MCL HOLDINGS, INC./MERITAGE HOMES

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4.2 Recording of Documents; Priori. 4.2.1 Prior to 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, and Developer shall deliver the proof of recording as required by Section 4.2.3,below. 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 Project for the Term of this Agreement. 1t 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. 4.2.2 The Agreement shall be recorded against the Property and have priority over those matters of public record, except as approved in writing by the City;provided,however,prior to issuance of a certificate of occupancy(or its equivalent) for the Project,the Parties may execute an amendment to this Agreement or other appropriate instnuent that ensures that the requirements of this Agreement are properly recorded against each Affordable Unit and memorializes Owner's obligation to provide the Affordable Units on a for-sale basis in accordance with this Agreement and, upon the recording of such instrument as to the individual Affordable Units, the City may determine, in its sole and absolute discretion, to a release of this Agreement to the Property as a whole. 4.2.3 Prior to issuance of building permits for the Project, Developer shall cause to be provided to City a condition of title guarantee (or other evidence acceptable to the City) that demonstrates this Agreement is senior to any other lien, deed of trust, mortgage, or other interest in the Property or the Project, except those approved by the City in writing. The City shall have not less than ten (10)days to determine, in its sole and absolute discretion,that this Agreement(or an amended version of the Agreement restricting the Affordable Units) has senior rights. if City disapproves the evidence provided by Developer, then Developer agrees and acknowledges that City may withhold the building permit unless and until Developer provides evidence satisfactory to the City demonstrating priority of this Agreement or an amendment thereto. 4.3 Occupancy Levels. Developer shall not apply or permit any occupancy requirements that violate local, state or federal law during the development or sale of the Units 4.4 Use of the Property. All uses conducted on the Property by Developer, including, without limitation, all activities undertaken by the Developer pursuant to this Agreement, shall conform to all applicable provisions of the Santa Ana Municipal Code and other applicable federal, state, and local laws, rules, and regulations. 4.5 Maintenance. Developer shall, at all times during the terns of this Agreement, cause the Property and the Project to be maintained in a decent, safe and sanitary manner, regardless of cause of the disrepair. Developer and each Homebuyer shall be Rilly and solely responsible for costs of maintenance, repair, addition and improvements. City, and any of its employees, agents, contractors or designees shall have the right to enter upon the Property at Page 13 55394.00101\43423340.1