GRANT DEED CONTAINING POWER OF TERMINATION AND OTHER COVENANTS AFFECTING THE FUTURE USE AND OCCUPANCY OF CERTAIN PROPERTY PART ONE 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 grants 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 Grant Deed ( "Property"). PART TWO The grant 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. Conveyance 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 Grant 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 granted by the Grantor to the Grantee in its "AS IS," "WHERE IS" and "SUBJECT TO ALL FAULTS CONDITION," as of the date of recordation of this Grant Deed, with no warranties, expressed or implied, as to the environmental or other physical condition of the Property, the presence or absence of 24 2 geOG - 5v RVEIMLUNDERWOOM703497.1 1 any patent or latent environmental or other physical condition on or in the Property, or any other matters affecting the Property. Section 3. Project Restricted to Qualified 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 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. Form 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 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, 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 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, sub - lessees, sub - tenants, or vendees of the premises herein transferred. The foregoing provision shall be binding upon and shall obligate the RVBUS \LUNDERWOOD \703497.1 2 06-2357347 contracting party or parties and any subcontracting party or parties, or other transferees under the instrument. 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. RVB US\LUN DE RWOO D \703497.1 3 OS 2357347 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 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 Grant 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 Grant 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 Grant Deed and the issuance and recordation of a Certificate of Completion, for the time period set forth for each covenant. Section 8. Costs and Attorneys' 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 Grant 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. Effect of Unlawful Provision; Severability. In the event that any provision of this Grant Deed may be held to be invalid or unlawful by a final judgment of a court of competent jurisdiction, such invalidity shall not affect the validity of any other provision of this Grant Deed. RV13USTUNDERWOOD \703497.1 4 06-2357347 IN WITNESS WHEREOF, the Grantor has caused this Grant Deed to be executed by its authorized representative(s) on this y bth day of &tube✓ , 2006. Date: O aobc� tea, ATTES By: Agency Se etary APPROVED AS TO LEGAL FORM: BEST BEST & KRIEGER LLP By: V . Agency Counsel RV BUS \LUNDERWOOD \703497.1 GRANTOR: THE REDEVELOPMENT AGENCY OF THE CITY OF ARCADIA, a public body, corporate and politic By: M=1 W, a w'n 12. ye 11,e (Name) Eueoui '�. Dirflcfar (Title) 06 2357347 !lit �Hl �a c� 0 STATE OF CALIFORN COUNTY OF ACKNOWLEDGEMENT On OI , 2006 before me, C (here insert name and title of the officer), personally appeared known to me (or proved to me on the basis of satisfactory evidence) to be the personA) WI su scri a to the within instrument and acknowledged to me that he /ske /tVey executed the ss authorized capacity(ik), and that by his /her /their signatureO on the instrument the person(N1, behalf of which the person acted, executed the instrument. WITNESS my hand and official seal. Signature STATE OF CALIFORNIA COUNTY OF 2006 before me, ! ACKNOWLEDGEMENT CamwMw 1 1410608 _personally ose name($) is/ Ire ne in his /hkr +eir or the entity upon (Sea)) (here insert name and title of the officer), personally appeared , personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is /are subscribed.to the within instrument and acknowledged to me that he /she /they executed the same in his /her /their authorized capacity(ies), and that by his /her /their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. Signature R V B U S \L UN D E R W 00 W 03497.1 06-2357347 (Seal) IT �4 L; { TO CERTIFICATE OF ACCEPTANCE OF THE REDEVELOPMENT AGENCY OF THE CITY OF ARCADIA GRANT 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 Grant Deed, of the delivery of the subject property described within the Redevelopment Agency of the City of Arcadia Grant Deed, subject to all of the community redevelopment covenants expressly set forth or incorporated within the Redevelopment Agency of the City of Arcadia Grant Deed. GRANTEE: TRADEMARK DEVELOPMENT COMPANY, LLC a California limited liability company Date: By: aw C- . 14"V� Its: Date: `�� 7i�6 By: Its: R VBUS\LUNDER W OOD \703497.1 I 06 2357347 fit) •. ACKNOWLEDGEMENT STATE OF CALIFORNIA COUNTY OF On , 2006 before me, (here insert name and title of the officer), personally appeared , personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is /are subscribed to the within instrument and acknowledged to me that he /she /they executed the same in his /her /their authorized capacity(ies), and that by his/her /their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. Signature ACKNOWLEDGEMENT STATE OF CALIFORNIA COUNTY OF 2 On0�( 3 12006beforeme, �4e. VMy' on V101at" 12010i.e. (Seal) (here insert name and title of the officer), personally appeared L�an Pk'. r , 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 acknowled me that he /she /they executed the same in his /her /their authorized capacity(ies), and J,hat by his/her /t sig ture(s) on the instrument the person(s), or the entity upon behalf of which the oerson(sY acted. exec uted the ins"trument. R V BUS \LUN DE R W OOD \703497.1 nif LYSETTE FREEMAM Commisslon # 1679872 Notary Public — COINOm10 Los Angeles County Comm. Expires Aua 8, 201 66.2357347 (Seal) 0 ATTACHMENT TO THE REDEVELOPMENT AGENCY OF THE CITY OF ARCADIA GRANT DEED Real property in the City of Arcadia, County of Los Angeles, State of California, described as follows: Parcel l: LOT 5 IN BLOCK 72 OF THE "ARCADIA" SANTA ANITA TRACT, IN THE CITY OF ARCADIA, AS PER MAP RECORDED IN BOOK 15 PAGES 89 AND 90 OF MISCELLANEOUS RECORDS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY. APN: 5773 - 014 -912 Parcel 2: LOT 6 IN BLOCK 72 OF THE "ARCADIA" SANTA ANITA TRACT, IN THE CITY OF ARCADIA, AS PER MAP RECORDED IN BOOK 15 PAGES 89 AND 90 OF MISCELLANEOUS RECORDS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY. APN: 5773- 014 -913 Fi+�+ IId� 1-9 06-2357347 RV BUSTUNDERWOODV 03497.1 ATTACHMENT .1 Gl r - TITLE(S) : FEE • • This page is part of your document - DO NOT DISCARD EEM1 06 2357348 RECORDED /FILED IN OFFICIAL RECORDS RECORDER'S OFFICE LOS ANGELES COUNTY CALIFORNIA 10/24/06 AT 08:00am NIfl�II�IIII��IIV CODE 20 CODE 19 CODE 9 Assessor's Identification Number (AIN) To be completed by Examiner OR Title Company in black ink. D.T.T. Number of AIN's Shown THIS FORM IS NOT TO BE DUPLICATED - FIRST AMERICAN TITLE COMPANY OF L.A. "SUBDIVISION" RECORDING REQUESTED BY: WHEN RECORDED MAIL TO: Redevelopment Agency of the City of Arcadia 240 West Huntington Drive Arcadia, California 91066 Attention: Executive Director r� 06.2357348 APNs: 5773 - 014 -912 and 5773 -014 -913 (Space above for Recorder's Use) No recordingfee required- Gov't Code Section 27383; This document is exempt from fee per Gov't Code Section 6103 SEE EXHIBIT "A" ATTACHED AGENCY DEVELOPMENT DEED OF TRUST THIS AGENCY DEVELOPMENT DEED OF TRUST ( "Agency Development Deed of Trust ") is made this day of September, 2006, between Trademark Development Company, LLC, a California limited liability company ( "Trustor "); in favor of First American Title Insurance Company ( "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 1. 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 Truster 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 A" 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 l,,,4 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 tyod "Appurtenances," and together with the Land and the Improvements, the "Property"). h4l 001 /;LLf C) j r 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 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 Truster'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 any one 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 fa direct the order of sale), at public auction to the highest bidder for cash in lawful money of the United do� 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 06.2357348 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. 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 Trustor, 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. Reconveyance. 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 PW 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. 06-2357348 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 Trust. 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. Acceptance. 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] H- (XI r4i 0$ 2357348 A - - - - - -- s��w+ rl� SIGNATURE PAGE TO AGENCY DEVELOPMENT DEED OF TRUST TRUSTOR: TRADEMARK DEVELOPMENT COMPANY, LLC a California limited liability company Qe. By. Its By: Its: 06.235734 E. C r "N IAN 0 ACKNOWLEDGEMENT STATE OF CALIFORNIA" COUNTY OFJ�'> 0 to i i .. . - -�i+Jt1 .0 ♦ .� • �.�stti[✓•7 (here insert name and title of the officer), persdn3ily appeared PAe�rt=s personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is /are subscribed to the within instrument and acknowle d to me that he /she /they executed the same in his /her /their authorized capacity(ies), and that by his /her /the' gnature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted,.executedAgXnstrument. WITNESS my hand ACKNOWLEDGEMENT STATE OF CALIFORNIA COUNTY OF On (lIkOC� '?) , 2006 before me, LYSETTE FREEMAN Commission # 1.679872 Notary Publlc — Cd fat, Loa Angeles County (Seal) (here insert name and title of the officer), persohally appeared r " personally known to me (or proved to me on the basis of satisfactory evidence) to be the rson(s) whose name(s) is /are subscribed to the within instrument and ackno ged to me that he /she /they executed the same in his /her /their authorized capacity(ies), and that by his/he e' signature(s) on the instrument the person(s), or the entity upon behalf of which th person(s) acted, exec ed a instrument. WITNESS my fi ' s Are LVA71T FREEMAN Commisabn O 1679872 Notary Public — COIMoMfb [Q—:g Los Angeles Ca rdy Corr. Expires Au & 9n Sign ure 1) 2357348 k��lw EXHIBIT A TO AGENCY DEVELOPMENT DEED OF TRUST Legal Description of the Land Real property in the City of Arcadia, County of Los Angeles, State of California, described as follows: Parcel 1: LOT 5 IN BLOCK 72 OF THE "ARCADIA" SANTA ANITA TRACT, IN THE CITY OF ARCADIA, AS PER MAP RECORDED IN BOOK 15 PAGES 89 AND 90 OF MISCELLANEOUS RECORDS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY. APN: 5773 -014 -912 Parcel 2: LOT 6 IN BLOCK 72 OF THE "ARCADIA" SANTA ANITA TRACT, IN THE CITY OF ARCADIA, AS PER MAP RECORDED IN BOOK 15 PAGES 89 AND 90 OF MISCELLANEOUS RECORDS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY. APN: 5773- 014 -913 RVBUS \LUNDERWOOD \720580. t EXHIBIT A n6 2357348 ARTICLE I. RIGHTS AND REQUIREMENTS OF THE CITY OF Notwithstanding any other provision to the contrary as may be contained in this Declaration, and in addition to all other rights granted to the City of , California (the "City ") pursuant to the provisions of this Declaration, the City shall have the following additional rights, and Declarant, the Association and the Owners, as applicable, shall comply with the following provisions, City requirements and conditions: Section 1. Definitions. (a) For purposes of this Article, the term "Improvements" Shall have that meaning set forth in this Declaration, if any, but shall also include all improvements in the Project, including, without limitation, the following: all structures and buildings (and all components thereof); private utilities; landscaping improvements and plantings; fences and walls, private streets and driveways, sidewalks, parking areas, garages, carports, lighting, signs, irrigation and drainage facilities. (b) For purposes of this Article, the term "Association Maintenance Areas "shall have that meaning set forth in this Declaration, if any, but shall also include any on or off -site easement areas or public property within or adjacent to the Project required to be maintained by the Association. Section 2. Maintenance. Declarant, the Association and each Owner shall comply with the following special conditions: (a) Association Maintenance. The Association shall, at all times, perform such maintenance as is required to be performed by the Association under this Declaration, which maintenance shall include, without limitation, maintenance of all Common Areas (and, if applicable, Association Maintenance Areas), together with all Improvements located therein, in good repair, condition and appearance, and shall keep the Common Areas (and, if applicable Association Maintenance Areas), neat, clean and sanitary, free from any accumulation of debris or waste materials,, and otherwise in accordance with this Declaration and applicable City Codes and Regulations. (b) Owner Maintenance, Each Owner, including Declarant, shall, at all times, perform such maintenance as is required to be performed by an Owner under this Declaration, which maintenance shall include, without limitation, maintenance of such Owner's Lot, Parcel or Unit, and all Improvements located therein, in good repair, condition and appearance, and shall keep the Lot, Parcel or Unit neat, clean and sanitary, free from any accumulation of debris or waste materials, and otherwise in accordance this Declaration and applicable City Codes and Regulations. (c) Landscape Maintenance. All landscaping in the Project, including, without limitation, trees, shrubs and other vegetation, drainage and irrigation systems, shall be installed as provided in the landscape plan as approved by the City and shall be permanently maintained in good, first class condition, healthy, without deterioration, free of waste and debris, and in conformity with the landscaping maintenance standards of the City. Dead or diseased plants shall be promptly replaced with landscaping similar in type, size and quality. Automatic irrigation systems shall be properly maintained and other reasonable and adequate landscape maintenance facilities and procedures shall be provided to fulfill the foregoing requirements. (d) Parking and Driveways. Driveways and traffic aisles on the Project shall be kept clear and unobstructed at all times. No vehicles or other obstruction shall project into such driveways or traffic aisles. All private streets or driveways, sidewalks and parking areas shall be regularly swept and cleaned. All asphalt and concrete paved areas shall be repaired, replaced, and re- striped, as necessary, to maintain said pavement at all times in a level and smooth condition. Any traffic or parking signage will be properly maintained. (e) Public Nuisance. The Project shall be maintained in such manner as to, at a minimum, avoid the reasonable determination of a duly authorized official of the City that a public nuisance has been created by the absence of adequate maintenance such as to be detrimental to public health, safety or general welfare, or such condition or deterioration or disrepair causes appreciable harm or has been truly detrimental to the Project or improvements within one thousand (1000) feet of any portion of the Project. Section 3. Enforcement by the City. In the exercise of its general police power, the City regulates land uses and subdivisions within the City, including certain requirements for the Project as reflected in the provisions of this Declaration. Each Owner acknowledges by acceptance of the deed or other conveyance therefor, whether or not it shall be expressed in any such deed or other instrument, that each of the covenants, conditions and restrictions set forth in this Article benefit the City, and that the City has a substantial interestto—be_ protected with regard to assuring compliance with, and enforcement of, these covenants, conditions and restrictions and any amendments thereto. All such covenants, conditions and restrictions shall therefore be enforceable by the City by proceedings at law or in equity or in the following manner: If in the opinion of the City Manager of the City (or his authorized representative), the Association at any time fails to maintain the Common Area (and, if applicable, the "Association Maintenance Areas "), and the improvements located thereon, in accordance with specified standards of repair, maintenance and cleanliness in accordance with this Article, the City shall give written notice to the Association (by certified mail, return receipt requested, or by an express mail or delivery service which provides confirmation of delivery date and receipt therefor) specifying the nature of such deficiency ( "Notice of Deficiency "). Such Notice of Deficiency from the City shall be addressed to the Association and shall require that the Association take appropriate corrective action within thirty (30) days of receipt of such Notice of Deficiency unless there exists a hazardous condition creating an immediate possibility of serious injury to persons or property, in which case the time for correction may be reduced to a minimum of five (5) days. The Association shall have the right, within ten (10) days of receipt of such Notice of Deficiency, to file an appeal with the City Council of the City for public hearing before the City Council to consider the reasonableness of the City's requirements as set forth in the Notice of Deficiency. The decision of the City Council on such appeal shall be binding upon all parties but may be appealed by the Association through an appropriate action in any court having jurisdiction. The Notice of Deficiency from the City shall state the anticipated costs that the City would assess against the Association for corrective work to be accomplished, which costs shall be no more than those charged by competitive private industry for similar work. If the Association, within the time set forth in the Notice of Deficiency (subject to extension for such time as may be required to appeal the Notice of Deficiency to the City Council) does not undertake and complete the corrective work required as described in the Notice of Deficiency, the City may (but will not be obligated to) undertake and complete such corrective measures as are set forth in the Notice of Deficiency and assess the costs thereof against the Association. The City may elect to enforce payment of such costs through the procedures set forth in this Declaration for the establishment of assessment liens or through an action at law (which action may be brought without foreclosing or waiving any lien securing such amount). The Association shall be liable for any judgments obtained by the City against the Association related to the performance of the requirements under this Article. Section 4. Easement to City. In the event the City elects to undertake and complete the corrective measures as set forth in the Notice of Deficiency, Declarant hereby grants to, and reserves for, the City and its authorized representatives, employees and contractors, a non- exclusive easement for access, ingress and egress upon and across the Project as may be necessary to complete such work. Section 5. Easement for Law Enforcement and Emergency Vehicles and Personnel. Declarant hereby reserves a non - exclusive easement for access, ingress and egress upon and across the Project as may be necessary for law enforcement and for the provision of emergency services in the Project by City and state law enforcement officers and vehicles, City Fire Department and other emergency services vehicles and personnel. Section 6. Agreement Between Declarant and City. The Declarant, in exchange for granting of the City's approval of this Declaration, hereby agrees to hold, sell and convey the Project subject to the covenants, conditions, restrictions and reservations contained in this Article. Declarant also grants to the City the right and power to enforce the covenants, conditions, restrictions and reservations contained in this Article against the Declarant, so long as Declarant has an interest in the Project, and all persons or entities having any right, title or interest in the Project, or any part thereof, their heirs, successive owners and assigns and successors -in- interest. Section 7. Compliance with Law. Declarant, the Association and each Owner shall comply with state and federal law and with all ordinances, regulations and standards of the City, and any assessment district of the City, as may be applicable to the Project. Section 8. Other Rights and Remedies of the City. (a) In the event of any violation or threatened violation of any of the provisions of this Declaration, then in addition to, but not in lieu of, any of the rights or remedies the City may have to enforce the provisions hereof, the City shall have the right to withhold or revoke, after giving notice of said violation, any building permits, occupancy permits, certificates of occupancy, business licenses and similar matters or approvals pertaining to the Project or any part thereof or interests therein as to the violating person or entity or one threatening violation. (b) Any enforcement rights of the City as described in this Article are in addition to and not instead of rights of the City regarding enforcement of City codes and regulations, and the City may use any enforcement vehicle available to it to insure that the Project does not become a nuisance. Section 9. No City Liability. The failure or refusal of the City to exercise any of the rights or powers conferred by this Article will not result in any liability to the City and shall not give rise to a cause of action against the City, its officers and employees, on the part of any person. No officer or employee of the City shall be personally liable to the Declarant, the Association or any Owner, for any default or breach by the City, its officers and employees, under this Declaration. Section 10. Amendments/Termination. Any termination of this Declaration, and any amendment to any provision of this Article or to any other provisions of this Declaration enforceable by the City shall require the prior written consent of the City Manager (or his authorized representative) prior to recording any amendment to this Declaration, which (a) affects the rights of the City under this Article; (b) affects the Association's obligation to maintain the Common Area (and, if applicable, Association Maintenance Areas) as described in this Declaration; (c) redefines or changes the description and /or boundaries of the Common Area (and, if applicable, Association Maintenance Areas) as described in this Declaration, or (d) terminates this Declaration. The City's prior written approval shall be recorded concurrently with any such amendment or termination. Any such amendment or termination recorded without the City's written approval shall be null and void. Section 11. Attorney's Fees. In any action brought by the City to enforce this Declaration, the prevailing party will be entitled to receive its attorney's fees and costs, in addition to such other relief as may be granted. In addition, the City shall be entitled to receive its attorney's fees and costs expended in connection with (a) enforcement of this Article, and (b) any settlement procedure as may be ordered by the court. To the extent the Association and/or any individual Lot Owners is a non - prevailing party in any enforcement action, the Association or the individual Lot Owners against whom such enforcement action has been taken shall be liable for any such attorney's fees and costs. Section 12. Notices. Notices to the City that may be required or necessary under this Declaration, if any, shall be provided to the following addresses: To City: City of Attn: With Copy to: Section 13. Miscellaneous. (a) The Association shall be required, on January I't of each year, to file with the City's Director of Planning the names, addresses and telephone numbers of the Association's Project management company and responsible Project manager and each member of the Association's Board of Directors Section 14. Other Special Conditions and Requirements for this Project. Section 15. Covenants Running with the Land. Declarant hereby declares that all of the Project shall be held, sold, conveyed, encumbered, hypothecated, leased, used, occupied and improved subject to the restrictions, covenants, conditions and equitable servitudes set forth in this Article, all of which are for the benefit of the City and for the purpose of uniformly enhancing or protecting the value, attractiveness and desirability of the Project. The covenants, conditions, restrictions, reservations, equitable servitudes, liens and charges set forth herein shall run with the land and shall be binding upon all persons having any right, title or interest in the Project, or any part thereof, their heirs, successive owners and assigns; shall inure to the benefit of and be binding upon Declarant and the City, and their successors and assigns and successors - in- interest; including, without limitation, the Association and the Owners of Units or Lots in the Project, and may be enforced by the City. r ARTICLE 1. RIGHTS AND REQUIREMENTS OF THE CITY OF Notwithstanding any other provision to the contrary as may be contained in this Declaration, and in addition to all other rights granted to the City of California (the "City ") pursuant to the provisions of this Declaration, the City shall have the following additional rights, and Declarant, the Association and the Owners, as applicable, shall comply with the following provisions, City requirements and conditions: Section 1. Definitions. (a) For purposes of this Article, the term "Improvements" shall have that meaning set forth in this Declaration, if any, but shall also include all improvements in the Project, including, without limitation, the following: all structures and buildings (and all components thereof); private utilities; landscaping improvements and plantings; fences and walls, private streets and driveways, sidewalks, parking areas, garages, carports, lighting, signs, irrigation and drainage facilities. (b) For purposes of this Article, the term "Association Maintenance Areas "shall have that meaning set forth in this Declaration, if any, but shall also include any on or off -site easement areas or public property within or adjacent to the Project required to be maintained by the Association. Section 2. Maintenance. Declarant, the Association and each Owner shall comply with the following special conditions: (a) Association Maintenance. The Association shall, at all times, perform such maintenance as is required to be performed by the Association under this Declaration, which maintenance shall include, without limitation, maintenance of all Common Areas (and, if applicable, Association Maintenance Areas), together with all Improvements located therein, in good repair, condition and appearance, and shall keep the Common Areas (and, if applicable Association Maintenance Areas), neat, clean and sanitary, free from any accumulation of debris or waste materials, and otherwise in accordance with this Declaration and applicable City Codes and Regulations. (b) Owner Maintenance. Each Owner, including Declarant, shall, at all times, perform such maintenance as is required to be performed by an Owner under this Declaration, which maintenance shall include, without limitation, maintenance of such Owner's Lot, Parcel or Unit, and all Improvements located therein, in good repair, condition and appearance, and shall keep the Lot, Parcel or Unit neat, clean and sanitary, free from any accumulation of debris or waste materials, and otherwise in accordance this Declaration and applicable City Codes and Regulations. (c) Landscape Maintenance. All landscaping in the Project, including, without limitation, trees, shrubs and other vegetation, drainage and irrigation systems, shall be installed as provided in the landscape plan as approved by the City and shall be permanently maintained in good, first class condition, healthy, without deterioration, free of waste and debris, and in conformity with the landscaping maintenance standards of the City. Dead or diseased plants shall be promptly replaced with landscaping similar in type, size and quality. Automatic irrigation systems shall be properly maintained and other reasonable and adequate landscape maintenance facilities and procedures shall be provided to fulfill the foregoing requirements. (d) Parking and Driveways. Driveways and traffic aisles on the Project shall be kept clear and unobstructed at all times. No vehicles or other obstruction shall project into such driveways or traffic aisles. All private streets or driveways, sidewalks and parking areas shall be regularly swept and cleaned. All asphalt and concrete paved areas shall be repaired, replaced, and re- striped, as necessary, to maintain said pavement at all times in a level and smooth condition. Any traffic or parking signage will be properly maintained. (e) Public Nuisance. The Project shall be maintained in such manner as to, at a minimum, avoid the reasonable determination of a duly authorized official of the City that a public nuisance has been created by the absence of adequate maintenance such as to be detrimental to public health, safety or general welfare, or such condition or deterioration or disrepair causes appreciable harm or has been truly detrimental to the Project or improvements within one thousand (1000) feet of any portion of the Project. Section 3. Enforcement by the City. In the exercise of its general police power, the City regulates land uses and subdivisions within the City, including certain requirements for the Project as reflected in the provisions of this Declaration. Each Owner acknowledges by acceptance of the deed or other conveyance therefor, whether or not it shall be expressed in any such deed or other instrument, that each of the covenants, conditions and restrictions set forth in this Article benefit the City, and that the City has a substantial interest to be protected with regard to assuring compliance with, and enforcement of, these covenants, conditions and restrictions and any amendments thereto. All such covenants, conditions and restrictions shall therefore be enforceable by the City by proceedings at law or in equity or in the following manner: If in the opinion of the City Manager of the City (or his authorized representative), the Association at any time fails to maintain the Common Area (and, if applicable, the "Association Maintenance Areas "), and the improvements located thereon, in accordance with specified standards of repair, maintenance and cleanliness in accordance with this Article, the City shall give written notice to the Association (by certified mail, return receipt requested, or by an express mail or delivery service which provides confirmation of delivery date and receipt therefor) specifying the nature of such deficiency ( "Notice of Deficiency "). Such Notice of Deficiency from the City shall be addressed to the Association and shall require that the Association take appropriate corrective action within thirty (30) days of receipt of such Notice of Deficiency unless there exists a hazardous condition creating an immediate possibility of serious injury to persons or property, in which case the time for correction may be reduced to a minimum of five (5) days. The Association shall have the right, within ten (10) days of receipt of such Notice of Deficiency, to file an appeal with the City Council of the City for public hearing before the City Council to consider the reasonableness of the City's requirements as set forth in the Notice of Deficiency. The decision of the City Council on such appeal shall be binding upon all parties but may be appealed by the Association through an appropriate action in any court having jurisdiction. The Notice of Deficiency from the City shall state the anticipated costs that the City would assess against the Association for corrective work to be accomplished, which costs shall be no more than those charged by competitive private industry for similar work. If the Association, within the time set forth in the Notice of Deficiency (subject to extension for such time as may be required to appeal the Notice of Deficiency to the City Council) does not undertake and complete the corrective work required as described in the Notice of Deficiency, the City may (but will not be obligated to) undertake and complete such corrective measures as are set forth in the Notice of Deficiency and assess the costs thereof against the Association. The City may elect to enforce payment of such costs through the procedures set forth in this Declaration for the establishment of assessment liens or through an action at law (which action may be brought without foreclosing or waiving any lien securing such amount). The Association shall be liable for any judgments obtained by the City against the Association related to the performance of the requirements under this Article. Section 4. Easement to City. In the event the City elects to undertake and complete the corrective measures as set forth in the Notice of Deficiency, Declarant hereby grants to, and reserves for, the City and its authorized representatives, employees and contractors, a non- exclusive easement for access, ingress and egress upon and across the Project as may be necessary to complete such work. Section 5. Easement for Law Enforcement and Emergency Vehicles and Personnel. Declarant hereby reserves a non - exclusive easement for access, ingress and egress upon and across the Project as may be necessary for law enforcement and for the provision of emergency services in the Project by City and state law enforcement officers and vehicles, City Fire Department and other emergency services vehicles and personnel. Section 6. Agreement Between Declarant and Cif. The Declarant, in exchange for granting of the City's approval of this Declaration, hereby agrees to hold, sell and convey the Project subject to the covenants, conditions, restrictions and reservations contained in this Article. Declarant also grants to the City the right and power to enforce the covenants, conditions, restrictions and reservations contained in this Article against the Declarant, so long as Declarant has an interest in the Project, and all persons or entities having any right, title or interest in the Project, or any part thereof, their heirs, successive owners and assigns and successors -in- interest. Section 7. Compliance with Law. Declarant, the Association and each Owner shall comply with state and federal law and with all ordinances, regulations and standards of the City, and any assessment district of the City, as may be applicable to the Project. Section 8. Other Rights and Remedies of the City. (a) In the event of any violation or threatened violation of any of the provisions of this Declaration, then in addition to, but not in lieu of, any of the rights or remedies the City may have to enforce the provisions hereof, the City shall have the right to withhold or revoke, after giving notice of said violation, any building permits, occupancy permits, certificates of occupancy, business licenses and similar matters or approvals pertaining to the Project or any part thereof or interests therein as to the violating person or entity or one threatening violation. (b) Any enforcement rights of the City as described in this Article are in addition to and not instead of rights of the City regarding enforcement of City codes and regulations, and the City may use any enforcement vehicle available to it to insure that the Project does not become a nuisance. Section 9. No City Liability. The failure or refusal of the City to exercise any of the rights or powers conferred by this Article will not result in any liability to the City and shall not give rise to a cause of action against the City, its officers and employees, on the part of any person. No officer or employee of the City shall be personally liable to the Declarant, the Association or any Owner, for any default or breach by the City, its officers and employees, under this Declaration. Section 10. Amendments /Termination. Any termination of this Declaration, and any amendment to any provision of this Article or to any other provisions of this Declaration enforceable by the City shall require the prior written consent of the City Manager (or his authorized representative) prior to recording any amendment to this Declaration, which (a) affects the rights of the City under this Article; (b) affects the Association's obligation to maintain the Common Area (and, if applicable, Association Maintenance Areas) as described in this Declaration; (c) redefines or changes the description and /or boundaries of the Common Area (and, if applicable, Association Maintenance Areas) as described in this Declaration, or (d) terminates this Declaration. The City's prior written approval shall be recorded concurrently with any such amendment or termination. Any such amendment or termination recorded without the City's written approval shall be null and void. Section 11. Attorney's Fees. In any action brought by the City to enforce this Declaration, the prevailing party will be entitled to receive its attorney's fees and costs, in addition to such other relief as may be granted. In addition, the City shall be entitled to receive its attorney's fees and costs expended in connection with (a) enforcement of this Article, and (b) any settlement procedure as may be ordered by the court. To the extent the Association and /or any individual Lot Owners is a non - prevailing party in any enforcement action, the Association or the individual Lot Owners against whom such enforcement action has been taken shall be liable for any such attorney's fees and costs. Section 12. Notices. Notices to the City that may be required or necessary under this Declaration, if any, shall be provided to the following addresses: To City: City of Attn: With Copy to: Section 13. Miscellaneous. r (a) The Association shall be required, on January 1st of each year, to file with the City's Director of Planning the names, addresses and telephone numbers of the Association's Project management company and responsible Project manager and each member of the Association's Board of Directors Section 14. Other Snecial Conditions and Requirements for this Project. Section 15. Covenants Running with the Land. Declarant hereby declares that all of the Project shall be held, sold, conveyed, encumbered, hypothecated, leased, used, occupied and improved subject to the restrictions, covenants, conditions and equitable servitudes set forth in this Article, all of which are for the benefit of the City and for the purpose of uniformly enhancing or protecting the value, attractiveness and desirability of the Project. The covenants, conditions, restrictions, reservations, equitable servitudes, liens and charges set forth herein shall run with the land and shall be binding upon all persons having any right, title or interest in the Project, or any part thereof, their heirs, successive owners and assigns; shall inure to the benefit of and be binding upon Declarant and the City, and their successors and assigns and successors - in- interest; including, without limitation, the Association and the Owners of Units or Lots in the Project, and may be enforced by the City. r Nreevne ni" • • ktaa -°(4 AFFORDABLE HOUSING AGREEMENT (119 Alta Street / 121 Alta Street) between THE REDEVELOPMENT AGENCY OF THE CITY OF ARCADIA a public body, corporate and politic and TRADEMARK DEVELOPMENT COMPANY, LLC a California limited liability company ]Dated as of June 6, 2006, for reference purposes only] RV PUB \KV ARNER \714954.1 0 0 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 sue.) ( "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. The City Council has since amended the Redevelopment Plan for the Project Area on the following dates by the following ordinances: (i) on May 19, 1981 by Ordinance Number 1722, (ii) on November 4, 1986 by Ordinance Number 1847, (iii) on November 1, 1994 by Ordinance Number 2025, (iv) on June 4, 1999 by Ordinance Number 2102, and (v) on October 7, 2003 by Ordinance Number 2181. 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 (16,000) square feet in size located at 119 Alta Street and 121 Alta Street in 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 located within the Project Area. D. The Developer desires to acquire the Property from the Agency and construct on the Property six (6) owner- occupied town homes ( "Project ") reserved for sale (for a period of at least forty - five (45) years) to families whose household earnings at the time of sale do not exceed one hundred twenty percent (120 %) 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); and (ii) provide the Developer a forgivable 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 affordable 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 RVPUB\KVARNBR \714954.1 -1- 0 0 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. 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 Adjusted Family Income. The term "Adjusted Family Income" shall mean the 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. 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 A¢encX. 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 Agency 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 Agency 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 financing the development of the Project on the Property. 1.1.7 Agency 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. RV PUBV{VARNER \714954. t -2- 1.1.8 Agency Grant Deed. The term "Agency Grant Deed" shall mean the grant 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 Agency'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. 1.1.10 Agency'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 Agreement. The term "Agreement" shall mean this Affordable Housing Agreement between the Agency and the Developer, including the Exhibits attached to this Agreement. 1.1.12 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 CE A. The term "CEQA" shall mean the California Environmental Quality Act, California Public Resources Code Section 21000 et se q. 1.1.14 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. 1.1.15 Cam. 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. 1.1.16 City Council. The term "City Council" shall mean the duly elected governing body of the City. 1.1.17 Close of Escrow; Closing. The terns "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 Grant Deed to be recorded and the Developer's Title Policy to be delivered to the Developer. 1.1.18 Closing Date. The term "Closing Date" shall mean the date of the Closing, as set forth in Section 2.11. 1.1.19 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 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. RVPUBUCVARNERg14954.1 -3- 0 0 1.1.21 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. 1.1.22 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. 1.1.23 CRL. The term "CRL" shall mean California Community Redevelopment Law (California Health and Safety Code Section 33000 et sec.). 1.1.24 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. 1.1.25 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. 1.1.26 Developer's Conditions Precedent. The term "Developer's Conditions Precedent" shall mean the conditions precedent to the Closing for the benefit of the Developer as set forth in Section 2.8.1. 1.1.27 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. 1.1.28 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. 1.1.29 Developer's Survey. 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 ALTA/ASCM land survey standards. 1.1.30 Developer's Survey Objection Notice. The term "Developer's Survey Objection Notice" shall have the meaning ascribed to the term in Section 2.2. 1.1.31 Developer's Title Objection Notice. The term "Developer's Title Objection Notice" shall have the meaning ascribed to the term in Section 2.1.1. 1.1.32 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 Grant 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. 1.1.33 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 sixtieth (60th) calendar day thereafter. RVPUB \KVARNER \714954.1 -4- 0 0 1.1.34 Effective Date. The term "Effective Date" shall have the meaning ascribed to the term in Section 1.5. 1.1.35 Environmental Laws. The term "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 et seq.]; the Resource Conservation and Recovery Act of 1976 ( "RCRA ") [42 USC Section 6901 et sec .]; the Clean Water Act, also known as the Federal Water Pollution Control Act ( "FWPCA ") [33 USC Section 1251 et sue.]; the Toxic Substances Control Act ( "TSCA ") [15 USC Section 2601 et seMJ; the Hazardous Materials Transportation Act ( "HMTA ") [49 USC Section 1801 et seq.]; the Insecticide, Fungicide, Rodenticide Act [7 USC Section 6901 et sec.] the Clean Air Act [42 USC Section 7401 et sec.]; the Safe Drinking Water Act [42 USC Section 300f et w .]; the Solid Waste Disposal Act [42 USC Section 6901 et seMJ; the Surface Mining Control and Reclamation Act [30 USC Section 101 et sue.] the Emergency Planning and Community Right to Know Act [42 USC Section 11001 et se .]; the Occupational Safety and Health Act [29 USC Section 655 and 657]; the California Underground Storage of Hazardous Substances Act [California Health and Safety Code Section 25288 et see .1; the California Hazardous Substances Account Act [California Health and Safety Code Section 25300 et se .]; the California Safe Drinking Water and Toxic Enforcement Act [California Health and Safety Code Section 24249.5 et sec.] the Porter - Cologne Water Quality Act [California Water Code Section 13000 et seq.] together with any amendments of or regulations promulgated under the statutes cited above and any other federal, state, or local law, statute, ordinance, or regulation now in effect or later enacted that pertains to occupational health or industrial hygiene, and only to the extent 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. 1.1.36 Escrow. The term "Escrow" shall mean an escrow account opened with Escrow Holder for the conduct of the purchase and sale transaction described in this Agreement. 1.1.37 Escrow Holder. The term "Escrow Holder" shall mean Premium Escrow, Inc., located at 150 North Santa Anita, Suite 110, Arcadia, California 91006; telephone: (626) 446 -8221. 1.1.38 Executive Director. The term "Executive Director" shall mean the Executive Director of the Agency or his or her designee or successor in function. 1.1.39 Fair Market Value. The term "Fair Market Value" shall have the meaning ascribed to the term in Section 2.5. 1.1.40 Financine Commitments. The term "Financing Commitments" shall mean irrevocable commitments, subject only to customary and reasonable conditions precedent from a Lender for financing the construction, ownership and use of the Project. 1.1.41 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. , RVPU13\KVARNER \714954.1 -5- 0 0 1.1.42 FIRPTA. The term "FIRPTA" shall mean the United States Foreign Investment in Real Property Transfer Act. 1.1.43 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. 1.1.44 Fiscal Year. The term "Fiscal Year" shall mean a twelve (12) calendar month period commencing on July 1 of one year and ending on June 30 of the immediately following year. 1.1.45 Governing Body. The term "Governing Body" shall mean the governing body of the Agency. 1.1.46 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. 1.1.47 Governmental Requirements. The term "Governmental Requirements" shall mean 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 Project. 1.1.48 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, HMTA, or under any other Environmental Laws; (ii) those substances listed in the United States Department of Transportation ( "DOT ") Table [49 CFR 172.1011, 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. 1.1.49 Land Use Laws. The term "Land Use Laws" shall have the meaning ascribed to the term in Section 2.4.1. 1.1.50 Lender. The term "Lender" shall mean a mortgagee or a beneficiary of a Lien and shall include its successors and assigns. 1.1.51 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. 1.1.52 Loan. The term "Loan" shall mean any loan made as permitted by this Agreement. 1.1.53 Marketing_ Application and Initial Owner Selection Plan. The term "Marketing Application and Initial Owner Selection Plan" shall mean the marketing application and RVPUB\KVARNER \714954.1 -6- 0 0 initial owner selection plan attached to this Agreement as Exhibit L and incorporated into this Agreement by this reference. 1.1.54 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. 1.1.55 New Homes. The term "New Homes" shall mean the six (6) town homes constituting the Project. The term "New Home" shall mean one (1) of the town homes in the Project. 1.1.56 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, 1.1.57 Opening of Escrow. The term "Opening of Escrow" shall have the meaning ascribed to the term in Section 2.6. 1.1.58 Outside Closing Date. The term "Outside Closing Date" shall mean ninety (90) calendar days after the Opening of Escrow. 1.1.59 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. 1.1.60 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. 1.1.61 Project. The term "Project" shall mean the Construction of six (6) town homes 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. 1.1.62 Project 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. 1.1.63 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. 1.1.64 Project 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. 1.1.65 Project Entitlements. The term "Project Entitlements" shall mean the tract map and any other entitlements 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) RVPUBVCVARNERV14954.1 -7- 0 0 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. 1.1.66 Property. 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. 1.1.67 Purchase Price. The term "Purchase Price" shall have the meaning ascribed to the term in Section 2.4. 1.1.68 Qualified 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. 1.1.69 Qualified 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. 1.1.70 Redevelopment Plan. The term "Redevelopment Plan" shall mean the redevelopment plan for the Project Area, as amended from time to time. 1.1.71 Regulatoryy Agreement. 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. 1.1.72 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. 1.1.73 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. 1.1.74 Scone 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 C and is incorporated into this Agreement by this reference. 1.1.75 Title Company. The term "Title Company" shall mean First American Title Company located at 520 North Central Avenue, Glendale, California 91203. 1.1.76 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 Permitted Transfer. RVPUH\KVARNER \714954.1 -8- 0 0 1.2 Parties to Agreement. 1.2.1 Agency. The Agency is a public body, corporate and politic, exercising 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; facsimile (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 1028 North Lake Avenue, Suite 101, Pasadena, CA 91104, Attention: Joel Bryant; telephone: (626) 398 -4621; facsimile (626) 398 -4221; with copies to Myers Nave, 333 South Grand Avenue, Suite 1670, Los Angeles, CA 90071, Attention: Ruben Duran; telephone (213) 626 -2906; facsimile (213) 626 -0215. 1.3 Representations and Warranties. 1.3.1 Agency 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 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 Neither the execution of this Agreement nor the consummation 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 Agency is a party or by which the RVPUB \KVARNER \714954.1 -9- Agency 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 Agency or to the Property. 1.3.1.5 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 Developer Representations and Warranties. The representations and warranties of the Developer contained in this Section 1.3.2 shall be based upon the actual current knowledge of Joel Bryant 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: 1.3.2.1 The Developer is 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 consummate 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 consummation 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 consummation 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 documents 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 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 in compliance with this Agreement by the Developer. 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. RVPUB\KVARNER \714954.1 -to- 0 • 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 (it) 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. 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 except for: (i) any transfer that does not change management or operational control of the Property or the Project, (ii) any transfer of any interest in the Developer to any other owner of any interest in Developer, or (iii) any transfer to any person or entity directly or indirectly, controlling or controlled by or under common control with the Developer (whether by direct or indirect ownership of equity interests, by contract or otherwise). 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 Legal Description of Property Exhibit B Site Map of Property Exhibit C Project Scope of Development Exhibit D Project Schedule of Performance Exhibit E Agency Grant Deed Exhibit F Certificate of Completion Exhibit G Regulatory Agreement Exhibit H Project Budget and Financing Plan Exhibit I Agency Development Promissory Note Exhibit J Agency Development Deed of Trust Exhibit K Marketing Application and Initial Owner Selection Plan. RVPUB\KVARNER \714954.1 -I]- 11 ARTICLE II r ACQUISITION AND CONVEYANCE OF PROPERTY 2.1 Review and Approval of Condition of Title of Property y the Developer. 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 fifteen (15) 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 five (5) business 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 Developer'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 the Agency within five (5) business days after the Developer's receipt of the Agency's Survey Notice, to RVPUB %KVARNERM4954.1 -12- • i 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. ions. 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 Developer's Due Diligence Investigation of the Property. 2.3.1.1 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. Agency represents that it neither possesses nor has any knowledge of the existence of any studies, reports, or other substantial documentation concerning the environmental RVPOB\KVARNER \714954. t -13- 0 0 condition of the Property. As part of its pre - development activity on the Property, Developer will perform, or cause to be performed at Developer's sole expense, a standard Phase I environmental review and analysis on the Property within 15 days of the opening of escrow, and to deliver to Agency all written results of such review and analysis within 5 business days of receipt by Developer. If the Phase I review and analysis concludes that either (i) a Phase II analysis should be conducted on the Property, or (ii) there are conditions on the Property that require any type of environmental clean up or remediation, whose costs would exceed $5,000, Developer and Agency shall immediately meet and confer in good faith to determine a next course of action. Developer reserves the right, and Agency acknowledges and agrees to such reservation, to terminate this Agreement if Developer decides, in its sole but reasonable discretion, after reviewing the Phase I report, that the transaction contemplated by this Agreement will no longer be economically feasible. 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 California Civil Code Section 1542, which reads, as follows: "A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS/HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM/HER, MUST HAVE MATERIALLY AFFECTED HIS/HER SETTLEMENT WITH THE DEBTOR." Initials of the D veloper 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 "). RVPUBVCVARNER \714954.1 -14- • • 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 condition of the Property by the Developer in its existing "AS IS," "WHERE IS" and "SUBJECT TO ALL 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 "SUBJECT TO ALL FAULTS" condition at any time before the end of the Due Diligence Period. 2.4 Project 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 The Developer shall notify the Agency immediately upon approval of any Project Entitlements. RVPUB \KVARNER \714954.1 -15- 0 0 2.5 Purchase and Sate 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 Five Hundred Thousand Dollars ($1,500,000) ( "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 Opening 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 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 June 16, 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 Agreement, 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 prior to the Close of Escrow. 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; RVPUB %KVARNER%714954. 1 -16- 0 0 2.8.1.2 The Title Company is unconditionally committed to issue the Developer's Title Policy to the Developer; and 2.8.1.3 The Agency deposits all of the items into Escrow required by Section 2.10. 2.8.2 Agency'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 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 Developer has provided the Agency with satisfactory evidence of Lenders Financing Commitments to provide the Construction Loan in an aggregate amount no less than Nine Hundred Thirty Thousand Dollars ($930,000); 2.8.2.5 The Developer has provided the Agency with satisfactory evidence of the insurance required by Section 4.1.19; 2.8.2.6 The Developer has obtained the Project Entitlements that are required for the development of the Project on the Property; 2.8.2.7 The Developer performs all of its material obligations required to be performed by the Developer under this Agreement prior to Close of Escrow; and 2.8.2.8 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 Deposits. 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 The Regulatory Agreement, duly executed and acknowledged by the authorized representatives of the Developer. RVPUB %KVARNER1714954.1 -17- 0 0 2.9.3 An acknowledgment and acceptance of the Agency Grant Deed, duly executed and acknowledged by the authorized representatives of the Developer. 2.9.4 Two (2) duplicate original copies of the Closing Statement described in Section 2.14.2, duly executed by the authorized representatives of the Developer. 2.9.5 A PCO Statement executed by the authorized representative(s) of the Developer for the Property. 2.9.6 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. 19.7 Evidence of the existence, organization and authority of the Developer reasonably requested by Escrow Holder or Title Company. 2.9.8 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. 2.9.9 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 Agency's Escrow Deposits. 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 exceed One Hundred Twenty Three Thousand Dollars ($123,000). 2.10.2 The Agency Grant Deed executed by the authorized representative of the Agency. 2.10.3 The Regulatory Agreement, duly executed and acknowledged by the authorized representatives of the Developer. 2.10.4 A FIRPTA 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. 2.10.5 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. 2.10.6 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. RVPUB\KVARNER \714954.1 -18- I • • 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 Grant Deed and the Agency Development Deed of Trust with the Office of the Recorder of Los Angeles County, California, for recordation in the order set forth 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; 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 Policy. 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 Agency 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 Grant 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 Grant 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) a certified copy of the Agency Development Deed of Trust to the Agency and a copy to the Developer, each showing all recording information, (iv) the original of the Agency Development Promissory Note to the Agency and a copy to the Developer, and (v) 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. RVPUB\KVARNER \714954.1 -19 2.14 Escrow Costs. The Agency shall pay one -half (Yz) 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 (Yz) 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. 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 11; Liquidated Damages. 2.17.1 Breach of Article II By the Agency; 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 RVPUB\KVARNER \714954.1 -20- 0 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 TEN THOUSAND DOLLARS ($10,000.00). 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 EXCLUSIVE 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. Ials of t Developer Initials of the Agency 2.17.2 Breach of Article II By 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 TEN THOUSAND DOLLARS ($10,000.00). 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 (INCLUDING THE REMEDY OF SPECIFIC PERFORMANCE AND THE RIGHT TO RECORD A NOTICE OF PENDENCY OF ACTION AGAINST THE PROPERTY) BEING HEREBY EXPRESSLY WAIVED. ANYTHING IN THIS SECTION 2.17.2 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 fe Developer M0 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 -13, W -9 or such other form(s) 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. RVPUB \K V ARNER \714954.1 -21- 0 0 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 Property. 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 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 Project Costs; Project Budget and Financing 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. 3.2 Change In Project Costs. 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. 3.3 Changes in Project Budget and Financing Plan. 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. 3.4 Development Financing. 3.4.1 Agency 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 Agency Development Loan. . The Developer shall use the Agency Development Loan as set forth in this Agreement solely for the Project Costs associated with RVPUB\KVARNER \714954.1 -22- • r completing the Project and in accordance with the Project Budget or to pay down the Construction 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. 3.4.1.2 Disbursement of Agency Development Loan. 3.4.1.2.1 First Installment. The first installment of the Agency Development Loan in an amount not to exceed One Hundred Twenty Three Thousand Dollars ($123,000) ( "First Installment ") shall be distributed to the Developer at the Close of Escrow as provided in Article 11. 3.4.1.2.2 Remaining Balance of Agency 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, together with the Lender of the Construction Loan shall open a restricted bank account with a financial institution reasonably 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 twenty percent (20 %) of the proceeds of the Remaining Balance of the Agency Development Loan; and (vii) seventh, an additional twenty percent (20 %) of the proceeds of the Construction Loan. 3.4.1.3 Repayment of Agency 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 Construction Loan. As provide in the Agency Development Promissory Note, the Developer's repayment of the Agency Development Loan shall be callable in full on demand 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 in the amount of approximately Nine Hundred Thirty Thousand Dollars ($930,000). The Lender for the Construction Loan shall be an institutional Lender. 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 of the Agency. 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. RVPUB \KVARNER \714954.1 -23- • • 3.5 No Subordination of Affordability 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 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, and any other person claiming under or through any of the foregoing. 3.6 No Other Agency 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 Project 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 town home New Homes reserved for sale to 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. 4.1.1 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 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. RVPUB \KVARNERM4954.1 -24- 0 0 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 sale to 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. 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 RVPUMKVARNHR \714954.1 -25 i • 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 shall 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 generally 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 of the Developer. 4.1.10 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 shall 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 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" shall be defined as those changes from the approved final construction drawings, plans and specifications RVPUMI(VARNBRV 14954.1 -26- 0 0 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 governmental 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 shall 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 shall take reasonable precautions to ensure the safety and stability of surrounding properties during said construction. 4.1.16 The Developer shall begin and complete all 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 Executive Director or as otherwise provided for in this Agreement. The Schedule of Performance shall 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 Close of Escrow, the Developer shall furnish, or shall 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, 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. 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 RVPUBVCVARNERV 14954.1 -27- 0 0 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 governing 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 because 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 California labor standards and requirements and with respect to the development of the Property. 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 such labor standards and 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 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 caused by the negligence of the Developer or its officers, agents or employees. RVPUB\KVARNER \714954.1 -28- • 4.1.23 The Agency shall inspect relevant portions of the construction of the Project on the Property and consult with the Developer 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 Aeainst 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 The prohibition against transfer contained in Section 4.3.1 shall not apply to: (i) any transfer that does not change management or operational control of the Property or the Project, (ii) any transfer of any interest in the Developer to any other owner of any interest in Developer, or (iii) any transfer to any person or entity directly or indirectly, controlling or controlled by or under common control with the Developer (whether by direct or indirect ownership of equity interests, by contract or otherwise). 4.3.3 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 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. RVPUB\KVARNER \7 t 4954.1 -29- 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 shall 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) have 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 of a 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 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 RVPUB\KVARNER \714954.1 -30- 0 0 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 Property (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 Agency to Satisfy Other Liens on the Property after Conveyance 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 pay or 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 the contrary, the completion of construction of the Project on the Property shall include the completion of construction of all of the New 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. RV PUB \KVARNER \714954.1 -31- • • 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 Grant Deed or other instrument of transfer, which the Agency Grant 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 fumish 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 Grant Deed, or a Regulatory Agreement. 4.7 Marketing AWlication 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 Project Restricted to Qualified 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 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. RVPUB \KVARNER \714954.1 -32- 0 0 5.2 Oblieation 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 Nonsegregation 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: 5.3.1 In Deeds. "The grantee herein covenants by and for itself, its successors and assigns, and all persons claiming under or through them, that there 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 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, 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. 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 RVPUB \KVARNER \714954.1 -33- • 0 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 term 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 Parry 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. 6.2.1.1 The laws of California shall govern the interpretation and enforcement of this Agreement. 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. RVPUB \KVARNER \714954.1 -34- • • 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, 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 provision 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 Specific 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 Agency 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, 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 RVPUBVKVARNER \714954.1 -35- i 0 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, Repossess and Revest. 6.7.1 Following 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 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 6.7.1.2 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) calendar 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: 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; RVPUB\KVARNER \714954.1 -36- • • 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 reverting 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 portion thereof; 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 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: RVPUB \KVARN ER \714954.1 -37- 0 0 to the Developer: Trademark Development Company, LLC 1028 North Lake Avenue, Suite 101 Pasadena, CA 91104 Attention: Joel Bryant Facsimile: (626) 3984621 to the Agency: Redevelopment Agency of the City of Arcadia 240 West Huntington Drive Arcadia, California 91066 Attention: Executive Director Facsimile: (626) 446 -5729 with copy to: Myers Nave 333 South Grand Avenue, Suite 1670 Los Angeles, CA 90071 Attention: Ruben Duran Facsimile (213) 626 -0215 with copy to: Best Best and Krieger LLP 3750 University Avenue Suite 400 Riverside, California 92501 Attention: Kevin K. Randolph Facsimile: (951) 686 -3083 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 Avainst Payment of Consideration for Agreement. The Developer warrants that it has not paid or given, and will not pay or 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 Agency Officials and Employees. No member, official or employee of the Agency shall 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 Delay: 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, quarantine restrictions, freight embargoes or lack of transportation, weather- caused 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 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 RVPU B\KV ARNE R\714954.1 -38- 0 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 inspect the books and records of the Developer pertaining to the Property, and/or the development of the Project 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, if no time is given, within a reasonable time. 7.8 Real Estate Commissions. The Agency shall not be liable for any real estate commissions, brokerage fees or finder 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 Grant 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 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 Attorneys' 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 RVPUB\KVARNER \714954.1 -39- • • 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. ARTICLE VIII ENTIRE AGREEMENT, WAIVERS AND AMENDMENT 8.1 Entire Agreement. This Agreement integrates all of the terms and conditions mentioned herein or incidental hereto, and supersedes all negotiations or previous agreements between the Parties with respect to all or any portion of the Property and the development thereof. 8.2 No Merger With Agency Grant Deed. None of the terms, covenants, agreements or conditions set forth in this Agreement shall be deemed to be merged with the Agency Grant 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 Agreement. 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 two (42) pages (including signature pages) and eleven (11) Exhibits, which constitute the entire understanding and Agreement of the Parties. 9.1.2 Acceptance of Agreement By the Agency. 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 RVPUBUCVARNERV t4954.1 -40- 0 (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] RV PUB \KVARNER \714954.1 -41- • • SIGNATURE PAGE TO AFFORDABLE HOUSING AGREEMENT Date: APPROVED AS TO LEGAL FORM: BEST BEST & KRIEGER LLP By: �genc y Counsel AGENCY: THE REDEVELOPMENT AGENCY OF THE CITY OF ARCADIA, a public body, corporate and politic 0 qKN,DAS 61,14400 William R. Kelly Executive Director RVPUB\KVARNER \714954.1 -42- 0 0 SIGNATURE PAGE TO AFFORDABLE HOUSING AGREEMENT DEVELOPER: TRADEMARK DEVELOPMENT COMPANY, LLC a California limited liability company Date: 66 Z- DD By: Its: Date: By: Its: RVPUB \KVARNER \714934.1 _43. • • EXHIBIT A TO AFFORDABLE HOUSING AGREEMENT Legal Description of Property lInsert Legal Description of Property on this Page] RVPUB \KVARNERV 14954.1 EXHIBIT B TO AFFORDABLE HOUSING AGREEMENT Site Map of Property ]Insert Site Map of Property on this Page] RVPUB \KVARNERV 14954.1 LJ 0 • EXHIBIT C TO AFFORDABLE HOUSING AGREEMENT Project 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 town homes which shall be 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 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.] RV PUB \KVARNER \714954.1 0 EXHIBIT D TO AFFORDABLE HOUSING AGREEMENT Schedule of Performance ]Attached Behind This Page] RVPUB \KV ARNER \714954.1 0 • 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) M Within 10 days of the Effective Date July 10, 2006 The Developer may submit Construction documents for plan check to the July 10, 2006 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 No later than 28 days from first submittal. from submittal to the City The Developer to submit revised Construction documents to the Building No later than 14 days Division for second plan check. from receipt of City comments. The City to provide the Developer with final corrections to plans from second No later than 28 days submittal. from re- submittal to the City. The Planning Commission to consider the tentative tract map for the Project by August 22, 2006 public hearing. The Developer to submit final plans for permits and pay fees at the Building No later than 14 days Division. upon receipt of City's final comments. The Developer to comply with Section 2.8.1 of the Agreement entitled Prior to the close of Developer's Conditions Precedent escrow. The Developer to commence Construction of the Project on the Property. No later than 90 days after conveyance of the Property to the Developer. The Developer to submit to the Agency the final tract map for the Project. No later than 60 days before request for Certificate of Completion The Agency Board shall consider final tract map for the Project. No later than 30 days before request for Certificate of Completion RVPUBAKVARNERV714954.1 0 Completion of Construction of the Project on the Property. R V P U B \K V A RN L R \714954.1 0 Within 12 months after commencement of Construction of the Property. 0 i EXHIBIT E TO AFFORDABLE HOUSING AGREEMENT Agency Grant Deed [Attached Behind This Page] RVPUB\KVARN ER\714 954.1 u 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: 0 THE REDEVELOPMENT AGENCY OF THE CITY OF ARCADIA GRANT DEED CONTAINING POWER OF TERMINATION AND OTHER COVENANTS AFFECTING THE FUTURE USE AND OCCUPANCY OF CERTAIN PROPERTY PART ONE 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 grants 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 Grant Deed ( "Property"). PART TWO The grant 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. Conveyance 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 Grant 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 granted by the Grantor to the Grantee in its "AS IS," "WHERE IS" and "SUBJECT TO ALL FAULTS CONDITION," as of the date of recordation of this Grant 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. Project Restricted to Qualified 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 R V P U B\K V A RN E R \7149 54.1 r 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. Form 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 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, 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 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, 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 RV PUB\KVARNER \714954.1 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 RV PUB \KVARNER \714954.1 0 0 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 parry 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 Grant 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 Grant 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 Grant Deed and the issuance and recordation of a Certificate of Completion, for the time period set forth for each covenant. Section 8. Costs and Attomevs' 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 Grant 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. Effect of Unlawful Provision; Severability. In the event that any provision of this Grant Deed may be held to be invalid or unlawful by a final judgment of a court of competent jurisdiction, such invalidity shall not affect the validity of any other provision of this Grant Deed. IN WITNESS WHEREOF, the Grantor has caused this Grant Deed to be executed by its authorized representative(s) on this _ day of 2006. EXHIBIT E -4 RV PUB\K V ARN ER \714954.1 Date: ATTEST: Agency Secretary 0 0 APPROVED AS TO LEGAL FORM: BEST BEST and KRIEGER LLP Lo Agency Counsel SIGNATURE PAGE TO AGENCY GRANT DEED GRANTOR: THE REDEVELOPMENT AGENCY OF THE CITY OF ARCADIA, a public body, corporate and politic LIN William R. Kelly Executive Director [SIGNATURE MUST BE ACKNOWLEDGED] EXHIBIT E -5 R V P U B \K V A RN E R \714954.1 0 i CERTIFICATE OF ACCEPTANCE OF THE REDEVELOPMENT AGENCY OF THE CITY OF ARCADIA GRANT 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 Grant Deed, of the delivery of the subject property described within the Redevelopment Agency of the City of Arcadia Grant Deed, subject to all of the community redevelopment covenants expressly set forth or incorporated within the Redevelopment Agency of the City of Arcadia Grant Deed. GRANTEE: TRADEMARK DEVELOPMENT COMPANY, LLC a California limited liability company Date: By: Its: By: Its: [ALL SIGNATURES MUST BE ACKNOWLEDGED] EXHIBIT E -6 RVPUBIKVARNERV714954.1 0 0 ATTACHMENT TO THE REDEVELOPMENT AGENCY OF THE CITY OF ARCADIA GRANT DEED Legal Description of Property [Insert Legal Description of Property on this Pagel EXHIBIT E -7 R V PU B\ K V A RN B R \714954.1 EXHIBIT F TO AFFORDABLE HOUSING AGREEMENT Certificate of Completion [Attached Behind This Pagel EXHIBIT F RV PUBUCVARNER \714954.1 • RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: The Redevelopment Agency of the City of Arcadia 240 West Huntington Drive Arcadia, California 91066 Attention: William R. Kelly EXEMPT FROM RECORDING FEE PER GOVERNMENT CODE SECTION 27383 CERTIFICATE OF COMPLETION 0 (Space above for Recorder's Use) 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 1. 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 town home 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 Grant Deed. EXHIBIT F -1 RV PU B \K V ARNER \714954.1 Lj DATED AND ISSUED this day of Date: ATTEST: Lm Agency Secretary APPROVED AS TO LEGAL FORM: BEST BEST & KRIEGER LLP W Agency Counsel M Executive Director EXHIBIT F -2 RV PUB %KV ARN E R \714954.1 46 0 6 EXHIBIT G TO AFFORDABLE HOUSING AGREEMENT Regulatory Agreement [Attached Behind This Page] R V P UB \ K V A RN E R \714954.1 • • RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: The Redevelopment Agency of the City of Arcadia 240 West Huntington Drive Arcadia, California 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 RVPUB \KV ARNER \714954.1 0 THIS REGULATORY AGREEMENT AND DECLARATION OF RESTRICTIVE COVENANTS FOR OWNER - OCCUPIED PROPERTY LOCATED AT 119 AND 121 ALTA 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 119 and 121 Alta Street in the City of Arcadia ( "City") identified as Assessor's Parcel Numbers 5773- 014 -912 and 5773- 014 -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 town homes 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. NOW, THEREFORE, IN CONSIDERATION OF THE MUTUAL COVENANTS AND UNDERTAKINGS SET FORTH HEREIN, AND FOR OTHER GOOD AND VALUABLE CONSIDERATION, THE 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: R V P U B \K V A RN ER \714954.1 `] Section 1. Definitions of Certain Terms. As used in this Regulatory Agreement, the following terms shall have the meaning as provided in this Section 1 unless the specific context of usage of a particular word or term may otherwise require: 1.1 Adiusted Family 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 1.167(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 Intemal 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 Delivery 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. 1.6 Maintenance Deficiency. 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 R V P U B \KV A RN ER \714954.1 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 California 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 town home 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. 1.10 Notice of Agency Concurrence. The term "Notice of Agency Concurrence" means the acknowledgment in recordable form in which the Agency confirms that the proposed Successor -hi- 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 Homebuyer. 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 financing, insurance, escrow and other fees and costs. 1.12 Qualified Residence Period. The term "Qualified Residence Period" means the period of time beginning on 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 1.14 Regulatory 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- RVPUBIKVARNER \714954.1 C, Interest shall be bound by each of the covenants, conditions and restrictions of this Regulatory Agreement. Section 2. Acknowledsments and Representations of the Qualified Homebuyer. 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 of this 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 aggregate 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 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 RVPUB \KV ARNER \714954.1 0 0 Section 3. Covenant of the Qualified Homebuyer to Maintain Affordability of the New Home During the Qualified 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 -ht- 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; 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. RVPUMKVARNERV 14954.1 9 0 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 until 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 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) RVPUB\KV ARNERM4954.1 0 0 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; 4.1.2 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 lumber, 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 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 R V P U n \K V A RN E R \714954.1 0 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 against 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. Acknowledgment of Priority of the Provisions of Section 3 and Section 6.2 of this Regulatory 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 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 Money Mortgage Loan and Agency 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 anyjudicial foreclosure sale. RV PUBLIC V A RNER \714954.1 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 writing 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 shall 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 affordable single 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 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 -ln- 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 or 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 cure, correction or remedy, the Qualified Homebuyer shall not be deemed to be in default hereunder. RVPUB\KV ARNER \714954.1 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 of default. 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. 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 11. 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. Attorneys' 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 RVPUB \KV ARNERM 4954.1 • • Agreement which are hereby declared 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 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 By Performance Deed of Trust. 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 shall be secured by the Deed of Trust RVPMKV ARNER \714954.1 • • 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] RV PUBUCV A RNER \714954.1 Date: Date: Date: Date: RV PLJMKVARNER \714954.1 • SIGNATURE PAGE TO REGULATORY AGREEMENT 0 QUALIFIED HOMEBUYER: 0 Its: 0 Its: DEVELOPER: TRADEMARK DEVELOPMENT COMPANY, LLC a Califomia limited liability company M Its: LM Its: Date: ATTEST: L.n Agency Secretary 0 SIGNATURE PAGE TO REGULATORY AGREEMENT APPROVED AS TO LEGAL FORM: BEST BEST & KRIEGER LLP in Agency Counsel RV PUB \KVARNER \714954.1 AGENCY: THE REDEVELOPMENT AGENCY OF THE CITY OF ARCADIA, a public body, corporate and politic C William R. Kelly Executive Director 0 EXHIBIT A TO REGULATORY AGREEMENT Legal Description of the Property 0 [Insert Legal Description of Property on this Page] EXHIBIT G R V P U B \K V A RN E R \714954.1 • r EXHIBIT B TO REGULATORY AGREEMENT Legal Description of the New Home ]Insert Legal Description of New Home on this Page] EXHIBIT G RV PUB \KV ARNER \714954.1 0 0 EXHIBIT C TO REGULATORY AGREEMENT Performance Deed of Trust EXHIBITG RV PUB\RV A RNER \714954.1 0 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 defined 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 R V PUB%KVARNER \714954.1 • • 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 defined 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 PROTECT THE SECURITY OF THIS DEED OF TRUST, TRUSTOR COVENANTS AND AGREES: 1. 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 RV PUB\KVARNER \714954. t ! • 2. That Trustor shall 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, shall 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 parry, a security interest in all of the property described herein in, 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 defined 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 or 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, all such property described as the Trust Estate hereinabove. The security interests granted in this paragraph are hereinafter severally and collectively called the "Security Interest'. The Security Interest shall be self - operative 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 shall 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 RVPUB\KVARNERV 14954.1 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 RV PUBUK VARNER \714954.1 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; 11. 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 Beneficiary 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 rules of the applicable fire rating or inspection organization, bureau, association or office. IT IS MUTUALLY 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 RV P U13\KV ARNER \714954. t 0 0 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 R V PUBLIC V ARNER \714954.1 0 0 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, Beneficiary, 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 furnish 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 nonrecourse 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 RVPUB \KVARNERM 4954.1 0 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 (3 0) 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: I EXHIBIT G RVPUB\KVARNER \7 t 4954.1 STATE OF CALIFORNIA ) ) ss. COUNTY OF RIVERSIDE ) On , 200. before me, Notary Public, personally appeared personally known to me or O proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is /are subscribed to the within instrument, and acknowledged to me that he /she /they executed the same in his/her /their authorized capacity(ies), and that by his/her /their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. Signature of Notary [SEAL] EXHIBIT G RV PUBUKV ARNER \714954.1 r L EXHIBIT A TO PERFORMANCE DEED OF TRUST Legal Description of Subject Property EXHIBIT G RVPUBV4VARNERV 14954.1 0 EXHIBIT H TO AFFORDABLE HOUSING AGREEMENT Project Budget and Financing Plan [Attached Behind This Page RV PUB\K V ARNER \714954.1 0 E EXHIBIT I TO AFFORDABLE HOUSING AGREEMENT Agency Development Promissory Note [Attached Behind This Page] RV PUB \KVARNER \714954.1 9 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 Affordable 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 defined herein shall have the meanings given to them in the Agreement. Principal. FOR VALUE RECEIVED, 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. Repayment Reduction of Principal; Release and Reconvevance. a. Repayment of the Agency 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 (5"') anniversary of the date of execution of this Agency Development Promissory Note by Maker. RV PUEVCV ARNER \714954.1 0 0 5. Prepayment. 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 shall 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. 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 following 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 generally 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 generally 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 shall 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. RVPUBVCVARNERM 4954.1 0 • Costs and Attorneys' Fees Paid by 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. Date: RV PUB\KV ARNER \714954.1 ISAFRI 11 TRADEMARK DEVELOPMENT COMPANY, LLC a California limited liability company By: Its: By: Its: EXHIBIT J TO AFFORDABLE HOUSING AGREEMENT Agency Development Deed of Trust RV PUB \KV ARN 6R \714954.1 P r RECORDING REQUESTED BY: WHEN RECORDED MAIL TO: Redevelopment Agency of the City of Arcadia 240 West Huntington Drive Arcadia, California 91066 Attention: Executive Director 273831 0 AGENCY DEVELOPMENT DEED OF TRUST (Space above for Recorder's Use) 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 ( "Truster "); 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 1. 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 A" 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 R V PUBUCVARNER \714954.1 C� 0 present and future obligations of Truster 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 Obli atga ions. 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 any one 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. R V P UB\K V A RN E R \714954.1 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 Trustor, 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 Trust. RV PUBUCV ARNER \714954.1 • 0 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. Acceptance. 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 Truster's address set forth above. [Signatures on Following Pages] RVPUB %KVARN ERV 14954.1 0 SIGNATURE PAGE TO AGENCY DEVELOPMENT DEED OF TRUST TRUSTOR: TRADEMARK DEVELOPMENT COMPANY, LLC a California limited liability company By: Its: By: Its: RV PUB\KV ARNER714954.1 r NOTARY ACKNOWLEDGMENT STATE OF CALIFORNIA ) ❑ Individual(s) ss. ❑ Corporate COUNTY OF LOS ANGELES Officer(s) ) ❑ Partner(s) ❑ Attorney -in -Fact • Trustee(s) • Subscribing Witness On 2006, before me, the ❑ Guardian/Consewator undersigned notary public, personally appeared ° Otbec ❑ personally ]mown to me OR ❑ proved to me on the basis o satisfactory evidence to be the person(s) whose name(s) is /are subscribed to the within instrument and acknowledged to me that he /she/they executed the same in his /her /their authorized capacity(ies), and that by his/her /their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. Signature of Notary Public RVPU3 \KV ARNER \714954.1 0 NOTARY ACKNOWLEDGMENT STATE OF CALIFORNIA ) ) ss. COUNTY OF LOS ANGELES ) On , 2006, before me, the undersigned notary public, personally appeared ❑ personally known to me OR ❑ proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is /are subscribed to the within instrument and acknowledged to me that he /she /they executed the same in his/her /their authorized capacity(ies), and that by his/her /their signature(s) on the * instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal RVPUBVCVARNER \714954.1 r ❑'individual(s) ❑ Corporate Officer(s). El Pariner(s)! ❑ Attorney-fir-Fact ❑ Trustee(s) ❑ Subscribing Witness - ❑ Guardian/Conservator ❑..Other: Signature of Notary Public C- 0 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: RVPUBVKVARNERV 14954.1 0 0 EXHIBIT K 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 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 Angeles/Long 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 RVPUBAKCVA710715 RV PUB\KV ARNER \7 t 4954.1 0 • Income ranges from Dollars income) to $ Dollars $_ income). (See below) 0 for a single person (moderate _ for three people (moderate Income Limits (2005) 1 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. 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 1). 7.2 Only one (1) name per address/household will be permitted to submit an Interest Form and be placed on the waiting list. Should more than one (1) 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. RVPUBUCCVV10715 RV PUBUCVARNERV 14954. t 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 (1) 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 at a.m. /p.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 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 will need to provide proof of social security 7.15 Applicants will 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. RVPUB\KCV\710715 RV P UB \KV ARNER \714954.1 7 C7 ATTACHMENT 1 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 Address City Birth Date Apt. 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 4. Length of time at this address. from to 5. Spouse's Name: (if to be co -owner ) 6. Other third -party (non- spouse) proposing to share tenancy, (if any): Name: City Birth Date Birth Date 7. Relationship to applicant: 8. Assets/Equity — 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). RVPUB\KCV V 10715 RV PUB \KV ARNER \714954.1 0 0 1 Person 2 People 3 People Moderate Certification a. I/We certify that my /our annual income is less than shown in "Annual Income Restrictions" above. B. UWe certify that UWe 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. UWe 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 RVPUBAKCVA710715 RVPUB\KVARNER \714954.1 Date Date Print name Other Signature: (if any) Spouse Print name Signature: (if any) Other Party Print name RVPUBAKCVA710715 RVPUB\KVARNER \714954.1 Date Date