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Home My WebLink AboutR26-Economic Development FROM: Maggie Pacheco, Director Housing and Community Development ECONOMIC DEVELOPMENT AGENCYC...."'.....L OF THE CITY OF SAN BERNARDINO .' . .., i 111.1111 :i-, SUBJECT: CENTURY CROWELL- ARROW VISTA HOUSING DEVELOPMENT DATE: November 27,2000 SvnoDsis of Previous Commission/Council/Committee Action(s); On October 19,2000, the Redevelopment Committee recommended that this item be sent to the Community Development Commission for approval Recommended Motion(s); OPEN JOINT PUBLIC HEARING CLOSE JOINT PUBLIC HEARING (Community Develooment Commission) MOTION A: RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF SAN BERNARDINO APPROVING THE DISPOSITION OF CERTAIN LANDS BY THE REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO TO CENTURY CROWELL COMMUNITIES, L.P. ("DEVELOPER") ON THE TERMS SET FORTH IN FIRST AMENDED AND RESTATED DISPOSITION AND DEVELOPMENT AGREEMENT (NORTHWEST PROJECT AREA) (Mavor and Common Council) MOTION B: RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO ACKNOWLEDGING RECEIPT OF A REPORT RELATING TO THE PROPOSED DISPOSITION OF CERTAIN LANDS SUBMITTED BY THE REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO AND AUTHORIZING THE SALE OF PROPERTY ON THE TERMS SET FORTH IN A FIRST AMENDED AND RESTATED DISPOSITION AND DEVELOPMENT AGREEMENT BY AND BETWEEN CENTURY CROWELL COMMUNITIES ("DEVELOPER") AND THE REDEVELOPMENT AGENCY ("AGENCY") Contact Person(s): Gary Van Osdel/Maggie Pacheco Phone: 663-1044 Project Area(s) Northwest Ward(s): 6th Supporting Data Attached: 0" Staff Report Ii] Resolution(s) 0 Agreement(s)/Contract(s) 0 Map(s) 0 LetterlMemo FUNDING REQUIREMENTS Amount: $ 425,640 Source: Agency Housing Funds SIGNATURE: Budget Authority: 2000-200 I EDA Budget /l1 ~ _ (j~<~ Maggie leeo, Director Housing and Community Development Commission/Council Notes: GVO:MP:lag: 12-04-00 Century COMMISSION MEETING AGENDA Meeting Date: 12/04/2000 Agenda Item Number: ..8d.fp ECONOMIC DEVELOPMENT AGENCY STAFF REPORT --------------------------------------------------------------------------------------------------------------------- First Amended and Restated Disposition and Development A2reement (DDA)- Centurv Crowell/Del Rev at Arrow Vista Housin2 Development BACKGROUND: The Agency owns approximately 14.68 acres of residential land remaining from Arrow Vista Development of Dukes and Dukes (the "Site"). On August 3, 1998, the community Development Commission directed staff to develop and circulate a Request for Proposal (RFP) for development of the Site. The City owns part of the Site because the Community Development Department was a City Department when it was acquired it was not transferred during the Department's consolidation with the Redevelopment Agency. Any disposition of the Site will require the City to quitclaim the Site to the Agency. This RFP led to approval of an Exclusive Right to Negotiate with Century Crowell Communities, L.P. (the" Developer"). The Developer is a merger of Century Vintage Homes (John Pavelak) and Crowell/Leventhall Builders (Harry Crowell). Both have been active in the area for more than 20 years. Collectively the principals have built over 11,000 housing units and I million square feet of commercial and industrial space. Local developments include Whispering Glen and Cimmaron Ranch in South San Bernardino and Del Rey at Los Colinas in Rialto. The Developer is based in the City of San Bernardino and based on their history of developments, they are an experienced Developer, which has the ability to bring private financing to the contemplated project. On July 19,1999, the Mayor and Common Council and the Community Development Commission approved a certain Disposition and Development Agreement (DDA) by and between the Agency and the Developer. For a number of reasons, particularly, the Developer's inability to structure satisfactory terms for an Assessment District financing to help reduce the initial sales price of the new homes, the Developer was unable to proceed with the project. On April 14,2000 a Notice of Termination was given to the Developer by the Agency Executive Director. Between early May 2000 through June 8,2000 staff continued discussions with the Developer, thus resulting in a report to the Redevelopment Committee and the Committee authorizing specific amendments to the July 1999 DDA. Reports on these on-going discussions were presented by staff to the Redevelopment Committee on August 10, 2000 and again on August 21, 2000. Thereafter, Staff and Developer continued to have dialogue about the various business points in accordance with the guidance provided by the Redevelopment Committee regarding the modifications which were indicated in the previously approved July 1999 DDA in order to enable the project to materialize. --------------------~---~~--------------------------------------------------------------------------------.--------------------------------- GYO:MP:lag: 12-04-00 Century COMMISSION MEETING AGENDA Meeting Date: 12/04/2000 Agenda Item Number: R. J.~ - Economic Development Agency Staff Report Century Crowell November 22, 2000 Page Number -2- --------------------------------------------------------------------------------------------------------------------- Toward this end, On October 19, 2000 staff and Developer prcsented to the Redevelopment Committee the new business terms proposed to be incorporated into a Restated and Amended Agreement; as such, the Staffrecommended that the Redevelopment Committee approve Staffs and Developer's reestablishment of the affordable new single-family dwelling development proposal on the site subject to the amended DDA. CURRENT ISSUE: Bascd on the new business points approved by the Redevelopment Committee on October 19, 2000 Staff and Developer proceeded to finalize a Restated and Amended Agreement; as such, the purpose of this item is to conduct a public hearing to consider approval of the First Amended and Restated Disposition and Development Agreement ("First Amendment"). The First Amendment includes, but is not limited to the following major deal points: . Agency will sell the 24 lots (the "Site") to Developer at the sales price of $114,000 (approximately $4750 per lot). However, this $114,000 would only be paid to Agency out of the first profits from the sale of the 24 homes, prior to profit distribution to Developer; if any. The $114,000 is based on the estimated amount owed to the Tax Collector claims for back taxes for the 24 lots. Although Staff intends to work with the Tax Collector in an effort to substantially reduce or eliminate the back taxes from the Site, (the Agency is tax exempt) if necessary, the back taxes will be paid from the Agency's Housing Fund under protest to the Tax Collector and a claim for a refund of such tax will be filed on behalf of the Agency. Consequently, there is a possibility that there will be no fiscal impact to the Agency with regard to back taxes. In contrast, under the July 1999 DDA, the Developer was to pay the sum of $7000 pcr lot to the Agency in cash at escrow close. The Agency was responsible for clearing any purported unpaid property tax using such cash sales proceeds. However, because the Developer was unable to obtain assessment district financing to facilitate the installation of necessary infrastructure costs, the Developer's current economic pro forma as of October 2000 indicates that the project is not able to bear a $7000 per lot land cost, and other ancillary project related costs; The current pro forma shows the Developer netting an approximate profit of 5-6%; the sale of the Site will allow the Site to be placed back on the tax rolls at an average sales price per completed new home of $124,000, thus resulting in new property taxes of about $30,000 year. . During the first 6 months, following the closing of escrow on the 24 lots, under the First Amendment the Developer will have any option, but under no obligation, to purchase the southern 38 lots with the business terms to be negotiated in the discretion of the Developer and the Agency, if the option is exercised by the Developer. During this 6- month period, the Agency is not precluded from negotiating with other prospective GVO:MP:lag: I 2-04-00 Century COMMISSION MEETING AGENDA Meeting Date: 12/04/2000 Agenda Item Number: Pd..~ Economic Development Agency Staff Report Century Crowell November 22, 2000 Page Number -3- --------------------------------------------------------------------------------------------------------------------- buyers, provided Developer is notified. If the option is exercised, Staff will return to the Commission with a proposed Second Amendment to the DDA. . Agency will transfer sewer and water capacity credits, previously purchased by the Agency from the Water Department at the approximate original cost of $71,640, for all 24 lots to the Developer; . Agency will sell the single-family home located at 1684 Susie Lane property (the "Sales Office Site") at the fair market value of $115,000 to the Developer. This sum will be paid to the Agency by Developer when the Sales Office Site is sold to an income eligible homebuycr at completion of the Project; in the interim Developer has agreed to convert and use the home as a sales office for the development of the 24 lots rather than placing a trailer on the development site. This temporary use has already been approved by the Planning Department. . Agency will set aside up to $240,000 from the Agency's Housing Fund to provide up to 10% down payment/closing costs assistance to Developer's income eligible buyers; (Not to exceed 120% of median income, i.e., family of4~$56,880 annual income). The First Amended and Restated Disposition and Development Agreement requires adoption of Resolution by both the Community Development Commission and Mayor and Common Council. The findings within the Resolutions include determinations as follows: (a) The disposition and development of the Site, and sale of the Sales Office Site, is consistent with the Northwest Redevelopment Plan, the City's General Plan and Housing Element; the surrounding land uses are single family residential; (b) The First Amendment will increase the supply of affordable housing and create homeownership opportunities for low and moderate income buyers; (c) The sales price for the Site under the First Amendment is less than the 1999 fair market value under the term of the original development scenario; however, in light of the chronology of events and financial circumstances set forth in the 33433 Report including Staff's evaluation of the Developer's most current pro forma, the disposition price of the Site under the First Amendment (of $114,000, payable from "Developer Profit") is reasonable, and it appears that a higher price for the Site does not appear to be achievable under current market conditions. The Sales Office property is being sold to the Developer at the appraised estimated value of $115,000. The sales price for the "option property" will be determined at a future date based upon the market conditions and any development constraints, and as mutually negotiated by the Developer and the Agency, once the Developer exercises its option to make such purchase. GYO:MP:lag:12-04-00 Century COMMISSION MEETING AGENDA Meeting Date: 12/04/2000 Agenda Item Number: p..at, Economic Development Agency Staff Report Century Crowell November 22, 2000 Page Number -4- --------------------------------------------------------------------------------------------------------------------- (d) No further environmental review is necessary for the approval of the First Amendment and the disposition of the Site and the Sales Office Site is necessary A final subdivision map for the Site (and the option property) has been recorded, and public street and infrastructure improvements have already been installed for the Site. The Sales Office Site is an existing unoccupied single-family home that the Agency acquired as a result of a previous foreclosure action. The Planning Commission further found that, on October 19,2000, the proposed project would have no negative impact on the environment. (e) The development of the Site will reduce blight, create replacement-housing units for the Agency and eligible homebuyers, and temporary construction jobs for area residents; improve the image and enhance neighborhood conditions thus, improving the quality of life for residents within the Northwest Project Area. Although, the Developer has been unable to provide evidence of financing, they have verbally assured the Redevelopment Committee and Staff that there financing will materialize for development of the Site. The Developer is expected to close escrow within 60 days from approval of the First Amendment. Should they fail to close within the prescribed timeframe, the Agency will retain the sum of $25,000 as liquidated damages. Recommendation: That the Mayor and Common Council and Community Development Commission adopt the attached Resolutions. --I::J:xo;,lP ~ Housing and Community Development GVO:MP:lag: 12-04-00 Century COMMISSION MEETING AGENDA Meeting Date: t2/04/2000 Agenda Item Number: RJ.. , ~ lQ) [p)l~l RESOLUTION NO. 2 RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF SAN BERNARDINO APPROVING THE DISPOSITION OF CERTAIN LANDS BY THE REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO TO CENTURY CROWELL COMMUNITIES, L.P. ("DEVELOPER") ON THE TERMS SET FORTH IN FIRST AMENDED AND RESTATED DISPOSITION AND DEVELOPMENT AGREEMENT (NORTHWEST PROJECT AREA) 3 4 5 6 WHEREAS, the Redevelopment Agency of the City of San Bernardino (the "Agency") 7 owns or has a beneficial interest in certain subdivided lands referred to in this Resolution 8 collectively as the "Sites" which are situated within the redevelopment project area of the 9 Northwest Redevelopment Project described as: 10 (i) Lot Nos. 6 through 13, inclusive and Lot Nos. 27-42, inclusive of Subdivision 11 Tract Map No. 11261 (the "Phase I Site"); and Lot Nos. 1 through 38, inclusive of Subdivision Tract Map No. 13822 (the 12 (ii) 13 "Phase II Site"); and 14 (iii) 1684 Susie Lane, San Bernardino, California, Tract 11261, Lot 19, APN #0269- 15 371-16 (the "Property"). 16 WHEREAS, the City of San Bernardino (the "City") acquired the Phase I Site under the 17 terms of a 1989 tax-defaulted property sale agreement with the County of San Bernardino 18 (Westlands Bank) and the Agency acquired the Phase II site from Dukes-Dukes and 19 Associates; and 20 WHEREAS, Dukes-Dukes and Associates undertook the redevelopment of Phase I Site 21 and the Phase II Site pursuant to an agreement which was cancelled following the approval of an "Agreement for Relinquishment of Rights and Forgiveness of Obligations" dated as of February 21,1994 by and between Dukes-Dukes and Associates and the Agency; and 22 23 24 WHEREAS, in calendar year 1998, the Agency circulated a written request for proposals among qualified developers of affordable single family residential dwelling units in 25 -1- Cm,.",CDCAIMfI<l which the Agency solicited proposals for the disposition and redevelopment of the Sites on 2 terms acceptable to the Agency; and 3 WHEREAS, based upon a review and evaluation of the proposals submitted to the 4 Agency, the Community Development Commission of the City of San Bernardino (the 5 "Commission") as the governing board of the Agency selected the proposal submitted by 6 Century Crowell Communities, L.P., a California limited partnership (the "Developer") for 7 further study and evaluation pursuant to the terms of an instrument entitled "Exclusive Right to 8 Negotiate for Property Acquisition and Redevelopment Assistance Between Century Crowell 9 Communities, L.P. and the Redevelopment Agency of the City of San Bernardino" dated as of 10 February I, 1999; and 11 WHEREAS, the Agency and Developer on July 19, 1999 entered into a Disposition and 12 Development Agreement (the "Agreement") for the disposition of the Sites to the Developer 13 together with a report which summarized the key terms of the Agreement and described the 14 manner in which the proposed disposition of the Sites to the Developer will assist in the 15 elimination of blight (the "33433 Report"); and 16 WHEREAS, the Agency and Developer desire to amend the Agreement, and have 17 prepared the First Amended and Restated Disposition and Development Agreement (the "First 18 Amendment") to the Agreement; and 19 WHEREAS, it is appropriate for the Commission to take the actions as it pertains to the 20 First Amendment and approve the First Amendment as set forth in this Resolution. 21 NOW, THEREFORE, THE COMMUNITY DEVELOPMENT COMMISSION 22 ACTING ON BEHALF OF THE REDEVELOPMENT AGENCY OF THE CITY OF SAN 23 BEIU>lARDINO DOES HEREBY RESOLVE, DETERMINE AND ORDER AS FOLLOWS: 24 Section I. On December 4, 2000, the Commission conducted a full and fair joint 25 public hearing with the Mayor and Common Council of the City of San Bernardino relating to -2- CC""H)..COC..........., 2 3 4 5 6 7 8 9 10 II 12 13 14 15 16 17 18 19 20 the disposition and redevelopment of the Sites by the Developer pursuant to the terms and conditions of the First Amendment. The minutes of the Agency Secretary for the December 4, 2000 meeting of the Commission shall include a record of all communication and testimony submitted to the Commission and to the Mayor and Common Council by interested persons relating to the joint public hearing, the 33433 Report and the approval of the First Amendment. Section 2. A copy of the First Amendment in the form submitted at the joint public hearing is on file with the Agency Secretary. The Commission hereby finds and determines as follows: (i) the disposition and redevelopment of the Sites by the Developer in accordance with the First Amendment is consistent with the Redevelopment Plan for the Northwest Redevelopment Project and the Agency Implementation Plan: (ii) the terms and conditions of the Agreement contain assurances that the Sites will be redeveloped for affordable single family residential dwelling use purposes as permitted under the Redevelopment Plan; (iii) the purchase price for the Sites payable by the Developer to the Agency, subject to the satisfaction of the terms and conditions of the Agreement, is an amount which the Commission declares to be fair, just and reasonable, and that the disposition of the Sites on the terms set forth in the Agreement shall materially benefit and sustain the implementation of the Redevelopment Plan and assist the community to increase the supply of affordable single family residential dwelling units available to persons and households of a low- and moderate income; (iv) the consideration payable by the Developer to the Agency for the disposition of the Sites (e.g.: $114,000 and $115,000 for the property located at 1684 21 22 23 24 25 -3- Lon'ufYCOCAft'Imd Susie Lane, San Bernardino, California payable to the Agency upon 2 completion of the project subject to the terms of the First Amendment and 3 the assumption by the Developer of the obligation of the Agency to 4 complete any installation of the off-site public improvements for 5 Subdivision Tract Map No. 13822) is an amount which is not less than the 6 fair reuse value of the Sites at the use and with the affordable single family 7 dwelling occupancy and maintenance covenants and other terms, conditions 8 and development costs authorized in the First Amendment. 9 Section 3. The Commission hereby finds and determines that no further 10 environmental review by the Agency of the disposition and redevelopment of the Sites of the 11 Developer pursuant to the terms and conditions of the First Amendment is necessary at this 12 time under the California Environmental Quality Act, as amended, in light of the following 13 facts: 14 (i) the final subdivision tract maps for the Sites have previously been recorded and 15 the redevelopment of the sites by the Developer pursuant to the Agreement will 16 not require any revision or change in the approved subdivision tract maps for the 17 Sites; and 18 (ii) the redevelopment of the Sites by the Developer pursuant to the Agreement does 19 not involve any new significant increase in the severity of previously identified 20 environment effects which were not previously considered as part of the approval 21 of the subdivision tract maps for the Sites; and 22 (iii) the Sites are situated in the redevelopment project area of the Northwest 23 Redevelopment Project and by virtue of the facts set forth in subparagraph (i) and 24 (ii) above, pursuant to the provisions of Title 14 California code of Regulation 25 Section 15180, no further review of the potential effect of the redevelopment of -4- C<O,",yCOCA"""" the Sites in accordance with the Agreement is required at this time under CEQA 2 and the Final EIR for the Northwest Redevelopment Project. 3 Section 4. The Commission hereby approves, receives and files the 33433 Report 4 and the First Amendment in the form as submitted at this joint public hearing. 5 Section 5. The Commission hereby approves the disposition of the Sites to the 6 Developer on the terms set forth in the First Amendment. The Chair of Commission and the 7 Executive Director are hereby authorized and directed to execute the First Amendment on 8 behalf of the Agency together with such technical and conforming changes as may be 9 recommended by the Executive Director and approved by the Chair of the Commission. The 10 signatures of the Chair of the Commission and the Executive Director on the First Amendment 11 shall provide conclusive evidence that the First Amendment has taken effect. In the event that 12 the First Amendment may not be fully executed by the parties for any reason within sixty (60) 13 days following the date of adoption, of this Resolution, the authorization granted to the Chair 14 of the Commission and the Executive Director to execute the First Amendment on behalf of the 15 Agency shall be of no further force or effect. 16 Section 6. Provided that the First Amendment has been fully executed by the 17 parties within the period of time set forth in Section 5 of this Resolution, the Executive 18 Director of the Agency is hereby authorized and directed to take all actions set forth in the First 19 Amendment on behalf of the Agency to close the escrow transaction described therein. The 20 Chair of the Commission and the Executive Director are further authorized and directed to 21 execute an acknowledgement of acceptance of transfer oftilie of the Phase I Site from the City 22 pursuant to the Resolution of the Mayor and Common Council of even date herewith, and to 23 execute the final form of the Agency Grant Deed transferring title in the Sites from the Agency 24 to the Developer upon satisfaction of the applicable conditions for the close of the escrow set 25 forth in the First Amendment. -5- Crn'"ryCOCAmeM fill 2 fill 3 fill 4 fill 5 fill 6 fill 7 fill 8 fill 9 fill 10 fill 11 fill 12 fill 13 fill 14 fill 15 fill 16 fill 17 fill 18 fill 19 fill 20 fill 21 fill 22 fill 23 fill 24 fill 25 fill -6- Crn'uf)' CDC Amond 2 RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF SAN BERNARDINO APPROVING THE DISPOSITION OF CERTAIN LANDS BY THE REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO TO CENTURY CROWELL COMMUNITIES, L.P. ("DEVELOPER") ON THE TERMS SET FORTH IN FIRST AMENDED AND RESTATED DISPOSITION AND DEVELOPMENT AGREEMENT (NORTHWEST PROJECT AREA) 3 4 5 I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Community 6 Development Commission of the City of San Bernardino at a meeting thereof, held 7 on the day of 8 Commission Members: ESTRADA 9 LIEN 10 MCGINNIS II SCHNETZ 12 SUAREZ 13 ANDERSON 14 MC CAMMACK 15 ,2000, by the following vote to wit: Abstain Aves Nays Absent 16 Rachel G. Clark, City Clerk 17 18 The foregoing resolution is hereby approved this day of ,2000. 19 20 21 Judith Valles, Chairperson Community Development Commission City of San Bernardino 22 Approved as to form and Legal Content: 23 24 25 By: -7- Crn'ufj'CDCAma>d ~(Q)~V RESOLUTION NO. 2 RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO ACKNOWLEDGING RECEIPT OF A REPORT RELATING TO THE PROPOSED DISPOSITION OF CERTAIN LANDS SUBMITTED BY THE REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO AND AUTHORIZING THE SALE OF PROPERTY ON THE TERMS SET FORTH IN A FIRST AMENDED AND RESTATED DISPOSITION AND DEVELOPMENT AGREEMENT BY AND BETWEEN CENTURY CROWELL COMMUNITIES ("DEVELOPER") AND THE REDEVELOPMENT AGENCY ("AGENCY") 3 4 5 6 WHEREAS, the Redevelopment Agency of the City of San Bernardino (the "Agency") 7 owns or has a beneficial interest in certain subdivided lands referred to in this Resolution 8 collectively as the "Sites" which are situated within the redevelopment project area of the 9 Northwest Redevelopment Project described as: 10 (i) Lot Nos. 6 through 13, inclusive and Lot Nos. 27-42, inclusive of 11 Subdivision Tract Map No. 11261 (the "Phase I Site"); and 12 (ii) Lot Nos. I through 38, inclusive of Subdivision Tract Map No. 13822 (the 13 "Phase II Site"); and 14 (iii) 1684 Susie Lane, San Bernardino, California, Tract 11261, Lot 19, 15 APN# 0269-371-16 (the "Property") 16 WHEREAS, the City of San Bernardino (the "City") acquired the Phase I Site under the 17 terms of a 1989 tax-defaulted property sale agreement with the County of San Bernardino 18 (Westlands Bank) and the Agency acquired the Phase II Site from Dukes-Dukes and 19 Associates; and 20 WHEREAS, Dukes-Dukes and Associates undertook the redevelopment of the Phase I 21 Site and the Phase II Site pursuant to an agreement which was cancelled following the approval of an "Agreement for Relinquishment of Rights and Forgiveness of Obligations" dated as of February 21,1994 by and between Dukes-Dukes and Associates and the Agency; and 22 23 24 WHEREAS, in calendar year 1998, the Agency circulated a written request for proposals among qualified developers of affordable single family residential dwelling units in 25 .1. C.nluryAm.ndm.nl which the Agency solicited proposals for the disposition and redevelopment of the Sites on 2 terms acceptable to the Agency, and 3 WHEREAS, based upon a review and evaluation of the proposals submitted to the 4 Agency, the Agency selected the proposal submitted by Century Crowell Communities, L.P" a 5 California limited partnership (the "Developer") for further study and evaluation pursuant to 6 the tern1S of an instrument entitled "Exclusive Right to Negotiate for Property Acquisition and 7 Redevelopment Assistance Between Century Crowell Communities, L.P, and the 8 Redevelopment Agency of the City of San Bernardino" dated as of February 1, 1999; and 9 WHEREAS, the Agency and Developer on July 19, 1999 entered into a Disposition 10 Development Agreement (the "Agreement") for the disposition of the Sites to the Developer II together with a report which summarized the key terms of the Agreement and described the 12 manner in which the proposed disposition of the Sites to the Developer will assist in the 13 elimination of blight (the "33433 Report"); and 14 WHEREAS, the Agency and Developer desire to amend the Agreement, and have 15 prepared the First Amended and Restated Disposition and Development Agreement (the "First 16 Amendment") to the Agreement; and 17 WHEREAS, it is appropriate for the Mayor and Common Council to take the actions 18 with respect to the 33433 Report and the First Amendment and to formalize the transfer of 19 legal title in the Phase I Site to the Agency for disposition and redevelopment pursuant to the 20 Agreement and the First Amendment subject to the conditions set forth in this Resolution, 21 NOW, THEREFORE, BE IT RESOLVED, DETERMINED AND ORDERED BY 22 THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO, AS 23 FOLLOWS: 24 Section 1. On December 4, 2000, the Mayor and Common Council conducted a full 25 and fair joint public hearing with the Community Development Commission of the City of San -2- Century Am."dmenl 2 3 4 5 6 7 8 9 10 II 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Bernardino relating to the disposition and redevelopment of the Sites by the Developer pursuant to the terms and conditions of the First Amendment. The minutes of the City Clerk for the December 4,2000 meeting of the Mayor and Common Council shall include a record of all communication and testimony submitted to the Mayor and Common Council by interested persons relating to the joint public hearing, the 33433 Report and the approval of the First Amendment. Section 2. This Resolution is adopted in order to satisfy the provisions of Health and Safety Code Section 33433 as relate to the disposition and sale of the Sites by the Agency to the Developer on the terms and conditions set forth in the Agreement. A copy of the First Amendment in the form submitted at the joint public hearing is on file with the Agency Secretary. The Mayor and Common Council hereby find and determine as follows: (i) the disposition and redevelopment of the Sites by the Developer 10 accordance with the First Amendment IS consistent with the Redevelopment Plan for the Northwest Redevelopment Project and the Agency Implementation Plan; (ii) the terms and conditions of the Agreement contain assurances that the Sites will be redeveloped for affordable single family residential dwelling use purposes as permitted under the Redevelopment Plan; (iii) the purchase price for the Sites payable by the Developer to the Agency, subject to the satisfaction of the terms and conditions of the Agreement, is an amount which the Community Development Commission has determined to be fair, just and reasonable, and that the disposition of the Sites on the terms set forth in the Agreement shall materially benefit and sustain the implementation of the Redevelopment Plan and assist the community to increase the supply of affordable single family residential .3. CenluryAmendmenl 2 3 4 5 6 7 8 9 10 dwelling units available to persons and households of a low- and moderate Income; (iv) the consideration payable by the Developer to the Agency for the disposition of the Sites (e.g.: $114,000 and $115,000 for the property located at 1684 Susie Lane, San Bernardino, California payable to the Agency upon completion of the project subject to the terms of the First Amendment and the assumption by the Developer of the obligation of the Agency to complete any installation of the off-site public improvements for Subdivision Tract Map No. 13822) is an amount which is not less than the fair reuse value of the Sites at the use and with the affordable single 11 family dwelling occupancy and maintenance covenants and other terms, 12 conditions and development costs authorized in the First Amendment. 13 Section 3. The Mayor and Common Council hereby find and determine that no 14 further environmental review of the disposition and redevelopment of the Sites of the 15 Developer pursuant to the terms and conditions of the First Amendment is necessary at this 16 time under the California Environmental Quality Act, as amended, in light of the following 17 facts: 18 (i) 19 20 21 22 (ii) 23 24 25 the final subdivision tract maps for the Sites have previously been recorded and the redevelopment of the Sites by the Developer pursuant to the Agreement will not require any revision or change in the approved subdivision tract maps for the Sites; and the redevelopment of the Sites by the Developer pursuant to the Agreement does not involve any new significant increase in the severity of previously identified environmental effects which were not previously -4- CenluryAmendmcnl considered as part of the approval of the subdivision tract maps for the 2 Sites; and 3 (iii) the Sites are situated in the redevelopment project area of the Northwest 4 Redevelopment Project and by virtue of the facts set forth in subparagraph 5 (i) and (ii) above, pursuant to the provisions of Title 14 California Code of 6 Regulation Section 15180, no further review of the potential effect of the 7 redevelopment of the Sites in accordance with the Agreement is required 8 at this time under CEQA and the Final EIR for the Northwest 9 Redevelopment Projec!. 10 Section 4. The Mayor and Common Council hereby approve, receive and file the 11 33433 Report and the First Amendment in the form as submitted at this joint public hearing. 12 Section 5. The Mayor and Common Council hereby approve the disposition of the 13 Sites by the Agency to the Developer on the terms set forth in the First Amendment; provided 14 however, that nothing in this action by the Mayor and Common Council shall be deemed to be 15 an approval by the City of any matter set forth in Section 2.16(4) of the Agreement, or to 16 otherwise evidence a waiver of any power reserved to the City with respect to the review and 17 approval by the City of any subsequent development project application of the Developer 18 relating to the issuance of development and building permits by the City to the developer for 19 the improvement of the Sites as may be necessary or appropriate. 20 Section 6. Subject to the satisfaction by the Developer and the Agency of the conditions 21 precedent for the close of the escrow transaction as set forth in the First Amendment, the 22 Mayor and the City Clerk are hereby authorized and directed to execute the appropriate form of 23 a quitclaim deed which transfers all of the right, title and interest of the City in the Phase I Site 24 to the Agency concurrently upon the close of such escrow transaction. 25 IIII -5- Century Amendment 2 RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO ACKNOWLEDGING RECEIPT OF A REPORT RELATING TO THE PROPOSED DISPOSITION OF CERTAIN LANDS SUBMITTED BY THE REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO AND AUTHORIZING THE SALE OF PROPERTY ON THE TERMS SET FORTH IN A FIRST AMENDED AND RESTATED DISPOSITION AND DEVELOPMENT AGREEMENT BY AND BETWEEN CENTURY CROWELL COMMUNITIES ("DEVELOPER") AND THE REDEVELOPMENT AGENCY ("AGENCY") 3 4 5 6 I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Mayor and 7 Common Council of the City of San Bernardino at a meeting thereof, held on the 8 day of ,2000, by the following vote to wit: 9 Counei I Members: Absent Aves Navs Abstain ESTRADA to LIEN 11 12 MCGINNIS SCHNETZ SUAREZ ANDERSON MC CAMMACK 13 14 15 16 17 Rachel G. Clark, City Clerk 18 The foregoing resolution is hereby approved this day of ,2000. 19 20 21 Judith Valles, Mayor City of San Bernardino 22 23 Approved as to form and Legal Content: 24 CenluryAmendmenl 25 By: -6- SUMMARY REPORT PURSUANT TO HEALTH AND SAFETY CODE SECTION 33433 THE CALIFORNIA COMMUNITY REDEVELOPMENT LAW ON THE FIRST AMENDED AND RESTATED DISPOSITION AND DEVELOPMENT AGREEMENT (the "FIRST AMENDMENT") BY AND BETWEEN THE REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO (the "AGENCY") AND CENTURY CROWELL COMMUNITIES, L.P,A CALIFORNIA LIMITED PARTNERSHIP (the "DEVELOPER")- NORTHWEST REDEVELOPMENT PROJECT AREA INTRODUCTION: This Summary Report (the "Report") has been prepared by the Redevelopment Agency of the City of San Bernardino (the "Agency") pursuant to Section 33433 of the California Health and Safety Code. This Report sets forth certain details of the proposed First Amendment between the Agency and Developer with regard to the development of 24 single-family lots located at 19th Street and Pennsylvania Street, 38 single-family lots located at California and 16th Streets (the "Site") (see attached Map-Exhibit A), and the single-family dwelling unit located at 1684 Susie Lane, Ciiy of San Bernardino (the "Property"). The following describes the provisions, terms and conditions and costs of the First Amendment to the Agency. A. SALIENT POINTS OF THE FIRST AMENDMENT: The purpose of the First Amendment is to enable the development ofa single-family affordable housing development located at the Site (the "Project") based on the renegotiated terms and conditions. The original Disposition and Development Agreement (DDA) was entered between the parties on July 19, 1999 and for a number of reasons, the Project was delayed, primarily due to the Developer's inability to obtain assessment district financing intended to augment Developer's private financing and financially allow the development of the Project to materialize. The assessment district was a critical element of the DDA and without this financing the Project was economically unachievable. Thus, one of the fundamental reasons for the changes to the DDA. Below are the major First Amendment deal points: . Agency will sell the initial 24 lots to Developer at the sales priee of $114,000 (approximately $4750 per lot). However, this $114,000 would only be paid to Agency out of the first profits from the sale of the 24 homes, prior to profit distribution to Developer; if any. The $114,000 is based on the estimated amount owed, the Tax Collector claims for back taxes for the 24 lots. Although Staff intends to work with the Tax Collector in an effort to eliminate the back taxes from the Site, (the Agency is tax exempt) if necessary, the back taxes will be paid from the Agency's Housing Fund under protest with the Tax Collector. Consequently, there is a possibility that there will be no fiscal impact to the Agency with regard to back taxes. In contrast, under the July 1999 DDA, the Developer was to pay the sum of $7000 per lot to the Agency in cash at escrow close. The Agency was responsible for clearing any purported unpaid property tax using such cash sales proceeds. However, because the Developer was unable to obtain Page lof4 assessment district financing to facilitate the installation of necessary infrastrnctnre costs, the Developer's current economic pro forma as of October 2000 indicates that the project is not able to bear a $7000 per lot land cost, and other ancillary project related costs; The current pro forma shows the Developer netting an approximate profit of 5-6%; This is less than the going rate ofretnm for similar projects (8%-10%). The sale of the 24 lots will place the property back on the tax rolls at an average sales price per completed new home of $124,000, thus resulting in new property taxes of approximately $30,000 annually. . During the first 6 months, following the closing of escrow on the 24 lots, under the First Amendment the Developer will have any option, but under no obligation, to purchase the southern 38 lots with the business terms to be negotiated in the discretion of the Developer and the Agency whcn thc option is exercised. During this 6-month period, the Agency is not precluded from negotiating with other prospective buyers, provided Developer is notified. If the option is exercised, Staff will return to the Commission with a proposed Second Amendment to the DDA. . Agency will transfer sewer and water capacity credits, previously purchased by the Agency from the Water Department at the approximate original cost of $71,640, for all 24 lots to the Developer. . Agency will sell the single-family home located at 1684 Susie Lane property (the "Sales Office Site") at the fair market value of $115,000 to the Developer. This sum will be paid to the Agency by Developer when the Sales Office Site is sold to an income eligible homebuyer at completion of the Project; in the interim Developer has agreed to convert and use the home as a sales office for the development of the 24 lots rather than placing a trailer on the development site. This temporary use has already been approved by the Planning Department. . Agency will set aside up to $240,000 from the Agency's Housing Fund to provide up to 10% down payment/closing costs assistance to Developer's income eligible buyers; (Not to exceed 120% of median income, i.e., family of 4=$56,880 annual income). . The Developer is expected to close escrow within 60 days from approval of the First Amendment. Should they fail to close within the prescribed timeframe, the Agency will retain the sum of $25,000 as liquidated damages. B. COST OF THE FIRST AMENDMENT TO THE AGENCY This Section outlines the total costs of the Agreement to the Agency, including, but not limited to land acquisition costs, clearance costs, relocation costs, the costs of any improvements to be provided by the Agency, plus the expected interest on any loans or bonds to finance the First Amendment, if applicable. As stated in A above the Agency intends to sell the initial 24 lots to the Developer, transfer its water and sewer rights for 24 lots to the Developer; in addition, the Agency will sell the 1684 Susie Lane Property to the Developer at Fair Market Value of$115,000. The Agency will also be obligated to Page 2 of4 set aside up to $240,000 of Agency Housing Funds to be made available to the Developer's eligible buyers for down payment assistance. Therefore, the total costs of the First Amendment to the Agency are estimated at $425,640. However, the benefits associated with the First Amendment far exceed the Agency's estimated costs of the First Amendment as will be further discussed in item C and D of this Report. C. ESTIMATED VALUE OF THE INTEREST TO BE CONVEYED DETERMINED AT THE HIGHEST AND BEST USES PERMITTED UNDER THE REDEVELOPMENT PLAN; AND ESTIMATED VALUE OF THE INTEREST TO BE CONVEYED BASED ON THE REOUlRED REUSE AND WITH THE CONDITIONS. COVENANTS AND RESTRICTIONS REOUlRED UNDER THE FIRST AMENDMENT; The estimated value of the interested to be conveyed to Developer at the highest and best uses permitted under the redevelopment plan is between $114,000 to $168,000 for the 24 single-family lots. The estimated value of the property located at 1684 Susie Lane is $115,000. The interest to be conveyed and at the price, to the Developer was determined by reviewing the Developer's total development costs in relation to what the Developer is expected to expend for development of the Project and an expected reasonable return to the Developer at the conclusion of the development of the Project. Based on the attached pro-forma (Exhibit B), the total Project costs are estimated at $2,901,505 and the resale price of the total Project are estimated at $3,081,750. Therefore, the estimated profit to the Developer is 5.8%. This profit margin is less than the standard profit or going rate for developments analogous to the proposed housing development which ranges between of eight (8%) to ten (10%) percent; thus creating the justification for the Developer seeking a lower purchase price of $] 14,000 for the 24 single family lots payable to the Agency only if a profit is realized on the Project. Moreover, previous economic reports commissioned by the Agency indicated that the Project as proposed under the July 19, 2000 DDA was economically unfeasible if the assessment district financing did not occur to help off-set Developer's up-front Project costs. In fact, based on this report, it is unlikely that investors would be willing to contribute sufficient capital to undertake the project given its limited return and the cost associated with the overall Project. However, the reduction in sales price by the Agency and deferment of such purchase price until completion of the Project is intended to minimize the financial risks to the Developer. In conclusion, the interest to be conveyed to Developer has been determined to be fair market value based on the reuse and development of the Project subject to conditions, covenants and restrictions place by the Agency under the First Amendment and the new evidence contained in this Report. Moreover, the purchase price and development of the Project has been determined at the highest and best use consistent with the permitted uses under the redevelopment plan. Furthermore, the interest to be conveyed to the Developer will be developed in conformance with the City's General Plan and Housing Element, Municipal Development Code, and Agency's AB 1290 Implementation Plan. Page 3 of4 D. EXPLANATION OF WHY THE SALE OF THE SITE AND THE PROPERTY WILL ASSIST IN THE ELIMINATION OF BLIGHT WITH REFERENCE TO ALL SUPPORTING FACTS AND MATERIALS RELIED UPON IN MAKING SUCH EXPLANATION: The development proposed nnder the First Amendment will reduce blight, create replacement housing units for the Agency, provide homeownership opportunities, temporary construction jobs for area residents; improve the image and enhance neighborhood conditions; increase property taxes and property values, thus improving the quality of life for residents within the Northwest Project Area. In addition to blight eradication, the proposed Project is consistent with the adopted Agency Five -Year Implementation Plan, which sets forth the following goals and objectives. . Creation of viable housing options within the redevelopment project area that span a range of incomes, including housing for the indigent; Creative implementation of catalyst projects which spur reinvestment on surrounding blocks. Improvements to existing water and sewer lines, streets, sidewalks, parkways, and lighting in the public right of way. Continued participation in the enhancement of the public infrastructure system. Acquisition and development of property to abate nuisance uses and provide for future development. . . . . The First Amendment will assist the Agency in meeting most of the objectives and goals set forth above, specifically, by encouraging reinvestment and revitalization in blighted neighborhoods and provide decent, up-scale affordable housing for area residents at affordable housing prices. The First Amendment is subject to closure of a public hearing with a majority approval vote by the Community Development Commission. Page 4 of4 l j L 19thSlreet -- G G G 8 G G 0 0 G 0 Lincoln Street i " @ @ 0) G '" . 269/361 C . 0 0 0 " e .- < < G G (0 . ~ G .' -----, --- I 0 8 , . ------- j" ----- . .. , '" li " '" . ] .. " 17th Streel 08 @ , 0 , (0 , I ... ., . I 8 I \" I I l .......... ... n.' . G I I .. .. .. ..... .. .... I G I ; I .... ... ....... 1 @ . I I r' .......... 00" G , t" ...mml Go I" .. ..............-t G , , , Cummings Way . . in "'j ;t . ~ . <3 .....m.~ i _ooo.........--i _.~.....J e ./ ;.... I , " i , .....m..........! @l ...............j 91 / In.. ! i,. .......-......1 g: I 16th Street G @ I ( l' I NORTH ( I "'01"'5<;4. RDA ASSESSOR.S EXISTING GENERAL PLAN AREA THOMAS GUIDE' PROJECT NUMBER LAND USE LAND USE DESIGNATION PAGE , GRID Within Northwest 269-361-04 thru 20 & Vacant land RS . Residential Suburban 5.861 Ac. MIL 576 C-4 Project 269.361-30 thru 36 (improved) 269-371-43 thru 80 Vacant Land RS . Residential Suburban 8.82 AC. MIL 576 C-4 (unimproved) "Thomas Guide San Bernardino County, 1997 Edition C.tYofS."s..m.ordlno~ ECOllOWIC DEVELOPllE,HT AGE/tICy EXHIBIT rlA" , I_~~: ''1; ol'S:~~1 ] sl :J.~ .1,. 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Go a.c~= ~~~ .taU ~~1~ j ~~:if" ._~~~!j~!~~:J!~~ ~H 5 ~!ii5 ~ 0 0M>~ O~u.Eo_~oo~_ CJ~ 0. .,- EXHIBIT "B" RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO 201 North -E" Street, Suite 301 San Bernardino, California 92401 (Space Above Line for Use By Recorder) FIRST AMENDED AND RESTATED DISPOSITION AND DEVELOPMENT AGREEMENT BY AND BETWEEN REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO AND CENTURY CROWELL COMMUNITIES, L.P. a California Limited Partnership SBEOIOOOl/DOC/OQl-2 11/29/00 930 jmm FIRST AMENDED AND RESTATED DISPOSITION AND DEVELOPMENT AGREEMENT THIS FIRST AMENDED AND RESTATED DISPOSITION AND DEVELOPMENT AGREEMENT (this "Restated Agreement") is entered into as of 2000, by and between the REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO, a public body corporate and poli tic (the "Agency") and CENTURY CROWELL COMMUNITIES, LP, a California limited partnership (the "Developer") RECITALS A. WHEREAS, the Agency and the Developer entered into the original Disposition and Development Agreement (the "Original DDA") on August ____, 1999; B. WHEREAS, the Agency and the Developer now desire to enter into this Restated Agreement in order to amend their respective rights, duties and obligations and to set forth new or additional terms and conditions to the Original DDA; and C. WHEREAS, this Restated Agreement shall, upon execution, amend and supersede the Original DDA in its entirety. NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Agency and the Developer hereby agree as follows: TERMS AND CONDITIONS Section 1.01. Purpose of Aoreement. The purpose of this Restated Agreement is to effectuate various redevelopment plans of the Agency by making available affordable housing for low- and moderate-income homebuyers and to cause the residential development of a single family housing tract (the "Site"). The Site is situated within the redevelopment project area of the Northwest Redevelopment Project in the City of San Bernardino, California (the "City"). A legal description of the Site is attached hereto as Exhibit "Au and incorporated herein by this reference. The development of the Site pursuant to this Restated Agreement is in the vital and best interests of the City and the health, safety and welfare of its residents, and in accord with the public purposes and provisions of applicable state and local laws. The Agency has determined that the development and uses contemplated by this Restated Agreement will benefit the low- and moderate-income housing needs of the City as well as the various redevelopment project areas of the City. SBEO/0001/DOC/OOl-2 11/29/00 930 jmm 1 Section 1.02. The Site. The Site, which is designated as Subdivision Tract Map No. 11261, consists of a total of TWENTY- FOUR subdivided lots (each lot in the Site, shall be referred to hereafter as a "Site Lot"). Promptly following the purchase of the Si te from the Agency, the Developer shall undertake the development, improvement, marketing and sale of single family detached residential homes on each Site Lot. The provisions of this Restated Agreement are applicable to the Site in its entirety. Section 1.02.1 Sales Office. In order to effectuate the development, improvement, marketing and sale of the single family homes at the Site, Agency is agreeing to sell and Developer is also agreeing to purchase, pursuant to the terms set forth in this Restated Agreement, an existing single family residence in the vicini ty of the Site for temporary use by Developer as a sales office pending completion of the development. This existing single family residence, (hereafter the "Sales Office"), is located at 1684 Susie Laner San Bernardino, CA, and is more particularly described in the legal description for such Sales Office set forth in Exhibit "A-I" attached hereto and incorporated herein by this reference. The provisions of this Restated Agreement are applicable to the Sales Office in its entirety. Section 1.03. Parties to the Aoreement. (a) The Aaencv. The Agency is a public body, corporate and politic, exercising governmental functions and powers and organized and existing under Chapter 2 of the Community Redevelopment Law of the State of California (Health and Safety Code Section 33020, et ~.) The principal office of the Agency is located at 201 North "E'f Street, Suite 301, San Bernardino, California 92401. (b) The DeveloDer. The Developer is Century Crowell Communities, L.P., a California limited partnership. The principal office and mailing address of the Developer for purposes of this Restated Agreement is: 1535 South "0" Street, Suite 200, San Bernardino, California 92408. Section 1.04. Prohibition Aaainst Chanae in Ownership. Manaaement and Control of Developer and Assianment of Aareement. The qualifications and identity of the Developer are of particular concern to the Agency. It is because of those qualifications and identity that the Agency has entered into this Restated Agreement with the Developer. No voluntary or involuntary successor in SBEOI0001/DOC/OOl-2 11/29/00 930 jrnm 2 interest of the Developer shall acquire any rights or powers under this Restated Agreement except as expressly set forth herein. Except as set forth in Section 3.04, the Developer shall not assign all or any part of this Restated Agreement or any rights hereunder prior to the issuance of the final Certificate of Completion without the prior written approval of the Executive Director of the Agency, which approval shall not be unreasonably withheld or delayed. The Developer shall promptly notify the Agency in writing of any material change in the identity of the parties either comprising or in control of the Developer, as well as any and all changes in the interest or the degree of control of the Developer by any such party, of which information the Developer or any of its partners or officers has been notified or may otherwise have knowledge or information. This Restated Agreement may be terminated by the Agency prior to the Close of the Escrow as set forth in Section 2.03 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 final Certificate of Completion such a material change in the ownership, or control of the Developer occurs with respect to the Site or Sales Office; provided, however, that (AI the Agency shall first notify the Developer in writing of its intention to terminate this Restated Agreement or assert any other such remedy, and (B) the Developer shall have twenty (201 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. For the purpose of this Section 1.04 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 of more than a forty-nine percent (49%) interest of the ownership of the Developer, and/or a series of such sales, assignments or conveyances which in the aggregate exceed a disposi tion or change of more than a forty-nine percent (49% I interest of the ownership of the Developer. SBEO/OOOl/DOC/001-2 11/29/00 930 jrnm 3 Section 1.05. Benefit to Prolect Areas. The Agency has determined that the development of the Site and the disposition of the Sales Office to Developer in accordance with this Restated Agreement will eliminate blight and provide needed low- and moderate-income housing to the various project areas of the Agency as well as to areas in proximity thereto, which housing is needed due to the insufficiency of such housing within the City generally. ARTICLE II DISPOSITION OF SITE AND SALES OFFICE Section 2.01. Purchase and Sale of the Si te. Subj ect to all of the terms, conditions and provisions of this Agreement, and for the consideration of the Purchase Price for the Site as herein set forth, the Agency hereby agrees to sell and the Developer hereby agrees to purchase the following: all of the right, tile and interest of the Agency in the Site as more fully described in Exhibit "A". Section 2.01.1 Purchase and Sale of the Sales Office. Subject to all of the terms, conditions and provisions of this Agreement, and for the consideration of the Purchase Price for the Sales Office as herein set forth, the Agency hereby agrees to sell and the Developer hereby agrees to purchase the following: all of the right, tile and interest of the Agency in the Sales Office as more fully described in Exhibit "A-I". Section 2.01.2. Additional Consideration (a) Assianrnent of Riahts. As part of the consideration for the purchase and sale of the Site and Sales Office, the Agency hereby agrees to transfer at Close of Escrow, all of its rights title and interest in any prepaid sewer and water capacity fees and or other such prepaid utility fees (hereinafter "Prepaid Fees"), up to a guaranteed amount of ONE HONDRED SIXTY SIX THOOSAND DOLLARS 1$166,000). Should Escrow fail to Close, or should this Agreement otherwise be terminated prior to Close of Escrow, or should Agency reacquire the Site and the Sales Office after Close of Escrow pursuant to Developer's default under this Agreement or the Promissory Note I, Promissory Note II or Deed of Trust (as hereinafter defined) then all such rights, title and interest in the Prepaid Fees shall automatically revert back the Agency upon such termination, failure of the Escrow to Close or reacquisition by Agency, as applicable. SBEO/0001/DOC/001-2 11/29/00 930 jrnm 4 (b) Mortaaae Assistance Proaram. As part of the consideration for the purchase and sale of the Site and Sales Office, the Agency hereby further agrees to set up and provide financing assistance to Qualified Horne Buyers (as that term is hereinafter defined)pursuant to a Mortgage Assistance Program that provides financing for downpayrnent or closing costs for homes purchased at the Site in an amount up to 10% of the purchase price for each home electing to participate in the Program, in a maximum aggregated sum of TWO HUNDRED FORTY THOUSAND DOLLARS ($240,000) that will be available for the entire Mortgage Assistance Program, and at financing rates and under further terms to be specified by the Agency. (c) Option to Purchase Phase II Lots. Developer shall have the "option to purchase" from the Agency all of Agency's rights, title and interest in the Subdivision Tract Map No. 13822 (the "Phase II Site"), which consists of THIRTY-EIGHT (38) subdivided lots. A legal description for the Phase II Site is attached hereto as Exhibit "A-2" and incorporated herein by this reference. The option to purchase set forth in this subparagraph "c" is subject to the following terms and conditions: 1. During the first six months following the Close of Escrow on the sale of the Site to Developer (hereinafter the "Initial Option Period"), should any other party make an offer to the Agency to purchase the Phase II Site, then Developer will have the option to purchase the Phase II Site upon the same terms and conditions contained in the offer, subject to documentation satisfactory to the Agency and provided further that such terms and conditions of the offer include performance bonds or other security, in a form and amount acceptable to the Public Works Director and City Engineer for the City of San Bernardino, necessary to cover the cost of all public improvements, utility infrastructures r rights of way, and common area facilities and improvements required to complete the Phase II Site. Should Developer fail to provide written notice to the Agency of its unconditional commitment to exercise its option and proof of the foregoing security within ten (10) business days of being notified by the Agency of the other offer, then Developer's option to purchase shall expire and be of no further force or effect upon the expiration of such tenth business day. Should Developer successfully exercise its option hereunder, Developer shall be required to close escrow on the Phase II Site based upon such option within ninety (90) days of the date of its written notice to the Agency of Developer's unconditional commitment to exercise its option, or Agency shall no longer have any obligation to transfer any rights, title or interest in the Phase II Site to Developer. 2. Should no other party enter into an escrow to purchase the Phase II Site within the Initial Option Period, then, SBEO/OOOl/oOC/OOl-2 11/29/00 930 jmm 5 notwithstanding any expiration of Developer's option to purchase, for a period of 45 days following such period, Developer shall have an exclusive right to negotiate for the purchase of the Phase II Site upon terms and conditions agreeable to both parties. Should the parties fail to open escrow on the sale and purchase of the Phase II Site within such 45 days following the Initial Option Period, then Developer's exclusive right to negotiate shall be terminated and be of no further force and effect on the day following the expiration of such 45 day period. Section 2.01.3 Purchase Price for the Site. The purchase price which the Agency agrees to accept from the Developer and which the Developer agrees to pay to the Agency for the Site is the sum of ONE HUNDRED AND FOURTEEN THOUSAND DOLLARS ($114,000.00) in United States currency (the "Site Purchase pricell). The obligation of the Developer to pay the Site Purchase Price shall be evidenced by Promissory Note I in the form attached hereto as Exhibit ~B". Section 2.01.4 Purchase Price for the Sales Office. The purchase price which the Agency agrees to accept from the Developer and which the Developer agrees to pay to the Agency for the Sales Office is the sum of ONE HUNDRED AND FIFTEEN THOUSAND DOLLARS ($115,000.00) in United States currency (the ~Sales Office Purchase Price") . Purchase referred Section 2.01.5 Definition of Price and the Sales Office to herein in the aggregate as Purchase Price. The Site Purchase Price shall be the "Purchase Price." Section 2.02. Return of Deposit. Payment of Purchase Price: Application or (a) As of the date of this Agreement, the Developer has deposited the sum of Twenty Five Thousand Dollars ($25,000.00) (the "Deposit") with First American Title Insurance Company ("Escrow Holder"), Escrow #ADAMS37. As of August 27, 1999, the Deposit has been placed into an interest-bearing escrow account with the interest thereon to accrue to the benefit of the Developer. At the Close of Escrow (as hereinafter defined), the Deposit, together with all interest earned thereon, less costs of closing payable by Developer, shall be returned to Developer. (b) Sales Office) Pavment of Purchase Price (For the Site and For the (i) For the payment of the Purchase Price for the Site: The Purchase Price for the Site shall be evidenced by Promissory Note I in the form attached as Exhibit "B", and shall be SBEO/000l/DOC/001-2 11/29/00 930 jrnrn 6 payable to the Agency solely from the 'Profit of the Developer,- as this term is defined in the next paragraph, below, realized by the Developer from the sale or transfer (other than a permitted transfer as set forth in Section 3.04) of its interest in the Site. The Purchase Price for the Site shall be due and payable to the Agency prior to any distribution of Profit of the Developer and within thirty (30) days following the earlier date of: (A) the close of the last New Home Escrow for the sale of all of the completed New Homes in the Site; (E) the sale, transfer, assignment or other hypothecation of the interest of the Developer in all of the Site Lots to a third party, other than to New Homeowners or except for a permitted construction-related financing authorized by Section 3.04; (C) thirty (30) days following the Agency's transmittal of written notice of default to the Developer. "Profit of the Develo'Der" means and refers to the gross amount realized by the Developer upon the sale or transfer of its interest in the Agreement or in the Site, after deducting "Project Costs" as defined in the next sentence, incurred during the course of the acquisition and development of the Site. "Proiect Costs" means and refers to the aggregate of the following customary and commercially reasonable costs incurred by the Developer in connection with the development of the Site: (A) (B) (C) (D) SBEO/0001/DOC/OOl-2 11/29/00 930 jmm the cost of Site preparation; architectural, engineering, legal, accounting, consulting, and other fees paid in connection with the planning, execution and financing of the Project on the Site including the cost of furnishing one or more models of the model homes to be constructed at the Site; the costs of other necessary studies, surveys, plans and permits not included in (B) above; the cost of insurance, interest and financing for the construction of the New Homes, surety and completion bonds, property taxes, and special assessment costs incurred during the course of construction of the Project on the Site; 7 (E) the cost of construction of the New Homes on the Site; (FI the cost of all other improvements to the Site including landscaping, fencing, site preparation and the installation of streets, sewers, utilities, and other off-site improvement costs paid by Developer; (G) indirect costs of the construction of the New cost of a construction construction security serVlces; Developer for the Homes, including the superintendent, and by private patrol (HI New Home sales marketing and advertising costs and the cost payable by the Developer as escrow costs, fees and charges upon the sale of each New Home to a Horne Buyer plus real estate sales commissions paid by the Developer to third party real estate brokers at the time of sale of each New Home; (I I A developer fee payable to the Developer of five percent (5%1 of the gross selling price of each completed New Home. (ii) For Payment of the Sales Office Purchase Price: SBEO/OOOl/Doc/OOl-2 11/29/00 930 jmm A. A promissory note of the Developer (the "Promissory Note TIU) in the form attached as Exhibit -Bn payable to the Agency in the principal sum of One Hundred And Fifteen Thousand Dollars ($1l5, 000). The Promissory Note II shall be secured by a Deed of Trust as set forth below, and shall include the following terms: (I I a maturity date of thirty (30) months following the Close of Escrow; (2) no interest shall accrue on the outstanding principal balance of the Promissory Note II except in the case of default. B. A deed of Exhibit "E" secure the Trust") . trust in the form attached as covering the Sales Office shall Promissory Note (the -Deed of 8 (c) From and after the Close of Escrow until the Purchase Price for the Site and the Purchase Price for the Sales Office are paid in full, the Developer shall provide the Agency with the following financial reports relating to the Site: (i) within forty-five (45) days of the end of each calendar quarter and upon the request of the Agency, a report on the status of the Project at the Site, which shall include, at a minimum, the trial balance, general ledger, cash receipt journal, cash disbursements journal, sales journal, job cost summary compared wi th the proj ect proforma, bank statement, and quarterly profit and loss statement, and schedule of cash flows and a weekly sales report for New Homes, as applicable; and (ii) within one hundred twenty (1201 days after the end of each fiscal year, an annual unaudited financial statement, prepared by the Developer for the Project at the Site, or, if obtained by the Developer, an audited financial statement. (d) The Developer shall provide the Agency with a suitably detailed written accounting prepared in accordance with generally-accepted accounting principles of the amount of the Purchase Price for the Site which is payable. The Agency shall have the right to inspect the business and financial records of the Developer as relate to these calculations and the verification of the amount of the Purchase Price for the Site as may be payable to the Agency, if any, after allowance is made for Project Costs. The Developer shall provide the Agency (and its auditors or accountants) with access to such business records upon reasonable prior notice from the Agency. (e) In the event that (i) the Agency or the Developer terminates this Restated Agreement pursuant to Section 2.03(a); or (ii) the Developer does not deliver its Due Diligence Approval Certificate (as hereinafter defined) to the Escrow Holder pursuant to Section 2.03(b) and this Restated Agreement is terminated; or (iii) the Developer's conditions precedent to the Close of Escrow described in Section 2.16(1), (2), (31, (5), or (6) are not satisfied (unless satisfaction has been waived by the Developer) and this Restated Agreement is terminated; or (iv) either the Site or the Sales Office suffers damage prior to the Close of Escrow, or an action of eminent domain is commenced by a governmental entity wi th respect to the Site or Sales Office prior to the Close of Escrow, and the Developer elects to terminate this Restated Agreement pursuant to Section 2.25, then the Deposit (less an SBEO/0001/DOC/OOl-2 11/29/00 930 jmm 9 amount equal to the customary and reasonable escrow cancellation charges of the Escrow Holder) shall be returned to the Developer. Section 2.03. Ooenina and Closina of Escrow. (a) The transfer and sale of the Site and the Sales Office shall take place through Escrow #ADAMS37 (the "Escrow") to be administered by First American Title Insurance Company: Escrow Department or such other escrow or title insurance company mutually agreed upon by the Developer and the Agency (the "Escrow Holder") . Notwithstanding the actual date of the opening of the Escrow, the Escrow shall be deemed open ("Opening of Escrow") upon delivery of a fully executed copy of this Restated Agreement to the Escrow Holder. The Escrow Holder shall promptly confirm to the parties the escrow number and the title insurance order number assigned to the Escrow. (b) In the event that the Developer has not delivered its Due Diligence Approval Certificate to the Agency and the Escrow Holder within thirty (30) days from the Opening of Escrow for any reason, then in such event this Agreement shall terminate upon written notice to the Escrow Holder from either the Agency or the Developer, whereupon the Deposit shall be returned by the Escrow Holder to the Developer (less an amount equal to the customary and reasonable escrow cancellation charges payable to the Escrow Holder) without further or separate instruction to the Escrow Holder, and the parties shall each be relieved and discharged from all further responsibility or liability under this Agreement. Ic) Provided that the Developer has delivered its Due Diligence Approval Certificate within the period of time authorized in Section 2.03(b), then the Closing Date of the Escrow shall occur within sixty (60) days thereafter, subject to the provisions of Section 2.16 and Section 2.17. The words "Close of Escrow," "Closing Date" and "Closing" shall mean and refer to 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 cause the Agency Grant Deeds for the Site and the Sales Office to be recorded and the policy of lnsurance for the Site and Sales Office to be delivered to the Developer. (d) The parties mutually covenant and agree to execute all necessary or appropriate written Escrow instructions as may be requested by the Escrow Holder. The Developer shall be solely responsible for the payment of the escrow cancellation costs of the Escrow Holder in any such event. Section 2.04. Escrow Instructions. This Agreement also consti tutes escrow instructions of the parties to the Escrow SBEO/0001/DOC/OOl-2 11/29/00 930 jrnm 10 Holder. Additionally, the Developer and the Agency each agree to execute the customary supplemental escrow instructions of the Escrow Holder in the form provided by the Escrow Holder to its clients in real property escrow transactions administered by it. In the event of a conflict between the additional terms of such customary supplemental escrow instructions of the Escrow Holder and the provisions of this Restated Agreement, this Restated Agreement shall supersede and be controlling. Upon any termination of this Restated Agreement or cancellation of the Escrow, the Escrow Holder shall forthwith return all monies (as provided in this Restated Agreement) and documents, less only the Escrow Holder's customary and reasonable escrow cancellation fees and expenses, as set forth herein. Section 2.05. Convevance of Title. On or before 12:00 noon on the business day preceding the Closing Date, the Agency shall deliver to the Escrow Holder a grant deed for the Site and a grant deed for the Sales Office in the forms attached hereto as Exhibit "C" (the "Agency Grant Deeds") duly executed and acknowledged by the Agency, which Agency Grant Deeds shall convey all of the right, title and interest of the Agency in the Site and Sales Office to the Developer as set forth in Section 2.01. The Escrow Holder shall be instructed to record the Agency Grant Deeds in the Official Records of San Bernardino County, California, if and when Escrow Holder holds the various instruments and funds for the accounts of the parties as set forth herein and can obtain for the Developer a CLTA owner's extended coverage policy of title insurance ("Title Policy") issued by Orange Coast Title Insurance Company or such other title insurance company mutually agreed upon by the parties ("Title Company") with liability in an amount equal to the Purchase Price together with such endorsements to the policy as may be reasonably requested by the Developer, insuring the following: With Respect to the Site: that the Site consists of a total of 24 lots pursuant to the Subdivision Map Act with fee title to the Site vested in the Developer (or the Developer's assignee or nominee) and subject only to: (1) non-delinquent real property taxes; (2) non-monetary title exceptions approved by the Developer pursuant to Section 2.13 below; (3) applicable provisions of the subdivision maps for the Site; (4) the provisions of the Agency Grant Deed for the Site; S3EO/0001/DOC/001-2 11/29/00 930 jmm 11 (5) the applicable provisions of this Agreement; and (6) such other title exceptions, if any, resulting from documents being recorded or delivered through Escrow. With Respect to the Sales Office: that the Sales Office consists of a single family residence on a single lot with fee title to the Sales Office vested in the Developer (or the Developer's assignee or nominee) subject only to: (1) non-delinquent real property taxes; (2) non-monetary title exceptions approved by the Developer pursuant to Section 2.13 below; (3) applicable provisions of the subdivision map for the Sales Office; (4) the provisions of the Agency Grant Deed for the Sales Office; (5) the applicable provisions of this Agreement; and (6) such other title exceptions, if any, resulting from documents being recorded or delivered through Escrow. Section 2.06. Additional Closina Obliaations of Aaencv. On or before 12:00 noon on the business day preceding the Closing Date (unless indicated otherwise), the Agency shall deliver to the Escrow Holder (unless indicated to be delivered directly to the Developer) copies of the following documents and other items: (1) a certificate of non-foreign status (the "Non- Foreign Affidavit") executed by the Agency, in the customary form provided by the Escrow Holder, and a California Franchise Tax Board Form 590-RE executed by the Agency; (2) all soils, seismic, geologic, drainage, toxic waste and environmental reports, surveys, Ilas-built" plans and specifications, working drawings, grading plans, elevations and similar information with respect to the Site heretofore obtained by the Agency, if any, which the Agency has in its possession and/or control to the extent that originals of such items have not been delivered previously by the Agency to the Developer pursuant to Section 2.08 below; (3) Statement Agency; two (2) duplicate original copies of the Closing described in Section 2.21, duly executed by the SBE0/0001/Doc/001-2 11/29/00 930 jrnm 12 (4) evidence of the existence, organization and authority of the Agency and of the authority of persons executing documents on behalf of the Agency reasonably satisfactory to the Escrow Holder and Title Company; and (5) any other documents, instruments, funds and records required to be delivered to the Developer under the terms of this Agreement which have not been previously delivered. Section 2.07. ClosinG ObliGations of Developer. On or before 12:00 noon on the business day preceding the Closing Date, the Developer shall deliver to the Escrow Holder copies of the following documents and other items: (1) an acknowledgment and acceptance of the Agency Grant Deeds, duly executed and acknowledged by the Developer. (2) two (2) duplicate original copies of the Closing Statement, duly executed by the Developer. (3) the Site) the Sales an original and duly executed Promissory Note I (for and Promissory Note II and the Deed of Trust (for Office) in recordable form. (4) evidence of the existence, organi za tion and authority of the Developer and of the authority of persons executing documents on behalf of the Developer reasonably satisfactory to the Agency, the Escrow Holder and the Title Company. (5) any other documents, instruments or funds required to be delivered by the Developer under the terms of this Agreement or as otherwise required by Escrow Holder or Title Company in order to close Escrow which have not previously been delivered. Section 2.08. Inspections and Review. (a) Due DiliGence Items. Within five (5) days after the execution of this Agreement, the Agency shall deliver true, correct and complete copies or originals of the following documents and items (collectively, "Due Diligence Items") to the Developer: (i) copies of all soils, selsmlC, geologic, drainage, toxic waste, engineering, environmental and similar type reports and surveys (including, but not limited to, any Environmental Site Assessments of the Site), surveys, building grading plans, drawings (including "as-built'! plans and specifications), schematics, blueprints and working drawings for the improvement of the Site or Sales Office, if any, in SBEO/0001/DOC/OOl-2 11/29/00 930 jrnm 13 the possession or control of the Agency and correspondence relating thereto, if any, within the Agency's possession or control. Iii) notices of violations, including, but not limited to, zoning ordinances, development or building codes affecting the Site or the Sales Office within the Agency's possession or control. (iii) disclosure of any legal matters affecting the use or condition of the Site or the Sales Office within the knowledge of the Agency. (b) Certain Definitions. For Restated Agreement, the terms set forth following meaning: the purpose below shall of this have the Ii) "environmental laws" means all federal, state, local, or municipal laws, rules, orders, regulations, statutes f 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 land only to the extent that the occupational health or industrial hygiene laws, ordinances, or regulations relate to hazardous substances on, under, or about the Site) , occupational or environmental condi tions on, under, or about the 3i te or Sales Office, as now or may at any later time be in effect, including without limitation, the Comprehensive Environmental Response, Compensation and Liability Act of 1980 I "CERCLA") [42 USC Section 9601 et seq.]; the Resource Conservation and Recovery Act of 1976 ("RCRA") [42 USC Section 6901 et seq.]; the Clean Water Act, also known as the Federal Water Pollution Control Act I"FWPCAn) [33 USC Section 1251 et eq.]; the Toxic Substances Control Act ("TSCAn) [15 USC Section 2601 et seq.]; the Hazardous Materials Transportation Act ("HMTA") [49 USC Section 1801 et seq.]; the Insecticide, Fungicide, Rodenticide Act [7 USC Section 6901 et seq.] the Clean Air Act [42 USC Section 7401 et seq.]; the Safe Drinking Water Act [42 USC Section 300f et seq.]; the Solid Waste Disposal Act [42 USC Section 6901 et seq.]; the Surface Mining SBEO/0001/OOC/001-2 11/29/00 930 jrnm 14 SBEO/0001/DOC/OOl-2 11/29/00 930 jmm Control and Reclamation Act [30 USC Section 101 et seq.] the Emergency Planning and Community Right to Know Act [42 USC Section 11001 et seq.]; the Occupational Safety and Health Act [29 USC Section 655 and 657]; the California Underground Storage of Hazardous Substances Act [H & S C Section 25288 et seq.]; the California Hazardous Substances Account Act [H & S C Section 25300 et seq.]; the California Safe Drinking Water and Toxic Enforcement Act [H & S C Section 24249.5 et seq.] the Porter-Cologne Water Quality Act [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 Site or Sales Office, or the regulation or protection of the environment, including ambient air, soil, soil vapor, groundwater, surface water, or land use. (ii) -hazardous substances. limitation: includes without those substances included within the definiteness 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 law; and those substances listed in the United States Department of Transportation (DOT)Table [49 CFR 172.101], or by the EPA, or any successor agency, as hazardous substances [40 CFR Part 302]; and 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 15 any material, waste, or substance that is (1) a petroleum or refined petroleum product, (2) asbestos, (3) polychlorinated biphenyl, (4) designated as a hazardous substance pursuant to 33 use Section 1321 or listed pursuant to 33 use Section 1317, (5) a flammable explosive, or (6) a radioactive material. Section 2.09. and Sales Office. Due Diliaence Investiaation of the Site (a) Within thirty (30) days from and after the Opening of Escrow, and subject to the extensions of time set forth below in Section 2.15, the Developer shall have the right to examine, inspect and investigate the Site and Sales Office (the "Due Diligence period") to determine whether their condition is acceptable to the Developer in its sole and absolute discretion. (b) During the Due Diligence Period, the Agency shall permi t the Developer, its engineers, analysts, contractors and agents to conduct such physical inspections and testing of the Site and Sales Office as the Buyer deems prudent with respect to the physical condition of the Site and Sales Office, including the inspection or investigation of soil and subsurface soil geotechnical condition, drainage, seismic and other geological and topographical matters, and for purposes of surveying the potential presence of any hazardous substances, if any. Any such investigation work on the Site or Sales Office may be conducted by the Developer and/or its agents during any normal business hours upon seventy-two (72) hours prior notice to the Agency, which notice will include a description of any investigation work or tests to be conducted by the Developer on the Site or Sales Office. Upon the Agency's request, the Developer will provide the Agency with copies of any test results to the extent it is not contractually prohibited from doing so and further, to the extent that the delivery of such copies to the Agency shall impose no cost or other liability upon the Developer. SBEO/0001/DOC/001-2 11/29/00 930 jmm 16 During the Due Diligence Period, the Developer shall also have the right to investigate all matters relating to the zoning, use and compliance with other applicable laws which relate to the use and development and improvement of the Site or the use of the Sales Office. The Agency shall cooperate fully to assist the Developer in completing such inspections and investigations of the condition of the Site or Sales Office. The Agency shall have the right, but not the obligation, to accompany the Developer during such investigations and/or inspections. Section 2.10. Due Diliaence AODroval Certificate. Within thirty (30) days following the Opening of Escrow, the Developer shall complete its investigation of the Site and Sales Office (subj ect to the extensions of time set forth in Section 2.15) and deliver a due diligence approval certificate signed by the Developer (the "Due Diligence Approval Certificate") to the Escrow Holder which either: Ii) indicates that the Developer accepts the condition of the Site and Sales Office or; (ii) contains a description of the matters or exceptions relating to the condition of the Site or Sales Office which the Developer was not able to accept or resolve to its satisfaction during the Due Diligence Period. Section 2.11. Books and Records. As part of the Developer's due diligence investigations during the Due Diligence Period, the Developer shall be afforded full opportunity by the Agency to examine all books and records which relate to the Site or Sales Office in the possession of the Agency and/or the Agency's agents or employees, including the reasonable right to make copies of such books and records. During the Due Diligence periodr the Agency will make sufficient staff available to assist the Developer with obtaining access to information relating to the Site and Sales Office which is in the possession or control of Agency. Section 2.12. Condition of the Site and Sales Office; DeveloDer's Release. The Developer acknowledges and agrees that it shall be given a full opportunity under this Agreement to inspect and investigate every aspect of the Site and Sales Office during the Due Diligence Period. The Developer shall accept the delivery of title to the Site and Sales Office on the Close of Escrow in an "AS IS," "WHERE IS" and "SUBJECT TO ALL FAULTS" condition. The Developer further agrees and represents to the Agency that by a date no later than the end of the Due Diligence Period, the Developer shall have conducted and completed (or waived the completion) of all of its independent investigation of the condi tion of the Site and Sales Office which the Developer may SBEO/0001/DOC/001~2 11/29/00 930 jrnm 17 believe to be indicated. The Developer hereby acknowledges that it shall rely solely upon its own investigation of the Site and Sales Office and its own review of such information and documentation as it deems appropriate for the purpose of accepting the condition and possession of the Site and Sales Office. The Developer is not relying on any statement or representation by the Agency relating to the condition of the Site or Sales Office unless such statement or representation is specifically contained in this Agreement. Without limiting the foregoing, the Agency makes no representations or warranties as to whether the Site or Sales Office presently comply with environmental laws or whether the Site or Sales Office contain any hazardous substance, as these terms are defined in Section 2.08(b) hereof. Furthermore, to the extent that the Agency has provided the Developer with information relating to the condition of the Site and Sales Office, including information and reports prepared by or on behalf of the City of San Bernardino, the Agency makes no representation or warranty with respect to the accuracy, completeness or methodology or content of such reports or information. Without limiting the above, 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 successor$ and assigns, waives and release 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 physical condition of the Site or Sales Office or any law or regulation applicable thereto, including the presence or alleged presence of harmful or hazardous substances in, under or about the Site or Sales Office including, without limitation, any claims under or on account of (i) CERCLA and similar statutes and any regulations promulgated thereunder or Iii) any other environmental laws. The Developer expressly waives any rights or benefits available to it with respect to the foregoing release under any provision of applicable law which generally provides that the general release does not extend to claims which the creditor does not know of 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 execution of this Agreement, 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 2.12 without limiting the generality of the foregoing: SBEO/0001/DOC/001-2 11/29/00 930 jrnrn 18 The undersigned acknowledges that it has been advised by legal counsel and is familiar with the provisions of California Civil Code Section 1542, which provides as follows: "A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOWN OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM, MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR." The undersigned, being aware of this code section, expressly waives any rights it may have thereunder, as under any other statutes or common law principles of effect. hereby well as similar Initials of Developer: The provisions of this Section 2.12 shall survive the Close of Escrow. Section 2.13. tv the Develooer. Review and Approval of Condition of Title (a) Within fifteen (15) days following the Opening of Escrow, Agency shall cause to be delivered to the Developer a preliminary title report or title commitment for a CLTA extended coverage policy of title insurance issued by the Title Company, describing the state of title of the Site and Sales Office, together with copies of all exceptions specified therein and with all easements plotted but excluding matters disclosed on a survey (the "Preliminary Title Report"). The Developer shall notify the Agency in writing ("Developer's Title Objection Notice") of any objections the Developer may have to the title exceptions contained in the Preliminary Title Report prior to the expiration of the Due Diligence Period. The Agency shall have a period of five (5) 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) agree to remove the objectionable items prior to the Close of Escrow, or (ii) decline to remove any such title exceptions and terminate the Agreement and the Escrow; 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 terminate Escrow rather than remove the objectionable items, the Developer shall have the right, by written notice delivered to the Agency within five (5) days after the Developer's receipt of the Agency's Title Notice, to agree to accept the Site and the Sales Office subject to the objectionable SBEO/0001/DOC/001-2 11/29/00 930 jmm 19 items, in which event the Agency's election to terminate the Escrow shall be of no effect, and the Developer shall take title at the Close of Escrow subject to such objectionable title items. In the event that the Escrow is terminated by the Agency under this Section 2.l3(a), the Agency shall be responsible for paying for all Escrow cancellation costs of the Escrow Holder and the Deposit shall be promptly returned to the Developer. (b) The Agency covenants not to further encumber and not to place any further liens or encumbrances on the Site or Sales Office, including, but not limited to, covenants, conditions, restrictions, easements, liens, options to purchase, options to lease, leases, tenancies, or other possessory interests without the prior written consent of the Developer. Upon the issuance of any amendment or supplement to the Preliminary Title Report which adds additional exceptions (including, but not limited to, adding additional exceptions for matters shown on the Survey as hereinafter defined), the foregoing right of review and approval shall also apply to said amendment or supplement (provided that the period for the Developer to review such amendment or supplement shall be the later of the expiration of the Due Diligence Period or ten (10) 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 above. Section 2.14. Survev. The Developer may obtain a survey of the Site and Sales Office prepared by a land surveyor duly licensed by the State of California and in compliance with ALTA/ASCM standards ("Survey"). The Survey shall be in a form acceptable to the Title Company for the deletion of the standard survey exception in the 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 Survey and to notify Agency in writing of any objections the Developer has to the Survey ("Developer's Survey Objection Notice"). The Agency shall have a period of five (5) 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 the objectionable items prior to the Close of Escrow or (ii) decline to remove such items and terminate the Agreement and the Escrow. If the Agency notifies the Developer of its intention to not remove the objectionable items, the Developer shall have the right, by written notice delivered to the Agency within five (5) days after the Developer's receipt of Agency's Survey Notice, to agree to accept the Site and Sales Office subject to the objectionable items, in which event, the Agency's election to terminate the Escrow shall be of no effect, and the Developer shall SBEO/0001/DOC/001~2 11/29/00 930 jmm 20 accept the Property at the Close of Escrow subject to such objectionable items. In the event that the Escrow is terminated by the Agency under this Section 2.14, the Agency shall be responsible for paying for all Escrow cancellation costs of the Escrow Holder and the Deposit shall be promptly returned to the Developer. Prior to the Closing, the Survey shall be recertified to the Developer, Title Company and the Developer's lender, if any. The Survey will be performed at the Developer's sole cost and expense. Section 2.15. Extension of Due Diliaence Period. In the event Agency fails to provide to the Developer the documents and other information required by Sections 2.08 by the date (s) set forth therein, the Due Diligence Period for such information shall be extended by one (1) day for each day of the delay by the Agency to permit the Developer to perform an adequate due diligence review (but not to exceed a total of thirty (30) days.) The Developer will use its best efforts to notify Agency of any documents the Agency has failed to deliver to the Developer within the time periods provided in Sections 2.08 and 2.11. In the event that the Developer has delivered its Due Diligence Approval Certificate and thereafter, prior to the Close of Escrow, the Agency presents the Developer with any new Due Diligence Item, the Close of Escrow shall be extended to permit the Developer to perform an adequate due diligence review of such new item for up to thirty (30) days. In the event that the Developer may fail to accept such new item wi thin such additional period of time and cause the Escrow to close, then in such event either party may terminate this Agreement and the Escrow as set forth in Section 2.20. Section 2.16. DeveloDer' 5 Conditions Precedent. The Developer's obligation to purchase the Site and the Sales Office shall be conditioned upon the fulfillment of the following conditions precedent, all of which shall be satisfied (or waived in writing pursuant to Section 2.19) prior to the Close of Escrow: (1) The Agency shall not have defaulted on any material term of this Agreement to be performed by the Agency hereunder, and each representation and warranty made by the Agency in this Agreement shall remain true and correct. For purposes of this subsection (1) only, a representation that is limited to the Agency's knowledge or notice shall be false if the factual matter that is subject to the representation is false, notwithstanding any lack of knowledge or notice to the Agency; (2) the Developer's approval of the Preliminary Title Report and the Survey, if applicable, within the time periods specified in Sections 2.13 and 2.14; SBEO/0001/DOC/OOl-2 11/29/00 930 jrnm 21 (3) the Developer's approval of the contents of all Due Diligence Items, and the other investigations of the Site and Sales Office made by the Developer and/or its designees pursuant to Sections 2.08 and 2.09 herein on or before the expiration of the Due Diligence Period, or such later date if the Due Diligence Period is extended pursuant to Section 2.15. The Developer shall be deemed to have disapproved such Due Diligence Items unless they are approved on or before 5:00 p.m. on the final day of the Due Diligence Period, or such later date if the Due Diligence Period is extended pursuant to Section 2.15 herein; (4) the Developer's approval of any notice of change In representation or warranty given by the Agency pursuant to Section 2.24 (a) hereof; (5) the Title Company has committed to issue the Title Policy, in favor of the Developer in the form described in Section 2.05; (6) the Developer has obtained a construction financing loan commitment on terms reasonably acceptable to it; and (7) the Agency shall have deemed satisfied (or waived satisfaction of) each of the conditions precedent set forth in Section 2.17. (8) completing of plan check by the City of San Bernardino of the plans submitted by Developer and approved by the City of San Bernardino Planning Commission on October 17, 2000, and notification to Developer by the City of San Bernardino that permits are available for pick-up. (9) school-fees required for the development of the Site shall not exceed $2.50 per square foot at Close of Escrow. (10) City approval of the use of the Sales Office as a sales office for the Site. Section 2.17. The Aaencv's Conditions Precedent. The Agency's obligation to convey the Site and the Sales Office to the Developer shall be conditioned upon the fulfillment of the following conditions precedent, all of which shall be satisfied (or waived in writing pursuant to Section 2.19) prior to the Close of Escrow: (1) the Developer has accepted the condition of the Site and Sales Office and submitted its Due Diligence Approval Certification to the Escrow Holder on or before the date set forth in this Agreement; SBEO/OOOI/Doc/OOl-2 11/29/00 930 jmm 22 (2) the Developer has accepted the condition of title of each of the Site and Sales Office on or before the date set forth in Section 2.13; (3) the Developer has provided the Agency with satisfactory evidence of the commitment of a lender to provide construction financing to the Developer for the construction and improvement of the Site with an initial construction loan disbursement amount sufficient to construct and improve not less than twelve (12) of the Site Lots; (4) the Developer shall not be in default of any material term of this Agreement to be performed by the Developer hereunder and each representation and warranty of the Developer made in this Agreement shall remain true and correct; and (5) deemed to precedent the Developer shall have satisfied (or shall be have waived satisfaction of) each of the conditions set forth in Section 2.16. Section 2.18. Deliverv of Documents and Purchase Price After Closina Date bv Escrow Holder. The Escrow Holder shall deliver to the Developer within (3) business days following the Closing Date a conformed copy of the Agency Grant Deeds, as recorded and the policy of title insurance issued by the Title Company in favor of the Developer. Section 2.19. Satisfaction of Conditions. Where satisfaction of any of the foregoing conditions requires action by the Developer or by the Agency, each party shall use its diligent best efforts, in good faith, and at its own cost, to satisfy such condition. Where satisfaction of any of the foregoing conditions requires the approval of a party, such approval shall be in such party's sole and absolute discretion. Either party may waive any of the conditions set forth in the Agreement, but any such waiver shall be effective only if contained in a writing signed by the applicable party and delivered to the Escrow Holder and the other party. Section 2.20. Termination. In addition to the right of each party to terminate the Agreement pursuant to Section 2.03, in the event each of the conditions set forth in Section 2.16, in the case of the Developer, or Section 2.17 in the case of the Agency is not fulfilled within ninety (90) days after the Opening of Escrow (subject to Section 2.15, if applicable) or waived by the applicable party pursuant to Section 2.19, either party may, at its option, terminate this Agreement and the Escrow opened hereunder, thereby releasing the parties from further obligations hereunder, SBEO/0001/Doc/001-2 11/29/00 930 jrnm 23 and all documents delivered by the Developer to the Agency or the Escrow Holder shall be returned to the Developer and all documents delivered by the Agency to the Developer or the Escrow Holder shall be returned to the Agency, and the Deposit shall be disbursed to the Developer, except as set forth in Section 2.16(4). Nothing in this Section 2.20 shall be construed as releasing any party from liability for any default of its obligations hereunder or breach of its representations and warranties under this Agreement occurring prior to the termination of this Agreement and/or the cancellation of the Escrow. Section 2.21. Prorations, Closina Costs, Possession. (a) Proration of Taxes. Real and personal property taxes for the Property shall be prorated by the parties to the Closing Date on the basis of a three hundred sixty-five (365) day year on the basis that the Agency is responsible for (i) all such taxes (if any) for the fiscal year of the applicable taxing authority occurring prior to the Current Tax Period (as defined below) and (ii) that portion of such taxes for the Current Tax Period to 11:59 p.m. on the Closing Date, whether or not the same shall be payable prior to the Closing Date. The phrase "Current Tax Period" refers to the fiscal year of the applicable taxing authority in which the Closing occurs. All tax prorations shall be based upon the latest available tax statement. If the tax statements for the fiscal tax year during which Escrow closes do not become available until after the Closing Date, then the rates and assessed values of the previous year, with known changes, shall be used, and the parties shall re-prorate said taxes outside of Escrow following the Closing Date when such tax statements become available. The Agency shall be responsible for and shall payor reimburse the Developer upon demand for any real or personal property taxes payable following the Closing Date applicable to any period of time prior to the Closing Date as a result of any change in the tax assessment by reason of reassessment, changes in use of the Property, changes in ownership, errors by the Assessor or otherwise. (b) Possession. The Developer shall be entitled to exclusive possession of the Site and Sales Office immediately upon the Close of Escrow. Provided that the Developer has delivered its Due Diligence Approval Certificate and has approved or waived the satisfaction of the conditions set forth in Section 2.16, the Agency shall grant the Developer a temporary license to enter the Site and Sales Office prior to the Closing Date for the following purposes: (i) to remove weeds, debris and graffiti from the Site and Sales Office; $BEO/0001/DOC/001-2 11/29/00 930 jrnrn 24 (ii) to conduct surveys and intrusive soil engineering testing and for repairs to existing perimeter walls surrounding the Site and Sales Office; (iii) to install temporary subdivision land sales advertising signs on the Site as permitted under the City sign ordinance; (iv) to conduct such approved by the discretion. other work Agency in as may be its sole Prior to the entry by the Developer onto any portion of the Site or Sales Office pursuant to such a license, the Developer shall execute a written license agreement affecting the Site and/or Sales Office in a form to be provided by the Agency in which the Developer shall agree to indemnify, defend and hold the Agency harmless from any adverse exceptions to title in the Site or Sales Office which may arise prior to the Closing Date by virtue of the Developer's entry onto the Site or Sales Office, or any portion thereof and the Developer shall further agree to indemnify, defend and hold the Agency harmless from and against any other claim, cause of action, liability or damage to persons or to property resulting from the activities of the Developer on the Site or Sales Office or any portion thereof pursuant to such license agreement. (c) Title Insurance Premium, Escrow and Closina Costs. The Agency shall pay the cost of the premium for a CLTA owner's extended coverage policy of title insurance on the Site and Sales Office in the amount of the Purchase Price, together with all title charges (including endorsements reasonably requested by the Developer to remove disapproved items shown on the Preliminary Tit:e Report or Survey pursuant to Sections 2.13 and 2.14 above), and the Agency shall also pay any documentary or other transfer taxes payable on account of the conveyance of the Site and Sales Office to the Developer, together with one-half (~) of the customary and reasonable escrow fees which may be charged by the Escrow Holder in connection with the Close of Escrow. The Developer shall pay the additional cost of the Survey and requested CLTA survey policy endorsements (to the extent such endorsements are unrelated to removal of any disapproved items shown on the Preliminary Title Report or Survey pursuant to Sections 2.13 and 2.14 above) which exceeds the premium for a CLTA owner's extended coverage policy of title insurance on the Site and Sales Office plus the cost of recording the Agency Grant Deeds, together with one-half (~) of the cost of the customary and reasonable escrow fees charged by Escrow Holder in connection with the Close of Escrow. SBEO/0001/OOC/OOl-2 11/29/00 930 jmm 25 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 San Bernardino County, California. No later than three (3) business days prior to the Closing Date, the Escrow Holder shall prepare for approval by the Developer and the Agency a closing statement ("Closing Statement") on the Escrow Holder I 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 liens secured by the Site and Sales Office and prorations made pursuant to this Agreement. The Developer and the Agency shall assist the Escrow Holder in determining the amount of all prorations. Section 2.22. BREACH OF ARTICLE II BY THE AGENCY; LIOUIDATED DAMAGES PAYABLE BY THE AGENCY TO THE DEVELOPER. IN THE EVENT THAT THE AGENCY COMMITS A MATERIAL BREACH OF ITS OBLIGATIONS UNDER THIS ARTICLE II PRIOR TO THE CLOSE OF ESCROW, THE DAMAGES THAT THE DEVELOPER WILL INCUR BY REASON THEREOF ARE AND WILL BE IMPRACTICAL AND EXTREMELY DIFFICULT TO ESTABLISH. THE DEVELOPER AND THE AGENCY, IN A REASONABLE EFFORT TO ASCERTAIN WHAT THE DEVELOPER'S DAMAGES WOULD BE IN THE EVENT OF SUCH A DEFAULT BY THE AGENCY, HAVE AGREED THAT SUCH DAMAGES SHALL BE IN AN AMOUNT EQUAL TO THE SUM OF TWENTY-FIVE THOUSAND DOLLARS ($25,000.00) AS LIQUIDATED DAMAGES. SUCH SUM SHALL BE PAID TO THE DEVELOPER IN THE EVENT OF SUCH DEFAULT BY THE AGENCY UPON THE TERMINATION OF THIS AGREEMENT AND CANCELLATION OF THE ESCROW, AS LIQUIDATED DAMAGES, WHICH DAMAGES SHALL BE THE DEVELOPER'S SOLE AND EXCLUSIVE REMEDY AT LAW OR IN EQUITY IN THE EVENT OF AND FOR SUCH DEFAULT BY THE AGENCY. WITHOUT LIMITING THE FOREGOING PROVISIONS OF THIS PARAGRAPH, THE DEVELOPER WAIVES ANY AND ALL RIGHTS WHICH THE DEVELOPER OTHERWISE WOULD HAVE BAD UNDER CIVIL CODE SECTION 3389 TO SPECIFICALLY ENFORCE THIS AGREEMENT. THE DEVELOPER AND THE AGENCY ACKNOWLEDGE AND AGREE THAT EACH OF THEM HAS READ AND UNDERSTANDS THE PROVISIONS OF THIS SECTION AND EACH AGREES TO BE BOUND BY ITS TERMS. Ini tials of Agency Initials of Developer SBEO/OQ01/DOC/OOl-2 11/29/00 930 jmrn 26 Section 2.23. BREACH BY THE DEVELOPER OF ARTICLE II; LIOUIDATED DAMAGES PAYABLE BY THE DEVELOPER TO THE AGENCY. IN THE EVENT THAT THE DEVELOPER COMMITS A MATERIAL BREACH OF ITS OBLIGATIONS UNDER THIS ARTICLE II PRIOR TO THE CLOSE OF ESCROW, THE DAMAGES THAT THE AGENCY WILL INCUR BY REASON THEREOF ARE AND WILL BE IMPRACTICAL AND EXTREMELY DIFFICULT TO ESTABLISH. THE DEVELOPER AND THE AGENCY, IN A REASONABLE EFFORT TO ASCERTAIN WHAT THE AGENCY'S DAMAGES WOULD BE IN THE EVENT OF SUCH A DEFAULT BY THE DEVELOPER, HAVE AGREED THAT SUCH DAMAGES SHALL BE IN AN AMOUNT EQUAL TO THE SUM OF TWENTY-FIVE THOUSAND DOLLARS ($25,000.00) AS LIQUIDATED DAMAGES. SUCH SUM SHALL BE PAID TO THE AGENCY IN THE EVENT OF SUCH DEFAULT BY THE DEVELOPER AS LIQUIDATED DAMAGES, waICH DAMAGES SHALL BE THE AGENCY'S SOLE AND EXCLUSIVE REMEDY AT LAW OR IN EQUITY IN THE EVENT OF AND FOR SUCH DEFAULT BY THE DEVELOPER. WITHOUT LIMITING THE FOREGOING PROVISIONS OF THIS PARAGRAPH, THE AGENCY WAIVES ANY AND ALL RIGHTS waICH THE AGENCY OTHERWISE WOULD HAVE HAD UNDER CIVIL CODE SECTION 3389 TO SPECIFICALLY ENFORCE THIS AGREEMENT. THE AGENCY AND THE DEVELOPER ACKNOWLEDGE AND AGREE THAT EACH OF THEM HAS READ AND UNDERSTANDS THE PROVISIONS OF THIS SECTION AND EACH AGREES TO BE BOUND BY ITS TERMS. Initials of Developer Initials of Agency Section 2.24. Reoresentations and Warranties. (a) Warranties and Representations bv the Aaencv. The Agency hereby makes the following representations, covenants and warranties and acknowledges that the execution of this Agreement by the Developer has been made and the acquisition by the Developer of the Site and Sales Office will have been made in material reliance by the Developer on such covenants, representations and warranties: (i) Warranties True. Each and every undertaking and obligation of the Agency under this Agreement shall be performed by the Agency timely when due; and that all representations and warranties of the Agency under this Agreement and its exhibits shall be true in all material respects at the Closing as though they were made at the time of Closing. (ii) Due Oraanization. The Agency is a community redevelopment agency, duly formed and operating under the laws of California. 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. SBEO/0001/DOC/OOl-2 11/29/00 930 jrnrn 27 (iii) Reauisite Action. The Agency has taken all requisite action and obtained all requisite consents 10 connection with entering into this Agreement and the instruments and documents referenced herein and in connection with the consummation of the transactions contemplated hereby, and no consent of any other party is required. (iv) Enforceabilitv of Aareement. The persons executing any instruments for or on behalf of the Agency have been authorized to act on behalf of the Agency and that the 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, 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. (v) Title. Prior to the Closing, the Agency will be the owner of (and the Developer will acquire hereunder) the entire right, title and interest in and to the Site and Sales Office to effectively vest in the Developer good and marketable fee simple title to the Site and Sales Office, that the Developer will acquire the Site and Sales Office free and clear of all liens, encumbrances, claims, rights, demands, easements, leases or other possessory interests, agreements, covenants, conditions, and restrictions of any kind or character (including, without limiting the generality of the foregoing, liens or claims for taxes, mortgages, conditional sales contracts, or other title retention agreement, deeds of trust, security agreements and pledges and mechanics lien) except: (i) property taxes not delinquent; (ii) the exceptions to title approved by the Buyer pursuant to Section 2.13; (iii) the obligation of the Developer to complete the installation of the subdivision public improvements required for the Site and to comply with all terms and conditions of this Agreement.; and (iv) such other exceptions, limitations, terms and conditions as set forth in this Agreement. (vi) No Litiaation. There are no pending or, to the best of the Agency's knowledge, threatened claims, actions, allegations or lawsuits of any kind, whether for personal injury, property damage, property taxes or otherwise, that could materially and adversely affect the value or use of the Site or Sales Office or prohibit the sale thereof, nor to the best of the Agency's knowledge, is there any governmental investigation of any type or nature pending or threatened against or relating to the Site or Sales Office or the transactions contemplated hereby. SBE0/0001/Doc/001-2 11/29/00 930 jrnrn 28 (vii) Operation and Condition Pendino Closino. Between the date of this Agreement and the Close of Escrow, the Agency will continue to manage, operate and maintain the Site and Sales Office in the same manner as existed prior to the execution of this Agreement. (viii) Contracts. There are no contracts or agreements to which the Agency is a party relating to the operation, maintenance, service, repair, development, improvement or ownership of either the Site or Sales Office which will survive the Close of Escrow except as may be set forth in the Agency Grant Deeds or in the Deeds of Trust (I and II) . (ix) Special Studies Zone. Neither the Site nor the Sales Office is to the best knowledge of the Agency located within a designated earthquake fault zone pursuant to California Public Resources Code Section 2621.9 or a designated area that is particularly susceptible to ground shaking, liquefaction, landslides or other ground failure during an earthquake pursuant to California Public Resources Code Section 2694. (x) The Aaencv's Knowledae. For purposes of this Section 2.22, the terms "to the best of the Agency's knowledge" or lito the Agency's knowledge" shall mean the actual knowledge of Gary Van Osdel, Executive Director, and Maggie Pacheco, Development Director. If the Agency becomes aware of any act or circumstance which would change or render incorrect, in whole or in part, any representation or warranty made by the Agency under this Agreement, whether as of the date given or any time thereafter through the Closing Date and whether or not such representation or warranty was based upon the Agency's knowledge and/or belief as of a certain date, the Agency will give immediate written notice of such changed fact or circumstance to the Developer, but such notice shall not release the Agency of its liabilities or obligations with respect thereto. All representations and warranties contained in this Section 2.24(a) are true and correct on the date hereof and on the Closing Date and 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 Close of Escrow. (b) Warranties and Representations bv the Developer. The Developer hereby makes the following representations, covenants SBEO/OOOl/oOC/OOl-2 11/29/00 930 jrnm 29 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: (l) The Developer is a duly organized and validly existing California limited partnership. 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. (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. (3) 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 are or shall be valid and legally binding upon the Developer and enforceable in accordance with their respective terms. (4 i Nei ther 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 Site or Sales Office. (5) The representations and warranties of the Developer contained in this Section 2.24 (b) shall be based upon the actual knowledge of John W. Pavelak and Ernest O. Vincent. All representations and warranties contained in this Section 2.24(b) are true and correct on the date hereof and on the Closing Date and Developer's liability for misrepresentation or breach of warranty, representation or covenant, wherever contained S3EO/0001/DOC/001-2 11/29/00 930 jrnm 30 in this Agreement, shall survive the execution and delivery of this Agreement and the Closing. Section 2.25. Damaae. Destruction and Condemnation. Prior to the Agency's delivery of possession of the Site and Office Site to Developer at the Close of Escrow, the risk of loss or damage to the Site and Sales Office shall remain upon the Agency. If either the Site or Sales Office suffers damages as a result of any casualty prior to the Close of Escrow which may materially diminish their value, then the Agency shall give written notice thereof to Developer promptly after the occurrence of the casualty. The Developer can elect to either: (i) accept the Si te and Sales Office in their damaged condition or Iii) the Developer may terminate the Agreement and recover the Deposit as set forth in Section 2.02. The Developer shall confirm the exercise of its election under subparagraph Ii) or Iii) of the preceding sentence within thirty (30) days of its receipt of notice from the Agency. In the event that, prior to the Close of Escrow, any governmental entity shall commence any actions of eminent domain or similar type proceedings to take any portion of either the Site or Sales Office, the Agency shall give prompt written notice thereof to Developer, and Developer shall have the option either: Ii) to elect not to acquire the Site or Sales Office, terminate the Agreement and recover the Deposit as set forth in Section 2.02; or Iii) the Developer may complete the acquisition of the Site and Sales Office, in which case Developer shall be entitled to all the proceeds of such taking; 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 Ii) or (ii) of the preceding sentence within thirty (30) days of its receipt of notice from the Agency. ARTICLE II I DEVELOPMENT OF THE SITE Section 3.01. Develooment bv Develooer. la) Scope of Development. The Site will be developed in conformity with the Redevelopment Plan for the Northwest Project Area, the General Plan for the City of San Bernardino, City of San Bernardino zoning requirements, City environmental restrictions Ii.e.: noise levels, building heights, etc.) and City of San Bernardino development condi tions and the Scope of Development attached hereto as Exhibit "ON, as follows: the construction on the Site Lots of twenty-four (24) single family detached residential dwelling units. At least twenty percent 120%) of such SBEO/0001/Doc/OOl-2 11/29/00 930 jmm 31 residential dwelling units (each referred to as a "New Home") are to be reserved for sale to "Qualified Home Buyers" whose "Adjusted Family Income" at the time of initial occupancy of each New Home, does not exceed the household income qualification limits of a "Moderate-Income Household." As used in the preceding sentence, the words identified below shall have the following meaning: "Adjusted Family Income". The words "Adjusted Family Income" mean 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 wi th Treasury Regulation 1.167 (k) - 3 (b) (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. "Moderate-Income Household." The words "Moderate-Income Household" mean persons and families whose income does not exceed one hundred and twenty percent (120%) of the area median income of the City adjusted for family size appropriate for the New Horne by the State Department of Housing and Conununi ty 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 Health and Safety Code Section 50093. "New Home." The words "New Home" mean and refer to the completed affordable single-family residential dwelling unit (including the land and landscape improvements thereon) as constructed and installed by the Developer or any subdivided lot on the Site and sold to the Qualified Horne Buyer. "Qualified Home Buyer." The words "Qualified Home Buyer" mean 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: Iii) shall be a first- time homebuyer, as this term is defined in Health and Safety Code Section 50068.5; and liii)pay no more than an Affordable Housing Cost for the New Horne 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. SBEO/0001/DOC/OOl-2 11/29/00 930 jrnrn 32 "Qualified Residence Period." The words "Qualified Residence Period" mean the period of time beginning on the Delivery Date and ending on the date which is ten (10) years after the Delivery Date. (b) The City's zoning ordinance and the City's building requirements will be applicable to the use and development of the Site pursuant to this Agreement. The Developer acknowledges that any change in the plans for development of the New Homes on the Site as set forth in the Scope of Development shall be subject to the City's zoning ordinance and building requirements, provided, however that not less than twenty percent (20%) of the New Homes developed on the Site shall be reserved for sale and occupancy by Qualified Homebuyers as set forth in Section 3.01(a) and Section 4.01. 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 Site or to the Developer, any successor in interest of the Developer or any successor in interest pertaining to the Site, except by modification or variance approved by the City consistent with this Agreement. (c) The Scope of Development set forth in Exhibit nO" is hereby approved by the Agency upon its execution of this Agreement. The Site shall be developed and completed in substantial conformance with the 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. (d) The Scope of Development of this Agreement shall not be binding upon the City Councilor the Planning Commission of the City with respect to any approvals of the development of the Site required from such other bodies. (e) Notwithstanding any provision to the contrary in this Agreement, the Developer agrees to accept and comply fully with any and all lawful and reasonable conditions of approval applicable to all permits and other governmental actions affecting the development of the Site and consistent with this Agreement. (f) The Developer shall cause landscaping plans In connection with development of the Site to be prepared by a licensed landscape architect. The Developer shall prepare and submit to the City for its approval, preliminary and final landscaping plans for the Site which are consistent with City Code requirements. These plans shall be prepared, submitted and approved within the times respectively established therefor in the Schedule of Performance as shown on Exhibit nE" attached hereto and SBEO/0001/OOC/001-2 11/29/00 930 jrnm 33 incorporated herein by reference and shall be consistent with the Scope of Development. (g) The Developer shall prepare and submit development plans, construction drawings and related documents for the development of the Site consistent with the Scope of Development to the City. The development plans, construction drawings and related documents shall be in the form of final drawings, plans and specifications. Final drawings, plans and specifications are hereby defined as those which contain sufficient detail necessary to obtain a building permit from the City. (h) The Developer shall timely submit to the City for its review and approval any and all plans, drawings and related documents pertinent to the development of the Site, as required by the City. Any failure by the City to approve any of such plans or to issue necessary permits for the development of the Site within thirty (30) calendar days of submission to the City shall constitute an enforced delay hereunder, and the Schedule of Performance shall be extended by that period of time beyond thirty (30) calendar days of submission to the City in which the City approves said plans; provided, however, that in the event that the City disapproves of any of such plans, the Developer shall within thirty (30) calendar days after receipt of such disapproval revise and resubmit such plans in accordance with the City's requirements and in such form and substance so as to obtain the City's approval thereof. (i) If the Developer desires to make any change in the final construction drawings, plans and specifications and related documents after their approval by the City, the Developer shall submit the proposed change in writing to the City for approval. (j) The Developer, upon receipt of a notice of disapproval by the City, must revise such portions of the proposed change in construction drawings, plans and specifications and related documents as are rejected and thereafter resubmit such revisions to the City for approval. (k) The Developer shall have the right during the course of construction to make changes in construction concerning the interior of structures and "minor field changes"; provided, however, nothing contained in this Section shall be deemed to constitute a waiver of or change in the City's Building Code requirements governing such "minor field changes" or in any and all approvals by the City otherwise required for such "minor field changes." (1) Except as otherwise specified in this Agreement, the cost of constructing the New Homes and all other improvements on SBEO/0001/DOC/OOl-2 11/29/00 930 jmm 34 the Site and adjacent thereto, all as set forth in the Scope of Development, shall be borne by the Developer. (m) Developer shall pay school fees as required and at the time specified by the San Bernardino Unified School District; provided however, that Developer's obligation to close escrow hereunder is contingent on school fees remaining at $2.50 per square foot at the time Developer pulls building permits for the Site Lots. All other development fees imposed by the City as a condition of developing the Site shall be paid by the Developer at the close of escrow on each Site Lot, subject to the City of San Bernardino's Fee Deferral program in effect of the effective date of this Agreement. (n) 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 Site hereunder including, but not limited to, specifications, drawings, plans, maps, permit applications, land use applications, zoning applications, environmental review and design review documents. (0) 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 Site except for such prepaid fees that have been expressly assigned to Developer by Agency pursuant to Section 2.01.2 of this Agreement. 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. (pi 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 shown in Exhibit "EU attached hereto, or within such reasonable extensions of such times as may be granted by the Agency or as otherwise provided for in this Agreement. The Schedule of Performance 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 times 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. SBEO/0001/DOC/OOl-2 11/29/00 930 jmm 35 (q) Prior to and during the period of construction of the New Homes and related off-site public improvements on the Site 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 twelve (12) weeks. The reports shall be in such form and detail as may reasonably be required by the Agency, and shall include a reasonable number of construction photographs taken since the last such report submitted by the Developer. In addition, the Developer will attend Agency meetings when requested to do so by Agency Staff. (r) Prior to the commencement of any construction, the Developer shall furnish, or shall cause to be furnished, to the Agency duplicate originals or appropriate certificates of public indemni ty and liability insurance in the amount of One Million Dollars 1$1,000,000.00) 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 including libel, slander and false arrest. 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 One Million Dollars 1$1,000,000.00) each occurrence; and proof of workers' compensation insurance. Any and all insurance policies required hereunder shall be obtained from insurance companies admitted in the State of 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 Site as obtained by the Agency shall not be transferred from the Agency to the Developer. Appropriate insurance means those insurance policies approved by the Agency Counsel consistent with the foregoing. Any and all insurance required hereunder shall be maintained and kept in force until the Agency has issued the final Certificate of Completion in connection with the development of the Site. (s) The Developer for itself and its successors and assigns agrees that in the construction of the improvements on the Site Lots, the Developer will not discriminate against any employee or applicant for employment because of sex, marital status, race, color, religion, creed, national origin, or ancestry. SB~O/OOOl/DOC/OOl-2 11/29/00 930 jmm 36 Notwithstanding the foregoing, the Developer will use best efforts to offer employment opportunities to local residents and will seek to acquire goods and services from local vendors. (t) The Developer shall the improvements on the Site Lots in laws, including all applicable requirements. carry out its construction of conformity with all applicable state labor standards and (u) 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 Si te and along Highland Avenue and California Street and, upon completion of applicable portions of the development of the Site, certificates of occupancy. (v) Officers, employees, agents or representatives of the Agency shall have the right of reasonable access to the Site, without the payment of charges or fees, during normal construction hours during the period of construction for the purposes of enforcing this Agreement including, but not limited to, the inspection of the work being performed in constructing the residences on the Site. Such officers, employees, agents or representatives of the Agency shall be those persons who are so identified by the Executive Director. Any and all officers, employees, agents or representatives of the Agency who enter the Site pursuant hereto shall identify themselves at the job site office upon their entrance on to the Site and shall at all times be accompanied by a representative of the Developer while on the Site; provided, however, that the Developer shall make a representative of the Developer available for this purpose at all times during normal construction 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 of this right of access, other than injury, property damage or liability relating to the negligence of the Developer or its officers, agents or employees. (wi The Agency shall inspect relevant portions of the construction site 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 Site. SBEO/0001/DOC/OOl-2 11/29/00 930 jrnm 37 Section 3.02. [RESERVED -- NO TEXT] Section 3.03. Taxes. Assessments, Encumbrances and Liens. The Developer shall pay prior to the delinquency all real property taxes and assessments assessed and levied on or against the Site or Sales Office subsequent to the Close of Escrow and the conveyance to the Developer of title to the Site and the Sales Office. 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. The covenants of the Developer set forth in this Section relating to the placement of any unauthorized mortgage, trust deed, deed of trust, encumbrance or lien, shall remain in effect only until all Certificates of Completion have been recorded with respect to development of the Site. Section 3.04. Prohibition Aaainst Transfer. la) Prior to the recordation of all Certificates of Completion with respect to development of the Site as set forth in Section 3.07 of this Agreement, the Developer shall not, without prior written approval of the Agency, 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 Site or the improvements thereon. This prohibition shall not apply to any of the following: (1) the reasonable grant by the Developer of utility easements or permits to facilitate the development of the Site; (2) the assignment of all of the Developer's interest in this Agreement the Site and the Sales Office to a limited liability company of which the Developer is the managing member (and the assumption of such interest by such limited liability company); and (3) sales by the Developer of individual residential lots to individual purchasers of New Homes. Ib) It is understood and agreed by the Developer that neither the Developer, nor its assigns or successors in interest to the Site or this Agreement, shall use or otherwise sell, transfer, convey, assign, lease, leaseback or hypothecate the Site or the Sales Office or any portion thereof to any entity or party, or for any use of the Site or Sales Office, that is partially or wholly exempt from the payment of real property taxes pertinent to the Site or the Sales Office, or any portion thereof, or which would cause the exemption of the payment of all or any portion of such real property taxes. (c) In the absence of specific written agreement or approval by the Agency, no unauthorized sale, transfer, conveyance, lease, leaseback or assignment of the Site or Sales Office shall be SBEO/0001/Doc/OOl-2 11/29/00 930 jrnm 38 the Sales Office to any other use, improvement thereon, except those uses or authorized by this Agreement. or to construct any other or improvements provided for (e) 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 improvements, 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 Site or Sales Office, or a portion thereof under Section 5.07, the Agency shall at the same time deliver to each holder of record of any mortgage, deed of trust or other security interest 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 such default shall be a default which 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 defaul t of the Developer. Nothing contained in this Agreement shall be deemed to permit or authorize such holder to undertake or continue the construction or completion of the improvements (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 or title of such holder 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 appropriate Certificates of Completion by the Agency. (f) In any case where, one hundred eighty (180) calendar days after default by the Developer in the completion of construction of improvements under this Agreement, the holder of any mortgage, deed of trust or other security interest creating a lien or encumbrance upon the Site or any portion thereof has not exercised the option to construct the applicable portions of the SBEO/0001/o0C/OOl-2 11/29/00 930 jmrn 40 Site, or has exercised the option but has not proceeded diligently and continuously with construction, the Agency may purchase the mortgage, deed of trust or other security interest 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 Site 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: 1. The unpaid mortgage, deed of trust or other security interest debt, including principal, accrued and unpaid interest, late charges, costs, expenses and other amounts payable to the holder by the Developer under the loan documents between the holder and the Developer, at the time title became vested in the holder (less all appropriate credits, including those resulting from collection and application of rentals and other income received during foreclosure proceedings.) 2. All expenses, if any, incurred by the holder with respect to foreclosure. 3. The net expenses, if any (excl usi ve of general overhead), incurred by the holder as a direct result of the subsequent ownership or management of the Site, such as insurance premiums and real estate taxes. 4. The cost of any improvements made by such holder. 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 mortgage or deed of trust debt and such debt had continued in existence to the date of payment by the Agency. 6. After expiration of the aforesaid one hundred eighty (180) calendar day period, the holder of any mortgage, deed of trust or other security affected by the option created by this Section, may demand, in writing, that the Agency act pursuant to the option granted hereby. If the Agency fails to exercise the right herein granted within sixty (60) calendar days from the date of such written demand, the Agency shall be conclusively deemed to have wai ved such right of purchase of the applicable SBEO/0001/DOC/001-2 11/29/00 930 jmrn 41 portion of the Site or the mortgage, deed of trust or other security interest. (g) In the event of a default or breach by the Developer of a mortgage, deed of trust or other security interest with respect to the Site (or any portion thereof) prior to the issuance of a Certificate of Completion for the Site (or any portion thereof), 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 3.05(g) upon the Site (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 Site as authorized herein. Section 3.06. Riqht of the Aqencv to Satisfv Other Liens on the Site and Sales Office after Convevance of Title. After the conveyance of title to the Site and Sales Office by the Agency to the Developer and prior to the recordation of all Certificates of Completion (referred to in Section 3.07 of this Agreement), and after the Developer has had a reasonable time to challenge, cure or satisfy any unauthorized liens or encumbrances on the Site or Sales Office, the Agency shall after sixty (60) calendar days prior written notice to the Developer have the right to satisfy any such liens or encumbrances; provided, however, that nothing in this Agreement shall require the Developer to payor make provisions for the payment of any tax, assessment, lien or charge so long as the Developer in good faith shall contest the validity or amount thereof, and so long as such delay in payment shall not subject the Site or Sales Office or any portion thereof, to forfeiture or sale. Section 3.07. Certificates of Completion. (a) Following the written request therefor by the Developer and the completion of construction of the improvements on a Site Lot, excluding minor building "punch-list" items to be completed by the Developer upon said Lot, the Agency shall furnish the Developer with a Certificate of Completion for the Site Lot as applicable, as the Agency may, in its sole discretion, deem appropriate, substantially in the form set forth in Exhibit "F" attached hereto. Notwithstanding any provlsion set forth herein to the contrary, the completion of construction of the improvements on a Site Lot shall be deemed to include the completion of construction of a residence on said Lot and any and all parking, front yard and landscaping and related improvements necessary to SBEO/OOOl/DOC/OOl-2 11/29/00 930 jmm 42 support or which meet the requirements applicable to the residence and its use and occupancy on said Lot. (b) 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 the development of a Site Lot. After the recordation of the Certificate of Completion, any party then owning or thereafter purchasing, leasing or otherwise acquiring any interest in a Site Lot shall not (because of such ownership, purchase, lease or acquisition) incur any obligation or liability under this Agreement, except that such party shall be bound by any covenants contained in the grant deed or other instrument of transfer which grant deed or other instrument of transfer shall include the provisions of Section 4.01 through 4.05, inclusive, of this Agreement. Neither the Agency nor any other person, after the recordation of a Certificate of Completion for a Site Lot, shall have any rights, remedies or controls that it would otherwise have or be entitled to exercise under this Agreement with respect to said Lot, as a result of a default in or breach of any provision of this Agreement, and the respective rights and obligations of the parties shall be limited to those set forth in the grant deed. (cl Any Certificate of Completion shall be in such form as to permit it to be recorded in the Recorder's Office of the County where the property is located. (d) If the Agency refuses or fails to furnish a Certificate of Completion for a Site Lot 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 SBEO/0001/DOC/OOl-2 11/29/00 930 jrnm 43 satisfied Si te Lot therefor. the requirements of this Agreement with respect to the as if a Certificate of Completion had been issued Ie) A Certificate of Completion shall not constitute evidence of compliance with or satisfaction of any obligation of the Developer to any holder of a mortgage, or any insurer of a mortgage securing money loaned to finance the improvements described herein, or any part thereof. A Certificate of Completion shall not be deemed to constitute a notice of completion as referred to in Section 3093 of the California Civil Code, nor shall it act to terminate the continuing covenants or conditions subsequent contained in the Agency Grant Deeds attached hereto as Exhibit "Cu. ARTICLE IV USE OF THE SITE Section 4.01. Uses. la) Developer covenants and agrees for itself, its successors, and assigns that at least twenty percent (20%) of the New Homes to be developed, constructed and improved on the Site, shall be reserved for sale and occupancy by Qualified Homebuyers whose Adjusted Family Income at the time of initial occupancy of each New Home does not exceed the household income qualification limits of a Moderate-Income Household for the lesser period of twenty (20) years following the recordation of this Agreement or for the Qualified Residence Period of each such New Home. The Developer shall cause to be recorded at the time of close of each "New Horne Escrow" for which the provisions of this Section 4.0l(a) are applicable the form of the community redevelopment affordability covenants and restrictions substantially in the form as attached hereto Exhibit "G." The selection of individual New Homes in the Site which shall be subject to the provisions of this Section 4.0l(a) shall be at the discretion of the Developer. The covenant of this Section 4.0l(a) shall run with the land. Ib) The Developer further covenants and agrees for itself, its successors and assigns that the Site and Sales Office shall be improved, developed and used in accordance with the Scope of Development. Developer covenants to develop and use the Site and Sales Office in conformity with all applicable laws. The covenants of this Section 4.01(b) shall also run with the land. SBEO/0001/DOC/001~2 11/29/00 930 jrnm 44 (c) It is understood and agreed by the Developer that neither the Developer, nor its assigns or successors shall use or otherwise sell, transfer, convey, assign, lease, leaseback or hypothecate the Site or the Sales Office or any portion thereof to any entity or party, or for any, that is partially or wholly exempt from the payment of real property taxes pertinent to the Site, or any portion thereof, or which would cause the exemption of the payment of all or any portion of such real property taxes. (d) Developer is expressly prohibited from leasing any of the Site Lots, or any structure thereon, pending final sale to a Qualified Homebuyer (e) The Sales Office may be sold at any time within the discretion of the Developer to a homebuyer, and the Agency shall, upon payment of all amounts due under the Note and the Deed of Trust release the Sales Office from the obligation of this Agreement. Section 4.02. Maintenance of the Site. The Developer covenants and agrees for itself, its successors, and assigns to maintain the Site and the Sales Office in a good condition free from any accumulation of debris or waste material, subject to normal construction job-site conditions, and shall maintain in a neat, orderly, healthy and good condition the existing landscaping at the Sales Office and that landscaping at the Site required to be planted in accordance with the Scope of Development. In the event the Developer, or its successors or assigns, fails to perform the maintenance as required herein, the Agency shall have the right, but not the obligation, to enter the Site and Sales Office and undertake, such maintenance activities. In such event, the Developer shall reimburse the Agency for all reasonable sums incurred by it for such maintenance activities. The obligation of the Developer under this Section 4.02 with respect to the Site Lots shall be discharged for each Lot at such time as a Certificate of Completion for the Lot is recorded. The obligation of the Developer under this Section 4.02 with respect to the Sales Office shall continue until such time as the Developer disposes of all of its rights, title and interest in the Sales Office. Section 4.03. Obliaation to Refrain from Discrimination. The Developer covenants and agrees for itself, its successors, its assigns and every successor in interest to the Site and Sales Office 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 Site or Sales Office; nor shall the Developer, itself or any person claiming under or through it, establish or permit any such practice or practices of SBEO/0001/DOC/OOl~2 11/29/00 930 jrnrn 45 discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessee or vendees of the Site or Sales Office. Section 4.04. Form of Nondiscrimination and Nonseareaation Clauses. The Developer covenants and agrees for itself, its successors, its assigns, and every successor in interest to the Site and Sales Office, 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 Site or Sales Office (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: (a) 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." (b) 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." Ie) In contracts: against or segregation of "There shall be no discrimination any person or group of persons on SBEO/0001/00C/001-2 11/29/00 930 jmm 46 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 wi th reference to the selection, location, number, use, or occupancy, of tenants, lessees, sublessees, subtenants, or vendees of the premises herein transferred. II 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. Section 4.05. Effect and Duration of Covenants. The covenants established against discrimination shall remain in effect in perpetuity. The covenants respecting uses and occupancy of each of the Five (5) New Homes which are designated by the Developer to be initially occupied by a Qualified Homebuyer as set forth in Section 4.01(a), shall remain in effect for the Qualified Residence Period of each such New Home, and shall run with the land and shall constitute equitable servitudes thereon, and shall, without regard to technical classification and designation, be binding for the benefit and in favor of the Agency, its successors and assigns and the City. The Agency is deemed the beneficiary of the terms an provisions of this Agreement and of the covenants running with the land for and in its own rights and for the purposes of protecting the interests of the community. 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 V DEFAULTS, REMEDIES AND TERMINATION Section 5.01. Defaults - General. (a) Subject to the extensions of time set forth in Section 6.05 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 SBEO/0001/DOC/OOl-2 11/29/00 930 jrnrn 47 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. (b) The injured party shall give written notice of default to the party in default, specifying the default complained of by the nondefaulting party. Delay in giving such notice shall not constitute a waiver of any default nor shall it change the time of default. Ic) Any failure or delays by either party in asserting any of its rights and remedies as to any default shall not operate as a waiver of any default or of any such rights or remedies. Delays by either party in asserting any of its rights and remedies shall not deprive either party of its right to institute and maintain any actions or proceedings which it may deem necessary to protect, assert or enforce any such rights or remedies. Section 5.02. Leaal Actions. (a) 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 the County of San Bernardino, State of California, in any other appropriate court in that County, or in the Federal District Court in the Central District of California. (b) The laws of the State of California shall govern the interpretation and enforcement of this Agreement. (c) 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 Chairman or the Agency, or in such other manner as may be provided by law. (d) In the event that any legal action is commenced by the Agency against the Developer, service of process on the Developer shall be made by personal service on John Pavelak(or such other Agent for service of process and at such address as may be specified in written notice to the Agency), or in such other manner as may be provided by law, and shall be valid whether made within or without the State of California. Section 5.03. Riahts and Remedies are Cumulative. Except with respect to any rights and remedies expressly declared SBEO/D001/DOC/001-2 11/29/00 930 jmm 48 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. Section 5.04. Damaaes. If either party defaults with regard to any provision of this Agreement, the nondefaulting 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, the defaulting party shall be liable to the other party for damages caused by such default. Section 5.05. Specific Performance. If either party defaults under any of the provisions of this Agreement, the nondefaulting party shall serve written notice of such default upon such defaulting party. If the defaulting party does not commence to cure the default and diligently and continuously proceed 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 (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), the nondefaulting party, at its option, may institute an action for specific performance of the terms of this Agreement, except as otherwise provided in this Agreement. Section 5.06. Aaencv Riahts of Termination Followina Close of Escrow. (a) 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, the Agency at its option may terminate this Agreement if the Developer 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 Site 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. SBEO/0001/OOC/001-2 11/29/00 930 jrnm 49 (b) 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, the Agency at its option may terminate this Agreement if the Developer: (a) 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 Department and Building Division of the City for plan check purposes and in order to obtain building permits for the project at the Site, together with applicable fees therefor, all 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 (b) does not carry out its other responsibilities under this Agreement or in accordance with any modification or variance, precise plan, design review and other environmental or governmental approvals and such default is not cured or the Developer does not commence and diligently and continuously proceed with such cure within thirty (30) calendar days after the date of receipt of written demand therefor from the Agency. Section 5.07. Rioht to Reenter. ReDossess and Revest. (a) The Agency shall, upon thirty (30) calendar days notice to the Developer which notice shall specify this Section 5.07, have the right, at its option, to re-enter and take possession of all or any portion of the Site and Sales Office, together with all improvements thereon, and to terminate and revest in the Agency the estate conveyed to the Developer hereunder, if af-cer conveyance of title, the Developer (or its successors in interest) shall: 1. Fail to commence construction of all or any portion of the improvements as required by this Agreement for a period of ninety (90) calendar days after written notice to proceed from the Agency; provided that the Developer shall not have obtained an extension or postponement to which the Developer may be entitled pursuant to Section 6.05 hereof; or 2. Abandon or substantially suspend construction of all or any portion of the improvements at the Site 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 SBEO/0001/DOC/001-2 11/29/00 930 jrorn 50 which the Developer may be entitled to pursuant to Section 6.05 hereof; or 3. Assign or attempt to assign this Agreement, or any rights herein, or transfer, or suffer any involuntary transfer, of the Site or any part thereof, in violation of this Agreement, and such violation shall not have been cured within thirty (30) calendar days after the date of receipt of written notice thereof from the Agency to the Developer. (bl The thirty (30) calendar day written notice specified in this Section 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 Subsections (1 I through (3) herein 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 Is) 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. Ic) terminate, and limited by and The right of the Agency to reenter, repossess, revest shall be subject and subordinate to, shall be shall not defeat, render invalid or limit: 1. Any mortgage, deed of trust or other interest permitted by this Agreement; security 2 . Any rights or interests provided in this for the protection of the holders mortgages, deeds of trust or other interests; Agreement of such security 3. Any leases, declarations of covenants, conditions and restrictions, easement agreements or other recorded documents applicable to the Site or Sales Office. Idl The grant deed to the Site and Sales Office or to any portion thereof conveyed by the Developer to another party, to the extent authorized under this Agreement and by the Agency, shall contain appropriate references and provisions to give effect to the Agency I s right, as set forth in this Section under specified circumstances prior to the recordation of a Certificate of Completion with respect to such portion, to reenter and take possession of such portion, or any part thereof, with all improvements thereon, and to terminate and revest in the Agency the estate conveyed to the Developer. SBEO/0001/DOC/001-2 11/29/00 930 jrnm 51 (e) Upon the revesting in the Agency of title to the Si te or Sales Office, or any part thereof, as provided in this Section, the Agency shall, pursuant to its responsibilities under State law, use its best efforts to resell the Site and Sales Office, 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 Site or Sales Office, or any part thereof, the proceeds thereof shall be applied: SBEO/OOOI/Doc/001~2 11/29/00 930 jmm 1. First, to make any payment made or necessary to be made to discharge or prevent from attaching or being made any subsequent encumbrances or liens due to obligations incurred with respect to ~he making or completion of the agreed improvements or any part thereof on the Site and Sales Office or any portion thereof; next to reimburse the Agency on its own behalf or on behalf of the City for all actual costs and expenses incurred by the Agency and the City, including but not limited to customary and reasonable fees or salaries to third party personnel engaged in such action (but excluding the Agency's or the City's general overhead expense) , in connection with the recapture, management and resale of the Site or Sales Office or any portion thereof; all taxes, assessments and water and sewer charges paid by the City and/or the Agency with respect to the Site and Sales Office or any portion thereof; any amounts otherwise owing to the Agency by the Developer and its successor transferee: and 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, up to the amount equal to the sum of: (1) the Purchase Price paid by the Developer for the Site and/or the Sales Office (or allocable to the applicable part thereof); and (2) the costs incurred for the development of the Site and Sales Office, 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. 52 3. Any balance application of Agency. remaining after proceeds shall be the foregoing retained by the ARTICLE VI GENERAL PROVISIONS Section 6.01. Between the Parties. Notices, Demands and Communications (a) 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 1.04(a) and Section 1.04 (b) 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. 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. (b) In addition to the submission of notices, demands or corrununications to the parties as set forth above, copies of all notices shall also be delivered by facsimile as follows: to the Developer: Century Crowell Communities, L.P. 1535 South "0" Street, Suite 200 San Bernardino, California 92408 Attn: John Pavelak F.lU(, (9091 381-0041 with copy to: Best, Best & Krieger, LLP 3750 University Ave. Attn: Michael Grant, Esq. Riverside, CA 92501 FAX, (909) 686-3083 to the Agency: Redevelopment Agency of the City of San Bernardino 201 North "E" Street Suite 301 San Bernardino, California 92401 FAX, (909) 888-9413 with copy to: Lewis, 0' Amato, Brisbois & Bisgaard 201 North "E" Street, Suite 300 San Bernardino, CA 92401 FAX: (909) 383-9378 Section 6.02. Conflict of Interest. No member, official or employee of the Agency having any conflict of interest, direct or indirect, related to this Agreement and the development of the Property shall participate in any decision relating to the SBEO/0001/OOC/OOl-2 11/29/00 930 jmrn 53 Agreement. The parties represent and warrant that they do not have knowledge of any such conflict of interest. Section 6.03. Warrant v Aaainst pavment of Consideration for Aareement. The Developer warrants that it has not paid or given, and will not payor give, any third party any money or other consideration for obtaining this Agreement. Third parties, for the purposes of this Section, 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. Section 6.04. Nonliabllitv of Aaencv Officials and Emplovees. 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. Section 6.05. Enforced Delav: Extension of Time of Performance. In addition to specific provisions of this Agreement, performance by either party hereunder shall not be deemed to be in default, or considered to be a default, where delays or defaults are due to the force majeure events of war, 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 Agency shall not extend the time for the Agency to act hereunder except for delays associated with lawsuit or injunction including but without limitatio~ 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) days of the commencement of such occurrence of delay. The inability of the Developer to obtain a satisfactory commitment from a construction lender for the improvement of the Site or to satisfy any other condition of this Agreement relating to the redevelopment of the Site shall not be deemed to be a force majeure event or otherwise provide grounds for the assertion of the SBEO/0001/DOC/OOl-2 11/29/00 930 jrnm 54 existence of a delay under this Section 6.05. 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. Section 6.06. 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 Site, and/or the development thereof, and pertaining to the Sales Office 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. The Developer shall also have the right at all reasonable times to inspect the books and records of the Agency pertaining to the Site and/or the development thereof as pertinent to the purposes of this Agreement. Section 6.07. ADDrovals. (a) 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. (bl to sign on his which are of adjustments to The Executive Director of the Agency is authorized or her own authority amendments to this Agreement routine or technical nature, including minor the Schedule of Performance. Section 6.08. Real Estate Commissions. The Agency shall not be liable for any real estate commissions, brokerage fees or finder fees which may arise from or related to this Agreement. SBEO/0001/DOC/001-2 11/29/00 930 jrnm 55 Section 6.09. 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. Section 6.10. Release of Develooer from Liabilitv. 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 any Site Lot when a Certificate of Completion has been issued by the Agency hereunder with respect thereto, other than any covenants and obligations provided by the grant deed by which the Site is conveyed to the Developer hereunder. Section 6.11. Attornevs' Fees. If either party hereto files any action or brings any action or proceeding against the other arising out of this Agreement, seeks the resolution of disputes pursuant to Section 6.12 hereof, or is made a party to any action or proceeding brought by the Escrow Agent, then as between the Developer and the Agency, the prevailing party shall be entitled to recover as an element of its costs of suit or resolution of disputes pursuant to Section 6.12 hereof, and not as damages, its reasonable attorneys' fees as fixed by the Court or other forum for resolution of disputes as set forth in Section 6.12 hereof, in such action or proceeding or in a separate action or proceeding brought to recover such attorneys' fees. Section 6.12. 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. ARTICLE VII ENTIRE AGREEMENT. WAIVERS AND AMENDMENT Section 7.01. Entire Aareement. la) This Agreement shall be executed In four (4) duplicate originals each of which is deemed to be an original. This Agreement includes ____ pages and attachments, which constitute the entire understanding and Agreement of the parties. Ib) This Agreement integrates all of conditions mentioned herein or incidental hereto, the terms and and supersedes SBEO/0001/DOC/001-2 11/29/00 930 j~~ 56 all negotiations or previous agreements between the parties with respect to all or any portion of the Site and the development thereof. (c) None of the terms, covenants, agreements or conditions set forth in this Agreement shall be deemed to be merged with the grant deed conveying title to the Site, and this Agreement shall continue in full force and effect before and after such conveyance until issuance of the final Certificate of Completion. (d) 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. ARTICLE VIII TIME FOR ACCEPTANCE OF AGREEMENT BY AGENCY AND RECORDATION Section 8.01. Execution and Recordation. (a) Following its execution by the Developer and prompt delivery thereafter to the Agency, this Agreement shall be subject to the review and approval by the governing board of the Agency in its sole and absolute discretion within forty-five (45) calendar days after the date of signature by the Developer. In the event that the Agency has not approved, executed and delivered the Agreement to the Developer within the foregoing period, then the rights and duties of the parties shall be as set forth in the Exclusive Right to Negotiate dated February 15, 1999 as referenced in Section 2.02. The date of this Agreement shall be the date when the Agreement shall have been approved by the Agency. (b) The Developer and the Agency agree to permit recordation of this Agreement or any portion thereof against the Site and the Sales Office in the Office of the County Recorder for the County where the Property is located. SBE0/0001/ooc/001-2 11/29/00 930 jmm 57 IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the dates set forth below. AGENCY Redevelopment Agency of the City of San Bernardino Date: By: Gary Van Osdel Executive Director APPROVED AS TO FORM: Agency Special Counsel DEVELOPER Century Crowell Communities, L.P., a California limited partnership By Century Homes Communities, a California corporation Date: By: John W. Pavelak President (All Signatures Must Be Notarized) SBEO/0001/DOC/OOl-2 11/29/00 930 jrnm 58 STATE OF CALIFORNIA ss COUNTY OF Notary , 2000, before me, the undersigned, a in and for said State, personally appeared , personally known to me (or proved to me on the basis of satisfactory evidence) to be the Executive Director of the Redevelopment Agency of the City of San Bernardino that executed the within instrument on behalf of said Agency and acknowledged to me that said instrument was authorized to be executed pursuant to a duly adopted resolution of said Agency. On Public WITNESS my hand and official seal. Signature: SBEO/0001/DOC/OOl-2 11/29/00 930 jmm 59 STATE OF CALIFORNIA ss COUNTY OF Notary , 2000, before me, the undersigned, a in and for said State, personally appeared , personally known to me (or proved to me on the basis of satisfactory evidence) to be the General Partner that executed the within instrument on behalf of Century Crowell Communities, L.P., a California limited partnership. On Public WITNESS my hand and official seal. Signature: 60 EXHIBIT "A" LEGAL DESCRIPTION SITE SBEO/OOOl/DOC/OOl-2 11/29/00 930 jmm Exh. "A" - 1 EXHIBIT "A-l" LEGAL DESCRIPTION Sales Office SBEO/OOQl/DOC/OOl-2 11/29/00 930 jmm Exh. "A~ 1" - 1 EXHIBIT "A-2" LEGAL DESCRIPTION PHASE II SITE SBEO/OOOl/Doc/OOl-2 11/29/00 930 jrnm Exh. llA-2" - 1 EXHIBIT "B" (A) FORM OF PROMISSORY NOTE I I FOR THE SITE PURCHASE PRICE) (E) FORM OF PROMISSORY NOTE II SECURED BY DEED OF TRUST II IC) FORM OF DEED OF TRUST AND ASSIGNMENT OF RENTS IFOR PROMISSORY NOTE II) SBEO/0001/Doc/OOl-2 11/29/00 930 Jrnm Exh. II B II - 1 PROMISSORY NOTE PAYABLE TO A PUBLIC AGENCY Borrower: Lender: i4> Century Crowell Communities, L.P., a California Limited Partnership Redevelopment Agency of the City of San Bernardino 201 North "E" Street Suite 301 San Bernardino, California 92324 Principal Amount: $114,000.00 Date of Promissory Note: , 2000 Interest Rate: 0% (Except in Case of Derault) PROMISE TO PAY. Century Crowell Communi ties, L. P., a Calirornia Limited Partnership, (herein referred to as the "Borrower") promises to pay to the Redevelopment Agency or the City of San Bernardino (the "Agency"), or order, in lawful money of the United States of America, the principal amount of One Hundred Fourteen Thousand Dollars ($114,000.00). The promise to pay contained in this paragraph is conditional upon the existence of a source of funds derined as "Profit or the Developer" in Section 2.02(bl or that certain First Amended and Restated Disposition and Development Agreement between the Agency and the Borrower. Ir Profit or the Developer exists, the outstanding principal and interest of this Promissory Note or whatever portion that can be paid f:::orn such profit must be paid first out or such prorit, before any other distributions from such profit. This Promissory Note constitutes a lien upon any Profit of the Developer. Any Profit of the Developer is held in trust ror the Agency, until the outstanding principal and interest under this Promissory Note are paid in full. INDEBTEDNESS. This Promissory Note evidences the indebtedness of the Borrower to the Agency under the terms and conditions of the First Amended and Restated Disposition and Development Agreement by and among the Borrower and the Agency. A copy or the First Amended and Restated Disposition and Development Agreement is on file with the Agency Secretary as a public record of the Agency. DEFINED TERMS. All initially capitalized terms used in this Promissory Note that are not specirically defined herein will have the meaning (s) ascribed to those terms in that certain First Amended and Restated Disposition and Development Agreement between the Agency and the Borrower. SBEO/0001/DOC/4225 11/29/00 930 jmrn 1 MATURITY AND PAYMENT. Borrower will pay this Promissory Note in full from "Profits of the Developer" as this term is defined in the First Amended and Restated Disposition and Development Agreement on or before (il the 30th day following the close of the last New Home Escrow for the sale of all of the completed New Homes in the Site, or (ii) the sale, transfer, assignment or other hypothecation of the interest of the Borrower in all of the Site Lots to a third- party, other than to New Homeowners and except for a permitted construction-related financing authorized by Section 3.04 of the First Amended and Restated Disposition and Development Agreement, or (iii) the 30th day following the Agency's mailing of written notice of default to the Borrower. Borrower will make all payments under this Promissory Note to the Agency at the address of the Agency: 201 North "En Street, Suite 301, San Bernardino, California 92401 or at such other place as the Agency may designate in wr-iting. INTEREST RATE. Interest shall not accrue on the outstanding principal balance of this Promissory Note, unless Borrower is in default under the terms of this Promissory Note or that certain firs~ Amended and Restated Disposition and Development Agreement between the Agency and the Borrower. Upon the occurrence of an event of default under this Promissory Note or that certain first Amended and Restated Disposition and Development Agreement between the Agency and the Borrower, the Borrower will be liable to the Agency for interest on the original principal balance of this Prom~ssory Note at the rate of 8% per annum calculated from the date of this Promissory Note and until repaid in full. PREPAYMENT. Borrower may pay wi thout penal ty all or a portion of the amount owed earlier than it is due. DEfAULT. Borrower will be in default if any of the following happens: (a) Borrower fails to make any payment when due. (b) Borrower breaks any promise Borrower has made to the Agency in the first Amended and Restated Disposition and Development Agreement, or Borrower fails to comply with or to perform when due any other term, obligation, covenant, or condition contained in this Promissory Note or any agreement related to this Promissory Note. (cl Borrower credit, defaults security under any agreement, loan, extension of purchase or sales SBEO/0001/DOC/4225 11/29/00 930 jrnrn 2 agreement, or any other agreement, in favor of any other creditor or person that may materially affect any of Borrower's property or Borrower's ability to repay this Promissory Note or the ability of Borrower to perform its other obligations under this Promissory Note or the Deed of Trust and Assignment of Rents of even date herewith. (d) Any representation or statement made or furnished to the Agency by Borrower or on Borrower's behalf is false or misleading in any material respect either now or at the time made or furnished. (e) If the Borrower becomes insolvent, or if a receiver is appointed for any part of Borrower's property, or if Borrower makes an assignment for the benefit of creditors, or any proceeding is commenced either by Borrower or against Borrower under any bankruptcy or insolvency laws. (f) Any creditor tries to take any of property on or in which the Agency has security interest. Borrower's a lien or (g) A material adverse change occurs in Borrower's financial condition, or the Agency believes the prospect of payment or performance of the indebtedness evidenced by this Promissory Note is impaired. If any default (other than a default in payment on this Promissory Note) is curable and if Borrower has not been given a notice of a breach of the same provision of this Promissory Note within the preceding twelve (12) months, it may be cured (and in such event nc default will be deemed to have occurred) if Borrower, after recei ving written notice from the Agency demanding cure of such default: (i) cures the default within fifteen (15) days; or (ii) if the cure requires more than fifteen (15) days, immediately initiates steps which the Agency deems in its sole discretion to be sufficient to cure the default, and thereafter Borrower continues and completes all reasonable and necessary steps sufficient to produce compliance as soon as reasonably practical. SBSO/0001/OOC/4225 11/29/00 930 jrom 3 RIGHTS OF THE AGENCY. Upon default the Agency may exercise any of its rights provided under the First Amended and Restated Disposition and Development Agreement and the related documents, including without limitation, the declaration by the Agency that the entire unpaid principal balance on this Promissory Note and all accrued unpaid interest is immediately due, without notice, and then Borrower will pay that amount. Upon Borrower's failure to pay all amounts declared due pursuant to this paragraph entitled "RIGHTS OF THE AGENCY," including failure to pay at maturity, the Agency, at its option, may also, if permitted under applicable law, declare that interest shall accrue on the unpaid balance of this Promissory Note after the date such amount is declared due, at the rate of eight percent (8%) per annum. The Agency may hire or pay someone else to help collect this Promissory Note if Borrower does not pay. Borrower also will pay the Agency that amount. This includes, subject to any limits under applicable law, the Agency's attorneys' fees and the Agency's legal expenses whether or not there is a lawsuit, including attorneys' fees and legal expenses for bankruptcy proceedings (including efforts to modify or vacate any automatic stay or injunction), appea~s, and any anticipated post-judgment collection services. Borrower also will pay any court costs, in addition to all other sums provided by law. This Promissory Note has been delivered to the Agency and accepted by the Agency in the State of California. If there is a lawsuit arising under this Promissory Note, the Superior Court of San Bernardino County, in the State of California, shall have jurisdiction over such lawsuit. This Promissory Note shall be governed by and construed in accordance with the laws of the State of California. COLLATSRAL. This Promissory Note is unsecured. GSNSRAL PROVISIONS. The Agency may delay 0:: forego enforcing any of its rights or remedies under this Promissory Note without losing them. Borrower and any other person who signs, guarantees or endorses this Promissory Note, to the extent allowed by law, waive any applicable statute of limitations, presentment, demand for payment, protest and notice of dishonor. Upon any change in the terms of this Promissory Note, and unless otherwise expressly stated in writing, no party who signs this ?romissory Note, whether as maker, guarantor, accommodation maker or endorser, shall be released from liability. All such parties agree that the Agency may renew or extend (repeatedly and for any length of time) this Promissory Note, or release any party, or guarantor or collateral, or impair, fail to realize upon or perfect Lender's security interest in the collateral and take any other action deemed necessary by the Agency in its sole discretion without the consent SBEO/0001/DOC/4225 11/29/00 930 jrnm 4 of or notice to anyone. All such parties also agree that the Agency may modify. this Promissory Note and/or the First Amended and Restated Disposition and Development Agreement without the consent of or notice to anyone other than the party with whom the modification is made. PRIOR TO SIGNING THIS PROMISSORY NOTE, BORROWER HAS READ AND UNDERSTANDS ALL OF ITS PROVISIONS. BORROWER AGREES TO THE TERMS OF THIS PROMISSORY NOTE AND ACKNOWLEDGES RECEIPT OF A COPY HEREOF. BORROWER: Century Crowell Communities, L.P., a California Limited Partnership By: Managing General Partner By: General Partner SBEO/0001/DOC/4225 11/29/00 930 jrnm 5 PROMISSORY NOTE PAYABLE TO A PUBLIC AGENCY Borrower: Lender: Century Crowell Communities, L.P., a California Limited Partnership Redevelopment Agency of the City of San Bernardino 201 North "E" Street Suite 301 San Bernardino, California 92324 Principal Amount: $115,000.00 Date of Promissory Note: , 2000 Interest Rate: 0% PROMISE TO PAY. Century Crowell Communities, L.P., a California Limited Partnership, (herein referred to as the "Borrower") promises to pay to the Redevelopment Agency of the City of San Bernardino (the "Agency"), or order, in lawful money of the United States of funerica, the principal amount of One Hundred Fifteen Thousand Dollars ($115,000.00), or so much as may be outstanding. INDEBTEDNESS. This Promissory Note evidences the indebtedness of the Borrower to the Agency under the terms and conditions of that cert.ain First Amended and Restated Disposition and Development Agreement by and among the Borrower and the Agency. A copy of the First Amended and Restated Disposition and Development Agreement is on file with the Agency Secretary as a public record of the Agency. MATURITY AND PAYMENT. Borrower will pay this Promissory Note in full on or before May 31, 2003, or immediately upon sale of the Property, as defined herein. Borrower will make all payments of interest and principal under this Pro~~sso=y Note to the Agency at the address of the Agency: 201 North "E" Street, Suite 301, San Bernardino, California 92401 or at such other place as the Agency may designate in writing. Unless otherwise agreed to by the Agency in writing or required by applicable law, payments will be applied first to any unpaid collection costs and any late charges, then to any unpaid interest, and any remaining amount to principal. INTEREST RATE. Interest shall not accrue on the outstanding principal balance of this Promissory Note unless: (i) Borrower does not pay this Promissory Note in full on or before May 31, 2003, or (ii) Borrower is in default under the terms of this Promissory Note or that certain First Amended and Restated Disposition and Development Agreement between the Agency and the Borrower. Upon SBEO/0001/DOC/4222 11/29/00 945 jmm 1 the occurrence of either event (il or Iii) described in the previous sentence, the Borrower will be liable to the Agency for interest on the original principal balance of this Promissory Note at the rate of 8% per annum calculated from the date of this Promissory Note and until repaid in full. PREPAYMENT. Borrower may pay without penalty all or a portion of the amount owed earlier than it is due. LATE CHARGE. will also be charge. If a payment is ten (10) days or more late, Borrower charged five percent (5%) of the payment as a late DEFAULT. Borrower will be in default if any of the following happens: (a) (b) (c) SBEO/0001/OOC/4222 11/29/00 945 jnun Borrower fails to make any payment when due. Borrower breaks any promise Borrower has made to the Agency in the First Amended and Restated Disposition and Development Agreement, or Borrower fails to comply with or to perform when due any other term, obligation, covenant, or condition contained in this Promissory Note or any agreement related to this Promissory Note. Borrower defaults under any loan, extension of credit, security agreement, purchase or sales agreement, or any other agreement, in favor of any other creditor or person that may materially affect any of Borrower's prope=ty or Borrower's ability to repay this Promissory Note or the ability of Borrower to perform its other obligations under this Promissory Note or the Deed of Trust and Assignment of Rents of even date herewith. (d) Any representation or statement made or furnished to the Agency by Borrower or on Borrower's behalf is false or misleading in any material respect either now or at the time made or furnished. (e) If the Borrower becomes insolvent, or if a receiver is appointed for any part of Borrower's property, or if Borrower makes an assignment for the benefit of creditors, or any proceeding is commenced either by Borrower or against Borrower under any bankruptcy or insolvency laws. 2 If) Any creditor tries to take any of Borrower's property on or in which the Agency has a lien or security interest. (g) A material adverse change occurs in Borrower's financial condition, or the Agency believes the prospect of payment or performance of the indebtedness evidenced by this Promissory Note is impaired. Ih) Any of the events described ln entitled "DEFAULT" occurs with guarantor of this Promissory Note. this paragraph respect to any If any default (other than a default in payment on this Promissory Note or the occurrence of a special event of acceleration) is curable and if Borrower has not been given a notice of a breach of the same provision of this Promissory Note within the preceding twelve (12) months, it may be cured (and in such event no default will be deemed to have occurred) if Borrower, after receiving written notice from the Agency demanding cure of such default: (i) cures the default within fifteen (15) days; or (ii) if the cure requires more than fifteen (15) days, immediately initiates steps which the Agency deems in its sole discretion to be sufficient to cure the default, and thereafter Borrower continues and completes all reasonable and necessary steps sufficient to produce compliance as soon as reasonably practical. RIGHTS OF THE AGENCY. Upon default the Agency may exerClse any of its rights provided under the Firsc Amended and Restated Disposition and Development Agreement and the related documents, including without limitation, the declaration by the Agency that the entire unpaid principal balance on this Promissory Note and all accrued unpaid interest is immediately due, without notice, and then Borrower will pay that amount. Upon Borrower's failure to pay all amounts declared due pursuant to this paragraph entitled "RIGHTS OF THE AGENCY," including failure to pay at the maturity, the Agency, at its option, may also, if pe=~itted under applicable law, increase the interest rate on this Promissory Note for interest which accrues after the date such amount is declared due, to the rate of ten percent (10%) per annum. The Agency may hire or pay someone else to help collect this Promissory Note if Borrower does not pay. Borrower also will pay the Agency that amount. This SBEO/0001/DOC/4222 11/29/00 945 jnun 3 includes, subject to any limits under applicable law, the Agency's attorneys' fees and the Agency's legal expenses whether or not there is a lawsuit, including attorneys' fees and legal expenses for bankruptcy proceedings (including efforts to modify or vacate any automatic stay or injunction), appeals, and any anticipated post-j udgment collection services. Borrower also will pay any court costs, in addition to all other sums provided by law. This Promissory Note has been delivered to the Agency and accepted by the Agency in the State of California. If there is a lawsuit arising under this Promissory Note, the Superior Court of San Bernardino County, in the State of California, shall have jurisdiction over such lawsuit. This Promissory Note shall be governed by and construed in accordance with the laws of the State of California. COLLATERAL. Borrower acknowledges this Promissory Note is secured by a Deed or Trust and Assignment of Rents of even date herewith. The Deed of Trust and Assignment of Rents affects certain real property commonly known as 1684 Susie Lane, San Bernardino, California (the "Property"). The Deed of Trust and Assignment of Rents contains the following due on sale provision: "Lender may, at its option, declare immediately due and payable all sums secured by this Deed of Trust upon the sale or transfer, without the Lender's prior written consent, of all or any part of the Property, or any interest in the Property. A "sale or transfer" means the conveyance of the Property or any right, title or interest therein; whether legal, beneficial, or equitable; whether voluntary or involuntary; whether by outright sale, deed, installment sale contract, land contract, contract for deed, leasehold interest with a term greater than one (I) year, lease- option contract, or by sale, assignment, or transfer of any beneficial interest in or to any land trust holding title to the Property, or by any other method of conveyance of property iat2res::'. This option shall be exercised by t~e Lender ':':1 accordance with the provisions of Paragraph 5.1 hereof; provided however, this option shall not be exercised if such remedy is prohibited by applicable law." GENERAL PROVISIONS. The Agency may delay or forego enforcing any of its rights or remedies under this Promissory Note without losing them. Borrower and any other person who signs, guarantees or endorses this Promissory Note, to the extent allowed by law, waive any applicable statute of limitations, presentment, demand for payment, protest and notice of dishonor. Upon any change in the terms of this Promissory Note, and unless otherwise expressly stated in writing, no party who signs this Promissory Note, whether as maker, guarantor, accommodation maker or endorser, shall be SBEO/0001/OOC/4222 11/29/00 945 jmrn 4 released from liability. All such parties agree that the Agency may renew or extend (repeatedly and for any length of time) this Promissory Note, or release any party, or guarantor or collateral, or impair, fail to realize upon or perfect Lender's security interest in the collateral and take any other action deemed necessary by the Agency in its sole discretion without the consent of or notice to anyone. All such parties also agree that the Agency may modify this Promissory Note and/or the First Amended and Restated Disposition and Development Agreement without the consent of or notice to anyone other than the party with whom the modification is made. PRIOR TO SIGNING THIS PROMISSORY NOTE, BORROWER HAS READ AND UNDERSTANDS ALL OF ITS PROVISIONS. BORROWER AGREES TO THE TERMS OF THIS PROMISSORY NOTE AND ACKNOWLEDGES RECEIPT OF A COPY HEREOF. BORROWER: Century Crowell Communities, L.P., a California Limited Partnership By: Managing General Partner By: General Partner SBEOI0001/DOC/4222 11/29/00 945 jrnm 5 RECORDING REQUESTED BY: Redevelopment Agency of the City of San Bernardino AND WHEN RECORDED MAIL TO: 201 North ~EH Street, Suite 301 San Bernardino, California 92401 Attention: Executive Director Space Above This Line is For Recorder's Use Only DEED OF TRUST AND ASSIGNMENT OF RENTS (Century Crowell Communities, L. P., First Amended and Restated Disposition and Development Agreement) THIS DEED OF TRUST AND ASSIGNMENT OF RENTS (the ~Deed of TrustH) is dated, 2000, among Century Crowell Communities, L.P., a California limited partnership (referred to herein as the ~TrustorH), whose address is 1535 South ~DH Street, Suite 200, San Bernardino, California 92408; the Redevelopment Agency of the City of San Bernardino, a body corporate and politic, whose address is 201 North "EH Street, Suite 301, San Bernardino, California 92401 (the "Lender" or "Beneficiary") and First American Title Insurance Company, a California corporation, whose address is 323 Court Street, San Bernardino, California 92401 (the ~TrusteeH) . 1.0 CONVEYANCE AND GRANT. For valuable consideration, Trus-cor irrevocably grants, transfers and assigns to Trustee in trust, with power of sale, for the benefit of Lender as Beneficiary, all of Trustor's right, title, and interest in and to the following described real property, together with all existing or subsequently erected or affixed buildings, improvements and fixtures; all easements, rights of way, and appurtenances and all other rights, royalties, and profits relating to the real property, including and without limitation all minerals, oil, gas, geothermal and similar matters located in San Bernardino County, State of California (the ~PropertyH) : SEE EXHIBIT ~AH LEGAL DESCRIPTION ATTACHED HERETO SBZC/0001/DOC/4224 1l/29/00 830 jrnm 1 Trustor presently assigns to the Lender all of Trustor's right, title and interest in and to all present and future leases of the Property and all Rents from the Property. In addition, Trustor grants Lender a Uniform Commercial Code security interest in the Rents and the Personal Property defined below. 2.0 DEFINITIONS. The following words shall have the meanings when used in this Deed of Trust. Terms not defined in this Deed of Trust shall have the attributed to such terms in the Uniform Commercial references to dollar amounts shall mean amounts money of the United States of America: following otherwise meanings Code. All in lawful First Amended and Restated Disposition and Development Agreement. The words "First Amended and Restated Disposition and Development Agreement" mean that certain agreement by and between the Trustor and the Lender which provides for the loan to the Trustor which is secured by this Deed of Trust for the conduct of certain redevelopment related actl vi ties to be undertaken by the Trustor in accordance with the terms and conditions of that Agreeme~t. Beneficiary. The word "Beneficiary" means the Redevelopment Agency of the City of San Bernardino, a body corporate and politic, its successors and assigns. The Agency is also referred to herein as "Beneficiary" and "Lender.". Deed of Trust. The words "Deed of Trust" mean this Deed of Trust and Assignment of Rents among Trustor, Lender, and Trustee, and includes without limitation all assignment and security interest provisions relating to the Personal Property and Rents. Improvements. The word "ImprovementsU means and includes without limitation all existing improvements on the Property. Indebtedness. The word "Indebtedness" means all principal and, if applicable, interest payable under the Promissory Note and any amounts expended or advanced by Lender to discharge obligations of Trustor or expenses incurred by Trustee or Lender to enforce obligations of Trustor under the Promissory Note and this Deed of Trust, together with interest on such amounts. This Deed of Trust secures, in addition to the amounts specified in the Promissory Note any future advances, together with all interest thereon, which future advances the Lender may in its sole and absolute discretion make so long as SBEO/C001/OOC/4224 11/29/00 830 jrrun 2 Trustor complies with all the terms and conditions of the Promissory Note or other loan agreement. Lender. The word "Lender" means Agency , its successors and assigns. Personal Property. The words "Personal Property" means all equipment, fixtures, and other articles of personal property now or hereafter owned by Trustor, and now or hereafter attached or affixed to the Property, together with all accessions, parts, and additions to, all replacements of, and all substitutions for, any of such property, and together with all proceeds (including without limitation all insurance proceeds and refunds of premiums) f~om any sale or other disposition of the Property. The words "Personal Property" also include all tangible and intangible items obtained or owned by, or in the possession of Trustor that are directly or indirectly related to the acquisition, development, design, construction, permitting, rnarketi:1g, or habitation of the Property or the improvements to be constructed on the Property, whether heretofore or hereaf~er issued, prepared, or executed, including without limita~ion all permits, licenses, authorizations and approvals, trademarks and trade names, and any and all land use entitlements, development rights, sewer capacity, approvals, density allocations and other rights of approvals, relating to or authorizing the development or occupancy of the Property, plus all utility or other deposits, reimbursement rights, studies, tests contracts, plans and specifications, relating to the Property and improvements. Promissory Note. The words "?romissory Note" mean the Promissory Note of even date herewith, in the principal amount of One Hundred Fifteen Thousand Dollars ($115,000.00) from Trustor to the Agency as Lender, together with all renewals, extensions, modifications, refinancing, and substitutions for the Promissory Note. Property. The word "Property" mear's collectively the Property and the Personal Property, and the rights described above in the "Conveyance and Gran~'l section of the Deed of Trust. Related Documents. The words "Related Documents" mean and include without limitation the E'irst Amended and Restate Disposition and Development Ag:-eement by and among the Trustor and the Agency, the Promissory Note or event date herewith, and all promissory notes, credit agreements, loan agreements, guaranties, security agreements, mortgages, deeds of trust, and all other instruments, agreements and documents, by and SBEO/0001/DOC/4224 11/29/00 830 jnun 3 ,I between the Trustor and the Lender whether now or hereafter existing, executed in connection with the Indebtedness. Rents. The word "Rents" means all present and future revenues, income, issues, royalties, profits, and benefits derived from the Property. rents, other Trustee. The word "Trustee" means First American Title Insurance Company, and any substitute or successor trustees. Trustor. The word "Trustor" means any and all persons and entities executing this Deed of Trust, including without limitation all Trustors named above. 3.0 THIS DEED OF TRUST, INCLUDING THE ASSIGNMENT OF RENTS AND THE SECURITY INTEREST IN THE RENTS AND PERSONAL PROPERTY, IS GIVEN TO SECURE (1) PAYMENT OF THE INDEBTEDNESS AND (2) PERFORMANCE OF ANY AND ALL OBLIGATIONS OF TRUSTOR UNDER THE PROMISSORY NOTE, THE RELATED DOCUMENTS, AND THIS DEED OF TRUST. THIS DEED OF TRUST, INCLUDING THE ASSIGNMEN~ OF RENTS AND THE SECURITY INTEREST IN THE RENTS AND PERSONAL PROPERTY, IS ALSO GIVEN TO SECURE ANY AND ALL OBLIGATIONS OF TRUSTOR UNDER THAT CERTAIN FIRST AMENDED AND RESTATED DISPOSITION AND DEVELOPMENT AGREEMENT BETWEEN TRUSTOR AND LENDER. ANY EVENT OF DEFAULT UNDER THE FIRST AMENDED AND RESTATED DISPOSITION AND DEVELOPMENT AGREEMENT, OR ANY OF THE RELATED DOCUMENTS REFERRED TO THEREIN, SHALL ALSO BE AN EVENT OF DE,AULT UNDER THIS DEED OF TRUST. THE PROMISSORY NOTE AND THIS DEED OF TRUST ARE GIVEN AND ACCEPTED ON THE FOLLOWING TERMS: 3.1 PAYMENT AND PERFORMANCE. Except as otherNise provided in this Deed of Trust, Trustor shall pay to Lender all amounts secured by this Deed of Trust as they become due, and shall strictly and in a timely manner perform all of Trustor's obligations under the Promissory Notel this Deed of Trust, and the Related Documents. 3.2 POSSESSION AND MAINTENANCE OF THE PROPERTY. Trustor agrees that Trustor's possession and use of the Property shall be governed by the following provisions: Possession and Use. Until the occurrence of an Event of Default, Trustor may (a) remain in possession and control 0: the Property, (b) use, operate o~ manage the Property for the purposes authorized in the First Amended and Restated Disposition and Development Agreement. SSEO/0001/DOC!4224 11/29/80 830 jmm 4 Duty to Maintain. Trustor shall maintain the Property in tenantable conditions and promptly perform all repairs, replacements, and maintenance necessary to preserve its value. Hazardous Substances. The terms "hazardous wastes," "hazardous substance," "disposal," \\ release 1" and "threatened release," as used in this Deed of Trust, shall have the same meanings as set forth in the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended, 42 o.s.c. Section 9601, et ~. I"CERCLA"), the Superfund Amendments and Reauthorization Act of 1986, Pub. L. No. 99-499 ("SARA"), the Hazardous Materials Transportation Act. 49 O.S.C. Section 1801/ et ~., the Resource Conservation and Recovery Act, 49 O.S.C. Section 6901, g ~., Chapters 6.5 through 7.7 of Division 20 of the California Health and Safety Code, Section 25100, et ~. , or other applicable state or Federal laws, rules, or regulations adopted pursuant to any of the foregoing. Trustor represents and warrants to Lender that: (a) Trustor has no knowledge of, or reason to believe that there has been: (i) any use, generation, manufacture, storage, treatment, disposal, release, or threatened release of any hazardous waste or substance by any prior owners or occupants of the Property or Iii) any actual or threatened litigation or claims of any kind by any person relating to such matters; and (b) neither Trustor nor any tenant, contractor, agent or other authorized user of the Property shall use, generate, manufacture, store, treat, dispose oI, or release any hazardous waste or substance on, under, or about the Property. Trustor authorizes Lender and its agents to enter upon the Property to make such inspections and tests and Lender may deed appropriate to determine compliance of the Property with this section of the Deed of T~ust. Any inspections or tests made by Lender shall be for Lender I s purposes only and shall not be consi:rued to create any responsibility or liability on the part of Lender to Trustor or to any other person. The representations and warranties contained herein are based on Trustor's due diligence in investigating the Property for hazardous substances. Trustor hereby (a) releases and waives any future claims against Lender for indemnity or contribution in the event Trustor becomes liable for cleanup or other costs under any such laws, and (b) agrees to indemnify and hold harmless Lender against any and all claims, losses, liabilities, damages, penalties, and expenses which Lender may directly or indirectly sustain or suffer resulting from a breach of this section of the Deed of Trust or as a consequence of any use, generation, storage, disposal, release or threatened release of hazardous substances occurring prior to Trustor's ownership or interest in the Property, whether or not the same was or should have SBEO/0001/DOC/4224 11/29/00 830 jmm 5 been known to Trustor. The provisions of this section of the Deed of Trust, including the obligation to indemnify, shall survive the payment of the Indebtedness and the satisfaction and reconveyance of the lien of this Deed of Trust and shall not be affected by Lender's acquisition of any interest in the Property, whether by foreclosure or otherwise. Lender's Right to Enter. Lender and its agents and representatives may enter upon the Property at all reasonable times to attend to Lender' 5 interests and to inspect the Property for purposes of Trustor's compliance with the terms and conditions of this Deed of Trust. Compliance with Governmental Requirements. Trustor shall promptly comply with all laws, ordinances, and regulations, now or hereafter in effect, of all governmental authorities applicable to the use or occupancy of the Property. Trustor may contest in good faith any such law, ordinance, or regulation and withhold compliance during any proceeding, including appropriate appeals, so long as Trustor has notified Lender in writing prior to doing so and so long as, in Lender's sole opinion, Lender's interests in the Property are not jeopardized. Lender may require Trustor to post adequate security or a surety bond, reasonably satisfactory to Lender, to protect Lender's interest. Duty to Protect. Trustor agrees neither to abandon nor leave unattended the Property. Trusto~ shall do all other acts, in addition to those acts set forth above in this section, which from the character and use of the Property are reasonably necessary to protect and preserve the Property. 3.3 DUE ON SALE. Lender may, at its option, declare immediately due and payable all sums secured by this Deed of Trust upon the sale or transfer, without the Lender's prior written consent, of all or any part of the Property, or any interest in the Property. A "sale or transfer" means the conveyance of the Property or any right, title or interest therein; whether legal or equitable; whether voluntary or involuntary; whether by outright sale, deed, installment sale contract, land contract, contract for deed, leasehold interest with a term greater than one (1) year, lease-option contract, or by sale, assignment or transfer of any beneficial interest in or to any land trust holding title to the Property or by any other method of conveyance of the property interest. This option shall be exercised by the Lender in accordance with the provisions of Paragraph 5.1 hereof; provided however, this option shall not be exercised if such remedy is prohibited by applicable law. S3EO/0001/DOC/4224 11/29/00 830 jmrn 6 3.4 TAXES AND LIENS. The following provisions relating to the taxes and liens on the Property are part of this Deed of Trust: I?ayment. Trustor shall pay when due (and in all events at least ten (10) days prior to delinquency) all taxes, special taxes, assessments, charges (including water and sewer), fines and impositions levied against or on account of the Property, and shall pay when due all claims for work done on or for services rendered or material furnished to the Property. Trustor shall maintain the Property free of all liens having priority over or equal to the interest of Lender under this Deed of Trust, except for the lien of property taxes and assessments not due. Right to Contest. Trustor may withhold payment of any tax, assessment, or claim in connection with a good faith dispute over the obligation to pay, so long as Lender's interest in the Property is not jeopardized. If a lien arises or is filed as a result of nonpayment, Trus~or shall within fifteen (15) days after the lien arises or, if a lien is filed, wi thin fifteen (15) days after Trustor has notices of the filing, secure the discharge of the lien, or if requested by Lender, deposit with Lender cash or a sufficient corporate surety bond or other security satisfactory to Lender in an amount sufficient to discharge the lien plus any costs and attorneys' fees or other charges that could accrue as a result of a foreclosure or sale under the lien. In any contest, Trustor shall defend itself and Lender and shall satisfy any adverse judgment before enforcement against the Property. Trustor shall name Lender as an additional obligee unde~ any surety bond furnished in the contest proceedings. Evidence of Payment. Trustor shall upon demand furnish to Lender satisfactory evidence of payment of the taxes or assessments and shall authorize the appropriate governmental official to deliver to Lender at any time a written statement of the taxes and assessments against the Property. 3.5 I?ROI?ERTY DAMAGE INSURANCE. The following provisions relating to insuring the Property are a ?art of this Deed of Trust: Main tenance of Insurance. T r U 5 tor s hall pro cur e and maintain policies of fire insurance with standard extended coverage endorsements on a replacement basis for the full insurable value covering all Improvements on the Property in an amount sufficient to avoid application of any coinsurance clause, and with a standard mortgagee clause in favor of Lender, together with such other insurance, including but not SBEO/C001/DOC/4224 11/29/00 830 jmm 7 limi ted to hazard, liability, business interruption and boiler insurance, as Lender may reasonably require. Notwithstanding the foregoing, in no event shall Trustor be required to provide hazard insurance in excess of the replacement value or the improvements on the Property. Policies shall be written in form, amounts, coverages and basis reasonably acceptable to Lender and issued by a company or companies whose policies of insurance qualify for inclusive in the State insurance guarantee fund, are rated not less than "A(vii) II in Best Insurance Guide, current edition and are in other respects reasonably acceptable to Lender. Trustor, upon request of Lender, will deliver to Lender from time to time the policies or certificates or insurance in form satisfactory to Lender, including stipulations that coverages will not be canceled or diminished without at least thirty (30) days's prior written notice to Lender. Application of Proceeds. Trustor shall promptly notify Lender of any material loss or damage to the Property. Lender may make proof or loss if Trustor fai~s to do so within fifteen (15) days or the casualty. Whether or not Lender's security is impaired, Lender may, at its election, receive and retain the proceeds and apply the proceeds to the reduction of the indebtedness, payment of any lien affecting the Property, or the restoration and repair of the Property. If Lender elects to apply the proceeds to restoration and repair, Trustor shall repair or replace the damaged or destroyed improvements in a manner reasonably satisfactory to Lender. Lender shall, upon satisfactory proof of such expenditure, pay or reimburse Trustor from the proceeds for the reasonable cost of repair or restoration if Trustor is not in default under this Deed of Trust. Any proceeds which have not been disbursed within 180 days after their receipt and which Lender has not committed to the repair or restora~ion of the Property shall be used first to pay any amount owing to Lender under this Deed of Trust, then to pay accrued interest, and the remainder, if any, shall be applled to the principal balance of the Indebtedness. If Lender holds any proceeds after payment in full of the Indebtedness, such proceeds shall be paid to Trustor. Unexpired Insurance at Sale. Any unexpired insurance shall inure to the benefit of, and pass to, the purchaser for the Property covered by this Deed of Trust a~ any trustee's sale or other sale held under the provisions of this Deed of Trust, or at any foreclosure sale of such Proper~y. Trustor's Report on Insurance. Upon :::-eque s t 0 f Lencte r, however not more than twice per year, Trustor shall furnish to SBEO/0001/DOC/4224 :1/29/00 830 jrnm 8 Lender a report on each existing policy of insurance showing (a) the name of the insurer, lb) the risks insured; lc) the amount of the policy; ld) the property insured, the then current replacement value of such property, and the manner of determining that value; and Ie) the expiration date of the policy. Trustor shall, upon request of the Lender, have an independent appraiser satisfactory to Lender determine the cash value replacement cost of the Property. 3.6 EXPENDITURES BY LENDER. If Trustor fails to comply with any provision of this Deed of Trust, or if any action or proceeding is commenced that would materially affect Lender's interests in the Property, Lender on Trustor's behalf may, but shall not be required to, take any action that Lender deems appropriate. Any amount that Lender expends in so doing will bear interest at a rate charged under the Promissory Note from the date incurred or paid by Lender to the date of repayment by Trustor. All such expenses, at Lende~'s option, will (a) be payable on demand; or lb) be added to the balance of the Promissory Note and be apportioned among and be payable with any installment payments to become due duri~g either Ii) the term of any applicable insurance policy or Iii) the remaining term of the Promissory Note; or Ie) be treated as a balloon payment which will be due and payable at the Promissory Note's maturity. This Deed of Trust also will secure payment of these amounts. The rights provided for in this paragraph shall be in addition to any other rights or any remedies to which Lender may be entitled on account of the default. Any such action by Lender shall not be construed as curing the default so as to bar Lender from any remedy that it otherwise would have had. 3.7 WARRANTY; DEFENSE OF TITLE. The following provisions relating to ownership of the Property are a part or this Deed or Trust: Title. Trustor warrants that la) Trustor hold good and marketable title or record to the P~operty in fee simple, free and clear of all liens and encumbrances other than those set forth in the title insurance policy iss~ed in favor of, and accepted by, Lender in connection with this Deed of Trust, and Ib) Trustor has tne full right, power, a!1d authority to execute and deliver this Deed of Trust to Lender. Defense of Title. SubJect to the exception in the paragraph above, Trustor warrants and will forever defend its title to the Property against the lawful claims of all persons. In the event any action or proceeding is commenced that questions Trustor's title or the interest of Trustee or Lender under this Deed of Trust, Trustor shall defend the action at SBEO/OOOl/DOC!4224 11/29/00 830 jmre 9 Trustor's expense. Trustor may be the nominal party in such proceeding, but Lender shall be entitled to participate in the proceeding and to be represented in the proceeding by counsel of Lender's own choice, and Trustor will deliver, or cause to be delivered, to Lender such instruments as Lender may request from time to time to permit such participation. Compliance with Laws. Trustor warrants that the Property and Trustor's use of the Property complies with all existing applicable laws, ordinances, and regulations of governmental authorities. 3.8 CONDEMNATION. The following provisions relating to condemnation proceedings are a part of this Deed of Trust: Application of Net Proceeds. If all or any part of the Property is condemned by eminent domain proceedings or by an proceeding or purchase in lieu of condemnation, Lender may at its election require that all or any portion of the net proceeds of the award be applied to the Indebtedness or the repair or restoration of the Property. The net proceeds of the award shall mean the award after payment of all reasonable costs, expenses, and attorneys' fees, Trustee or Lender in connection with the condemnation. Proceedings. If any proceeding in condemnation is filed, Trustor shall promptly notify Lender in writing, and Trustor shall promptly take such steps as may be necessary to defend the action and obtain the award. Trustor may be the nominal party in such proceeding, but Lender shall be entitled to participate in the proceeding and to be represented in the proceeding by counsel of its own choice, and Trustor will deliver or cause to be delivered to Lender such instruments as may be requested by it from time to time to permit such participation. 3 . 9 IMPOSITION OF TAXES, FEES AND CHARGES BY GOVERNMENTAL AUTHORITIES. The following provisions relating to governmental taxes, fees and charges are a part of this Deed of Trust: Current Taxes, Fees and Charges. Upon request by Lender, Trustor shall execute such documents in addition to this Deed of Trust and take whatever other action is requested by Lender to perfect and continue Lender's lien and security interest on the Property. Trustor shall reimburse Lender for all taxes, as described below, together with all expenses incurred in recording, perfecting or continuing this Deed of Trust, SBEO/0001/DOC!4224 11/29/00 830 jmrn 10 including without stamps, and other Deed of Trust. limitation all taxes, fees, documentary charges for recording or registering this Taxes. The following shall constitute taxes to which this section applies: (al a specific tax upon this type of Deed of Trust or upon all or any part of the Indebtedness secured by this Deed of Trust; (bl a specific tax on Trustor which Trustor is authorized or required to deduct from payments on the Indebtedness secured by this type of Deed of Trust; (c) a tax on this type of Deed of Trust chargeable against the Lender or the holder of the Promissory Note; and (d) a specific tax on all or any portion of the Indebtedness or on payments of principal and interest made by Trustor. Subsequent Taxes. If any tax to which this section applies is enacted subsequent to the date of this Deed of Trust, this event shall have the same effect as an Event of Default (as defined below), and Lender may exercise any or all of its available remedies for an Event of Default as provided below unless Trustor either (a) pays the tax before it becomes delinquent, or (b) contests the tax as provided above in the Taxes and Liens section and deposits with Lender cash or a sufficient corporate surety bond or other security satisfactory to Lender. 3.10 SECURITY AGREEMENT; FINANCING STATEMENTS. The provisions relating to this Deed of Trust as agreement are a part of this Deed of Trust: follo'ding a security Security Agreement. This instrument shall constitute a security agreement to the extent that any of the Property consti tutes fixtures or other personal property, and Lender shall have all of the rights of a secured party under the Uniform Commercial Code as amended from time to time. Security Interest. Upon request by Lender, Trustor shall execute financing statements and take whatever other action is requested by Lender to perfect and continue Lender's security interest in the Rents and Personal Property in a manner and at a place reasonably convenient to Trustor and Lender and make it available to Lender within three (3) days after receipt of written demand from Lender. Addresses. The mailing addresses of Trustor (debtor) and Lender (secured party), from which information concerning the security interest granted by this Deed of Trust may be obtained (each as required by the Uniform Commercial Code), are as stated on the first page of this Deed of Trust. SB~O/OOOl/DOC/4224 :1:/29/00 830 jrnrn 11 3.11 FURTHER ASSURANCES; ATTORNEY-IN-FACT. The following provisions relating to further assurances and attorney-in-fact are a part of this Deed of Trust: Further Assurances. At any time, and from time to time, upon request of Lender, Trustor will make, execute and deliver, or will cause to be made, executed or delivered, to Lender or to Lender's designee, and when requested by Lender, cause to be filed, recorded, refiled, or rerecorded, as the case may be, at such times and in such offices and places as Lender may deem appropriate, any and all such mortgages, deeds of trust, security deeds, security agreements, financing statements! continuation statements, instruments of further assurance, certificates, and other documents as may, in the sole opinion of Lender, be necessary or desi~able in order to effectuate, complete, perfect, continue, or preserve (a) the obligations of Trustor under the Promissory Note, this Deed of Trust, and (b) the liens and security interests created by this Deed of Trust as first and prior liens on the Property, whether now owned or hereafter acquired by Trusto~. Unless prohibited by law or agreed to the contra~y by Lender in writing, Trusto;: shall reimburse Lender for all costs and expenses incurred in connection with the matters referred to in this paragraph. Attorney-In-Fact. I f Trustor fails to do any of the things referred to in the preceding paragraph, Lender may do so for and in the name of Trustor and at Trus~or's expense. For such purposes, Trustor hereby irrevocably appoints Lender as Trustor's attorney-in-fact for the purpose of making, executing, delivering, filing, recording, and doing all other things as may be necessary or desirable, in Lender's sole opinion, to accomplish the matters referred to lTI the preceding paragraph. 4.0 FULL PERFORMANCE AND RECONVEYANCE. If Trustor pays all the Indebtedness, including without limitation, all future advances, when due, terminates the line credit, and otherwise performs all the obligations imposed upon Trustor under the First Amended and Restated Disposition and Development Agreement, the Promissory Note and this Deed of Trust, Lender shall execute and deliver to Trustee a request for full reconveyance and shall execute and deliver to Trustor suitable statements of termination of any financing statement or. file evidencing Lender's security interest in the Rents and Personal Property. Lender may charge Trustor a reasonable reconveyance fee at the time of reconveyance. SBEO/0001/OOC/4224 1:/29/00 830 jITID 12 5.0 DEFAULT. Each of the following, at the option of Lender, shall constitute an event of default ("Event of Default") under this Deed of Trust: Default Indebtedness. Failure of Trustor to make any payment when due under the Promissory Note. Default to Other Payments. Failure of Trustor within the time required by this Deed of Trust to make any payment for taxes or insurance, or any other payment necessary to prevent filing of or to effect discharge of any lien. Compliance Default. Failure to comply with any other term, obligation, covenant or condition contained in this Deed of Trust, the Promissory Note, the First Amended and Restated Disposition and Development Agreement, or in any of the Related Documents. Breaches. Any warranty, representation or statement made or furnished to Lender by or on behacf of Trustor under this Deed of Trust, the Promissory Note, the First Amended and Restated Disposition and Development Agreement, or any of the Related Documents is, or at the time made or furnished was, false in any material respect. Insolvency. The insolvency of Trustor, appointment or a receiver for any part of Trustor's property, any assignment for the benefit or creditors, the commencement of any proceeding under any bankruptcy or insolvency laws by or against Trustor, or the dissolution or termination of Trustor r s existence as a going business (if Trustor is a business). Except to the extent prohibited by federal law or California law, the death of Trustor also shall constitute an Event of Default under this Deed of Trust. Foreclosure, etc. Commencement of foreclosure, whether by judicial proceeding, self-help, repossession or any other method, by any creditor of Trustor against any of the Property. However, this subsection shall not apply in the event or a good faith dispute by Trustor as to the validity or reasonableness of the claim which is the basis of the foreclosure, provided that Trustor gives Lender 'Ilritten notice of such claim and furnishes rese=ves or a surety bond for the claim satisfactory to Lender. Breach breach other of Other Related Documents or any Agreements. Any by Trustor under the terms of any Related Document or agreement between Trustor and Lender that is not SBEO/0001/DOC/4224 11/29/00 830 j~~ 13 remedied within any grace period provided therein (if any), including without limitation any agreement concerning any other indebtedness or other obligation of Trustor to Lender whether existing now or later. 5.1 RIGHTS AND REMEDIES ON DEFAULT. Upon the occurrence of any Event of Default and at any time thereafter, Trustee or Lender, at its option, may exercise anyone or more the following rights and remedies, in addition to any other rights or remedies provided by law: Foreclosure by Sale. Upon an Event of Default under this Deed of Trust, Beneficiary may declare the entire indebtedness secured by this Deed of Trust immediately due and payable by delivery to Trustee of written declaration of default and demand for sale and of written notice of default and of election to cause to be sold the Property, which notice Trustee shall cause to be filed for record. Beneficiary also shall deposit with Trustee this Deed of Trust, the Promissory Note, other documents requested by Trustee, and all documents evidencing expenditures secured hereby. After the lapse of such time may then be required by law following the recordation of the notice of default, and notice of sale having been given as then required by law. Trustee, without demand on Trustor, shall sell the Property at the time and place fixed by it in the 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 the Property by public announcement at such time and place of sale, and from time to time thereafter may postpone such sale by public announcement at the time filed by the preceding postponement in accordance with applicable law. Trustee shall deliver to such purchaser its deed conveying the Property so sold, but without any covenant or warranty, express or implied. The recitals in such deed of any matters or facts shall be conclusive proof of the truthfulness thereof. Any person, including Trustor, Trustee or Beneficiary may purchase at such sale. After deducting all costs, fees and expenses of Trustee and of this Trust, including cost of evidence of title in connection with sale. Trustee shall apply the proceeds of sale to payment of; all sums expended under the terms hereof, not then repaid, with accrued interest at the amount allowed by law in effect at the date hereof; all other sums then secured hereby; and the remainder, if any, to the person or persons legally entitled thereto. SBEO/0001/OOC/4224 1l/29/00 830 jrnm 14 Judicia~ Forec~osure. With respect to all or any part of the Property, Lender shall have the right in lieu of foreclosure by power of sale to foreclose by judicial foreclosure in accordance with and to the full extent provided by California law. UCC Remedies. Wi th respect to all or any part of the Property, Lender shall have the rights and remedies of a secured party under the Uniform Commercial Code, including without limitation the right to recover any deficiency in the manner and to the full extent provided by California law. Co~lect Rents. Lender shall have the right, without notice to Trustor, to take possession of and manage the Property and collect the Rents, including amounts past due and unpaid, and apply the net proceeds, over and above Lender's costs, against the indebtedness. In furtherance of this right, Lender may require any tenant or other user of the Property to make payments of rent or use fees directly to Lender. If the Rents are collected by Lender, then Trustor irrevocably designates Lender as Trustor's attorney-in-fact to endorse instruments received in payment thereof in the name of Trustor and to negotiate the same and collect the proceeds. Payments by tenants or other users to Lender in response to Lender IS demand shall satisfy the obligations for which the payments are made, whether or not any property grounds for the demand existed. Lender may exercise its r~ghts under this subparagraph either in person, by agent, or through a receiver. Appoint Receiver. Lender shall have the right to have a receiver appointed to take possession of all or any part of the Property, with the power to protect and preserve the Property, to operate the Property preceding foreclosure or sale, and to collect the Rents from the Property and apply the proceeds, over and above the cost of the receivership against the indebtedness. The receiver may serve without bond if permitted by law. Lender' s right to the appointment of a receiver shall exist whether or not the apparent value of the Property exceeds the indebtedness by a substantial amount. Employment by Lender shall not disquali:y a person from serving as a reC81ver. Tenancy at Sufferance. If Trustor remalns in possession of the Property after the Property is sold as provided above or Lender otherwise becomes entitled to possession of the Property upon default of Trustor, Trustor shall become a tenant at sufferance of Lender or the purchaser of the Property and shall, at Lender's option, either (a) pay a SBEO/0001/DOC/4224 11/29/00 830 jrnm 15 reasonable rental for the use of the Property, or (b) vacate the Property immediately upon the demand of Lender. Other Remedies. Trustee or Lender shall have any other right or remedy provided in this Deed of Trust or the Promissory Note or by law. Notice of Sale. Lender shall give Trustor reasonable notice of the time and place of any public sale of the Personal Property or of the time after which any private sale or other intended disposition of the Personal Property is to be made. Reasonable notice shall mean notice given at lease five (5) days before the time of the sale or disposition. Any sale of Personal Property may be made in conjunction with any sale of the Property. Sale of the Property. To the extent permitted by applicable law, Trustor hereby waives any and all rights to have the Property marshaled. In exercising its rights and remedies, the Trustee or Lender shall be free to sell all or any part of the Property together or s8!Jarately, in one sale or by separate sales. Lender shall be entitled to bid at any public sale on all or any portion of the Property. Waiver: Election of Remedies. A waiver by any party of a breach of a provision of this Deed of Trust shall not constitute a waiver of or prejudice the party's rights otherwise to demand strict compliance with that provision or any other provision. Election by Lender to pursue any remedy provided in this Deed of Trust, the Promissory Note, in any Related Document, or provided by law shall not exclude pursuit of any other remedy, and an election "to make expenditures or to take action to perform an obligation of Trustor under this Deed of Trust after failure of Trustor to perform shall not affect Lender's right to declare a default and to exercise any of its remedies. Attorneys' Fees; Expenses. If Lender institutes any suit or action to enforce any of the terms of this Deed of Trust, Lender shall be entitled to recover such sum as the court may adjudge reasonable as attorneys r fees at trial and on any appeal. Whether or not any court action is involved, all reasonable expenses incurred by Lender which in Lender's opinion are necessary at any time for the protection of its interest or the enforcement or its rights shall become a part of the indebtedness payable on demand and shall bear interest at the Promissory Note rate from the date of expenditure until repaid. Expenses covered by this paragraph include, without limitation, however subject to any limits under applicable SE~:/8001/DOC/4224 11/29/00 830 jmm 16 law, Lender's attorneys' fees whether or not there is a lawsuit, including attorneys' fees for bankruptcy proceedings (including efforts to modify or vacate any automatic stay or injunction), appeals and any anticipated post-judgment collection services, the cost of searching records, obtaining ti tIe reports (including foreclosure reports), surveyors' reports, appraisal fees, title insurance, and fees for the Trustee, to the extent permitted by applicable law. Trustor also will pay any court costs, in addition to all other sums provided by law. Rights of Trustee. Trustee shall have all of the rights and duties of Lender as set forth in this section. 6.0 POWERS AND OBLIGATIONS OF TRUSTEE. The following provisions relating to the powers and obligations of Trustee are part of this Deed of Trust: Powers of Trustee. In addition to a-L-L powers of Trustee arising as a matter of law, Trustee shall have the power to take the following actions with respect to the Property upon the written request of Lender and Trustor: (a) join in preparing and filing a map or plat of the Property, including the dedication of streets or other rights to the public; (b) join in granting any easement or creating any restriction on the Property; and (c) join in any subordination authorized under the Disposition and Development Agreement or other agreement affecting this Deed of Trust or the interest of Lender under this Deed of Trust. Obligations to Notify. Trustee shall not be obligated to notify any other party of a pending sale under any other trust deed or lien, or of any action or proceeding in which Trustor, Lender, or Trustee shall be a party, unless the action or proceeding is brought by Trustee. Trustee. Trustee shall meet all qualifications required for Trustee under applicable law. In addition to the rights and remedies set forth above, with respect to all or any part of the Property, the Trustee shall have the right to foreclose by notice and sale, and Lender shall have the right to foreclose by judicial foreclosure, in either case in accordance with and to the full extent provided by applicable law. Successor Trustee. Lender, at Lender's option, may from time to time appoint a successor Trustee to any Trustee appointed hereunder by an instrument executed and acknowledged by Lender and recorded in the office of the recorder of San Bernardino County, California. The instrument shall contain, in addition SBEO/0001/DCC/4224 11/29/00 830 jrom 17 to all other matters required by state law, the names of the original Lender, Trustee, and Trustor the book and page where this Deed of Trust is recorded, and the name and address of the successor trustee, and the instrument shall be executed and acknowledged by Lender or its successors in interest. The successor trustee, without conveyance of the Property, shall succeed to all the title, power, and duties conferred upon the Trustee in this Deed of Trust and by applicable law. This procedure for substitution of trustee shall govern to the exclusion of all other provisions for substitution. 7.0 NOTICES TO TRUSTOR AND OTHER PARTIES. Any notice under this Deed of Trust shall be in writing and shall be effective when actually delivered or, if mailed, shall be deemed effective when deposited in the United States mail first class, registered mail, postage prepaid, directed to the addresses shown near the beginning of this Deed of Trust. Any party may change its address for notices under this Deed of Trust by giving formal written notice to the other parties, specifying tha t the purpose of this notice is to change the party' s address. All copies of notices of foreclosure from the holder of any lien which has priority over this Deed of Trust shall be sent to Lender's address, as shown near the beginning of this Deed of Trust. For Notice purposes, Trustor agrees to keep Lender and Trustee informed at all times of Trustor's current address. Each Trustor requests that copies of any notices of default and sale be directed to Trustor's address shown near the beginning of this Deed of Trust. 8.0 STATEMENT OF OBLIGATION. Lender may collect a fee, in an mount not to exceed the statutory maximum, for furnishing the statement of obligation as provided by Section 2943 of the Civil Code of California. 9.0 [Reserved -- No Text] 10.0 ASSIGNMENT OF CONTRACTS. In addition to any other grant, transfer or assignment effectuated hereby, without in any manner limiting the generality of the grants in the conveyance and grant section hereof, Trustor shall assign to Beneficiary, as security for the indebtedness secured hereby/Trustor's interest in all agreements, contracts, leases, licenses and permi~s affecting the Property in any manner whatsoever, such assignments to be made, if so requested by Beneficiary, by instruments in form satisfactory to Beneficiary; but no such assignment shall be construed as a consent by Beneficiary to any agreement, contract license or permit so assigned, or to impose upon Beneficiary any obligations with respect thereto. SB~O/OOOl/DOC/4224 11/29/00 830 jmm 18 11.0 BOOKS AND RECORDS. Trustor shall maintain, or cause to be maintained, proper and accurate books, records and accounts reflecting all items of income and expense in connection with the operation of the Property or in connection with any services, equipment or furnishings provided in connection with the operation of the Property, whether such income or expense be realized by Trustor or by any other person or entity whatsoever excepting persons unrelated to and unaffiliated with Trustor and who leased from Trustor portions of the Property for the purposes of occupying the dame. Upon the request of Beneficiary, Trustor shall prepare and deliver to Beneficiary such financial statements regarding operation of the Property as Beneficiary may reasonably request. Beneficiary, or its designee, shall have the right from time to time during normal business hours to examine such books, records and accounts and to make copies or extracts therefrom. 12.0 MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of this Deed of Trust: Amendments. This Deed of Trus-c, together with any Related Documents, constitutes the entire understanding and agreement of the parties as to the matters set forth in this Deed of Trust. No alteration of or amendment to this Deed of Trust shall be effective unless given in writing and signed by the party or parties sought to be charged or bound by the alteration or amendment. Annual Reports. Trustor shall furnish to Lender, upon request, a certified statement of net operating income received from the Property during Trustor's at such time and in such form and detail as Lender may request pursuant to the First Amended and Restated Disposition and Development Agreement. Acceptance by Trustee. Trustee accepts this Trust when this Deed of Trust, duly executed and acknowledged, is made a public record as provided by law. Applicable Law. This Deed of Trust has been delivered to Lender and accepted by Lender in the State of California. This Deed of Trust shall be governed by and construed ~n accordance with the laws of the State of California. Caption Headings. Caption headings in this Deed of Trust are for convenience purposes only and are not to be used to interpret or define the provisions 0: this Deed of Trust. SBEO/OOOl/DOC/4224 11/29/00 830 jmm 19 Merger. There shall be no merger of the interest or estate created by this Deed of Trust with any other interest or estate in the Property at any time held by or for the benefit of Lender in any capacity, without the written consent of Lender. MUltiple Parties. All obligations of Trustor under this Deed of Trust shall be joint and several, and all references to Trustor shall mean each and every Trustor. This means that each of the persons signing below is responsible for all obligations in this Deed of Trust. Where anyone or more of the parties are corporations or partnerships, it is not necessary for Lender to inquire into the powers of any of the parties or of the officers, directors, partners, or agents acting or purporting to act on their behalf. Severability. If a court of competent jurisdiction finds any provision of this Deed of Trust to be invalid or unenforceable as to any person or circumstance, such finding shall not render that provision invalid or unenforceable as to any other persons or circumstances. If feasible, any such offending provision shall be deemed to be modified to be within the limits of enforceability or validity; however, if the offending provision cannot be so modified, it shall be stricken and all other provisions of t~is Deed of Trust in all other respects shall remain valid and enforceable. Successors and Assigns. Subject to the limitations stated in this Deed of Trust on transfer of Trustor's interest, this Deed of Trust shall be binding upon and inure to the benefit of the parties, their successors and assigns. If ownership of the Property becomes vested in a person other than Trust, Lender, without notice to Trustor, may deal with Trustor's successors with reference to this Deed of Trust and the indebtedness by way of forbearance or extension without releasing Trustor form the obligations of this Deed of Trust or liability under the Indebtedness. Time is of the Essence. Time is of the essence in the performance of this Deed of Trust. Waivers and Consents. Lender shall not be deemed to have waived any rights under this Deed of Trust (or under the Related Documents) unless such waiver is in writing and signed by Lender. No delay or omission on the part of Lender in exercising any right shall operate as a waiver of such right or any other right. A waiver by and any party of a provision of this Deed of Trust shall not constitute a waiver of or prejudice the party's right otherwise to dema~d strict SBEO/OOOl/DOC/4224 1:/29/00 830 jrnrn 20 compliance with that provJ.sJ.on or any other provision. No prior waiver by Lender, nor any course of dealing between Lender and Trustor, shall constitute a waiver of any of Lender's rights or any of Trustor's obligations as to any future transactions. Whenever consent by Lender is required in this Deed of Trust, the granting of such consent by Lender in any instance shall not constitute continuing consent to subsequent instances where such consent is required. EACII TRUSTOR ACKNOWLEDGES HAVING READ ALL TilE PROVISIONS OF TillS DEED OF TRUST, AND EACII TRUSTOR AGREES TO ITS TERMS, AND TilE TEBMS OF TilE PROMISSORY NOTE SECURED BY TillS DEED OF TRUST. TRUSTOR: Century Crowell Communities, L.P., a California limited partnership By: Managing General Partner By: General Partner [SIGNATURES MUST BE ACCOMPANIED BY NOTARY JURAT] SB~O/OOOl/DOC/4224 11/29/00 830 jrnm 21 EXHIBIT "Au Legal Description SBEO/OOOI/DOC/4224 11/29/00 830 jrnm 22 EXHIBIT \\C" AGENCY GRANT DEEDS I AND II [TO BE SUBMITTED IN A FORM MUTUALLY ACCEPTABLE TO THE AGENCY AND THE DEVELOPER BY A DATE NO LATER THAN THE END OF THE DEVELOPER'S DUE DILIGENCE PERIOD] SBEO/0001/DOC/OOl-2 11/29/00 930 jrnm Exh. IIC" - 1 Recording Requested By and After Recording Mail To: (Space above for Recorder's Use) REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNAlUlINO GRANT DEED For valuable consideration, tne receipt of which lS hereby acknowledged, the REDEVELOPMENT AG2NCY 0, THE CITY 0, SAN BERNARDINO, a public body, corporate and politic ("Grantor") hereby grants to CENTURY CROWELL COMMUNITIES, L.?, a California limited partnership ("Grantee") the real proper':y legally described in Exhibit A and by this reference incorpora=ed herein ("Property"). 1. The Property is conveyed subject to that certain ,irst Amended and Restated Disposition and Development Agreement dated as of , 2000, by and betNeen Grantor and Grantee ("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. 2. The Grantee covenants by ar.d for itself, its heirs, executors, administrators and assigns, and all persons claiming under or through them, that there shal::" be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex, age, ~arital status, national origin or ancestry in the sale, lease, s'.lblease, transfer, use, occupancy, tenure or enj oyment of the P:-operty, nor shall the Grantee or any person claiming under or tjrough it, establish or permit any such practice or practices or discrimination or segregation with reference to the selectio~, location, number, use or occupancy of tenants, lessees, subte~an~s, sublessees or vendees in or on the Property. All deeds, leases or contracts made relative to the Property shall contain the following nond~scrimination clauses: SBEO/0001/DOC/4223 11/28/00 315 jmm 1 (al In deeds: "The grantee herein covenants by and for itself, its heirs, executors, administrators and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex, age, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land herein conveyed, nor shall the grantee, or any person claiming under or through the grantee, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, locations, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees in or on the land herein conveyed. The foregoing covenants shall run with the land." (b) In leases: "The lessee herein covenants by and for itself, its heirs, executors, administrators and assigns, and all persons claiming under or through 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, age, marital status, national origin or ancestry in the leasing, subleasing, transferring, use, occupancy, tenure or enjoyment of the land herein leased, nor shall the lessee itself, or any person claiming unde:: or th::-ough it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy, of tenants, lessees, subtenants, sublessees or vendees in the land herein leased." Ie) 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, age, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land, nor shall the transferee itself, or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of SBEO/0001/DOC/4223 11/28/00 315 jmm 2 tenants, lessees, subtenants, sublessees or vendees of the land." 3. No violation or breach of the covenants, conditions, restrictions, provisions or limitations contained in this Grant Deed shall defeat or render invalid or in any way impair the lien or charge of any mortgage, deed of trust or other financing or security instrument permitted by the Agreement; provided, however, that any successor of Grantee to the Property shall be bound by such remaining covenants, conditions, restrictions, limitations and provisions, whether such successor's title was acquired by foreclosure, deed in lieu of foreclosure, trustee's sale or otherwise. 4. The covenants contained in this Grant Deed aga~ns~ discrimination shall remain in effect in perpetuity. 5. The covenants contained in this Grant Deed shall be binding for the benefit of the Grantor and its successors and assigns, and such covenants shall run in favor of the Grantor for the entire period during which such covenants shall be in full force and effect, without regard to whether the Grantor is or remains an owner of any land or interest herein to which such covenants relate. The Grantor, in the event of any breach of any such covenants, shall have the right to exercise all of the rights and remedies, 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 shall be for the benefit of and shall be enforceable only by the Grantor and its successor. S3~O/G001/DOC/4223 1:/28/00 315 jmm 3 IN WITNESS WHEREOF, the Grantor and Grantee have caused this instrument to be executed on their behalf by their respective officers thereunto duly authorized this ____ day of , 2000. Grantor: REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO [SIGNATURES TO BE ACKNOWLEDGED FOR RECORDATION] By: Chairperson By: Secretary APPROVED AS TO FORM: By: Agency Counsel The provisions of this Grant Deed are hereby approved and accepted. Century Crowell Communities, L.P., a California limited partnership By Century Homes Communities, a California corporation Date: By: John W. Pavelak President SBEO/OOOI/DOC/4223 11/23/00 315 jrnm 4 EXHIBIT "0" SCOPE OF DEVELOPMENT The Site shall be developed as follows: twenty-four (24) single family detached residential units on the Site. The Site shall be developed in accordance with this Agreement, but subject to the requirements of the subdivision map, zoning ordinance of the City and any variances or modifications therefrom as approved by the City. The Developer shall effect the design and construction with respect to the development of the Site in accordance with the Schedule of Performance (Exhibit IIEII) and this Agreement as follows: The Site will be developed with twenty-four (24) single family detached residential units and all necessary landscaping required by City laws and approvals applicable to the Site shall be installed. The development shall be first class, constructed of quality materials, to City Code, and shall be unified in architectural theme and treatment throughout the Site and adjacent off-site areas, insofar as reasonable and practicable. All improvements to be constructed by the Developer shall be constructed or installed in accordance with the technical specifications, standards and practices of the City and all governing agencies and in accordance with plans and specifications approved by the City. The Developer shall cause the proper documents to be filed and fees paid to all governmental or regulatory agencies, including utilities, for applications for all required permits and approvals. The Developer shall at its cost and expense undertake and complete any and all soils, utility and drainage studies, plans and reports that may be necessary in connection with the development of the Site and shall provide a copy of said studies and reports to the Agency. Said studies and reports shall be completed prior to the issuance of any building permits for the Site. SBEO/0001/DOC/001-2 11/29/00 930 jmm Exh. lIDI1 - 1 EXHIBIT "E" SCHEDULE OF PERFORMANCE (Days shall be calendar days, and all dates herein are subject to change due to force majeure in accordance with Section 6.05 of the Agreement) [THIS SCHEDULE OF PERFORMANCE SHALL BE COMPLETED IN A MUTUALLY ACCEPTABLE FORM BY THE PARTIES BY NO LATER THAN THE END OF THE DEVELOPER'S DUE DILIGENCE INVESTIGATIONS] Agency approval of DDA Close of Escrow Within 90 days following Agency Approval of DDA and Opening of Escrow Submittal of plans for approval weeks from approval of planning Agreement Submittal of construction documents and landscaping plans weeks from Planning approval Start of construction weeks from issuance of all permits Completion of model house weeks from start of construction Completion of Site weeks from start of construction Submittal of construction documents and landscaping plans weeks from Start of construction weeks from issuance of all permits SBEO/0001/DOC/001~2 11/29/00 930 jrnm Exh. I1EI1 - 1 EXHIBIT IIF" When Recorded, Mail to: CERTIFICATE OF COMPLETION We, Chairperson and Secretary of the Redevelopment Agency of the City of San Bernardino (the "Agency") hereby certify as follows: By its Resolution No. , 2000, the Agency has adopted and resolved as follows: approved Section 1. The improvements required to be In accordance with that certain Disposition and Agreement (the "Agreement") dated , by the Agency and a California (the "Developer") on Lot No. of Tract (the "LotH) more fully described in Exhibit "A" attached hereto and incorporated herein by this reference, have been completed in accordance with the provisions of said Agreement. constructed Development and between Section 2. This Certificate of Completion shall constitute a conclusive determination of satisfaction of the agreements and covenants contained in the Agreement with respect to the obligations of the Developer, and its successors and assigns, to construct and develop the improvements on the Lot, excluding any normal and customary tenant improvements and minor building "punch-list" items, and including any and all buildings and any and all parking, landscaping and related improvements necessary to support or which meet the requirements applicable to the building and its use and occupancy on the Lot, whether or not said improvements are on the Lot or on other property subject to the Agreement, all as described in the Agreement, and to otherwise comply with the Developer's obligations under the Agreement with respect to the Lot and the dates for the beginning and completion of construction of improvements thereon under the Agreement; provided, however, that the Agency may enforce any covenant surviving this Certificate of Completion in accordance with the terms and conditions of the Agreement and the grant deed pursuant to which the property containing the Lot was conveyed under the Agreement. Said Agreement is an official record of the Agency and SBEO/0001/DOC/001-2 11/29/00 930 jmm Exh. lIF" - 1 a copy of said Agreement may be inspected Secretary of the Redevelopment Agency of the located at 201 North ftE" Street, Suite California, during regular business hours. in the office of the City of San Bernardino 301, San Bernardino, Section 3. Completion pertains is hereto. The Lot to which this Certificate of more fully described in Exhibit "A" attached DATED AND ISSUED this day of 200 Executive Director of the Redevelopment Agency of the City of San Bernardino SBEOI0001/Doc/OOl-2 11/29/00 930 jmm Exh. IlFll - 2 EXHIBIT "G" COMMUNITY REDEVELOPMENT HOUSING AFFORDABILITY COVENANTS AND RESTRICTIONS SBEO/0001/o0C/OOl-2 11/29/00 930 jrnrn Exh. IlGll - 1 EXHIBIT "G" RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: Redevelopment Agency of the City of San Bernardino 201 North "E" Street, Suite 301 San Bernardino, California 92401 Attn: Executive Director (Space Above Line Reserved For Use By Recorder) RECORDATION OF THIS INSTRUMENT IS EXEMPT FROM ALL FEES AND TAXES REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO COMMUNITY REDEVELOPMENT HOUSING AFFORDABILITY COVENANTS AND RESTRICTIONS Dated as of 200 Arrow Vista Single Family Housing Improvement Project NORTHWEST REDEVELOPMENT PROJECT ilEDEVELOPHENT AGDCY OF = = OF SAN BEIlNA1lDJ:NO C~'l'Y ilEDEVEI.OPMEN'r BOl1SmG AFFOlilOAB:tIoI'l'Y COVENANTS Jl!lIl lllilSTlUC'rIONS (Arrow Vista Sinq~e Fami~y BOWline; Improvement Project) THIS REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO COMMUNITY REDEVELOPMEN7 HOUSING AFFORDASILITY COVENANTS AND RESTRICTIONS (the "Section 33334.3 Covenant") is made and ente:ed into as of ' 200_, by and anonq CSNTURY-CROWELL, Communities, LP, f.. California limited pa=t:1e=ship (the Detlelope=U) t t!":.e R2DEVELGPME01T Jl..Gi::NCY OF T:iE CI7Y CC' 5';'_1-1 BC:R.N;'.P.wI~jC, a bedy c8:po:ate and pcli~ic (the "Agency"), a~d (t:~_e "Qt:a.2.:.:.:..es. Ecmecllye="), a:-:c. 'C.h~s 5e-:::.:.or. 3:3j3-i. 3 Ccve::a:".c fcllow:.ng fac:.s se~ fo=:.~ i~ Reci~a:s. r-'-~-- _. -- -- - -- - -- - - c~ t::e RECI""';'__S p... T~e CU=.2.ifiec:. EC:..'2::'J.ye.: ~:~;:cses to acq'..:..:.=e a s:..::g:e fa~.:..ly reside::ce (the "New Eene") I l:=a:e~ wi:h.:.n the City of Sa~ ee::::a=di:lc ('t:::e !tel:.,:!"), f:oIT'. t:-:e :e-;e:o;:,==, ~:: ce C:i;.e:: 2:-.:: or~"~;,:,,,,,, b'l t.....;. Ql.;::ll.;;;"",.... E'""me:-""'I"""'" -" ....~.::>;.. C-~"'C;"",-l r?,s_~c:::>_-_._C~. ......""::-..1,........ .~ ,,_ .______~_ ....... ......... -- c_ l._____ . _.:..... _,:-c:...;.. ~ -- - - T~e legal desc=ip~io~ of the New Eo~e is a::a~~e~ he::::e:o 25 Ex~i~i: "A" and inccr;c::::a:ed he=ei~ by tiis re~e=e~ce. B. The ll.ge:-'.cy h ~ - useS. a::c a;:;:':"iec: certai!"_ 2.:fc::::::2.b~e hOt.:si~g deve~c~me~~ fJ~C5 frc~ tje LCN-a::c ~ccerate-I~co~e r.oL:si::; Ft.:::ds of seve=a~ different res.eve':"c;:~e::t p=c~ec: area5, i~c~~di::g t::e Scate College F.edeve~op::le;;.': Prcje~t, to IT,a:<e tte Ne:..... MCI7.e c'.railable for: cC~1...:.isi":ion t:y t:--,e Q'..:al.i:ied Homebuyer f::o;c:. t::e Developer sl.:bj ect to c::.e te:::::ns c:-.d c::r.c:.t.:.or.s of the COP....:u..:nl:y Redevelo~~errt Law fou~d at Health a::d Sa:e:y Code Section 33000, e: se=. (the "Ac:") c~d t~is Section 33334.3 Cove~a~t; a~d C, The Act rna~dates tta': the ac~uisitic~, use and oc=~~a~cy o~ tte New Ho~e shall be rest~icte~ i~ ce=:c~~ res~e~ts fer t~e te=~ as p=ovided he=ein (the "Qeali:ie~ Res~de~ce Per:icd") i~ c::de= to e~s~=e that the New Home will be used a~d cc:~~ied i~ a==c=da~ce witt the Act a~d t::.e a~~ordab:e single fa~ily 'reside~tia~ d~elli~g u~it developme~t goals a~d cbjectives cf the Agency. S2~:/a001/DGC/35a9.2 6/9/991:.30 L-nk 1 NOW, 'rlIDZFORE, IN CONSIDEllMION OF 'rlIliI M!l'rUAL COVENANTS AND 1lNIlERnlaNGS SJiI':r FO~ IIEllEIN, llNIl FOR O'rlllil1l. GOOD AND VALlJ'l"T'" CONSID~ION, -:ru RECEIFr AND ::iu.uCIDCY OF nICR IS lIEllEllY ACXNo1iLEDGED, -:ru QUALIFIED 1l00000UYER, 'rlIliI DEVELOPER AND -:ru AGENCY 00 IlE1lEBY coVENAN'l' AND AG1lEE FOR rm:MSELVES, -:ruIR SUCCESSORS AND ASSIGNS AS FOLLOWS: Section 1. Definitions of Certain Te=ns. ll.s usee. in t~.:.s Section 33334.3 Cove~a~tl t~e following wares and terms sta:l ha72 the meaning as prov~cec in the Recitals 0= in this Sectic~ 1 unless t:;.e spec:.:1.c contex: of usage of a particular word or te=~ rr.ay o~he=Nise reqcire: res.:...c.:.::g T:: 22. 5 '-..:.= '/ ea.:::". i::::::i7':'C''':'=.':'' i:"'. ;::1-2 Ne...; Rs:;'..:':a.:'':'8:: T~e wc=~s "A~~~s:ed Fa=i:y :::==~e/ a~n~a.l l::c=~e (a::::~~sted fe:: fa.~.:.:y cr :[2.:::':"':"1 =es.:...c:..:...:"',~ c.: ::.:::.:.:.:. as Adjusted Family Income. mea::. t::e 52-Ze) c:: a:::ici~a:.ed t8ta.l EC~.e 2.3 1.1-5' (:.:, cal::'..:':"=. :2:: ~~, !-:' , - 2:::::::::::2.:"'.::2 '...;:... ::. '...::"'.:.e:: ....:...- l....'= c::-::.s, ac.~us:ed, hCL:.se:-.c:= . . ::2.~2:: u-'-,!"' ~2.=:-..:...=. "; 5':"':2 ---~-~--~- - -- ~-~---_.._- '..;:... =.-. time tc HCL:S 1.:",,<; i~~=~2 a=jL:s:~2~: :~~::=S 2.=~~S:2= C~C c~=~=== ---- t':"::-,2, C''':'=S:''':'2.:'.= 'C..:: ::2::::.:...(;.:-. 2 c: t:-.2 (:'..:..:2:: 5:2.:-25 PO.C: C: 1~37 as 2::-,2:-.:2'::' . Affordable Housing Cost. T~e wc=is "A~:~=da~:e EC~5.:..~q C:5:" sha:l have t~e ~ea~.:..ng as s:- =c=:~ i~ ~ea::j a~= Sa~2:'; C:::e Sectio~ 50052.5. I~ t~e case of a Mcce=c:e I~co~e Eo~se~::i, t~e A::or::'c=:e Ec~si~; C:5: a: t~e ~.:..~e 0: ~~e c::se 0: :~e N-" t:,....._:;=. E<:::'-"-Cl"; 0:::.....,::11 r:~- C;:. 1<;'0:::<:: t-"-,::- .....c--./ E~""'''''- -::::;-,.-,;:,-- ,=,'01 r1_l.._ _'-- -..--- .'-- - --- ------ \..,~~---~ --::..- :-------- (29%) of t:--:= g=css ir'.C::r:-.2 c: t:-:e hcus2:--.cl::., no:- ex:::ee::. c:'.e p=cc.t.:c: of t~......i=::/-f':"'ie pe=:e:,.: (3:~:; :':"':c'as Or'.2 r.'...::-.:::.::e::. --.. perce~: (l~Q~) of a:-ea medic~ i~cc~e fo: t~e ci:y asj~s:e::. --- fa:::ily size as a;:::::o;:=.:..a:e !"J:: t:......e ~je.,; ECr..2. I:". ::'.2 e',"e:-.: t~at eithe:- t~e Cualif.:..e::. EC8e=~ye= a~ t~e ti~e c~ tie c~:se of t~e New Ec~e ~5~=CW, cr l~:e= t~~: a F:o;:cses S~CC:55~:-:~- Interest. may be a "ve=y 1::',." inca!..e house:-.cld" 0= 2. "lc.....e= ~ncome house~ol~", as these ter~s are defined i~ Ee~:t~ a~~ Safety Code Sec~icn 50053.5{b), the~ i~ s~c~ e/e~: t~e a~c~~: of the maxi~urn A~~ordab:e E"Jusing Cas: pay~~le ty a~j s~=h Successor-In-Inte::est hc~sehold in c8nnec~icn W~~~ t~e acquisition of the New Heme a: any ti~e d~:ing the C~al.:..:.:..e~ Reside~ce Period s~a11 ce calcula:e~ as se~ fc::~ i~ Eea::h ar,c Safety Coce 50053.5(b) (l) c:- (2), as a;:~:ica=le. Code. 1986, with The '.....are "Code" mea::s the In.ternal Ke'ie:"'.:..:.e Ceee c: as asen.dec, and a::j re;~:a:ion, =:..:.li::05 or c=cce~~:e5 res~ec:-:. therata. S=~Q;OOO:/DCC/35G9.2 6/9/9? l::'J 0 l::rl.~< 2 De~ive:y Date. The words "Delive"y Date" mean the date of delivery of title and possession of the New Home from the Developer to the Qualified Homebuye" at the close of the New Heme Escrow. Moderate-Income Household. The words "Moderate-Income Household" mean pe~sons and families whose income does not exceed one hundred and t'.-ie!'1ty percent (120%) of the area median income of the City adjusted for family size by the State Depar"::ner'l.t of Housing and Community Development in accordance with adjustment f~c':.o!'s adopted a:",,~d ame:1ded f=om t:me to time by the Uni':.ed States De?a~tment c: Housing and U==an Develcp~e~t pursua;.t to Section 8 of t~e United Sta:es Housing Act c: 1937, and Eeal:j a~d Sa:e:y CGce Section 50C93. New Home. T:-,e W~...,...j<:: .~ -....- "Ne...... ::::-:-.e" ITa?:--. 2:"".:: =2 :8= -~ -~ ;::......e c=~;leted a====~a~:e si;.;:e-:=.=i:! =eside~:~a: dwe:~i~; ~~~: ccr.s:.r'J.~t.ec: a.:-.ci i~s:a2.l2=' 1::.; ;::"'.e ~e.:e_c=e= 2.:-.::: 50_:=' t:: c::e (.:..::cluc.:..:-,g -C:-.2 I':>~"" --..--' a::c la::~~:a~e .:..~~=cve~e:::.s t::e=ec:"".) Qua:ifies Ec~ej~je.:. New Home Esc=ow. 'I':-te '/'Ie'::'5 "~'ie"..i E-:::-"e EsC=C,....." IT'.2a:-. 2:-'"'::!. ::'2:2': to tne rea_ as:2.:'2 ccr3eya:-.ce t.:a:-.5a:::'~Qr" c= ese.::;::....- by a::::: ::2':.....-2e::. t::.e C2"ie:::;:e.: 2.:;:'::' t::e Q!..:a:..:.:.:..ed ~~:::-.e::::'...::.!e.: (0':: 1=':-2:=, by a~c bet.N2e:: t::e Qua:.:..:.:..e~ Ec~e=~:.;e= a::d t:-t2 S~~ces:sc=-:::- In:e.:es:). T~e t..:a::s:e.: c: :::e Ne~ ~::n2 ~.:o~ t~e Oe72:0;:2': to t:-,2 Q1....:a:ifie::. E.::::-a:::...:.ye.: (0': ..:.a: 2.: , 'cy a:".c 'ce:"N"ee:-. '---~ Qua:ifiec Ec~e~'...:je= a::d t::e 5"::::255:.:-:::.-::::e=25:.i a:::cm;:lis~e::. u;:c:: t~e clcse 0: t::e ~eN Ecns Esc.:cw. 5:.....a2.: be Notice of Agency Concur=ence. T:--ie wc::::is "l-jo~ice cf p..,;e::c":j Ccr.c'Jr.:e:-.ee" r.,ea:-, c..'_ r:::.-:::.- tJ t:-,e ack::c'N'ledg::-~e::. ~ l:-" re~ordajle fo=~ i::. w~ic:-: t::e A;e:;cy ccn=i=~s t~2~ t::e p.:c;:csec: Suecessor-I~-Inte::est of c::e Qua:.:..:.:..ed Ec~e=~ye= 5a~is=ies a~l of the Acjus:ec F2~~ly 1~co~e a~d c~he= req~ire~e~ts of t~i5 Sectio~ 3333~.3 Cove::.ant fa: cC:~;c~2Y of the N2~ Heme by t~e Sue~esso.:-I~-I~teres~ Residence Perioc. a:. c:."; '-~.,,~ c:...:ri:-"c the Q".:>l i ::,.:=0,.... --------' Qualified Homebuye=. The wc.:,;:::s "CL:a:ified f.cr..e=~yer" rr.e=.:"". '-.~'= pu:chase.: of t:.....e Ne'N" Ec::::,e f:::':'", t.-.e CeveloE=e:: (e.g.: 2.:1 pe:sons ide:-,.:.if.l.ed as ha'li~g c p.:c;:e::.y olN'ne.:shi? inte:2S::' ves'Cec. in the Ne',,j Herr.e 2.5 c: tr,e close of t~e Ne"N" E.:::-.e [serc',.i). F-.': t!".2 close c: t.::e ~2',~" Ecrr.e [ser::'N", t~.e Qc.alif.:..e::: Eor..ebuye= s:-.all: (i) h2.~le c:". .=.:::-.'..:a':' /l.G. t.:s:.es Farr.ily 1:-,::::::e w:--.ich does r.ot exceed t=---e r.cL:se:.....cld nCC!7.E q:..:a:i:ie.=.:.i.::-, S3~:;80C~/CCC/J=09"2 6/9/';9 1130 lmk. 3 limits of a Moderate-Income Household: (ii) shall be a first- time homebuyer, as this term is defined in Health and Safety Code Section 50068.5; and (Hi)pay no more than an Affordable Housing Cost for the New Heme pursuant te the te=s of the purchase transaction for the New Home, including all sums payable by the Qualified Hemebuye:: fer its purchase money mortgage financing I insurance, escrow and other fees and costs. Qua~~f:ied Res:idence Period. The words "Qualifie-i Residence Pe=iod" mean the period of time beginning on the DeliTls=y Date and enc!.i.ng 0:'. the date wr...:.c:;. is ten (lO) yea..=s a::.e= t::.e De2..i.'le::y Date. Section 33334.3 Covenant. L-:e ',oic:::.s "5e:::..:..:=:: 33J3~.3 Cove~a~:." ~ea~ these Rede7e~c;~e~: A;e~cy oE the Ci.:.y cE Sa~ Ee=:,:a:=~no C8~~~~i:y Re~eve:8c~e~: Eoesi~g A=:c=::.a=i~i:j r:.cmecu:/e:: , t^.e Deve:c;e: a~d t~e A=e~C.l .....~~-_._._- '-'~- ~--,-_._..,-, . - r..;:;." c ~; 0"'; ...:.-------- 'Co :::2 US",; CC'le~a:'::s a~C Re3':=ic:io~5 ~j 2~d a~c~; t~a Successor-In-Interes't. T:-:e wc:::::s ".s..:~::es5c::-:::'"'.-::'"'.:2-:"~.s:" mea:-. a~c re~2-:" to the ~2-:"sc~, f2=~:Y 0:: t:~.se:-:old w:-:~c:-: xa"; a2q~~:"e t~e NeN Ec~e f:"o~ t~e CU2:::~e~ Ec~e~~ye= a:. a~y ~~~e c~=i~~ -~- G:":2.1':":':"2= ?,e5~c.e:;2e ?e.::..:c: :;-; ;:"::":::-.2.52, 2..35':';:-.::'2:-::, t':2~5:2:" 0:: cthe:"N:se. T~e S~c::essc:-:~-:::;:e::2S:' s:-:a:~ be a "fi::s:-ti~e hcme~~ye=" 2:-:d s~2:1 h272 a~ i~CCffi2 level fc:: the t~e:ve (12) mcn::-:s ~::io= to tje ca:e C~ w:-:ich t:-:e S:":::::25S0:- I~-Inte=es: 2cq~.:..::es the New E:~e w:-:.:..:::-: ce2s no: ex::eec the t-!ece::2 ":e- ::::-:::::;:-,e rn2x~m~n Adjus:.ed Fa=.:..ly I~coce 1e7e: fo.: a Household. Cpc~ a=q~.:..s.:..t~cn 0: the New Hes2 the S~c::ess::.:- I:-:.-!n:.e::est shall ce cou::.d b'l e2:::-. c~ t:-,e c::',,'e~2.:-.:s, c:nditior.s a:-:c rest::ic:icns 0: tjis Section 33334.3 Ccve::.a:-::. The titles a::d headings of the sec:iorls of t:-,.:..s S2:::.io:: 33334.3 (avena:'.c have bee::. inse:::ed fo: cO::7en:ence 0: re~e=e~ce cn:y and a::e net to be c8~s~de=eG a pa=: he:eo: a~c s~2~1 r.G~ i~ a,.j 'o/'ia'/ mcdi:y 0= r2st=ic~ t:-.e rr,ea::.:.:'"'.'; a::j 0: t::.e 'C.e:::-:"',s c': p:=ovisions he::es:. Section 2. Acknowlec.cments and Renresentations 0:: the Oualified Homebuver. The Qua~ifieG hc~e~~ye:: he.::-e=v a=k~2~:e~;e5 2:'.G re~=ese:'.ts t~at, as 0: the Delive.:y Oa:e: (a) the total hcuse:-.old i::c:::r..e f:::.: t:-.e Qua~if:ec. E2!:"~e::;;ye= cees not. exc:eed t~e max:.::n..:.::: ancur:: pe=::-::t:ed as Jl..djus:.e'::. Fa::-..:..':':! !~come for a Mode::ate-:~come House~o~d, ad~usted I'~~ !a=~_y si:e; S2~C/COO~/DOC/3S09"2 6/9/9? ::3C 1:::.:':: 4 (b) the Qualified Homebuyer intends to promptly occupy the New Home after the Delivery Date as the principal place of residence for a term of at least two (2) years following the Delivery Date and the Qualified Homebuyer has not entered into any arrangement and has no present intention to rent, sell, transfe= or assign the New Home to any third party during the Qualified Residence Period so as to frustrate the purpose of this Section 33334.3 Covenant; (c) the Qualified Homebuye~ has no present intention to lease or rent any room or sublet or rent a por":.ion of the Ne',.; Heme to any relative of the Qualified Hornebuye: or to any third pe=scn a":. a~y time during the Qualified Reside~ce Perioe; (d) the sum paja::le eac:,. rr:s,.::t by ":.:;'9 Q1.;a2..i.f.:..e.::. ::c:7:e:::...:.::-e:- f:)llo'..;ing the close c: the Ne'.~. ::cne Esc=~:,..r as ;::::::::.:.;2._ a:-.:: i~:e=est, property taxes a::c, p:c;e:=y cas:...:.a.::y i::s:...:.=a~ce f:: t~e acs~isition o~ the New Hc~e dces nc: ex=ee~ t~e A~~c=da.::::e Hc:...:.s.:..::= Cost for t~e house~c~~; (e) t~e Qua:i=ie~ Ec~ebuye= a;=ee~ c: ~==/~=e t~e Aqe~cj w~=~ t::e follo',.;i.r:g i:e::-.s c: i:--,:o=::-,e.:.:.::-. IG':- ::-.'s"::e'.::.:.c:--. l:J t::,= AgeC:2:! ~=c~ptly upon wri~~e,- re~~es: 0: :je Aqer:cj: Ii) 50aoe and federa: inee::-.a tax re:'~::ns file", C! Ch pe=sccs '....hc =25':'::'2 i:-. t:'.e Ne....... Ec::-,e fa.:- '-u_ ca~e~G2= yea= p=e~ed:r:q t::e c~ose c: t:::e Ne~ E~~e Es:.=cw for i~s=ec:ior: c: s~cj S:2~e cc:i fe=e=a: i~come tax re~~=~s; (iij c~::rcno '"ase, lC.COGe ac.::: sal;;.r! 5:aoe",e:-::5 _~_ al~ pe=son res:.=:.r:g ir: the NeN Eone a~ t~e c~ose 0: the New HOffie ~s~=cw; (f) The Qualified Hcme;:llj"e= has ceer: i:l=o=::-.e':::. cy t:~_e Developer that this Section 3~334.3 Ccve,-ant i~Foses certain restrictions on t~e use a~d occ~;ar:cy c: t~e New ECwe c~=i~g t::e te=~ of this Section 3333~.4 Cover:ar:: ar:d t:::a~ this Sec:i.c~ 3333~.3 Covenant imposes ce=tain restric~io~s O~ the resale c: the NeN Ec~e c'.1.ring the Qualified Res~dence Pe:ioc. The Qualified Eome=~....:.~.e= a::k::,o'Nledges and ur'.de=s~ands tr-.a: these res~=ic'Cicr:s s::all ::'2 applicable to the New Eeme a::.d to a~'/ resa:e o~ t~e New Earne f=~c the Delive=y Date to the end c: the Q\.la':"i~ied Res:..de:""..ce Pe=.i,~c which is 201 Dated: I:1icials 0: Qcal.ified Eo~ec~ye= S3~G/0001/DaC/3509.2 6/?ng llJQ lmk : Section 3. covenan1: of t:he Onal.ified Hcmebq.ver 1:.0 Ma.:inu.in Affor"",s}o,,il.:it:v of ~. New gl"mt_ Durina' the Oua1.:ified itms.i.denee P.ri.od and Covenan't Rel.at.i.na 'to Sa1e or 'l'ran.sfar of ~. New Home Durina th. Ouali.fi.Ad R.!I.:id.nc:e Period to a Suc:cl!!!!l3or-In-Intsre!lt. (a) The Qualified Homebuyer for itself, its heirs, successors and assigns, hereby covenants and agrees that during .the te=:n of the Qualified Residence Period the New Home shall be used and, occupied by the Qualified Homebuyer as its principal reside~ce, and that the New Herne shall be reserved for sale, use a~d occu~ancy by the Qualified Homebuyer and/or for another Mcdera~e-rnc8me Household as a Successor-!rr-:nteres: a~ a~ A::orda=le Eo~s~~~ Cos:. T:-:.e Qualified Eomecuyer, for itse1:, i:s n8':"=5, S:..:CC853C=S anc. assigns, fu=~ier covenan:s anc agrees t~a:, d:..:ri::~ t~e C~a:i:ied Resic:.e:-:.ce Peri::c, t:-.8 ;',';e':.c:! s:--,al:' 1"12.';8 t.;;e r:-;=-,.:' a:"'.::' c.'...::',; as ~=c~~de~ in t~is Se~:.ici- 3 to ver::j t~2.: eac~ =~-=~te=~s~ 0: t~~ Q~~~i:ied Ec~e~~je= i~ t~e tie incc~e =e~uire~e~ts and A::crja~:e E:~5:~; ____r~:- - .~-:==--- ~-~~~-~- -------~- :-';2'.., E:::-.2 ~"'-' ~-'':='= --------- C:c.s: ..' . - .:...:.:-:-..:. ::=.:':=:"'.5 C: a Mcdera~e-:~=::~e ~cuse~c:d (~ased ~;:n :~e Ad:~s:ed Fa=i:! :n::~e c: Q;:~'~ ---.. hCL:.se~~.o:"C) , 0: t.-:e Ne'",- a::::. t~a: trans:e= r:8:":',2 "~ c_ t.~.e cc~;_e:.:..c,. c: c..:"'.'.J a S:..:::es~:=-::::"'.-:::':.:2=e~: _.:.c:.:: :=. ------ "~ s~~jsc: to t~e re~:rda:i:n c: t~e "Nc::ce of Aqe~cy Cc::=~==e~ce" as ~rc~iGed i:: Se=tic~ J(d; (:0:1 T~e Qua:ified Ec~essyer, i:S2::, l:S successors 2.~C ..'~ - L..,,:;: agrees t:~.2.: c.'..:.::::-.g t.~~e te-=:7. c: \:::e Qualified ~:se~L:.jer s~a:: ~c:' S2::, 0: t:-.2 Ne','l ECS2 (or a:"'.'/ .:..::.:.e=2s: ass:g~s, he::~=y c::~e::.an:.s Qua:i::.ed Resice::.ce Pericd ~~."" c...~ tr2.::s:e= or c:~e=~is2 t:~.e=2i::.) to a r.G::ice t:: t=-.e cis::cse S~cc~ssc=-:::-::::e=es: ~i:~:L:.: 1"" ,...~- --- - - ci 'J:':"'.C' - - '.-ir: : :2:"'. c::~~C'.1rr2:"'.ce cf ;'.;2':.C,:/ a:"'.c w'::hc.:: 1"" ....=- o::::.ai::i:"'ig' t.-:e ''';=':''::2':. t::'2 p.,c;e:"'.c"j 2.5 ;:=c'lide-::. r.erei:1. .:..":. l-::as: s.i:.<':.y. (E:=') da'fS crier te the da':.e C~ ~~ic~ the Q~a~i:ied Hc~et~'fe= c~=ccse5 t: ~ .. .. - - tr2..::.s:er ti-:J..e i:"'~ the Ne'tl Eerne to 2. S;..:.c::essor-I,:~-I:1tere5:', t::.e Q~alified Homebuye= sha~l se~c a writ::'2~ notice to t.he A;e~cy 2.5 provided in Section 17 0: tr.e inte~:ion of t~e Qua:ified E8Lec~ye:: t.a sell the Ne~ Ec~e to a S~ccesso=-:::.-I~::.e=es~ w::.ic~ i~cl~de5 t~e ~ .. . . ~ ' ~G~~o~~ng t=~e anc corre::: ~~:or~2.::c~: (incl'.lc.inc hOL:ss["-,cld 0: to reside i:1 t::'e t:-1e p=~;:C5e'::. ide.::.:i::! S~ccessc=-~~-In:eres: (~) n2.::le of t::-te 0: all ~er5::::5 l:': "-- L..__::::: S~:ces5cr-=~-:n:'eres~, r:-::::os:.,:.;:: ,.. - - the Ne"..; nc::"e) ; (~~I cop:es 0: State a~~ federal i:1cc~e for the Successcr-ir,-:.::.:eres: fer t2.:< r"e::..:::':.s VQ.~"" prec:edi:1g the v~-- in w:-:ic:--' t.-.c t:-,e C2_e:-.::'2= r.o:ice c: S=~8/C001/CCC/3=09.2 6/9/9:: EJC lr:t:< 6 intention to sell the New Home is given to the Agency; (iii) resale price of the Ne'. Home payable by the Successor-In-Inte~est, 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 a~d all other resale costs or charges payable by either the Qualified Homebuyer or the Successor-In-!nte::est; (i'7) na~e address, a~d tele~horre n~rr~e= 0: the escrow CCm~~~Y whic~ s~~~l c:c==i~a:e the t=a~s:~= 0: t~e NE~ Ec~e f:8w che ~ealified Ec~ec~ye= tc ~je S~sceS5c=-:~-:~:e=es:; (7) a;::=8;::ia':e ~.:::.::;=':;e crad.:.: =e:e::8:",.-::8 ~.~~ ~'-- S~ccessc=-:~-:~:e=es: wi ::-. a '.,,;::::,, ::8:"'. c...:::-,c:i:2.:icr. 5:':;:-.5:: =:/ t:-:e 5:"':C:::835:::=-::--,-::-,:'8:85': o5....1..:.:-.c::.:.:..:-,<; i::. -""- ,..., ._-;:: ---'-.1 t~ co;,,:: 2.:: c s:..::::: ::e:8:8=".C8; 2..:"'.:: (vi) s:..:.c:-. c:.he: re'::"e'tii:'.: reiisc::ab'::"y .,.-c:=..-",:::",,- ---::;----, i:::::~a:~c~ as t~s Age~cj ~aj as ~:~v~ded i~ Se~:ion 3 :c: . (0) W~~h~n tNe::~j (20) d~!3 f:'::"lc~:~g res2~~: 0: the notice of i~~e~tio~ desc:iced i~ Sec::c:: 3;b) I t~e Agency Sh2'::"~ F::,:ce t~e Qualified H082cuye: w~~h ei:~e: a ~:e'::"iilli::a:y conf~r~a:io~ of a~~roval or a pre'::"i~i::=:y reje~:i::: of a~9rcva'::" i:: w:ici::q of tje inco~e a::d househclc ccc~~a::cy ~~a::fica:ic::s of t~e Successcr-:::- In~erest. The Age::cy s~all not u:::eascnacly w~:~~old a~pro'ta'::" of any proposed sa'::"e of t~e New Esse to a Successc=-In-Interes~ w~c sa:is:ies t~e Adj us:ed Family Inc::r.-.e a:'.d t~e ll.f:ordab'::"e EOL.:sing Cost requirements for occupancy 0: t~e New home a::d for w~cm t~e o~he= infor~a~ior. as describec i~ Sec~ic:: 3(b) hcs been provided to t~e Age::cy. In the e7e::t that t~e A;e::cy may req~est additic~a~ i~fo=maticn relati~g to the cs~:i=~a:io~ 0: t~e llict~e=s desc:i6ei 1.:'. Section 3 (b), the Qt.:alif.:..e-:: Ecmect.lye= s::a.:l previde 5:'::::: i~fo:mation to the Age~cy as F=am~tly as fe~s~~~e. (d) r.;f:o~ its fi::a'::" confi::7ta'::.c:: 0: a::~=;J'"'2::' 0: t:--,e 1l.djL1s:e.::. Fa:n:ly Income a:-,c. ll_::o=:ia~:e ECl.ls~:ig Cas: eligibi1i:y 0: t:-J.e S:..:.ccessor-In-Inte=est to acq:..:i:e the Ne'...; Eorr.e, the Age::c,! s:--.2:1 celive= a w=itte:: ack::c~ledgme::: a~d ap~=oval 0: the resale of t~e Ne"i Home to the Successc:-In-Inte:est i:: reco:c,a'::l.e fC::::-L t:J c::e escro'.... hclde.= re:e=e:-,cec i::. Sec':ior: 3 (b) (iv) a::cT,Ie, ar:d t:--:e:ea::e: S=~~/OC01/DOC/35C9.2 6/9/93 12.30 lmk 7 the Successor-In-Interest may acquire the New Home subject to the satisfaction of the following conditions: (i) the recordation of the Notice of Agency Concu==ence execut.ed. by the Successor-In-Interest a:1d the Agency at the close of the resale escrow; (ii) the escrow holde: shall ha7e prav~ded the Agency with a copy of the c'..:.s:cmary for~ of t~e final escrow closing stat.:!!l.ent or t:,.e Qt.:alified Hcrneb~ye= a~d the fina: escrow clcsi~q s~~=e~ent for t~e Suc~essc=-In-:~:e=es:; a~d (;;; , ____I t::.e c~he= c:::::::::'::'0;.5 of the resa..:...2 e5==::','; as E:::::-.e=l.:.:/s:: a::::' e5:a=:i5~e~ cy the C~a:ified s~c:::essc=-:::-::::2=es: <:'-,: , -..--- ha72 tee:: 52::'5::'2d. (e;' T::e Qua':"i:ie-:. E:::::-,e'::''':':/2: .=~- :":52'..:, 1.:'5 2.55:'-:;:--.5 he::e::'1 C:::: '__2::2.:""_:' 5 a:-.:: c;:ees -..-- c'..:.=i:",q ~eside::::::e Period tje ~e~ ~c~e 5~a__ ~=: t~ ~:~::j, 5:...:.:::::-:=::55=:-= ;:-- l...:':;: C'C~~:'::'~::: 5:"':':: :"e.::.-=e:::, e- r3~:e~ t: anv tj~r~ person, exce~: ~=: a :e=~c:a:y ....=._..~rl ~~----'- \..'-- ~= e:c:ee= 12 mcr:::J.S) :.n t:-.':: 6're:-.: c: a:-. e::-.~:;;e:-.::::/ c: c:h.::: t.::-.:':::5ee~ c:.:=~~s:a::ce a5 may te exp:es-=:y a;;=c7e~:.n w::.::.n; by t~e A=enc'; s~~~e:::: to cc~pl~a::c.:: c~::.n~ t~e te=pc=~:j ren:a: pe::.:::s ~:.:~ t~e =:nc~:::::n5 req~:.:e~ ::j t~e reascnaj~e te~=o=a=y ren~a: c::::::~;ancy A"'o"'~'1 m",_ Q,~.:=.l;;~ 0"'; ;.:~~oi--,n/;::;- ~:".=11 '';:_''''-.' ;..l'::: '-'_..:.._____ ..-...-~-. -- ~.._-- t~e A;ency p:ier t: t~e ccrr~en=e~en: cf p:2::::ica:::e, 'cut ;... 2:-.'/ e'le=:: 'I'i:':.-..:..r: 5~t=:.: a w::.::.::n re~~e5: t: :ne te~;c:a:j cc:::~~an:::j, as :-.::: mere -'- -..... '---~.' (;:: Ca.'i5 fe:"2.cT"'':':1g the Ne....; Ec:::e by a corr~ence~ent 0: a :":::,,:,,C2 .=:-.2__ 52: f:::::.:-. :~-.e ,:;:::....::->'::'5 te:::;:c=a:~./ re:-.::'=.: c::::::upa:-.c:/ ,- - - -- '-' - ~..-:;: .. . . . , L:1~::~ ~a::y, wn~cn r.:::"e::'..:.~"e: ::22.:2:':-2:5 -=:. 6::-.2::;-:=:::-'::::';' c:: has ccc'..:.::ei an~ L~=': a te~9c=a=y c::::'e: en wj:.c~ t~2 Q~a:~fi2~ ~~:ores2~~ ci=CU~3:a~ce -:=,--;:: __u___ cc=~pa~cy in nece5sa::y. Section 4. Maintenance Cone':' tic:! of the New Home. i:s S~==~5SC:S a~d ass~g~s, The c:';e:"'.a:-,:5 Homecuye:, fo:: itse~:, a~c a;:ee5 t:::'a~: [".e:e:::1/ Q ,'-' , 'ua~l.:l.ec (a) The exterio= areas of tte Ne~ ~:~e wn~c~ a::2 s~~~e== to p:..:::2..ic v:e'''' (e.g.: all i::-,p:ove::-a:"'.::s, ;::a'.':.::g, walk'",a.:''''-5, la:-.c.5.:a;.:..::.q, a.::.c. c:~a:r'.e~tatior.) sha2.1 be ITle.:.::.:a.:..:"'.ec. i::. geed r2;:2.':': a:"".c a r.eat, cI2=.::' a:;d orderly cond:.tior., c=~:.~a:y ~ea: a::.d tea: ex:::e;::e~. In the e'lent that at a:-.y tl.::'.e c~=':':1C t:-.e te:::7l cf t::e C.'...:.a:ifie::. Reside;.ce Period, there is an cccu::e::ce of 2:1 2c~e=se co~::.:.:ic:: c:: a:-.y a:2::. of the Ne'....... Eone w':--.':":::-: is 5....:::=e::: t:: cub2..ic ,,-,:;:," .l.:". cc::::raventicn of the ge~e:a2.. ~a':":1t2na::.=e s:an::.a:~ cesc=:.~e~ a~c~e, (a "~Jaintena:1ce De:icie:-.cy") t:....e:-. t.~.e t-.';e;;.c"j 5:-:'2.':"1 r.c::.:..:":! the S=~:!GCC:!CCC/3SQ?2 6/9/::: ::":30 l:;tk 8 Qualified Homebuyer in writing of the Maintenance Deficiency and give the Qualified Homebuyer thirty (30) 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 d-"elling residential property use restrictions: failure to prope::ly maintain the windows 1 s'tructural ele!Uents I and. painted ex:e:rio!:' surface areas of the d'N'elling unit i:1 a clean and presentable manner; failu::e to keep the f::c....t. a::.c sice ya::::i areas of t~e p:rc;:e=ty f-~;::. 0: aC:::':':T.ula.:~c c.el::::is, a;:;:..:..:.a:-.ces I inc;:erable ~c~c= ve~~c~e5 cr ffic:cr ve~icle pa=~s, or free of s:c:::a;e 0: l~~e=, t:.:.i~~i~S =a:e=ia~s or e~~i;:~e~: ~C: rec~la=lv i~ use on tje p:o.ce::v; - - - fai::"u:::e tc re.;:...:la.::2..y IT:::"," 1 a ','C. a:eas 0:: ce::::t..:.. -: c.:a5S2S pla:-.t.e-j :"':". _12:....:--. a::eas .:-~ ~:c;eec r',.:.:-"e :...:'.::::"'.23 .( 9") .l.:"'~ t6~;~~, c: I~~l~=~ to o:~e:~:s~ m~:~~a~~ ~~6 ~~~~3:a;:~; in c r2asc~~~~6 ca~c~~~:~ f:e~ of ws= a~= C6S:~S; pa:::-:{~::g c: c...:"'.'j cor.r.le:::::~_ r.::::.::: V6;-_.2...C..;..'2- l~ e:-:='2-55 c: 7,Oi]C pcr..:..:"'.=s g:GS5 '''''e~';:-_: a:-:.!....i:~_e=e 0.:"'; t:-.'2- p=G!=e=~y, 0:: the pa=~~.:"'::; c: mo~o: v7;:-.ic~es, bca.:s, ca.::-.;::e:: s:"'.e~2.s, tra.~16::s, rec=ea:io~a~ ve~~cle3 a:-:.c t~e l~ke in a~y sij'2- ya::d c:: C~ a.~'j ot~e: ~a.:~3 of :~e ?=c;e::tj w~i=~ cove=e~ by a patied a:-:.c ~~~e:~ea=:e su:::ace; --- ~~- c;_ '= :._ '_ the 1..:<:';: 0: t:--.e ga.:age c;_~:=. 0: t::.'2- ci-Ne_..!..l~g 1..::-.i: rG: p~=~oses c~te:: tja:: t~e pa:~::-:.g of mc:cr vetic165 a:-:.d t:-:.e s:c::age cf pe::scna~ PCSS65S:C:-:'S a~d mec~a~ica2. e~~ipme:-:': of Fe::sc:-:.s residing i~ t~e Ne~ Ecme. In the e~ent t~e Qua~ified Ecce~~ye: fai~s to C~=e or C8~~e~ce ta C'.lre the ~2.l:1te:"';C.:'1ce De:icie:1c::' W:::-_:r'~ t:--,e ti:7i.E allo',.;ee, t::.e F-.gency. may :he=~a=te:: ....c.ondu~t a _ I=...::C~ic hea::i::g fol~o,....'i::;; tra~sm~~~al 0: W':ltte~ nc~~ce t~e=~~: t: t~e Q~a~ified E~ffiec~ye:: te~ (10) days prior to the schedu~e~ date 0: s~c~ pub~ic he~::i~g i~ c~je= to verify whet~e:: a Mai~~e~a~c~ Def:c:e~cy ex~st3 a~c w~et~e= t~e Qualified Ecme=uye: has fa:1e~ to c~~~:y wi~~ t~e p=cv~s:o~ cf t~is Section 4 (a) _ If, upon the cor.cl1..:.s.:..cn c: a pl.:blic he.:::.:::.:-.;, ....~a Age"c m-'{~s a fi~~;-- tha" a ~-;~~---~r- DQ~;ri;:-rv e";s-s a~~ 1.._._ ;. Y c. _ _..,-__,~" - L.=_._..~..:='.__::: ---,---.-'-.. .....- - ..... t:.....a': the:-e a?gea::s to be ncr.-c~r.,;:_:a:-:.ce w.:..:h the ge:""e=a':" t:ie Ne'ri to C'J:e r.crc.e (ex:.e::ior- t~e il.ge::cy a::eas c,.':"y} De :i::ie:-.cy, ma~::.tenance s':a:1ca::d, as shall have the right to e:1te: a::.d pe::form a':"l acts necessa:y desc=ibe~ abc~e, . - tr:e::ea:~er t:--.e Ma.:..::.':er':a::ce S3~J/OOO~/DOC/350?2 6/91?9 1:.30 l;nk 9 or to take other action at law or equity the Agency may then have to accomplish the abatement of the Maintenance Deficiency. ~ny sum expended by the Agency for the abateme!!t of a Maintenance Deficiency as authorized by this Section 4(a) shall become a lien on the New Home. If the amount of the lie!! is not paid within thirty (30) days after written dema!!d for payme!!t by the Age!!cy to the Qualified Hcmebuyer, the Agency shall have the right to enforce the lien in the manne= as provided in Section 4 (c) . (b) Graffiti which is visible f:om any public righ~-cf-way which is adjacen~ or contiguous to t~e New Heme shall be re~cvec by the Qua~ified Hcmeb~ye= from any ex:e:ior s~=:ace of a s~=~c~~=e or i~~=ove~enc en the Ne~ Earne by either: pai~:i~g eve: t~e e/ide~ce of S:":C:--. va::.dalis::", wi':.h a paint '~'r.ic:-:' h2.S bee:--. colcr-:7La-:c:-:.-e:s. to t::.e s~rface on w~ic~ the pai~t is a~~:~e~, or g:a::i-:i ~ay be re~cv2~ 'Ii:'t.:; sa:"le~:c.s, de:e:;e:"',:s or: wa..:e:: as a;:;:::;:ria':2. I:"_ -c::e e"i8:-.: :~a: g:a::i:i is placei C~ t:-:.e Ne~ ~::ce (ex:e:ier 2=~=.5 e~:y: 2~= s:,,:C::-, era::::.:.i i::: visi::::,= f'::::17l 2':-. 2::~a:~.:-.:. c.: ccr.:.i:;:.;.c'....:.s c,...:,::.:..:...:: r~;~:-c:-W2Y a~d t~e.:ea::e.: s:...:.::~ q:a::~:i is ~=c re~c~ed wi:~i~ 72 t:u:s fa:lawi~; c~s tine c: i:s a;;:i::a:i:~; c~e~ i~ s:.;.c~ e~e~: a~d '"i:::-:'01...':': ncr:ice c::: t:--,e C.'..:ali:iE'::: :::::-.5'::'''':::'5:, t.:-,E ;'.,:;e,:,.::y 5:-.2.:: :--.=.';5 f"~Q. r:...g:'.c to 6:'.:.e= t:-.e Ne'.... .._..._ a.:-.::. re::',c'v.e :':-.e <;r2:::...:.:.... Ncc~i:~s:a~di~; a~! F=cvisio~ c: Sec:.io~ 4:=.; t::: t~e cc~:=a=j, a~j s'...:::,:", e:<;:e:-.ce-:. by -::.::e: ;",;e-:.ci fer t:-.E :::::-.o';=.: c: gr::::i::. f:::;:-, t:-.e ~;e','i Ec~e as a:..:t::cr:.zes by :::i5 Sec:i:::~ 4': s~a:: becc~e 2. lie~ c~ t~e c.::"'':: -.!- a'::f"Q"" If t~e asc~~: of t~e lie~ is ~c: ~aid wi:~i~ t~i=:j ',..;:::.:...:.::e:". ce::"',a:1.c fc:r ~aji:".E::: C'i the F-.ger,cy t= ("1"\ ......... Ne',..; Ecu:.e. t.e: lie:--. i~ the ma~~er as F':O~iided i- c.=.,-.-;......- _.. -~~-_....,. . .. :.-.'2 r:...g:-.-:' .:! .,-.', . ,......1. to e:-.=::::::::2 i:'5 C~a':"i:.:...ed Ec~e~~ye::, t~e Age::cy s~a:: ta,e (c) Tte par:ies here~c f~=~~er 2:":::":::::y u~ie=s~~~c 2~C 2~=ee th2~ the r:...g:""~~s c::>r1:e:::::e-::i U;?C:--. t:-.~ ;'.:;~.:-.=j' t.:.::cer 'C..:"'.:. 5 Se-::~:.::;- 4 expressly i::cluce the po',.;e.: tc: e 5:2::':"':' 5:-. 2::C. e:"".::o.:ce a 1 ~.=.~ cr c~:-.e.: e::c'.;I:';;:ra.:--.ce 2;ai::.s~ t:"le Ne'.'; ECL':".e l:".. t:--.e ma:",.ne= P=::T:.c.e= u::ce::: Civil Code Sec~io~s 2924, 292~::: a::d 2924c i~ the a~c~::~ as reasc::ably necessa=y tc: resto:::e c~e Ne~ ECffie to t~e ma:.::=e::a::ce s~a::.-:.arc required u:;cer Sectior. 4 ::2) or Sestio.:"'. 4 (::::), i:--.c':"uci:",,_:; 2~tor~eys fees and costs 0: t~e A:;e::sy associa.:ed w~~~ t~e a=a:e~ent c~ the Ma~nte~2::.ce De~i=ie::cj 0:: re~ova! c~ g:::a::=i':i a~c the collectiOG of the costs of t~e Age::cj i:: connectio;: wi:~ suc~ ac~ic::. In 2:1.Y legal Frcceeding fo:: e~~G::ci::g suc~ a lie::. aga:.::s:. t~e New Heme, the prevailing path sha':"l be e::ti'C.led tc recover its a~tGr;.evsl fees 2:"d c::s-:'S of sui:. T['.e ~r::";isior.s c~ t:-.is Se:::.:.o:: 4, s:-.2l1 be a cC~Je:'~a:1: r'.1:1ni::.g ....it::. t:-.2 la::.d fo:: tr.e <:".1=.l:.:::.e.:. Reside!1.ce Period 2.:1C. s:-:.a11 be e-:.:o:::cea:le by the F-.ge:1cy ,~ i~s disc::etion, cunula:ive with any o:::.e.: r~;hcs or powe::s g=a~~ed by t::.e F.ge:1cy unce:: 2.??licable 1:3.'.... Nc'C.:--.i::.g i:: t::e fares-a:'::.; previsions of t:,:.s Section 4 s:-.a:'l be dee:nec. to prec~uc.e t:--.e sa~:/COQ~/SOC/J=u~.2 5/9/ 99 ~.:.30 1::1:< 10 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 City and other ap91icable law. Section 5. [RESERVED/NO TEXT] Sect.ion 6. [RESERVED/NO T"..X'l'i Section 7. Aaencv Riaht of Foreclosure of Purchase Manev Mort~a~e Loan and F.;=st Refusal. (a) Dt.:::i:1~ :':--.s CT"':2.~:':2.ed ?2:s~i2:-.:2 2e::::.cc: '-.._ .-.;'2:-.:::: 5:"'.2_.:... ha72 t~2 rig~= (be: ~cc t~e cb::.;a.::.c~' :: bid C~ t~2 ;~r=~a.5e c: a.~y mcr:ga.qe lca~ l:.e~ ses~r2d tj :~2 Ne~ E=~e a: t~2 t:'~E cf a~v :r~:s:ee fcres:cscre sa:e cr a~j j~~ic~a: f~=2::=S~:::2 sa.:e. (. . ~, ~. Der:.n= :~e C~a.~:.f:.ec: ~es~i2~=2 Fe:-:.:c: .=-.;e:-.=/ 5:"'.2__ ta72 the rig~: cf ::.::::::: refus2: t: ~~:::=~a.se t~e ~e~ E=~e :ro= t~e Qua:i::.ec: He~ebcyer e~ t~e sa=e ter=s wti=~ tje C~a:if:.e~ ~c~ebc!e::: ma'! p=os:cse to c:fe::: t~e Ne',~. Ecr.,e fcr resa':e '-~' a S'..:.:::e3's-::"'.- I~:e=e3:. T~e Age~cj m~s: eX2r:~se s~=h a =~g~: o~ f~rs: r2~~sa: 'r'j.':':;-.l..n t:::.r-:.y (30) days follo'......:.:".'; '.....=::..::2:". nc:::..:~ca:i.c:-_ c: t:"'.2 i~:e~~:.o~ of t~e Q~a':.:.~.:.e~ hc~e=~je= :: =ese:~ the Ne~ ~=~~I a~= .- the Age~cy acce~~s the effer i~ w=:.:i~g ~:.:~:n s~ch t.:.=e ;er.:.cc ~h2 A,=:=.~""',.: s....~_'_' ~e l-c:::...::-.c to c'"'l"-..':=.....=. ~.-.-_- C"--1,..,-<:::~ c_;: ...:.,c l\.'J'~..," t..:.C-...~_ '~~"'-.: '- J..; L_ ~ "~__._ '- _ ____..c_::::: ,-.._ _ T r._ s:r2.c:~j i~ acccr~2nce w:.:i the c::e=. The=ea::e= ens Agen=y s~a:: ;::2:/ t:-:.e "resale c-~ ,....=." to tje QL:2.':'~:.:.ei Ec;:-.e::'..:.~.e::: Coo..... C'::::52 2.:-. E5,..........,'. fr-- .....~.=- t-;::....<:::;:""- 0'::: t~"" N"'-" ;.:...,.,.."'- -,.., ....:.,.<:. 7\,-"'-_,...... ,.~_....,~- "':'<-'/ '-_'-'1'1 '-'_ l..._ __..____ _ .._ _.... .._..._ '---' l.._'- r.-=___,-.! 1'1-----.. --. -_ (6C) days folIc!.....:::; writts.::. ne:.:.f.:.c.=. :ic:". 0: Qua':'.:.:iec Eccetuye= to resel~ the Ne~ ECL:S2. .....~;::::. L..._ i:-,:2:-.:':'::-, of "" .....<:;: Section 8. Covenants t~ Run With the Land. The Ce,e~c;e=, the Age~cy a.::.c the Quali~::..ed H:~e~~'ie= here~l; cec~a=e the.:.= specific inte~t tha: the ccvena.::.:s, reSe=~a:ie::s anc re's:ric:icns set fer::1 herei:1 a.:-e part of a cc"_-:,.,::,,,. p':'a~ fo::: t:-.e c.e';e:c;:-:-.e:-.: c: a:fordable s:.~g:e fa~.:.1y hcusing i~;rove=e:::s i~ t~e State Co::e;e Rece7elop:TIe~.t P.rcjeG~ a!"!.d tha: ea:::-; 5:-.22.1 1:2 c.ee::".e:: c:::,~,,-e~a.:-.:s :~~~ins with the 12~d a::d shall pass to a~d 1:2 bi~d~n; c;c~ the Ne~ EC~2 a~d each Suc=esso:::-I~-I~:e=es: o~ t~e Qua~i:iei E=~e~~~.e::: i~ the Ne~ Heme fo.:- the ter~ p:o~ided i~ Se::io~ 1J. T~e Q~a:ifie~ Ecr..e~uye= he=ecy expressly as 3 '...:r..es t::e d....:::! a:--.d c::2.i;a:ic:--. <:""..... pe=for~ each c: t~e covenants 2.~d to hc~c= each 0: the re5e=~a:icn5 and rest.riccions set fo.:-th in th.:.s Sec:icn 33334.3 Cc~ena~:. --_.. S2~:iaOO:!~CC!3509.2 6/9/1? ::"!.30 l::-.k 11 and eve=y 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, reser"rations, and restrictions, regardless of whether such cove~ants, reser7ations and restrictions are set forth in such contract, deed or other instrument. Section 9. Burden and B@nefit. The Develocer, the Agency and the Qualified Hcmebuyer hereby declare their" ur:.derstar!.ding and inte~: that the b~r=e~ of the c=venan~s set forth hereir!. touc~ and concern the land in t~at the Qua1if:ed Hcmebuyer's legal interest i:: t::.e Ne'l'i HOIT'.e is affected by the a::ordal:le s.:..ngle fa~.:..ly c.'..Jelli::c use anc. ccc:..:ca::cy cove:1.a:.:.s here'..:r:c.e=. T~e ~_ce::c'/ anc. t::.e - - - - C~a::::ed Ec~e=~yer tere=y furt~er declare tie.:..r ~r:ce=star:c.:r:g ar:~ ir::e::: tha: the ce::e=i~ c: s~c~ C:72::a:::s to~c~ ar:= c~::cerr: t~e 120:"'_.:' c:.; e:",.ha:"'.c':':"'.q a:"'_'::' i:",,:::=~2os.:..:"','; t:-.e 2:",_j-::../::-.e:"'..: 2.:"'_= '''':'5-=-= c: :.:--_e >iE..'i ::::7.E !:::/ t~e in:~:"'_;::'2':' ce::e:.:..:::.:.a.':':"E5 C: S"..::::-: COite::.a.::.:s, =~s-=.:.;a.:.:.:::"'_.s a::i by f~::~e:.:.~; t~~ ~~~:.:..:: ~~':~C5e5 - -- - . . . !::::- ','/":-.:':::-, a::~ =e3:=':"Ct~Cn5, ~c::ejs r.:cm t~e Lc~-2.::s M:cer2o:e I:::::~e ~:~s:ng :~::= c: t~~ 3:2.:e Cc__e;e Rede~e:::;~e::: P.:=jec: w~=~ used a::d a;~:ie= t! t~e Age::::! C::-:'2::- to 'cy rr,2.:-:e c.....'::: Ne',,; :'.=::-.2 ~'i=.':":a.:::s t~~ C~c:.:..:.:.ed E:~e::~!e=, fe: . . . a.c~"...:..:.s:. :.::.c;_ oc::",,:;:=.:-.C! Section 10, Te.:-::l. This Se::':"c~ 3333~,3 C:7e::.a.::: s~a:~ a;;:_! Qua:::.:.e:. ~:=e::~jer a::d tc Ee.C:-: 3~c::ess:::- Cel~7e:j Ca:~ f:r the Q~a.:.:..:.:.e= ~~s.:.de::=e -.... :::-.e Ne~,; Hcr:-,e I~-::"'.:e:es:. as Per~:::c. -- e.g.: 2.::::. t::e c: t~:5 Sec:..:.::: 3~33~.3 CCI~::a.::t shall r~~a..:.:: i~ f~ll r::r::e a::d e:.:e::: fe: t~;_ (:8) years a::e: t:-le Ce:'i,e:":! Ca.:-e. ........,. .--.- .. p:cv:.s:on or section te:ecf, ma; t~ ~~:=.:..~a.:ed a.::e= c~e Ce::'E=! Ca.:e u=cn a;=ee~e::: cy t::e Aqe::.::! a::~ t::e Q~ali:.:.ed Ecme:Cuye: (0: the S~ccessc:-:n-Inte=es: i:: the New ~:~e;, i: there 5::2.11 ta7e J:ee:-. t::-ov.:dec:. t.c t:-.e A.;e::.cy a:: c~.:.:-..:.c,". of s;:e.::.:..al leqa.: CC ''':':-_5 e.:.. tja~ s~ch a ter~~~c:':'c~ u~de: t~e te:3S a::d COGC.:.~iC~5 c;p:-c~2d by t'-~ Zl,-~""'.r.1 in ;"'c: r=-:::c:......:--a''''1o d''''-'l''"~-~.''''''''' .-'1' nc.... -.....;-c~.....c:=-"/ .:>~'=~,-- ___ ._::_..~~ _.. ___ ____.....__ -'__ __'-____'-'.. N___ '_ c:.._,______ ______ t:--le F.g-eney 0::: t.:,= i:",,',Testme~t cf Lc'....-a.:"'cC Mcdera::e-::",.co!:',e EOL:5':"::; F~~d5 of the A~e~cy i~ the New Ecme. Section 11. Breach and Default and Enforcement. (:.; Fa.:.1''::2 or delay by t:-,e C:L:=.2..~f':'2':::::' Hor:-.e:ct..:.yer tc nor'_o: cr t:erfcr:n any rna:.e.::i.al ter:Tl c: f::ovi.s.:..o:"'_ of this Sec~ioL: 33J3-:i:. 3 Ccve::a~t shall e:Jnstitu:e a breach L:~Ge= th.:s A;=ee~e:1t; p=ov:.cec ncwe,e:-, that if the Qua.:ified Ec~e=~!e= c:~~e~ces to c~re, carre::: c: re~edy the a:leged b:each w.:.t~:n th-=-r:y (30) cale::ca: days a::e: t:--,e da::e 0: wri:i:e::. notice s:;::e-::.:y:.:,:; 5:.1::::' l::e2.:::: 2:"'.:::: 5:-_a2..2- d.:.1i.;e::tly ccm~le:e s~ch cure, ccrrect.:.c~ c= r2~ec.y, the C~a.:.:.f.:.e:::::. Ec~e=~je= shall not ce deemed to ce :~ de:a~lt he:e~~ce::-. Sc~C/:CC:!Ccc!3509.2 6/ ~/<:9 1:.30 l:r:k 12 The Agency shall give the Qualified Homebuyer written notice of breach specifying the alleged breac~ 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 e'lent of default: provided, however, the Agency shall not exercise any remedy for an event of default hereunder without first delive::ing the written notice of breach as specified in this Section 11. Except with respect to rights and re!TIedies expressly decla=ed to be exclusive in this Section 33334.3 Covenant, the rights a~d re~ecies of the Agency are cum~la:ive wi:~ a~y ocher righ~ 0: ~c~e= of the Agency or eta Ci~y or oc~e= a;;li:able la~, a~d the exe==ise of o~e or mere or s~c~ righ~s 0: =e~e~ies s~al~ ns~ p=ecl~=e :~e exercise by the Age~cy a: t~e same c: di::e=e~: ti~es, of a~y c:he: =ig~: or remedy fc= t~e sa~e t=e=.=~ or e7e~: of de~a~~:. I::. t::-~e e'le::.i: i:~a.: 2. :::::e=.::-. cf t::e QL:2.:~~.:.es ::crr,e::'....:.yer ::'.2.'( re~2.':'::' i~cu==ed fJ': ~c=e th2.~ ch.:..::! 10' . . ca:e~G2.= cays ~Q~~8N.:.~; '..;r.:. ::.en notice, as f=::~l.:.::ed a::o~le, a:",. e'.-e::: of de~=......:.::: <:;:'-;:: ''''::: _u___ __ dee~ed to have cc=~==e~, I:: aid':':':'::: t:: :::e re~ed.:.a: f':C7':'S':':::S cf Se::.:.or. 4 as related t: 2. Ma.:.:::e::2.~ce Ce:.:.c.:.ency a: the Ne~ Ec~e, 1..:.;: or. the occ'J.==e:-~c:e of a':'../ e':2;-~t cf c:e:a...:2.t t:-.e P-.;e,.cy s:-.2.':': be e:::i:le~ to see< a~y a~;ropr.:.a:e leee.: p.:oceed~::.gs as fo:lows: "'~-.:::r' - -...--' or ca::'.2..;es by i:1~t':"2.:.:.:-..g (il l:y rr,ac.c'''c.'.lS 0= o::ca= o'ce:, ac:eor. 0" p=ocsacec.'i a: la'~i c= i:",. e:::..:.:.:}, :.c re:n..:.:..=e ti1.e Q1..:a~i:.:.es. E::me'::,-=-ye= tJ ':2':::':::-. its or:2.iga.:icr-,s 2.:",c. C07e~a::.tS he.:e~~::e.:, cr e::.jo.:.::. a::.y acts 0': th.:.~~s W:"'.:"C,-: InC.} l:e L::-.':'2.'.~':'''':':' 0= i:1 v:.c":'=.:ior: of t::e rights of t:-:e p..;e:-.::y; c= (iil by oche= action a: la~ c= 1:1 0= conv8::.ie::t tc e:-.:o.::::e cove~ancs a~c a~=e~~~~cs EcmeG~ye= tc tje ~;e~si. es~i:y as necess~=y . ", . tr:.e oc..:..J..gatJ..c:"'.s, of tie Qualified (oj No therc pa=:y shall ha7s c~y =o'i~: c= pc~s= :0 e~:c==e a:-_'.! p=o'lision or this Section 3333~. 3 Ccve::a:'1t. or, behalf 0: t.::e F.:;e:-.cy or to ccmf:el the J..ge;-,c'j t: e~fc==e any pro;ilsic;-: of t:-:is Sese ion 33334.3 Covenant. against the Q~2.:ified HOffieb~!er on t~e Ne~ :::::-,e. Section 12. s~a:l be gove=ned Governincr Law. T~.:.s Sec:ion 3J33~.3 CC-l2:"'.=.::C ty t~e laws of t~e S:ate of Califo=~ia. S=~:/SCO~/Dcc/35u9.2 6/9/99 lUG lmk 13 ~ Seetion 13. a__"~-~~. This Section 33334.3 Covenant may be amended after the Delivery Date only by a written instrument executed by the Qualified Homebuyer (or the Successor-In-Interest, as a9plicable) and by the Agency. The Developer shall have not any right or power to approve any suc~ amer:.dment to this Section 33334.3 Covenant, and the execution by the Develoger of any such amen~ent a~ter the delivery date shall not be recuired. - - Section 14. Attornev's Fees. In the event that the Agency brings an action to enforce ar'.Y ccr..dition 0= COlTe~a::tf represe:ltation or war:ranty in this Sec:.icn 33334.3 Covenan:. or othe=....ise a=ising out of this Se-::~icr: 33334.3 Coveca:-:.':., t:;.e prs7aili:lc ca=~v i~ such action sta:l be er'.citled to recover f==ffi t~Q c....'.,a- "~~__"f4r~;::.~cna;"'1Q a...'C"'.....Q<i""" fa",,<=: t::J ba f;X='''''': b'/ t'-::=. c""-"'- ..__ '_..___ ~c:._._~ --- --- - '-"_..-.- ---- -- --" -- . ..- -.--.- i.., ,.'-; .-'..... ~,,'C-.a>,..... 1 S e,..,~o......::.,..; .=." '.'='0' _, -=."i en' ~ c~<:;:--s C"_- s'.'C.'-. s':.' -_. _... oN....:....... a J~c.~..,,-_.'- - _.~...__....., '-- - '-- - --- - -- Section 15, Se"re:::-abili tv, If ~~y ~:~V~5~~~ cf ~~~s S~~~~:~ 3333~.3 C8~e~2~~ ~~e~=o:=2~=~e cy a ju=~sdic:i8~ s~c~ s:-:a 2. 2. be c.ec:"=.:ec!. - ..... --- . . ~ ,;",,'<:;'--'--, , ' ,--~----,..- _.~'''''':-O:::::_::::' __ 10::::: ~- S:1a::" --" "'-Il.. affer:: :~na':' j~c;~e~: or ~ecre-= 0: a c:~r: c: c8~;e:e~: i~va':'idi~y or u~e~=:::e=.~~2.i:y cf S~=~ pr:~is~:~ l...~::= :!:e:::a.~!"'..:.~g C2.::S -- t::is Sec:~c:". 3333";.3 Cove~a~~ w::ic~ are he:eof dec:"a:ec!. ci t::e --= --;.::. =: ~-- ---- c::: t:e se-,-e:?:::e frc~ a~y c~he: par: wtic~ is !C~~C cy a cc~:: tc ce u::e:".fc::ceaI:::2.e. . . . . l.:"_";a_.:.::: or Section 16. Time is of the Essence, =0: eacn p:cv.:.s.:.c:: cf t::is Sec:io:: 33334.3 Ccvena.::: w::ic:: s:a:es a 5=2:C':':':': a:::cl..:.::: of ti~e wi:::i~ w~ic~ t~e re~uire=e:::s :je:ec: are t: ce sa.:is:ie=, ti~-= sha:: ce dee:::ed to be c: t~e esse~:e. Section 17. Notice. A::y ~c:::e =e=~~:ed ~~ ce give:: u::ter tiis Sec~ic~ 33334.3 Ccve~a~t s~a:l ~e ~ive:: by t~e Ase::cy 0= OJ the Cuali:ied Homeb~ye:, as ap9lic=~:e, Cj pe:sc~a: ce:i7e=y 0: by ~i=s: Class U~ited Sta~es mail a~ t~-= ad~:esses s~ecifie~ celow 0= at s~ch at~e: acd=ess as may be s~eci:ied ~~ w:iti~g ty ~~e par~ies he::e:o: I: .~ c_ the ll.gency: Execu:ive Ci:ec:o: ~edevs~o9~s~~ A;e:::y c= t~e Cit} 0: Sa~ Be:~a:Gi~c 20:;' Nc=:~ "E;" Scree::., S'...:.ite 3C1 Sa,. Ee::16:::':'::0, CJ.. 9:'48~ P=:.or..e: (~C9) 32~-50e: S2~2/GCO:/DCC/3=09.2 6/9130:: 12.30 1;7::< 14 If to the Qualified Homebuyer: Attn: ~hone : Notice shall be deemed given five (5) calendar days afcer the date of mailing to the party, or, if personally delivered, when received by the Executive Director or the Ager.cy 0= the Qualified Home~uye=, as applicable. sa~a/OCOl/~CC/3509.2 6/3/99 ll30 b,k 15 IN WITNESS 'iiF.EREOF, the Develope::, the Qualified Homebuyer and the Agency have caused this Section 33334.3 Covenant 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. The recordation of this Section 33334.3 Co'renant is authorized under Health and Safety Code Section 33334.3(g) QU~LI=ISD HOMEBUYER D-~~,.4. c:.___. 8y: By: c;~-r:::..c:::::::? Ce~:~=!-C=cwe~~ CG~:~~~=ies, L? a Ca~::o=~i~ l~~~tej p~==~e=s~:~ Ca:ed: 8f: P-.G::::iC.:' Rece/e~o~~e~~ A~e~cj 0: ~~e C::1 0: S2~ 3e=~a=di~c Ca:ec:.: E:/: C~a:= of t~e Ccr.~~ni:j De7elQ=~e~~ Ccr.:issic~ 8f: Exe;:'..l:...:.ve D; _;;;::.,-_ro,,.... ____L.-'-'_ [ALL SIGNATURSS MUS: B~ NCTARIZ2DJ A~~=oved as to Fo=~: By: Po.gency Cct.::1sel S3~~/8GOl/DOC/35u9.2 6/9/99 1130 lnk 16 SS~:/QCO:/SCC/3SC9.2 6/?/9? 1::.30 !...'!t;< EXHIBIT ~A" Legal Description of the New Home 17