DEVELOPMENT AGREEMENT AND PRESERVATION COVENANTS AND DEED RESTRICTIONS: THIS DEVELOPMENT AGREEMENT AND PRESERVATION COVENANTS AND DEED RESTRICTIONS, is entered into this _____ day of _____, _____, by and between [owner], its heirs, successors and assigns and the Historic Preservation Division, Office of Cultural Affairs, State of New Mexico ("the division"), a public agency.

1. A. RECITALS:

   (1) The division is a public agency organized under the laws of the state of New Mexico.

   (2) The division has established a program under the Section 18-6-22 NMSA 1978 to contract with lending institutions for the purpose of making loans to owners of registered cultural properties for the restoration, rehabilitation or repair of those properties in accordance with the Historic Preservation Loan Act (Sections 18-6-18 through 18-6-23 NMSA 1978).

   (3) The division has established, through a loan participation agreement dated [_____, _____], with the [lending institution], a loan consisting of funds of the division and of the lending institution(s).

   (4) The owner is the owner in fee simple of [description/address of property], in _____, New Mexico, (hereinafter referred to as the "property" and more fully described in [_____], to this agreement, hereby incorporated into and made a part of this agreement) a property entered on the state register of cultural properties and/or in the national register of historic places.

   (5) [Lending institution] by the authority of the loan participation agreement has approved a loan from [participating parties] in the amount of [loan amount] to owner for the purpose of restoring, rehabilitating and repairing the property.

   (6) The restoration, rehabilitation and repair to be performed by means of the referenced loan are more fully described in [_____] to these covenants and deed restrictions, hereby incorporated into and made a part of these covenants and deed restrictions; and

   (7) Section 18-6-23(A)(1) NMSA 1978 requires the maintenance of the property as restored, rehabilitated and repaired for not less than seven years. Consistent with Section 18-6-23 (A)(1) NMSA 1978, the terms of the loan section of the loan participation agreement (attachment A) requires that at the time of approval of a loan the owner/borrower and the division shall execute and record covenants and deed restrictions running with the land for a term of not less than seven years to ensure that the historic and architectural value of the property will be preserved.

   (8) In consideration of the loan provided to owner by the division and other valuable considerations, the receipt and adequacy of which is hereby acknowledged, the owner hereby agrees that the property shall be subject to the restrictions provided in the covenants set forth below (the "covenants"), that the covenants shall run with the land for the seven-year period specified below and shall bind all future owners and occupants of the property during that period, and that this agreement shall be recorded so that the covenants shall constitute a deed restriction with respect to the property.

2. B. AGREEMENT: Owner's covenants: Owner hereby covenants to do and to refrain from doing, as the case may be, each of the following activities upon the property:

   (1) without the prior written permission of the division, signed by a duly authorized representative thereof, owner shall not undertake any of the following actions:

   (a) construction, alteration, remodeling, ground disturbance or other modification of the property affecting the condition of the property

   (b) construction, alteration, remodeling ground disturbance or other modification of the property affecting the view to the property or encroaching upon the open space of the property.

   (2) Owner shall at all times maintain the property in a good and sound state of repair. Subject to the casualty provisions of casualty damage or destruction section below, this obligation shall require repair, rebuilding and reconstruction whenever necessary to maintain the property in good and sound condition.

   (3) No buildings or structures not presently on the property shall be erected or placed on the property during the term of these covenants and deed restrictions except for temporary structures required for the repair and maintenance of the property.

   (4) Nothing in this instrument shall be deemed to prohibit owner from seeking any financial assistance available to him from any source for the maintenance and repair of the property; provided, however, that the lien of the covenants and deed restrictions set forth in this agreement shall not be made subordinate to any mortgage or other lien interest in connection with other financial assistance without the division's prior written approval.

3. C. Standards for review: In exercising any authority created by the covenants and deed restrictions to inspect the property, to review any construction, alteration, repair or maintenance, or to review casualty damage or to approve reconstruction of the property following casualty damage, the division shall apply the standards for rehabilitation and guidelines for rehabilitating historic buildings, issued and as may be issued from time to time by the secretary of the interior (hereinafter the "standards") and/or state or local standards considered appropriate by the division for review of work affecting historically or architecturally significant structures or for construction of new structures within historically, architecturally or culturally significant areas. Whenever the division receives notice that the standards have been amended, it shall notify the owner of the amendment. Owner agrees to abide by the standards in performing all ordinary repair and maintenance work. In the event that the standards are abandoned or materially altered or otherwise become, in the sole judgment of the division, inappropriate for the purposes set forth above, the division may apply alternative standards which, in the division's sole discretion, it determines are reasonable in light of the purposes of the Historic Preservation Loan Fund Act and other relevant circumstances, and shall notify the owner of the substituted standards.

4. D. Casualty damage or destruction:

   (1) In the event that the property or any part thereof shall be damaged or destroyed by casualty, the owner shall notify the division in writing within one (1) day of learning of the damage or destruction, such notification including what, if any emergency work has already been completed.

   (2) For purposes of this instrument: [description of insurance coverage].

   (3) No repairs or reconstruction of any type, other than temporary emergency work to prevent further damage to the property and to protect public safety, shall be undertaken by the owner without the division's prior written approval of the work.

   (4) Within four (4) weeks after learning of the date of damage or destruction, the owner shall submit to the division a written report prepared by a qualified restoration architect or other licensed architect (acceptable to owner and the division) which shall include the following:

   (a) an assessment of the nature and extent of the damage;

   (b) a determination of the feasibility of the restoration of the property and/or reconstruction of damaged or destroyed portions of the property; and

   (c) a report of such restoration/reconstruction work necessary to return the property to the condition existing prior to casualty. If in the opinion of the division, after reviewing such report, the purpose and intent of the covenants and deed restrictions will be served by such restoration/reconstruction, the owner shall within eighteen (18) months after the date of such report complete the restoration/reconstruction of the property in accordance with plans and specifications consented to by the division and shall be obligated to utilize all casualty insurance proceeds for that purpose, if necessary, as determined by the division, in its sole discretion.

5. E. The division's covenants: The division may, at its discretion and without prior notice to owner, convey, assign or transfer its beneficial interest in these covenants and deed restrictions to a unit of federal, state or local government or to a similar local, state or national organization whose purposes, inter alia, are to promote preservation or conservation of historical, cultural, or architectural resources, and which at the time of conveyance, assignment or transfer is a qualified organization under the Internal Revenue Code, provided that any such conveyance, assignment or transfer requires that the preservation and conservation purposes for which the covenants and deed restrictions were granted will continue to be carried out. The division shall exercise reasonable judgment and care in performing its obligations and exercising its rights under the terms of these covenants and deed restrictions.
6. F. Inspection: Representatives of the division shall be permitted at all reasonable times to inspect the exterior and interior of the property. Representatives of the division shall be permitted to enter and inspect the interior of the property to ensure maintenance of structural soundness and safety; inspection of the interior will not, in the absence of evidence of deterioration, take place more often than annually, and may involve reasonable testing of interior structural condition. Inspection of the interior will be made at a time mutually agreed upon by owner and the division, and owner covenants not to withhold unreasonably its consent in determining a date and time for such inspection.

7. G. The division's remedies: The division has the following legal remedies to correct violation of any covenant, stipulation or restriction herein, in addition to any remedies now or hereafter provided by law:

   (1) The division, may following reasonable written notice to owner, institute suit(s) to enjoin any violation of this instrument by ex parte, temporary, preliminary and /or permanent injunction, including prohibitory and /or mandatory injunctive relief, and to require the restoration of the property to the condition and appearance required under this instrument.

   (2) The division shall also have available all other legal and equitable remedies to enforce owner's obligations hereunder.

   (3) In the event that owner is found to have violated any of its obligations, owner shall reimburse the division for any costs or expenses incurred in connection therewith, including all reasonable court costs and attorney's, architectural, engineering and expert witness fees.

   (4) Exercise by the division of any remedy hereunder shall not have the effect of waiving or limiting any other remedy, and the failure to exercise any remedy shall not have the effect or waiving or limiting the use of any other remedy or the use of such remedy at another time.

8. H. Notice of proposed sale: Owner shall promptly notify the division in writing of any proposed sale of the property and provide the opportunity for the division to explain the terms of the covenants and deed restrictions to potential new owners prior to sale closing.
9. I. Covenants and deed restrictions run with the land: The obligations imposed by these covenants and deed restrictions shall be effective for seven (7) years from the date first written above and shall be deemed to run as a binding servitude with the property. These covenants and deed restrictions shall extend to and be binding upon owner and the division, their respective successors in interest and all persons hereafter claiming under or through owner or the division, and the words "owner" and "the division" when used herein shall include all such persons. Owner agrees that these covenants and deed restrictions shall be inserted in any subsequent deed or other legal instrument by which owner divests itself of either the fee simple title to or its possessory interest in the property or any part thereof.
10. J. Recording: Owner shall do and perform at its own cost all acts necessary to the prompt recording of this instrument in the lands records of [county] , New Mexico. This instrument is effective only upon recording in the land records of [county], New Mexico.

11. K. Subordination of subsequent mortgages; division's rights in connection with senior liens: The covenants and deed restrictions shall have lien priority over all mortgages and other rights affecting the property granted after execution and recording of the covenants and deed restrictions.

    (1) Before exercising any right or remedy due to breach of these covenants and deed restrictions except the right to enjoin a violation hereof, the division shall give all mortgagees of record written notice describing the default, and the mortgagees shall have sixty (60) days thereafter to cure or cause a cure of the default.

    (2) Nothing contained in the above paragraphs or in these covenants and deed restrictions shall be construed to give any mortgagee the right to extinguish these covenants and deed restrictions by taking title to the property by foreclosure or otherwise.

    (3) Borrower's default in connection with any loan or other obligation secured by a lien superior to the mortgage or the lien of the covenants and deed restrictions shall constitute an event of default pursuant to these covenants and deed restrictions. The division and/or the lending institution shall have the right (but not the obligation) to cure any default in connection with superior liens and charge the costs of curing such defaults to borrower.

    (4) The following provisions apply to all mortgagees now or hereafter holding a mortgage on the property.

    (a) If a mortgage grants to a mortgagee the right to receive the proceeds of condemnation proceedings arising from any exercise of the power of eminent domain as to all or any part of the property or the right to receive insurance proceeds as a result of any casualty, hazard or accident occurring to or about the property, the mortgagee shall have a superior claim to the insurance and condemnation proceeds and shall be entitled to same in preference to the division until the mortgage is paid off and discharged, notwithstanding that the mortgage is subordinate in priority to these preservation covenants and deed restrictions.

    (b) If a mortgagee has received an assignment of the leases, rents and profits of the property as security or additional security for a loan, the mortgagee shall have a superior claim to the leases, rents and profits of the property and shall be entitled to receive same in preference to the division until said mortgagee's debt is paid off, notwithstanding that the mortgage is subordinate to these preservation covenants and deed restrictions.

    (c) Until a mortgagee or purchaser at foreclosure obtains ownership of the property following foreclosure of its mortgage or deed in lieu of foreclosure, the mortgagee or purchaser shall have no obligation, debt or liability under these preservation covenants and deed restrictions.

12. L. Written notice:

    (1) Any notice which either owner or the division may desire or be required to give to the other party shall be in writing and shall be mailed postage prepaid by registered or certified mail with return receipt requested, or hand delivered; if to owner, then at [address], and if to the division, then to [address].

    (2) Each party may change its address set forth herein by a notice to such effect to the other party. Any notice, consent, approval, agreement, or amendment permitted or required of the division under these covenants and deed restrictions may be given by the director of the historic preservation division or by any duly authorized representative of the division.

13. M. Evidence of compliance: Upon request by the division, owner shall promptly furnish the division with evidence of its compliance with any obligation of owner contained herein.

14. N. Interpretation and enforcement: The following provisions shall govern the effectiveness, interpretation and duration of the covenants and deed restrictions.

    (1) Any rule of strict construction designed to limit the breadth of restrictions on alienation or use of property shall not apply in the construction or interpretation of this instrument, and this instrument shall be interpreted broadly to effect its preservation and conservation purposes and the transfer of right and the restrictions on use herein contained.

    (2) This instrument shall extend to and be binding upon owner and all persons hereafter claiming under or through owner, and the word "owner" when used herein shall include all such persons, whether or not such persons have signed this instrument or then have an interest in the property. Any right, title or interest herein granted to the division also shall be deemed granted to each successor and assign thereof, and the work "the division" shall include all such successors and assigns.

    (3) This instrument may be executed in counterparts, each page of which (including exhibits) shall be initialed by owner and the division for purposes of identification. In the event of any disparity between the counterparts produced, the recorded counterpart shall in all cases govern. Except as provided above, each counterpart shall be held by each of owner and the division. One counterpart shall be recorded as provided above and may be returned to the division, and one counterpart shall be stored as a matter of public record at the [county] courthouse.

    (4) Except as expressly provided herein, nothing contained in this instrument grants nor shall be interpreted to grant to the public any right to enter on the property.

    (5) To the extent that the owner owns or is entitled to development rights which may exist now or at some time hereafter by reason of the fact that under any applicable zoning or similar ordinance the property may be developed to use more intensive (in terms of height, bulk, or other objective criteria regulated by such ordinances) than the property is devoted to as of the date hereof, such development rights shall not be exercisable on, above, or below the property during the term of these covenants and deed restrictions, nor shall they be transferred to any adjacent parcel and exercised in a manner that would interfere with the preservation and conservation purposes of these covenants and deed restrictions.

    (6) For purposes of furthering the preservation of the property and of furthering the other purposes of this instrument, and to meet changing conditions, owner and the division are free to amend jointly the terms of this instrument in writing without notice to any party; provided however, that no such amendment shall limit the duration or interfere with the preservation and conservation purposes of the donation. Such amendment shall become effective upon recording among the land records of [county], New Mexico.

    (7) The terms and conditions of these covenants and deed restrictions shall be referenced in any transfer of the property by the owner, his heirs, successors and assigns.

    (8) The invalidity of any statute of the state of New Mexico or any part thereof shall not affect the validity and enforceability of this instrument according to its terms, it being the intent of the parties to agree and to bind themselves, their successors and their assigns for the duration of these covenants and deed restrictions to each term of this instrument whether this instrument be enforceable by reason of any statute, common law or private agreement either in existence now or at any time subsequent hereto. This instrument may be re-recorded at any time by any person if the effect of such re-recording is to make more certain the enforcement of this instrument or any part thereof. The validity or unenforceability of any provision of this instrument shall not affect the validity or enforceability of any agreement relating to the subject matter thereof.

    (9) Nothing contained herein shall be interpreted to authorize or permit owner to violate any ordinance or regulation relating to building materials, construction methods or use. In the event of any conflict between any such ordinance or regulation and the terms hereof, owner shall promptly notify the division of such conflict and shall cooperate with the division and the applicable governmental entity to accommodate the purposes both of this instrument and of such ordinance or regulation.

    (10) This instrument reflects the entire agreement of owner and the division. Any prior or simultaneous correspondence, understandings, agreements and representations are null and void upon execution hereof, unless set out in this instrument.

15. O. Expiration: This easement shall expire and be void and of no force on the _____ day of _____, _____.

    IN WITNESS WHEREOF, of the date first written above, owner has caused this development agreement and conservation easement to be executed, sealed and delivered; and the division has caused this instrument to be accepted, sealed and executed in its name by its authorized representative.

    Owner:

    ______________ Date__________

    [name]

    State of New Mexico

    Office of Cultural Affairs

    Historic Preservation Division

    By:______________ Date__________

    [name]

    state historic preservation officer

    STATE OF NEW MEXICO )

    ) ss.

    COUNTY OF ______________)

    The foregoing instrument was acknowledged before me this _____ day of _____, _____, by _____.

    _________________

    NOTARY PUBLIC

    (SEAL)

    my commission expires:

    __________

    [7/16/97; 4.10.2.23 NMAC - Rn, 4 NMAC 10.2.23, 1/1/08]