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6 3. AFFORDABILITY 3.1 Total Affordability Term. Pursuant to California Government Code Section 65915(c)(2)(A)(ii)(III), each Affordable Unit shall be restricted to use and occupancy by an Eligible Household for a total period of no less than forty-five (45) years ("Total Affordability Term"). The Total Affordability Term for an Affordable Unit shall commence on the date that the building in which the Affordable Unit is located receives all required occupancy permits from the City. 3.2 Memorializing Commencement of Total Affordability Term. Developer shall keep or cause to be kept detailed records of the commencement date of the Total Affordability Term for each Affordable Unit. City shall have the right to review and verify said records without a fee from City to Developer to ensure that the commencement date specified by Developer for an Affordable Unit coincides with the date that the initial Affordable Unit received all permits from City required for occupancy of the Unit. In the event that a conflict exists between the date specified by Developer for the commencement of the Total Affordability Term for an Affordable Unit and the date specified by City's issuance of all required permits for occupancy of the Unit, the date specified by City's issuance of all required permits for occupancy of the Unit shall control. 3.3 Levels of Affordability. 3.3.1 Moderate-Income Households. Subject to the terms of Section 5, Developer covenants that no less than four (4) Affordable Units in the Project shall at all times during the Density Bonus Housing Agreement Term be sold or conveyed to, or preserved for Moderate- Income Households, and will be sold or resold onto to Moderate-Income Households. 4. OPERATION OF THE PROJECT BY DEVELOPER 4.1 Payment of Density Bonus Setup Fee. Prior to the Effective Date, Developer delivered payment to City of the required density bonus setup fee in the amount of one-eighth (1/8th) of one percent (1%) of the total estimated construction budget for the Project. 4.2 Recording of Documents. No later than issuance of building permits for the Project, Developer and the City shall record or cause to be recorded in the Official Records for Orange County, California, an executed original of this Agreement. City shall cooperate with Developer in promptly executing in recordable form this Agreement. The date of recording of the Agreement shall be the Effective Date of the Agreement. Upon the date of recording, the terms and conditions of this Agreement shall be binding upon and run with the Property and the Project. It is the express intent and agreement between the Parties that this Agreement shall remain binding and enforceable against the Property, the Project, and the Units to ensure compliance with the State Density Bonus Law and City Density Bonus Law, and to ensure the continued supply of Affordable Units in the Project, except as expressly set forth in this Agreement. 4.2 Sale of Units. Upon the completion of construction of the Project and receipt by Developer of all required permits for the occupancy of the Units, Developer shall sell or convey 6/27/2022 Planning Commission 2 –406