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CIC Glen Ridge LP; 2009-10-07;
DOC# 2009-0557583 RECORDED REQUEST OF First American Title SUBDIVISION MAPPING DEPT. RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: Carlsbad Redevelopment Agency 2965 Roosevelt Street, Suite B Carlsbad, CA 92008 Attn: Executive Director No fee for recording pursuant to Government Code Section 27383 VI 21P OCT 07, 2009 8:00 AM OFFICIAL RECORDS SAN DIEGO COUNTY RECORDER'S OFFICE DAVID L BUTLER, COUNTY RECORDER FEES: 0.00 WAYS: 3 DA: 1 PAGES:21 MF DEED OF TRUST WITH ASSIGNMENT OF RENTS AND SECURITY AGREEMENT (Glen Ridge Apartments) THIS DEED OF TRUST WITH ASSIGNMENT OF RENTS AND SECURITY AGREEMENT ("Deed of Trust") is made as of OCT- 0? , 2009, by and among CIC Glen Ridge L.P., a California limited partnership ("Trustor"), First American Title Co' a California corporation ("Trustee"), and the Carlsbad Redevelopment Agency, a public body, corporate, and politic ("Beneficiary"). FOR GOOD AND VALUABLE CONSIDERATION, including the indebtedness herein recited and the trust herein created, the receipt of which is hereby acknowledged, Trustor hereby irrevocably grants, transfers, conveys and assigns to Trustee, IN TRUST, WITH POWER OF SALE, for the benefit and security of Beneficiary, under and subject to the terms and conditions hereinafter set forth, Trustor's fee interest in the property located in the City of Carlsbad, County of San Diego, State of California, that is described in the attached Exhibit A, incorporated herein by this reference (the "Property"). TOGETHER WITH all interest, estates or other claims, both in law and in equity which Trustor now has or may hereafter acquire in the Property and the rents; TOGETHER WITH all easements, rights-of-way and rights used in connection therewith or as a means of access thereto, including (without limiting the generality of the foregoing) all tenements, hereditaments and appurtenances thereof and thereto; TOGETHER WITH any and all buildings and improvements of every kind and description now or hereafter erected thereon, and all property of the Trustor now or hereafter affixed to or placed upon the Property; TOGETHER WITH all building materials and equipment now or hereafter delivered to said property and intended to be installed therein; TOGETHER WITH all right, title and interest of Trustor, now owned or hereafter acquired, in and to any land lying within the right-of-way of any street, open or proposed, adjoining the Property, and any and all sidewalks, alleys and strips and areas of land adjacent to or used in connection with the Property; 1010\20\406821.2 .4274 4275 TOGETHER WITH all estate, interest, right, title, other claim or demand, of every nature, in and to such property, including the Property, both in law and in equity, including, but not limited to, all deposits made with or other security given by Trustor to utility companies, the proceeds from any or all of such property, including the Property, claims or demands with respect to the proceeds of insurance in effect with respect thereto, which Trustor now has or may hereafter acquire, any and all awards made for the taking by eminent domain or by any proceeding or purchase in lieu thereof of the whole or any part of such property, including without limitation, any awards resulting from a change of grade of streets and awards for severance damages to the extent Beneficiary has an interest in such awards for taking as provided in Paragraph 4.1 herein; TOGETHER WITH all of Trustor's interest in all articles of personal property or fixtures now or hereafter attached to or used in and about the building or buildings now erected or hereafter to be erected on the Property which are necessary to the complete and comfortable use and occupancy of such building or buildings for the purposes for which they were or are to be erected, including all other goods and chattels and personal property as are ever used or furnished in operating a building, or the activities conducted therein, similar to the one herein described and referred to, and all renewals or replacements thereof or articles in substitution therefor, whether or not the same are, or shall be attached to said building or buildings in any manner; and TOGETHER WITH all of Trustor's interest in all building materials, fixtures, equipment, work in process and other personal property to be incorporated into the Property; all goods, materials, supplies, fixtures, equipment, machinery, furniture and furnishings, signs and other personal property now or hereafter appropriated for use on the Property, whether stored on the Property or elsewhere, and used or to be used in connection with the Property; all rents, issues and profits, and all inventory, accounts, accounts receivable, contract rights, general intangibles, chattel paper, instruments, documents, notes drafts, letters of credit, insurance policies, insurance and condemnation awards and proceeds, trade names, trademarks and service marks arising from or related to the Property and any business conducted thereon by Trustor; all replacements, additions, accessions and proceeds; and all books, records and files relating to any of the foregoing. All of the foregoing, together with the Property, is herein referred to as the "Security." To have and to hold the Security together with acquittances to the Trustee, its successors and assigns forever. FOR THE PURPOSE OF SECURING: (a) Payment of just indebtedness of Trustor to Beneficiary as set forth in the Note (defined in Article 1 below) until paid or cancelled. Said principal and other payments shall be due and payable as provided in the Note. Said Note and all its terms are incorporated herein by reference, and this conveyance shall secure any and all extensions thereof, however evidenced; and (b) Payment of any sums advanced by Beneficiary to protect the Security pursuant to the terms and provisions of this Deed of Trust: following a breach of Trustor's obligation to 1010\20\406821.2 4276 advance said sums and the expiration of any applicable cure period, with interest thereon as provided herein; and (c) Performance of every obligation, covenant or agreement of Trustor contained herein and in the Loan Documents (defined in Section 1.2 below). AND TO PROTECT THE SECURITY OF THIS DEED OF TRUST, TRUSTOR COVENANTS AND AGREES: ARTICLE 1 DEFINITIONS In addition to the terms defined elsewhere in this Deed of Trust, the following terms shall have the following meanings in this Deed of Trust: Section 1.1 The term "Loan Agreement" means that certain Loan Agreement between Trustor and Beneficiary, dated of even date herewith providing for the Beneficiary to loan to the Trustor an amount not to exceed One Million Fourteen Thousand Dollars ($1,014,000) for the development of the Property. Section 1.2 The term "Loan Documents" means this Deed of Trust, the Note, the Loan Agreement, the Regulatory Agreement, and any other debt, loan or security instruments between Trustor and the Beneficiary relating to the Property. Section 1.3 The term "Note" means the promissory note in the principal amount of One Million Fourteen Thousand Dollars ($1,014,000) dated of even date herewith executed by the Trustor in favor of the Beneficiary, the payment of which is secured by this Deed of Trust. (A copy of the Note is on file with the Beneficiary and terms and provisions of the Note are incorporated herein by reference.). Section 1.4 The term "Principal" means the amount required to be paid under the Note. Section 1.5 The term "Regulatory Agreement" means the regulatory agreement by and between the Beneficiary and the Trustor, dated and recorded in the official Records of San Diego County concurrently herewith. ARTICLE 2 MAINTENANCE AND MODIFICATION OF THE PROPERTY AND SECURITY Section 2.1 Maintenance and Modification of the Property by Trustor. The Trustor agrees that at all times prior to full payment of the sum owed under the Note, the Trustor will, at the Trustor's own expense, maintain, preserve and keep the Security or cause the Security to be maintained and preserved in good condition. The Trustor will from time to 1010\20\406821.2 4277 time make or cause to be made all repairs, replacements and renewals deemed proper and necessary by it. The Beneficiary shall have no responsibility in any of these matters or for the making of improvements or additions to the Security. Trustor agrees to pay fully and discharge (or cause to be paid fully and discharged) all claims for labor done and for material and services furnished in connection with the Security, diligently to file or procure the filing of a valid notice of cessation upon the event of a cessation of labor on the work or construction on the Security for a continuous period of thirty (30) days or more, and to take all other reasonable steps to forestall the assertion of claims of lien against the Security of any part thereof. Trustor irrevocably appoints, designates and authorizes Beneficiary as its agent (said agency being coupled with an interest) with the authority, but without any obligation, to file for record any notices of completion or cessation of labor or any other notice that Beneficiary deems necessary or desirable to protect its interest in and to the Security or the Loan Documents; provided, however, that Beneficiary shall exercise its rights as agent of Trustor only in the event that Trustor shall fail to take, or shall fail to diligently continue to take, those actions as hereinbefore provided. Upon demand by Beneficiary, Trustor shall make or cause to be made such demands or claims as Beneficiary shall specify upon laborers, materialmen, subcontractors or other persons who have furnished or claim to have furnished labor, services or materials in connection with the Security. Nothing herein contained shall require Trustor to pay any claims for labor, materials or services which Trustor in good faith disputes and is diligently contesting provided that Trustor, upon written request of the Beneficiary, shall, within thirty (30) days after the filing of any claim of lien, record in the Office of the Recorder of San Diego County, a surety bond in an amount 1 and 1/2 times the amount of such claim item to protect against a claim of lien. Section 2.2 Granting of Easements. Trustor may not grant easements, licenses, rights-of-way or other rights or privileges in the nature of easements with respect to any property or rights included in the Security except those required or desirable for installation and maintenance of public utilities including, without limitation, water, gas, electricity, sewer, telephone and telegraph, or those required by law and as approved, in writing, by Beneficiary. Section 2.3 Assignment of Rents. As part of the consideration for the indebtedness evidenced by the Note, Trustor hereby absolutely and unconditionally assigns and transfers to Beneficiary all the rents and revenues of the Property including those now due, past due, or to become due by virtue of any lease or other agreement for the occupancy or use of all or any part of the Property, regardless of to whom the rents and revenues of the Property are payable. Trustor hereby authorizes Beneficiary or Beneficiary's agents to collect the aforesaid rents and revenues and hereby directs each tenant of the Property to pay such rents to Beneficiary or Beneficiary's agents; provided, however, that prior to written notice given by Beneficiary to Trustor of the breach by Trustor of any covenant or agreement of Trustor in the Loan Documents, Trustor shall collect and receive all rents and revenues of the Property as trustee for the benefit of Beneficiary and Trustor to apply the rents and revenues so collected to the sums secured by this Deed of Trust with the balance, so long as no such breach has occurred, to the account of Trustor, it being intended by Trustor and 41010\20\406821.2 4278 Beneficiary that this assignment of rents constitutes an absolute assignment and not an assignment for additional security only. Upon delivery of written notice by Beneficiary to Trustor of the breach by Trustor of any covenant or agreement of Trustor in the Loan Documents, and without the necessity of Beneficiary entering upon and taking and maintaining full control of the Property in person, by agent or by a court-appointed receiver, Beneficiary shall immediately be entitled to possession of all rents and revenues of the Property as specified in this Section 2.3 as the same becomes due and payable, including but not limited to rents then due and unpaid, and all such rents shall immediately upon delivery of such notice be held by Trustor as trustee for the benefit of Beneficiary only; provided, however, that the written notice by Beneficiary to Trustor of the breach by Trustor shall contain a statement that Beneficiary exercises its rights to such rents. Trustor agrees that commencing upon delivery of such written notice of Trustor's breach by Beneficiary to Trustor, each tenant of the Property shall make such rents payable to and pay such rents to Beneficiary or Beneficiary's agents on Beneficiary's written demand to each tenant therefor, delivered to each tenant personally, by mail or by delivering such demand to each rental unit, without any liability on the part of said tenant to inquire further as to the existence of a default by Trustor. Except as previously approved by the Beneficiary as set forth in the Loan Agreement, Trustor hereby covenants that Trustor has not executed any prior assignment of said rents, that Trustor has not performed, and will not perform, any acts or has not executed and will not execute, any instrument which would prevent Beneficiary from exercising its rights under this Section 2.3, and that at the time of execution of this Deed of Trust, there has been no anticipation or prepayment of any of the rents of the Property for more than two (2) months prior to the due dates of such rents. Trustor covenants that Trustor will not hereafter collect or accept payment of any rents of the Property more than two (2) months prior to the due dates of such rents. Trustor further covenant that Trustor will execute and deliver to Beneficiary such further assignments of rents and revenues of the Property as Beneficiary may from time to time request. Upon Trustor's breach of any covenant or agreement of Trustor in the Loan Documents, Beneficiary may in person, by agent or by a court-appointed receiver, regardless of the adequacy of Beneficiary's security, enter upon and take and maintain full control of the Property in order to perform all acts necessary and appropriate for the operation and maintenance thereof including, but not limited to, the execution, cancellation or modification of leases, the collection of all rents and revenues of the Property, the making of repairs to the Property and the execution or termination of contracts providing for the management or maintenance of the Property, all on such terms as are deemed best to protect the security of this Deed of Trust. In the event Beneficiary elects to seek the appointment of a receiver for the Property upon Trustor's breach of any covenant or agreement of Trustor in this Deed of Trust, Trustor hereby expressly consents to the appointment of such receiver. Beneficiary or the receiver shall be entitled to receive a reasonable fee for so managing the Property. All rents and revenues collected subsequent to delivery of written notice by Beneficiary to Trustor of the breach by Trustor of any covenant or agreement of Trustor in the Loan Documents shall be applied first to the costs, if any, of taking control of and managing the Property and collecting the rents, including, but not limited to, attorney's fees, receiver's fees, premiums on receiver's bonds, costs of repairs to the Property, premiums on insurance policies, taxes, assessments and other charges on the Property, and the costs of discharging any obligation or liability of Trustor as lessor or landlord of the Property and then to the sums secured by this 1010\20\406821.2 4279 Deed of Trust. Beneficiary or the receiver shall have access to the books and records used in the operation and maintenance of the Property and shall be liable to account only for those rents actually received. Beneficiary shall not be liable to Trustor, anyone claiming under or through Trustor or anyone having an interest in the Property by reason of anything done or left undone by Beneficiary under this Section 2.3. If the rents of the Property are not sufficient to meet the costs, if any, of taking control of and managing the Property and collecting the rents, any funds expended by Beneficiary for such purposes shall become indebtedness of Trustor to Beneficiary secured by this Deed of Trust pursuant to Section 3.3 hereof. Unless Beneficiary and Trustor agree in writing to other terms of payment, such amounts shall be payable upon notice from Beneficiary to Trustor requesting payment thereof and shall bear interest from the date of disbursement at the rate stated in Section 3.3. Any entering upon and taking and maintaining of control of the Property by Beneficiary or the receiver and any application of rents as provided herein shall not cure or waive any default hereunder or invalidate any other right or remedy of Beneficiary under applicable law or provided herein. This assignment of rents of the Property shall terminate at such time as this Deed of Trust ceases to secure indebtedness held by Beneficiary. The rights of the Beneficiary under this Section 2.3 are subject to the rights of any senior mortgage lender. ARTICLE 3 TAXES AND INSURANCE; ADVANCES Section 3.1 Taxes, Other Governmental Charges and Utility Charges. Trustor shall pay, or cause to be paid, at least fifteen (15) days prior to the date of delinquency, all taxes, assessments, charges and levies imposed by any public authority or utility company which are or may become a lien affecting the Security or any part thereof; provided, however, that Trustor shall not be required to pay and discharge any such tax, assessment, charge or levy so long as (a) the legality thereof shall be promptly and actively contested in good faith and by appropriate proceedings, and (b) Trustor maintains reserves adequate to pay any liabilities contested pursuant to this Section 3.1. With respect to taxes, special assessments or other similar governmental charges, Trustor shall pay such amount in full prior to the attachment of any lien therefor on any part of the Security; provided, however, if such taxes, assessments or charges may be paid in installments, Trustor may pay in such installments. Except as provided in clause (b) of the first sentence of this paragraph, the provisions of this Section 3.1 shall not be construed to require that Trustor maintain a reserve account, escrow account, impound account or other similar account for the payment of future taxes, assessments, charges and levies. In the event that Trustor shall fail to pay any of the foregoing items required by this Section to be paid by Trustor, Beneficiary may (but shall be under no obligation to) pay the same, after the Beneficiary has notified the Trustor of such failure to pay and the Trustor fails to fully pay such items within seven (7) business days after receipt of such notice. Any amount so advanced therefor by Beneficiary, together with interest thereon from the date of such advance at the maximum rate permitted by law, shall become an additional obligation of Trustor to the Beneficiary and shall be secured hereby, and Trustor agrees to pay all such amounts. 1010\20\406821.2 4280 Section 3.2 Provisions Respecting Insurance. Trustor agrees to provide insurance conforming in all respects to that required under the Loan Documents during the course of construction and following completion, and at all times until all amounts secured by this Deed of Trust have been paid and all other obligations secured hereunder fulfilled, and this Deed of Trust reconveyed. All such insurance policies and coverages shall be maintained at Trustor's sole cost and expense. Certificates of insurance for all of the above insurance policies, showing the same to be in full force and effect, shall be delivered to the Beneficiary upon demand therefor at any time prior to the Beneficiary's receipt of the entire Principal and all amounts secured by this Deed of Trust. Trustee is aware that California Civil Code Section 2955.5(a) provides as follows: No lender shall require a borrower, as a condition of receiving or maintaining a loan secured by real property, to provide hazard insurance coverage against risks to the improvements on that real property in an amount exceeding the replacement value of the improvements on the property. Section 3.3 Advances. In the event the Trustor shall fail to maintain the full insurance coverage required by this Deed of Trust or shall fail to keep the Security in accordance with the Loan Documents, the Beneficiary, after at least seven (7) days prior notice to Beneficiary, may (but shall be under no obligation to) take out the required policies of insurance and pay the premiums on the same or may make such repairs or replacements as are necessary and provide for payment thereof; and all amounts so advanced therefor by the Beneficiary shall become an additional obligation of the Trustor to the Beneficiary (together with interest as set forth below) and shall be secured hereby, which amounts the Trustor agrees to pay on the demand of the Beneficiary, and if not so paid, shall bear interest from the date of the advance at the lesser of eight percent (8%) per annum or the maximum rate permitted by law. ARTICLE 4 DAMAGE, DESTRUCTION OR CONDEMNATION Section 4.1 Awards and Damages. All judgments, awards of damages, settlements and compensation made in connection with or in lieu of (1) taking of all or any part of or any interest in the Property by or under assertion of the power of eminent domain, (2) any damage to or destruction of the Property or in any part thereof by insured casualty, and (3) any other injury or damage to all or any part of the Property ("Funds") are hereby assigned to and shall be paid to the Beneficiary by a check made payable to the Beneficiary. The Beneficiary is authorized and empowered (but not required) to collect and receive any funds and is authorized to apply them in whole or in part upon any indebtedness or obligation secured hereby, in such order and manner as the Beneficiary shall determine at its sole option. The Beneficiary shall be entitled to settle and adjust all claims under insurance policies provided under this Deed of Trust and may deduct and retain from the proceeds of such insurance the amount of all expenses incurred by it in connection with any such settlement or adjustment. All or any part of the amounts so collected and recovered by the Beneficiary may be released to Trustor upon such conditions as the Beneficiary may impose for 1010\20\406821.2 4281 its disposition, and Beneficiary agrees to release Funds to Trustor to rebuild the Project on the Property provided Trustor demonstrates to Beneficiary that such rebuilding is economically feasible. Application of all or any part of the Funds collected and received by the Beneficiary or the release thereof shall not cure or waive any default under this Deed of Trust. The rights of the Beneficiary under this Section 4.1 are subject to the rights of any senior mortgage lender. ARTICLE 5 AGREEMENTS AFFECTING THE PROPERTY; FURTHER ASSURANCES; PAYMENT OF PRINCIPAL AND INTEREST Section 5.1 Other Agreements Affecting Property. The Trustor shall duly and punctually perform all terms, covenants, conditions and agreements binding upon it under the Loan Documents and any other agreement of any nature whatsoever now or hereafter involving or affecting the Security or any part thereof. Section 5.2 Agreement to Pay Attorneys' Fees and Expenses. In the event of any Event of Default (as defined below) hereunder, and if the Beneficiary should employ attorneys or incur other expenses for the collection of amounts due or the enforcement of performance or observance of an obligation or agreement on the part of the Trustor in this Deed of Trust, the Trustor agrees that it will, on demand therefor, pay to the Beneficiary the reasonable fees of such attorneys and such other reasonable expenses so incurred by the Beneficiary; and any such amounts paid by the Beneficiary shall be added to the indebtedness secured by the lien of this Deed of Trust, and shall bear interest from the date such expenses are incurred at the lesser often percent (10%) per annum or the maximum rate permitted by law. Section 5.3 Payment of the Principal. The Trustor shall pay to the Beneficiary the Principal and any other payments as set forth in the Note in the amounts and by the times set out therein. Section 5.4 Personal Property. To the maximum extent permitted by law, the personal property subject to this Deed of Trust shall be deemed to be fixtures and part of the real property and this Deed of Trust shall constitute a fixtures filing under the California Commercial Code. As to any personal property not deemed or permitted to be fixtures, this Deed of Trust shall constitute a security agreement under the California Commercial Code. Section 5.5 Financing Statement. The Trustor shall execute and deliver to the Beneficiary such financing statements pursuant to the appropriate statutes, and any other documents or instruments as are required to convey to the Beneficiary a valid perfected security interest in the Security. The Trustor agrees to perform all acts which the Beneficiary may reasonably request so as to enable the Beneficiary to maintain such valid perfected security interest in the Security in order to secure the payment of o 1010\20\406821.2 4282 the Note in accordance with their terms. The Beneficiary is authorized to file a copy of any such financing statement in any jurisdiction(s) as it shall deem appropriate from time to time in order to protect the security interest established pursuant to this instrument. Section 5.6 Operation of the Security. The Trustor shall operate the Security (and, in case of a transfer of a portion of the Security subject to this Deed of Trust, the transferee shall operate such portion of the Security) in full compliance with the Loan Documents. Section 5.7 Inspection of the Security. At any and all reasonable times upon seventy-two (72) hours' notice, the Beneficiary and its duly authorized agents, attorneys, experts, engineers, accountants and representatives, shall have the right, without payment of charges or fees, to inspect the Security. Section 5.8 Nondiscrimination. The Trustor 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, age, sex, sexual orientation, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Security, nor shall the Trustor itself or any person claiming under or through it establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees in the Security. The foregoing covenants shall run with the land. ARTICLE 6 HAZARDOUS WASTE Trustor shall keep and maintain the Property in compliance with, and shall not cause or permit the Property to be in violation of any federal, state or local laws, ordinances or regulations relating to industrial hygiene or to the environmental conditions on, under or about the Property including, but not limited to, soil and ground water conditions. Trustor shall not use, generate, manufacture, store or dispose of on, under, or about the Property or transport to or from the Property any flammable explosives, radioactive materials, hazardous wastes, toxic substances or related materials, including without limitation, any substances defined as or included in the definition of "hazardous substances," hazardous wastes," "hazardous materials," or "toxic substances" under any applicable federal or state laws or regulations (collectively referred to hereinafter as "Hazardous Materials") except such of the foregoing as may be customarily kept and used in and about multifamily residential property. Trustor shall immediately advise Beneficiary in writing if at any time it receives written notice of (i) any and all enforcement, cleanup, removal or other governmental or regulatory actions instituted, completed or threatened against Trustor or the Property pursuant to any applicable federal, state or local laws, ordinances, or regulations relating to any Hazardous 1010\20\406821.2 4283 Materials, ("Hazardous Materials Law"); (ii) all claims made or threatened by any third party against Trustor or the Property relating to damage, contribution, cost recovery compensation, loss or injury resulting from any Hazardous Materials (the matters set forth in clauses (i) and (ii) above hereinafter referred to a "Hazardous Materials Claims"); and (iii) Trustor's discovery of any occurrence or condition on any real property adjoining or in the vicinity of the Property that could cause the Property or any part thereof to be classified as "border-zone property" under the provision of California Health and Safety Code, Sections 25220 et seq., or any regulation adopted in accordance therewith, or to be otherwise subject to any restrictions on the ownership, occupancy, transferability or use of the Property under any Hazardous Materials Law. Beneficiary shall have the right to join and participate in, as a party if it so elects, any legal proceedings or actions initiated in connection with any Hazardous Materials Claims and to have its reasonable attorneys' fees in connection therewith paid by Trustor. Trustor shall indemnify and hold harmless Beneficiary and its boardmembers, supervisors, directors, officers, employees, agents, successors and assigns from and against any loss, damage, cost, expense or liability directly or indirectly arising out of or attributable to the use, generation, storage, release, threatened release, discharge, disposal, or presence of Hazardous Materials on, under, or about the Property including without limitation: (a) all foreseeable consequential damages; (b) the costs of any required or necessary repair, cleanup or detoxification of the Property and the preparation and implementation of any closure, remedial or other required plans; and (c) all reasonable costs and expenses incurred by Beneficiary in connection with clauses (a) and (b), including but not limited to reasonable attorneys' fees. Without Beneficiary's prior written consent, which shall not be unreasonably withheld, Trustor shall not take any remedial action in response to the presence of any Hazardous Materials on, under or about the Property, nor enter into any settlement agreement, consent decree, or other compromise in respect to any Hazardous Material Claims, which remedial action, settlement, consent decree or compromise might, in Beneficiary's reasonable judgement, impair the value of the Beneficiary's security hereunder; provided, however, that Beneficiary's prior consent shall not be necessary in the event that the presence of Hazardous Materials on, under, or about the Property either poses an immediate threat to the health, safety or welfare of any individual or is of such a nature that an immediate remedial response is necessary and it is not reasonably possible to obtain Beneficiary's consent before taking such action, provided that in such event Trustor shall notify Beneficiary as soon as practicable of any action so taken. Beneficiary agrees not to withhold its consent, where such consent is required hereunder, if either (i) a particular remedial action is ordered by a court of competent jurisdiction, (ii) Trustor will or may be subjected to civil or criminal sanctions or penalties if it fails to take a required action; (iii) Trustor establishes to the reasonable satisfaction of Beneficiary that there is no reasonable alternative to such remedial action which would result in less impairment of Beneficiary's security hereunder; or (iv) the action has been agreed to by Beneficiary. The Trustor hereby acknowledges and agrees that (i) this Article is intended as the Beneficiary's written request for information (and the Trustor's response) concerning the environmental condition of the Property as required by California Code of Civil Procedure Section 726.5, and (ii) each representation and warranty in this Deed of Trust or any of the other Loan Documents (together with any indemnity applicable to a breach of any such representation and warranty) with respect to the environmental condition of the property is intended by the 1010\20\406821.2 4284 Beneficiary and the Trustor to be an "environmental provision" for purposes of California Code of Civil Procedure Section 736. In the event that any portion of the Property is determined to be "environmentally impaired" (as that term is defined in California Code of Civil Procedure Section 726.5(e)(3)) or to be an "affected parcel" (as that term is defined in California Code of Civil Procedure Section 726.5(e)(l)), then, without otherwise limiting or in any way affecting the Beneficiary's or the Trustee's rights and remedies under this Deed of Trust, the Beneficiary may elect to exercise its rights under California Code of Civil Procedure Section 726.5(a) to (1) waive its lien on such environmentally impaired or affected portion of the Property and (2) exercise (a) the rights and remedies of an unsecured creditor, including reduction of its claim against the Trustor to judgment, and (b) any other rights and remedies permitted by law. For purposes of determining the Beneficiary's right to proceed as an unsecured creditor under California Code of Civil Procedure Section 726.5(a), the Trustor shall be deemed to have willfully permitted or acquiesced in a release or threatened release of hazardous materials, within the meaning of California Code of Civil Procedure Section 726.5(d)(l), if the release or threatened release of hazardous materials was knowingly or negligently caused or contributed to by any lessee, occupant, or user of any portion of the Property and the Trustor knew or should have known of the activity by such lessee, occupant, or user which caused or contributed to the release or threatened release. All costs and expenses, including (but not limited to) attorneys' fees, incurred by the Beneficiary in connection with any action commenced under this paragraph, including any action required by California Code of Civil Procedure Section 726.5(b) to determine the degree to which the Property is environmentally impaired, plus interest thereon at the rate specified in the Note until paid, shall be added to the indebtedness secured by this Deed of Trust and shall be due and payable to the Beneficiary upon its demand made at any time following the conclusion of such action. ARTICLE 7 EVENTS OF DEFAULT AND REMEDIES Section 7.1 Events of Default. The following shall constitute Events of Default following the expiration of any applicable notice and cure periods: (1) failure to make any payment to be paid by Trustor under the Loan Documents; (2) failure to observe or perform any of Trustor's other covenants, agreements or obligations under the Loan Documents, including, without limitation, the provisions concerning discrimination; or (3) failure to make any payment or perform any of Trustor's other covenants, agreements, or obligations under any other debt instruments or regulatory agreement secured by the Property, which default shall not be cured within the times and in the manner provided therein. Section 7.2 Acceleration of Maturity. If an Event of Default shall have occurred and be continuing, then at the option of the Beneficiary, the amount of any payment related to the Event of Default and the unpaid Principal of the Note shall immediately become due and payable, upon written notice by the Beneficiary to the Trustor (or automatically where so specified in the Loan Documents), and no omission on the 1010\20\406821.2 4285 part of the Beneficiary to exercise such option when entitled to do so shall be construed as a waiver of such right. Section 7.3 The Beneficiary's Right to Enter and Take Possession. If an Event of Default shall have occurred and be continuing, the Beneficiary may: (a) Either in person or by agent, with or without bringing any action or proceeding, or by a receiver appointed by a court, and without regard to the adequacy of its security, enter upon the Security and take possession thereof (or any part thereof) and of any of the Security, in its own name or in the name of Trustee, and do any acts which it deems necessary or desirable to preserve the value or marketability of the Property, or part thereof or interest therein, increase the income therefrom or protect the security thereof. The entering upon and taking possession of the Security shall not cure or waive any Event of Default or Notice of Default (as defined below) hereunder or invalidate any act done in response to such Default or pursuant to such Notice of Default and, notwithstanding the continuance in possession of the Security, Beneficiary shall be entitled to exercise every right provided for in this Deed of Trust, or by law upon occurrence of any Event of Default, including the right to exercise the power of sale; (b) Commence an action to foreclose this Deed of Trust as a mortgage, appoint a receiver, or specifically enforce any of the covenants hereof; (c) Deliver to Trustee a written declaration of default and demand for sale, and a written notice of default and election to cause Trustor's interest in the Security to be sold ("Notice of Default and Election to Sell"), which notice Trustee or Beneficiary shall cause to be duly filed for record in the Official Records of San Diego County; or (d) Exercise all other rights and remedies provided herein, in the instruments by which the Trustor acquires title to any Security, or in any other document or agreement now or hereafter evidencing, creating or securing all or any portion of the obligations secured hereby, or provided by law. Section 7.4 Foreclosure By Power of Sale. Should the Beneficiary elect to foreclose by exercise of the power of sale herein contained, the Beneficiary shall give notice to the Trustee (the "Notice of Sale") and shall deposit with Trustee this Deed of Trust which is secured hereby (and the deposit of which shall be deemed to constitute evidence that the unpaid principal amount of the Note is immediately due and payable), and such receipts and evidence of any expenditures made that are additionally secured hereby as Trustee may require. (a) Upon receipt of such notice from the Beneficiary, Trustee shall cause to be recorded, published and delivered to Trustor such Notice of Default and Election to Sell as then required by law and by this Deed of Trust. Trustee shall, without demand on Trustor, after lapse of such time as may then be required by law and after recordation of such Notice of Default and Election to Sell and after Notice of Sale having been given as required by law, sell the Security, at the time and place of sale fixed by it in said Notice of Sale, whether as a whole or in separate 121010\20\406821.2 4286 lots or parcels or items as Trustee shall deem expedient and in such order as it may determine unless specified otherwise by the Trustor according to California Civil Code Section 2924g(b), at public auction to the highest bidder, for cash in lawful money of the United States payable at the time of sale. Trustee shall deliver to such purchaser or purchasers thereof its good and sufficient deed or deeds conveying the property so sold, but without any covenant or warranty, express or implied. The recitals in such deed or any matters of facts shall be conclusive proof of the truthfulness thereof. Any person, including, without limitation, Trustor, Trustee or Beneficiary, may purchase at such sale, and Trustor hereby covenants to warrant and defend the title of such purchaser or purchasers. (b) After deducting all reasonable costs, fees and expenses of Trustee, including costs of evidence of title in connection with such sale, Trustee shall apply the proceeds of sale to payment of: (i) the unpaid Principal amount of the Note; (ii) all other amounts owed to Beneficiary under the Loan Documents; (iii) all other sums then secured hereby; and (iv) the remainder, if any, to Trustor. (c) 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, and without further notice make such sale at the time fixed by the last postponement, or may, in its discretion, give a new Notice of Sale. Section 7.5 Receiver. If an Event of Default shall have occurred and be continuing, Beneficiary, as a matter of right and without further notice to Trustor or anyone claiming under the Security, and without regard to the then value of the Security or the interest of Trustor therein, shall have the right to apply to any court having jurisdiction to appoint a receiver or receivers of the Security (or a part thereof), and Trustor hereby irrevocably consents to such appointment and waives further notice of any application therefor. Any such receiver or receivers shall have all the usual powers and duties of receivers in like or similar cases, and all the powers and duties of Beneficiary in case of entry as provided herein, and shall continue as such and exercise all such powers until the date of confirmation of sale of the Security, unless such receivership is sooner terminated. Section 7.6 Remedies Cumulative. No right, power or remedy conferred upon or reserved to the Beneficiary by this Deed of Trust is intended to be exclusive of any other right, power or remedy, but each and every such right, power and remedy shall be cumulative and concurrent and shall be in addition to any other right, power and remedy given hereunder or now or hereafter existing at law or in equity. Section 7.7 No Waiver. (a) No delay or omission of the Beneficiary to exercise any right, power or remedy accruing upon any Event of Default shall exhaust or impair any such right, power or remedy, or shall be construed to be a waiver of any such Event of Default or acquiescence therein; and every right, power and remedy given by this Deed of Trust to the Beneficiary may be exercised from time to time and as often as may be deemed expeditious by the Beneficiary. Beneficiary 's expressed or implied consent to a breach by Trustor, or a waiver of any obligation 131010\20\406821.2 4287 of Trustor hereunder shall not be deemed or construed to be a consent to any subsequent breach, or further waiver, of such obligation or of an}' other obligations of the Trustor hereunder. Failure on the part of the Beneficiary to complain of any act or failure to act or to declare an Event of Default, irrespective of how long such failure continues, shall not constitute a waiver by the Beneficiary of its right hereunder or impair any rights, power or remedies consequent on any Event of Default by the Trustor. (b) If the Beneficiary (i) grants forbearance or an extension of time for the payment of any sums secured hereby, (ii) takes other or additional security or the payment of any sums secured hereby, (iii) waives or does not exercise any right granted in the Loan Documents, (iv) releases any part of the Security from the lien of this Deed of Trust, or otherwise changes any of the terms, covenants, conditions or agreements in the Loan Documents, (v) consents to the granting of any easement or other right affecting the Security, or (iv) makes or consents to any agreement subordinating the lien hereof, any such act or omission shall not release, discharge, modify, change or affect the original liability under this Deed of Trust, or any other obligation of the Trustor or any subsequent purchaser of the Security or any part thereof, or any maker, co- signer, endorser, surety or guarantor (unless expressly released); nor shall any such act or omission preclude the Beneficiary from exercising any right, power or privilege herein granted or intended to be granted in any Event of Default then made or of any subsequent Event of Default, nor, except as otherwise expressly provided in an instrument or instruments executed by the Beneficiary shall the lien of this Deed of Trust be altered thereby. Section 7.8 Suits to Protect the Security. The Beneficiary shall have power to (a) institute and maintain such suits and proceedings as it may deem expedient to prevent any impairment of the Security and the rights of the Beneficiary as may be unlawful or any violation of this Deed of Trust, (b) preserve or protect its interest (as described in this Deed of Trust) in the Security, and (c) restrain the enforcement of or compliance with any legislation or other governmental enactment, rule or order that may be unconstitutional or otherwise invalid, if the enforcement for compliance with such enactment, rule or order would impair the Security thereunder or be prejudicial to the interest of the Beneficiary. Section 7.9 Trustee May File Proofs of Claim. In the case of any receivership, insolvency, bankruptcy, reorganization, arrangement, adjustment, composition or other proceedings affecting the Trustor, its creditors or its property, the Trustee, to the extent permitted by law, shall be entitled to file such proofs of claim and other documents as may be necessary or advisable in order to have the claims of the Beneficiary allowed in such proceedings and for any additional amount which may become due and payable by the Trustor hereunder after such date. Section 7.10 Waiver. The Trustor waives presentment, demand for payment, notice of dishonor, notice of protest and nonpayment, protest, notice of interest on interest and late charges, and diligence in taking any action to collect any sums owing under the Note or in proceedings against the 141010\20\406821.2 4288Security, in connection with the delivery, acceptance, performance, default, endorsement or guaranty of this Deed of Trust. ARTICLE 8 MISCELLANEOUS Section 8.1 Amendments. This instrument cannot be waived, changed, discharged or terminated orally, but only by an instrument in writing signed by Beneficiary and Trustor. Section 8.2 Reconveyance by Trustee. Upon written request of Beneficiary stating that all sums secured hereby have been paid or forgiven, that all obligations to be performed by the Trustee under the Loan Documents (including, but not limited to, the operation of the Property in accordance with, and for the entire term of, the Regulatory Agreement), and upon surrender of this Deed of Trust to Trustee for cancellation and retention, and upon payment by Trustor of Trustee's reasonable fees, Trustee shall reconvey the Security to Trustor, or to the person or persons legally entitled thereto. Section 8.3 Notices. If at any time after the execution of this Deed of Trust it shall become necessary or convenient for one of the parties hereto to serve any notice, demand or communication upon the other party, such notice, demand or communication shall be in writing and shall be served personally, by reputable overnight delivery service, or by depositing the same in the registered United States mail, return receipt requested, postage prepaid and (1) if intended for Beneficiary shall be addressed to: Carlsbad Redevelopment Agency 2965 Roosevelt Street, Suite B Carlsbad, CA 92008 Attn: Executive Director and (2) if intended for Trustor shall be addressed to: CIC Glen Ridge, L. P. c/o Chelsea Investment Corporation 5993 Avenida Encinas, Suite 101 Carlsbad, CA 92008 Attn: James J. Schmid Any notice, demand or communication shall be deemed given, received, made or communicated on the date personal delivery is effected or, if mailed in the manner herein specified, on the delivery date or date delivery is refused by the addressee, as shown on the return receipt. Either party may change its address at any time by giving written notice of such change to Beneficiary 1010\20\406821.3 4289 or Trustor as the case may be, in the manner provided herein, at least ten (10) days prior to the date such change is desired to be effective. Section 8.4 Successors and Joint Trustors. Where an obligation is created herein binding upon Trustor, the obligation shall also apply to and bind any transferee or successors in interest. Where the terms of the Deed of Trust have the effect of creating an obligation of the Trustor and a transferee, such obligation shall be deemed to be a joint and several obligation of the Trustor and such transferee. Where Trustor is more than one entity or person, all obligations of Trustor shall be deemed to be a joint and several obligation of each and every entity and person comprising Trustor. Section 8.5 Captions. The captions or headings at the beginning of each Section hereof are for the convenience of the parties and are not a part of this Deed of Trust. Section 8.6 Invalidity of Certain Provisions. Every provision of this Deed of Trust is intended to be severable. In the event any term or provision hereof is declared to be illegal or invalid for any reason whatsoever by a court or other body of competent jurisdiction, such illegality or invalidity shall not affect the balance of the terms and provisions hereof, which terms and provisions shall remain binding and enforceable. If the lien of this Deed of Trust is invalid or unenforceable as to any part of the debt, or if the lien is invalid or unenforceable as to any part of the Security, the unsecured or partially secured portion of the debt, and all payments made on the debt, whether voluntary or under foreclosure or other enforcement action or procedure, shall be considered to have been first paid or applied to the full payment of that portion of the debt which is not secured or partially secured by the lien of this Deed of Trust. Section 8.7 Governing Law. This Deed of Trust shall be governed by and construed in accordance with the laws of the State of California. Section 8.8 Gender and Number. In this Deed of Trust the singular shall include the plural and the masculine shall include the feminine and neuter and vice versa, if the context so requires. Section 8.9 Deed of Trust, Mortgage. Any reference in this Deed of Trust to a mortgage shall also refer to a deed of trust and any reference to a deed of trust shall also refer to a mortgage. Section 8.10 Actions. Trustor agrees to appear in and defend any action or proceeding purporting to affect the Security. 1010\20\406821.2 4290 Section 8.11 Substitution of Trustee. Beneficiary may from time to time substitute a successor or successors to any Trustee named herein or acting hereunder to execute this Trust. Upon such appointment, and without conveyance to the successor trustee, the latter shall be vested with all title, powers, and duties conferred upon any Trustee herein named or acting hereunder. Each such appointment and substitution shall be made by written instrument executed by Beneficiary, containing reference to this Deed of Trust and its place of record, which, when duly recorded in the proper office of the county or counties in which the Property is situated, shall be conclusive proof of proper appointment of the successor trustee. Section 8.12 Statute of Limitations. The pleading of any statute of limitations as a defense to any and all obligations secured by this Deed of Trust is hereby waived to the full extent permissible by law. Section 8.13 Subordination. The rights and remedies of the Beneficiary under this Deed of Trust shall be subject in all respects to the terms and conditions of that certain subordination agreement by and among the Beneficiary, the Trustor and U.S. Bank National Association, as trustee, recorded concurrently herewith. Section 8.14 Acceptance by Trustee, Trustee accepts this Trust when this Deed of Trust, duly executed and acknowledged, is made public record as provided by law. Except as otherwise provided by law the Trustee is not obligated to notify any party hereto of pending sale under this Deed of Trust or of any action of proceeding in which Trustor, Beneficiary, or Trustee shall be a party unless brought by Trustee. Section 8.15 Nonrecourse Loan. The loan secured by this Deed of Trust is non-recourse as more particularly set forth in Section 2.8 of the Loan Agreement. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] 171010\20\406821.3 4291 IN WITNESS WHEREOF, Trustor has executed this Deed of Trust as of the day and year first above written. TRUSTOR: CIC GLEN RIDGE, L.P., a California limited partnership By: Pacific Southwest Community Development Corporation, a California nonprofit public benefit corporation, its Managing General Partner By: . Jack K. Jaynes, Executive Director/President By: CIC Glen Ridge, LLC, a California limited liability company, its Co-General Partner Jarnes J. Schmidyfts iCl 181010\20\406821.2 4292 STATE OF CALIFORNIA COUNTY OF On appeared )ss. . before me,, personally , personally knoSvn to me (Qr proved to me on The basis ff satisfactory evidenre) to be the person(s) whose name(s)(Ts/pre-subscribed to the within instrument and acknowledged to me that<hj$she/they executed the same in (fisfoer/meir- authorized capacity(ies), and that by(hi^her/their signature(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. MICHELLE CASSEL Commission # 1488413 Notary Public - California Orange County 1010\20\406821.2 4293 -0 • \ ss. , before me, STATE OF CALIFORNIA COUNTY OF On appeared the basis of satisfactory e within instrument and acknowledged to me that h^/ste/they executed the same indi3/heF/their authorized capacity(ies), and that byit^hef/therrsignatureCs) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. , personally known to me (ef- proved to me on ce) to be the person(s) whose name(s)(i!0are~5ubscribed to the WITNESS my hand and official se Commission #1488413 I Notary Public-California I Orange County 1010\20\406821.2 EXHIBIT A 4294 The land referred to is situated in the State of California, County of San Diego, and described as follows: LOT 1 OF CARLSBAD TRACT NO. 02-16, ROBERTSON RANCH EAST VILLAGE, IN THE CITY OF CARLSBAD, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO MAP THEREOF NO. 15608, FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY, SEPTEMBER 18, 2007, TOGETHER WITH PORTIONS OF GLEN AVENUE, WIND TRAIL WAY AND CANNON ROAD ADJACENT THERETO AS SHOWN ON SAID MAP. APN: 168-360-01-00 1010\20\537706.1 RECORDED REQUEST OF First American Title SUBDIVISION MAPPING DEPT. RECORDING REQUESTED BY, AND WHEN RECORDED MAIL TO: Carlsbad Redevelopment Agency 2965 Roosevelt Street, Suite B Carlsbad, Ca. 92008 Attn: Executive Director DGC# 2009-0557587 OCT 07, 2009 8:00 AM OFFICIAL RECORDS A Q A Q SAN DIEGO COUNTY RECORDER'S OFFICE 41 O « O DAVID L BUTLER, COUNTY RECORDER FEES: 21.00 PAGES: 5 5f SPACE ABOVE THIS LINE FOR RECORDER'S USE NOTICE OF AFFORDABILITY RESTRICTIONS ON TRANSFER OF PROPERTY NOTICE IS HEREBY GIVEN, that the Carlsbad Redevelopment Agency, a public body corporate and politic (the "Agency"), to carry out certain obligations under the Community Redevelopment Law of the State of California (Health and Safety Code Section 33000 et. seq.) and the Redevelopment Plan for the Carlsbad Village Redevelopment Area and the South Carlsbad Coastal Redevelopment Area, has required CIC Glen Ridge, L.P., a California Limited Partnership (the "Owner") to enter into certain affordability covenants and restrictions entitled, Regulatory Agreement and Declaration of Restrictive Covenants with the Agency and the City of Carlsbad (the "Restrictions"), with reference to a housing development (the "Development") situated on the certain real property (the "Property") located at 3555 Glen Avenue, City of Carlsbad, Assessor's Parcel No. 168-360-01-00, and further described in Exhibit "A", incorporated herein by reference. The affordability covenants and restrictions contained in the Restrictions include without limitation and as further described in the Restrictions: 1. One (1) unit in the Development is restricted for occupancy by lower income households, at rents affordable to lower income households. 2. Thirty-Seven (37) units in the Development are restricted for occupancy by very low income households, at rents affordable to very low income households. 3. Additional requirements concerning operation, management and maintenance of the Development are also imposed by the Restrictions. In the event of any conflict between this Notice of Affordability Restrictions on Transfer of Property (the "Notice") and the Restrictions, the terms of the Restrictions shall prevail. Page 1 4329 The Restrictions were recorded concurrently herewith, as Instrument NQ.dl*"'"^ 'Jo/ jn tne Official Records of San Diego County, and shall remain in effect until fifty-five (55) years after the date of this Notice. This Notice is being recorded and filed by the Agency in compliance with Health and Safety Code Sections 33334.3(f)(3) and (4) and/or Section 33413(c)(5), as amended effective this date, and shall be indexed against the Agency and the Owners. Date:OCT. 07 _, 2009 IN WITNESS WHEREOF, the parties have executed this Notice of Affordability Restrictions on Transfer of Property on or as of the date first written above. OWNER: CIC GLEN RIDGE, L.P, a California limited partnership By:. ; dame:— ^ CITY: CITY OF CARLSBAD, a municipal corporation S.: Its: LISA HILDABRAND CITY MANAGER AGENCY: CARLSBAD REDEVELOPMENT AGENCY, a public body corporate jyid politic LISA HILDABRAND Its CITY MANAGER /gXEflmVE. DiREGTQg, Page 2 LEGAL DESCRIPTION . - « ~ EXHIBIT A 403U The land referred to is situated in the State of California, County of San Diego, and described as follows: LOT 1 OF CARLSBAD TRACT NO. 02-16, ROBERTSON RANCH EAST VILLAGE, IN THE CITY OF CARLSBAD, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO MAP THEREOF NO. 15608, FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY, SEPTEMBER 18, 2007, TOGETHER WITH PORTIONS OF GLEN AVENUE, WIND TRAIL WAY AND CANNON ROAD ADJACENT THERETO AS SHOWN ON SAID MAP. APN: 168-360-01-00 PageS 4331 CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT State of California County of personally appeared ^ <o before me,(Vine. Here Insert Name anditle of the Officer f Q- djitl Name(s) of Signer(s) LISA ANNE YOUNG f Commission # 1829407 I Notary Public • California | San Diejjo County 5 l5,2013* who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s)Ltsfare subscribed to the within instrument and acknowledged to me that he/she/they executed the same in histoer/their authorized capacity(ies), and that by his/bef/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. Place Notary Seal Above WITNESS my hand and official seal. Signature Signature of Nota^f'ublic OPTIONAL Though the information below is not required by law, it may prove valuable to persons relying on the document and could prevent fraudulent removal and reattachment of this form to another document. Description of Attached Document Title or Type of Document: A]trff6-€- O^P Document Date:Number of Pages: Signer(s) Other Than Named Above: Capacity(ies) Claimed by Signer(s) Signer's Name: D Individual D Corporate Officer — Title(s): D Partner — D Limited D General D Attorney in Fact n Trustee D Guardian or Conservator D Other: RIGHT THUMBPRINT OF SIGNER Top of thumb here Signer Is Representing:. Signer's Name: D Individual D Corporate Officer — Title(s): D Partner — D Limited D General D Attorney in Fact D Trustee D Guardian or Conservator D Other: Signer Is Representing: RIGHT THUMBPRINT OF SIGNER Top of thumb here ©2007 National Notary Association • 9350 De Soto Ave., P.O. Box 2402 -Chatsworth, CA 91313-2402 • www.NationalNotary.org Item #5907 Reorder: Call Toil-Free 1 -800-876-6827 4332 CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT Here Insert Name and Title of the CJfficer State of California County of On Date personally appeared ~HfclLA RENAECOWAN Commission * 1848471 Notary Public. CaliforniaSan Diego County ^My Comm. Expires May 10.2013 who proved to me on the basis of satisfactory evidence to be the person^ whose nams{s)(ls2Safe subscribed to the within instrument and acknowledged to me that be^fi^ytriey executed the same in -his^fiejl/thetr authorized capacity(tes), and that by-ht^e^thtetf signature^ on the instrument the person(a), or the entity upon behalf of which the person(ff) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Place Notary Seal Above Signature OPTIONAL - Though the information below is not required by law, it may prove valuable to persons relying on the document and could prevent fraudulent removal and reattachment of this form to another document. Description of Attached Document Title or Type of Document: Document Date:Number of Pages: Signer(s) Other Than Named Above: Capacity(ies) Claimed by Signer(s) Signer's Name: n Individual D Corporate Officer — Title(s): D Partner — D Limited [J General D Attorney in Fact n Trustee I] Guardian or Conservator H Other: RIGHTTHUMBPRINT OF SIGNER Signer Is Representing:. Signer's Name: D Individual D Corporate Officer — Title(s): n Partner — C Limited n General n Attorney in Fact n Trustee D Guardian or Conservator n Other: Signer Is Representing: RIGHTTHUMBPRINT | OF SIGNER ©2007 National Notary Association • 9350 De Soto Ave., P.O. Box 2402 • Chatsworth, CA 91313-2402 • www.NationalNotary.org Item #5907 Reorder: Call Toll-Free 1-800-876-6827 RECORDED REQUEST OF First American Title SUBDIVISION MAPPING DEPT. RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: Carlsbad Redevelopment Agency 2965 Roosevelt Street, Suite B Carlsbad, CA 92008 Attn: Executive Director No fee for recording pursuant to Government Code Section 27383 DOC# 2009-0557582 OCT 07, 2009 8:00 AM OFFICIAL RECORDS SAN DIEGO COUNTY RECORDER'S OFFICE DAVID L BUTLER. COUNTY RECORDER FEES: 0.00 PAGES:19 \°\ M 4255 REGULATORY AGREEMENT AND DECLARATION OF RESTRICTIVE COVENANTS (Glen Ridge Apartments) This Regulatory Agreement and Declaration of Restrictive Covenants (the "Agreement") is made and entered into as of NOVEMBER 26_, 200 7 (the "Agreement Date"), by and between the Carlsbad Redevelopment Agency, a public body, corporate and politic (the "Agency"), and CIC Glen Ridge, L.P., a California limited partnership (the "Developer"). RECITALS 1. The Agency and the Developer have entered into a Loan Agreement (the "Loan Agreement") under which the Agency agreed to loan up to One Million Fourteen Thousand Dollars ($1,014,000) (the "Loan") to the Developer to finance the development of a seventy- eight (78)-unit affordable apartment complex (the "Development") on certain real property in the City of Carlsbad owned by the Developer and more particularly described in Exhibit A attached to and incorporated herein (the "Property"). Capitalized terms used but not defined in this Agreement shall have the meanings set forth in the Loan Agreement. 2. The Loan consists of Low and Moderate Income Housing Fund monies, which must be utilized in accordance with the requirements of the Community Redevelopment Law (Health and Safety Code Section 33000 et sea.). 3. Through this Agreement, the Agency is imposing occupancy and affordability restrictions on the Development pursuant to Health and Safety Code Section 33334.3(f)(l)(A) and in order to meet replacement housing requirements applicable to the Redevelopment Area pursuant to Health and Safety Code Section 33413(a). 4. The Agency also intends to utilize the Development to obtain affordable housing production credits pursuant to Health and Safety Code Section 33413(b)(2)(A) as newly constructed units located outside of the Redevelopment Area and, except for one (1) manager's unit, available at affordable housing cost to very low, lower, and moderate income households. 1010\20\406818.2 4256 Such units are required to remain affordable to such households for fifty-five (55) years. This Agreement is also intended to implement this requirement. 5. In consideration of receipt of the Loan, the Developer has further agreed to observe all the terms and conditions set forth below. 6. In order to ensure that the entire Development will be used and operated in accordance with these conditions and restrictions, the Agency and the Developer wish to enter into this Agreement. THEREFORE, the Agency and the Developer hereby agree as follows: ARTICLE 1. DEFINITIONS Section 1.1 Definitions. When used in this Agreement, the following terms shall have the respective meanings assigned to them in this Article 1. (a) "Actual Household Size" shall mean the actual number of persons in the applicable household. (b) "Adjusted Income" shall mean the total anticipated annual income of all persons in a household, as calculated in accordance with 25 California Code of Regulations Section 6914 or pursuant to a successor State housing program that utilizes a reasonably similar method of calculation of adjusted income. In the event that no such program exists, the Agency shall provide the Owner with a reasonably similar method of calculation of adjusted income as provided in said Section 6914. (c) "Agency" shall mean the Carlsbad Redevelopment Agency, a public body, corporate and politic. (d) "Agreement" shall mean this Regulatory Agreement and Declaration of Restrictive Covenants. (e) "Agreement Date" shall mean the date of this Agreement as set forth above. (f) "Assumed Household Size" shall have the meaning set forth in Section 2.2(d). The definition is utilized to calculate affordable rent and is not intended to be a limit on the number of persons occupying a unit. (g) "City" shall mean the City of Carlsbad, a municipal corporation. 1010\20\406818.2 4257 (h) "Deed of Trust" shall mean the deed of trust of even date herewith in favor of the Agency on the Developer's fee interest in the Property which secures repayment of the Loan and performance of this Agreement. (i) "Developer" shall mean CIC Glen Ridge, L.P., a California limited partnership, and its permitted successors and assigns. (j) "Development" shall mean the Property and the seventy-eight (78) residential units to be constructed on the Property, as well as any additional improvements, and all landscaping, roads and parking spaces existing thereon, as the same may from time to time exist. (k) "Loan" shall mean the funds loaned to the Developer by the Agency pursuant to the Loan Agreement. (1) "Loan Agreement" shall mean that certain Loan Agreement dated concurrently herewith by and between the Agency and the Developer. (m) "Lower Income Household" shall mean a household with an Adjusted Income that does not exceed the qualifying limits for lower income households, as established and amended from time to time pursuant to Section 8 of the United States Housing Act of 1937, and as published by the State of California Department of Housing and Community Development. (n) "Lower Income Units" shall mean any of the Units which, pursuant to Section 2.1 below, are required to be occupied by Lower Income Households. (o) "Median Income" shall mean the median gross yearly income, adjusted for Actual Household Size or Assumed Household Size as specified herein, in the County of San Diego, California, as published from time to time by the United States Department of Housing and Urban Development ("HUD") and the State of California. In the event that such income determinations are no longer published, or are not updated for a period of at least eighteen (18) months, the Agency shall provide the Developer with other income determinations which are reasonably similar with respect to methods of calculation to those previously published by HUD and the State. (p) "Other Income Household" shall mean a household with an Adjusted Income which does not exceed ninety percent (90%) of Median Income, adjusted for Actual Household Size. (q) "Other Income Units" shall mean the Units which, pursuant to Section 2.1 below, are required to be occupied by Other Income Households. (r) "Property" shall mean the real property described in Exhibit A attached hereto and incorporated herein. 1010\20\406818.3 4258 (s) "Redevelopment Area" shall mean, collectively, the Carlsbad Village Redevelopment Project Area and the South Carlsbad Coastal Redevelopment Project Area, as may be amended from time to time. (t) "Rent" shall mean the total of monthly payments by the Tenant of a Unit for the following: use and occupancy of the Unit and land and associated facilities, including parking; any separately charged fees or service charges assessed by the Developer which are required of all Tenants, other than security deposits; an allowance for the cost of an adequate level of service for utilities paid by the Tenant, including garbage collection, sewer, water, electricity, gas and other heating, cooking and refrigeration fuel, but not telephone service or cable TV; and any other interest, taxes, fees or charges for use of the land or associated facilities and assessed by a public or private entity other than the Developer, and paid by the Tenant. (u) "Tenant" shall mean a household legally occupying a Unit pursuant to a valid lease with the Developer. (v) "Term" shall mean the term of this Agreement, which shall commence on the Agreement Date and shall continue for fifty-five (55) years. (w) "Unit(s)" shall mean any one (1) or all of the seventy-eight (78) rental units to be constructed on the Property. (x) "Very Low Income Household" shall mean a household with an Adjusted Income that does not exceed the qualifying limits for very low income households, as established and amended from time to time pursuant to Section 8 of the United States Housing Act of 1937, and as published by the State of California Department of Housing and Community Development. (y) "Very Low Income Rent" shall mean the maximum allowable rent for a Very Low Income Unit pursuant to Section 2.2(a) below. (z) "Very Low Income Units" shall mean any of the Units which, pursuant to Section 2.1 below, are required to be occupied by Very Low Income Households. ARTICLE 2. AFFORD ABILITY AND OCCUPANCY COVENANTS Section 2.1 Occupancy Requirements. The Developer shall regulate the use and occupancy of the Units in the following manner: 1010\20\406818.2 4259 One Bedroom Two Bedroom Three Bedroom Total Very Low Income 0 18 19 37 Lower Income 1 0 0 1 Other Income 16 11 12 39 Total 17 28 32 77 (plus 1 manager's unit) Section 2.2 Allowable Rent. (a) Very Low Income Rent. Subject to the provisions of Section 2.3 below, the Rent charged to Tenants of the Very Low Income Units shall not exceed one-twelfth (1/12th) of thirty percent (30%) of fifty percent (50%) of Median Income, adjusted for Assumed Household Size. (b) Lower Income Rent. Subject to the provisions of Section 2.3 below, the Rent charged to Tenants of the Lower Income Units shall not exceed one-twelfth (l/12th) of thirty percent (30%) of sixty percent (60%) of Median Income, adjusted for Assumed Household Size. (c) Other Income Rent. Subject to the provisions of Section 2.3 below, the Rent charged to Tenants of the Other Income Units shall not exceed one-twelfth (1/12th) of thirty percent (30%) of ninety percent (90%) of Median Income, adjusted for Assumed Household Size. (d) Assumed Household Size. In calculating the allowable Rent for the Units, the following Assumed Household Sizes shall be utilized (except that if any federal statutes or regulations require use of alternate household size assumptions in calculating rents, such federally-mandated household size assumptions shall be used instead of the assumptions provided below): Number of Bedrooms One Two Three Assumed Household Size 2 3 4 (e) Approval of Rents for Units. Initial rents for all Units shall be approved by the Agency prior to occupancy. All rent increases for all Units shall also be submitted to the Agency for approval not less than thirty (30) days before notice is given to the affected Tenant and shall be imposed only if in compliance with this Agreement. The Agency shall provide the Developer with a schedule of maximum permissible rents for the Units annually. 1010\20\406818.3 4260 Section 2.3 Increased Income of Tenants. (a) Increased Income Over Very Low Income. In the event, upon recertification of a Tenant's household's income, the Developer determines that a former Very Low Income Household has an Adjusted Income that exceeds the qualifying income for a Very Low Income Household, but has an Adjusted Income not exceeding the qualifying limit for a Lower Income Household, upon expiration of the Tenant's lease, and sixty (60) days' written notice to the Tenant, the Rent may be increased to one-twelfth (1/12th) of thirty percent (30%) of sixty percent (60%) of Median Income, and the Owner shall rent the next available Unit to Very Low Income Household to comply with the requirements of Section 2.1 above. (b) Increased Income Over Lower Income. In the event that, following recertification of a Tenant's income, the Developer determines that a former Very Low Income Household, or Lower Income Household has an Adjusted Income that exceeds the qualifying limit for a Lower Income Household but does not exceed ninety percent (90%) of Median Income, adjusted for Actual Household Size, then, upon expiration of the Tenant's lease and sixty (60) days' written notice to the Tenant, such household's Unit shall be considered an Other Unit, and the Rent may be increased to one-twelfth (l/12th) of thirty percent (30%) of ninety percent (90%) of Median Income, and the Developer shall rent the next available Unit to or Very Low Income Household or Lower Income Household to comply with the requirements of Section 2.1 above. (c) Increased Income Over 90% of Median Income. If, upon recertification of a Tenant's income, the Developer determines that a Tenant has an Adjusted Income exceeding ninety percent (90%) of Median Income, adjusted for Actual Household Size, such Tenant shall be permitted to continue to occupy the Unit, and, upon expiration of the Tenant's lease, and sixty (60) days' written notice to the Tenant, the Rent may be increased to one-twelfth (l/12th) of thirty percent (30%) of the Tenant's actual Adjusted Income, and the Unit shall continue to be classified as an Other Unit until the Tenant vacates the Unit at which time the Unit shall be re- rented to an income-eligible household to meet the requirements of Section 2.1. (d) Termination of Occupancy. Upon termination of occupancy of a Unit by a Tenant, such Unit shall be deemed to be continuously occupied by a household of the same income level (e.g., Very Low Income Household, Lower Income Household, or Other Income Household) as the income level of the vacating Tenant, until such Unit is reoccupied, at which time the income character of the Unit (e.g., Very Low Income Household, Lower Income Household, or Other Income Household) shall be redetermined. Section 2.4 Tax Credit Rules. To the extent the provisions of this Agreement, regarding Adjusted Income, assumed household size or increased income of Tenants, conflict with requirements applicable to any Units regulated by a low income housing tax credit regulatory agreement, such that the Developer cannot comply with both the tax credit requirements and the requirements of this Agreement, the Developer shall so notify the Agency and may comply with the tax credit requirements regarding Adjusted Income, assumed household size or increased income in lieu of the requirements of this Agreement provided that 1010\20\406818.3 4261 the Developer shall, at all times during the Term, comply with the requirements of Section 2.1 and Section 2.2. ARTICLE 3. INCOME CERTIFICATION AND REPORTING Section 3.1 Income Certification. The Developer shall obtain, complete and maintain on file, immediately prior to initial occupancy and annually thereafter, income certifications from each Tenant renting any of the Units (excluding the manager's Unit). The Developer shall make a good faith effort to verify that the income provided by an applicant or occupying household in an income certification is accurate by taking one or more of the following steps as a part of the verification process: (1) obtain a pay stub for the most recent pay period; (2) obtain an income tax return for the most recent tax year; (3) conduct a credit agency or similar search; (4) obtain an income verification form from the applicant's current employer; (5) obtain an income verification form from the Social Security Administration and/or the California Department of Social Services if the applicant receives assistance from either of such agencies; or (6) if the applicant is unemployed and has no such tax return, obtain another form of independent verification. Copies of tenant income certifications shall be available to the Agency upon request. Section 3.2 Annual Report to the Agency. The Developer shall submit to the Agency (a) not later than the ninetieth (90th) day after the close of each calendar year, or such other date as may reasonably be requested by the Agency, a statistical report, including income and rent data for all Units covered by this Agreement, setting forth the information called for therein, and (b) within fifteen (15) days after receipt of a written request, any other information or completed forms requested by the Agency in order to comply with reporting requirements of the State of California, the City, and/or the Agency. Section 3.3 Additional Information. The Developer shall provide any additional information pertaining to the subject matter of this Agreement reasonably requested by the Agency. The Agency shall have the right to examine and make copies of all books, records or other documents of the Developer which pertain to the Development. Section 3.4 Records. The Developer shall maintain complete, accurate and current records pertaining to the Development, and shall permit any duly authorized representative of the Agency to inspect records, including records pertaining to income and household size of Tenants. All Tenant lists, applications and waiting lists relating to the Development shall at all times be kept separate and identifiable from any other business of the Developer and shall be maintained in a reasonable 1010\20\406818.3 4262 condition for proper audit and subject to examination during business hours by representatives of the Agency. The Developer shall retain copies of all materials obtained or produced with respect to occupancy of the Units for a period of at least five (5) years. Section 3.5 On-site Inspection. The Agency shall have the right to perform an on-site inspection of the Development at least one (1) time per year. The Developer agrees to cooperate in such inspection. Such right to annually inspect the Development shall be addition to the City's right to inspect the Development in accordance with the City's municipal code as may be amended from time to time. ARTICLE 4. OPERATION OF THE DEVELOPMENT Section 4.1 Residential Use. The Development shall be operated only for residential use and associated common areas. No part of the Development shall be operated as transient housing. Section 4.2 Compliance with Loan Agreement. The Developer shall comply with all the terms and provisions of the Loan Agreement. Section 4.3 Taxes and Assessments. The Developer shall pay all real and personal property taxes, assessments and charges and all franchise, income, employment, old age benefit, withholding, sales, and other taxes assessed against it, or payable by it, at such times and in such manner as to prevent any penalty from accruing, or any lien or charge from attaching to the Property; provided, however, that Developer shall have the right to contest in good faith, any such taxes, assessments, or charges. In the event Developer exercises its right to contest any tax, assessment, or charge against it, Developer, on final determination of the proceeding or contest, shall immediately pay or discharge any decision or judgment rendered against it, together with all costs, charges and interest. The Developer shall not apply for a property tax exemption for the Property under any provision of law, except pursuant to Revenue and Taxation Section 214(g), without the Agency's prior written consent. Section 4.4 Preference to Displacees. The Developer shall give a preference in the rental of any Units to eligible households displaced by activity of the Agency upon receiving a written request of the Agency regarding such displacement. 1010\20\406818.3 4263 ARTICLE 5. PROPERTY MANAGEMENT AND MAINTENANCE Section 5.1 Management Responsibilities. The Developer is responsible for all management functions with respect to the Development, including without limitation the selection of Tenants, certification and recertification of household size and income, evictions, collection of rents and deposits, maintenance, landscaping, routine and extraordinary repairs, replacement of capital items, and security. The Agency shall not have any responsibility over management of the Development. The Developer shall retain a professional property management company approved by the Agency in its reasonable discretion to perform its management duties hereunder as set forth below. A resident manager shall also be required. Section 5.2 Management Agent. The Development shall at all times be managed by an experienced management agent reasonably acceptable to the Agency, with demonstrated ability to operate residential facilities, like the Development in a manner that will provide decent, safe, and sanitary housing (as approved, the "Management Agent"). The Agency hereby approves CIC Management, Inc., as the initial Management Agent. The Developer shall submit for the Agency's approval the identity of any other proposed Management Agent. The Developer shall also submit such additional information about the background, experience and financial condition of any proposed Management Agent as is reasonably necessary for the Agency to determine whether the proposed Management Agent meets the standard for a qualified Management Agent set forth above. If the proposed Management Agent meets the standard for a qualified Management Agent set forth above, the Agency shall approve the proposed Management Agent by notifying the Developer in writing. If the proposed Management Agent is disapproved by the Agency, the disapproval shall state with reasonable specificity the basis for disapproval. Thereafter, the Developer shall submit a different proposed Management Agent, and submit such additional information about the background, experience and financial condition of the proposed Management Agent as is reasonably necessary for the Agency to determine whether the proposed Management Agent meets the standard for a qualified Management Agent set forth above. Only the written approval of the Agency of the Developer's proposed Management Agent shall constitute the Developer's compliance with this Section. Section 5.3 Periodic Performance Review. The Agency reserves the right to conduct an annual (or more frequently, if deemed necessary by the Agency) review of the management practices and financial status of the Development, including the performance of the Management Agent. The purpose of each periodic review will be to enable the Agency to determine if the Development is being operated and managed in accordance with the requirements and standards of this Agreement. The Developer shall cooperate with the Agency in such reviews. 1010\20\406818.3 4264 Section 5.4 Replacement of Management Agent. If, as a result of a periodic review, the Agency determines in its reasonable judgment that the Development is not being operated and managed in accordance with any of the material requirements and standards of this Agreement, the Agency shall deliver notice to Developer (and the Developer's limited partner) of its intention to cause replacement of the Management Agent, including the reasons therefor. Within fifteen (15) days after receipt by Developer of such written notice, Agency staff and the Developer shall meet in good faith to consider methods for improving the financial and operating status of the Development, including, without limitation, replacement of the Management Agent. If, after such meeting and a thirty (30)»day period to cure the deficiencies in the management of the Development, Agency staff requires, in writing, the replacement of the Management Agent, Developer shall promptly dismiss the then Management Agent, and Developer shall appoint as the Management Agent a person or entity meeting the standards for a Management Agent set forth in Section 5.2 above and approved by the Agency pursuant to Section 5.2 above. Any contract for the operation or management of the Development entered into by Developer shall provide that the contract can be terminated as set forth above. Failure to remove the Management Agent in accordance with the provisions of this Section shall constitute default under this Agreement, and the Agency may enforce this provision through legal proceedings as specified in Section 6.8. Section 5.5 Approval of Management Policies. The Developer shall submit its written management policies with respect to the Development to the Agency for review, and shall amend such policies in any way necessary to ensure that such policies comply with the provisions of this Agreement. Section 5.6 Property Maintenance. The Developer agrees, for the entire Term of this Agreement, to maintain all interior and exterior improvements, including landscaping, on the Property in good condition and repair (and, as to landscaping, in a healthy condition) and in accordance with all applicable laws, rules, ordinances, orders and regulations of all federal, state, county, municipal, and other governmental agencies and bodies having or claiming jurisdiction and all their respective departments, bureaus, and officials. The Agency places prime importance on quality maintenance to protect its investment and to ensure that all Agency-assisted affordable housing projects within the City are not allowed to deteriorate due to below-average maintenance. Normal wear and tear of the Development will be acceptable to the Agency assuming the Developer agrees to provide all necessary improvements to assure the Development is maintained in good condition. The Developer shall make all repairs and replacements necessary to keep the improvements in good condition and repair. 1010\20\406818.3 4265 In the event that the Developer breaches any of the covenants contained in this section and such default continues for a period often (10) days after written notice from the Agency with respect to graffiti, debris, and waste material, or thirty (30) days after written notice with respect to general maintenance, landscaping and building improvements, (and subject to any stricter requirements included in any applicable City ordinance) then the Agency, in addition to whatever other remedy it may have at law or in equity, shall have the right to enter upon the Property and perform or cause to be performed all such acts and work necessary to cure the default. Pursuant to such right of entry, the Agency shall be permitted (but are not required) to enter upon the Property and perform all acts and work necessary to protect, maintain, and preserve the improvements and landscaped areas on the Property, and to attach a lien on the Property, or to assess the Property, in the amount of the reasonable expenditures arising from such acts and work of protection, maintenance, and preservation by the Agency and/or costs of such cure, including an administrative charge equal to fifteen percent (15%) of such expenditures, which amount shall be promptly paid by the Developer to the Agency upon demand. ARTICLE 6. MISCELLANEOUS Section 6.1 Lease Provisions. The Developer shall use a form of Tenant lease approved by the Agency. The form of Tenant lease shall also comply with all requirements of this Agreement, and the Loan Agreement, and shall, among other matters: (a) provide for termination of the lease and consent by the Tenant to immediate eviction for failure: (1) to provide any information required under this Agreement or reasonably requested by the Developer to establish or recertify the Tenant's qualification, or the qualification of the Tenant's household, for occupancy in the Development in accordance with the standards set forth in this Agreement (after expiration of applicable notice and cure periods), or (2) to qualify as a Very Low Income Household, Lower Income Household, or Other Income Household as a result of any material misrepresentation made by such Tenant with respect to the income computation or certification; and (b) be for an initial term of not less than one (1) year, and provide for no Rent increase during such year (except for an increase following the publication of new Median income figures). After the initial year of tenancy, the lease may be month to month by mutual agreement of the Developer and the Tenant, however the Rent may not be raised more often than once every twelve (12) months. The Developer will provide each Tenant with at least sixty (60) days' written notice of any increase in Rent applicable to such Tenant, and with such further notice as may be required by Section 2.3 above. 1010\20\406818.3 4266 Section 6.2 Nondiscrimination. All of the Units shall be available for occupancy on a continuous basis to members of the general public who are income eligible. The Developer shall not give preference to any particular class or group of persons in renting the Units, except to the extent that the Units are required to be leased to Very Low Income Households, Lower Income Households, and Other Income Households. There shall be no discrimination against or segregation of any person or group of persons, on account of race, color, creed, religion, sex, sexual orientation, marital status, national origin, source of income (e.g., SSI), age, ancestry, or disability, in the leasing, subleasing, transferring, use, occupancy, tenure, or enjoyment of any Unit nor shall the Developer or any person claiming under or through the Developer, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy, of tenants, lessees, sublessees, subtenants, or vendees of any Unit or in connection with the employment of persons for the construction, operation and management of any Unit. All deeds, leases or contracts made or entered into by Developer as to the Units or the Development or portion thereof, shall contain covenants concerning discrimination as prescribed by the Loan Agreement. Section 6.3 Section 8 Certificate Holders. The Developer will accept as Tenants, on the same basis as all other prospective Tenants, persons who are recipients of federal certificates for rent subsidies pursuant to the existing housing program under Section 8 of the United States Housing Act of 1937, as amended, or its successor. The Developer shall not apply selection criteria to Section 8 certificate or voucher holders that are more burdensome than criteria applied to all other prospective Tenants, nor shall the Developer apply or permit the application of management policies or lease provisions with respect to the Development which have the effect of precluding occupancy of units by such prospective Tenants. Section 6.4 Term. The provisions of this Agreement shall apply to the Property for the entire Term. This Agreement shall bind any successor, heir or assign of the Developer, whether a change in interest occurs voluntarily or involuntarily, by operation of law or otherwise, except as expressly released by the Agency. The Agency makes the Loan on the condition, and in consideration of, this provision, and would not do so otherwise. Section 6.5 Compliance with Loan Agreement and Program Requirements. The Developer's actions with respect to the Property shall at all times be in full conformity with: (i) all requirements of the Loan Agreement; and (ii) all requirements imposed on projects assisted with the Agency monies under California Health and Safety Code Section 33334.2 et seq., as may be amended from time to time. 1010\20\406818.3 4267 Section 6.6 Notice of Expiration of Term. At least six (6) months prior to the expiration of the Term the Developer shall provide by first-class mail, postage prepaid, a notice to all Tenants in the Units containing (a) the anticipated date of the expiration of the Term, (b) any anticipated Rent increase upon the expiration of the Term, (c) a statement that a copy of such notice will be sent to the Agency, and (d) a statement that a public hearing may be held by the Agency on the issue and that the Tenant will receive notice of the hearing at least fifteen (15) days in advance of any such hearing. The Developer shall also file a copy of the above-described notice with the Agency. Section 6.7 Covenants to Run With the Land. The Agency and the Developer hereby declare their express intent that the covenants and restrictions set forth in this Agreement shall run with the land, and shall bind all successors in title to the Property, provided, however, that on the expiration of the Term of this Agreement said covenants and restrictions shall expire. Each and every contract, deed or other instrument hereafter executed covering or conveying the Property or any portion thereof, shall be held conclusively to have been executed, delivered and accepted subject to such covenants and restrictions, regardless of whether such covenants or restrictions are set forth in such contract, deed or other instrument, unless the Agency expressly releases such conveyed portion of the Property from the requirements of this Agreement. Section 6.8 Default by the Developer: Enforcement by the Agency. If the Developer fails to perform any obligation under this Agreement (including but not limited to the failure to rent the Units as set forth in Article 2), and fails to cure the default within thirty (30) days after the Agency has notified the Developer, and the Developer's investor limited partner, in writing of the default or, if the default cannot be cured within thirty (30) days, fails to commence to cure within thirty (30) days and thereafter diligently pursue such cure and complete such cure within ninety (90) days, or such longer period as approved by the Agency in writing, the Agency shall have the right to enforce this Agreement by any or all of the following actions, or any other remedy provided by law: (a) Calling the Loan. The Agency may declare a default under the Loan Agreement, and declare the Loan due and payable and proceed with foreclosure under the Deed of Trust. (b) Action to Compel Performance or for Damages. The Agency may bring an action at law or in equity to compel the Developer's performance of its obligations under this Agreement, and/or for damages. (c) Remedies Provided Under Loan Agreement. The Agency may exercise any other remedy provided under the Loan Agreement. (d) Agency Sublease of Units. If and to the extent necessary to correct any Developer default, the Developer hereby grants to the Agency the option to lease, from time to 1010\20\406818.3 4268 time, Units in the Development for a rental of One Dollar ($1.00) per Unit per year for the purpose of subleasing such units to comply with Article 2 of this Agreement. Upon the request of the Agency following such default by the Developer, the Developer hereby agrees to execute such documents as reasonably requested by the Agency, including but not limited to, rental agreement(s) in a form prepared by the Agency, to implement the sublease of the Unit(s). Any rents received by the Agency under any such sublease shall be paid to the Developer after the Agency has been reimbursed for any expenses reasonably incurred in connection with such sublease. Section 6.9 Recording and Filing. The Agency and the Developer shall cause this Agreement, and all amendments and supplements to it, to be recorded in the Official Records of the County of San Diego. Section 6.10 Governing Law. This Agreement shall be governed by the laws of the State of California. Section 6.11 Waiver of Requirements. Any of the requirements of this Agreement may be expressly waived by the Agency in writing, but no waiver by the Agency of any requirement of this Agreement shall, or shall be deemed to, extend to or affect any other provision of this Agreement. Section 6.12 Amendments. This Agreement may be amended only by a written instrument executed by all the parties hereto or their successors in title, and duly recorded in the real property records of the County of San Diego. Section 6.13 Notices. Any notice requirement set forth herein shall be deemed to be satisfied one (1) day after mailing of the notice by reputable overnight delivery service or three (3) days after mailing of the notice by first-class United States certified mail, postage prepaid, addressed to the appropriate party as follows: Developer: CIC Glen Ridge, L.P. c/o Chelsea Investment Corporation 5993 Avenida Encinas, Suite 101 Carlsbad, CA 92008 Attn: James J. Schmid 1010\20\406818.3 4269 and a copy to: MMA Glen Ridge, LLC c/o MMA Financial TC Corporation 101 Arch Street Boston, MA 02110 Attn: Asset Management and Legal Department and a copy to: David E. Raderman, Esq. Gallagher, Evelius & Jones LLP 218 N. Charles Street, Suite 400 Baltimore, MD 21201 Agency: Carlsbad Redevelopment Agency 2965 Roosevelt Street, Suite B Carlsbad, CA 92008 Attn: Executive Director Such addresses may be changed by notice to the other party given in the same manner as provided above. Section 6.14 Severability. If any provision of this Agreement shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining portions of this Agreement shall not in any way be affected or impaired thereby. Section 6.15 Multiple Originals: Counterparts. This Agreement may be executed in multiple originals, each of which is deemed to be an original, and may be signed in counterparts. Section 6.16 Subordination. The rights and remedies of the Agency under this Agreement shall be subject in all respects to the terms and conditions of that certain Subordination Agreement by among the Agency, the Developer and U.S. Bank National Association, as Trustee, recorded concurrently herewith. REMAINDER OF PAGE INTENTIONALLY LEFT BLANK 1010\20\406818.3 4270 IN WITNESS WHEREOF, the Agency and the Developer have executed this Agreement by duly authorized representatives, as of the last date written below. DEVELOPER: CIC GLEN RIDGE, L.P., a California limited partnership By: Pacific Southwest Community Development Corporation, a California nonprofit public benefit corporation, its Managing General Partner By: Jack K. Jaynes, Executive Director/President By: CIC Glen Ridge, LLC, a California limited liability company, its Co-General Partner AGENC James J. Schmid, it^ Manager CARLSBAD REDEVELOPMENT AGENCY, a public body corporate and politic ^>->r " By: ^/P^ LISA HILDABRAND Its: INTERIM CITY MANAGER/EXECUTIVE DIRECTOR APPROVED AS TO FORM: Q. RonaTS Ball, Agency Counsel 1010\20\406818.2 16 STATE OF CALIFORNIA COUNTY OF SAN DIEGO ) ) ss. ) 4271 On -, - ?ffl)\, before me, the undersignedyja Notary Public, personally appeared , personally known to me (ef-proved to me on- thc basis of sal & factory evideficefto be the person(s) whose name(s)dsfere-subscribed to the within instrument, and acknowledged to me that(fig)sfee/feey executed the same in@?hef/rttcir authorized capacity(ies), and that by<4n^/hef/tbetr signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. MICHELLE CASSEL L Commission # 1488413 | Notary Public - California f Orange County r WVO3rrmExpieslVfcv8,2fX6CVUIBEf STATE OF CALIFORNIA COUNTY OF SAN DIEGO ) ) ss. ) . before me, the undersigned^a Notary Public, personally appeared , personally known to me (ui piuved lu me- thc-baoio of Gatisfactoiy ovidcncc) to be the person(s) whose name(s)(Is&*e-5ubscribed to the within instrument, and acknowledged to me that ji^fchc/thoy -executed the same in^ii§2feer/their authorized capacity(ies), and that by hjj^ier/thcir signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. MICHELLE CASSEL* Commission # 1488413 Notary Public-CaliforniaOrange County 1010\20\406818.2 4272 CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT State of California County of On cScy/g, Date personally appeared ore me. Shei k-lfcniat. Gokian *- Here Insert Name and Titl ^ t Name and Title1 of the Officer Name(s) of Signer(s) SHEILA RENAE COBIAN Commission * 1848471 Notary Public - California San Diego County Mv Comm. Expires May 10.2013 who proved to me on the basis of satisfactory evidence to be the person(e)r whose name(s)(js^af:e subscribed to the within instrument and acknowledged to me that -he^h^tbey executed the same in Ns(fiejytbe«' authorized capacity^iee), and that by J^e^Fjephhetf signature(S) on the instrument the person^), or the entity upon behalf of which the person(8f acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. Place Notary Seal Above WITNESS my hand and official seal. Signature Signature of Notary Public OPTIONAL Though the information below is not required by law, it may prove valuable to persons relying on the document and could prevent fraudulent removal and reattachment of this form to another document. Description of Attached Document Title or Type of Document: Document Date:Number of Pages:. Signer(s) Other Than Named Above: Capacity(ies) Claimed by Signer(s) Signer's Name: l_l' Individual D Corporate Officer —Title(s): 12 Partner — n Limited D General L_, Attorney in Fact D Trustee n Guardian or Conservator in Other: RIGHTTHUMBPRINT | OF SIGNER Top of thumb here Signer Is Representing:. Signer's Name: C Individual D Corporate Officer — Title(s): D Partner— I Limited \ General LJ Attorney in Fact D Trustee U Guardian or Conservator H Other: Signer Is Representing: I RIGHTTHUMBPRINT OF SIGNER Top of thumb here ©2007 National Notary Association • 9350 De Solo Ave.. P.O. Box 2402 • Chatsworth, CA 91313-2402 • www.NationalNotary.org item #5907 Reorder: Call Toll-Free 1 -800-876-6827 4273 EXHIBIT A The land referred to is situated in the State of California, County of San Diego, and described as follows: LOT 1 OF CARLSBAD TRACT NO. 02-16, ROBERTSON RANCH EAST VILLAGE, IN THE CITY OF CARLSBAD, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO MAP THEREOF NO. 15608, FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY, SEPTEMBER 18, 2007, TOGETHER WITH PORTIONS OF GLEN AVENUE, WIND TRAIL WAY AND CANNON ROAD ADJACENT THERETO AS SHOWN ON SAID MAP. APN: 168-360-01-00 1010\20\537706.1