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HomeMy WebLinkAbout04 - Agmt - 605-611 E Washington~F TI ~s~~f~cY Be~A~~ tVIEETINC o~ATE: A~EN~v sEC~ETA~~ tysE ONLY: MARCH 7, 2011 TITLE: LOAN AGREEMENT - 605-611 EAST VVASFIINGTON STREET APPROVED [] As Recommended [] As Amended ^ Ordinance on 1~` Reading t] Ordinance on 2"d Reading [] Implementing Resolution ~ Set Public Hearing For_ CONTINUED TO ~ R,r~i' (~ 1 r,~c~` FiLE NUMBER INTERIMxECUTl1/E ®IRECT®~ ~E~oMMEN®®AcT~c~N Authorize the Executive Director, or designee, and Agency Secretary to execute the attached loan agreement with Santa Ana WBBB, LP in an amount not to exceed $3,888,497, subject to non- substantive changes approved by the Executive Director and Agency General Counsel. COMMUNITI° REDEVELOPMENT AND HOUSING COMMISSION ACTION At its regular meeting on February 15, 2011, by a vote of 5:0 (Bist absent), the Community 62edevelopment and Housing Commission approved the recommended action. DISCUSSION On March 1, 2010, Orange Housing Development Corporation (OHDC), anon-profit 501(c)(3), and C&C Development (C&C), afor-profit developer, were awarded the contract to implement the multi-family rental program funded by the Federal National Stabilization Program (NSP). They have formed a Limited Partnership Warned Santa Ana WBBB, LP (Developer) for financing purposes. In June 2010, the developer acquired foreclosed vacant lots at 605-611 East Washington (Exhibit 1) using NSP funds. The entitlement process is being completed and the project is proceeding with funding in order to commence construction. The developer proposes to construct 36 multi- family rental units of which 10% or 4 units will be rented to extremely low income families (at or below 30% of the Area Median Income (AMI)) and 31 units will be rented to very low income families (at or below 50% of AMI). The one remaining unit will be designated as a manager unit. The project will have 8two-bedrooms, 27 three-bedrooms and 1five-bedroom. The following table contains the breakdown of the units by bedroom size and affordability as well as maximum rents: 4-1 Loan Agreements 605-611 E. lNashington Street March 7, 2011 Page 2 Gross Rents for Units for Affordable Units 30%AMI 50%AMI No. Of Bedrooms Gross Rent # of Units Max. Income Gross Rent # of Units Max. Income 2 n/a 0 n/a $981 8 $41,850 3 $724 4 $30,100 $1134 22 $50,200 5 n/a 0 n/a $1395 1 $61,350 i The architecture and materials for this project are designed to promote sustainability. The developer will be seeking Leadership in Energy & Environmental Design (LEED) Gold Certification for this development. LEER is a third-party certification program and the nationally accepted benchmark for the design, construction and operation of high performance green buildings. There are four levels of LEED certification: Certified, Silver, Gold and Platinum. The total development cost is $14,832,587. The developer will be applying to the California Debt Limit Allocation Committee (CDLAC) for tax exempt financing and to the California Tax Credit Allocation Committee (TCAC) for low income housing tax credits; both sources will be used to help meet permanent and construction financing costs. There is a $6,389,497 gap and staff is recommending it be filled with $2.5 million from HOME and $3,888,497 from the Redevelopment Agency. The following table summarizes the sources and uses: Sources Tax Exempt Bonds/Permanent Lender $ 1,987,126 HOME (City) $ 2,500,000 Tax-Increment (Redevelopment Agenc $3,888,497 NSP Funds/Acquisition 655,000 General Partner Equity $ 67 Deferred Developer Fee $1,027,183 Limited Partner Equity (Tax Credits) $ 4,774,714 Total $14, 832, 587 Uses Acquisition 671,250 Construction $ 9,694,087 Fees and Permits $1,014,085 Developer fee $1, 764,193 Soft Costs $ 1,271,365 Costs Deferred Until Conversion $ 234,031 Financing Costs $ 183,577 Total $ 14,832,587 4-Z Loan Agreements 605-611 E. Washington Street March 7, 2011 Page 3 Construction of these units will assist the City and Agency in meeting the Regional Housing Needs Assessment (RHNA) goals identified in the Housing Element, Consolidated Plan and the Implementation Plan. In addition, the 5 bedroom unit will fulfill the only outstanding replacement housing obligation of the Agency. ENVIRONMENTAL C®IVIPLIANCE In accordance with the National Environmental Policy Act, the proposed project has been cleared per Section 58.36, Part 58. Pursuant to Section 15238(b) of the California Environmental Quality Act, the construction of these housing units is ministerial, and is exempt from review. FISCAL IMPACT Funds are available in the Tax Increment Housing Set-Aside account (no. 5071883066220). APPROVED AS TO FUNDS AND ACCOUNTS: r ~ ., _ ' rr~~,;:r f ~ y l; Shelly Landry-Bayle=-'( Housing Manager ~'~ Community Development Agency ~f~S~f ~l~ S a~ e _ Francisco Gutierrez '" Executive Director `~° ~~~~ Finance & Management Services Agency NTE/SLB/JP-H/mlr Exhibits: 1. Map 2. Agreement 4®3 THIS PAGE LEFT BLANK INTENTIONALLY 4-4 lsas 7STH 5T 1478 1914 !r!s PROJECT SITE: t43o ,]ss ]as a:s 605-611 E. Washington d 335 14.7J l~~4 ~ .37c idTH 5T L 377 !]7 3e7 !7: C 375 q Y ai ~7 ,,,, :Wx 700 H N uNa: zl~ 4 ~~~ WASH IHGTQN AV r 9 4 l77a 779 7~ ti~5 f7lx j77 ;7:H N ~y t r7!c 775 f7!d V ~ { ~Q5 605 - 611 East Washington Exhibit 1 4-5 For Item #4 Exhibit 2, please refer to the March 7, 2011 City Council Agenda City Council Agenda Item #25F LOAN AGREEMENT This LOAN AGREEMENT ("Agreement") is entered into on this 7th day of March, 2011 by and among the CITY OF SANTA ANA, a California municipal corporation and charter city duly organized and existing under the Constitution and Laws of the State of California ("City"), the COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF SANTA ANA, a public body, corporate and politic ("Agency"), and SANTA ANA WBBB, LP., a California limited partnership (collectively, "Developer"). RECITALS The following recitals are a substantive part of this Agreement: A. In furtherance of the objectives of the California Community Redevelopment Law, Health and Safety Code Section 33000, et seq. ("Redevelopment Law"), the Agency desires to assist in the redevelopment of certain real property located at 605-611 East Washington (APN# 398-151-11 and 398-151-12), within the boundaries of the City, as more particularly described on Exhibit A and incorporated herein ("Property"). The Property consists of undeveloped vacant property. A map of the Property ("Site Map") is attached hereto and incorporated herein as Exhibit B. A Site Plan is attached hereto and incorporated herein as Exhibit C. B. The Property is currently owned by the Developer. The Developer acquired the Property using funds loaned to the Developer by the City ("NSP Loan") pursuant to that certain Neighborhood Stabilization Program Rental Housing Development Loan Agreement, dated as of June 1, 2010 ("NSY Loan Agreement"). The NSY Loan is evidenced by that certain City Promissory Note Secured by Subordinated Dccd of Trust to the City of Santa Ana, California (605-611 E. Washington Street), dated as of June 1, 2010 ("NSP Promissory Note"), in the original principal amount of $655,000, and is secured by that certain City Deed of Trust and Assignment of Rents in favor of the City, recorded against the Property in the official records of Orange County, California, on .Tune 2, 209 0 ("NSP Deed of Trust"). Pursuant to the NSP Loan Agreement, Developer shall comply with those certain Affordability Covenants and Restrictions by and between Developer and City, recorded against the Property in the official records of Orange County, California on June 2, 2010 as Instrument No. 2010000258490 ("NSP Covenants"). The NSP Loan Agreement, NSP Promissory Note, NSP Deed of'1'rust, and NSY Covenants are referred to collectively herein as the "NSP Documents: ' C. Tn furtherance of the HOMO Program, the Redevelopment Law, and the Agency's Redevelopment Plan, Developer has applied to City and Agency for Loans with which to: construct the Improvements at the Property, 2. provide deeper levels of affordability for the Affordable Units at the Property, and thereafter to maintain, operate and professionally manage the Property as decent, safe, sanitary and affordable rental housing. D. The City, Agency and Developer desire by this Agreement for City and Agency to provide financial assistance to Developer in the form of loans and for the Developer to agree to EXHIBIT 2-1 construct and maintain affordable imdti-family residential housing on the Property which shall remain affordable for a period of not fewer than 55 years. City shall provide a "City Loan" and the Agency shall provide an "Agency Loan" (together, the "Loans") to the Developer for development of the Property, all in accordance with the terms of this Agreement. E. Separate Promissory Notes shall be executed by Developer in the amount of the Loans to be made by City and Agency to Developer pursuant to this Agreement, The Agency Promissory Note will be in the original principal amount of $3,888,497 (see the Agency Promissory Note attached hereto and incorporated herein as Exhibit F) and t~e,City Promissory Note will be in the original principal amount of $2,500,000 (see the City P~t``aniissory Note attached hereto and incorporated herein as Exhibit G). Separate Deeds of trust will be executed for each promissory note and recorded against the Property in the Official Recotdsf{see the Agency Deed of Trust and City Deed of Trust attached hereto and incorporated he~'e[n as Exhibits H-1 and H-2, respectively). F, The City's and Agency's ~ construction of the Improvements on the Pi vital and best interest of the City and the 1 with the public pwposes and provisions of under which the redevelopment of thq;Ei~oje G. Prior to and as a Conditfori `Pj~s Developer shall apply for an obtain (and subr Director) (1) an allocation of tax exempt bond Committee (CDLAC)J '(2) an aXJ,pcation of i Credits") from the Ca111oxma Tax'C{i`edit Allobi ~, for a Senior Loan from'--a Senior ~"endar. all pursuant to Section 311.1'leh H " ' ?It is agreed b~ part of this Agreement a`,nd,, t] ~;F,. Recitals. ahd all exhibits `at reference, "shall constitute the 1. If#hpre is any the terms and corditi4ns con apply. f.:; . NOW, THEREFOR herein contained, City, Agenc ns to the Deve~p~e it to the terms of.thi and welfare of its` aral, stijte, and local and the Developer's Agreement, are in the >idents, and in accord aws;-and requirements to d~sbuxs,~ment of any portion of the Loans, cncc docir~~nting the same to the Executive irg frpm thd'~~lifornia Debt Limit Allocation 4% Jovv,,,,inoo'me housing tax credits ("Tax imnnttee~~~T,~AC), and (3) a firm commitment „„ sonably apljroved by the Executive Director farti~S;-that the foregoing Kecitals are a substantive s atilt>.conditions are approvod and together with the reto~'~all of which are incorporated herein by this between the Agency and Developer. Fancy between federal and state guidelines with regard to any of herein, the more shingent (most restrictive) requirements shall ,for and in consideration of the mutual covenants and agreements and Developer agree as follows: 100. DEFINITIONS AND INTERPRETATION 101. Defined Terms. All capitalized terms used herein, including, withouC limitation, in the Recitals above and in all other Project Documents, unless otherwise expressly defined, are defined where first used in this Agreement, and/or as set forth in this Section 101. "Affordable Housing" means housing operated in accordance with the requirements of 24 CFR 92.252 and the rents governed by California Health and Safety Code Section 50053. 2 "Affordability Restrictions" means that certain Affordability Restrictions on Transfer of Property, which contains the covenants and restrictions pertaining to the operation, maintenance, and management of the Project as Affordable housing for a term of not fewer than 55 years, which covenants and restrictions shall run with the land, to be executed by the Agency, the City, and the Developer and recorded against the Property in the Official Records. The Affordability Restrictions and the legally required notice thereof axe attached hereto as F,xhibit I and incorporated herein. "Affordable Rent" means the monthly rents which do not exceed the maximum amount applicable to Exhemcly Low Income and Very Low Income hou~el}olds, as applicable, as described ;<; in Article 700. ' "Agency" is defined in the preamble hereto. hi Ihe'~~!~nt the Agency is disestablished, dissolved, ceases to exist, or othertivise becomes unalile to exercise'its rights under this Agreement prior to the expiration of the Term, the City shall be entitled to exercrseany and all rights granted to the Agency hereunder, "Agency/City" means the Agency aucUoi~'the';~.(~ily, as "Agency Decd of Trust" means the deed of~'trust eneifmbcring the Property, in the form attached hereto as Exhibit II-1 to `b@ executed by DeVel~per in order to secure the Agency Promissory Note. "Agency Loan" means the loan to ;be made ~td, Developer Yzy the Agency solely from tax increment moneys ~~ ~ ' ~, /~f{ "Agency Prom><Ssory Note" means that certain promissory note in the original principal amount of $3,888 497;'>iri gthe form attached Hereto as F,xhibit F, which shall be executed by Developer in,fayor of Agegey to-cvadcnoc,,.,the otijigation of Developer to repay the Agency Loan though residual reCetpts as further descr ~bedfi the Agency Promissory Note. s, .. "Agreement" m8ans,this Loan Agreement by and among the City, Agency and Developer. "Area,,31~'fedian Income">o~ "AMI": shall mean the median incomo for the Orange County, California PMSA3as determined KV:JIUD fiom time to time. "Annual Brfdg¢~" and "A.[f~rating Budget" shall mean the aimual operating budget for the Project that sets forth the projected Operating Expenses (defined in the Promissory Notes) for the upcoming year that is subject,t3 and shall be submitted for review and approval by Executive Director, in his/her reasonali~le'discretion, each year during the Affordability Period. "Basic Concept and Schematic Drawings" are described in Section 302.3. "Building Permit" means the building and grading permit(s) to be issued by City and required for the construction of the Improvements. "Business Day" means any Monday, Tuesday, Wednesday, Thursday or Friday on which Santa Ana City Hall is open to the public for the conduct of City affairs. "Calendar Year" means each consecutive twelve (12) month period from January 1 to December 31. 3 "City" is defined in the preamble hereto. funds. "City Loan" means the loan to be made to Developer by City solely from HOME Program "City Deed of Trust" means the deed of trust encumbering the Property, in the form attached hereto as Exhibit H-2, to be executed by Developer in order to secure the City Promissory Note. "City Promissory Note" means that certain promissory note in the original principal amount of $2,500,000, in the form attached hereto as Exhibit G, whipl sli~ll be executed by Developer iu favor of City to evidence the obligation of Developer to repay the City Loan through residual receipts as fiirthcr described in the City Promissory Note. _ "Conditions Precedent" means the conditiotis of the proceeds of Che Loans, including the tnrtial dis' Retainage, as set forth in Sections 601, 602 and 603.'` "Construction Contract" means each and eve Contractor, and/or any subcontractor for the construcfi including construction of any on site bl; off-site Development, the land use entitlement~~pprtivedby the Drawings. The Construction Contract betpy~een Deye~o r ; .,.. fixed fee to complete all woxlc to be performed or caGSf under such Construction Contract. Each C6tistructiori approved (or disapl of Section 3 and tl General Cont<~actor (ii) an cxprc~s agkr, as applicabl6, fhaf-: the with the Section 3 Clause other applicab"Ie;,~ederal re which such Gcnt>~~1, Cont construction and developn shall remain pnmanlyk}ie., documentation. "County" means the with or, as ;ment of any portion disbursement of the !t between Devetoper, the General mprovements, o~'~ny part thereof, ents included it the Scope of the approved Design Development ,.General Contractor shall be for a be perf9rlned by the General Conh•actor j~ract slia~l Abe reviewed and reasonably ~, , b6rihact to include: (i) a full recitation s acknowledgement and agreement by the ~, to fully comply with the Scetion 3 Clause, General Contractor and each subcontractor, al payment under its contract, the General ride written evidence, in form reasonably it and all its subcontractor(s) have complied etmgahc development of the Project, and (iii) reference to all and 1asv~ based on the final federal funding souroes, if any, to subaonfraotor, as applicable, must comply in undertaking tho Project; provided it is understood by the parties that it is and 's obligation to obtain and submit all required Section 3 Clause of Orange, California. "Deeds of Trust" means, collectively, the Agency Deed of Trust and City Decd of Trust. "llesign Development Drawings" means those plans and drawings to be submitted to the City and Agency for approval, pursuant to Section 302.1. "Developer" is defined in the preamble hereto. Developer is a California limited partnership currently comprised of Orange Housing Development Corporation, a California non-profit public benefit corporation and community housing development organization, and C&C Development Co., LLC, a California limited liability company. "Developer's Representative" shall mean the Chief Executive Officer or the Managing General Partner of Developer or his/her designee. "Environmental Laws" means any federal, state or local law, statute, ordinance or regulation pertaining to environmental regulation, contamination or cleanup of any Hazardous Materials including, btrt not limited to: (i) sections 25115, 25117, 25122.7,or 25140 of the California Health and Safety Code, Division 20, Chapter 6.5 (Hazardous Waste Control Law), (ii) Section 25316 of the California Health and Safety Code, Division 20, Chapter 6.8 (Carpenter- Presley-Tanner Hazardous Substance Account Act), (iii) Section„~•~501 of the California Health and ~; Safety Code, Division 20, Chapter 6.95 (Hazardous Matei`ta)s'` Release Response Plans and inventory), (iv) Section 25281 of the California Health anti fSa~ty Code, Division 20, Chapter 6.7 (Underground Storage of Hazardous Substances), (v) Segtrons311;of the Clean Water Act (33 U.S.C. section 1317), (vi) Section 1004 of the Resource Conscr4v,~fion ancJ.l3geovery Act, 42 U.S.C. section 6901, et seq. (42 U.S.C. section 6903, (vii) Sectiot~',P:101 of the Cp~nprchcnsive Environmental Response, Compensation and Liability Act, 42 U.S,C. section 9601 e`t-:-se.,q•, or (viii) any state or federal lien oi• "superlien" law, any environmenl~l cleanup statute or r'~gulation, or any permit, approval, authorization, license, variance or permission required by any governmental authority having jurisdiction. "Event of Default" and in Section 2001. "Executive Director" means, collecGivcly, tll'e:,City Mariag~r of the City and/or the Executive Director of the Agency, and/or xhe atrthorizei~ designee~s),~o~ either`of them. { "Extremely LoN, Income": means an adjusted(ncome wVllich does not exceed thirty percent (30%) of the Area M~elian lneotYie:l,for the Orange County,`California PMSA, as adjusted for household size and periodt~ally publis~tcd by HUD as such qualifying limit is amended from time to lime. "General ContNhptor" meFxns, the general epntcactor to be hired by Developer to engage and supervise; the subconhaGt0i's, in ~the.;jperformance' and completion of the conshuction of the lmprovemenYs and all other 'qtr-site ~xid, off-site improvements required to be coush•ucted in connection tvith;ahe Protect, 'al•l,,in uccor~auce with the Scope of Development, the land use entitlement to be npprovcd by City; and the approved Design Development Drawings. The General Contractor shall be i~f~sonably aeaezplable to and approved by the Executive Director, in his or her reasonable discrettonr;-~"the patties acknowledge that the Gcnetal Contractor will not be performing actual construction work for any portion of the Project, but instead shall hire subcontractors, who shall be reasonably approveN by`£hc Executive Director.] [confirm] "Governmental Authority" means any governmental or quasi governmental agency, board, bureau, commission, department, court, administrative tribunal or other instrumentality or authority, and any public utility. "Governmental Requirements" means all applicable laws, ordinances, statutes, codes, rules, regulations, orders, and decrees of the iJnited States, the State of California, the County, the City, or any other political subdivision with jurisdiction over property within the City, and of any other political subdivision, agency, or instrumentality exercising jurisdiction over the Agency, Developer or Propet•ty, including all applicable federal, state, and local occupation, safety and health laws, rules, regulations and standards, applicable state and labor standards, applicable prevailing wage requirements, the City zoning and development standards, City permits and approvals, building, plumbing, mechanical and electrical codes, as they apply to work undertaken pursuant to this Agreement, and all other provisions of the City and its Municipal Code (as they apply to work undertaken pursuant to this Agreement), and the Unruh Civil Rights Act, Civil Code § 51 et seq. "Hazardous Materials" means any substance, material, or waste which is or becomes, regulated by any local governmental authority, the State of California, or the United States government, including, but not limited to, any material or substance which is (i) defined as a "hazardous waste," "extremely hazardous waste," or "reshicted hazardous waste under Section 25115, 25117, or 25122.7, or listed pursuant to Section25'140 of the California Health and Safety Code, Division 20, Chaptcr 6.5 (Hazardous Waste Control`Law), (ii) defined as a "hazardous substance" under Section 25316 of the California Health and Safety Code, Division 20, Chaptcr 6.8 (Carpenter-Presley-Tanner Iazardous Substance Acs material," "hazardous substance," or " hazardou~_-wa Health and Safety Code, Division 20, Chapter,G,95 :( and Inventory), (iv) defined as a "hazardous substance" and Safety Codc, Division 20, Chapter 6 7 (Under (v)petroleum, (vi)friabls asbestos, (vii)polych7ouni}S; substances" pursuant to Section 311 o~the,Clean Watei• a "hazardous waste" pursuant to Seotion'1Q04 of tho 42 U.S.C. Section 6909 et seg.,(42 U S,C, ~sectigp, 69 pursuant to Section 101 of the Comnr~hensNe.;°£n Liability Act, 42 U.S.C. "HOME Program" Housing Act, as amend@d sp seg. and the implementing~> as it may hereafter;be amendi "HOME Regulation forth at 2~.GFR §92.1, et seq.: the extent~i~a'pplicable to tl Redevelopment =Law and all and the other Proiect Docu requirements, this A shall conform to the a. housing render 24 CFR and et unt Adtl. r-(iiil defined as a "hazardous under Section 25501 of the California Hazardous Materiala,Release Response Plans under Section 25'L'81=of the California Health ground Storage of Hazardous Substances), ed bipher;~~s, (viii) des~at~d ae "hazardous Act.(33 i7.S.C. Section 131:7.); (ix) defined as Res4Glcc Conservation and Recovery Act, 03) of ~~). defined as "hazardous substances" vironmeital;~,Response, Compensation, and n the Title.lI of the Cranston-Gonzalez National Affordable the HOME investment Partnership Act, 42 U.S.C. §12701, el ;ulations at 24>C'FR §92.1, et seq., as such law now exists and xtept:applicable;to the Projoct. .mean the implementing regulations of the HOME Program set ~ re,~rdations now exist and as they may hereafter be amended, to eel: .: Developer covenants hereunder to comply with the ble fIC~IvIE Regulations in the performance of this Agreement whichever are more restrictive. In implementation of these ,oject, and all eligible conh•ibutions and expenditures hereunder ;ing developed hereunder does and shall qualify as affordable because each Housing Unit shall be rented at an Affordable Rent; b. This Agreement serves as the written agreemeul diaC imposes and enumerates (by meeting or exceeding) all of the affordability requirements from 24 CFR §92.252; the property standards requirements of 24 CFR §92.251; and income determinations made in accordance with 24 CFR §92.203. "HOME Units" shall mean eleven (11) of the Housing Units (specifically, Yen (10) of the three-bedroom units and one (1) five-bedroom unit) which shall be designated as HOME Units and shall be subject to all applicable 1-TOME Regulations. [All IIOME Llnits shall be "Low HOME" units pursuant to the HOME Regulations.] [confirm] The HOME Units shall be "fixed" HOME Units, such that the specific Housing Units designated as HOME Units shall not change. Developer shall designate eleven (11) of the Housing Units as HOME Units, subject to approval by the Executive Director and in accordance with this paragraph, the HOME Program, and the HOME Regulations. "Housing Unit" or "Housing Units" means the thirty-six (36) individual apartment units at the Property to be constructed, leased, managed, and operated by Developer as long term Affordable Housing and in implementation of the Project (inclusive of the Affordable Units and the HOME Units). "HUD" means the United States Department of successors or• assigns thereof. "lmprovcments" means all improvements an'd',;fixtures Property, including, without limitation, landseapitg, trees improvements (including, without ]imitation, st{~'"ets, curbs, lighting), all as more specifically defined in Section,3,0] and it hereto. "lndermritees" means City employees, attorneys, contractors, agents, and volunteers. "Legal Description" tne~h? and incorporated hererlt f-r "Loan Documeits't.means Deed of Trust, the Agency Pro. Restrictions. aiid a1f~'o~ter agreertS connection with the i;oaias or from i "Loatxs" means the Agency "Notice'.'as.defined in Seefi ng'and Urban Development and any to be Cgnshuctcd by Developer at the and ''plaltt materials; and oilsitc storm i3t•~igs, and adjacent street i the Scope of?'Dwelopment attached and then pas~'and present elected officials, officers, ppointrve btiax~lg and commissions, representatives, the leeal;descrintion".Sfahe Pronerty attached hereto as Exhibit A iectively, thts,Agreement, the City Promissory Note, the City ory. Note the,, Agency Deed of Trust, the Affordability document, omiiis~'rument llhal the Oily or Agency squires in to time to;effeofuate the purposes of this Agreement. the City Loan. 21 "NSY Loari" ttipans the`~aan made to the Developer by the City pursuant to that certain Neighborhood Stabilization Program Rental housing Development Loan Agreement, dated as of June 1, 2010. Developer "used the proceeds of the NSP Loan to pay the cost of acquiring the Property. "NSP Covenants" means those certain Affordability Covenants and Restrictions by and between Developer and City, recorded against the Property iu the official records of Orange County, California on Juno 2, 2010 as Instrument No. 2010000258490, which set forth certain affordability, use and maintenance restrictions applicable to the Property and the Project. "NSP Deed of Trust" means that certain City Decd of Trust and Assignment of Rents recorded against the Property in the Official Records on Tune 2, 2010 as Instrument No. 2010000258491, which secures repayment of the NSP Loan. "NSP Docmnents" is defined in Recital B. ,~ County. "Official Records" means the official land records maintained by the Rccordor of the "Partnership Agreement" means the Amended and Restated Limited Partnership Agreement of Santa Ana WBBB, LP, dated August 9, 2010, as it may be amended in accordance with the financing for the Project that is approved by the Executive Director pursuant to Section 311.. "Project" means the construction of the improvements upon the Property and the operation of the Project by Developer pursuant to this Agreement and the Project Documents. "Project Costs" means all costs of any nature accordance with generally accepted accounting principle "Project Documents" means this AgreeiYepti~ and NSP Documents, the Affordability Restrictions, and all"'other da to be executed by Developer in furtherance of the Project. "Promissory Notes" means the Agency "Property" means that certain lj~}oel of real~~g Washington in the City of Santa Ana, ~tid3"s,ttlgre fully Property attached hereto as Exhibit A, which is ui~prporab "Redevelopment"hats",aneans the G Safety Code Section 33009, eI seq; rys it may connection with the Project in Loan Documents, the ;ements and instruments the City Promissory Note. that is located `at 605-611 East d in the Legal Description of the by reference. to time. Law, Health and "Release of Consteuction CoYenauts" has the meaning set forth in Section 310. "RetaiuagQ" As:defined in,yS~ehon~6~s);,~, "Schedule of Peiformane`e';'~iheans the Schedule of Pet•fonnance attached hereto as Exhibit J and incorpoi~~ted heroin, whichsets forth,the dates and/or time periods by which certain obligations set forth iii ,jlifi Agreement mint be aeuiTxpplished. The Schedule of Performance is subject to ~,.~..,, revision from ~~titze to time as mutually agreed upon in writing between the Developer and the Executive Director, ahd the ExoGUtive Director is authorized to make such revisions as he or she deems reasonably necessary , "Satpe of Developmey~'"~4neans the Scope of Development attached hereto as Exhibit K and incorporated herein, which'~'~describes the scope, amount and quality of development of the Improvements to be constructed by the Developer pursuant to the terms and conditions of this Agreement. "Senior Lender" means the state of federal financial institution that provides the Senior Loan, as approved by City pursuant to Section 311. "Senior Loan" shall mean the senior loan being made by the Senior Lender concurrent with the Agency Loan and the City Loan, for payment of a portion of the Project Costs, and shall include any subsequent loan that refinances the initial Senior loan (as approved by the Executive Director). The Senior Loan shall consist of those related loan documents including, but not limited to the Senior Loan Agreement and the Senior Deed of Trust (collectively "Senior Loan Doeutnents"). 8 "Senior Loan Deed of Trust" means the deed of trust securing the Senior Loan by encumbering the Property. "Senior Loan Documents" means, collectively, the Senior Loan Agreement governing the Senior Loan, the Senior Loan Note, the Senior Loan Deed of Trust, and any other agreement, document or instrument that the Senior Lender requires in connection with the Senior Loan. "Senior Loan Note" means the promissory note evidencing the Senior Loan. "Site Map" means the map depicting the Site which :is ,attached hereto as Exhibit B and incorporated herein. "Site Plan" means the Site Plan depicting Exhibit C and incorporated herein. "Tax Credits" is defined in Recital G. "Term," "Term of Affordability" and effectiveness of this Agreement and the Aflordab for not fewer than fifty-five (55) years fiom he is Project. "Very Low Income" means an adj of the Area Median Income for the Orange and periodically published by IIl)D as such 102. Sin or any other Loan used in the sirgula all Documettt,slaall include sneli!1 be modified,_.,:R,eferences her Agreement unless:-a different references to the exhibits ai References to subparagraphs reference appears. The;t{trm ` certificates, opinions, consent "including" and "include" men which is attached hereto as which shall e`'~'~ 1 Certificate of the term of ain in effect iancv fot• the t exceed fifty percent (50%) adjusted for household size, from time to time. d term used in the plural in this Agreement of the relevant class and any defined term rers of the relevant class. bftiCir Terms. `zany reference to this Agreement or any Loan cumeiit'both as originally executed and as it may from time to time n:.to Articles and Sections shall be construed as references to this ocument is "named. References to Exhibits shall be construed as ched to this Agreement unless a different document is named. ralL,''be construed as references to the same Section in whioh the refinent" is used in its broadest sense and encompasses agt•eements, ~lnstrtunents and other written material of every kind. The terms "including (include) without limitation." 10A. Exhibits Incorporated. All attachments and exhibits attached to this Agreement, as uow existing and as the same may from time to time be modified, are incorporated herein by this reference. 200. PROJECT BUDGET A line-item budget for the Project, [including a summary statement of sources and uses of funds and a projected cash flow showing repayment of the Loans,] is included in Exhibit D ("Project Budget"). Developer shall submit a final, updated Project Budget to Agency/City for approval by the Executive Director as a Condition Precedent to the initial disbursement of any proceeds of the Loans. 9 Any material change to the approved Project Budget requested by Developer shall be subject to the prior written approval of the Executive Director. 300. DEVELOPMENT OF THE SITE 301. Scope of Development. Subject to all of the other terms and conditions set forth in this Agreement, Developer shall dcvclop or cause the development of the Improvements on the Property in accordance with the Scope of Development, the City of Santa Ana's Municipal Code, and the Basic Concept and Schematic Drawings and Design Development Drawings submitted by Developer and reasonably approved by the City and Agency asset forth herein, at all times set forth in the Schedule of Performance. The Improvements shall generally consist of the construction of a thirty-six (36) unit multi-family residential Project on the Ptopeisty,(includiug eight (8) two-bedroom units, twenty-seven (27) three-bedroom units, and one.(1) five-bedroom unit), along with associated landscaping and other required onsite and offsite implflvements. The;,lmprovements are generally depicted on the Site Plan and described in the Scene of Development. - 302. Design Review. 302.1 Developer Submissions. Within,.4hei `lime set forth iit`fhe Schedule of Performance and as a Condition Pteeedent to disbmsemerit of any portion of the Loans, the Developer shall submit to Che Agency/Crty ikny and all plans ai]~ drawings which may be required by the City with respect to any permits and land use entitlements-~ykrich are required to be obtained to dcvclop the Improvements, aqd such plans.£or the Iinpiovements as retuired by the City in order for the Developer to obtain Bud~ltig Pennils for the Irripl9ycmcrits'' (collectively, the "Design Development Drawings'.'} Wrthiitrthirty (30) days afle(+the Ageljcy/,City's disapproval or conditional approval of such platis,.the Developer shall ievr$a'`"the portions of such plans identified by the Agency/City as requiring 1ey;isions and resubmit thaxcvised plans to the Agency/City. "the llesign Developmegt;~iaw~ngs shalt be 9pPS~stent;v<~th the Site Plau and the approved Basic Concept and Schemattc Di'avv~ngs r ~%' 302,7,x,, SpCyfa,( Develop~fient Requirements. The Design Development Drawings sh~iJl, to the extent ¢Alnpat~ible<with applicable design requirements of the City of Santa Ana and the A~glget Documents; ipcorporate-.design elements and building practices that will reduce the maintcnauce:attd utility eosts,and also reduce the adverse environmental impacts otherwise associated with residential constr}tclion. Such design elements and practices may include, but are not limited to passive solarEflesign, environmentally sensitive landscaping, installation of energy efficient furnaces and water heaters (Energy Star Appliances), and installation of high efficiency toilets. 302.2 Cit3%~Review and Approval. The City and the Agency shall have all rights to review and approve or disapprove all Design Development Drawings and other required submittals in accordance with the Santa Ana Municipal Code and this Agrcoment, and nothing set forth in this Agreement shall be construed as the City/Agency's approval of any or all of the Design Development Drawings. 302.3 Basic Concept and Schematic Drawings, The Basic Concept and Schematic Drawings for the Project were submitted to the Agency and City prior to the execution of this Agreement by Developer. Agency and City shall review and approve, conditionally approve or disapprove the Basic Concept Drawings for the Project (and Developer shall make any required revisions) within the time set forth in the Schedule of Performance. The Basic Concept and 10 Schematic Drawings generally depict all improvements and include the Site Plan, all exterior elevations, renderings showing the exterior design, architectural style, and appearance of the affordable housing development, landscaping concepts, and the interior floor plans for each unit to be developed on the Property. The objective of the Basic Concept and Schematic Drawings prepared and submitted by the Developer to the City was to provide reasonable opportunity to evaluate the aesthetic appearance, neighborhood compatibility, and general scope and quality of the Project on the Property. The Improvements shall be developed in accordance with Che approved Basic Concept and Schematic Drawings and related documents, except for such changes which may be mutually agreed upon between the Developer and the Executive Director. Any<such changes shall be within the limitations established in the approved Design Development Drawings. In the event of any inconsistency between the Design Development Drawings and""the Basic Concept and Schematic Drawings, the approved Design Development Drawings shall, goi~efn. 302.4 Revisions. Any and all its inspectors which are required under the Mun, (e.g. Building, Phnnbing, Fire, Electtical, etc.) ~~ be included by the Developer in its Design Deve shall be completed during the construction of the 302.5 llefects in to the Developer or to third parties in nor for any structw•al or other de Development Drawings, nor fo~• any established by this Section 302.. 303. Land or other works of iml cause to be secured-a required for the; Tmj' constructioh or work. required); and pay all (a) fees required by the Improvements. orders or re~?j~ons required by the City and xle and all otlex%gpplicable Uniform Codes • other applicable~lakv~ and regulations shall Drawings and other required submittals and Agency and`_(lie City shall not be responsible either irony defects tit>the Design Development Drawings, .., ~q;_wolk done' "d6^cQrding to the approved Design mably caused by ttie 1•gvicw and approval processes Before comriiencement of`construction of the Improvements e Property'ithc Developer shall, at its own expense, secure or tjnd,S?ther entitlements, permits and approvals which maybe Citiy'.oi• any other governmental agency affected by such tall, without limitation, apply for and sectu•e the following (as fees associated therewith: shall obtain all building and grading permits and pay all and other governmental agencies with jurisdiction over the Notwithstanding anything to the contrary set forth herein, the execution of this Agreement does not constitute the granting of or a commitment to obtain any required land use permits, entitlements or approvals required by the Agency or the Cily. Developer aelcnowledges and agrees that all plans prepared for the Project (including the Design Development Drawings) shall be subject to the City's normal planning review process and further that such plans may be subject to review by the City's Planning Commission. 304. Schedule of Performance. The Developer shall submit all Design Development Drawings, obtain all permits, commence and complete all construction of the Improvements, and satisfy all other obligations and conditions of this Agreement within the limes established therefore in the Schedule ofPerformance attached hereto as Exhibit) and incorporated herein. The Agency 11 and City shall perform all of their obligations hereunder within the times established therefore in the Schedule of Performance. 305. Cost of Construction. Except to the extent othettivise expressly set forth in this Agreement, all of the cost of the planning, designing, developing and constructing all of the Improvements, including preparation of the Property and grading,. shall be borne solely by the Developer. 306. Reserved. 307. Completion of Project. Developer shall development of the Project. In any event, Developer shal(;c established therefor in the Schedule of Performance unl'eS: and lleveloper. 308. Rights of Access. For purpose; representatives of the City and Agency shall have t or fees, at normal construction hours during the Agreement, including but not limited t9, ,the inspe~ the Improvements so long as such City au~ agency City and Agency (or their representatives) shall, ex prior to exercising their rights pursuant to"th}s Secti 309. Compliance W,ifh Laws. The of tho Improvements in'cyonformity_with all apj labor standards, the Ci~?,2oning and develop electrical codes, and all othe~provisioi]s of the disabled and .handicapped aeoess=requirement 11 assuring ht of as od of cc in i 08. ~nce and diligently prroeeed with the Project not later than the date sd,by agreement of Agency, City ~mpliaiice;,with this Agreement, s to the Pi op~,rty, without chargee truction for th0,.,purposes of this being perfourie~l:in constructing comply with all safety rules. The ;y situations, notify the Developer pot shall, catr•yotiit the design and construction taws, itioludjng all applicable federal and state andards, builduig, plumbing, mechanical and Santa Ana Municipal Code, and all applicable ding without limitation the Americans With ;Government Code Scetion 4450, et seq, Civil Rights Act, Civil Code Sections 51, et seg., and`~~hy other applicable-Governmental Requirements :09.1 Prev:tiling Wage r;Requirements. Developer shall carry out the construction through completion of the Bnprovements and the overall development of the Property in conformity with all applicable federal, state and local labor laws and regulations, including, without lihritation, as applicable, the :requirements to pay prevailing wages under federal law (the Davis-Bacon Act, 40 U`:"S.C, ~Secfion 3141, et seq., and the regulations promulgated thereunder set fw•th at 29 CFR Part 1 (colledtively, "Davis-Bacon")) and California law (Labor Code Section 1720, et seq.). The applicability of~fedcral, state and local prevailing wage laws will be determined based upon the final financing structure and sources of funding of the Project, as approved by Executive Director pursuant to Section 311, et seq. Developer shall be solely responsible, expressly or impliedly, for determining and effectuating compliance with all applicable federal, state and local public works requirements, prevailing wage laws, labor laws and standards, and neither Agency nor City malccs any representation, either legally and/or financially, as to the applicability or non-applicability of any federal, state and local laws to the Project, either onsite or offsite. Developer expressly, knowingly and voluntarily acknowledges and agrees that neither Agency nor City has previously represented to Developer or to any representative, agent or aifiliatc of Developer, or its General Contractor or any 12. subcontractor(s) for the construction or development of the Project, in writing or otherwise, in a call for bids or otherwise, that the work and coustruction undertaken pursuant to this AgreemenC is (or is not) a "public work," as defined in Section 1720 of the Labor Code or under Davis-Bacon. Developer laiowingly and voluntarily agrees that Developer shall have the obligation to provide any and all disclosures or identifications with respect to the Project as required by Labor Code Section 1781 and/or by Davis-Bacon, as the same may be amended fi•om time to time, or any other similar law or regulation. Developer shall indemnify, protect, pay for, defend (with legal counsel acceptable to Agency and City) and hold harmless the Inc~elnnitecs, from and against any and all loss, liability, damage, claim, cost, expense and/or "incr'ease'd costs" (including reasonable attorneys fees, court and litigation costs, and fees of expert,~Gimssses) which, in connection with the development, construction (as defined by applicable law)'atid/or.;aperation of the Project, including, without limitation, any and all public works (as defined.liy"applicable law), results or arises in any way fiom any of the following: (i) the noncompharzce;[by Developer y/ijh any applicable local, state and/or federal law or regulation, including, wrthout~'Ihnitation, any app~cablc federal and/or state labor laws or regrlations (including, without hmif~tion, if applicable, the i;g~uirement to pay state and/or federal prevailing wages); (ii) the impletn~iilaLjon of Section 1781 of the Lahor Code and/or of llavis-Racon, as the same may be amended from time;fofime, or any other similar law or regulation; and/or (iii) failure by De~loper to provide any ie~uired disclosure oridcntification as required by Labor Code Section 1781 and/QI',,by Davis-]3acaiT, as the same may be amended from time to time, or any other similar law of:regulaton. 1t is agte~d by the parties that, in connection with the development and construction (as defiiied~~by applieall~`Iaw or regulation) of the Project, including, without limitation.any and all public works (as defined.by;applicable law or regulation), Developer shall beat alj;risks of<payment "or"non-paymenT of prevailing wages under applicable federal, state and loeal;~aw or reglation and/or• the `Impletnei~tayion of Labor Code Section 1781 and/or by Davis Bacon=;;~'s•,the sameii~~y be amended fi'om time to time, and/or any other similar law or regulation. "Increased'bosls," as.iiscd in this Section 309.1, shall have the meaning ascribed to it in Labor C,odp Seatton 17$1, as {he'~same .may be amended from time to time. The foregoing indemuity'sh~ll sut'vi'3,e~;terminatioh of this <Agreeme>~(`and shall continue after completion of the construction and developrlertt of ile P>•oject by Developer. :::.309.2 SecfrGn,3 Compliance. Developer agrees to comply with and to cause the General Conti~i)Oto,,r, each subcontractor, and-any other contractors and/or subcontractors or agents of Developer to cotq~lywith the regllitements of Section 3 of the Housing and Urban Development Act of 1968, as amended,'::12 U.S.C. §;1701 u, and the implementing regulations, in connection with the construction of the Yroje~t„ Devpl,iper shall submit to Agency/City each Construction Contract with appropriate provisions pi•ovidfig for the construction of the Project in conformance with the terms of this Agreement, iuchtding`'tle' Section 3 Clause set forth below. The General Contractor, each subcontractor, and any other conhractors or subcontractors or agents of Developer shall have provided to the l;xecutive Director the certification in appendix B of 24 CFR Part 24 that neither it nor its principals is presently debarred, suspended, proposed for debarment, declared ineligible, or voluntarily excluded from participation from the Project, and Developer shall be responsible for determining whether each contractor has been debarred. Section 3 of Che Housing and Urban Development act of 1968, 12 U.S.C., 1701u, as amended by Section 915 of the Housing and Community Development Act of 1992 requires that economic opportunities generated by HUD financial assistance for housing and commuuity development programs be targeted toward low- and very low- income persons. Whenever IND assistance generates oppot4unities for employment or contracting, state and local grantees, as well as 13 other recipients of H[JD housing assistance funds must, to the greatest extent feasible, provide these opportunities to low- and very low- income persons and to businesses owned by or employing low- and very low- income persons. Section 3 applies to projects for which FItTD's share of project costs exceeds $200,000 and contracts and subcontracts awarded on projects for which IIUD's share or project costs exceeds $200,000 and the contract or subcontact exceeds $100,000. For purposes of this Section 3 Clause and compliance thereto, whenever the word "contractor" is used it shall mean and include, as applicable, the Developer, and its contractor and subcontractor(s), if any. The particular text to be utilized in any,~pd all contracts of any contractor doing work covered by Section 3 shall be in substantially the fpriri` of the following, as reasonably determined by the Agency, or as directed by I-IUD or its representative, and shall be executed by the applicable contractor under penalty of perjury: ~t~,,~,, "The work to be performed under"thiseontract rs:SUbject to the requirements of Section 3 of the.; Housing and Urban`DeYelopment Act of 1968, as amended, 12~ tT:S.C. 1701u ("Section '3".) The purpose of Section 3 is to ensure, that employment aud''other economic opportunities generated by ; HiJD "'as'sistance or ItUll assisted projects covered ,by Section 3, shall, to'~the gr•eatesl extent' feasible, be directed to lowand very low=iricome persons (inclusive of I;xt<•emely Low Tucorpt~ households and.zVery Low Income households served by the :,,~roj8ct);~;particrrlarly persons who axe recipients of I3iJD assrslance.;'for housing ; , "r,. ;~ The parties to lliisYOpntract agrcC to Colrrply with 11UD's regulations in 24 Ck`IZ,part 135a ~yhich imp1emeiil Section 3.~ As evidenced by ;, . their exedutlop of this Contract, the paities to this contract certify that they,are undel•rno conhaciuul,or other:>j1}rpediment that would prevent The contracfbx• agiees.;,to seud 'fo each labor organization or represcntatrve o£:woilcers;vXjth which the contractor has a collective bargaining agreeirie~nl or otherundorstanding, if any, a notice advising the;i!iabor organiza4)~rn or workers' representative of the contractor's coriiYtrit;ments under;. this Section 3 clause, and will post copies of notices rl conspipiioUS places at the work site where both employees and applicants for training and employment positions can see the notice. The notice shall describe the Section 3 preference, shall set forth minimum number of job titles subject to hire, availability of apprenticeship and training positions, the qualifications for each; and the name and location of person(s) taking applications for each of the position; and the anticipated date the work shall begin. The contractor agrees to inclrrde this Section 3 clause in every subcontract subject to compliance with regulations in 24 CFR parC 135, and agrees to false appropriate action, as provided in an applicable provision of the subcontract or in this Section 3 clause, upon a finding that the subcontractor is in violation of the regulations 24 CFR part 135. The contractor will not subcontract with any 14 subcontractor where the contractor has notice or lrnowlcdge that the subcontractor has been found in violation of the regulations in 24 CFRpart 135. The contractor will certify that any vacant employment positions, including training positions, that are filled (a) after the contractor is selected but before the contract is executed, and (b) with persons other than those to whom the regulations of 24 CFR part 135 require employment opportunities to be directed, were not filled to circumvent the contractor's obligations under 29:-CFR part 135. Noncompliance with f1Ull's regiila result in sanctions, termination of debarment or suspension from futut~r~. After the foregoing Section 3 .C;jaf~si contractor, as applicable, the following text shall be'.;~rlc "The contractor/provider by his/her signature affixed;. contractor has read the requirements pf the Section contained therein for all ofhis/her oneratioiisa~eJated to m 24 :CFR part 135 may contract 'for default, and )assisted contracts." there shall be aaignatw•e block for .the ded imgredialely abpvq,the signature block declares under penalty of perjury that reto 1:.Clause~and accepts all :its requirements To the extent applicable, tlag Deueli~per shall comply and/or cause compliance with Section 3 Clause requireme}lts fox the Project. ~ "~ Fox, eXample, tivhen and if Developer or its contractor(s)/subcontractors) hue(s) full trine employoes •rather than `volunteer labor or materials, Section 3 is applicabl~apd all disclosure and repot~inga•equii•em@nts apply. 309.3 'Liens and Stgp Notices. Tl,?e Developer shall not allow to be placed on the Property or aiay-part thereol` any lien oist4p notice: if a claim of a lien or stop notice is given or recorded affcc~mg the lmprovemetts the beVeloper shaJ(within thirty (30) days of such recording or service or;within five (5};days oft)e Agency's demand`whichevertast occurs: (a) -pay and discharge the same; or (b) affect the release thereof by recording and delivering to the Agency a stuety bond in sufficient form and ~'~ount, or othettivise; or (c) ptof~ide the Agency with other assurance which the Agency deems, in its sole discretion, to be satisfactory for the payment of such lien or bonded stop notice and fox the full and continuous protectioi'of Agency from the effect of such lien or bonded stop notice. 3111. Release of Construction Covenants. Promptly after completion of the Improvements or any portion thereof in conformity with this Agreement, the Agency shall furnish the Developer with a "Release of Construction Covenants," substantially in the form of Exhibit L hereto which is incorporated herein by reference. The Agency shall not unreasonably withhold such Release of Construction Covenants. The Release of Construction Covenants shall be a conclusive determination of satisfactory completion of the applicable portion of the Improvements and the Release of Construction Covenants shall so state. Any party then owning or thereafter purchasing, leasing, or otherwise acquiring any interest in the Property shall not (because of such ownership, 15 purchase, lease or acquisition) incur any obligation or liability under this Agreement except for those continuing covenants as set forth herein and in the Affordability Restrictions. If the Agency refuses or fails to furnish the Release of Const<uction Covenants, after written request from the Developer, the Agency shall, within thirty (30) days of written request therefore; provide the Developer with a written statement of the reasons the Agency refused or failed to furnish the Release of Construction Covenants. The statement shall also contain the Agency's opinion of the actions the Developer must take to obtain the Release of Construction Covenants. The Release of Construction Covenants shall not constitute evidence of compliance with or satisfaction of any obligation of the Dcvcloper to any holder of any mortgage, money loaned to finance the Improvements, or any part,,' Covenants is not a notice of completion as referred to in S~cti 311. Financing of the Improvements. 3]1.1 Approval of Finan Performance and as a Condition Precedent to any proceeds of the Loans, Developer shall obtained sufficient equity capital and/or;l~as and pennancnt financing neeessar~,;,to~: construction of the hmprovements m aoco` Developer shall apply for and use oommei'c exempt bond financing from .the Califoi~h allocation of Tax Credits .from the. Califorr firm commitment Executive Director disapprove such ev the reasons for such disapproval'<~nd new evidence of financing (oraermina shall approve,px disapprove sttch,.ncw times established~in this Secttofi`3~111 initially submitted Yo Agency/City. concunently with the.fiASt dtsbursex}e: from obtained insurer of a mortgage securing 'The Release of Construction of the California Civil Code. the time set`f6rth in the Schedule of meat of construetiq)r or disbursement of y;arid>City evidence t)Iat Developer has d hlfiding commrtmenf~for construction ~velonment of the Property and the ~e,with this P,' leement. The parties anticipate that .,.., y reaso)able effb't`s;:to obtain (1) an allocation of tax )ebt ,itt)it:~lllocahonr,Committee (CDLAC), (2) an 'ax C1'edtt All',Sxcption C~bmmittee (TCAC), and (3) a Senior: T,endei; ;i ll,, as reasonably approved by the ~mifted by Developer. Agency/City shall approve or aeiff`s;.yvithin thirty (30) days of receipt of a complete bly'wilhheld or conditioned. If Agency/City shall ~qgy/Giiy shall do so by Notice to Developer stating ixs)iall promptly obtain and submit to Agency/City reeinent as pennilted by Section 2003). Agency/City of financing in the same manner and within the same tproval or disapproval of the evidence of financing as er shall close the approved financing prior to or of the Loans. Such evidence of `'financing shall include the following: (a) a copy of a legally binding, firm and enforceable 'loan commitment(s) from an approved Senior Lender or Letter of Credit obtained by Developer for 100% of the estimated cost to construct the Improvements, from unrelated financial institutions for the Senior Loan for financing to fund the construction, operation and maintenance of the Improvements, subject to such lenders' reasonable, customary and normal conditions and terms, and/or (b) a certification from the chief financial officer of Developer that Developer has sufficient fiords to complete the construction, operation, and maintenance of the hnprovemcnt and that such funds have been committed to such construction, and/or (c) documentation showing that Dcvcloper has obtained allocations of tax exempt bond financing from CDLAC and Tax Credits fi•om TCAC, along with evidence that Developer has obtained a commitment from a tax credit investor to provide equity in exchange fox a limited partnership interest in Developer pursuant to the Partnership Agreement, and/or (d) other doctunentation satisfactory to the Agency/City as evidence of other sources of capital sufficient to demonstrate that Developer has 16 adequate foods to cover the difference between the total cost of the construction and completion of the Improvements, less financing authorized by those loans set forth in subparagraph (a) above. 311.2 No Encumbrances Except Agency recorded documents (Deeds of Trust/Affordability Restrictions on Transfer of Property). The Developer shall not enter into any conveyance for financing prior to the Release of Construction Covenants without the prior written approval of the Agency, which approval Agency agrees to give if any such conveyance for financing is given to a responsible financial lending institution or person or entity ("Holder"). The Developer may enter into a conveyance for financing after Che completion o£,t~ie Improvements as evidenced by the recording of the Reloasc of Construction Covenants without;thp:approval of the Agency. 311.3 Holder Not Obligated to mortgage or deed of trusC authorized by this Agrer this Agreement to consh•uct or complete the Impri such construction or completion; nor shall any covi, construed so as to obligate such Holder. Notliin~g permit or authorize any such Holder to devot~'s improvements thereon, other than those uses or ii Agreement. 311.4 Notice of De Cure. With respect to any mortgage whenever the Agency may deliver any Developer in completiofi of cons~ucti deliver to each holder of record bf:ap copy of such notice or demand. Each?. are concerned) have the"right, at its,o)- cure or remedy or commence to pir e o or remade of ariv sucliDefault and to mstrucfIhprovements. The holder of any ntsliall noh;le obligated by the provisions of vents or any pot!tion thereof, or to guarantee it or any other pro~ii ion in this Agreement be this Agreement sliail'bE deemed to construe, to any uses pr to constrict any irovidcd for `ox'authorized by this ult #o Mortgagee on Aeed of Trust Holders; Right to n heed o1 (rust granEecJ "by Developer as provided herein, ttrce of derna~cJ'to„Developerwith respect to any llefault by ~ of-the lmpXgvetrients,, the Agency may at the same time mortgage or<~decd of trusT. authorized by this Agreement a ch Holder Sl`all (insoiar''a"s the rights granted by the Agency on, wrthtq'S)',xty (60) days after the receipt of the notice, to ietl?tidy and=hereafter to pursue with due diligence the dire dd''t~fe AoSt (hereof to the mortgage debt and the lien of its to undeiCe or continue the construction or completion of the Improvements, or any po~ien thet'eQ,f, if necessary to conserve or protect the improvements or construction already completed,.yvithout hying first expressly assumed Developer's obligations to the Agency hereunder. Except a's! set forth'in the immediately preceding sentence, such Holder may enforce the terms.'pf this Agreetreut agaiusC the Agcney only if it has first expressly assumed Developer's obligatigljs to the agency under this Agreement by written agreement reasonably satisfactory to the Agei7`,cy. Agency shall fund its obligations under this Agreement to any Holder who undertakes to cothplet~•„tNe Improvements. Any such Holder properly completing such improvement shall be entitled',' upon compliance with Lhe requirements of Seotion370 of this Agreement, to a Release of Construction Covenants. Tt is understood that a Holder shall be deemed to have satisfied the sixty (60) day time limit set forth above for commencing to cure or remedy a Developer Default which requires title and/or possession of the Property (or portion thereof) if and to the extent any such Holder has within such sixty (60) day period comrnenccd proceedings to obtain title and/or possession and thcrca8cr the Holder diligently pursues such proceedings to completion and cures or remedies the Default. 311.5 Right of the Agency to Cure Mortgage or Deed of Trust Default. In the event of a mortgage or deed of trust default or breach by Developer prior to the completion of the construction of any of the Improvements or any part thereof, Developer shall immediately deliver to Agency a copy of any mortgage holder's notice of default. If the Holder of any mortgage or deed of 17 trust has not exercised its option to construct, the Agcney shall have the right but no obligation to cure the default hi such event, the Agency shall be entitled Co reimbursement from Developer of all proper costs and expenses incurred by the Agency in curing such default. The Agency shall also be entitled to a lien upon the Property to the extent of such costs and disbursements. Any such lien shall be junior and subordinate to the mortgages or deeds of trust pursuant to this Section 31l . 311.6 Changes Requested by Holder. In the event that a lender or Holder which has been approved pursuant to this Section 311, et seq., requires one or more amendments to this Agreement, or any of the attachments hereto, the Agency agrees:,-Yo reasonably consider approving such proposed amendment, and if such proposed amendment(s)'' does not materially affect the Agency's interests hereunder, the Agency Executive Direetor`or his or her designee is hereby authorized to make such amendment(s) without further apthoriz~tion fi•om the Agency. 311.7 Subm•dination of Affordability Restrictions;,. In the event the Executive Director finds that an economically feasible mejklod of financing for the Gonsh•uction and operation of the Project without the subordination of the Affordability Restrictions is nat reasonably available, Executive Director may agree to subordinate the 4oVpnants contained in the` jegulatory Agreement and the lieu of the Loans to the Senior Loan, the Bond Regulatory Agreement and/pr the Tax Credit Regulatory Agreement, subject to the tpl,'ms of this Section' 311.7. Each and'aiiy subordination agreement evidencing or affirming Agctlcy's and City's;, subordination of the Affordability Restrictions entered into by Ageney'atrd/it''City shall contain written commitments which the Executive Director finds are reasonably de,~igned fo<p}'otect Agerigy's and City's investment in the Project in the event of default; any suchr subordination, agreerrierlt(s) shall contain contractual obligation of such Senior Lepcier,, to inchid8,. without limitation, `fife following: (a) concurrent delivery to Agency and City of a ~frue„copy of each and any noHc'e,provided by the Senior Lender for the Project to Developer (as its boii`oyver) during fife term of the"Senior Loan for the Project; (b) a reasonably extended cure period and tight to Agency, and City to cure and asswne the Senior Loan, and/or other senior len(s) for the Pioledt iij~on the same terms applicable to the approved financing to Developer 'pursuant,:to the lgali docurizcriYs applicable thereto with such right, but with no obligat~un;-to the Agency and City.be,ing available'both from the date of issuance of any notice of default'thr•oilgh and after the iecordatioh of a formal Notice of Default by the Senior Lender for the Project pursuant to applicable C~iifornia Code of Civil Procedure foreclosure requirements, and (e) a right of Agency :and City to ctu'e- a defaLdt=%on each of the senior loan(s) for the Project prior to foreclosure and af(~r; recordation. o'f a Notice of Default pursuant to applicable California Code of Civil Procedure require~pents, and 'such curt rights may also include: (d) a right of Agency and City ,,. to negotiate with the ~etlior lierder(s) for the Project after notice of default from the Senior Lender(s) and prior to foreclosurc'(e) an agreement that if prior to foreclosure of the Senior Loan fox the Project, Agency or City takes title to the Property and cures the default on the senior loan(s) for the Project, the Senior Lender(s) will not exercise any right it may have to accelerate the Senior Loan by reason of the transfer of title to Agency or City, and (f) a right of Agency and City to acquire Developer's interest in the Property from Developer at any time after a material default on the Senior Loan for the Project. 18 400. PRESERVED] 500. LOANS 501. Agency Loau. 501.1 Amount and Purpose. Subject to the terms and conditions of this Agreement, Agency agrees to make the Agency Loan to lleveloper from tax increment money in the principal amount of up to $3,888,497 for those purposes described in this Agreement. 501.2 Agency Promissory Note and evidenced by the Agency Promissory Nole in the loan Loan shall be secured by the Agency Deed of Trust in tl Agency Deed of Trust shall be a deed of trust efiet subordinate only to the Senior Loan Deed of Tnisl, 501.3 Usc of Agency Loan only for costs incurred by lleveloper to con Project Budget. 501.4 Agency Loans` set forth in the Agency Promissory Note 502. City 502.1 Amu Agreement, City agreesto m principal amount of up to $2f s02.z cty evidenced"by the City Prom: shall be secy~ed by the Citq D, of Trust shall;j3,~, a deed of tri Senior Loan 17ee'~ of Trust, as )egd of~~Trust. The Agency Loan shall be tttachcd hereto as Exhibit F. 'fhe Agency _, for•matl~ched hereto as Exhibit H-1. The iibering thCYroperty in second position, Proceeds of the Agency Loan shall he used mprgv"~itents as set focll} in the approved terms anSi;~onditions of the Agency Loan are as sidualicceipts,notc. Sib~ect to ~tle terms and conditions of this nn HOME Program funds to Developer in the ses described in this Agreement. y Note attd" >5eed of Trust. The City Loan shall be in the foiKn' attached hereto as Exhibit G. "fhe City Loan p;in the form attached hereto as Exhibit H-2. The City Deed tag the Property in third positon, subordinate only to the y Lle Executive Director, and the Agency Deed of'frust. 502 3 s, Use of ~ify Loan Proceeds. The proceeds of the City Loan shall be used only for costs mcuued''iby Developer to construct the Improvements as set forth in the approved Project Budget. 502.4 City Loan 'Germs. The terms and conditions of the City Loan are as set forth in the City Promissory Notc which is a residual receipts note. 'fhe HOMF. Program compliance period is fifteen (15) years, connnenciug on the date that all work is complete and the Property is fully occupied. 19 503. Other Terms and Conditions of the Loans. (a) The Agency Promissory Note and City Promissory Note shall become immediately due and payable, in the event of any of the following: (i) failure to complete the Project within the time set forth in the Schedule of Performance; (ii) violation of any of the,,.,,use covenants and restrictions contained in this Agreement or any other Project Document after'he expiration of any applicable notice and cure periods; (iii) an Event of any other Project Document which is not timely ct cure periods pursuant Co the terms of this Agreetr}gfi 600. CONDITIONS TO 601. Conditions Pre Sections 602 and 603 below, A, the salisi'action, or waiver by the 601.1 the authorized officer necessary, each oftbe<f this (a) (e) of In t by T~eYg~oper under this Agreement or ~r expuatioH of any applicable notice and applicable P,ipjeet DocumenC. PROC);EllS ioh"' fo.. the %Conditions Precedent set forth in tion to :disburse the Loan Amounts is subject to ofthe`fti]loyWing Conditions Precedent: Note; Deed of Trust; and Restrictions, to the Agency, signed by ;) acknowledged where 601.2 D2'sigh' Approvals. The Developer shall have obtained approval by the Agency of the Design Development Drawings as set forth in Section 302. 601.3 Land IIse Approvals. The Developer shall have received all land use approvals and permits required pursuant to Section 303. 601.4 Construction Contract; General Contractor. Developer shall have provided to Agcney and City (within a reasonable time for Executive Director to review, comment and approve or disapprove) a signed copy of the Construction Contracts between Developer and the General Conriactor and between Developer's General Contractor and each subcontractor for the construction of the lmprovements inclusive of all on-site and off-site improvements required to be constructed in connection therewith, if any, certified by the General Contractor to be a true and 20 correct copy thereof, and Executive Director shall have reasonably approved such General Contractor) as having the experience and financial resources (based on audited or unaudited financial statements submitted to Executive Director) necessary to construct and complete the Project. Developer shall submit to Agency and City evidence regarding each entity serving as a subcontractor for the construction of each portion of the Improvements, along with satisfactory evidence of necessary license(s), certification(s), bonding (with respect to the General Contractor's license bond required by the State of California) and insurance, all as required by this Agreement and as reasonably requested by Executive Director. Each Construction Contract (and all subcontracts) shall include the Section 3 Clause set forth in Section 309.2 hereof. ;lllp Construction Contract with the General Contractor shall be for a fixed, all-inclusive fee to complete`all work to be performed by the General Contractor to construct the Improvements, subject to hp~toved change orders. 601.5 Construction Secm•ity. delivered to Agency and City an unconditional anc equal to fi$een percent (15%) of the total the coil, ProjecC Budget which is approved by Agency ati~ Letter of Credit"), along with reasonably sit, Contractor's financial strength (such as the two mo of General Contractor) and reputation for quality a'oper stiall~J}avc obtained and shall have ocable staii'c~;y`,;;letter of credit in an amount on costs for £he 'Project, as set forth in the for the Project (ciihcctively, "Performance pry evidence demonstrating the General ~. ,. pt aUdtt~,e~ or unaudited;fi)aarcial statements complete the Project in accordance wrth;this;Agreement. deposited with the Executive Director acid shall be, in full unconditional and irrevocable right to di'2w on siich'nstn date of recordation of the notige of completion in the~eVa ceases construction in v-io]atidn of this Agreement or•••~'ails violation of this Agrcci)cnt. In s Performance better of Credit in its whether the proceeds of the Perfor the Project.: Agciicy and Crty w Beneficiar~ies)sigrie$ ;aliel dated sta of Credit effecting Agency's, and`( ba h•ansmitted to Developer oil,the of the Perfofin'Ance Letter oI Cr'edii of other and/tii`-additional seew ity~, performance bonds eovermg one guarantees and/or combinations Security"), which Agency and;Cit; her sole, reasonable diso'ratiori that security that is substantially similar and pcrforrtratice necessary to nance Letter of CrediC shall be effect with Agency and City's I thirty-five (35) days after the qer (or its General Conhactor) e'construction of the R•oject in event, t`tgency~and City.'Shall have the right to draw on the disorcttoh,` and have the sole and absolute right to determine cp. Letter of Credit shall be used to pay for the completion of rovi'de Developer with a copy of Agency's and City's (as ;nt pr'b~i~ed to the Lender pursuant to the Performance Letter ixy,'s draw oil the Performanw Letter of Credit, which copy will sarxie,date that the statement is transmiCted to the Lender. In lieu Developer may propose providing Agency and City other forms addressirt`g Che completion of construction (such as payment and gndred percent (100%) of the Project), other bonds and sureties, ~ any of those, collectively referred to herein as "A]lernatc 'will approve and accept if the Executive Director determines in such Alternate Security will provide Agency and City a level of and equivalent to the Performance Letter of Credit. 601.6 Financing, The Agency shall have approved Developer's evidence of financing of the Improvements on the Property as provided in Section 311.1 and such financing shall be available for development of the Bnprovemenes or, to the extent said financing consists of a third party loan or loans, said loan or loans shall have closed and funded or be ready to close and fund concurrently with the Loans. 601.7 Final Project Budget and Construction Schedule. Developer shall have submitted to Agency/City and Agency/City shall have approved the final/updated Project Budget and updated construction schedule for the construction oFImprovemcnts. 21 601.8 Corporate Resolution. Developet• shall deliver to Agency a certified copy of a resohiCion of Developer's Board of Directors authorizing (or ratifying) the execution of this Agreement and establishing funding for fulfilling Developer's obligations under this Agreement. 601.9 Opinion. The Executive Director shall have received and approved a standard borrower's counsel's opinion from Developer's counsel which shall be a law Finn licensed to practice within the State of California and having experience in transactions similar in size and nature to the transaction contemplated hereunder. 601.10 Management Plan. Developer shall ,have prepared and submitted to Agency, and Agency shall have approved, a Management Pla~i; as'provided in Section 1205. 601.11 Agency Authority. No legal impediment shall have been enacted or• shall from malting the Agency Loan to Developer. regulation or other to prevent Agency 601.12 Title Insurance. Agency<.and City shall have rece}ved a 2006 ALTA Lender's loan policy of fitle insurance ("Agency/City'Title Polipy"), or evidi;nce ,of a commitment therefore satisfactory to City, issued by hirst American Title'hisurance Company and in form and substance satisfactory to Agency/City„togother with all endoYSements and binders required, naming City and Agency as the insured, in a policy<~mount of not less-than the City Loan Amount and the Agency Loan Amount, showing Developer as~ the fee owner 'qf the Property and insuring the combined City Deed of Trust and the AgenGypeed of Trust to be valld• priority liens on the Property. The City Promissory Note and Deed of Tritsf and the Agency Promissory Note and Deed of Ttvst shall be subordinate only-to the Se,tigr Loan Note and Senior LO;~an;Deed of Trust, as approved by the Executive Director. Tlie-,order oi'=priority of the various monetary encumbrances and regulatotry agreements affecting the Property sliall, be as follows;: (unless subordinated pursuant to ~n Deed of'I'rust eed of'frust of Trust ement 6. NSP Covenants NSP Deed of Trust 601.13 Affordability Restrictions. Developer shall have delivered to the Agency, in the form attached hereto as Exhibit i, the Affordability Restrictions pursuant to which, among other Chings, Developer agrees that the Property shall be used only for decent, safe, and sanitary rental Affordable Housing pursuant to the affordability requirements of Code of Federal Regulations ("CFR") Section 92.252 or 92.254 and California Health and Safety Code Sections 50053 and 33334.3, as applicable. 22 601.14 Documents Recorded. This Agreement, the Agency Deed of Trust, the City lleed of Trust and the Affordability Restrictions shall have been recorded in the Official Records ofthe County. 601.15 Request for Notice. Agency shall have recorded a request for notice of default under the Senior Loan ("Request for Notice of Default"). 601.16 Insurance. Agency/City shall have received evidence satisfactory to the Agency/City Attorney and the City's Risk Manager that all of tha;policies of insurance required by Article 1900 of this Agreement are in full force and effect. 601.17 No Litigation. No litigation threatened by any third parties which seeks to enjoin tl}e' 601.18 Kepresentations and W? Developer contained in this Agreement and the of disbursement of any proceeds of the Loans as thou] the Executive Director, Agency/City shall have Developer's Representative. 601.19 No Default. any other Project Document shall have giving of notice or the passage of time render this Agreement or a~iq othat Pra Agency/City shall have eceived .a'certi 602. to make any satisfactioriz 602.1 i shall have'b'een satisfied Exccuttvc Dii~ei;tor). his/her own it satisfactorily in regulations). shall be pending or ed herein. .. The repres@ptations and warranties of ict Documents ~~all be oorreet as of eaah on and as of that daYE,, and if requested by 1 a„certificate to ttiat;..effect signed by t hy`peveloper under this Agreement or ventssshall have occurred which, with the stitutc an?Gvent of Default by Developer t if,lequestsd by the Executive Director, r, .. ~igrA~~ by Developer's Representative. ;den`f to Any Disbursement. Agency/City's obligation uding~tlie_-first and fmal disbursements) is subject to the ent. All Conditions Precedent set forth in Section 601 satisfied) by Developer (or shall have been waived by tisfacfo~3' Progress. The Executive Director shall be satisfied, based on or gtktiei' reliable information, that the construction is progressing ice.vrifl all applicable laws and other requirements (including HOME 602.3 Condition of Title. Either (i) the Executive Director reasonably believes that no event has occurred that would give rise to a colorable claim against the Property (e.g., a mechanic's lien) superior to the claim of Agency/City against the Property with respect to the subject disbursement, or if such claim is made, then Executive Director shall receive satisfactory evidence that such claim has been bonded over until its resolution; or (ii) Agency/City must have received, at Developer's expense but payable out of the Loan proceeds from the title insurer who issued the Agency/City Title Policy, all endorsements thereto then reasonably required by Agency/City (inohtding, without limitation, CLTA Form 122 -- priority of advance endorsements). 23 602.4 Representations and Warranties. The representations and wanautics of Developer contained in this Agreement and the other Project Documents shall be correct as of the date of the disbursement as though made on and as of that date. 602.5 No Default. No Event of Default by Developer shall remain uncured (unless, to the extent permitted under this Agreement, Developer is diligently taking action to cure such default) and no event shall have occurred which, with the giving of notice or the passage of time or both, would constitute an Event of Default by Developer. 603. Final Disbursement. Agency/City's obl Section 611 is subject to the satisfaction of the following 603.1 Constrnction Complete. all on-site and off-site improvements and all landsc by the Executive Director. 603.2 Certificate of requiring inspection or certification by any Governirient: certified as complete. Developer shall request that the C of Occupancy, a copy of which shall he rdelivered to disbursement to occur. 603.3 Liep,Free. At leastone ofthefo (a) FThirty-five (35),days shall notice of eomp]etion fo,'r„ the consirstction of the final mechanic's or material man'; lien shall be outstanding; or or (c) lien affecting the;P~•operty, to lisburse the Retainage pursuant to Conditions Precedent: ucti~rt.,pf the hnprovcmcnts including be complete, as reasonable determined !vny portion~offl~~ construction work itloi'ity shall have 1Z,een inspected and ;_ wilding Department ts,~ue a Certificate 3xecutive Director, in order for final occurred: since the recording of a valid s to be constructed, and no have passed since actual completion of the :chanic's or materialman's lien shall be have bonded over any mechanic's or materiahncn's sonable satisfaction. 604. Disbursemont Pi•o`ecdures for Loan(s). The Loan proceeds shall be disbursed to finance the consttvction'of the Project. Subject to Section 604.1, the Loan proceeds shall not be used for any purpose other that%;Sor` construction related costs, including Developer fee and soft costs related to development of tlie>Project, all in accordance with the approved Project Budget, with such costs all subject to Agency/City's prior review. All disbursements shall be made as reimbursements to Developer for costs actually and reasonably incurred by Developer for the construction of the Improvements in accordance with the Project Budget, based on detailed invoices and/or bills received from the General Contractor; materials suppliers, consultants and subcontractors that have performed work on the Project. Developer and Agency/City shall agree on a draw request schedule to ensw~e that the Agency/City is provided with frequent updates regarding the status of the construction of the hnprovements, the status of expenditures in accordance with the Project Budget, and the status of invoices submitted by and payments to the General Contractor, suppliers, consultants, and subcontractors performing work at the Project. 24 605. Termination for Failure of Condition. If (a) any of the conditions set forth herein are not timely satisfied (subject to applicable notice and cure rights) or waived by the Executive Director within the times set forth in the Schedule of Performance, and (b) Agency/City is not in default wider this Agreement, Agency/City may teilninatc this Agreement without any further liability on its part by giving written notice of termination to Developer. Upon the giving of such notice, all principal, interest and other amounts owing under the specified due date. 606. Waiver of Conditions. The conditions set forth pertaining to Agency/City's obligation to make disbursements of the Agency Loan and City Lean proceeds are for Agency/City's benefit only and the Executive Director may waive all or any part 6f such rights by written notice to Developer. r f.. 606.1 Waiver of Disbursement ConcJifions.' Unless Agency/City otherwise agrees in writing, the making by Agency/City of'1py disbursement with knowledge that any condition to such disbursement is not fulfilled shall ceiistitute a waiver: of such condition only with respect to the particular disbursement made and such condition shall'6e':condition to all further disbursements until fulfilled. 606.2 Modification Exectrtive Director shall have the autl forth herein in order to conform them 607. Disbt line-item basis in ace Section. Tn no event excess of the amount allobated to upon Developer's writteh request intends to fuiid:y!ith such disbu require aoC9rnpahied iu each c including ih'any event j?aitial lie received any payment for ivprlc 1 required by':Agency/City. Dig Days prior lo:tlla__ date of the monthly. meht..;Conditions fmd Procedures. The the disbursement conditions and procedures set n•ovisions of the contract for construction. ~~e Loari pxo9geds shall $e disbursed on a line-item by •ojecf:$udget:and. Subject to the` Conditions Precedent in this have a~iy obllgatiori~to;disburse any amount for any item in ~m in the Project Budget. 'Disbursements shall be made only form of a p~taw Request showing all costs which Developer t, iY,em~~ed~ma•.such detail as Agency/City may reasonably (a)'invoices~attd lien releases satisfactory to Agency/City, ses ezdcuteaby each contractor and subcontractor who has ed, and (b}'all other documents and information reasonably Requests shall be submitted no less than ten (10) Business disbursement, and shall not be submitted more often than Prior to cacti disbursementay Agency/City of proceeds of the Agency/City Loan, Developer shall deliver to AgencylCrty ~'''%draw request ("Draw Request"), and all required supporting information as set forth in therLoan Documents or as otherwise reasonably required by Agency/City in order to provide information for evaluating the requested disbursement pursuant to customary conshuction lending practices of institutional lenders in Southern California. Agency/City shall notify the Developer of approval or disapproval of each Draw Request within five (5) husiness days after receipt of the Draw Request, using the Agency's/City's "Disbursement/Change Order Approval Notice". Agency/City shall have the right, bttt not the obligation, to discontinue processing Draw Requests unless and until receipt of notification iiom the other of approval or disapproval of each outstanding Draw Request. 608. Manner of Disbursement. Agency/City may make any disbursement by check payable to Developer; or on a voucher basis; or by check payable ,jointly to Developer and any 25 contractor, subcontractor or other claimant; or directly to any such claimant; or by any other means reasonably selected by Agency/City. 609. Cost Overruns. In the event that, at any time and for any reason, (a) the actual cost reasonably estimated by Agency/City or Developer to be required to complete all matters included in any line item in Che Project Budget exceeds the amount allocated to that line item in the Project Budget, (b) Project Costs for any matters not covered by a specific line item have been or will be incurred, or (e) the undisbursed portion of the proceeds of the Loans is or may be insufficient to pay all Project Costs for construction of the hnprovements that may be payable under the Agency/City Loan Documents or otherwise in connection with the conslructgu;<'Developer shall, within ten (10) days after it receives written notice thereof from Agency/City ofairy of the foregoing matters, do one or mare of the following: (a) provide salisiactory~eu~ylence to Agenc;~/City that Developer has previously paid such excess Project Costs or otlle£wrs`e~provided for sueh'insufficiency (collectively, the "Excess Cost") with fiords from a source other than the Agency/City Loan;-; (b) reallocate sufficient funds to ;pay the Excess host from fiords allocated to "Contingency" in the Project Budget; piro~rded, hgwever, that the Executive llirector's consent to any such reallocation shall be required; or (c) deposit an jtnount equal to the 1;~xGess Cost in anon-interest bearing account ("Overrun Account'), with Agency/city fronf~vhiclr withdrawals may be made only with the consent of the Executive ~ireetor but which` Wzll be o~Ck}austed,prior to'any further disbursement for any line item, so that a~jy resulting;surplus in an~7irie item<ofthe Project Budget wIll then be reallocated to the line items) iu whicli';the ExceS~,Costs are expedled to be incurred. /"h^. Agency/City shall have rro obhgatian to mal~e,,further disbursements under the Loans until Developer .has paid or, otherwise~,provided~for all ~EXeess Costs as required above. Amounts deposite.'tl by Developer, ,in the'Ouerrun Accoun"t:,.for any Excess Costs shall be disbursed by Agency/Cjty prior to the distiiyrsementnf any remaining Agency Loan or City Loan proceeds in the manner de'sc'ribed in subdivisign (c), above,,, 610. `Colt Savings 5ublect to Section 609, upon completion of and disbursement for all matters covered by ~agy hnc rt~4S in the Project Budget, any remaining undisbursed amounts allocated to that Iina~lem shall'.~};e retained by the City, with a corresponding reduction in the principal amount of the Loans 611. Retainage. `"Agency/City will withhold a "Retainage" of 10% from each Disbursement for each of the hard cost line items of the Project Cost breakdown (and other line items thereof designated far withholding of retainage) set forth in the Project Budget until all conditions to the final disbursement of proceeds of the Loans have been satisfied. In lieu of Agency/City's withholding the Retainage, Developer can by written notice to Agency/City elect not to draw any overhead m' profit (in an amount not less than the full Retainage) as would otherwise be permitted under the Construction Contract until such time as Retainage would otherwise have been released. Agency/City shall not retain funds for building materials purchased by Developer or for soft costs of construction for which Developer supplies documentation to Agency/City that Developer has provided payment in full. 26 612. Holdback. The Retainage otherwise available for disbursement shall be subject to a holdback of one hundred twenty-five percent (125%) of the estimated cost (as determined by the Executive Director) for "punch-list" items. Such holdback will be released when all punch-list items have been completed to the satisfaction of Agency/City. 700. AFFORDABILITY REQUIREMENTS, USE AND MAINTENANCE. OF THE PROPERTY 701. Use Covenants and Restrictions. (a) Developer agrees and i land and bind Devclopet•, its successors, its assign and Developer will make all but one of the Housing Unit income and Very Low Income households at rents.] entire Term of Phis Agreement. The HOME Prograri shall be enforced until the date that is fifteen (15) yep Project as complete to HUD. Upon expiration of the>l, Agency/City shall require that all Affordable Units rej assumed household size at the same iaQome levels, adopted Agency guidelines. ,,;,, (b) (35) of the Housing Units be HOME Units. The ,,Eli Project with comparable a 702. Affordall be calculated pursuant to t Very low-50"/0-, Two Very ]ow-50%'~"„ "".Tlu•e Very low-50% Five. Ext.low-30% The venarits;'which covenants shall run with the ~ry~SUCpcssor in interest to the Property that bri the Pi•opel3y available to Extremely Low fordable to such households throughout the requirements appljcable to the HOME Units after the date on which the City reports the yeat• HOME Prograiri,oornpliancepsriod, the un affofilable, with rents calculated based on s ~equii`ed by the Redevelopment Law and The P~oleet shall cons~~t of thitiy?si?i (36) Housing Units, Thirty-five l be Affordab"le Units: `eleven (11} of~the Affordable Units shall also Units shall'bc,fixed,,tfiuts~and. shall lie disttibuted throughout the ,. hestli~the other` Units, as:~pprovecY by the Executive Director. ordable )tent to be charged for the Affordable Units shall '' No~'Affordable No. HOME Rent Units Units Max Income $,981 8 $1134 22 $1395 1 $724 4 ible Units 35 0 $41,850 10 $50,200 1 $60,350 0 $30;100 11 (a) ''''The Affordable Rents for Very Low Income households shall not exceed the lower and more restrictive of: (i) The very low income rents as calculated render the methodology presented in California Health and Safety Cade Section 50053(b)(2); or (ii) 1'he standards set forth by the California Tax Credit Allocation Committee (TCAC); or (iii) With respect to the HOME Units, the Low HOME rent amount set forth in the HOME Regulations. 27 (b) The Affordable Rents for Extremely Low Income households shall not exceed the lower and more restrictive of: (i) The extremely low income rents as calculated under the methodology presented in California Health and Safety Code Section 50053(b)(1); or (ii) The standards set forth by the California Tax Credit Allocation Committee (TCAC). (c) Utility allowances shall be deltcted from the maximum gross monthly rent charged to tenants of the Affordable Umts, `I'lic Santa Ana housing Authority publishes the utility allowance. r 703. Rent Increases. On an annual basrsrtlae"Agency/C)1y,,shall provide the Developer with the maximum allowable schedule of rents for th~`property. In rib.'eveut can Developer charge any tenant more than such amount. ' 500. AGENCY AND CITY 801. Agency Representatiops-nnd Warranties. `tgcncy hereby represeirts and warrants to Developer, as of the dale of this Agrecgieijt as.follows 801.1 Authority Agctiby rs a j`!ublic body,,;cnrporate and politic, existing pursuant to the California Community Redeyelopm~pt Law,. (California Health and Safety Code Section 33000, et se9 ), Which has; been authorized to tlans3at Jiisincss pursuant to action of the City, As of the date of this Agreement, Agency has fu~ir`iight, povJei•~and lawfirl authority to execute, perform, and deliver this Agreement, Together wit)r -Xts exhibits, and has been fully authorized by all requisite actions on the part of Agency :., ;,, ~~ 801.2 ~Vq Coii~'lict. To ~fhe best drf~~Agency's knowledge, Agency's execution, r.,, delivery,drjd performance of its obhg'dtions under=f)i'is Agreement will not constitute a default or a breach uRdet4any contract, agreement or bf~ier to which Agency is a party or by which it is bound. 802. `'-City Represent Developer, as of the date of this as follows: City hereby represents and warrants to 802.1 ' zA of the date of this Agrecrn deliver this Agreement, is actions on the part of City. y City is a California municipal corporation and charter City. As ~~ has Rill right, power and lawful authority to execute, perform, and with its exhibits, and has been fully authorized by all requisite 802.2 No Conflict. To the best of City's lmowledge, City's execution, delivery and performance of its obligations under this Agreement will not constitute a default or a breach under any contract, agreoment or order to which City is a party or by which it is bound. 900. DEVELOPER REPRESENTATIONS ANll WARRANTIES 901. As a material inducement to Agency/City to enter into this Agreement, Developer represents and warrauts as follows: 28 901.1 Formation, Qualification and Compliance. Developer is a California limited partnership currently comprised of Orange IIousing Development Corporation, a California nonprofit public benefit corporation, and C&C Devolopment Co., LLC, a California limited liability company. Developer is a duly organized California limited partnership formed within and in good standing under the laws of the State of California. Developer has full right, power and ]awful authority to undertake all obligations as provided herein and the execution, perfonnanco and delivery of this Agreement by Developer has been fully authorized by all requisite actions on the part of the Developer. Orange Housing Development Corporation is (a) a non-profit public-benefit corporation, validly existing and in good standing under the laws of the State?. o)' California, (b) has all requisite authority to conduct its business and own and lease its propc)•fies,`(c) has qualified and is in good standing as a Community Housing Development O standing in every jurisdiction in which the nature of where failure to qualify could have a material add performance of its obligations under the Loan llocpin~ applicable to its business and has obtainc"d ;all authorizations fi•orn, and has aocomplished all ~lin, Governmental Authority that arc necessary for the tr`ai7 gamzatio», and (d) is qualified and in good its business-.makes qualification necessary or crse~ effect -.oii<,its financial condition or the :iits. Developel iS~.in compliance with all laws approvals, licenses,,,, exemptions and other s, registrations and yyalifications with, any faction obits business 901.2 Execution (a) Devclo~ obligations under the Loan Documeuts. to execute and perform its (~6) ~ `1`he,,execution and delivery by Develbper of each Loan Document, and the pe:•formancc~of;pevelopa"s,obligations ll}0reunder;~lias„¢een authorized by all necessary action and does not and well not: (i) ~ ""require any dbns,~nt or approval not heretofore obtained of any person havmg~;anyinterest in Developer; ~' (ii) violate any provision of, or require any consent or approval not heretofore, obtained under, any articles of incorporation, by-laws or other governing document applicable to Developer; (iii) - result in or require the creation of any lien, claim, charge or other right of others ofany kind i(blher than under the Agency/City Loan Documents) on or with respect to any property iow or )iei•eafter owned or leased by Developer; (iv) to best of its knowledge, violate any provision of any law presently in effect; or (v) constitute a breach or default under, or permit the acceleration of obligations owed raider, any eonU•act, loan agreement, lease or other agreement or document to which Developer is a patty or by which Developer or any of its property is bound. (c) Developer is not in default, in any respect that is materially adverse to the interests of Agency/City under the Loan Documents or that would have any material adverse effect on the financial condition of Developer or the conduct of its business, under any law, contract, 29 lease or other agreement or document described in sub-paragraph (d) or (e) of the previous subsection. (d) No approval, license, exemption or other authorization from, or filing, registration or qualification with, any Governmental Authority is required which has not been previously obtained in connection with: (i) the execution of Developer of, and the performance by Developer of its obligations under, the Loan Documents; and ~:;,. ~: <:.>; (ii) the creation of the helr~de'sciibcd in the Loan Documents. 901.3 Financial and Other Information Tti` tl~,best of Developer's lmowledge, all financial information furnished to Agency/City wjth.respect to D;eygloper in connection with the Loans (a) is complete and correct in all material respects as of the date of preparation thereof, (b) accurately presents the financial condition of Developer, and (c) has becn,,prepared in accordance with generally accepted accounting principles eonS)slently applied or in aceo~dance with such other principles or methods as are reasonably acceptable~tip,Agevpy/~ity. To the best of Developer's lmowledge, all other documents and information furnished to Agency/City with ro~pect to Developer, in connection with the Loans, are c,orleet and, complete rnsOtait as completeness is necessary to give the Agency/City accurate knowledge bf the=subject matter Tq,,the best of Developers knowledge Developer has no material liability or contingent lrap3lity not di'sp)gsed to Agency/City in writing and there is no material lien, ~l~im, charge oi•'pther ri`glit o£ others~of;.any kinds (including liens or retained security trues gf~eondr~ional vendd'rs) on any,;propertyr of Developer not disclosed in such financial statements or dt~rerwise csclosed to Agency/City m wi~[ting. 9014 ~~pgrience and Quah£~cgtions. Developer has the experience and qualifications ;pe,g~ssary to peifprm as' Developer ptii`suant to this Agreement and the other Project 901.5 No,ly,iateria['~1,dverse Change. There has been no material adverse change in the conditions, financial or othgrtivrse,~~4#•I?eveloper since the dates of the latest financial statements furnished to`t~g~cy/City. Since those dafcs;peveloper has not entered into any material transaction not disclosed in stseh financial statements or "otherwise disclosed to Agency/City in writing. 901.6 " °~ax Lrah~lity. Developer has filed all required federal, state and local tax returns and has paid all taxc~ (apcluding interest and penahies, but subject to lawful extensions disclosed to Agency/City in writing) other than taxes being promptly and actively contested in good faith and by appropriate proceedings. Developer is maintaining adequate reserves for tax liabilities (including contested liabilities) in accordance with generally accepted accounting principles or in accordance with such other principles or methods as are reasonably acceptable to Agency/City. 901.7 Governmental Requirements. To best of its lrnowledge, Developer is in compliance with all Governmental Requirements relating to the Property and/or the Project and all Governmental Authority approvals, including zoning, land use, planning requirements, and requirements arising from or relating to the adoption or amendment of, any applicable general plan, subdivision and parcel map requirement; environmental requirements, including the requirements of the California Environmental Quality Act and the National Environmental Policy Act and the 30 preparation and approval of all required environmental impact statements and reports; use, occupancy and building permit requirements; and public utilities requirements. 901.8 Rights of Others. Developer is in compliance with all covenants, conditions, restrictions, easements, rights of way and other rights of third parties relating to the Property. 901.9 Litigation. There are no material actions or proceedings pending or, to the best of the Developer's lrnowledge, threatened against or affectin~Jaeveloper, any oi'the members of the Developer non-profit corporation, or any properly of Developer before any Governmental f., Authority, except as disclosed to Agency/City in writing pr~oi•,totthe execution of this Agreement. If at any titnc during the Term of this Agreement there a~rrses,an}~slnaterial legal proceeding, real or threatened, to which the Developer entity becomes, or iiiay be iiiade_•a parry, or to which any of its property is or may become subject, or any other eveitoccurs, which could materially or adversely affect the ability of the Developer to carry out its obligations herewrc{er, Developer shall promptly (and in any event within five (5) business days) notify the Agency in writirig:r ., 901.10 Bankruptcy execution proceedings, assigmncnj reorganization or other proceedings ai proceedings contemplated by Develof 901.11 information, regardles accurate, correct and =. subject matter, and doi shall personal interests or the iii' direct or itdgect financial will pay or give„qny third 1 901;13. N official or employoc of~he any default or breach by `fl or on any obligations unde' To the heat Jo~' Developer's knowledge,., no attachments, for the bet~fit of creditors, insolvetiCy, banlu•uptcy, ~entiitig or threatened=:against Developer, nor ate any of such or ..Developer's knowledge, all ~ylCity, by whatever means, is and accurate knowledge of its . No'ri~e4nber, official or employee of the Agency/City direct, iri'this Agreement, nor shall any such member, .ion relating to this Agreement which affects his/her ratiofi partnership or association in which he/she has a eloper warrants that it neither has paid nor given, nor other consideration for obtaining this Agteement. y of Agency/City Officials and Employees. No member, agency shall be personally liable to the Developer in the event of Agency or for any amount which may become due to Developer s of this Agreement. 901.14 No Assignment. Developer expressly aclarowledges and agrees that the City and Agency have only agreed to assist the Developer as a means by which to induce, the construction/development of the Property. Accordingly, Developer further expressly acknowledges and agrees that this Agreement is a personal right of Developer that is neither negotiable, transferable, nor assignable excepC as set forth herein. Developer may assign some or all of its rights under Che Agreement only with the prior written consent of the 1Jxecutive Director (such consent not to be rmreasonably withheld), except that no prior consent is necessary for an assignment by a limited partner of Developer to an affiliate, or as otherwise provided in the Deed(s) of Trust. 3Y 901.15 Applicable Law. This Agreement shall be interpreted, governed and enforced under federal and state laws. 901.16 Third Parties. This Agreement is made for tho solo benefit of Developer and the City and Agency and their successors and assigns, and no other person or persons shall have any rights or remedies under or by reason of this Agreement or any right to the exercise of any right or power of the Agency/City hereunder or arising from any default by Developer, nor shall the Agency/City owe any duty whatsoever to any claimant for labor performed or materials furnished in connection with the construction of the Properly. 901.17 Control of Property. The parties aCkll;pvledge that neither the Agency nor City has at any time participated in any manner in the mariagGiv~tl~, or operation of the Property, and will not so pattieipate at any time hereafter. r 902. Obligation to Notify re Changeq~ ~''tJntil the final disbursement of the Loans, Developer shall, upon learning of any fact or eontllYion which would cause any of the warranties and representations in this Article 900 not to be hue, air}mcdiatcly give written n9tice of such fact or condition to Agency. Such exception(s) to a representatiou.'Shall not be deemed a breach by Developer hereunder, but shall constitute an exception whteh Agency and City shrill have a right to approve or disapprove if such except{on ,would have an cffoc~ on the value and/or operation of the Property. If Agency and City elect to rriake ariy.llisbursemetit~of the Loans following disclosure of such information, Developer's rcpresenfafi`gns arid. 4g~rranties `cont=ained herein shall be deemed to have been made as of such drsbursement, siiliject to siieli~exception(s). • If, following the disclosure of such information, Age~Gy aStd Gtt,Y elect no"# to, malCefurther-disbursainents of the Loans, then this Agreement shall mlom~tieally terininate, and neither party shall have any further rights, obligations or liabilities hereunder ~T'JIe representations and GVa~fanties set forth in this Article 900 shall survive ,:,:.•. the fn~al disbursement oftherLoans aric) continue for'sthe Term hereof. 1000. lOgl. Permits ani1:,Q~pprovals; Developer shall diligently obtain all permits, including all building per~tiixs, licenses, approvals, exettiptions and other authorizations of Governmental Agencies required in connection with the constniclion and conversion of the Property. 1002. Commencement~.afd Completion of Construction. The construction of the Project shall be considered cotflplete for' ptiirposes of this Agreement only when (a) all work described has been completed and fully paid.-for, and (b)all work requiring inspecfion or ce~•tification by Governmental Authority has,>i~~en completed and all requisite certificates, approvals and other necessary authorizations (including required final certificates of occupancy) have been obtained. 1003. Change Orders, The contract for construction shall not be modified except pursuant to change orders. All change orders: (a) shall be in writing, numbered in sequence, signed by Developer and submitted to City prior to the proposed effectiveness thereof and accompanied by any working drawings and a written narrative of the proposed change. (b) Shall be subject to the Executive Director's and Senior Lender's prior written approval of the Executive Director and Bank. 32 1004. Entry and Inspection. At all times prior to completion of the construction, upon reasonable notice, Agency/City and their agents shall have (a) the right of free access to the Property and all sites away from the Property where materials for the conshruction are stored, (b) the right to inspect all labor performed and materials furnished for the construction, and (c) the right Co inspect and copy all documents pertaining to the construction. 1005. Construction Information. From time to time druing the course of the construction, within ten (10) Business Days following Agency or City's written demand therefore, Developer shall furnish requested reports of Project Costs, progress schedules andconttactors' costs breakdowns for the construction, itemized as to trade description and item, showing the name of the contractor(s) and/or subcontractor(s), and including such indirect costs a~~eal estate taxes, legal and accounting fees, insurance, architects' and engineers' fees, loan :fees,: ;interest during construction and contractors' overhead. 1006. Protection Against Liens. Completion upon completion of the construclio cessation of labor on the construction for a pe reasonably required to prevent the assertion of any claim of lien is asserted against the proper Agency or the City by any person furnishing immediately give written notice of the same t within ten (10) Business Days after written (b) effect the release thereof,.:by delivering t requirement of applicable l~ws`;fog,,such relea; require to release Agerigy/City fro~iizauy oblig claim. _ 7eyeioper shall diligently, file a valid Notice of y`dligontly file a notice of'c'~~sation in the event of a iod~gf thirty (30) days or moro,~.,~nd take all actions ~laims;bf lien aga'ihst the P~oper~y, ,ht the event that y or any step""notice or claim is as'ssrted against the labor or ma enals to the Property, Developer shall ~gencylC sand shall, promptly and in any event demand thcrofo~, (a) pay and discharge the same, ~ Agency/City a surety bond complying with the ;, or (c) take sugh othei` action as Agency/City may iliori of habrhty.w;lth respect to such stop notice or 1100. COVENANTS `1141: CHDO. ,~~ Orangel3ousing Devalo,~ment Corporation, the sole member of the managing general partner of,pevelo~er, represents and warrants that it qualifies and is in good standing as %a, Commumty:;Hpusmg Development Organization under the HOME Program. Developer he~,el?g covenants a~~l agrees r~o maintain such status throughout the term of this Agreement, and .to, provrdc thc,;:Agency and City with written documentation necessary to demonstrate mainten~itce of said' status on an annual basis. In the event Orange Housing Development Corporation transfei`S` its general partnership irilerest in Developer to another entity (with the consent of the laeeu£iVe"Director or as otherwise permitted by this Agreement), Developer hereby agrees that such successor entity shall qualify and be in good standing as a Community Housing Development Organization under the HOME Program and shall satisfy the requirements and meet the qualifications of Orange IIousing Development Corporation, as described in Section 90].1. 1102. Qualification as Affordable Housing. As more particularly provided in the Affordability Restrictions on Transfer of Property, Developer shall use, manage and operate the Property in accordance with the requirements of 24 CFR 92.252 and California Health and Safety Code Section 50053 so as to qualify the housing on the Property as Affordable Housing with affordable rents. 33 1103. Tenant and Participant Protection. Developer shall comply with the requirements of 24 CFR 92.253. 1104. Lease Requirements. The requirements set forth in Section 1207 hereof shall apply to all resident lease agreements for HOME Units at the Project. 1105. Handicapped Accessibility. Developer shall comply with (a) Section 504 of the Rehabilitation Act of 1973, and implementing regulations at 24 CFR 8C governing accessibility of projects assisted under the HOME Program; and (b) the Americans;.withDisabi1ities Act of 1990, and implementing regulations at 28 CFR 35-36 in order to provide,hahdiz;apped accessibility to the extent readily achievable. 11.06. Usc of Debarred, Suspended, or with the provisions of 24 CFR 24 relating to the conhacts, or funding of any contractor or subconY. or placement in ineligibility status. _. ;ible'Particj, .ants. Developer shall comply ~, yment, engagement of services, awarding of during any periodaof debarment, suspension, 1107. Maintenance of Drug-Free Workpl provide adrug-flee workplace in accox~lq~ice with 24 1108. Lead-Based Paint. the Lead-Based Paint Poisoning regulations at 24 CFR 35. 1109. marketing pre for the Prproei'ty as shall certify; that Developer will the requirements, as applicable of 4821-4846) and implementing and perform such affirmative 24 C1~R92.351. 1110. , )Cqual Opportunity ahd:Fair Housiftg. Developer shall carry out the conshruction and perform;its obhgat~pns under.tj5is Agiee~nent in compliance with all of the state and federal laws and reguhtions iegardtng equah~'opportunity~~~nd fair housing described in 24 CFR 92.350. Developer must also follow,fhe regitireixtents of Heahh and Safety Code Section 33435. ,. -, ~;, 1111. ?=Property Standiirds Developer shall cause the Property to meet the housing quality standards set fot~h,jn 24 C.FR. 8$2.109, as'-well as all applicable local, state and federal codes and ordinances, inchiiim~g zoning ordjnsjhces. Developer shall also cause the Property to meet the current edition of the ModePEn~rgy CocJe'published by the Council ofAmerican Building Officials. 1112. Displacement and Relocation. Developer acknowledges and agrees that, pursuant to 24 CFR 92.253 and eonsiste'nt with the other goals and objectives of this part, City must ensure that it has taken all reasonable steps to minimize the displacemeuC of persons as a result of the eonstruction. Furthermore, to the extent feasible, residential tenants must be provided a reasonable opportunity to lease and occupy a suitable, decent, safe, sanitary and affordable dwelling unit on the Property upon completion of the construction. Developer agrees to cooperate fully and completely with City in meeting the requirements of 24 CFR 92.253 and shall take all actions and measures reasonably required by the Executive Director in connection therewith. All applicable state guidelines must also be followed. 1113. Other Program Requirements. Developer shall carry out each activity in compliance with all federal laws and regulations described in subpart H of 24 CFR 92, except that 34 Developer does not assume City's responsibilities for environmental review in 24 C1~R 92.352 or the intergovernmental review process in 24 CFR 92.359. 1114. Request for Disbm•sements of Funds, Notwithstanding anything contained in this Agreement to the contrary, Developer may not request disbursements of funds under this Agreement until the funds are needed for payment of eligible costs (such funds shall be used solely towards the construction of the Project). The amount of each request shall be limited to the amount needed. 1115. Eligible Casts. Developer shall use HOME costs" pursuant to 24 CPR 92.206. 1116. Records and Reports. Developer shall Agency/City such records, reports and information as thF in order to permit City to meet the record keeping ag'd,jtc to 24 CFR 92.508. 1117. Uniform Administrative Regmi'~picnts. requirements and standards of OMB Circular Nq'.,,A- Organizations," and with the followmg~itachmenls to OIV~E (a) concerning deposit insurance; to pay costs defined as "eligible from time to tlmc submit to ector may reasonably require menu required of it pursuant No. A-11 comply with the s for Non-Profit except for paragraph 4 (y}, Attaoh'urent C, "Refenfion and Citsfodial Requirements for Records", except that in lieu of t11~ provisions?:In paragraph; 4, the retention period for records pertaining to individual CDRG activities starts, from ;the dale oE,,submission of the annual performance and evaluation repptt, 2$ plgscribed m24 CFIt.570 507, in which the specific activity is reported on for the final.t~rte; ~ ''s (d) ~ttach'mCi1tF, "Standards forPinancial Management Systems"; Paragraph 2; (e) t~ttachment`H, "Monitoring and Reporting Program Performance", O, "Procurement Standards." 1118. Conflict of Interest. Developer shall comply with and be bound by the conflict of interest provisions set forth at 24 CFR 570.611, as well as state regulations pertaining to conflict of interest. 1119. Monitoring. Developer shall cure any defects or deficiencies found by the Agency/City while conducting such inspections within twa weeks of written notice thereof, or such longer period as is reasonable within the sole discretion of the Agency/City. 1120. Recertification of Tenant Income. (a) Developer shall take all necessairy steps to review the income of all tenants prior to renting to them, as well as reviewing current tenants on an annual basis, in 35 accordance with HOME regulations and guidelines. Every fifth (5th) year, Developer shall require new original income documents Co be submitted by tenants. Tenants in HOME Units whose incomes no longer comply with federal income guidelines shall have their rents adjusted in accordance with federal HOME guidelines (24 CFR 92.252-92.253). (b) HOME Units continue to quality as affordable housing despite a temporary non-compliance caused by increases in the incomes of existing tenants if aotions satisfactory to HUD are being taken to ensure that all vacancies are filled in accordance with this Section until the noncompliance is corrected. 1121. Other HOME Program Requirements. -Dep©loper shall comply with all other applicable requirements of the HOME Program. ~, '~.. 1122. Controlling Covenants. If there is a ;discrepancy betyvicen State and Federal law with regard to any of the aforementioned covenants, t1ir more stringent r'ecJuirement shall apply. 1200. MAINTENANCE, MANAGEMENT, OPERATION, PRESERVAT)CON AND REPAIR OF PROPERTY ~,. 1201. Maintenance of the Prdpcrty. Developer'"shall, at its sole cost and expense, maintain or cause to be maintained the iriteriot•-,and exterior of Che Project and all IIousing Units thereof and the Property in a decent, safe apd santtary manner, in accordance with the HUD Housing Quality Standards (HQS) and the maintenance slandalds.required.by~Section 92.251 of the HOME Kegcdations, and iu accp`rdanee with the standard of,tt)aintenance ot`first class apartments within Orange County Califoitiia. None ofShe Housing Unr}"s' ih the 1'i~oject shall at auy time be utilized on a transient basis, nor stjall the Property or any p`orlion thereof' ever be used as a hotel, motel, dormitory, fraternity or sorority house, rooming }rouse, hospital, nursing home, sanitarium or rest home, or be gonvelted to condotnimurn owltershrp ~ at any time Developer fails to maintain the ,: . Project oi'~ihe Property in accordance with''~z1fis Agreetfi'ept and such condition is not corrected within five (SJ`days after written notice -1=rom City wrth respect to graffiti, debris, and waste material, or thirty t1~yS,,after written notice frotn",City with r`Os~pect to general maintenance, landscaping and building iinproycments, then City, m addition to whatever remedy it may have at law or at equity, shall have the might to enter upon,~he applroaple portion of the Project or the Property and perform all acts and work iieCeSsary to protec)':praintain, and preserve the Project and the Property, and to attach a lien upon the Property, or to ans~ss the Property, in the amount of the expendihu•es arising 1iom such acts and work of,Ploteettpn=`-'~aintenance, and preservation by City and/or costs of such cure, including a reasonable aamuusiYafvc charge, which amount shall be promptly paid by Developer to City upon demand. The hens"oreated under this Section shall be subject and subordinate to tho lien of the mortgage or deed of mist encumbering the Property (or any part of the Property) for the Primary Loan approved pursuant to the terms of this Agreement. 1201.1 Alterations and Repair. Developer shall not remove, demolish or materially alter any Improvement without Agency/City's prior consent, except to make non- sh•uclural repairs which preserve or increase the Property's value, and shall promptly restore, in a good and professional manner, any hnprovement (or other aspect or portion of the Property) that is damaged or desn~oyed from any cause. 1202. Compliance with Laws. Developer shall comply with all Governmental Requirements (including, without limitation, all requh•ements relating to' Che obtaining of 36 Governmental Authority approvals), all Governmental Authority approvals and all rights of third parties, relating to Developer, the Property or Developer's operation of the Project thereon. 1203. Taxes and Impositions. Developer shall pay, prior to delinquency, all of the following (collectively, the "hnpositions"): (a) all general and special real property taxes and assessments imposed on the Property; (b) all other taxes and assessments and charges of every kind that are assessed upon, the Property (or upon the owner and/or operator of the Property) and that create or may create a lien upon the Property (or upon airy personal property or fixtures used in connection with the Properly), including, without limitatigll,;, non-governmental levies and assessments pursuant to applicable covenants, conditions or restciGtto"ns; and (c) all license fees, taxes and assessments itnposcd on City (other than City's income`or franchise taxes) which are measured by or based upon (in whole or in part) the amount of ~lie';.oblig~tions secured by the Property. If permitted by law, lleveloper may pay any hnpositiori -in nstalh~epts (together with any accrued interest), 1203.1 Right to Cmrtest, lledi, long as (a) its validity is being actively contes (b) Developer has demonstrated to Agency/( imposition unpaid pending the outcome Qf such Property in satisfaction of such Imposttion-or-pth Loan Documents, and (c) Developer has fiuni satisfactory in an amount not less than ':100% penalties), shall not be requirzd lo,pay any Imposition so good faith and by appropriate proceedings, tcasonable' satisfaction that leaving such tidings could not result in conveyance of the imliair~City and Agency's interests under, the Agency/City with a bond or other security he appli~alile claim (including interest and 1203 2 ~ rdenee,pf,Payment. ~~ Upon demand>by Agency/City from time to time, Developer shall dehver~to. City, withlr thirty (30) days following the due date of any imposition, evidence of payment reasonably satisfactory to Agency/City. -1203 ~ -..Books aril) $ecords, Developer shall maintain complete books of account and other records refle'oting its operations (in connection with any other businesses as well as with respccf to _the Property),~in accordance,>With generally accepted accounting principles applied on a consistent basis or in accordance with such other principles or methods as are reasonably acceptable to Agency/City,:in accordance with 24 CFR 92.508. 1204. Payment of Fees :-~evcloper shall pay annually to City/Agency on December 1 of each year, monrtoung and.admrrfisi~ative fees described in the Bond Regulatory Agreement between the Housing Authority ofthc,City~~of Santa Ana and the Developer, executed upon issuance of bonds pertaining to this Project. 1205. Management Plan. As a Condition Precedent to the first disbursement of the Loans to the Developer, Developer shall submit to the Executive Director a Management Plan in a form that is acceptable to the Executive Director, including, but not limited to, the components listed below. Approval of the Management Plan must be obtained from the Executive Direotor prior to any disbursement of the Loans to the Developer. lleveloper shall manage the units in accordance with the approved Management Plan, including such amendments as may be approved in writing tiom Circe to time by the Executive Director, for the term of the income and rent restrictions contained in these Restrictions. The components of the Management Plan shall include: 37 1205.1 Management Agent. Developer shall submit the name and qualifications of the proposed Management Agent. The Executive Director shall approve or disapprove the proposed Management Agent in writing based on the experience and qualifications of the Management AgenC. 1205.2 Management Agreement. Developer shall submit a copy of the proposed management agreement specifying the amount of the management fee, and the relationship and division of responsibilities between Developer and Management Agent. 1205.3 Annual Budget and Projected Cash of the Loans, and annually thereafter not later than one hued each calendar year thereafter, Developer shall submit a prpjec the Executive Director. The budget and cash flow sha'll`-b~ Executive Director. i" -. 1205.4 Tenant Selection Management Plan written tenant selection each of the following requirements: (a) D purpose of providing housing for the applicants' ability of senior citizens that Gonzalez National Aff have for: by the Agenc~ltnd City, in the grounds for any eligible tenants to selection of tenants from a written waiting list approved tl:order of their application, insofar as is practicable; and Prior to the first disbursement (150) days after the close of ating budget and cash flow to arm that is acceptable to the shall adoptjand include as part of its for the Affordable Units that meet ies shall be consistent with the Low Income households; I to program eligibility and lease agreement; asona6le<consideration to the housing needs under 42 U.S.C. § 12744 of the Cranston- The prompt written notification to any rejected applicant of ;h policies shall provide fu•st priority iu the selection of qualified are referred by the Agency or City; (t) Such policies shall carry out the adopted affirmative marketing procedures of the City of Santa Ana, which are designed to provide information and otherwise attract eligible persons from all racial, ethnic and gender groups in the housing market area to the units. Prior to the date of this Agreement, City has provided Developer with the City's affirmative marketing procedures; and (g) Developer and Agency shall cooperate to effectuate the tenant selection policies described in this Section prior to the initial renting, or upon occurrence of a vacancy, and the re-renting of any Affordable Unit. of 38 1205.5 Termination of Tenancy. Developer, its successors or assigns, must adhere to federal and state law requirements with regard to termination of any tenancy of each and every Affordable Unit. Developer may not terminate the tenancy or refuse to renew the lease of a tenant of an Affordable Unit within the Project except for failure to pay rent, serious or repeated violation of the terms and conditions of the lease; for violation of applicable federal, state, or local law; or for other good cause. Any termination or refusal to renew must be preceded by not less than 30 days by Developer's service upon the tenant of a written notice specifying the grounds for the action. 1205.6 Termination of Management Contr~cEY'"Replacement of Management Agent. If at any time the Agency determines that the units arefibt being managed or maintained in accordance with the approved Management Plan, Developer sffall,ehange the management agent or the practices complained of, upon receipt of written Notice ilbit:,the Executive Director. The Execrrtive Director may require Developer to cl?agg"eamanagement plactices or to terminate the management contract and designate and retain a: different management.°agent. The management contract shall provide that it is subject to terminatip~ by Developer withouY~pcnalty, upon thirty (30) days prior written notice, at the direction of the Executive Directo}. Within teh (10) days following a direction of the Executive Director to replace the inanagcrrlerjt s'agent, the Developer shall select another management agent or make o}her arrangements Satisfactory to the Executive Director or designee for continuing management of thc;Housing Units. 1206. Vouchers. Developer, its successors and assigns,-shall not refiise to lease a unit to a holder of a rental voucher under 24 CFR part 887 (Housing Choice Voucher Program) or to a holder of a comparable document eviderJ,Ging partioip~tion inla tenant-based'assistancc program because of the status of the prospective letia'nt as a holder of'sueh certifc~te of family participation, rental voucher, or comparabletenant-based;, assistance document. Total rents charged to such tenants, including the tenant contribution and., rental assistance, shall not exceed the Affordable Kent permttted to he ehgE•ged pursuant: to tlusAgecment;,the Affordability Restrictions, and the NSP Documents 107. Lease Requirements :1Developer shall execute or cause to be executed a written lease m a form approved in writigg by A~~ncy and City (other than immaterial modifications thereto) which complies ~yith the applioalile HOME regulations, the Kedevelopment Law, and all applicable federal, state arld 19pa1 laws and`3~gulations, with each tenant household identifying by name all permitted occupants, both adults',~nd minors, occupying each unit. The lease between tenants occupying the units and+DeveloPetmust be for not less than one year, unless by mutual agreement between the tenant and`Develops~'t~. The lease may not contain any of the following provisions (in which references to "owner"<sliall mean the Developer, its successors or assigns): (a) Agreement by the tenant to be sued, to admit guilt, or to a judgment iu favor of the owner in a lawsuit brought in comrection with the lease; (b) Agreement by the tenant that the owner may take, hold, or sell personal property of household members without notice to the tenant and a court decision on the rights of the parties. This prohibition, however, does not apply to an agreement by the tenant concerning disposition of personal property remaining in the housing unit after the tenant has moved out of the Unit. The owner may dispose of this personal property in accordance with state law; 39 (c) Agreement by the tenant not to hold tho owner or the owner's agent legally responsible for any action or failure to act, whether intentional or negligent; (d) Agreement of the tenant that the owner may institute a lawsuit withorrt notice to the tenant; (e) Agreement by the tenant that the owner may evict the tenant or household members without instituting a civil court proceeding in which the tenant has the opportunity to present a defense, or before a court decision on the ri~hls of the parties; ~,.;, .:. (f) Agreement by the tenant to warve,any right to a trial by jury; F". (g) Agreement by the tenant.ta,waNe,,fklp tenant's right to appeal, or to otherwise challenge in court, a court decision in connection with the lehs,e; and (h) Agreement by tl even if the tenant wins in a courC proceeding b? maybe obligated to pay costs if the tenant loses. 1208. Project Operating Rue directly into a segregated depository i Operating Account") in accordance wilt by the Executive Director each year. accordance with Qie provtstons 4~:this ~ revised from time to,tiirie with A`~eucvl account solely for Operating Budget. prior written appt~o~ Account") ngaater than monthly depo~jts.from approved Annhal Bud Replacement Resetves or repairing shuotura1 required to preserve tl Account for any other this to pay attorney'~,,fges or other legal costs ter against the tenant"~he tenant, however; r irlcjsf'promptly deposit alI project income shed..e'~clusively for the ProjecC ("Project Budget pk2pared by Developer and approved fi'om Cli1s ac,,count may be made only in he "approved Qj3erating Budget, as it may be DevClopcr,.may make withdrawals from this and project fees included in the approved other purposes may be made only with the nt Res¢i'.ve Accoiiht; Developer must establish or cause to be established tAng replaoeJTrent reserve depository account ("Replacement Reserve ty (6p) days a~t,er the Notice of Completion is filed. Developer must make sect ijtoome info t,~e Replacement Reserve Aoeount in accordance with the as arYlet>ded fi•om "time to time. Developer may withdraw funds from the punt solely to fund capital improvements for the Project, such as replacing nests, f'ur'niture, fixtures or equipment of the Project that are reasonably oject,= I~'eveloper may not withdraw funds from the Replacement Reserve ose ~rvithout the prior written approval of the Agency/City. 1210. Monitoring and Recordkeeping. Throughout the Tenn of this Agreement, Developer shall comply with all applicable reeordkeeping and monitoring requirements seC forth u2 the Redevelopment l,aw and the HOME Program, including Section 92.508 (or sueoessor regulation) of the HOME Regulations and Section 33418 of the Redevelopment Law, and shall annually complete and submit to Agency/City a Certification of Continuing Program Compliance substantially in the form of ExhibitN hereto, or other form provided by the Executive Director. Representatives of the Agency and City shall be entitled to enter the Property, upon at least twenty-four (24) hours notice, to monitor compliance with this Agreement, to inspect the records of the Project, and to conduct an independent auditor inspection of such records. Developer agrees to cooperate with City in malting the Property and all Housing Units thereon available for such inspection or audit. 40 Developer agrees to maintain records in a businesslike manner, to make such records available to the Agency and City upon twenty-four (24) hours notice, and to maintain such records for the entire Term of this Agreement. Developer shall cure any defects or deficiencies found by the Agency/City while conducting such inspections within two weeks of written notice thereof, or such longer period as is reasonable within the sole discretion of the Agency/City. Without limiting the generality of the foregoing, Developer shall prepare, maintain and submit to the Agency, as appropriate, the following records and reports in compliance with Health and Safety Code Section 33418 and 24 CFR 92.504(c)(12): 1210.1 Annual Reports. Developer (herein referred to as the "Annual Report") within one each calendar year, commencing with the end of the c first disbursement of the Loans occurs. The Annual.R as to such information as the Executive Director may' following: 1 hle%~"vith the Agency an Amuial Report lred f(fj,y (150) days following the end of tar ysa1,,(l?}' portion thereof] in which the shall eoht~n a certification by Developer require, including, but not limited to, the (a) The fiscal condition`of+ he Pio~g~t,',including the Axmual Budget; an updated Project cash flow projection; a financial statetYlegt t`or the previous d~lendar year that includes a balance sheet and a profit ahd )oss,statement mdtb~ting any surplus or deficit in operating accounts; a detailed itemized listing of inCOttie~nc(,expenses,Fati~l~,the amounts contained in any fiscal reserves. Snch Annual Budget and financial sldte~nent shall ~l~e prepared in accordance with generally accepted accounting practices, oor)srstently ~(pphed The:Executive Director may require that the financial state7r~eht be audited at Dcvelope 's~,expense by~aii'independent certified public accountant aoeeptabl~to?the Execilliye Director ~,"' (b) -, Any substantial physical dofects in the Project, including a description of any major repair or mamtenapce wotk.undertaken%.or needed in the previous and current years. Such statetnept shall desot:be rvhll sleps'D`euCloper'l~~ taken in order to maintain the Project in a safe and ~~aanitary condition in accordance with;, applicable housing and building codes and the property standards set forth-in,24 CPR'~2.251. (e) .Q,teport ~ega1'ding the occupancy of the Affordable Units indicating the income of each current resitlelrt and the current rents charged each resident and whether those rents include uttltt(es,';including tdcgrds that demonstrate that the Project meets the requirements of 24 CFR 92.253 for telrarlt and parkcipant protection under the HOME Program and the requirements of the Agreement and tHese I~eStrxeiions. (d) ~ General management performance, including tenant relations and other relevant information. (e) Records that demonstrate that the Affordable Units meet the affordability requirements of 24 CFR 92.252 and Section 50053 of the California Health and Safety Cade, for the required period of affordability according to Section 33334.3 of the California Health and Safety Code. (f) Evidence of a currently paid hazard insurance policy in accordance with the requirements of the Agency Dccd of Trust and the City Deed of Trust, with a loss payable endorsement naming the Agency and City as a loss payees together with other approved lenders (as 41 their interests may appear), with a "Replacement Cost Endorsement" in amount sufficient to prevent Developer or Agency/City from becoming a co-insurer under the terms of the policy, but in any event in an amount not less than 100% of the then full replacement cost, to be determined at least once annually and subject to reasonable approval by the Execurtive Director. (g) Evidence of a currently paid liability insurance policy, naming the Agency and City as additional insureds and in a form approved by legal counsol to the Agency and City, with coverage as described in the Agreement. Pi•o ert shall be rovided ever (h) Termite reports pertaining to tli~ "~ p y p' y fifth (5th) year. (i) Such other information as maq~~l~e reasonably required by the Executive Director or his/her designee. 1210.2 Records and Audits..; lleveloper shall maintain Yhe,following records, and make them available for inspection by the Agency, the, City, the State or HUD ':•. (a) records wwhich demonstrate t$dt~~~the project meets the property standard specified in 24 CFR 92.251, (b) records, for'each Affogdable Umts~'~'hich demonstrates that the project meets the requirements of 24 CFR 92.252; `' (c) records which demonstr€tte wrraplance with the tenant and participant protections, as specified in 24 Section 29,253, (d) -a•ecgrds .which demonstrate compliance with the Equal Opportunity and Parr Housing requirements outlined in these Restnct4ons, including: rr (i) data on the'eXtent to which each racial and ethnic group and single head.?Qf household (by gendee-of ;head of household) have applied for, participated in, or benefited from" any prrogram o1 at iv~ty fmided in whole or in part with HOME funds; (r{~.; documentation of actions undertaken to meet the equal opportunity requucnichts of 24`;:CFR 92.350, which implements Section 3 of the Housing Development Act of 1968, as amep2led (12 U.S.C. § 1701 u); (iii) documentation and data on the steps taken to implement Developer's outreach programs to minority-owned and women-owned businesses to meet the minority outreach requirements of 24 CFR 92.350; (e) documentation of the steps taken to carry out an affirmative marketing program in accordance with 24 CFR 92.351, if applicable; (f) if applicable, records which demonstrate compliance with the requirements relating to relocation of displaced persons, as described in 24 CFR 92353. At a minimum, these shall include project occupancy lists identifying the name and address of all persons occupying the project property upon Developer's acquisition (i.e., the date on which Developer obtained site control); 42 (g) records concerning lead-based paint in accordance with 24 CFR 92.355; (h) if applicable, records which support any requests for waivers of the couYlict of interest prohibition as stated in 24 CFR 92.356; (i) records of certifications of conh•actor qualifications as they relate to the debarment and suspension requirement as stated in 24 CFR 92357 and 24 CFR Part 24; and (j) any other reports issued by other-agencies monitoring the Project. 1210.3 Retention of Records. All HOME Program funds must be retained for the most housing projects, records may be retained for five y~, records of individual tenant income verifications'; as retained for the most recent five year period, until:five (24 CFR 92.508). Developer shall cooperate with,. records relevant to the Agreement for a minimum of and any and all amendments hereto, or for five years a audits or litigation relevant to the Agreenia}ll,,whichev Office of the Auditor General of HUD, at1,C~)0'r.lheir rel ~„ access to all locations, books, and recoxcls for the ;1 oxaminin said locations book.@, and reeordswith or g > reGq~cjs pertaining to each calendar year of ~~~.. . •egent five year period, except that for rental :after the pYOjec'x,completion dale; except that oject rents and p1ip,~ect inspections must be years after the a~fbxc)gbility period terminates rc Agency and City to ;retain all books and ~e years;~lf)er the exprrattoU,of the Agreement tar the'cofi'chrsion or resoliffiAp of any and all r is lafc% The Agency, the City, the State, the esent~yt}ves shall have unrestricted reasonable rrpose of~xrgnitoring, auditing, or otherwise 1210.4 Dehverysbl';Records.upon Termrnati¢h,of Agreement. If so directed by the Agency, the City, the rotate or HUI) upon teripination of the A'gieement, Developer shall cause all records, accounts, doeuifietiSs3tion and'all other maferials relevant to the work to be delivered to the Agency, the City,.the Stato or DUI), ~as depository. 1210 5 `.. Access t6 Records All records, accounts, documentation and other materrals 1~levant to the`Pioje,cC sliaA;be accessible at any time to the authorized representatives of the Agency, :ihe City, the State qx HU15, on reasonable prior notice, for the purposo of examination or audit. 1210,'¢., Amrual;,l~,ydit. The Agency/City may perform an annual audit at the close of each calendar year iu:wluch llc"se Restrictions are in effect. Developer shall reasonably cooperate with Agency/City with respect to rich audit. 1211. Effect of Violation of the Terms and Provisions of this Agreement After Completion of Construction. The Agency and City are deemed the beneficiaries of the terms and provisions of this Agreement, the other Project Documents, and all covenants running with the land, for and in their own right and fox the purposes of protecting the interest of the community and other parties, public or private, in whose favor and for whose benefit this Agreement, the other Project Documents, and Che covenants running with the land have been provided, without regard to whether the Agency or City have been, remain or are owners of any land or interest therein in the Property or in the Project. The Agency and City shall have the right, if the Agreement or covenants are breached, to exercise all rights and remedies, and to maintain any actions or suits at law or in equity or other proper proceedings to enforce the curing of such breaches to which it or arty other 43 beneficiatiea of this Agreement and covenants may be entitled. The covenants contained in this Agreement shall remain in effect as follows: (a) The covenants against discrimination, as set forth in Article 1300 and the environmental covenants set forth in Article 1400 shall remain in effect in perpetuity. (b) All other covenants set forth herein and in the other Project llocuments, including the oovenants pertaining to the operation, use, maintenance and management of the Property as Affordable Housing set forth in Article 700 and„this Article 1200, shall remain in effect throughout the entire Tenn hereof. 1300. NONDISCRIMINATION COVENANTS 1301. Obligation to Refrain from Dtscrin?inafimt. Devdloper covenants and agrees for itself, its successors, its assigns and every successor `i"i1 interest to therProperty or any pact thereof, that there shall be no discrimination against of segregation of any person or group of persons on account of race, color, creed, religion, sex, matttal,,~stahis, ancestry or national origin in the sale, lease, sublease, transfer, use, occupancy, tenure of efl~gyment of-ahe Property nor shall Developer itself or any person claiming under or through him esfiibJish or;permit any such practice or practices of discrimination or segregation with.reforegce to the sel8otiori, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or=veric)ecs ofthe'Pee'perty. The foregoing covenants shall run with the land and shall remain in effect-=in perp'e'~ility. 1302. Nondis~ employed or applymg~~ subcontractors, biddcrt because of race, color, medical condition, _ medic Title Vii of the Crvl~Righ of 1963,29'U.S.C. Seetiol et seq., Code Government Code, et seq., and all otfi State of California et seq, the' S.C. Section in Employment, ,;DBV~IOper eci`ti~i'8s and agrees that all persons ;nt by it, tf~'affili~~~s~, subsidiaries, or holding companies, and all s;' are and will ~e treated ~~equally by it without regard to, or ;entry, nattona(-origin, sex, age, pregnancy, childbirth or related igtt or;.physical 41; mental disability, and in compliance with 1964; 4~ U, .S.C. Ss Ilion 2000, et seg., the Federal Equal Pay Act l}e Age lliscrithinaiion in Employment Act of 1967, 29 U .S.C. oir~cform and Control Act of 1986, 8 U.S.C. Section 1324b, California Fair Employment and Housing Act, Cal. Government el seq., the-CaliforniaEqual Pay Law, Cal. Labor Code Section 1197.5, Cal. ction 11135'~:thc Americans with Disabilities Act, 42 U.S.C. Section 12101, pplicable arif•G,discrimiuation laws and regulations of the iJnited States and the hey;now exist or may hereafter be amended. 1303. Statutory lYalitliscrimination Covenants. Except to the extent preferences are permitted or required by this°Agreement, Developer covenants by and for itself, its successors and assigns, and all persons claiming tinder or through them that there shall be no discrimination against or segregation of, any person or group of persons on account of any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the sale, lease; sublease, transfer, use, occupancy, tenure, or enjoyment of the Property, nor shall the grantee or any person claiming under or through him or her, establish or permit any practice or practices of discrimination or segregation with rcfetenee to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees, or vcndees in the Property. Developer shall refrain from restricting the rental, sale or lease of the Property or any portion thereof on the basis of any of the characteristics listed above. Developer shall also comply 44 with the equal opportunity and fair housing requirements set forth in Section 92350 of the I-TOME Regulations. The foregoing covenants shall run with the land and remain in effect in perpetuity. All such deeds, leases or contracts shall contain or be subject to substantially the following nondiscrimination or nonsegtegation clauses: (a) In Deeds: "The grantee herein covenants by and for himself or herself, his or her heirs, executors, administrators, and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation ol; any person or group of persons on account of any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, suh~l3vision (m) and parageaph (1) of subdivision (p) of Section 12955, and Section ] 2955.2 of the GtivernmenC Code, in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment cif thaj~iemises herein conveyed, nor shall the grantee or any person claiming Linder or tluough him' or her',' establish or permit any practice or practices of discrimination or segregation with refeYgpec to the selection, location, munber, use or occupancy of tenants, lessees, subtenants, sublesse~~or vendees in the premises herein conveyed. The foregoing covenants shall run with the land: '. ' (b) In Leases: "The lessee,)Lerein cpve(lants by and foi (amself or herself, his or her heirs, executors, adminisUatpr&;;and assigns,'9nd aiJ p,ei`sons claimmng under" or through him or her, and this lease is made and accepted upon and subleet to,,the following conditions: "That there shall he no discrimination against or se~tegattolL of any person,gr group of persons, on account of any basis listed in subdivision (a) or (d) ofS@ct~dn'~12955 of the`C3ov~rnment Code, as those bases are defined in Sections 12926 12:926.1, subdidislgn (m)'ar,d~~ragraph~`k) of subdivision (p) of Section 12955, and Section 1295 2,of the GovernrienL Code ip th~:~aeasmgs~subleasing, hansferring, use, occupancy, tenure, or efjaj~oymenl b~klxe premises hereif5 leased<riprshall the lessee himself or herself, or any person claiming under or through him or her, ;establish or permit any such practico or practices of discrimination or segregation with reference to hu.selection, location, number, nse, or occupancy, of tenants, h~sees,sublessees,~subfenants ,oryendees;ii,thepremises herein leased." ~~(e) In ~oiztraets: ~ ` 1liepe,,shall be no discrimination against or segregation of, any person or group of persons oii, account of ariy basis listed in subdivision (a) or (d) of Section 12955 of the Government Codc:as thosq bases are defined in Sections 12926, 12926.1, subdivision (m) and paragr~`}5)~ (1) of subdvison (p) of Section 12955, and Section 12955.2 of the Government Code, in the sale; lease, sublease;p•ansler, use, occupancy, tenure, or enjoyment of the premises which are the subject of this A`~;teement, nor shall the grantee or any person claiming under or through him or her, estauhsh or~i~;(iiit any practice or practices of discrimination or segregation with reference to the selecton,'~looafon, numbct•, use or occupancy of tenants, lessees, subtenants, sublessees, or vendees in tlic premises herein conveyed. The foregoing covenants shall run with the land," 1303.2 In Affordable Housing Restrictions. The foregoing covenants shall (a) be inchided in the Affordability Restrictions, (b) run with the land, and (c) remain effective for the entire Term of Affordability (for not fewer than 55 years). 1304. Covenants Remain in Perpetuity. The covenants established in this Article 1300 shall, without regard to technical classification and designation, run with the land and be binding on Developer and any successor in interest to the Property, in favor of Agency and City and their successors and assigns, and shall remain in effect in perpetuity. 45 1400. ENVIRONMENTAL MATTERS 1401. Representation and Warranty. Except as Developer has expressly disclosed to Agency and City in writing, Developer has no lcnowlcdgc (a) of the presence on, under or about the Property, now or in the past, of any Iazardous Materials, or of the transportation to or from the Property of any Hazardous Materials, (b) that asbestos or polychlorinated biphenyls (PCBs) are contained in or stored on the Property, or (c) that there are any underground storage tanks located in, on or under the Property, and (d) Developer has not received any notice or other communication from any Governmental Authority having jurisdiction over the Property notifying Developer of the presence of Hazardous Materials in, on, or under the Property, orany""portion thereof. 1402. Compliance with Environmental Lays .~; D~yeloper shall take all necessary precautions to prevent the release into the environment of any Haz~lc~ous Materials which are located in, on or under the Property. Such precautions s(ial~;iriclude coiripJjance with all Governmental Requirements with respect to Hazardous Mate}talc, 'ln addition, the Developer shall install and utilize such equipment and implement and adhere to such procedures%as are consistent with commercially reasonable standards as respects the disclosure, storage, use, re~riwal and disposal of Hazardous Materials. In addition, Developer shall ~;(a)comply',with all Envifourpental Laws and environmental permits applicable to tha .construction arid,operafion of the Properry;,;(b) immediately pay or cause to be paid all costs and expenses incurred by reason of such compliance, (c) keep the Property free and clear of any enviromnental olaitgs or liens impnsed pursuant to any Environmental Law, and (d) obtain and renew all enviro,'nmental permits ret(gired fox ownership or use of the Property 1403. Presence,df Hazardous MaterialsL`Debeloper shall not, and shall not permit anyone else to, genes ate, use, tre't,, store, haiitlle, rcleasc,;or dispose of Hazardous Materials on the Property, or transport or permit the fi ansportaf~o,'h of Hazardous Materials to or from the Property except for de minimis quagtltles used at tho. Prop~i•tyin c4mpliane~',,with all applicable Environmental Laws and required ir~•cohnecfion'yy~jth the routine operation and tiiaintenanee of the Property. 14124. Notice off' Eiivironmerital Matters:' Developer shall notify the Agency/City, and provide to t(ie: Agency/City a ;cgpy or copies, of ull environmental permits, disclosures, applications, entitlements o1•: inquiries relating;t9 the Property which have been conveyed to Developer, including notices of violatioiif,notices to comply, citations, inquiries, clean-up or abatement orders, cease and desist order, reports, filed pursuatty;to self-reporting requirements and reports filed or applications made pursuant to any G6vernmen~~1 Requirement relating to Hazardous Materials and underground tanks. The Developer shall report<fo the Agency, as soon as possible after each incident, any unusual or potentially important incidents with respects to the environmental condition of the Property. In the event of a release of any Hazardous Materials into the environment, Developer shall, as soon as possible after the release, furnish to Agency/City a copy of any and all reports relating thereto and copies of all correspondence with governmental agencies relating to the release. Upon request, Developer shall furnish to Agency/City a copy or copies of any and all other environmental entitlements or inquiries relating to or affecting the Fioperty including, but not limited to, all permit applications, permits and reports including, without limitation, those reports and oflrer matters which roay be characterized as confidential. Developer shall immediately advise Agency/City in writing of any of the following: (a) any pending or threatened environmental claim against Developer or the Property, (b) any condition or occurrence that (i) results in noncompliance with any applicable environmental law, (ii) could reasonably be anticipated to cause the Property to be subject to any 4fi restrictions on the ownership, occupancy, use or transferability of the Property under any environmental Law, or (iii) could reasonably be anticipated to form the basis of an environmental claim against the Property or Developer. 1405. Developer Environmental Indemnity. Developer aelmowledges that Developer located the Property and performed due diligence regarding the condition of the Property prior to acquiring the Property, to Developer's satisfaction and without assistance from the City or Agency. Developer hereby agrees that at Developer's expense, defend (using counsel satisfactory to Agency and City), indemnify, assume all responsibility for, and save and hold the lndemnitees harmless from and against any claim, action, suit, proceeding, loss, cost, damage, liability, deficiency, fine, penalty, punitive damage, or expense (including, without limitation, attorhey's fees), resulting from, arising out of, or based upon (i) the release, use, generation, dischargestofage or disposal of any Hazardous Materials in violation of Environmental Laws during thb period of the. Developer's ownership of the Pt•operty, on, under, in or about, oi• the transportation of any such Hazardous Materials to or from, the Property by Developer or any of Developer Panties dung the period of the;Developer's ownership of the applicable Property, or (ii) the violation, or al)eged violation of any Environmental Laws relating to the use, generation, release, discharge, storage dl$posa] or transportation of?I~azardons Materials on, undet•, in or about, Co or from, the Property during fire pertod~~of the Deveiop~i ss;ownership of the Property. This indemnity shall include; without limitattoit, aiiy'<iamage, liability,"fine, penalty, cost or expense arising from or out of any ciatrii;action, suit, of proceeding for personal injury (including sickness, disease or death), tangible business income, profits or other ecc nuisance, contamination, leak;spill, r 1500. OTHER While any obligation of Housing Development Corps the State of Cia~i~ornia, and documentation of such status rty daij~agc, compensation for lost wages, to the'i4fitia] resource or the environment, Se.effeet on'the environment. Promissory Notes or Deeds of Trust remain scent to the extent that Executive Director 'Developer's managing general partner Orange its existence in good standing under the laws of under federal law and Developer shall provide to the Agency/City. 1502. Yrotec~ipn of Lreri>;~ Developer shall maintain the lien of the Agency/City Deed(s) of Trust as a valid second and t~iird'priorily deed of trust on the Property and take all actions, and execute and deliver to AgericpJ~ity all documents, reasonably required by Agency/City from time to time in connection therewith. 1503. Notice of Certain Matters. Developer shall give notice to Agency/City, within ten (10) days of Developer's learning thereof, of each of the following: (a) any filed litigation or claim affecting or relating to the Property and involving an amount in excess of $5,000; and any litigation or claim that might subject Developer or any general partner to liability in excess of $5,000, whether covered by insurance or not; (b) any dispute between Developer and a Govermnental Authority relating to the Property, the adverse determination of which might materially affect the Property; 47 (c) any change in Developer's principal place of business; (d) any aspect of the improvements that is not in substantial conformity with the plans or code; (e) any Event of Default or event which, with the giving of notice or the passage of time or both, would constitute au Event of Delaulh, (f) any material default by Developer ox any other party under any Senior Loan document, or the receipt by Developer of any notice ;of default under any Senior Loan document; / / . (g) the creation or imposition of any neehanics' or matcrialmans' lien or other lieu against the Property which might malerial),y affect the Property; and/or (h) any material adverse"change in the financ~af:ggndition of Developer. 1504. Further Assurances. Developer shall execyt0;pnd acknovdled,~e (or cause to be executed and aclniowiedged) and dariver to Agency/City ~~11~''doeuments, and 'tgke all actions, reasonably required by AgencylCity rein time to time to confirm the rights created or now or hereafter iutendcd to be created undei,t>ie,Loan Documents;,to protect and further the validity, priority and enforceability of the Agency~~ity Deeds pf Tuist;lo subject to the Deed(s) of Trusl any property intended by the terms of any Loan rocuments, to be coVei'ed by the Agency/City Deeds of Trust or othertivise to ,icariy out the pur~oses of .,the':Loan Docifinents and the hansactions contemplated they eun~cr' 1505. Annual`~iitancial S,fajemeuts. Developer shall deliver to Agency/City, within one hundred fifty (150) days after. thefend of each Calendar Year, (a) a certified public accountant reviewed balapec sheet, for Developer 'a's ~"of the end'p`f such Calendar Year and a certified public accountant reviewed sfa~$ement bf.profit and loss~for"[developer and for Developer's operations in connectiolt.;with the Property. for such ,calendar Year, together with all supporting schedules, (b) a certificate of such certified public accoYintput that such documents were reviewed by such certified public accountant in accordance' yith generally accepted accounting principles and otherwise comply with generally accepted accounting principles review requirements, and (c) a certificate of Developer's chief ftnancial officer. that such documents: (i) were prepared in accordance with generally accepted accounting priij~iples applied on a consistent basis or in aeoordance with such other principles or methods as are reasonably acceptable to Agency/City, (ii) fairly present Developer's financial condition, (iii) show all material liabilities, direct and conth2gent, and (iv) fairly present the results of Developer's operations. Developer shall also provide the Agency/City with any other annual audit reports issued by other monitoring agencies. Developer shall include in said reports a residual receipts report. In addition to the foregoing, Developer shall comply with the requirements set forth in Section 1210. 1506. Audits and Access to Records. Developer agrees that Agency/City, the U.S. Department of Housing and Urban Development, the Comptroller Ueneral of the United States or any of their authorized representatives shall have the right of access, upon reasonable notice, to any books, documents, papers, or other records of Developer which are pertinent to this Agreement in order to make audits, examinations, abstracts, excerpts or hanscripts. Developer will maintain all books and records pertaining to this Agreement for a period of not less than five (5) years after all 48 matters pertaining to this Agreement (i.e., audit, disputes or litigation) are resolved in accordance with applicable federal or state laws, regulations or policies, and when a period of affordability or recapture applies to Developer's activities, for a period of not less than five (5) years after the affordability or recapture period ends. In addition to the foregoing, Developer shall comply with the requirements set forth in Section 1210. 1507. Termite Inspection Report. Developer shall deliver a termite report pertaining to the Property to the Agency/City every fifth (5th) year beginning January 2016. 1600. OTHER NEGATIVE COVENANTS While any obligation of Developer under the Ptomtssoiyy, Notes or Deeds of Trust remain outstanding, the following provisions shall apply, except to `$lie'''';,extent that Executive Director otherwise consents in writing: l 1601. Default on Senior Loan. Developer shall not defaultbii'any of the Senior Loan documents, provided however, that Developer shall-.have such period as is provided in the Senior Loan Documents during which to effectuate a cure. ,; 1602. Transfers of Interest ran Ppgperty or Agreement. 1602.1 Prohibition. The. qualifications and:'!aidentity of the Developer are of particular concern to the Agency and City,<.It is because of t}iosequalifications and identity that Agency and City haveiehfered :into this ilgreemogf`2gd the other ;Project Documents with the Developer. Fot• the p~rigd cotnm~ricing upon jlie data: of this Agreement and until the expiration of the Term hereof, uo vol(ixltaty or involturtary suceessoi hr interest of the Developer shall acquire any rights or power render tlils hgreement,aror shall tlisDcveloper melee any total or partial sale, transfer, conveyance, ,as ignment, subdivision; refmanctng of ldase of the whole or any part of the Property or the Imptoyeli~e`ttts tfiereon wrthgtitJprior ~ri~ten approval of the Agency/City, except as expressly set forth hereni:'`" Any proposed total or partial sale, ..lri3'hsfer, conveyance, assignment, subdivision, refinancing or lease of the v~llole nor" ahy part of the`"Properly or the lmprovements will constitute a Default pursuant to Article 2000hereof. -- %.. `1~0~.2 Yermtttp(1 Transfers. Notwithstanding any other provision of this Agreement to the coiiifary, AgenE,yapproval of an assignment of this Agreement or conveyance of the Property or lmptovelnents of any part thereof, shall not be required in connection with any of the following: (a) 'Any transfers to an entity or entities in which the Developer, or either of its general partners, retains ownership or beneficial interest and retains management and control of the transferee entity or entities. (b) The conveyance or dedication of any portion of the Property to the City or other appropriate governmental agency, or the granting of easements or permits to facilitate construction of the lmprovements (as defined herein). (c) Any requested assignment for financing purposes (subject to such financing being considered and approved by the Agency pursuant to Section 311), including the grant 49 of a deed of trust to secure the funds necessary for construction and permanent financing of the improvements. (d) Removal of the investor limited partner of Developer upon the expiration of the fifteen (15) year tax credit compliance period applicable to the Project. In the event of an assignment by Doveloper under subparagraphs (a) or (c) above not requiring the Agency's prior approval, Developer nevertheless agrees that at least thirty (30) days prior to such assignmenC it shall give written notice to Agellgy/City of such assignment and satisfactory evidence that the assignee has assumed jointly with fi5'eveloper the obligations of this Agreement, 1602.3 Agency/City Conside agree that they will not unreasonably withh Section 1602, provided the Developer delivers approval. Such notice shall be acct assignee's or purchaser's development financial commitments and resources, proposed assignee or purchaser purse reasonably determined by the Agent h•ansferee or assignee on the basis ofi construction of facilities similar to the 1 and may reasonably disapprove, any prof Section 1602 applies, ,,which s.t~e. Age qualifications that the G>ansferring~~eve satisfactory to the Agett'cy/City's legit ~ Within thirty (30) days''~~;~£ter the'rece approval of..ap ~~gi~lnnenY or~.tragsf~r j approvo or.d,asapprove(: information~if any, the and deteiat)'itie whether requested. Agreement shall be bindi the term "Developer" `i: successors and assigns as to and/or opera in sufficaeaif of.:RegtiesteFs;I,:I'ransfm•. Agency and City iixoval of a T~ypest made pursuant to this n notice to the<A~epcy/City requesting such sufficient evidence'ffegarding tho proposed tional qualifications~apd,,.,experience, and its Ietail to',diiabia the Aeehcb to evaluate the znt to the ciWi'ta Set>~orth in this Section 1602 and as ~/City. The AgenG~%/City shall evaluate each proposed is c~evel9~ment and/br:;qualifications and experience in the mpiovemeailF's,--.and its `~paneial commitments and resources, aoSe~l transferee ot.~ssignee; dyring the period for which this ;ncy/City dptermu?e „rdoes -riot possess equal or better r /~~7 asslgnmcHt~i(n~;assumptiou agreement in a form set shat~l"also be regrired for all proposed assignments. of the 'Developer's written notice requesting Agency u~rt to tli~a Section 1602, the Agency/City shall either r~ r.. inert or shill respond in writing by stating what further rbly xoq}Iires in order to determine tho request complete ;quested approval. Upon receipt of such a response, the ncy/City such further information as may be reasonably ~' and Assigns. All of the teams, covenants and conditions of this e Developer and its permitted successors and assigns. Whenever this Agreement, such term shall include any other permitted 1602.5 Assignment by City or Agency. City and Agency may assign or transfer any of their rights or obligations under this Agreement without the approval of the Developer. 1700. ENFORCED DELAY; EXTENSION OF TIMES OF PERFORMANCE In addition to specific provisions of this Agreement, performance by either party hereunder shall not be deemed to be in Default, and all performance and other dates specified in this Agreement shall be extended, where delays or Defaults are due to causes beyond the control or without flit fault of the party claiming an extension of time to perform, which may include: war; insurrection; strikes; lockouts; riots; floods; earthquakes; fires; casualties; acts of God; acts of the public enemy; acts of 50 terrorism; epidemics; quarantine restrictions; freight embargoes; lack of transportation; governmental restrictions or priority; litigation; unusually severo weather; inability to secure necessary labor, materials or tools, delays of any contractor, subconh•actor or supplier; acts or omissions of the other party; acts or failures to act of the City, Agency, or any other public or governmental agency or entity (other than the acts or failures to act of the Agency or City which shall not excuse performance by the Agency or City). Notwithstanding anything to the contrary in this Agreement, an extension of time for any such cause shall be far the period of the enforced delay and shall commence to run fi•om the time of the commencement of the cause, iY• notice by the party claiming such extension is sent to the other party within thirty (30) days of the commencement o£ tie cause. Times of performance F .;.. under this Agreement may also be extended in writing by lh`c.: mutual agreement of Agency/City (through the Executive Director) and Developer. Notwithstanding any provision of this Agreement to the contrary, the lack of funding to complete the Impl'ovem~ts shall not constitute grounds of enforced delay pursuant to this Article 1700. I A00. INDEMNIFICATION 1801. Nonliability of Agency and Crty: developer aclcnowledges~and agrees that: (a) The relationship between =Developer and Agency/C;ity is and shall remain solely that of borrower au`d lender, Agency/C~fy" neither undertakes nor assumes any responsibility to review, inspect, supervise,`~approye (other~tfiaigfor aesthetics) or inform Developer of any matter in connection with the con'Struction,'irieluding matters• relating to: (i) the performance ., . of the construction work, ,(iA) architects,". contractors, ; subcontractors and materialmen, or the workmanship of or materials usiwd by any'`of them, ox (111)tj?re piogi~ess of the construction; and Developer shall rely c[ifiCely on itsofvn judgment with`=lespecf tgSUCh matters and acknowledges that any review, inspecUoif;;"supervisiori~"ryapproval oi• Information stipplicd to Developer by City in connection with such maiterg: is solely for the protection of Agency/City and that neither Developer nor any t>urdpArty is entitled to i eiy on ll , ,, ,, ; (b) T~oti(vithstanding "any other provision of any Loan Document: (i) the Agency arid. City are not'a [partner, joint venture,"alter-ego, manager, controlling person or other business assogiate or participant,of any lciiad of Developer and Agency/City does not intend to ever assume any s(t6hstatus; (ii) Agency/City's';activities in connection with the Loan(s) shall not be "outside the seope.;,of the activities,, of a lender of money" within the meaning of California Civil Code Section 3434, a's';modified oTYecodified from time to time, and Agency/City does not intend to ever assume any responsibility tb."iiiy person for the quality or safety of the Property or the Project; and (iii) Agency/City shall hpt fe~'deemed responsible for or a participant in any acts, omissions or decisions of Developer; %':`' (c) AgeneylCity shall not be directly or indirectly liable or responsible for any loss or injury of any kind to any person or property resulting from any construction on, or occupancy or use of, the Property, whether arising from: (i) any defect in any building, grading, landscaping or other onsite or offsite improvement; (ii) any act or omission of Developer or any of Developer's agents, employcos, independent contractors, licensees or invitees; or (iii) any accident on the Property or any fire or other casualty or hazard thereon; and (d) By accepting or approving anything required to be performed or given to Agency/City under the Loan Documents, including any certificate, financial statement, srrevey, appraisal or insurance policy, Agency/City shall not be deemed to have warranted or represented the 51 sufficiency or legal effect of the same, and no such acceptance or approval shall constitute a warranty or representation by Agency/City to anyone. 1802. Developer Indemnity. Without limiting Developer's obligations to indemnify the Indemnitees set forth in Section 1405, Developer shall, at Developer's expense, defend (using counsel satisfactory to Agency and City), indemnify, assume all responsibility for, and save and hold the Indemnities harmless from any and all losses, damages, liabilities, claims, causes of action, judgments, settlements, court costs, demands, defense costs, reasonable attorneys' i'ees, expert witness fees, and other legal expenses, costs of evidence of title, cp,~ts of evidence of value, and other expenses which they may suffer or incur and any liability of ariy'lcind or nature arising from or relating to the subject matter of this Agreement and/or any dthe~i'Project Document or the validity, applicability, interpretation or implementation hereof or injuries to persons directly or indirectly related to or f:. Improvements, operation, management, or ownersl~pu (including reasonable attorneys fees and costs), Whe;Cher before or after termination of this Agreement: ;'f~@velol Indemnitees for property damage or bodily mluty to, t willfid misconduct of any of the hrdemnitees DeJeJol such action; provided, however, that'th~s,obligation fn extent that Developer determines in its seasonable discr the interests of the parties justify a compi'orriise., or a Developer shall compromise or settle sufih<actton m:;a.,.~ any liability or obligation )n;thi right to hire (sublcct~~o; reason neoessary to defend, tfie right reasonable settlement agreemen the right to pay any judgments defends any such .action, as -: against ariy`claims, losses, li~l of judg"me~it,,settlement, or sl claim only+ wJl)I the written ,ti shall release Dev~lopcr's oblil foregoing agreements. by Devi the request of Developer', City any such claim, action,-`suit, punitive damage, or expense,': regard, hereorls';i{gd for any damages to property or ri oonneiifon with the construction of the f the Piopertyj,inchrding accidental death such damage sltl accrue or be discovered per shall not be `6~Jjgated to indemnify the ie extent occasioncd+by the negligence or cr shall.•have the obligation to defend any defetid''shall not be effective if and to the such action is meritorious or that it of such action, in which case lly protects the Indemnitees from id'i'igbt to defend shall include the written' appiovaL:by Crky;and Agency) attorneys and experts process and: setGl'e reasonable+ claims, the right to enter into dpay amougts•;as required by the terms of such settlement, and ssed against Developer or any other Indemnitees. If Developer orth : above, (i);td;;, the extent of Developer's indemnification ,toper sliall`indetil~li'fy and hold harmless Indemnitees from and qr damages ass"essed or awarded against either of them by way on`npd (ii) City and Agency shall be entiCled to settle any such of Deycloper and any settlement without Developer's consent undei'~~tli'is Section 1802 with respect Yo such settled claim. The shall remain in effect for the entire Term of this Agreement. At gency shall cooperate with and assist Developer in its defense of ;eding, loss, cost, damage, liability, deficiency, fine, penalty, ded that City and Agency shall not be obligated to incur any expense in connection wifh!-such cooperation or assistance. Notwithstanding the foregoing, Developer shall not be required to indemnify the Agency with respect to actions arising from the proposal made by the Governor of California to eliminate redevelopment agencies. 1803. Reimbursement of Agency/City. Developer shall reimburse Agency/City immediately upon written demand for all costs reasonably incurred by Agency/City (including the reasonable fees and expenses of attorneys, accountants, appraisers and other consuhants, whether the same are independent contractors or employees of City) in connection with the enforcement of the Loan Documents and all related matters including all claims, demands, causes of action, liabilities, losses, commissions and other costs against which Agency/City is indemnified under the Loan Documents. Such reimbursement obligations shall bear interest from the date occurring twenty (20) days after Agency/City gives written demand to Developer and shall be secured by the Agency/City 52 Deed(s) of Trust. Such reimbursement obligations shall survive the cancellation of the Agency Promissory Note and/or the City Promissory Note, release and reconvcyance of the Agency/City Deed(s) of Trust, issuance of a Release of Construction Covenants, and termination of this Agreement. 1900. INSIIRANCE, CASUALTY AND CONDEMNATION 1901. Policies Required. While any obligation of Developer under the Project Documents remains outstanding, Developer shall maintain at Developer's _~Qle expense, with insutrors either (i) admitted in California or (ii) whioh are not admitted to "A" or above and reasonably approved by the Agency/1 form and substance reasonably satisfactory to the City Ar Manager] (a) worker's law in connection with the construction; (b) prior to fire and hazard "all risk" insurance cc the event of fire, lightning, windstor•i covered by "all risk" coverage polieie flood if the Property is in an area desig completion of the consLTUct cost of all Improvem~iif;:;(ir of fire, lightning, windstorm covered by `,`.all risk" coved flood if the Property i ;in an time to %z, (e) ] Agency/City from ttirlq to time, l have an A.M. Best Rating of wing policies of insurance in ect to Approval by City Rislc and afiyother insurance required by ncememf and following completion o£the construction, 100% of Ehe rpp~laccmcnt cost of tl~ie Ttnprovcments in rlism, mahotoCiS;''mischief and all other asks normally areg where the ,Property is located (including loss by s "subject,to the darige~~,of flood); ~f the ,construction and at all times prior to <tnsmarice~`cgveriug 100% of the replacement during the course of construction in the event malicious mischief and all other risks normally yere the Property is located (including loss by `;~o the danger of flood); iisiance in amounts reasonably required by less than $1,000,000 for "single occurrence;" y dairiage insw•ance in amounts reasonably required by the no event less than $1,000,000; and insurance reasonably required by Agency/City, All such insurance shall provide that it may not be canceled or materially modified without thirty (30) days prior written notice to Agency/City. The policies required under subparagraphs (b) and (c) shall include a "lender's loss payable endorsement" (Form 438BFLI) in form and substance satisfactory to Agency/City, showing the Agency and the City as encumbrance, The Agency and the City shall be named as an additional insurcd(s) in the policies required under subparagraphs (d) and (e). Certificates of insurance for the above politics (and/or original policies, if required by Agency/City) shall be delivered within ten (10) days after demand therefore, and prior to start of any construction work All policies insuring against damage to the Improvements shall contain an agreed value clause sufficient to eliminate any risk of co-insuranoe. No less than thirty (30) days prior to the expiration of each policy, Developer shall deliver to Agency/City evidence of renewal or replacement of such policy reasonably satisfactory to City Attorney. 53 1902. Agcncy/City Attorney May Modify. The Agency/City Attorney may modify the type and amounts of insurance (inchiding reasonable increases in policy limits) required pursuant to this Section. 1903. Claims and Proceedings. Developer shall give Agency/City immediate notice of any material oasualty to any portion of the Property, whether or not covered by insurance, and of the initiation or threatened irritiation of any proceeding for the condemnation or other talung for public or quasi-public use of any portion of the Property (collectively, "Condemnation"), and shall provide Agcncy/City with copies of all documents which pertain to any such casualty or Condemnation. Developer shall take all action reasonably required by Agency/Ct~~ah connection therewith to protect the interests of Developer and/or City, and Agency/City shill be entitled (without regard to the adequacy of its security) to participate in any action, olairit; adj~xstmcnt or proceeding and to be represented therein by counsel of its choice. Developer 3ha11 not settle, adjust, or compromise any claim, action, adjustment or proceeding without prior Witten approval„which approval shall not be unreasonably withheld or delayed. 1904. Delivery of Proceeds to Agency(City. In the event that :notwithstanding the "lender's loss payable endorsement" requirement~se(`~forth.abpve, the pmee~ds of any casualty insurance policy described herein are paid to Developer, Deueloper shall, subject to any superior rights of the Senior Lender, deliver suah"-pipt+,eeds to the Agency and City immediately upon receipt. 1905. Application of Casualty liisuranee'Proeeeds, Any,procccds collected ("Proceeds") under any casualty insuranee;policy described in this Agreement shall. be disbursed to Developer as provided below, but Qtly upon:,fulfillmen't `of ca9Ji of the .following conditions ("Restoration Conditions wrthm niuet 90''~", ys (unless extenc)ed by mutgal agreement of Developer and >) Y ( ) da Agency/City) following'the oecurreflce of the darri~g"'e' for which the Proceeds are eollecYed: ,f .> (a) Developei•ahall demonstrate to Agency/City's reasonable satisfaction that the P~ooee'ds (together with atijounts~doposrted bj%Developer pursuant to subparagraph (b)) will be adcquate'fo reparr flie;improvein~nts and to restore the fair market value of the Property, within a time period reasonably determined by<=Agcncy/City,' to at least the value it had immediately prior to sustaining the>-damage. Such demonstrafiop shall include delivery to Agency/City of (i) plans and specifications reasonably satiaf~rckQry to Agency/City, and (ii) a construction contract in form and content, and with a eoniraotor, reasonably satisfactory to Agency/City. (b) To `the extent that the Proceeds are insufficient to accomplish the restoration required abo"ve, t?ev~loper shall deliver to Agency/City funds ("Shortfall Funds") in the amount of such shortfall, wfiG"li frmds shall be assigned to City as security for Developer's obligation hereunder and held and disbursed in the same manlier as the Proceeds. (c) Developer shall execute such documents as City requires to evidence and secure Developer's obligation to use all amounts disbursed for the diligent restoration of the Property. (d) No F.vent of Default shall remain uncured. 1906. Method of Disbursement and Undisbmsed Fonds. Any Proceeds and Shortfall Funds to be disbursed to Developer shall be held by Agency/ City and disbursed in accordance with then customary disbursement procedures and related provisions. Any amounts remaining 54 undisbursed following completion of such restoration shall be returned to Developer up to the amount of any Shortfall Funds deposited by Developer, and any other amormts remaining shall either be paid to Developer or applied by Agency/City against any obligations to Agency/City that are secured by a lien on the Property, as they elect in their sole and absolre discretion. 1907. Tailure to Satisfy Conditions. In the event that Developer fails to fulfill the Restoration Conditions within ninety (90) days (unless extended pursuant to Section 1905) following the date on which the damage occurs, Che Proceeds shall be applied by Agency/City against any obligations to Agency/City that are secw•ed by a lien on the Prope>~y~ and the selection of which such obligations to apply the Proceeds against shall be made by Agency/City in their sole and absolute discretion. 1908. Restoration. Nothing in this E from repairing and restoring all damage to the provisions, regardless of whether insurance proc 1909. Condemnation; Treatment of `C Senior Lender, Developer hereby assigns to the . Agency or City secured by a lien on; the. Propert; with any condemnation, and any proceeds "of any Subject to any superior rights oC'Senior Lf Compensation to Agency/City immediately upo' Property to an extent that, in the reasonableapini to render the Property;, not ea~ngmically ~iqb: Developer's security is,othcrwisdliripaired, Agep to judgment or settlerrie~t Ln conncctigart with ariy` obligations secured in sueh~.grder as Q~ency/City amount or due dates of payri~ents, dRe iunder the unpaid balance of the;No Developer's assiguec "Agi any actuahor threatened coS (a) liens are not impaired, any restoration of the P'o.ject. other available or strued to excuse Developer with other Loan Document Subject tas'~ity superior rights of as security fo%,~11 obligations to Dyable to Develoi~~t• in connection tt (collectively, "Compensation"). r shall deliver such remaining eipt. if ;th$,,talcing results in a loss of the Ageltcy/Cftysuch taking renders or is likely rf,~ iu ;Agency/City's reasonable judgment ty may"ap~ly the Compensation received due emnation oi• other taking to reduce the unpaid determine, and without any adjustment in the >. if so applied, any award in excess of the Agency/City shall be paid to Developer or igation to fake any action in connection with ti#iirg the foregoing, as long as the value of Agency/City's proceeds may be used by the Developer for repair and/or (b) NpLliwithstanding the foregoing, during the tax credit compliance period for the Project, as determined undor Section 42 of the Internal Revenue Code, any condemnation proceeds may be used by the Developer for repair and/or restoration of the Project. 1910. Waiver of Subrogation. Developer hereby waives all rights to recover againsC the Agency or the City (or any officer, employee, agent or representative of Agency or City) for any loss incurred by Developer from any cause insured against or required by any Loan Document, to be insured against; provided, however, that this waiver of subrogation shall not be effective with respect to any insurance policy if the coverage thereunder would be materially reduced or impaired as a result. Developer shall use its best efforts to obtain only policies which permit the forogoing waiver of subrogation. 55 2000. DEFAULTS AND REMEDIES 2001. Events of Default. Subject to the extensions of time set forth in Article 1700, failure by either party to perform any action or covenant required by this Agreement or any other Project Document within the time periods provided herein (or therein) following notice and faihrre to cure as described hereafter, constitutes a "Default" or "Event of Default" under this Agreement. A party claiming a Default shall give written notice of Default to the other party specifying the Default complained of. Except as otherwise expressly provided in this Agreement, the claimant shall not institute any proceeding against any other party, and the other pa}-ty shall not be in Default if such party within thirty (30) days from receipt of such notice immediately; with due diligence, commences to cure, correct or remedy such failure or delay and shall complete such cure, correction or remedy with diligence. Without limiting the generality of the foregoing, the occurrence of any of the following, whatever the reason therefore, shall const~tu{e an Event of Default by Developer under this Agreement: (a) Developer fails to;fnalce any payment of pi`i~6ipal or interest under the Promissory Notes when due, and such faihue rs rfot cured within fifteen (CS)'Business Days after Developer's receipt of written notice that such paymenf ryas not,repeived when dues;,. ~~ f _ ;:, (b) Developer fails to perform ~fz~ other obligation for the payment of money under any Loan Document, and~suCh failure is not cut~d within fifteen (15) Business llays after Developer's receipt of written nottce3hat stieh obligation v~~s not performed when due; (e) Developer fails"to perform~~any obligation (other than the obligations described in subparagrafihs (a) ari~i (b) abov0) under any Loan ;Document, and such failure is not cured within thirty (30) tfays after D,e~elopet's tccetp`t of written Yiotice that such obligation was not performed; provided that, rf;cur~ cat(not reasonably;bc effected within such thirty (30)-day period, such failure shall not be an Fyept,~if 15efaultso long aS Developer (in any event, within ten (10) days after rec,etrpt p,~snch notice) cotltlxierices to cute, and thereafter diligently (in any event within ninety (90) dais;after receipt ofsuch notioc) prosecutes suoll;curc to completion; .., ; (d) `~py representation or warranty in any Loau Document proves to have been mcotrect"irany material 're'spect wheriinade; (e) T1e;Property is materially damaged or destroyed by fire or other casualty unless Developer fulfills "the Restoration Conditions set forth in the insurance provisions of this Agreement within `ninety (9,0} days (unless extended pursuant to Section 1905) and thereafter diligently restores the Propegty iii accordance with this Agreement; (f) Worlc on the construction ceases for thirty (30) consecutive days for any reason (other than governmental orders, decrees or regulations, acts of God or any other deity, strikes or other causes beyond Developer's reasonable control), provided that the same do not, in the aggregate and in the Agency/City's reasonable judgment, tlueaten to delay the completion of the construction beyond the required completion date set forth in the Schedule of Performance; (g) Developer is enjoined or otherwise prohibited by any Governmental Authority from constructing and/or occupying the improvements and such injunction or prohibition continues unstayed for sixty (60) days or more for any reason; 56 (h) Developer is dissolved, liquidated or terminated, or all or substantially all of the assets of Developer axe sold or otherwise transferred without the Executive Director's prior written consent; (i) Developer is the subject of an order for relief by a bankruptcy court, or is unable or admits its inability to pay its debts as they mature, or makes an assignment for the benefit of creditors; or Developer applies for or consents to the appoinhneut of any receiver, trustee, custodian, conservator, liquidator, rehabilitator or similar officer for it or any part of its property; or any receiver, trustee, custodian, conservator, liquidator, rehabililaTor or similar officer is appointed without the application or consent of Developer and the appointment continues undischarged or rmstayed for ninety (90) days; or Developer institutes or;egnsents to any bankruptcy, insolvency, reorganization, arrangement, readjustment of debt, di~solutiont" custodianship, conservatorship, liquidation, consttuction or similar proceeding relating to rt br any part of its property; or any similar proceeding is instituted without the consent of Developer and contrni(i;'s;undismissed or unstayed for ninety (90) days; or any judgment, writ, warrant of attachment or execution, or similar process is issued or levied against any property ofDevelopcr and is not released, vacated, or fully bonded within ninety (90) clays after its issue or levy; or (j) (i) any rof the Senior Loan!docu whole or in part and for any reason (e~eepl. flue to repayment~in Executive Director's prior written c,ori'senl'or. (ii)Develope "d any of its duties or obligations tinder or°in connection with ~~ subject to all applicable.,notice and cure :pei'iods,~o5 (iii) any amended, supplemented-; consent shall not be itq, herein, Agency/City he Limited Partner shall be same basis as;if~nade or at its (a) owing under the L'D~n Do connection therewth`;to be the Property, enter into c. by expenditure of its own inents is revokedibi terminated, in full of the Senior Loan), withouC the efaults or otherwise fails to perform an~.~of the Senior Loan documents, of ~g Senior Loan documents is E~~.. /Cit~+'<s~'prior written consent, which ___ _ o anything to the contrary contained any cure ;of`any default ~'inade or tendered by Developer's cure by Developer and shall be accepted or rejected on the occurrence of any Event of Default, do any or all of the following: ritteri'-notice to Developer, declare the principal of all amounts together with all accrued interest and other amounts owing in ely due and payable, regardless of any other specified due date; its own right or by acourt-appointed receiver, take possession of for and otherwise proceed with the completion of the construction (c) Exercise any of its rights under the Loan Documents and any rights provided by law, including, without limitation, the right to seek specific perfiormance and the right to foreclose on any security and exercise any other rights with respect to any security, all in such order and manner as City elects in its sole and absolute discretion; (d) Suspend or terminate the award of HOME funds if Developer fails to comply with any term of that award; and 57 (e) Suspend or terminate the award of the tax increment funds if Developer fails to comply with any teen of that award. 2003. Termination by the Developer. hi the event that the Developer is not in default under this Agreement or any other Project Document and the Agency and City do not provide the Loans pursuant to this Agreement; or in the event of any default of the Agency or City prior to the first disbursement of the Loans, which is not cured within the time set forth in Section 2001 hereof, and any such failure is not cured within the applicable time period after written demand by the Developer, then this Agreement may, at the option of the Developer, be terminated by written notice thereof to the Agency/City. From the date of the written notice;bf `termination of this Agreement by the Developer to the Agency/City and thereafter this Agreemerit shall be deemed terminated and there shall be no further rights or obligations between the partied,arising from this Agreement, except that the parties may pursue any other remedies they may have heretpic]pr. 2004. Termination by the Agency or (Ci Default under this Agreement, and (i) the Developef to assign or transfer this Agreement or any Project in violation of Section 1602 of this Agreement; or (ii Loans set forth in Sections 601, 602,,uttd 603 hereof this Agreement and/or the Schedule of~kerformance City; or (iii) the Developer fails to co~irienCe dogst forth in the Schedule of Performance br;fails to: Improvements for at within thirty (30) day. does not submit evid related docrunents as Performance, in the default or failure shat by the Ag~ircy or (v) default y~rfhin the tin Develop~r'or any as. Property, shall;.at the Developer and therea rights or obligations l may have hereunder> (90) of w of by ty; 'Tn the event that neXthcr Agency nor City is in (or any successor in iYitergst) assigns or attempts Document or,any rights thi;rein or in the Property 9ne or moe:of the Conditions Precedent to the is not fulfilled on or before the'time set forth in and such :failure is not caused by the Agency or ructron of tll~ Improvements within the time set proceed vVith;gr suspends construction of the anei ;such deiaultsor failure shall not be cured nd thereforby tlia Agency; or (iv) the Developer of msurance;;construction plans, drawings and nd within tlie~time set forth in the Schedule of canner.and by,ihe dates rEspegtively provided in this Agreerncnt and such not be enre~i;v4ithin thirty (30)%aays after the date of written demand therefor he Devclop'er is othei~wise,in Default of this Agreement and fails to cure such aet Forth iii Section 2001 -hereof; then this Agreement and any right of the gnee 6r transfeTe@ with respect to or arising out of the Agreement or the rption of the AgeYiey/City, be terminated by the Agoncy/City by notice to the er this Agireement'sNall be deemed terminated and there shall be no further ~tween the';p"~rties, except that the parties may pursue any other remedies they 2005. Institutibr< of Leal Actions, hr addition to any other rights or remedies and subject to the restriction otherwise`52(%~6rth in this Agreement, either party may institute and action at law or equity to seek specific performance of the terms of this Agreement, or to cure, corrector remedy any Default, to recover damages for any Default, or to obtain any other remedy consistent with the purpose of this Agreement. Such legal actions must be instituted in the Superior Court in the County of Orange, State of California, or in the District for the Central District of California. 2006. Acceptance of Service of Process, In the event that any legal action is commenced by the Developer against the City or Agency, service of process on the City or Agency shall be made by personal service upon the P,xecutive Director of the City or Agency or in such other manner as may be provided by law. In the event that any legal action is commenced by the City or Agency against the Developer, service of process on the Developer shall be made by personal service upon 58 the Chief Executive Officer of the Managing General Partner of the Developer or in such other manner as may be provided by law. 2007. Damages. In the event that Che Agency/City is liable for damages to Developer, such liability shall not exceed costs incuned by the Developer in the performance of this Agreement and shall not extend to compensation far loss of frtture income, profits or assets; provided, however, Developer's only remedy for any breach of this Agreement by the Agency/City shall be an action for specific performance of such party's obligations or exercise of Developer's right to terminate this Agreement pursuant to Section 2002(f). ~: ``? 2008. Nom•ecourse Liability. Neither Developer any personal liability under this Agreement, the Agency R,t and Deeds of Trust, and any judgment, decree or orcjei` fo action ip enforce the obligation ofDevelopec to repay t]ie lc enforceable against Developer only to the extent ofDsvelog 2009. Cumulative Remedies; No Waiver':,, Agenc; Project Documents are cumulative and in addition to all, righ exercise by Agency/City of any right of remedy shall"ngt cor nor invalidate any notice of default or ~iiy~ct done puisuaLi Agency or City in the exercise of any'Othef'xight or reme] implied from any omission by Agency/City;to take action on persists or is repeated. i~TO .waiver of any .;default 'shall -aft expressly waived, and any such waiver shall be operatrve ou partner of Developer, shall have Note, the City Promissory Note, ~~ent of money obtained in any need, by such documents shall be est:iu!the Property. pity's rights ancJ,remedies under the aril remedies provided by law. The titute a cure or waiver of any default, to any such notice, nor prejudice the > No waiver ol• any default shall be cgouilt of such default if such default et any default other than the defarilt Ior the~tiime and to the extent slated. ~. . No waiver of any prpviston of.`,an Project Document shall=;bg construed ae a waiver of any subsequent breach of~ Elje; same pro~lsion. Agency%City's con"sent to or approval of any act by Developer requiring further consent oY' approval shall not be deemed to waive or render unnecessary Agency/City'~S.con~ent to or appi;4~al ol'aitysubsegt~eri~ act. 'fhe Agency or the City's acceptance of the late peiforSriatice;of;any oblig~tiou shall got.GOnstitute a waiver by Agency/City of the right to requirc,piompt performance of alf<~urther obhgatiori"s; Agency/City's acceptance of any performance following;the sending or filing.;of any•no>ice of default shall not constitute a waiver of either party's right to pirdeeed with the execci5e of its<iemedies for any unfulfilled obligations; and Agency/City's acceptance of-any,,paitial performance shall iiot constitute a waiver by Agency/City of any rights. 2100. 2101. Obligations Uncoliditional and Independent. Notwithstanding the existence at any time of any obligation or liability of AgencyIcily to Developer, or any other claim by developer against Agency/City, in connection with the Loan or otherwise, Developer hereby waives any right it might otherwise have (a) to offset any such obligation, liability or claim against Developer's obligations render the Loan Documents, or (b) to claim that the existence of any such outstanding obligation, liability or claim excuses the nonperformance by Developer of any of its obligations under the Loan Documents. 2102. Notices. All notices, demands, approvals and other coimnunications provided for in the Loan Documents (each, a "Notice") shall be in writing and be delivered to the appropriate parry by personal service or U.S. mail at its address as follows: 59 if to Developer: Santa Ana. WBBB, LP c/o Orange Housing Development Corporation 414 E. Chapman Avenue Orange, California 92866 Attention: Chief Executive Officer With a copy to: C&C Development Co., LLC 14211 Yorba Street, Suite 200 Tustin, California 92780 If to Agency/City: City of Santa Ana ,f Executive Director (CDN1ZDti} . 20 Civic Center Plaza (M 3'~)` P.O. Box 1988 Santa Ana, Califorrii0,92702 [What is address?] With a copy to: City/Agency Attorney. City of Santa Ana '` . 20 Ciuie:Center Plaza, Santa `Ana,: California Addresses for notice may be changed as're~ personally served shall be effective when ti three (3) days after deplsit m tlia„„U.S. Mai non-receipt of any notice as the're,~~'}{lt of a notified or as the result of a refusal"tcS accent the be No Third forth rights aiidpbligatior any rights hereiatler or by to all other parties. All notices otices mailed shall be effective foregoing notwithstanding, the ~hich the sending party was not be deeiied receipt of such notice. and Wxi•-ranties. All representations and warranties in ;of the Loan(s) described herein and have been or will of ~invesiigation made by either party. This Agreement is made for the purpose of setting } the Agency and City, and no other person shall have 210,5. Binding Effect; Assigntneut of Ohligatimts. This Agreement shall bind, and shall inure to the benefit of, D$ueloper.aid Agency/City and their respective successors and assigns. Other than as expressly provided .to the contrary in this Agreement, Developer shall not assign any of its rights or obligations undct• ahy Loan Document without the prior written consent of Agency/City, which consent may be withheld in Agoncy/City's sole and absolute discretion. Any such assignment without such consent shall, at Agency or City's option, be void. 2106. Prior Agreements; Amendments; Consents. 'this Agreement (together with the other Project Documents and all exhibits and attaclnnents hereto and thereto) contains the entire agreement between the Agency, City and Developer with respecC to the Loan(s) and the Property, and all prior negotiations, understandings and agreements are superseded by this Agreement and such other Project Documents. Except for the other Project Documents all prior or contemporaneous agreements, understandings, representations and statements, oral or written, are merged in this Agreement and shall be of no further force or effect. Each party is entering this Agreement based GO solely upon the representations set forth herein and upon each party's own independent investigation of any and all facts such party deems material. No modification of any Project Document (including waivers of rights and conditions) shall be effective unless in writing and signed by the party against whom enforcement of such modification is sought, and then only in the specific instance and for the specific purpose given. 2107. Governing Law. All of the Loan Documents shall be governed by, and construed and enforced in accordance with, the laws of the State of California and Federal law, whichever is more stringent. Developer irrevocably and unconditionally submitsao the jurisdiction of the Superior Court of the State of California for the CoLmty of Orange or t1r~,C~iiited States District Court of the Central District of California, as Agency/City may deem approp`iate, iu connection with any legal action or proceeding arising out of or relating to this AgrcertSerit 6r,the Loan Documents. Assuming proper service of ptrocess, Developer also waives jurisdiction or venue. 2108. Severability of Provisions. unenforceable or invalid shall affect the re Loan Documents are hereby declared to be 2109. Headings. Article aril convenience of reference only and shall 2110. Conflicts. Irt~tlie event those of any other Loan bocui~ent, prevail; provided hovlev~r that, vt+ith-e that one document prov~dcs for grew not be deemed a confhct~amless ak`' have any personal interest;': or employee participate in interests or tlt~:lttterests of indirectly interesi~d,, 2112. W~rra~ritp . paid or given, and will `it obtaining this Agreement.'' in objecUQn;segarding personal or in rem of any Loan Dpctjment that is held to be ons, ,and to this ~'1~~<~ll provisions of the in the Loan Documents for Loan Documents, of this Agreement and this Agleeme~k, ttnlcss. othervvi'se expressly provided, shall spect to anyrtia~ter addressed in both such documents, the fact r, lesser oY :~J,f~erent right's or obligations than the other shall .,, e applicable;provisions are inconsistent and could not be Jo member, gfficial or employee of the Agency or City shall ~j}•eet, in this'Agreement, nor shall any such member, official ~u~yelating to the Agreement which affects his/her personal iti6hz parhrarship or association in which he/ehe is directly or ayment of Consideratimr. Developer warrants that it has not give, any third person any money or other consideration for 2113. Nmiliability of Agency/City Officials and Employees. No member, official or employee of Agency/City shall be personally liable to Developer, or any successor in interest, in the event of any default or breach by Agency/City or for any amount which may become, due to Developer or successor, or on any obligation under the terms of this Agreement. 2114. Relationship Among Agency, City and Developer. It is hereby acknowledged that the relationship among the Agency, City and the Developer is not that of a partnership or joint venture and that the Agency, City and Developer shall not be deemed or construed for any purpose to he the agent of the other. Accordingly, except as expressly provided herein or in the Attachments 61 hereto, the Agency and City shall have no rights, powers, duties or obligations with respect to the development, operation, maintenance or management of the Improvements. 2115. Plans and Data. Where Developer does not proceed with the work and construction of the Property, and when this Agreement is terminated with respect thereto for any reason, Developer shall deliver to Agency/City any and all plans and data concerning the Property, and Agency/City or any person or entity designated by Agency/City shall have the right to use such plans and data without compensation to Developer. Such right of Agency/City shall be subject to auy right of the preparer of the plans to their use. .A 2116. Authority to Enter Agreement. Each undesi~iied represents and warrants that its signature hereinbelow has the power, authority and right xg b~d,their respective parties to each of the terms of this Agreement, and shall indemnify the Agency;and City"fully, including reasonable costs and attorney's fees, for any injuries or damages to Agency/City m tlie.,event that such authority or power is not, in fact, held by the signatory or is wtthdrawn. 2117. Agency and City Approvals an authority of this Agreement and the authority to Director (or his duly authottized representative). make approvals, issue interpretations,: w~iye p Agreement on bohalf of the Agency so long'ds sup the uses or development petrtritted on the Prope incurred or to be incurred by. the Agency as, sp waivers and/or amendtnenis~may illchrde eztensic of Performance. All other matarii{L,~nd/rn~ subSta require the eonsideratioii,;action and written con Executive Director may~trah~fer and:asyign the a the City at apy+time, upon givipg~t]91ice to Develo d A,etions. The Agency an~1;,City shall maintain implement this,Agt'eement 'thiough the Executive The'Executive~Ditector shall have-'the authority to rovisions; a(id/or enter into amendments of this ;h actions do igll materially or substantially change cty,:;or materially,,9r substantially add to the costs eci~ed horein, andsuch approvals, interpretation, ins of time to,perforri~ as specified in flee Schedule ntiahinterpretations, waivers, or amendments shall sent of the Agency Board and City Council. The utltority to this Agreement to the City Manager of per but without Developer's approval. signed in multiple cortnterpatts which, when t and shall be deemed to be an original. 2119 :[ ;`Keel Estate Br'olferage Commission. The Agency, the City and the Developer each represent and rvan~ut to the otht<r,~that no broker or finder is entitled to any commission or finder's fee in connection w~t)a the I oaii's.?i The patties each agree to defend and hold harmless the other parties from any clanrt t4 any such'=;'commission or fee from any broker, agent or finder with respect to this Agrcemont which-ts pa~aUl~' by such party. 2120. Attorney's Fees. In any action between the parties to interpret, enforce, reform, modify, rescind, or otherwise in connection with any of the terms or provisions of this Agreement, the prevailing party in the action shall be entitled, in addition to damages, injunctive relief, or any other relief to which it might be entitled, reasonable costs and expenses including, without limitation, litigation costs and reasonable attorneys' fees. 2121. Ltterpretation. As used in this Agreement, masculine, feminine or neuter gender and the singular or plural number shall each be deemed to include the others where and when the context so dictates. The word "including" shall be construed as if followed by the words "without limitation." This Agreement shall bo interpreted as though prepared jointly by both parties. 62 2122. No Waiver. A waiver by any party of a breach of any of the covenants, conditions or agreements under this Agreement to be performed by another party shall not be construed as a waiver of airy succeeding breach of the same or other covenants, agreements, restrictions or conditions of this Agreement. 2123. Computation of Titne. The time in which any act is to be done under this Agreement is computed by excluding the first day, and including the last day, unless the last day is a holiday or Saturday or Sunday, and then that day is also excluded. The teen "holiday" shall mean all holidays as specified in Section 6700 and 6701 of the California,G9vernment Code. If any act is to be done by a particular time during a day, that time shall be Pacific dime Zonc time. 2124. Legal Advice. Each party represents and ~arratlts to the other the following: they have carefully read this Agreement, and in signing this Agreemeht,-llr~y do so with full knowledge of any right which they may have; they have receive~izi<tependent legal,advice from their respective legal cormsel as to the matters set forth in this Agrdeffient, or have kriow)pgly chosen not to consult legal counsel as to the matters set forth in this'Agreement; and, they; have freely signed this Agreement without any reliance upon any agreeinent~,promise, r~tatement or representation by or on behalf of the other party, or their respective agents, edij~loyees, 4fCc~ttorncys cxcephas specifically set forth in this Agreement, and without dittess or coerciori,`whetlf~t`economic or otherwise. 2125. Time of Essence. Tiine i5 ck~~•essly made"of the essence with respect to the performance by the Agency, the City, and the Developer of each :and every obligation and condition of this Agreement. 2126. CoopeYation. Eaoh~arty agrees to cQOperatc'dlath,.the other in this transaction and, in that regard, to sign ;any and all ;;documents ,which may Ue`S•easonably necessary, helpful, or appropriate to catry orrt the..purposes` and intent of.,this Agreement including, but not limited to, releases or additional agreements, 2127. ~ TraeisfeY.of Developer Limited Partner's Interest. Notwithstanding anything to the contcary, in this Agreemenx or the Loau Documeti}s, no consent shall be required of either the City or the Agea?cy, (and it shall ngt2~e deemed_a default or an Event of llefatiilt under any of the Loan Documents),'fi}ponneetion wittt'xh~ transfcY;and/or the assignment by the Devclopor's limited partner oPits interest iii f1ie,Developer tti~dlt entity controlled or managed by an entity which is related to or under common control -with the De~~loper's limited partner. 2128. Removal of Deve'loper's General Partner. Notwithstanding anything to the contrary in this Agreement orate Loan Documents, the removal and/or replacement of a General Partner for cause in aocordanoo with the Partnership Agreement shall not require the consent of either the City or Agency and shall not shall not constitute a default or an Event of Default under this Agreement or the Loan Documents or accelerate the maturity of the City Loan or the Agency Loan. if the Developer's limited partner exercises its right to remove a Gcncral Partner, City and Agency will not unreasonably withhold their consent to the substitute general partner; provided however, the consent of either the City or Agency shall not be required if the substitute general partner is an affiliate of the Developer's limited partner. The substitute general partner shall assume all of the rights and obliterations of the removed general partner hereunder. {Signalzn•es on, following page} 63 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed on the date se[ forth at the beginning of this Agreement. AGENCY: COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF SANTA ANA, a public body, corporate and politic By:. Executive Director ATTEST: Maria D. Huizar, Secretary APPROVED AS TO FORM By: By: ATTEST: Maria D. Huizar, Cleric APPROVED AS TO FORM By:, Lisa E. Storck Assistant Com Lisa F,. Storck Assistant City Attorney SANTA ANA, a municipal corporation City Manager 64 DEVELOPER: SANTA ANA WBBB LP, a California T imited Partnership By: ORANGE HOUSING DEVELOPMENT CORPORATION, a California nonprofit corporation,.its managing general partner By: Bobert Offlccr C&C Developmegt.LLC, a California limited liability company, its :developer general IZ. Cottle, its 65 ;family Trust Dated its member Barry A. Cottle, Trustee