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HomeMy WebLinkAbout0269C - QUALITY PREFERRED CORP - 740 GATEWAY OPA PA7 Quality Preferred Corp. Owner Participation Agr. PA7 - 740 Gateway Dr. AGREEMENT #269 OWNER PARTICIPATION AGREEMENT R762, 4-3-91 THIS OWNER PART ,,ZCIPATION AGREEMENT ( "Agreement" ) is entered into this -yt day of , 1991 by and between THE COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF PALM SPRINGS, CALIFORNIA, a public body, corporate and politic, whose offices are located at 3200 East Tahquitz- Canyon Way, Palm Springs, California 92262 ( "Agency" ) and QUALITY PREFERRED CORPORATION, a California corporation, whose offices are located at P.O. Box 2110 , Palm Springs, California 92263 ( "Participant" ) . The Agency and the Participant hereby agree as follows : 1 . 0 DEFINITIONS . 1 . 1 Certificate of Completion. The term "Certificate of Completion" shall mean that certain Certificate of Completion attached hereto as Exhibit "E" and incorporated herein by reference. 1 . 2 City. The term "City" shall mean the CITY OF PALM SPRINGS, a municipal corporation, having its offices at 3200 East Tahquitz-Canyon Way, Palm Springs, California 92262 . 1. 3 Project . The term "Project" shall mean the project to be performed by the Participant upon the Site more particularly described on Exhibit "B" attached hereto and incorporated herein by reference. 1 . 4 Redevelopment Plan. The term "Redevelopment Plan" shall mean the Redevelopment Plan for the Palm Springs Desert Highland Redevelopment Project Area ( "Project Area" ) which was adopted by Ordinance Number 1231 of the City Council of City on November 20 , 1984 , as amended from time to time. A copy of the Redevelopment Plan is on file in the office of the City Clerk of the City. The Redevelopment Plan is incorporated herein by this reference and made a part hereof as though fully set forth herein. 1 . 5 Regulatory Agreement . The term "Regulatory Agreement" shall mean that certain Regulatory Agreement and Declaration of Covenants and Restrictions attached hereto as Exhibit "C" and incorporated herein by reference. 1 . 6 Schedule of Performance. The term "Schedule of Performance" shall mean that certain Schedule attached hereto as Exhibit "D" and incorporated herein by reference. 1 . 7 Site. The term "Site" shall mean that certain real property to be purchased by Participant located 2/383/014084-0006/30 4/2/91 1 in the City of Palm Springs , State of California commonly known as 740 Gateway Drive and more particularly described on Exhibit "A" attached hereto and incorporated herein by reference. 2. 0 PURPOSE OF AGREEMENT. The purpose of this Agree- ment is to effectuate the Redevelopment Plan for the Project Area by providing affordable housing within the Project Area and by assisting in the rehabilitation of the Site with funds from the Agency ' s Affordable Housing Set Aside Fund, established pursuant to Health and Safety Code Section 33000 , et sec . The provision of affordable housing within the Project Area, the rehabilitation of the Site and the fulfillment generally of this Agreement are in the best interests of the City and the welfare of its residents and are in accordance with the public purposes and provisions of applicable federal , state, and local laws and regulations , under which the Project has been undertaken and is being assisted. 3. 0 COVENANTS OF PARTICIPANT. 3 . 1 Rehabilitation of the Project . The Partici- pant shall commence the rehabilitation of the Project upon the Site in accordance with construction drawings, working specifications and related documents approved by the Agency in advance and in writing. 3 . 1 . 1 Title. Participant shall take title to the Site on or before the date specified in the Schedule of Performance. 3 . 1. 2 Permits . Before commencement of rehabilitation of the Project, Participant shall obtain any and all permits and approvals which may be required by the City or any other governmental agency with jurisdiction. 3 . 1 . 3 Costs of Construction. The cost of rehabilitating the Project shall be borne by the Participant , subject to the right of reimbursement pursuant to Section 4 . 1 below. 3 . 1 . 4 Construction Schedule . Participant shall submit the construction drawings, working specifica- tions and related documents for approval by the Agency on or before the date set forth in the Schedule of Performance. Rehabilitation of the Project shall commence on or before the date set forth in the Schedule of Performance and shall be completed within the time set forth in the Schedule of Performance except as mutually agreed in writing by Participant and Agency. The Project shall be deemed complete -2- upon the issuance of a Certificate of Completion as provided in Section 4 . 2 . 3 . 1. 5 Right of Access. Representatives of Agency and City shall have the reasonable right of access to the Site during the period of construction for the purposes of this Agreement , including, but not limited to, the inspection of the work being performed. 3 . 1. 6 Nondiscrimination During Construc- tion. Participant, for itself and its successors and assigns, agrees that during the rehabilitation of the Project, Participant will not discriminate against any employee or applicant for employment because of race, color , creed, religion, sex, marital status , ancestry or national origin. 3 . 2 Sale or Transfer of the Project . The Participant covenants that Participant shall not transfer the Site or any of its interests therein except as provided in this Section 3. 2 . 3 . 2. 1 Transfer Defined. As used in this Section, the term "Transfer" shall include any assignment, hypothecation, mortgage, pledge, conveyance, or encumbrance of this Agreement, the Site, or the improvements thereon. A Transfer shall also include the transfer to any person or group of persons acting in concert of more than twenty-five percent ( 25%) ( in the aggregate) of the present ownership and/or control of any person or entity constituting Participant or its general partners, taking all transfers into account on a cumulative basis, except transfers of such ownership or control interest between members of the same immediate family, or transfers to a trust , testamentary or otherwise, in which the beneficiaries are limited to members of the transferor ' s immediate family, or among the entities constituting Participant or its general partners or their respective shareholders . In the event any entity constituting Participant, its successor or the constituent partners of Participant or any successor of Participant , is a corporation or trust, such transfer shall refer to the transfer of the issued and outstanding capital stock of such corporation, of beneficial interests of such trust; in the event that any entity constituting Participant, its successor or the constituent partners of Participant or any successor of Participant is a limited or general partnership, such transfer shall refer to the transfer of more than twenty-five percent (25% ) of such limited or general partnership interest ; in the event that any entity constituting Participant, its successor or the constituent partners of Participant or any successor of Participant is a joint venture, such transfer shall refer to the transfer of more -3- than twenty-five percent ( 25% ) of the ownership and/or control of any such joint venture partner, taking all trans- fers into account on a cumulative basis . 3 . 2 . 2 Agency Approval of Transfer Required. Prior to recordation of the Certificate of Completion, Participant shall not Transfer this Agreement or any of Participant ' s rights hereunder, or any interest in the Site or in the improvements thereon, directly or indirectly, voluntarily or by operation of law, except as provided below, without the prior written approval of Agency, and any such purported Transfer without such approval shall be null and void. In considering whether it will grant approval to any Transfer by Participant before the recordation of the Certificate of Completion, which Transfer requires Agency approval, Agency shall consider factors such as ( i ) whether the completion of the Project is jeopardized; ( ii ) the financial strength and capability of the proposed transferee to perform Participant ' s obligations hereunder; ( iii) the proposed transferee ' s experience and expertise in the planning, financing, and rehabilitation of similar projects; and ( iv) whether the Transfer is for the purpose of financing the purchase or rehabilitation of the Site. A Transfer for financing purposes shall not be approved by the Agency if the financing exceeds eighty-five percent ( 85% ) of the acquisition and rehabilitation costs of the Site or if the loan documents do not state that the loan proceeds must be used for the construction or development of the Project . In the absence of specific written agreement by Agency, prior to the recordation of a Certificate of Completion, no Transfer by Participant of all or any portion of its interest in the Site or this Agreement ( including, without limitation, a Transfer not requiring Agency approval hereunder ) shall be deemed to relieve Participant or any successor party from any obligations under this Agreement . In addition, no attempted Transfer of any of Participant ' s obligations hereunder shall be effective unless and until the successor party executes and delivers to Agency an assumption agreement in a form approved by the Agency assuming such obligations. 3 . 3 Indemnification. During the period of construction of any of the improvements pursuant to this Agreement and until such time as is issued a Certificate of Completion for the Project , Participant agrees to and shall indemnify and hold the Agency and the City harmless from and against all liability, loss, damage, cost or expenses ( including reasonable attorneys ' fees and court costs ) arising from or as a result of the death of any person or any accident, injury, loss , or damage whatsoever caused to any person or to the property of any person which shall occur on the Site and which shall be directly or indirectly caused by -4- the acts done thereon or any errors or omissions of the Participant or its agents , servants, employees or contractors . Participant shall not be responsible for (and such indemnity shall not apply to) any acts, errors or omissions of the Agency or the City or their respective agents, servants, employees or contractors. Agency and City shall not be responsible for any acts , errors or omissions of any person or entity except Agency and City and their respective agents, servants , employees or contractors , subject to any and all statutory and other immunities. 3 . 4 Use of the Site. 3 . 4 .1 No Inconsistent Uses . Participant covenants and agrees that it shall not devote the Site to uses inconsistent with the Redevelopment Plan, the applicable zoning restrictions , this Agreement or the Regulatory Agreement . 3 . 4 . 2 Regulatory Agreement. The Partici- pant shall execute the Regulatory Agreement concurrently with the execution of this Agreement and have the Regulatory Agreement recorded against the Site through the escrow to purchase the Site on the closing date of the escrow. The Regulatory Agreement shall be signed and acknowledged by all parties having record title interest in the Site, shall make the Agency and City parties thereto and shall be enforceable by the Agency and the City. 4 . 0 AGENCY COVENANTS. 4 . 1 Reimbursement For Rehabilitation Costs . 4 . 1 .1 Construction Costs. The Agency shall reimburse the Participant for amounts actually expended by Participant for the rehabilitation of the Project pursuant to the plans approved by the City; provided that the Agency shall not reimburse the Participant for amounts expended in excess of FIVE THOUSAND DOLLARS ( $5, 000 . 00 ) . 4 . 1 . 2 Invoice. The Participant shall be reimbursed when the Project is completed; provided that the Participant submits to the Agency, in a form and content approved by the Agency, an invoice for the amounts expended by the Participant subject to reimbursement . The invoice shall set forth the amount actually expended by the Participant and the amount to be reimbursed by the Agency. The invoice shall be accompanied with any supporting documentation requested by the Agency. The Agency shall reimburse the Participant for all amounts stated thereon -5- which are approved by the Agency pursuant to this Agreement within thirty ( 30 ) days of submission. 4. 2 Certificate of Completion. Upon written request by Participant, and upon satisfactory completion of the Project, Agency shall issue to Participant a Certificate of Completion. The Certificate of Completion shall be, and shall so state, a conclusive determination of satisfactory completion of the Project required by this Agreement, and a full compliance with the terms of this Agreement relating to commencement and completion of the Project . After the date Participant is entitled to issuance of the Certificate of Completion, and notwithstanding any other provision of this Agreement to the contrary, any party then owning or thereafter purchasing, leasing or otherwise acquiring any interest in the Site shall not (because of any such ownership, purchase, lease or acquisition) incur any obligation or liability under this Agreement, except that such party shall be bound by the covenants that survive the issuance of the Certificate of Completion, as set forth in the Regulatory Agreement . The Certificate of Completion is not a notice of completion as referred to in California Civil Code Section 3093 . If the Agency refuses or fails to furnish a Certificate of Completion after written requests from Participant, Agency shall, within ten ( 10 ) days of written request, provide to the Participant a written statement of the reasons Agency refused or failed to furnish a Certificate of Completion. The statement shall also contain the Agency ' s opinion of the action Participant must take to obtain a Certificate of Completion. If the Agency shall have failed to provide such written statement within such ten (10) day period, Participant shall be deemed entitled to the Certificate of Completion. 4 . 3 Governmental Approvals . Notwithstanding anything herein contained to the contrary, it is expressly understood by the parties hereto that the Agency makes no representations or warranties with respect to the approvals required by any other governmental entity or with respect to approvals hereinafter required from the City or the Agency. The Agency reserves full police power authority over the Project and the Participant acknowledges that the City retains such full police power as well . Nothing in this Agreement shall be deemed to be a prejudgment or commitment with respect to such items nor to guaranty that such approvals or permits will be issued within any particular time or with or without any particular conditions . -6- 46 5 . 0 ENFORCEMENT. 5 . 1 Events of Default . In the event either party defaults in the performance or observance of any covenant, agreement or obligation set forth in this Agreement, and if such default remains uncured for a period of thirty ( 30) days after written notice thereof shall have been given by the non-defaulting party, or , in the event said default cannot be cured within said time period, the defaulting party has failed to commence to cure such default within said thirty ( 30 ) days and diligently prosecute said cure to completion, then the non-defaulting party shall declare an "Event of Default" to have occurred hereunder . 5 . 2 Remedies. In addition to any other rights or remedies that may be available and subject to the requirements of Section 5 . 1 above, either party to this Agreement may institute a legal or equitable 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 . 5 . 3 Rights and Remedies are Cumulative. Except as otherwise expressly stated in this Agreement, the rights and remedies of the parties are cumulative, and the exercise by any party of one or more of its 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 another party. 6.0 MISCELLANEOUS. 6 . 1 Governing Law. The laws of the State of California shall govern the interpretation and enforcement of this Agreement . 6 . 2 Notices . Formal notices, demands , and communications between Agency, City and Participant shall be sufficiently given if personally delivered or dispatched by registered or certified mail, postage prepaid, return receipt requested, to the addresses set forth above. All notices shall be deemed to be received as of the earlier of actual receipt by the addressee thereof or the expiration of forty- eight ( 48) hours after depositing in the United States Postal System in the manner described in this Section. 6 . 3 Conflicts of Interest . No member , official, or employee of Agency shall have any personal interest , direct or indirect, in this Agreement nor shall any such member, official, or employee participate in any decision relating to this Agreement which affects his personal -7- interests or the interests of any corporation, partnership, or association in which he is , directly or indirectly, interested. 6 . 4 Nonliability of Agency Officials and Employ- ees. No member, official, employee, or consultant of Agency or City shall be personally liable to Participant , or any successor in interest of Participant, in the event of any default or breach by Agency or for any amount which may become due to Participant or to its successor , or on any obligations under the terms of this Agreement . 6 . 5 Books and Records . 6 . 5 . 1 Maintenance of Books and Records . Participant shall prepare and maintain all books, records and reports necessary to substantiate Participant ' s compliance with the terms of this Agreement or reasonably required by the Agency. 6 . 5 . 2 Right to Inspect . The Agency shall have the right, upon not less than seventy-two ( 72 ) hours notice, at all reasonable times, to inspect the books and records of the Participant pertaining to the Public Improvements as pertinent to the purposes of this Agreement . Said right of inspection shall not extend to documents privileged under attorney-client or other such privileges . 6 . 6 Modifications . Any alteration, change or modification of or to this Agreement, in order to become effective, shall be made by written instrument or endorsement thereon and in each such instance executed on behalf of each party hereto. 6 . 7 Merger of Prior Agreements and Understandings . This Agreement and all documents incorporated herein contain the entire understanding among the parties hereto relating to the transactions contemplated herein and all prior or contemporaneous agreements , understandings, representations, and statements, oral or written, are merged herein and shall be of no further force or effect . 6 .8 Assurances to Act in Good Faith. Agency and Participant agree to execute all documents and instruments and to take all action and shall use their best efforts to accomplish the purposes of this Agreement . Agency and Participant shall each diligently and in good faith pursue the satisfaction of any conditions or contingencies subject to their approval . 6 . 9 Severability. Wherever possible, each provision of this Agreement shall be interpreted in such a -8- • manner as to be effective and valid under applicable law. If, however, any provision of this Agreement shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Agreement. IN WITNESS WHEREOF the Agency and Participant have executed this Agreement as of the date first written above. "AGENCY" ATTEST: THE COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF PALM SPRINGS, CALIFORNI�public ody, corporate and poli is By: A- By: l By: r ry , Sec _etary Execu i Direct r APPROVED AS TO FORM: RUTAN & TUCKER David JL Aleshire, Esq. Agency Counsel "PARTICIPANT" QUALITY PREFERRED, CORPORATION, a Cali fprnia corporation By: By: Its • AGEMICY BY RLS. MO. t1 -9- EXHIBIT A LEGAL DESCRIPTION OF THE SITE Lot 41, in the Palm Springs Gateway Estates Unit Number 1, as shown on file in Book 39, Pages 58 and 59 of Maps, Records of Riverside County, State of California. Also known as 740 Gateway Drive, Assessor's Parcel Number 669-355-013. EXHIBIT "B" DESCRIPTION OF PROJECT The Project shall consist of the rehabilitation of one single family dwelling located upon the Site in conformance with construction drawings, working specifications and related documents to be approved by the City and all permits and approvals required by the City for similar projects . EXHIBIT "B" TO OWNER PARTICIPATION AGREEMENT EXHIBIT "C" FREE RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: The Community Redevelopment Agency of the City of Palm Springs, California P.O. Box 2743 Palm Springs, California 92263-2743 Attn: Executive Director ( Space Above This Line for Recorder ' s Office Use Only) REGULATORY AGREEMENT AND DECLARATION OF COVENANTS AND RESTRICTIONS THIS REGULATORY AGREEMENT AND DECLARATION OF COVENANTS AND RESTRICTIONS ( "Regulatory Agreement" ) is made and entered into this day of , 199, by and between THE COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF PALM SPRINGS, a public body, corporate and politic ( "Agency" ) and QUALITY PREFERRED CORPORATION, a California corporation ( "Developer" ) . R E C I T A L S: A. Pursuant to an Owner Participation Agreement by and between Agency and Developer , dated concurrently herewith, ( the "OPA" ) , Agency has provided funds from the Agency ' s Affordable Housing Set-aside Fund ( "Set-aside Fund" ) to Developer to assist Developer in the purchase of that certain real property located in the City of Palm Springs, State of California and more particularly described in Exhibit "A" , attached hereto and incorporated by reference herein ( the "Site" ) . B. Pursuant to the OPA, Developer has agreed to rehabilitate a single-family dwelling located on the Site ( the "Project" ) and the Agency has agreed to reimburse Developer for a portion of the cost of the Project from the Set-aside Fund. C. The Site is located within the Desert Highland Redevelopment Project Area ( "Project Area" ) specifically described in the Redevelopment Plan for the Project Area which was approved and adopted by the City Council of the EXHIBIT "C" TO OWNER PARTICIPATION AGREEMENT 2/383/014084-0006/31 4/1/91 City of Palm Springs by Ordinance No. 1231 on November 20 , 1984 and as subsequently amended by means of Ordinances of the City Council . D. The Agency and/or the City of Palm Springs ( "City" ) has certain fee or easement interests in various streets, sidewalks, and other property within the City and are responsible for the planning and development of land within the City in such a manner so as to provide for the health, safety and welfare of the residents of the City. That portion of the Agency and/or the City ' s interests in real property most directly affected by this Regulatory Agreement is depicted in Exhibit "B" attached hereto and incorporated herein by reference ( "Public Parcel" ) . E. Agency and Developer now desire to place restric- tions upon the use and operation of the Project, in order to ensure that the Project shall be continuously made available to persons of moderate income for the term of this Regulatory Agreement . It is the intent of the parties that title to the Site shall be subject to this Regulatory Agreement and that the terms hereof shall be binding on the Developer and its successors in interest in the Site for so long as this Regulatory Agreement shall remain in effect . F. The parties further intend that the Developer , in exchange for the Agency entering into the OPA, shall hold, sell, and convey the Site subject to the covenants, conditions, restrictions and reservations set forth in this Regulatory Agreement and that the Agency and the City shall have the right and power to enforce the covenants, conditions, restrictions and reservations as provided herein. NOW, THEREFORE, the Developer and Agency declare, covenant and agree, by and for themselves , their heirs, executors, administrators and assigns, and all persons claiming under or through them, that the Site shall be held, transferred, encumbered, all of which are declared to be in furtherance of a common plan for the improvement and sale of the Site, used, sold, conveyed, leased and occupied, subject to the covenants and restrictions hereinafter set forth, and are established expressly and exclusively for the use and benefit of the Site, each and every person and entity who may now or in the future own the Site, the Agency and the City. 1. 0 DEFINITIONS. 1. 1 Owner . The term "Owner" shall mean any person who holds any fee interest in the Site during the term of this Regulatory Agreement, including the Developer . -2- 1. 2 Qualified Purchaser. The term "Qualified Purchaser" shall mean those persons whose income does not exceed one hundred twenty percent ( 1200 ) of the Riverside County Median Household Income . 1. 3 Riverside County Median Household Income. The term "Riverside County Median Household Income" shall mean the median income for a household of the size of a prospective Qualified Purchaser ' s household living in Riverside and San Bernardino Counties as set forth in regulations published by the California Department of Housing and Community Development pursuant to Health & Safety Code Section 50093, or its successor . 2 . 0 RESIDENTIAL PROPERTY. Each Owner hereby covenants and agrees that the Project shall be used solely as the single-family residence of Qualified Purchasers. To that end, and for the term of this Regulatory Agreement, each Owner hereby represents, covenants, warrants and agrees as follows : 2. 1 The Project shall not be utilized for rental purposes, except for rental to a Qualified Purchaser , and shall not be used as a hotel, motel, dormitory, fraternity house, sorority house or rooming house . 2 . 2 The Project shall be sold to members of the general public in accordance with the terms of this Regulatory Agreement, and the Developer will not give preference to any particular class or group in selling the Project, except to the extent that the Project is required to be sold to Qualified Purchasers as provided herein. 3. 0 RESALE OF PROJECT TO QUALIFIED PURCHASERS . Developer and each Owner hereby represents, warrants, and covenants as follows : 3. 1 In General . Except as expressly provided herein, throughout the term of this Regulatory Agreement, the Site shall only be sold to Qualified Purchasers . 3. 2 Resale by Developer . Within five ( 5 ) days after the Certificate of Occupancy is recorded by the Agency pursuant to Section 4 . 3 of the OPA, the Developer shall actively market the Project for sale to a Qualified Purchaser in an amount not to exceed SIXTY-FIVE THOUSAND DOLLARS ($65, 000 . 00) . -3- 3 . 3 Reporting Requirements . The Developer and each subsequent Owner of the Site shall advise Agency, by delivery of a certificate in writing, of the intended resale of the Site. Said certification shall specifically state ( i ) whether the prospective purchaser is a Qualified Purchaser, ( ii ) the name(s) of the prospective purchaser, ( iii ) the amount the prospective purchaser has agreed to pay for the Site, ( iv) an income certification of the Qualified Purchaser and (v) the proposed date of the close of escrow. The Owner shall also provide such other supporting documentation as may be required by the Agency, including, but not limited to, pay stubs and income tax returns of a Qualified Purchaser and a copy of the purchase agreement. The certificate shall be submitted to the Agency at least thirty ( 30) days before the scheduled close of escrow for the purchase of the Site ( "Close of Escrow" ) . 4 . 0 RESALE OF SITE TO NONOUALIFIED PURCHASER. Devel- oper and each Owner hereby covenants and agrees that if the Owner enters into a purchase agreement to sell the Site to a person who is not a Qualified Purchaser , the Agency shall have the right to either : 4 . 1 Purchase the Site on the same terms and conditions agreed to by the nonqualified purchaser within ninety ( 90 ) days of the date the Agency receives notice of the sale from the Owner ; provided that the purchase price shall be equal to the total of ( i ) FORTY FIVE THOUSAND DOLLARS ($45 , 000 . 00 ) (which amount consists of the amount Developer is to sell the Site pursuant to Section 3 . 2 of this Regulatory Agreement less the amount provided to Developer by Agency from the Set-Aside Fund) multiplied by ( ii ) a frac- tion, the numerator of which is the Consumer Price Index (All Items - All Urban Consumers ) for the Los Angeles-Anaheim- Riverside Area (1982-84 = 100 ) ( "CPI" ) published for the date that is two ( 2) months prior to the closing date of the proposed sale of the Site and the denominator of which is the CPI published for the date that is two ( 2) months prior to the date of this Regulatory Agreement plus ( iii ) the cost of capital improvements actually expended on the Site by the Owner as evidenced by supporting documentation and receipts acceptable to the Agency, excluding the improvements made by the Developer pursuant to the OPA; or 4 . 2 Allow the Owner to sell the Site to the non- qualified purchaser and the Owner shall pay the Agency the sum of TWENTY THOUSAND DOLLARS ($20, 000 . 00 ) , plus interest accruing at the rate of ten percent ( 10%) per year simple interest commencing on the date this Regulatory Agreement was -4- executed and ending the date of the close of escrow between the Owner and the non-qualified purchaser; provided that said sum shall not exceed the value of any and all consideration received or to be received by the Owner, less the amount calculated pursuant to Section 4. 1 of this Regulatory Agreement. 5 . 0 MAINTENANCE. 5 . 1 Maintenance Obligation. Developer shall maintain and operate the Site, and all landscaping, open space, common areas, improvements and structures upon the Site in good first-class order , condition and repair , and shall keep the entire Site free from any accumulation of debris or waste materials or other nuisances . Developer shall also maintain all landscaping on the Site in a healthy condition and replace any deteriorated or dead landscaping. The Site shall be maintained in accordance with all City codes, laws, regulations and ordinances , as they now exist or may be amended. Developer shall maintain the Site in such a manner as to avoid the reasonable determination of a duly authorized officer of the Agency or City that a public nuisance has been created such as to be detrimental to public health, safety or general welfare, or that such a condition of deterioration or disrepair causes appreciable harm or is materially detrimental to surrounding property or improvements . 5 . 2 Right of Entry. In the event Developer fails to maintain the Site in the above-mentioned condition, and satisfactory progress is not made in correcting the condition within thirty ( 30) days from the date of written notice from Agency, City or Agency may, at their option, and without further notice to Developer, declare the unperformed maintenance to constitute a public nuisance. Thereafter , either Agency or City, their employees, contractors or agents, may cure Developer ' s default by entering upon the Site and performing the necessary landscaping and/or maintenance. The Agency or City shall give Developer , its representative or the residential manager reasonable notice of the time and manner of entry, and entry shall only be at such times and in such manner as is reasonably necessary to carry out this Regulatory Agreement . Developer shall pay such costs as are reasonably incurred by Agency or City for such maintenance. 5 . 3 Lien. If the costs incurred pursuant to Section 5 . 2 are not reimbursed within thirty ( 30 ) days after Developers ' receipt of notice thereof, the same shall be deemed delinquent, and the amount thereof shall bear interest -5- thereafter at a rate of ten percent ( 100 ) per annum until paid. Any and all delinquent amounts, together with said interest, costs and reasonable attorney ' s fees, shall be a personal obligation of Developer as well as a lien and charge, with power of sale, upon the property interests of Developer, and the rents, issues and profits of such prop- erty. City and/or Agency may bring an action at law against Developer obligated to pay any such sums or foreclose the lien against Developer ' s property interests . Any such lien may be enforced by sale by the City or Agency following recordation of a Notice of Default of Sale given in the manner and time required by law as in the case of a deed of trust; such sale to be conducted in accordance with the provisions of Section 2924, et sec . , of the California Civil Code, applicable to the exercise of powers of sale in mortgages and deeds of trust , or in any other manner per- mitted by law. Any monetary lien provided for herein shall be subordi- nate to any bona fide mortgage or deed of trust covering an ownership interest in and to the Site, and any purchaser at any foreclosure or trustee ' s sale (as well as any deed or assignment in lieu of foreclosure or trustee ' s sale) under any such mortgage or deed of trust shall take title free from any such monetary lien, but otherwise subject to the provi- sions hereof; provided that, after the foreclosure of any such mortgage and/or deed of trust, all other assessments provided for herein to the extent they relate to the expenses incurred subsequent to such foreclosure, assessed hereunder to the purchaser at the foreclosure sale, as owner of the subject parcel after the date of such foreclosure sale, shall become a lien upon such parcel upon recordation of a Notice of Assessment or Notice of Claim of Lien as herein provided. 6 .0 ENFORCEMENT. 6 .1 Events of Default . In the event Developer defaults in the performance or observance of any covenant, agreement or obligation of Developer set forth in this Regulatory Agreement, and if such default remains uncured for a period of thirty ( 30) days after written notice thereof shall have been given by Agency, or, in the event said default cannot be cured within said time period, Developer has failed to commence to cure such default within said thirty ( 30) days and diligently prosecute said cure to completion, then Agency shall declare an "Event of Default" to have occurred hereunder, and, at its option, may take one or more of the following steps : -6- 6 . 1.1 By mandamus or other suit, action or proceeding at law or in equity, require the Owner to perform its obligations and covenants hereunder or enjoin any acts or things which may be unlawful or in violation of this Regulatory Agreement; or 6 . 1 . 2 Take such other action at law or in equity as may appear necessary or desirable to enforce the obligations, covenants and agreements of the Owner hereunder . 6 . 2 Rights are Cumulative. Except as otherwise expressly stated in this Regulatory Agreement, the rights and remedies of the parties are cumulative, and the exercise by any party of one or more of its 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 another party. 7 . 0 NONDISCRIMINATION. 7 . 1 In General. 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 Site, or any part thereof, nor shall Developer , or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the Site, or any part thereof . 7 . 2 Clauses in Agreements . Developer shall not restrict the rental, sale or lease of any portion of the Site on the basis of race, color , creed, religion, sex, marital status , ancestry or national origin of any person. Any and all agreements relating to the rental, sale or lease of the Site, or any portion thereof, shall contain the following nondiscrimination or nonsegregation clauses (or clauses substantially similar thereto) : 7 . 2 .1 Clause for Deeds . The following language shall appear in deeds : "The grantee herein covenants by and for himself or herself, his or her heirs, executors, administrators , and assigns, and all persons claiming under or through them, that there shall -7- be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex, marital status, ancestry or national origin in the sale, lease, sublease, transfer , use, occupancy, tenure or enjoyment of the land herein conveyed, nor shall the grantee himself or herself, or any persons claiming under or through him or her, establish or permit any such practice or prac- tices 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 con- veyed. The foregoing covenants shall run with the land. " 7 . 2 . 2 Clause for Leases . The following language shall appear in leases : "The lessee herein covenants by and for himself or herself, his or her heirs, executors, administrators and assigns, and all persons claiming under or through him or her , and this lease is made and accepted upon and subject to the following conditions: That there shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex, marital status , ancestry or national origin in the leasing, subleasing, transferring, use, occupancy, tenure or enjoyment of the land herein leased nor shall the lessee himself or herself, or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants , lessees, sublessees, subtenants, or vendees in the land herein leased. " 7 . 2. 3 Clause for Contracts . The following language shall appear in contracts : "There shall be no discrimination against or segregation of any persons or group of persons on account of race, color , creed, religion, sex, marital status, ancestry or national origin in the sale, lease, transfer , use, occupancy, tenure or enjoyment of land, nor shall the transferee -8- himself or herself, or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of land. " 8. 0 COVENANTS TO RUN WITH THE LAND. 8 .1 Covenants Running With The Land. Developer hereby subjects the Site to the covenants, reservations and restrictions set forth in this Regulatory Agreement . The Agency and the Developer hereby declare their express intent that all such covenants, reservations and restrictions shall be deemed covenants running with the land and shall pass to and be binding upon the Developer ' s successors in title to the Site; provided, however, that on the termination of this Regulatory Agreement said covenants, reservations and restrictions shall expire, except those covenants contained in Section 7 . 0 , which shall be binding in perpetuity. All covenants without regard to technical classification or designation shall be binding for the benefit of the Agency, and such covenants shall run in favor of the Agency for the entire term of this Regulatory Agreement , without regard to whether the Agency is or remains an owner of any land or interest therein to which such covenants relate. Each and every contract, deed or other instrument hereafter executed covering or conveying the Site or any portion thereof shall conclusively be held to have been executed, delivered and accepted subject to such covenants, reservations and restrictions, regardless of whether such covenants, reserva- tions and restrictions are set forth in such contract , deed or other instrument . 8 . 2 Touch and Concern the Land. Agency and Developer hereby declare their understanding and intent that the burden of the covenants set forth herein touch and concern the land in that Developer ' s legal interest in the Site is rendered less valuable thereby. Agency and Developer hereby further declare their understanding and intent that the benefit of such covenants touch and concern the land by enhancing and increasing the enjoyment and use of the Project by Qualified Purchasers, the intended beneficiaries of such covenants, reservations and restrictions , and by furthering the public purposes for which the Agency was formed. 8 . 3 Agreement Between Owner and Agency. The Declarant, in exchange for the Agency entering into the OPA, -9- • hereby agrees to hold, sell and convey the Site subject to the terms of this Regulatory Agreement . Declarant also grants to the Agency and the City the right and power to enforce the terms of this Regulatory Agreement against the Declarant and all persons having any right, title or interest in the Site or any part thereof, their heirs, successive owners and assigns . 9 . 0 TERM. This Regulatory Agreement, except for the provisions contained in Section 7 . 0 , shall automatically terminate without any further action of the parties twenty ( 20 ) years from the date the Certificate of Completion, as such term is defined in Section 4 . 3 of the OPA, is recorded against the Site. The provisions of Section 7 . 0 of this Regulatory Agreement shall remain in full force and effect in perpetuity. 10 . 0 ATTORNEYS ' FEES. In the event that a party to this Regulatory Agreement brings an action against the other party hereto by reason of the breach of any condition or covenant , representation or warranty in this Regulatory Agreement , or otherwise arising out of this Regulatory Agreement, the prevailing party in such action shall be entitled to recover from the other reasonably attorney ' s fees to be fixed by the court which shall render a judgment, as well as the costs of suits . Attorney' s fees shall include attorney ' s fees on any appeal, and in addition a party entitled to attorney' s fees shall be entitled to all other reasonable costs for investi- gating such action, including the conducting of discovery. 11 . 0 AMENDMENTS. This Regulatory Agreement shall be amended only by a written instrument executed by the parties hereto or their successors in title, and duly recorded in the real property records of the County of Riverside. This Regulatory Agreement may not be amended during the HUD Section 232H.C. loan period without the prior written approval of HUD. 12 . 0 NOTICE. Any notice required to be given hereunder shall be made in writing and shall be given by personal delivery, certified or registered mail, postage prepaid, return receipt requested, at the addresses specified below, or at such other addresses as may be specified in writing by the parties hereto: -10- • i Agency: Redevelopment Agency of the City of Palm Springs, California 3200 E. Tahquitz McCallum Way P.O. Box 2743 Palm Springs, CA 92263-2743 Attn: Executive Director Copy to: Rutan & Tucker 611 Anton Blvd. 13th Floor Costa Mesa, CA 92626 Attn: David J. Aleshire, Esq. Developer : Quality Preferred Corporation P.O. Box 2110 Palm Springs, CA 92263 The notice shall be deemed given three ( 3 ) business days after the date of mailing, or, if personally delivered, when received. 13 . 0 SEVERABILITY/WAIVER/INTEGRATION. 13. 1 If any provision of this Regulatory Agreement shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining portions hereof shall not in any way be affected or impaired thereby. 13. 2 A waiver by either party of the performance of any covenant or condition herein shall not invalidate this Agreement nor shall it be considered a waiver of any other covenants or conditions, nor shall the delay or forbearance by either party in exercising any remedy or right be consid- ered a waiver of, or an estoppel against , the later exercise of such remedy or right. 13 . 3 This Agreement contains the entire Agreement between the parties and neither party relies on any warranty or representation not contained in this Agreement . 14 . 0 FUTURE ENFORCEMENT. The parties hereby agree that should the Agency cease to exist as an entity at any time during the term of this Regulatory Agreement, the City of Palm Springs shall have the right to enforce all of the terms and conditions herein, unless the Agency had previously specified another entity to enforce this Regulatory Agree- ment. -11- IN WITNESS WHEREOF, the Agency and Developer have executed this Regulatory Agreement and Declaration of Covenants and Restrictions by duly authorized representatives on the date first written above . ATTEST: THE REDEVELOPMENT AGENCY OF THE CITY OF PALM SPRINGS', a public body, corporate and p�olit ' By: Secretary Executi e irector "Agency" APPROVED AS TO FORM: RUTAN & TUCKER By: David J. Aleshire Agency Counsel QUALITY PREFERRED CORPORATION, a California corporation BY Its : By: Its : "Developer" -12- EXHIBIT "D" SCHEDULE OF PERFORMANCE Description Date 1 . Participant to take title On or before April 30, 1991 to the Site 2 . Participant to submit On or before May 30, 1991 plans and drawings for the Project 3 . Participant to commence On or before June 15 , 1991 rehabilitation of Project 4. Participant to complete Within 180 days of rehabilitation of the commencement of construction Project EXHIBIT "D" TO OWNER PARTICIPATION AGREEMENT EXHIBIT "E" FREE RECORDING REQUESTED BY AND WHEN RECORDED RETURN TO: THE COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF PALM SPRINGS 3200 East Tahquitz-MacCallum Way Palm Springs , CA 92262 Attn: Executive Director ( Space Above This Line For Recorder ' s Office Use Only) CERTIFICATE OF COMPLETION WHEREAS, by an Owner Participation Agreement (hereinafter referred to as the "Agreement" ) dated 199 by and between THE COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF PALM SPRINGS (hereinafter referred to as "Agency" ) , and QUALITY PREFERRED CORPORATION, a California corporation (hereinafter referred to as "Participant" ) , Participant has redeveloped the real property (the "Site" ) , legally described on Exhibit 1 attached hereto and incorporated herein by reference, according to the terms and conditions of said Agreement; and WHEREAS, pursuant to Section 4 . 3 of the Agreement, promptly after completion of all construction work to be completed by Participant upon the Public Parcel and Dedicated Property, and upon request by Participant, Agency shall furnish Participant with a Certificate of Completion in such form as to permit it to be recorded in the Official Records of the County of Riverside; and WHEREAS, the issuance by Agency of the Certificate of Completion shall be conclusive evidence that Participant has complied with the terms of the Agreement pertaining to the redevelopment of the Site; and WHEREAS, Participant has requested that Agency furnish Participant with the Certificate of Completion; and WHEREAS, Agency has conclusively determined that the redevelopment of the Site has been satisfactorily completed as required by the Agreement ; and EXHIBIT "E" TO OWNER PARTICIPATION AGREEMENT Page 1 of 2 2/383/014084-0006/23 3/11/91 WHEREAS, the Agreement provided for certain covenants to run with the land, which covenants were incorporated in a Regulatory Agreement and Declaration of Covenants and Restrictions (the "Regulatory Agreement" ) ; NOW, THEREFORE: 1 . As provided in the Agreement, Agency does hereby certify that redevelopment of the Site has been fully and satisfactorily performed and completed, and that such redevelopment is in full compliance with said Agreement . 2 . This Certificate shall not constitute evidence of Participant ' s compliance with the Regulatory Agreement, the provisions of which shall continue to run with the land. 3. This Certificate of Completion shall not constitute evidence of compliance with or satisfaction of any obligation of Participant to any holder of a mortgage, or any insurer of a mortgage, securing money loaned to finance construction work on the Site, or any part thereof. Nothing contained herein shall modify in any way any other provision of said Agreement. 4 . This Certificate is not a Notice of Completion as referred to in California Civil Code Section 3093 . 5. Except as stated herein, nothing contained in this instrument shall modify in any way any other provisions of the Agreement or any other provisions of the documents incorporated therein. IN WITNESS WHEREOF, Agency has executed this Certificate as of this day of , 199_. THE COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF PALM SPRINGS By Executive Director Exhibit "E" TO OWNER PARTICIPATION AGREEMENT Page 2 of 2 EXHIBIT A LEGAL DESCRIPTION OF THE SITE Lot 41, in the Palm Springs Gateway Estates Unit Number 1, as shown on file in Book 39, Pages 58 and 59 of Maps, Records of Riverside County, State of California. Also known as 740 Gateway Drive, Assessor's Parcel Number 669-355-013. fi I